The government has found a workaround to the persistent problem that had long bugged investors considering the Philippines as a business site, as the Constitution bars foreigners from owning land in the country.

President Ferdinand R. Marcos Jr. signed a landmark law aimed at boosting foreign direct investment by extending long-term land leases for foreign investors, creating a more stable and attractive climate for doing business in the Philippines.

Republic Act 12252, signed on 29 August, amended the decades-old Investors Lease Act (RA 7652), effectively liberalizing the leasing of private lands by increasing the maximum lease period from 50 years (renewable for 25 years) to up to 99 years.

The law covers investments in key sectors, including industrial estates, manufacturing, agro-industrial ventures, tourism, agriculture, agroforestry, and ecological conservation.

RA 12252 adds a key policy provision that ensures the government’s commitment to providing reliable lease contracts and a stable regulatory environment for foreign investors.

It is part of the administration’s broader economic agenda to modernize the country’s investment framework and encourage inflow of capital, technology and jobs.

Under the new law, foreign investors are required to register their projects under Republic Act 7042 or the Foreign Investments Act of 1991, and the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE), as amended by the CREATE MORE Act.

All lease agreements must be recorded with the local Registry of Deeds and annotated on the title of the leased property.

The law also grants more regulatory teeth to investment agencies such as the Board of Investments, Fiscal Incentives Review Board, and other investment promotion agencies.

These bodies can now require investors to explain delays and compel them to begin development within a reasonable time if their projects fail to start within three years of signing a lease.

Additionally, penalties for violations have been significantly increased. Fines now range from P1 million to P10 million — up from the previous P100,000 to P1 million, along with possible imprisonment of six months to six years at the court’s discretion.