Restrictions and Foreign Equity Limits
- Investment activities listed in Annex A are reserved or restricted.
- Foreign equity participation limited to specified percentages per activity.
- List A:
- Strict restrictions or bans on foreign ownership in mass media, certain professions, retail trade below a certain capital, cooperatives, small-scale mining, and others.
- Foreign equity limits ranging from 0% to 60% depending on the sector, e.g., 25% for private recruitment, 30% for advertising, 40% for natural resources exploration, 60% for financing companies.
- List B:
- Limits (generally 40%) imposed due to security, defense, health, morals, and SME protection.
- Covers manufacture and distribution of firearms, explosives, military equipment, dangerous drugs, gambling, and enterprises with low capital.
Amendment Procedures
- List A amendments can be made anytime as necessary to reflect changes in specific laws.
- List B amendments can occur no more than once every two years aligned with RA 7042 and its rules.
Legal Effect and Revocation
- Revokes or modifies inconsistent prior orders, rules, or regulations.
- The order took effect on October 24, 2000.
Important Legal Concepts and Definitions
- Certain professions are reserved exclusively for Filipino citizens unless otherwise specified by law.
- Foreign ownership of private lands is limited by the Constitution.
- Full foreign participation allowed in natural resources under government-approved agreements.
- Special conditions apply to retail trade investments based on paid-up capital thresholds.
- Reciprocal rights required for foreign nationals investing in financing companies.
Key Regulatory Authorities and Compliance Requirements
- Philippine National Police clearance required for controlled manufacture and distribution involving firearms and explosives.
- Department of National Defense clearance required for manufacture and distribution of military-related equipment.
Miscellaneous Provisions
- The Negative List controls foreign participation to protect national interests in security, economic stability, and cultural integrity.
- The List distinguishes between constitutional mandates and pragmatic restrictions based on public policy considerations.