President Ferdinand R. Marcos Jr. has signed a landmark piece of legislation, Republic Act (RA) No. 12252, aimed at creating a more stable and attractive investment climate for foreign investors. The new law extends the maximum lease period for private lands from 50 years to 99 years, providing greater security for long-term projects.
Creating a Stable Investment Environment
RA 12252 amends the Investors’ Lease Act (RA 7652), liberalizing land lease contracts for various sectors, including industrial estates, factories, agro-industrial ventures, tourism, agriculture, agroforestry, and ecological conservation. This move underscores the government’s commitment to a flexible and dynamic policy designed to attract foreign capital. The longer lease period, which replaces the previous 50-year term plus a 25-year renewal option, is expected to encourage significant, long-term foreign direct investment.
The law formalizes the government’s policy to guarantee stable lease contracts, ensuring a reliable environment for foreign investors.
Key Provisions and Protections
To ensure compliance and accountability, the new law requires foreign investors to register their projects with relevant government agencies, including the Fiscal Incentives Review Board (FIRB), Board of Investments (BOI), and other Investment Promotion Agencies (IPAs). Additionally, all lease contracts must be registered with the local Registry of Deeds.
RA 12252 also includes provisions to address project delays. It empowers investment agencies to require investors to explain delays and to begin their projects within a reasonable timeframe, typically within three years of signing the lease. To deter violations, the law significantly increases penalties, raising fines from a range of PhP100,000–PhP1 million to PhP1 million–PhP10 million. It also maintains the possibility of imprisonment for six months to six years, at the court’s discretion.
The new law is poised to solidify the Philippines’ position as a top destination for foreign investment, providing the certainty and security that large-scale, long-term projects require.
