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PHILIPPINE FOREIGN INVESTMENT LAWS
 
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This web page features the full text of  the
Second Regular Investment Negative Lists A and B
of the
Foreign Investments Act of the Philippines.
 
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SECOND REGULAR INVESTMENT NEGATIVE LIST 
[Pursuant to Executive Order No. 362] 
[Effective October 24, 1996]

LIST A:
FOREIGN OWNERSHIP IS LIMITED
BY MANDATE OF THE CONSTITUTION AND SPECIFIC LAWS
 
No Foreign Equity
 

1.  Mass Media except recording [Article XVI, Section 11 of the Constitution; Presidential Memorandum Order dated 04 May 1994].

2.  Services involving the practice of licensed professions save in cases prescribed by law.

3.  Retail Trade [Republic Act No. 1180]

4.  Cooperatives [Chapter III, Article 26 of R. A. No. 6938]

5.  Private Security Agencies [Section 4 of R. A. No. 5487]

6.  Small-scale Mining [Section 3 of R. A. No. 7076]

7.  Utilization of marine resources in archipelagic waters, territorial sea, and exclusive economic zone [Article XII, Section 2 of the Constitution]

8.  Ownership, operation and management of cockpits [Section 5 of Presidential Decree No. 449]

9.  Manufacture, repair, stockpiling and/or distribution of nuclear weapons [Article II, Section 8 of the Constitution]

10.  Manufacture, repair, stockpiling and/or distribution of biological, chemical and radiological weapons [Various treaties to which the Philippines is a signatory and conventions supported by the Philippines)1

 
Up to Twenty-Five Percent (25%) Foreign Equity
 
11.  Private recruitment, whether for local or overseas employment [Articles 27 of Presidential Decree No. 442]

12.  Contracts for the construction and repair of locally-funded works except:

Up to Thirty Percent (30%) Foreign Equity
 
13.  Advertising [Article XVI, Section 11 of the Constitution]
 
Up to Forty Percent (40%) Foreign Equity

14.  Exploration, development and utilization of natural resources (Article XII, Section 2 of the Constitution)2

15.  Ownership of private lands [Article XII, Section 7 of the Constitution; Chapter 5, Section 22 of Commonwealth Act No. 141]

16.  Operation and management of public utilities [Article XII, Section 11 of the Constitution; Section 16 of Commonwealth Act No. 146]

17.  Ownership/establishment and administration of educational institutions [Article XIV, Section 2 of the Constitution]

18.  Engaging in the rice and corn administration [Presidential Decree No. 194]

19.  Financing companies regulated by the Securities and Exchange Commission [SEC] [Section 6, Republic Act No. 5980]

20.  Contracts for the supply of materials, goods and commodities to government-owned or controlled corporation, company, agency or municipal corporation [Republic Act No. 5183]

21.  Contracts for the construction of defense-related structure [e.g., land, air, sea and coastal defense, arsenals, barracks, depots, hangars, landing fields, quarters, hospitals] [Commonwealth Act No. 541]

22.  Project proponent and facility operator of a BOT project requiring a public utility franchise [Article XII, Section 11 of the Constitution; Section 2(a) of R. A. No. 7718]

23.  Private domestic and overseas construction contracts [Republic Act No. 4566; Section 14 of the Constitution]

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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 ingredients used in the manufacture thereof 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.    Chlorate of potassium and sodium
      ii.    Nitrates of ammonium 4vxc & 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, sniperscope and other similar devices [Republic Act No. 7042]
2.  Manufacture, repair, storage and/or distribution of products requiring Department of National Defense [DND] clearance:
    a.  Guns and ammunition for warfare
    b.  Nuclear weapons and ordnance
    c.  Military ordnance and parts thereof [e.g., torpedoes, mines, depthcharger, bombs, grenades, missiles]
    d.  Gunnery, bombing and fire control systems and components
    e.  Guided missiles/missile systems and components
    f.   Tactical aircraft (fixed and rotary-winged), components and parts thereof
    g.  Space vehicles and component system
    h.  Combat vessels (air, land, naval) and auxiliaries
    i.   Weapons repair and maintenance equipment
    j.   Military communications equipment
    k.  Night vision equipment
    l.   Stimulated coherent radiation devices, components and accessories
    m. Biological warfare components
    n.  Armament training devices
    [Republic Act No. 7042, as amended by R. A. No. 8179]
3.  Manufacture and distribution of dangerous drugs [Republic Act No. 7042, as amended by R. A. No. 8179]

4.  Sauna and steam bathhouses, massage clinics and other like activities regulated by law because of risks they may impose to public health and morals [Republic Act No. 7042, as amended by R. A. No. 8179]

5.  Other forms of gambling, e.g., race track operation; racehorse ownership/importation [Republic Act No. 7042, as amended by R. A. No. 8179]

6.  Domestic market enterprises with paid-in equity of less than the equivalent of US$200,000.00 unless they involve advance technology or they employ at least fifty [50] direct employees, the minimum paid-in capital will be reduced to US $ 100,000.00. [R. A. 7042, as amended by R.A. 8179]
 
 

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