House OKs bill that lets foreigners lease land for 99 years

MANILA, Philippines — The House of Representatives on Tuesday approved on third and final reading a bill that would extend up to 99 years, from the current 50, the period in which private land can be leased to a foreign investor, who would be allowed to sub-let the property.

House Bill No. 10755, which will amend Republic Act No. 7652 or the Investors’ Lease Act of 1993, is one of the measures identified as a priority by the Legislative-Executive Development Advisory Council for having the potential to attract more foreign investments.

A total of 175 House members approved the bill during Tuesday’s plenary session, three disapproved while two abstained.

On Monday, the Senate approved on the third and final reading its version of the measure, or Senate Bill No. 2898, authored by Senate President Francis Escudero.

Gabriela Rep. Arlene Brosas, who voted against the House bill, said that by extending the lease period the bill practically circumvented the constitutional restrictions on foreign land ownership.

A 99-year rental limit, she said, is “equivalent to a multi-generational lease, exceeding the global average life expectancy of 73 years.”

Brosas, who is also the assistant minority leader, also expressed concern that lands awarded to agrarian reform beneficiaries might also end up being leased to foreigners for a prolonged period due to the bill’s definition of private lands.

HB 10755 defines private lands as those “which have been segregated from the general mass of the public domain and distributed by any form of gratuitous or onerous grant by the State, such as a deed of sale, adjustment title, special grant, or possessory information title converted into a record of ownership.”

They also include patrimonial properties of the state-owned and controlled by investment promotion agencies, it added.

Still ‘restrictive’

HB 10755 is consolidation of three different bills whose authors include Speaker Martin Romualdez (Leyte), Senior Deputy Speaker Aurelio Gonzales Jr. (Pampanga), Majority Leader Manuel Jose Dalipe (Zamboanga City), Senior Deputy Majority Leader Ferdinand Alexander Marcos (Ilocos Norte), and Tingog Representatives Yedda Marie Romualdez and Jude Acidre.

In seeking amendments to RA 7652, the authors cited observations that the current terms for leasing land to foreign investors remained “restrictive, limiting the potential influx of foreign capital and the economic benefits it brings.”

In their explanatory note for the bill, they said the law required “modernization” to meet current global investment trends and enhance the country’s competitiveness.

HB 10755 would “establish greater stability and predictability in long-term lease contracts for foreign investors” and encourage more substantial and long-term investments.

“The bill proposes to extend the maximum allowable lease period for foreign investors to 99 years, subject to certain conditions and requirements. This will enable investors to plan and execute long-term projects with confidence,” they said.

It also has provisions streamlining administrative processes to reduce red tape, the authors added.

Longtime concern

In a statement announcing the bill’s approval on Tuesday, Romualdez said foreign investors had been expressing concern over the “short” lease period of private lands under RA 7652, which sets the limit at 50 years but renewable for an additional 25 years.

“We hope they would be satisfied with the proposal. We hope it would attract new foreign investments and encourage existing investors to expand their businesses, thereby creating more job and income opportunities for our people and sustaining our economic growth,” the Speaker said.

He said the bill aligned with President Marcos’ open-door policy for legitimate foreign capital and with existing practices in many countries in the region.

Under the bill, the lease contract would be subject to the approval of the Board of Investments, except for those involving lands inside economic zones or free port areas which would fall under the relevant investment promotion agencies.

The approved House bill allows the lessee to sublease the land with the consent of the lessor.

Violations of the bill’s provisions are penalized with fines ranging from P1 million to P10 million.

Akin to direct ownership

Arguing against the bill, Brosas said the long lease period could already be equated to direct foreign ownership.

“Beyond all the legalisms and technicalities, it is clear to us that in essence and practice this bill would pave the way for the free, monopolistic use and control by foreigners of our lands for a very long time,” she said.

“And not only does this bill aim to expand the aggregate land leasing period of foreign investors, but it also expands their leasehold rights by allowing long-term lease contracts to be pledged as a guarantee for a loan, and by permitting leaseholders to sublet the leased land.”

The bill’s “vague and loose” definition of private lands could open “a loophole that permits foreign investors’ prolonged leasing of agricultural lands awarded to our common Filipino farmers and agrarian reform beneficiaries,” she added.

(2024/12/18-05:50)