The government released the implementing rules and regulations (IRR) yesterday to implement the extended property lease for foreigners, which serious investors said will address the strict land ownership limits under the Constitution, a primary deterrent to setting up new businesses. 

The Department of Trade and Industry (DTI) and the Land Registration Authority (LRA) signed the IRR for Republic Act 12252, also known as the Investors’ Lease Act.  

The document, signed by Trade Secretary and Board of Investments (BoI) chairperson Cristina A. Roque and LRA administrator Gerardo Panga Sirios, was presented at a ceremony in New Clark City, hosted by the Bases Conversion Development Authority (BCDA), on 19 December, according to the DTI.

The Philippines has long maintained stringent restrictions on foreign land ownership, rooted in the 1987 Constitution’s nationalist provisions. 

Article XII, Section 7 explicitly reserves private land ownership for Filipino citizens or corporations in which Filipinos hold at least 60 percent of the capital, a policy designed to protect the national patrimony and prevent foreign dominance over key resources.

This “60/40 rule” effectively bars foreigners from outright owning land, limiting them instead to equity stakes in Filipino-majority corporations or land leases. 

Historically, under Republic Act 7652 (the original Investors’ Lease Act of 1993), foreign investors could lease private lands for up to 50 years, with a one-time renewal option for another 25 years, totaling a maximum of 75 years. 

The limits have been criticized as outdated and overly restrictive, stemming from post-colonial fears of exploitation, but are now widely seen as barriers to economic growth. 

Foreign investors have increasingly called for reforms to these rules, arguing that they hinder the country’s ability to attract foreign direct investment (FDI) relative to regional peers such as Vietnam, Indonesia and Thailand, where longer leases or even conditional ownership are permitted. 

The push gained momentum in the 2020s amid sluggish FDI inflows. The Philippines consistently ranks low in Southeast Asia for FDI inflows, with annual inflows of around $9- $10 billion, far below Vietnam’s $20+ billion. 

Key stakeholders, including foreign chambers of commerce, multinational corporations, and some local business groups, have highlighted that short lease terms discourage capital-intensive, long-term projects in sectors such as manufacturing, renewable energy, agro-industrial ventures, tourism developments and industrial estates. 

For instance, investors in solar farms or factories require decades to recoup costs, and uncertainty over lease renewals increases risks and financing challenges. 

The law extended the maximum lease period to 99 years, comprising an initial term of up to 75 years, renewable once for up to 24 years, while maintaining the constitutional ban on outright foreign ownership. 

Capital flow must be long-term.

Arriving three decades after the original law’s enactment, this extension represents a momentous milestone for the country’s economic landscape. By offering longer leasehold terms, the government aims to attract a steady flow of long-term capital, advanced technology and global expertise.

DTI Undersecretary and BoI managing head Ceferino S. Rodolfo, representing Secretary Roque, emphasized that the IRR is a significant step in unlocking these investment opportunities responsibly. At the same time, BCDA president and CEO Joshua M. Bingcang noted that the measure is instrumental in providing the stability and certainty required to remain competitive with the rest of the region.

Beyond extending the lease duration, the IRR introduces vital administrative safeguards designed to protect both landowners and lessees. A key feature is the requirement to annotate lease contracts on the land title, making the lease binding to the public and providing an essential layer of legal protection. 

Additionally, the IRR simplifies investment procedures by providing a straightforward, step-by-step process for compliance and establishing specific timelines for government agencies to act on applications, thereby reducing bureaucratic friction.

BoI Governor Atty. Marjorie O. Ramos-Samaniego extended gratitude to the LRA, the Fiscal Incentives Review Board, and various Investment Promotion Agencies for their collective effort in harmonizing policies and clarifying procedures. Representing the LRA at the ceremony, Pampanga Register of Deeds Atty. Lorna Dee affirmed that the registration of these leases reflects a national dedication to creating a business environment built on trust and clarity.

Secretary Roque expressed support for finalizing the IRR, noting that it boosts investor confidence by providing a stable and transparent regulatory environment.

“Our goal is to establish the Philippines as a top global investment destination. This signing provides the long-term security our investors need and proves that we are serious about creating a more competitive and business-friendly nation,” she added.

This new regulatory framework will officially take effect on 4 January 2026, following its publication in a newspaper on 20 December.