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Republic Act No. 12252, otherwise known as "An Act Liberalizing the Lease of Private Lands by Foreign Investors, Establishing the Stability of Long-Term Lease Contracts, Amending for the Purposes Republic Act No. 7652, Otherwise Known as the "Investors Lease Act" (the "Amended Investors Lease Act") was enacted into law on September 3, 2025. The Amended Investors Lease Act marks another major shift in the Philippines' investment policy by liberalizing the terms under which foreign investors may lease private lands.
Under the old regime, foreign investors (i.e., non-Philippine nationals) may lease private lands for a period of 50 years (renewable once for a period of not more than 25 years) subject to certain conditions. Under the Amended Investors Lease Act, the lease term is now up to an aggregate period of 99 years, subject to the following conditions:
- the President may impose a shorter lease period for investors engaged in vital services or industries considered as critical infrastructure, upon the recommendation of the Fiscal Incentives Review Board;
- the leased area can only be used for the approved and registered investment purposes;
- the leased premises should comprise such area as may be reasonably required for the purpose of the approved and registered investment;
- the investment must be registered under the Foreign Investments Act of 1991, the CREATE Act and CREATE MORE Act or other applicable laws, or has complied with investment requirements prescribed by appropriate Investment Promotion Agencies pursuant to existing laws; and
- the lease contract is registered with the Registry of Deeds of the province or city where the leased area is located and is annotated on the certificate of title covering the leased area.
Notably, the requirement to register the lease contract with the Registry of Deeds was not present under the previous law. The Registry of Deeds can register the lease agreement only if certain conditions are met, including the requirement that such lease agreement must have termination clauses relating to change in purpose or failure to commence the project within a reasonable period from the signing of the lease agreement.
The Amended Investors Lease Act also provides for the automatic termination of the lease agreement where the land is used for unauthorized purposes or where the investment is withdrawn within the period of the lease contract. With respect to renewal of lease agreements, the law provides that renewals at the option of the lessee subject to the same terms and conditions as the original contract is interpreted as a renewal upon mutual agreement of the parties. The foreign lessee must also show that it has made substantial social and economic contributions to the country as a condition for the renewal of the lease agreement.
In the case of tourism-related investments, (i) only projects with a minimum investment of USD 5,000,000 are eligible and (ii) at least seventy percent (70%) of the investment must be infused into the project within three years from the signing of the lease agreement.
In sum, the Amended Investors Lease Act seeks to promote foreign investment by liberalizing the term of land leases by extending the permissible lease period, while providing enhanced security and stability to long-term lease arrangements. It reflects the government?s broader policy objective of promoting economic development through increased foreign capital, while retaining oversight mechanisms aimed at safeguarding public interest.
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