EXECUTIVE ORDER NO. 139
EXECUTIVE ORDER NO. 139 -
PROMULGATING THE FIFTH REGULAR FOREIGN INVESTMENT NEGATIVE LIST
WHEREAS,
Republic Act (RA) No. 7042 also known as the Foreign Investments Act of
1991, as amended by RA 8179, provides for the formulation of a Regular
Foreign Investment Negative List covering investment areas/activities
which may be opened to foreign investors and/or reserved to Filipino
Nationals;
WHEREAS, the Regular Foreign Investment Negative List, consisting of
Lists A and B, is effective for two years pursuant to Sec. 8 of RA
7042 as amended and its Implementing Rules and Regulations;
WHEREAS, there is a need to formulate a Fifth Regular Foreign
Investment Negative List to reflect changes to List A and B provided in
new laws and recommended by concerned government agencies;
NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Republic
of the Philippines, by virtue of the powers vested in me by law, do
hereby order:
Section 1. Only the investment areas and/or
activities listed in Annex A hereof shall be reserved to Philippines
nationals, and hereafter shall be referred to as the Fifth Regular
Foreign Investment Negative List. The extent of foreign equity
participation in these areas shall be limited to the percentages
indicted in the List.
Sec. 2. Any amendment to List A may be made at any
time to reflect changes instituted in specific laws while amendments to
List B shall not be made more often than once every two years, pursuant
to Sec. 8 of RA 7042 as amended, and its Implementing Rules and
Regulations.
Sec. 3. All orders, issuances, rules and
regulations or parts thereof, which are inconsistent with this Order
are hereby revoked or modified accordingly.
Sec. 4. This Executive Order shall take effect
fifteen (15) days after publication.
Done in the City of Manila,
this 22nd day of October, in the year of Our Lord, Two Thousand and Two.
“ANNEX A”
FIFTH REGULAR FOREIGN INVESTMENT NEGATIVE LIST
LIST A: FOREIGN OWNERSHIP IS LIMITED BY MANDATE OF THE CONSTITUTION AND
SPECIFIC LAWS
No Foreign Equity
1. Mass media except recording (Art. XVI, Sec. 11 of
the Constitution; Presidential Memorandum dated 04 May 1994)
2. Practice of all professions 1
a.
Engineering
i.
Aeronautical engineering
ii.
Agricultural engineering
iii. Chemical
engineering
iv. Civil
engineering
v. Electrical
engineering
vi.
Electronics and communication engineering
vii. Geodetic
engineering
viii.
Mechanical engineering
ix.
Metallurgical engineering
x. Mining
engineering
xi. Naval
architecture and marine engineering
xii. Sanitary
engineering
b. Medicine
and allied professions
i.
Medicine
ii. Medical
technology
iii. Dentistry
iv. Midwifery
v. Nursing
vi. Nutrition
and dietetics
vii. Optometry
viii. Pharmacy
ix. Physical
and occupational therapy
x. Radiologic
and x-ray technology
xi. Veterinary
medicine
c. Accountancy
d. Architecture
e. Criminology
f. Chemistry
g. Customs
brokerage
h.
Environmental planning
i. Forestry
j. Geology
k Interior
design
l. Landscape
architecture
m. Law
n.
Librarianship
o. Marine deck
officers
p. Marine
engine officers
q. Master
plumbing
r. Sugar
technology
s. Social work
t. Teaching
u. Agriculture
v. Fisheries
(Art. XII, Sec. 14 of the
Constitution; Sec. 1 of RA 5181)
3. Retail trade enterprises with paid-up capital of
less than US$2,500,000 (Sec. 5 of RA 8762) 2
4. Cooperatives (Ch. III, Art. 26 of RA 6938)
5. Private security agencies (Sec. 4 of RA 5487)
6. Small-scale mining (Sec. 3 of RA 7076)
7. Utilization of marine resources in archipelagic
waters, territorial sea, and exclusive economic zone (Art. XII, Sec. 2
of the Constitution)
8. Ownership, operation and management of cockpits
(Sec. 5 of PD 449)
9. Manufacture, repair, stockpiling and/or
distribution of nuclear weapons (Art. II, Sec. 8 of the Constitution) 3
10. Manufacture, repair, stockpiling and/or
distribution of biological, chemical and radiological weapons and
anti-personnel mines (Various treaties to which the Philippines is a
signatory and conventions supported by the Philippines) 3
11. Manufacture of firecrackers and other pyrotechnic
devices (Sec. 5 of RA 7183)
Up to Twenty-Percent (20%) Foreign Equity
12. Private radio communications network (RA 3846)
Up to Twenty-Five Percent (25%) Foreign Equity
13. Private recruitment, whether for local or
overseas employment (Art. 27 of PD 442)
14. Contracts for the construction and repair of
locally-funded public works (Sec. 1 of Commonwealth Act No. 541, Letter
of Instruction No. 630) except:
a.
Infrastructure/development projects covered in RA 7718; and
b. Projects
which are foreign funded or assisted and required to undergo
international competitive bidding (Sec. 2(a) of RA 7718)
15. Contracts for the construction of defense-related
structures (Sec. 1 of CA 541)
Up to Thirty Percent (30%) Foreign Equity
16. Advertising (Art. XVI, Sec. 11 of the
Constitution)
Up to Forty Percent (40%) Foreign Equity
17. Exploration, development and utilization of
natural resources (Art. XII, Sec. 2 of the Constitution) 4
18. Ownership of private lands (Art. XII, Sec. 7 of
the Constitution; Ch. 5, Sec. 22 of CA 141)
19. Operation and management of public utilities
(Art. XII, Sec. 11 of the Constitution; Sec. 16 of CA 146)
20. Ownership/establishment and administration of
educational institutions (Art. XIV, Sec. 4 of the Constitution)
21. Culture, production, milling, processing, trading
excepting retailing, of rice and corn and acquiring, by barter,
purchase or otherwise, rice and corn and the by-products thereof 5
(Sec. 5 of PD 194; Sec. 15 of RA 8762) 5
22. Contracts for the supply of materials, goods and
commodities to government-owned or controlled corporation, company,
agency or municipal corporation (Sec. 1 of RA 5183)
23. Project proponent and facility operator of a BOT
Project requiring a public utilities franchise (Art. XII, Sec. 11 of
the Constitution; Sec. 2(a) of RA 7718)
24. Operation of deep sea commercial fishing vessels
(Sec. 27 of RA 8550)
25. Adjustment companies (Sec. 323 of PD 612 as
amended by PD 1814)
26. Ownership of condominium units where the common
areas in the condominium project are co-owned by the owners of the
separate units or owned by a corporation (Sec. 5 of RA 4726)
Up to Sixty Percent (60%) Foreign Equity
27. Financing companies regulated by the Securities
and Exchange Commission (SEC) (Sec. 6 of RA 5980 as amended by RA 8556)
6
28. Investment houses regulated by the SEC (Sec. 5 of
PD 129 as amended by RA 8366) 6
Footnotes
1. This is limited to Filipino citizens save
in cases prescribed by law
2. Full foreign participation is allowed for
retail trade enterprises: (a) with paid-up capital of US$2,500,000 or
more provided that investments for establishing a store is not less
than US$830,000; or (b) specializing in high end or luxury products,
provided that the paid-up capital per store is not less than US$250,000
(Sec. 5 of RA 8762)
3. Domestic investments are also prohibited
(Art. II, Sec. 8 of the Constitution; Conventions/Treaties to which the
Philippines is a signatory)
4. Full foreign participation is allowed
through financial or technical assistance agreement with the President
(Art. XII, Sec. 2 of the Constitution)
5. Full foreign participation is allowed
provided that within the 30-year period from start of operation, the
foreign investor shall divest a minimum of 60 percent of their equity
to Filipino citizens (Sec. 5 of PD 194; NFA Council Resolution No. 193
s. 1998)
6. No foreign national may be allowed to own
stock in financing companies or investment houses unless the country of
which be is a national accords the same reciprocal. rights to Filipinos
(Sec. 6 of RA 5980 as amended by RA 8556; PD 129 as amended by RA 8366)
LIST B: FOREIGN OWNERSHIP IS LIMITED FOR REASONS OF SECURITY, DEFENSE,
RISK TO HEALTH AND MORALS AND PROTECTION OF SMALL-AND MEDIUM-SCALE
ENTERPRISES
Up to Forty Percent (40 %) Foreign Equity
1. Manufacture, repair, storage, and/or distribution
of products and/or ingredients requiring Philippine National Police
(PNP) clearance:
a.
Firearms (handguns to shotguns), parts of firearms and ammunition
therefor, instruments or implements used or intended to be used in the
manufacture of firearms
b. Gunpowder
c. Dynamite
d. Blasting
supplies
e. Ingredients
used in making explosives:
i.
Chlorates of potassium and sodium
ii. Nitrates
of ammonium, potassium, sodium barium, copper (11), lead (11), calcium
and cuprite
iii. Nitric
acid
iv.
Nitrocellulose
v.
Perchlorates of ammonium, potassium and sodium
vi.
Dinitrocellulose
vii. Glycerol
viii.
Amorphous phosphorus
ix. Hydrogen
peroxide
x. Strontium
nitrate powder
xi. Toluene
f.
Telescopic sights, sniper scope and other similar devices
However, the manufacture or
repair of these items may be authorized by the Chief of the PNP to
non-Philippine nationals; Provided that a substantial percentage of
output, as determined by the said agency, is exported. Provided further
that the extent of foreign equity ownership allowed shall be specified
in the said authority/clearance (RA 7042 as ended by 8179)
2. Manufacture, repair, storage and/or distribution
of products requiring Department of National Defense (DND) clearance:
a.
Guns and ammunition for warfare
b. Military ordinance and parts thereof (e.g.,
torpedoes, depth charges, bombs, & grenades, missiles)
c. Gunnery, bombing and fire control systems and
components
d. Guided missiles/missile systems and components
e. Tactical aircraft (fixed and rotary-winged), parts
and components thereof
f. Space vehicles and component systems
g. Combat vessels (air, land and naval) and
auxiliaries
h. Weapons repair and maintenance equipment
i. Military communications equipment
j. Night vision equipment
k. Stimulated coherent radiation devices, components
and accessories
l. Armament training devices
m. Others as may be determined by the Secretary of
the DND
However, the manufacture or repair of these items may be authorized by
the Secretary of National Defense to non-Philippine nationals; Provided
that a substantial percentage of output, as determined by the said
agency, is exported. Provided further that the extent of foreign equity
ownership allowed shall be specified in the said authority/clearance
(RA 7042 as amended by RA 8179).
3. Manufacture and distribution of dangerous drugs
(RA 7042 as mended by RA 8179)
4. Sauna and steam bathhouses, massage clinics and
other like activities regulated by law because of risks posed to public
health and morals (RA 7042 as amended by RA 8179)
5. All forms of gambling, e.g. race track operation
(RA 7042 as amended by RA. 8179)
6. Domestic market enterprises with paid-in equity
capital of less than the equivalent of US$200,000 (RA 7042 as amended
by RA 8179)
7. Domestic market enterprises which involve advanced
technology or employ at least fifty (50) direct employees with
paid-in-equity capital of less than the equivalent of US$100,000 (RA
7042 as amended by RA 8179)
Search for
www.chanrobles.com
