Philippines unlocks 99-year land leases for foreigners — is now the time to cash in on PH economic boom?

Manila: The Philippines has just dropped a bombshell move to snag mega foreign cash.

How?

Amid the noise (and the haste) surrounding the multibillion flood-control scam, a new legislation has been crafted to drive foreign investments in energy, transportation, infrastructure, manufacturing — and, more importantly, in agriculture — as part of on-going reforms to raise the country's status as an upper-middle income country (UMIC).

Major step

In a major step, President Ferdinand Marcos Jr. inked Republic Act (RA) 12252 on September 3, 2025, supercharging private land lease rules for global investors.

The new law amends the decades-old Investors’ Lease Act (RA 7652) and extends allowable lease periods to as long as 99 years for projects in priority sectors, aligning the Philippines more closely with regional investment hubs in the Association of Southeast Asian Nations (Asean).

What changed under RA 12252

Under the revised framework, foreign investors with approved and registered projects may now lease private land for up to 99 years.

This nearly doubles the previous limit of 50 years (renewable by 25).

The reform introduces several investor-friendly provisions:

• Longer lease terms: Industrial, tourism, agriculture, agroforestry, and conservation projects now qualify for leases of up to 99 years.

• Transferable leasehold rights: Leasehold interests may be sold, assigned, transferred, or used as collateral for financing, improving access to credit and project bankability.

• Stronger legal security: Lease contracts must be registered with the Registry of Deeds and annotated on the land title, ensuring enforceability against third parties.

• National interest safeguards: The President may shorten lease terms for reasons of national security or critical infrastructure, upon recommendation of relevant agencies.

• Stiffer penalties: Violations — such as exceeding lease terms or using land outside the approved purpose — now carry fines of ₱1 million to ₱10 million, imprisonment of up to six years, and automatic contract voiding.

Land security: Why it matters for investors

Analysts say the extended lease period significantly improves investment certainty, especially for capital-intensive projects that require long payback horizons.

By reducing renewal risk and allowing leasehold rights to be monetised or pledged, RA 12252 lowers financing costs and makes the Philippines more competitive with neighbours that already offer 70- to 99-year land-use arrangements.

This is expected to benefit manufacturing, ecozones, renewable energy, logistics, and eco-tourism developments, where land security is critical to project viability.

Foreign investors remain lessees — not owners — under the law.

Land ownership stays with Filipino individuals or Filipino-controlled companies, and full control reverts to the lessor at the end of the lease unless both parties agree to renew.

Economic booster

For the broader economy, the government sees the reform as a catalyst for foreign direct investment (FDI), job creation, and regional development.

Vast tracts of arable land in the country remain idle or underutilised, resulting in huge underinvestment in agriculture, a key driver of higher local food prices.

Longer leases are expected to stimulate new investments, especially in emerging growth corridors such as Nothern and Central Luzon, parts of Visayas, the Bicol region and Mindanao (an island bigger than Portugal, or Belgium + The Netherlands combined).

Such investments could support local supply chains without altering constitutional limits on land ownership.

Business groups say the measure supports inclusive growth by channeling foreign capital into productive sectors rather than speculative land buying.

The law also complements existing incentives in "economic zones" and tourism estates, reinforcing the country’s push to attract long-term, patient capital rather than short-term inflows.

How foreigners can invest in property

Constitutional rules remain unchanged. The 1987 Constitution restricts land ownership to Filipino citizens and corporations that are at least 60% Filipino-owned.

While foreigners cannot own private land directly, they may:

• Lease private land for up to 99 years under RA 12252

• Own condominium units, subject to the 40% foreign ownership cap per building

• Invest through Philippine corporations that meet Filipino ownership thresholds

Dual citizens and former natural-born Filipinos retain full ownership rights, while foreign spouses may co-own property only to the extent allowed under Philippine family law.

Striking a balance

By extending land lease terms to 99 years, RA 12252 strikes a balance between investor confidence and constitutional safeguards.

For investors, it offers time, certainty, and flexibility. For the Philippines, it promises stronger FDI inflows, job creation, and sustained growth—without selling an inch of national soil.

Taxes, compliance

Lease registration and property transactions remain subject to documentary stamp taxes and local transfer taxes.

Tax amnesty

Separately, a real property tax amnesty under RA 12001 allows unpaid local property taxes incurred before July 2024 to be settled without penalties until July 2026, providing additional relief for landowners and developers.