(Manila, 8th) In order to attract foreign investment, the Philippines has relaxed land lease terms, extending the lease period for foreign investors from the original 75 years to 99 years.
On Wednesday (September 3), Philippine President Marcos Jr. signed the 'Investors' Lease Act' into effect, further opening up private land for foreign investor leasing.
Philippine law prohibits foreigners from owning private land locally; they can only lease it. According to previous regulations, the maximum lease term for foreigners was 50 years, extendable once for up to 25 years. Investors have long complained that this law created uncertainty for foreign investments, particularly those spanning several decades.
The new law now extends the lease period to 99 years, which is seen as an important step in creating a stable investment environment and attracting more long-term investment.
Under the new law, long-term land leases by foreign investors cover priority industries such as industrial parks, factories, tourism, and agriculture. The Philippine government emphasized that this policy is 'flexible and dynamic'—aiming both to attract foreign capital and to ensure land use aligns with investment commitments.
According to the new law, qualified foreign investment projects may sign land lease contracts for up to 99 years, but if the project involves national key services or infrastructure, the President may shorten the lease period.
The law clearly stipulates that leased land must be used exclusively for the approved project. If the investor withdraws or the land is used for other purposes, the lease contract will automatically terminate. Investors must also commence the project within three years of signing the lease contract, otherwise the lease will terminate.
Contract renewals require both parties' consent, and investors must provide proof of substantive contributions to Philippine society and economy. Any violation of the contract, lease overextension, illegal land use, or expansion of leased area without approval will render the contract invalid; responsible persons face fines ranging from 1 million to 10 million pesos (about 230,000 SGD), and may also face imprisonment of six months to six years.
Lee Chao, CEO of Philippine Lee Chao Realty Consultants, said the new law gives foreign businesses more time to recoup investments and increases the Philippines' attractiveness to investors in the region, making it more competitive with countries like Thailand, which have more developed infrastructure. He expects a large inflow of foreign investment into the Philippines, especially in tourism-related projects such as hotels.
On Wednesday (September 3), Philippine President Marcos Jr. signed the 'Investors' Lease Act' into effect, further opening up private land for foreign investor leasing.
Philippine law prohibits foreigners from owning private land locally; they can only lease it. According to previous regulations, the maximum lease term for foreigners was 50 years, extendable once for up to 25 years. Investors have long complained that this law created uncertainty for foreign investments, particularly those spanning several decades.
The new law now extends the lease period to 99 years, which is seen as an important step in creating a stable investment environment and attracting more long-term investment.
Under the new law, long-term land leases by foreign investors cover priority industries such as industrial parks, factories, tourism, and agriculture. The Philippine government emphasized that this policy is 'flexible and dynamic'—aiming both to attract foreign capital and to ensure land use aligns with investment commitments.
According to the new law, qualified foreign investment projects may sign land lease contracts for up to 99 years, but if the project involves national key services or infrastructure, the President may shorten the lease period.
The law clearly stipulates that leased land must be used exclusively for the approved project. If the investor withdraws or the land is used for other purposes, the lease contract will automatically terminate. Investors must also commence the project within three years of signing the lease contract, otherwise the lease will terminate.
Contract renewals require both parties' consent, and investors must provide proof of substantive contributions to Philippine society and economy. Any violation of the contract, lease overextension, illegal land use, or expansion of leased area without approval will render the contract invalid; responsible persons face fines ranging from 1 million to 10 million pesos (about 230,000 SGD), and may also face imprisonment of six months to six years.
Lee Chao, CEO of Philippine Lee Chao Realty Consultants, said the new law gives foreign businesses more time to recoup investments and increases the Philippines' attractiveness to investors in the region, making it more competitive with countries like Thailand, which have more developed infrastructure. He expects a large inflow of foreign investment into the Philippines, especially in tourism-related projects such as hotels.
According to data from the Philippine central bank, in the first five months of this year, the Philippines attracted US$2.96 billion in foreign direct investment (about RM12.482 billion), a year-on-year decrease of 27%. Compared with neighboring Southeast Asian countries, the Philippines lagged significantly in attracting foreign capital, drawing US$8.9 billion in 2024, while Vietnam brought in US$20.17 billion and Indonesia US$24.2 billion.