10th Regular Foreign Investment Negative List A & B

10th Regular Foreign Investment Negative List A & B

issued on the 29th day of May, 2015

LIST A: FOREIGN OWNERSHIP IS LIMITED BY MANDATE OF THE CONSTITUTION AND SPECIFIC LAWS

No Foreign Equity

1. Mass Media except recording (Art. XVI, Sec.11 of the Constitution; Presidential Memorandum dated 04 May 1994)

2. Practice of all professions *1 (Art. XII, Sec.14 of the Constitution, Sec. 1 of R.A. 5181, Sec. 7. J of R.A. 8981)

a. Pharmacy (R.A. 5921)
b. Radiologic and x-ray technology (R.A. 7431)
c. Criminology (R.A. 6560)
d. Forestry (R.A. 6239)
e. Law (Art. VIII, Section 5 of the Constitution; Rule 138, Sec. 2 of the Rules of the Court of the Philippines

3. Retail trade enterprises with paid-up capital of less than US$2,500,000 (Sec. 5 of R.A. 8762)*2

4. Cooperative (Ch. III, Art. 26 of R.A. 6938)

5. Private security agencies (SEC. 4 of R.A. 5487)

6. Small-scale mining (Sec. 3 of R.A. 5487)

7. Utilization of marine resources in archipelagic waters, territorial sea, and exclusive economic zone as well as small-scale utilization of natural resources in rivers, lakes, bays, and lagoons (Art. XII, Sec. 2 of the Constitution)

8. Ownership, operation and management of cockpits (Sec. 5 of P.D. 449)

9. Manufacture, repair, stockpiling and/or distribution of nuclear weapons (Art. II, Sec. 8 of the Constitution)*3

10. Manufacture, repair, stockpiling and/or distribution of biological, chemical and radiological weapons and anti-personal mines (various treaties to which the Philippines is a signatory and conventions supported by the Philippines)*3

11. Manufacture of firecrackers and other pyrotechnic devices (Sec. 5 of R.A. 7183)

Up to Twenty Percent (20%) Foreign Equity

12. Private radio communications network (R.A. 3846)

Up to Twenty –Five Percent (25%) Foreign Equity

13. Private recruitment, whether for local or overseas employment (Art. 27 of P.D. 442)

14. Contracts for the construction and repair of locally –funded public works (Sec. 1 of Commonwealth Act No. 541, Letter of Instruction No. 630) except:

a. Infrastructure/development projects covered in R.A. 7718; and
b. Pr0jects which are foreign funded or assisted and required to undergo international competitive bidding (Sec. 2(a) of R.A. 7718)

15. Contracts for the construction of defense related structures (Sec. 1 of CA 541)

Up to Thirty Percent (30%) Foreign Equity

16. Advertising (Art. XVI, Sec. 11 of the Constitution)

Up to Forty Percent (40%) Foreign Equity *4

17. Exploration, development and utilization of natural resources (Art. XII, Sec. 2 of the Constitution) *5
18. Ownership of private lands (Art. XII, Sec. 7 of the Constitution; Ch. 5, Sec. 22 of CA 141; Sec. 4 of R.A. 9182)
19. Operation of public utilities (Art. XII, Sec. 11 of the Constitution; Sec. 16 of CA 146)*6, 7
20. Educational institutions other than those established by religious groups and mission boards (Art. XIV, Sec. 4 of the Constitution)*8
21. Culture, production, milling, processing, trading excepting retailing, of rice and corn and acquiring, by barter, purchase or otherwise, rice and corn and the by-products thereof (Sec. 5 of P.D. 194) *9
22. Contracts for the supply of materials, goods and commodities to government-owned or controlled corporation, company, agency or municipal corporation (Sec. 1 of R.A. 5183)
23. Facility operator of an infrastructure or a development facility requiring a public utility franchise (Art. XII, sec. 11 for the Constitution; Sec. 2 (a) of R.A. 7718)
24. Operation of deep sea commercial fishing vessels (Sec. 27 of R.A. 8550)
25. Adjustment Companies (Sec. 332 of R.A. 10607 amending P.A. 612)
26. Ownership of condominium units (Sec. 5 of R.A. 4726)

LIST B: FOREIGN OWNERSHIP IS LIMITED FOR REASONS OF SECURITY, DEFENSE, RISK TO HEALTH AND MORALS AND PROTECTION OF SMALL AND MEDIUM-SCALE ENTERPRISES

Up to Forty Percent (40%) Foreign Equity

1.       Manufacture, repair, storage, and/or distribution of products and/or ingredients requiring Philippine National Police (PNP) clearance:

a. Firearms (handguns to shotguns), parts of firearms and ammunition therefore, instruments or implements used or intended to be used in the manufacture of firearms

b. Gunpowder

c.  Dynamite

d. Blasting Supplies

e. Ingredients used in making explosives

i. Chlorates of potassium and sodium

ii. Nitrates of ammonium, potassium, sodium barium, copper (11), lead (11), calcium and cuprite

iii. Nitric acid

iv. Nitrocellulose

v. Perchlorates of ammonium, potassium and sodium

vi. Dinitrocellulose

vii. Glycerol

viii.  Amorphous phosphorus

ix. Hydrogen peroxide

x. Strontium nitrate powder

xi. Toluene

f.        Telescopic sights, sniper scope and other similar devices
However, the manufacture or repair of these items may be authorized by the Chief of the PNP to non-Philippine nationals; Provided that a substantial percentage of output, as determined by the said agency, is exported. Provided further that the extent of foreign equity ownership allowed shall be specified in the said authority/clearance (R.A. 7042 as amended by R.A. 8179).

2.      Manufacture, repair, storage and/or distribution of products requiring Department of National Defense (DND) clearance:

a.      Guns and ammunition for warfare

b.      Military ordnance and parts thereof (e.g., torpedoes, depth charges, bombs, grenades, missiles)

c.       Gunnery, bombing and fire control systems and components

d.      Guided missiles/missile systems and components

e.      Tactical aircraft (fixed and rotary-winged0, parts and components thereof

f.        Space vehicles and component systems

g.      Combat vessels (air, land and naval) and auxiliaries

h.      Weapons repair and maintenance equipment

i.        Military communications equipment

j.        Night vision equipment

k.      Simulated coherent radiation devices, components and accessories

l.        Armament training devices

m.   Others as may be determined by the Secretary of the DND

However, the manufacture or repair of these items may be authorized by the Secretary of National Defense to non-Philippine national; Provided further that the extent of foreign equity ownership allowed shall be specified in the said authority/clearance (R.A. 7042 as amended by R.A. 8179).

3.      Manufacture and distribution of dangerous drugs (R.A. 7042 as amended by R.A. 8179)

4.      Sauna and steam bathhouses, massage clinics and other like activities regulated by law because of risks posed to public health and morals (R.A. 7042 as amended by R. A. 8179)

5.      All forms of gambling (R.A. 7042 as amended by R.A. 8179) except those covered by investment agreements with PAGCOR (P.D. 1869 as amended by R.A. 9487)

6.      Domestic market enterprises with paid-in equity capital of less than the equivalent of US$200,000 (R.A. 7042 as amended by R.A. 8179)

7.      Domestic market enterprises which involve advanced technology or employ at least fifty (50) direct employees with paid-in equity capital of less than the equivalent of US$100,000 (R.A. 7042 as amended by R.A. 8179)

*1 Foreigners are allowed to practice the following professions provided their country allows Filipinos to be admitted to the practice of these professions: aeronautical engineering, agricultural engineering, chemical engineering, civil engineering, electrical engineering, electronics engineering, electronics technician, geodetic engineering, mechanical engineering, metallurgical engineering, mining engineering naval architecture and marine engineering, sanitary engineering, medicine, medical technology, dentistry, midwifery, nursing, nutrition and dietetics, optometry, physical and occupational therapy, veterinary medicine, accountancy, architecture, chemistry, customs brokerage, environmental planning, geology, landscape architecture, librarianship, marine deck officers, marine engine officers, master plumbing, sugar technology, social work, teaching, agriculture, fisheries, guidance counseling, real estate service (real estate consultant, real estate appraiser, real estate assessor, real estate broker and real estate salesperson), respiratory therapy, psychology, real estate service ( real estate consultant, real estate appraiser, real estate assessor, real estate broker and real estate salesperson), sanitary engineering and interior design allow corporate practice by Filipinos.

*2 Full foreign participation is allowed for retail trade enterprises: (a) with paid-up capital of  US$2,500,000 or more provided that investments for establishing a store is not less than US$830,000; or (b) specializing in high end or luxury products, provided that the paid-up capital per store is not less than US$250,000 (Sec. 5 of R.A. 8762).

*3 Domestic Investments are also prohibited (Art. II, Sec. 8 of the Constitution; Conventions/Treaties to which the Philippines is a signatory).

*4 Lending companies regulated by SEC are allowed to have up to 49% foreign equity participation (Sec. 6 of R.A. 9474). Financing companies and investment houses regulated by SEC are allowed to have up to 60% foreign equity participation (Sec. 6 of R.A. 5980 as amended by R.A. 8556; P.D. 129 as amended by R.A. 8366).

*5 Full foreign participation is allowed through financial or technical assistance agreement with the President (Art. XII, Sec. 2 of the Constitution).

*6 The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such corporation or association be citizens of the Philippines (Article XII, Section 11 of the Constitution).

*7 A “public utility” is a business or service engaged in regularly supplying the public with some commodity or service of consequence such as electricity, gas, water, transportation, telephone or telegraph service (Supreme Court ruling JG Summit Holdings vs. Court of Appeals, et al., September 24, 2003). Power generation and the supply of electricity to the contestable market are not considered as public utility operation (Sec. 6 and Sec. 29, respectively of R.A. 9136).

*8 Control and administration of educational institutions shall be vested in citizens of the Philippines (Art. XIV, Sec. 4(2) of the Constitution).

*9 Full foreign participation is allowed provided that within the 30-year period from start of operation, the foreign investor shall divest a minimum of 60 percent of their equity to Filipino citizens (Sec. 5 of P.D. 194; NFA Council Resolution No. 193 s. 1998).