Senate President Chiz Escudero is confident that more foreign investors will look at the Philippines as an ideal investment destination with the enactment of a law that extends their land lease contract to 99 years.
The new law, principally authored by Escudero during the 19th Congress, was signed into law by President Ferdinand Marcos Jr. recently and amended Republic Act No. 7652 or the Investors’ Lease Act of 1993 in order to extend the lease contracts of foreign investors from the current maximum of 75 years.
“Foreign investors have long complained about the prohibitive provisions of our laws regarding the ownership of land by non-Filipinos.”
“Foreign investors have long complained about the prohibitive provisions of our laws regarding the ownership of land by non-Filipinos. Businesses will never place their funds in destinations where there is uncertainty in laws and regulations. This law will go a long way in addressing these concerns,” the veteran legislator said.
The seasoned lawmaker noted that ownership of land is always a crucial consideration of investors when choosing where to set up shop because no one will put in so much money only to be evicted after a short period of time.
“Ownership of land is always a crucial consideration of investors when choosing where to set up shop.”
“We may be strategically situated geographically, have a predominantly English-speaking workforce, and have among the hardest working people in the world, but unless there is stability in the investment environment, none of these advantages we have will help us in competing for investors,” the Senate President said.
Under the law, the leased property should be utilized only for the purpose of the approved and registered investment.
Failure by a lessee to commence its investment project within a period of three years from the signing of the lease contract may result in the revocation of all entitlements granted under this law.
The lease contract is renewable upon the mutual agreement of the parties concerned.
The registered lease cannot be subject to collateral attack. It cannot be altered, modified or cancelled except in a direct proceeding in accordance with law.
Unless specifically prohibited in the lease contract, the lessee may sublet the property with the consent of the lessor.
The law provides for stiff penalties for lease contracts that exceed the 99-year period; for the use of the leased premises for a purpose contrary to existing laws, public order, public policy, morals, or good customs; and if the agreement results in the lease of land in excess of the approved area.
These acts will result in the voiding of the contract and a fine of P1 million to P10 million or imprisonment of six months to six years upon the discretion of the court for both contracting parties.
“We thank President Marcos for supporting our bill. With the entry of more investments into the country, not only will more jobs be created but we will also gain from technology transfer that can be utilized to grow local enterprises and make them more competitive in the global stage,” Escudero concluded.
