Investment Incentives and Legal Safeguards
With the growing number of tourists in the Philippines, the enactment of Republic Act No. 12252 (RA 12252), otherwise known as the “Act Liberalizing the Lease of Private Lands by Foreign Investors” on 03 September 2025, paved the way for the liberalization of the leasing of private lands to foreign investors.[1] RA 12252 amended Republic Act No. 7652, also known as the “Investors’ Lease Act,” primarily to strengthen investors’ confidence in the Philippines to stimulate the inflow of foreign capital through secure leasing transactions and arrangements, with the long-term goal of generating employment opportunities and ultimately, promoting economic growth.
One of the most significant incentives brought by RA 12252 is the extension of the allowable lease period for foreign investors, from the previous maximum of seventy-five (75) years to now up to ninety-nine (99) years. This incentive provides greater stability and predictability for investors engaged in long-term projects that include agro-industrial ventures and ecological conservation programs. The extended lease period likewise gives investors greater security and sufficient time to recover their invested capital. [2]
Furthermore, the law strengthens the enforceability of lease contracts by requiring their registration with the Registry of Deeds and recognizing such registration as the operative act binding even against third parties. This legal safeguard provides investors with greater protection against possible disputes involving the said lease properties. Moreover, RA 12252 allows the leasehold rights to be transferred, assigned or used as collateral for financing.
Economic Growth and Foreign Investment
It is precisely because of these recent economic trends that the enactment of the said law became urgent. According to the Bangko Sentral ng Pilipinas (BSP), the net foreign direct investment (FDI) reached US$8.9 billion in 2024 and further declined 17% in 2025 to only $7.8 billion. These figures prompted lawmakers to create a more investor-friendly environment in order to reverse the downward trend and encourage long-term foreign capital inflows.
Ultimately, the enactment of RA 12252 reflects the Philippines’ unwavering commitment to modernizing its economic policies in order to attract more investors and compete more effectively within Southeast Asia. By offering longer lease periods and stronger legal protections, the law is expected to attract more investors while maintaining a balance between national interests and constitutional safeguards. Firms such as the ABO Law Firm can support the implementation of this law by guiding foreign investors through its legal and regulatory requirements. If effectively implemented, RA 12252 may serve as a catalyst for increased foreign participation in the Philippine industries, thereby significantly contributing to the country’s economic development.
Written by: Atty. Christine C. Tiamzon
[1] An Act Liberalizing the Lease of Private Lands by Foreign Investors, Republic Act. No. 12252 (03 September 2025).
[2] Reutors. Philippines extends land leases to 99 years to attract foreign investors. https://www.reuters.com/markets/asia/philippines-extends-land-leases-99-years-attract-foreign-investors-2025-09-05/?utm_source=chatgpt.com
