In September 2025, Republic Act No. 12252 amended Republic Act No. 7652, or the Investors’ Lease Act, by increasing the maximum aggregate period for which qualified foreign investors may lease private land to 99 years. With the issuance of its Implementing Rules and Regulations (IRR) in January 2026, the scope of this opportunity has become clearer, but so have the conditions attached to it.
While RA 12252 allows qualified foreign investors greater access to Philippine private land, the IRR makes it clear that the longevity of the lease is closely tied to the life and purpose of the underlying investment.
The question then arises: how long-term is a 99-year lease when its continued existence depends on the investment for which it was entered into?
Who may avail of the 99-year lease?
Not every foreign lessee may take advantage of the extended lease period. The IRR applies to a foreign investor “investing in the Philippines,” which it defines as making an equity investment through the actual remittance of foreign exchange or transfer of assets, such as capital goods, patents, formulae, or other technological rights or processes, upon registration with the Securities and Exchange Commission or Department of Trade and Industry, as applicable.
The foreign investor must likewise have an “approved and registered investment.” Depending on the nature of the enterprise, this may be evidenced by, among others, a Certificate of Registration for an export enterprise, a Certificate of Incorporation or License to Do Business for a domestic market enterprise, or a Certificate of Registration issued under the CREATE framework for a registered business enterprise of an Investment Promotion Agency (IPA).
THE LEASE FOLLOWS THE INVESTMENT
More significantly, the IRR requires the leased area to be used “solely” for the approved and registered investment. Withdrawal of the approved investment, use of the premises for a purpose other than that authorized, or violation of RA 12252 or its IRR may constitute grounds for termination or cancellation of the lease. Where the IPA is itself the lessor, violation of the terms of the lease may likewise result in termination.
Additionally, the IRR also includes the failure to operate the investment project within three consecutive years as a possible ground for termination of the lease contract if the order of the appropriate government agency to commence operation is not complied with.
With this being said, the lease, therefore, cannot be viewed independently of the investment supporting it. What happens then if an investor changes its business model, repurposes a facility, restructures its operations, or determines that the original project is no longer commercially viable?
What happens in an acquisition or restructuring?
These questions become particularly relevant in mergers, acquisitions, and corporate reorganizations. RA 12252 and the IRR allow the leasehold right to be sold, transferred, assigned, or used as security for a loan, subject to the conditions and limitations imposed under the law.
However, corporate transactions do not always involve a direct assignment of a lease. A purchaser may acquire the shares of the lessee rather than its assets. A multinational group may reorganize ownership of its Philippine subsidiary while the lessee remains the same entity. Operations may also be consolidated, expanded, or altered following an acquisition.
A lease capable of lasting 99 years could therefore remain in place through several changes in ownership and corporate structure.
CONTINUING REGULATORY OVERSIGHT
The regulatory relationship likewise does not end upon execution of the lease. The lease must be registered with the Registry of Deeds. Following annotation, the foreign investor must submit specified documents to the appropriate government agency for continuing compliance and monitoring. The relevant agency maintains a master list of registered foreign investors and monitors implementation of the approved and registered project. This continuing oversight is significant because the lease remains linked to the investment throughout its term.
RA 12252 may provide foreign investors with greater stability by allowing access to Philippine private land for almost a century. But a longer permissible lease period does not necessarily mean an unconditional 99-year stay.
For investors, lenders, and potential acquirers, a long-term lease under RA 12252 may therefore need to be viewed, not simply as a real property arrangement, but as part of the corporate investment itself. As businesses evolve, the more pertinent question may be whether the lease and the approved investment supporting it will continue to accommodate those changes.
(This article is for informational and educational purposes only. It is not offered and does not constitute legal advice or legal opinion.)
Earl Audric V. Balayan is an associate of the Corporate & Special Projects Department of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW).
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