Philippines pondering relaxing foreign land ownership limits for business growth

A top official from the Chamber of Real Estate and Builders’ Associations Inc. (Creba), known as Alejandro Mañalac, has suggested that The Philippines might consider relaxing restrictions on foreign ownership of land in limited areas, provided such a move would stimulate business activity and job creation. Speaking at a forum organised by The Manila Times on Thursday, the Creba international committee chairman said: “If the ownership of the land will generate business if it will generate employment…then maybe we can consider it.”

Currently, Philippine laws generally prohibit foreign nationals from acquiring land, though they are permitted to own condo units under Republic Act 4726, as long as 60% of the building is Filipino-owned. Despite acknowledging that numerous considerations would need to be addressed, Mañalac suggested the outcome could be beneficial.

“In areas wherein it (the land price) is already right now out of reach of the ordinary Filipinos, if we have all these [foreigners who] have all the money and buy, then our own people, the Filipinos, will no longer be able to afford those landed properties,” Mañalac cautioned. Balancing land ownership rights to avoid pricing native Filipinos out of the market was clearly a critical issue, he added. The question of what size properties might be made eligible for foreign purchase was another concern that he believes would need to be considered.

Mañalac also spoke of the inherent need for extensive consultation with all stakeholders should the government choose to approach this contentious issue. This year, the government has already moved some way towards liberalising foreign asset ownership rights, in a bid to enhance the country’s overall competitiveness reported Manila Times.

Indeed, in April amendments were introduced to the Commonwealth-era Public Service Act, which paved the way for foreign entities to fully own railways, airports, expressways, and telecommunications enterprises. However, a 40% limit on foreign ownership remains in place in certain other sectors, including electricity distribution and transmission, seaports, water pipeline distribution, and public utility vehicles.

In tandem with these changes, the Energy Department issued a circular in November which modified the Renewable Energy Act, permitting 100% foreign equity in the exploration, development, and use of solar, wind, hydro, and ocean or tidal energy resources.