On 17 December 2024, the House of Representatives approved on third and final reading House Bill No. 10755 which seeks to amend Republic Act No. 7652, otherwise known as the Investors’ Lease Act.
The key proposed amendment in the approved bill permits a foreign investor who is investing in the Philippines to lease a private land for a maximum period of 99 years subject to certain conditions, thereby replacing the previously set threshold of 50 years, renewable once for a period of not more than 25 years (i.e. maximum of 75 years). The extension of the land lease limit under the proposed law requires that: (i) the leased area shall be used solely for the purpose of the investment upon the mutual agreement of the parties; (ii) the leased premises shall comprise such area as may reasonably be required for the purpose of the investment, subject to the Comprehensive Agrarian Reform Law and the Local Government Code; (iii) the foreign investor has an approved and registered investment under the Foreign Investments Act of 1991, as amended; (iv) lease agreements to be subject to the approval of the Department of Trade and Industry-Board of Investments (“DTI-BOI“), except for lease of lands with economic zones or free port areas which shall be subject to the approval of the relevant Investment Promotion Agency (“IPA“); and (v) the DTI-BOI or IPA concerned shall approve the long-term lease contract, subject to the fulfilment of certain legal requirements.
Aside from the extension of the rental period, the approved bill also (i) defines “private land” as “those lands 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“; and (ii) allows foreign investors to sublease the rented land with the consent of the lessor, unless barred by a provision in the lease contract itself.
The Senate had earlier approved its own version of the bill, i.e. Senate Bill 2898 or the proposed Act Liberalising the Lease of Private Lands by Foreign Investors. The extension of the land lease limit, along with the other proposed amendments, is projected to bring in foreign investors and substantial capital to the Philippines. The contemplated increase of foreign investment is anticipated to result to better economic stability.
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