At the end of January this year, I wrote an article about the Philippine Senate’s passage of the “Foreign Investor Leasehold Liberalization Act” (SB2898), which proposed extending the maximum land lease term for foreign investors from 75 years to 99 years.
That policy direction immediately caught market attention. Now, on September 3, President Marcos officially signed the Republic Act No. 12252 (RA 12252), turning the proposal into law.
For Chinese enterprises seeking long-term establishment in the Philippines, this is an important signal. Yet behind the opportunity lie new constraints.
01｜99-Year Lease Term Now in Effect
Land tenure has always been a central issue for foreign investors in the Philippines. Since foreign ownership of land is prohibited, long-term leases have been the primary entry point. Previously, leases were capped at 50 years + 25 years, totaling 75 years. While not short, that term was often insufficient for projects with 30–50 year horizons, such as solar, storage, power plants, and industrial parks. For financing, collateral, and intergenerational operations, the 75-year cap created uncertainty.
With RA 12252, the maximum term is now 99 years—a guarantee that comes close to “quasi-ownership”. In regional comparison: Vietnam allows up to 70 years, Indonesia 80 years, Thailand even less. The Philippines’ extension to 99 years positions it as the most liberal regime in Southeast Asia.
Combined with recent tax reforms, business facilitation measures, and visa relaxation, this move reflects the government’s effort to shape a more stable long-term investment environment.
But the extension does not mean pure liberalization. RA 12252 also imposes stricter compliance rules:
Leases must be registered with the Registry of Deeds and annotated on the land title to be valid against third parties.
Land use must strictly align with the approved project; otherwise, the agreement is automatically terminated.
For projects involving national infrastructure, the President retains discretion to shorten the term.
In short : this is a “looser entry, tighter regulation” model—longer leases in exchange for stricter oversight.
02｜Which Sectors Benefit Most? Manufacturing, Energy, and Logistics
The industries that stand to gain the most from this change include:
① Manufacturing: From electronics and semiconductors to building materials and home appliances, land stability is the foundation for supply chain investment. A 99-year term eliminates the fear of losing land security midstream and allows both anchor companies and their suppliers to establish operations.
② Renewable Energy & Infrastructure: The Philippines is accelerating its energy transition. Solar, wind, and storage projects are capital-intensive with long payback periods. Without long-term land guarantees, such projects struggle to attract financing. The 99-year term now covers a project’s full lifecycle, making them bankable long-term assets. Similarly, ports, roads, and ecozones gain greater financing space and planning flexibility.
③ Logistics & Warehousing: With booming cross-border e-commerce and offshore manufacturing, demand for warehousing is surging. The Philippines, as a population and market hub, is becoming a logistics focal point. Long leases allow investment into large-scale distribution centers without renewal concerns.
Tourism and agriculture are also eligible, but under stricter rules. For tourism, projects must involve at least USD 5 million in investment, with 70% of capital deployed within three years. This high threshold signals the government’s intent to attract only well-capitalized, large-scale players.
In essence, the new policy is both an open window and a filter: only long-term, large-scale, economically impactful projects will enjoy the full 99-year benefit.
03｜Opportunities and Red Lines: Compliance Is Key
The flip side of the opportunity is heavy compliance. RA 12252 explicitly states:
Unregistered leases are invalid against third parties, affecting financing, mergers, and mortgages.
Any land use inconsistent with the approved project results in automatic termination.
Unauthorized subleasing or extensions render contracts void, with penalties of ₱1-10 million and 6 months to 6 years imprisonment.
The BOI (Board of Investments) and FIRB (Fiscal Incentives Review Board) now hold supervisory authority: if a project fails to commence within 3 years, the lessee must justify or risk losing both the lease and incentives. For projects linked to critical national services, the President may still shorten terms.
The message is clear: the Philippines welcomes long-term capital, but will not tolerate land speculation or inefficiency.
For Chinese enterprises, this creates both opportunity and risk. The advantage is legal certainty for manufacturing, energy, and logistics projects. The challenge is meeting high compliance thresholds and managing policy continuity, particularly beyond the 2028 elections. Contracts should include exit and adjustment mechanisms to guard against political shifts. Above all, timely project execution is non-negotiable, especially in tourism and agriculture where funding deadlines are strict.
In short, RA 12252 is a reform of “longer time + greater responsibility.” It opens a historic window, but success will depend on how well enterprises balance opportunity with compliance.
04｜Top 7 Questions for Enterprises
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Conclusion
Extending land leases from 75 to 99 years is more than a numeric change—it is a structural reform. For Chinese enterprises, it opens an unprecedented long-term opportunity while raising the compliance bar.
To capture the benefits, companies must treat compliance as a moat: rigor in land registration, usage management, project timelines, and exit planning will determine who thrives.
The window is open. The question is: who will stay long enough-and compliant enough-to seize it?
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