11th Regular Foreign Investment Negative List A & B

Whereas, Republic Act No. 7042, also known as the “Foreign Investment Act of 1991”, as amended, mandates the formulation of a Regular Foreign Investment Negative List, covering investment areas or activities which are open to foreign investors and/or reserved to Filipino nationals;

Whereas, there is a need to formulate the Eleventh Regular Foreign Investment Negative List, replacing the Tenth Regular Foreign Investment Negative List, to reflect changes to List A and List B, pursuant to existing laws, consistent with the policy to ease restrictions on foreign participation in certain investment areas or activities;

Only the investment areas and/or activities listed in the attached Eleventh Regular Foreign Investment Negative List shall be reserved for Philippine nationals, subject to the exceptions and conditions indicated therein.

Amendments to List A may be made at any time to reflect changes instituted in specific laws, while amendments to List B shall not be made more often than once every two years, pursuant to Section8 of R.A. 7042, as amended, and its revised implementing rules and regulations.

11th Regular Foreign Investment Negative List A & B

issued on the 29th day of October, 2018

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 1987 Constitution; Presidential Memorandum dated 05 May 1994) and internet business (DOJ Opinion No. 40, s. 1998) 1
2. Practice of Professions 2 (Art. XII, Sec. 14 of the Constitution, Sec. 1 of R.A. No. 5181, Sec. 7[j] of R.A. No. 8981), including Radiologic and x-ray technology (R.A. No. 7431), Criminology (R.A. No. 6506), Law (Art. VIII, Section 5 of the Constitution; Rule 138, Sec. 2 of the Rules of Court of the Philippines), and Marine deck officers and marine engine officers (R.A. No. 10635), subject to the Annex on Professions attached herewith and forming an integral part of this document, indicating the professions where (a) foreigners are allowed to practice in the Philippines subject to reciprocity; and (b) where corporate practice is allowed. Foreigners may teach at higher education levels (R.A. No. 8292), provided the subject being taught is not a professional subject (i.e., included in a government board or bar examination).
3. Retail trade enterprises with paid-up capital of less than US$2,500,000 (Sec. 5 of R.A. 8762)3
4. Cooperative (Ch. III, Art. 26 of R.A. 6938 as amended by Ch. II, Art. 10 of R.A. No. 9250)
5. Organization and operation of private detective, watchmen or security guards agencies (SEC. 4 of R.A. 5487)
6. Small-scale mining (Sec. 3 of R.A. 7076)
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)4
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)5
11. Manufacture of firecrackers and other pyrotechnic devices (Sec. 5 of R.A. 7183)

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

12. Private recruitment, whether for local or overseas employment (Art. 27 of P.D. 442)
13. Contracts for the construction of defense-related structures (Sec. 1 of C.A. 541)

Up to Thirty Percent (30%) Foreign Equity

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

Up to Forty Percent (40%) Foreign EquitySubject to applicable regulatory frameworks, contracts for the construction and repair of locally-funded public works (SEC. 1 o C.A. No. 541, Letter of Instruction No. 630), except:
a. Infrastructure/development projects covered in R.A. No, 7718; and
b. Projects which are foreign-funded or assisted and required to undergo international competitive bidding (Sec. 2[a]of R.A. No. 7718)6

Exploration, development and utilization of natural resources (Art. XII, Sec. 2 of the Constitution)7

Ownership of private lands (Art. XII, Sec. 7 of the Constitution; Sec. 22 of C.A. No. 141; Sec. 4 of R.A. No 9182)

Operation of public utilities (Art. XII, Sec. 11 of the Constitution; Sec. 16 of C.A. No. 146; Sec. 2(a) of R.A. No. 7718),8 except power generation and the supply of electricity to the contestable market (Sec. 6 and Sec. 29, respectively, of R.A. No. 9136) and such other like businesses or services not covered by the definition of public utilities9

Educational institutions other than those established by religious groups and mission boards, for foreign diplomatic personnel and their dependents, and other foreign temporary residents (Art. XIV, Sec. 4 of the Constitution),10 of for short-term high-level skills development that do not form part of the formal education system as defined in Sec. 20 of Batas Pambansa No.232 (1982)

Culture, production, milling, processing, trading except 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. No. 194)11

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. No. 5183)12

Operation of deep sea commercial fishing vessels (Sec. 27 of R.A. No. 8550, as amended by R.A. No. 10654)

Ownership of condominium units (Sec. 5 of R.A. No. 4726)

Private radio communications network (Art. XII, Sec. 11 of the Constitution, NTC Memorandum Circular No. 10-8-91)

1 DOJ Opinion No. 40 (s. 1998) uses the term “Internet Business” to refer to internet access providers that merely serve as carriers for transmitting message, rather than being the creator of messages/information.
2 Section 1(b) of Professional Regulation Commission Resolution No. 2012-668 defines ‘practice of a profession” as an “activity/undertaking rendered by a registered and licensed professional or a holder of a Special Temporary Permit as defined in the scope of practice of a professional regulatory law.”
3 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 is not less than US$250,000 (Sec. 5 of R.A. No. 8762).
4 Domestic investments are also prohibited (Art II, Sec 8 of the Constitution; Conventions/Treaties to which the Philippines is a signatory).
5 Domestic investments are also prohibited (Art II, Sec 8 of the Constitution; Conventions/Treaties to which the Philippines is a signatory).
6 Section 2(a) of R.A. No. 7718 states that “[f] or the construction stage of these infrastructure projects, the project proponent may obtain financing from foreign and/or domestic sources and/or engage the service of a foreign and/or Filipino contractor. Provided, That, in case an infrastructure of a development facility’s operation requires a public utility franchise, the facility operator must be Filipino of if a corporation, it must be duly registered with the Securities and Exchange Commission and owned up to at least sixty percent (60%) by Filipinos Provided further, That in the case of foreign contractors, Filipino labor shall be employed or hired in the different phases of the construction where Filipino skills are available xxx”
7 Full foreign participation is allowed through financial or technical assistance agreement entered into with the President (Art. XII, Sec. 2 of the Constitution).
8 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 must be citizens of the Philippines (Article XII, Section 11 of the Constitution).
9 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 in JG Summit Holdings v. Court of Appeals, et al., September 24, 2003).
10 Control and administration of educational institutions shall be vested in citizens of the Philippines (Art. XIV, Sec.4[2] of the Constitution).
11 Full foreign participation is allowed provided that with the 30-year period from start of operation, the foreign investor shall divest a minimum of sixty-percent (60%) of their equity to Filipino citizens (Sec. 5 of PD No. 194; NFA Council Resolution No. 193, s. 1998).
12 A contract may be awarded to any contractor or bidder who is a citizen, corporation or association of a foreign country the or regulations of which grant similar rights or privileges to citizens of the Philippines (Sec. 1 of R. A. No. 5183).

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)

ANNEX ON PROFESSIONS

A. Foreigners are allowed to practice the following professions in the Philippines provided that their home country allows Filipinos to be admitted to the practice of these professions:

  • Accountancy (Sec. 34, R.A. No. 9298)
  • Aeronautical engineering (Section 14, P.D. No. 1570)
  • Agricultural and biosystems engineering (Sections 15 and 31, R.A. No.10915)
  • Agriculture (Section 27, PRC Resolution No. 2000-663)
  • Architecture (Sections 13 and 27, R.A. No. 9266)
  • Chemical engineering (Section 30, R.A. No. 9297
  • Chemistry (Sections 16, 18, and 34, R.A. 10657
  • Civil engineering (Section 25, R.A. NO, 544, as amended)
  • Customs brokers (Section 25, R.A. No. 9280)
  • Dentistry (Secs. 14 and 31, R.A. No. 9484)
  • Electrical engineering (Section 38, R.A. No. 7920)
  • Electronics engineering (Sections 13 and 33. R.A. No. 9292)
  • Electronics technician (Sections 13 and 33. R.A. No. 9292)
  • Environmental planning (Sections 18 and 28, R.A. No. 10587)
  • Fisheries (Section 27, PRC Resolution No. 2000-664)
  • Forestry (Sections 14 and 27, R.A. No.10690)
  • Geodetic engineering (Section26, R.A. No. 8560)
  • Geology (Sections 17 and 33, R.A. No. 10166)
  • Guidance and counseling (Sections 13 and 29, R.A. No. 9258)
  • Interior design (Sections 15 and 29 R.A. No. 10350)
  • Landscape architecture (Sections 13 and 29) R.A. No. 9053)
  • Librarianship (Sections 15 and 28, R.A. No. 9246)
  • Master plumbing (Section 21, R.A. No. 1378)
  • Mechanical engineering (Section 39, R.A. No. 8495)
  • Medical technology (Section 27, R.A. No. 5527, as amended)
  • Medicine* (Section 9, R.A. No. 2382, as amended)
  • Metallurgical engineering (Sections 17 and 34, R.A. No. 10688)
  • Midwifery (Section 22, R.A. No. 7392)
  • Mining engineering (Sections 15, 16, and 28, R.A. No. 10698)
  • Naval architecture (Sections 13 and 31 R.A. No. 10698)
  • Nursing (Sections 13 and 20, R.A, No. 9173)
  • Nutrition and dietetics (Sections 15 and 31, R.A. No. 10862)
  • Optometry (Section 34, R.A. No. 8050)
  • Pharmacy (Sections 14 and 21, R.A. No. 10918)
  • Physical and occupational therapy (Sections 15 and 21, R.A. No. 5680)
  • Psychology (Sections 12, 13 and 24, R.A. No. 10029)
  • Real estate service (real estate consultant, real estate appraiser, real estate assessor, real estate broker and real estate salesperson) (Sections 13 and 34, R.A. No. 10024)
  • Respiratory therapy (Sections 13 and 34, R.A. No. 10024)
  • Sanitary engineering (Section 32 R.A. No. 1364)
  • Social work (Section 18, R.A. No. 4373, as amended)
  • Teaching at elementary and secondary levels (Sections 15 and 24, R.A. No. 7836, as amended)
  • Veterinary medicine (Sections 15 and 31, R.A. No. 9268)
  • Other professions as may be provided by law or by treaty where the Philippines is a party
    *For purposes of the Revised Foreign Investment Negative List, ergotherapy, speech therapy, homeopathy and acupuncture are not considered part of the medical profession and are therefore open to foreigners.

B. Corporate practice is allowed in the following professions, subject to the requirements and conditions under the pertinent professional regulatory law:

  • Aeronautical engineering (Section 28, P.D. No. 1570)
  • Agricultural and biosystems engineering (Section 29, R.A. No. 10915)
  • Architecture (Section 37, R.A. No. 9266)
  • Chemistry (Section 35, R.A. No. 10657)
  • Electronics engineering (Section 28, R.A. No. 9292)
  • Environmental planning (Section 25, R.A. No. 10587)
  • Forestry (Section 25, R.A. No. 10690)
  • Guidance and counseling (Section 27, R.A. No. 9258)
  • Interior design (Section 26, R.A. No 10350)
  • Landscape architecture (Section 26, R.A. No. 9053)
  • Naval Architecture (Section 30 [g], R.A. No. 10698)
  • Psychology (Section 33, R.A. No. 10029)
  • Real estate service (real estate consultant, real estate appraiser, real estate assessor, real estate broker and real estate salesperson) (Section 32, R.A. No. 9646)
  • Sanitary engineering (Section 30, R.A. No. 1364)
  • Social work (Section 1[c]. R.A. No. 4373, as amended)


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. 7076)

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).

9th Regular Foreign Investment Negative List B

9th Regular Foreign Investment Negative List B

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 therefor, 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 rotarywinged), 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) Stimulated coherent radiation devices, components and accessories
l) Armament training devices
m) Other 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 the DND 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)

3. Manufacture and distribution of dangerous drugs (R.A. 7042 as amended by R.A. 8719)

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 (R.A. 9487) operating within special economic zones administered by the Philippine Economic Zone Authority (R.A. 7916)

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)

9th Regular Foreign Investment Negative List A

9th Regular Foreign Investment Negative List A

9th Regular Foreign Investment Negative List A

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)

a) Engineering
i. Aeronautical engineering (P.D. 1570)
ii. Agricultural engineering (R.A. 8559)
iii. Chemical engineering (R.A. 9297)
iv. Civil engineering (R.A. 1582)
v. Electrical engineering (R.A. 7920)
vi. Electronics and Communication engineering (R.A. 9292)
vii. Geodetic engineering (R.A. 8560)
viii. Mechanical engineering (R.A. 8495)
ix. Metallurgical engineering (P.D. 1536)
x. Mining engineering (R.A. 4274)
xi. Naval Architecture and Marine engineering (R.A. 4565)
xii. Sanitary engineering (R.A. 1364)
b) Medicine and Allied Professions
i. Medicine (R.A. 2382 as amended by R.A. 4224)
ii. Medical Technology (R.A. 5527 as amended by R.A. 6318, P.D. 6138, P.D. 498 and P.D. 1534)
iii. Dentistry (R.A. 9484)
iv. Midwifery (R.A. 7392)
v. Nursing (R.A. 9173)
vi. Nutrition and Dietetics (P.D. 1286)
vii. Optometry (R.A. 8050)
viii. Pharmacy (R.A. 5921)
ix. Physical and Occupational Therapy (R.A. 5680)
x. Radiologic and X-ray Technology (R.A. 7431)
xi. Veterinary Medicine (R.A. 9268)
c) Accountancy (R.A. 9298)
d) Architecture (R.A. 9266)
e) Criminology (R.A. 6506)
f) Chemistry (R.A. 754)
g) Customs Brokerage (R.A. 9280)
h) Environmental Planning (P.D. 1308)
i) Forestry (R.A. 6239)
j) Geology (R.A. 4209)
k) Interior Design (R.A. 8534)
l) Landscape Architecture (R.A. 9053)
m) Law (Art. VIII, Sec. 5 of the Constitution; Rule 138, Sec. 2 of the Rules of Court of the Philippines)
n) Librarianship (R.A. 9246)
o) Marine Deck Officers (R.A. 8544)
p) Marine Engine Officers (R.A. 8544)
q) Master Plumbing (R.A. 1378)
r) Sugar Technology (R.A. 5197)
s) Social Work (R.A. 4373)
t) Teaching (R.A. 7836)
u) Agriculture (R.A. 8435)
v) Fisheries (R.A. 8550)
w) Guidance counseling (R.A. 9258)
x) Real estate service (R.A. 9646)
y) Respiratory therapy (R.A. 10024)
z) Psychology (R.A. 10029)

3. Retail trade enterprises with paid-up capital of less than US$2,500,000
(Sec. 5 of R.A. 8762) *2
4. Cooperatives (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. 7076)
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-personnel 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 CA 541, LOI 630) except:

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

17. Exploration, development and utilization of natural resources (Art. XII, Sec. 2 of the Constitution) *4
18. Ownership of private lands (Art. XII, Sec. 7 of the Constitution; Ch. 5, Sec. 22 of CA 141; Sec. 4 of RA 9182)
19. Operation and management of public utilities (Art. XII, Sec. 11 of the Constitution; Sec. 16 of CA 146)
20. Ownership/establishment and administration of educational institutions (Art. XIV, Sec. 4 of the Constitution)
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) *5
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. Project Proponent and Facility Operator of a BOT project requiring a public utilities franchise (Art. XII, Sec. 11 of theConstitution; Sec. 2a of R.A. 7718)
24. Operation of deep sea commercial fishing vessels (Sec. 27 of R.A. 8550)
25. Adjustment Companies (Sec. 323 of PD 612 as amended by P.D. 1814)
26. Ownership of condominium units where the common areas in the condominium project are co-owned by the owners of the separate units or owned by a corporation (Sec. 5 of R.A. 4726)

Up to Forty-Nine Percent (49%) Foreign Equity

27. Lending Companies (SEC.6 of R.A. 9474) *6

Up to Sixty Percent (60%) Foreign Equity

28. Financing companies regulated by the Securities and Exchange Commission (SEC) (Sec. 6 of R.A. 5980 as amended by R.A. 8556) *6
29. Investment houses regulated by the SEC (Sec. 5 of P.D. 129 as amended by R.A. 8366) *6 (Sec. 6 of R.A. 5980 as amended by R.A. 8556) *6

*1 This is limited to Filipino citizens save in cases prescribed by law

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

*5 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)

*6 No foreign national may be allowed to own stock in lending companies, financing companies or investment houses unless the country of which he is a national accords the same reciprocal rights to Filipinos (Sec. 6 of RA 9474; Sec. 6 of R.A. 5980 as amended by R.A. 8556; P.D. 129 as amended by R.A. 8366)

Philippines Foreign Investment Negative List B

Executive Order No. 98, s. 2012

Executive Order No. 98, s. 2012
MALACAÑAN PALACE
MANILA

BY THE PRESIDENT OF THE PHILIPPINES

EXECUTIVE ORDER NO. 98

PROMULGATING THE NINTH REGULAR FOREIGN INVESTMENT NEGATIVE LIST

WHEREAS, Republic Act (RA) No. 7042, also known as the “Foreign Investments Act of 1991,” as amended by RA 8179, provides for the formulation of a Regular Foreign Investment Negative List, covering investment areas/activities which may be opened to foreign investors and/or reserved to Filipino nationals; and

WHEREAS, there is a need to formulate the Ninth Regular Foreign Investment Negative List, replacing the Eight Regular Foreign Investment Negative List, to reflect changes to List A pursuant to existing laws and upon recommendation of concerned agencies.

NOW, THEREFORE, I, BENIGNO S. AQUINO III, President of the Philippines, by virtue of the powers vested in me by law, do hereby order:

SECTION 1. Ninth Regular Foreign Investment Negative List. Only the investment areas and/or activities listed in the Annex hereof shall be reserved to Philippine nationals, and hereafter shall be referred to as the Ninth Regular Foreign Investment Negative List. The extent of foreign equity participation in these areas shall be limited to the percentages indicated in the List.

SECTION 2. Amendments. Amendments to List A may be made at any time to reflect changes instituted in specific laws while amendments to List B shall not be made more often than once every two years, pursuant to Section 8 of RA 7042, as amended, and its revised implementing rules and regulations.

SECTION 3. Repeal. All issuances, orders, rules and regulations, or parts thereof, which are inconsistent with this Executive Order are hereby repealed, amended or modified accordingly.

SECTION 4. Separability. If any provision of this Executive Order is declared invalid or unconstitutional, the other provisions not affected thereby shall remain valid and subsisting.

SECTION 5. Effectivity. This Executive Order shall take effect fifteen (15) days after its publication in a newspaper of general circulation.

DONE, in the City of Manila, this 29th day of October, in the year of our Lord, Two Thousand and Twelve.

(Sgd.) BENIGNO S. AQUINO III

By the President:
(Sgd.) PAQUITO N. OCHOA, JR.
Executive Secretary