With regards to the foreign ownership laws by its neighboring Asian countries, the Philippines is lacking initiatives on amending its laws to respond to the current global trading. According to The Chamber of Real Estate & Builders’ Associations, Inc. (CREBA), it is time for Philippine lawmakers to review the existing foreign ownership laws of the Philippines. For CREBA, they believe that allowing foreigners to own land in the Philippines will encourage foreign investors to put bigger and more substantial investments in the Philippines and attract the much-needed capital that will create a butterfly in the country. CREBA also stated that foreign investment will also promote additional opportunities for local businesses and employment and raise additional government revenues from taxes.
It is stated in the 1987 Philippine Constitution that ownership of land in the Philippines is only restricted to a person or entities considered as Philippine national or Filipino citizens while Filipinos with dual citizenship and corporations with at least 60 percent Filipino ownership are permitted to own land, buildings, condominiums and townhouses under limitations mandated by law.
Foreign nationals, however, may buy condominium units as long as not more than 40 percent of all the units in a project are acquired by foreigners while Alien acquisition of Philippine real estate may also be allowed under the following circumstances: (1) land has been acquired prior to the 1935 Philippine Constitution; and (2) if acquisition is the result of hereditary succession.
In Asia countries such as Malaysia, Singapore and Thailand, foreigners are allowed to lands but subject to the limits and approval by the government as to the extent and ownership. While countries such as South Korea and Taiwan allow foreign ownership to countries who offer the same privilege.
However, CREBA suggested the following conditions so that there will still be mechanisms of control and only act as support for existing laws:
- In order to protect the Philippines’ natural resources, acquisition of lands by foreigners shall be limited to lands classified as alienable and disposable.
- Agricultural lands purchased by foreigners must remain agricultural in use and shall not be converted to any other purpose. The produce emanating there shall be retained for local consumption, and any excess in production can only be exported after due government certification.
- Ownership shall likewise be limited to undeveloped and under-developed areas to spur growth of new communities and centers of business activities particularly in the countryside.
Furthermore, CREBA believes that attracting and encouraging foreign direct investments is a key factor for the Philippines to develop. Property rights and real estate ownership security, in particular gives investors the confidence, flexibility and capacity to take more risks with their investments resulting in bigger investments