7/28/2019 9th for. Investment Neg. List November 2012

1/2

MALACAANGManila

EXECUTIVE ORDER NO. 98

PROMULGATING THENINTH 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, providesfor the formulation of a RegularForeign Investment Negative List,covering investmentareas/activities which may beopened to foreign investors and/orreserved to Filipino nationals; and

WHEREAS, there is a need toformulate the Ninth RegularForeign Investment Negative List,replacing the Eight RegularForeign Investment Negative List,

to reflect changes to List Apursuant to existing laws andupon recommendation ofconcerned agencies.

NOW, THEREFORE, I, BENIGNOS. AQUINO III, President of theRepublic of the Philippines, byvirtue of the powers vested in meby Law, do hereby order:

SECTION 1. Ninth RegularForeign Investment NegativeList. Only the investment areasand/or activities listed in theAnnex hereof shall be reserved toPhilippine nationals, and hereaftershall be referred to as the NinthRegular Foreign InvestmentNegative List. The extent offoreign equity in these areas shallbe limited to the percentagesindicated in the List.

SECTION 2. Amendments.Amendment to List A may bemade at any time to reflect

changes instituted in specific lawswhile amendments to List B shallnot be made more often thanonce every two years, pursuant toSection 8 of RA 7042 asamended, and its revisedimplementing rules andregulations.

SECTION 3. Repeal. Allissuances, orders, rules and

regulations or parts thereof, whichare inconsistent with this Orderare hereby repealed, amended ormodified accordingly.

SECTION 4. Separablity. If anyprovision of this Executive Orderis declared invalid orunconstitutional, the otherprovisions not affected therebyshall remain valid and subsisting.

SECTION 5. Effectivity. ThisExecutive Order shall take effect

fifteen (15) days after itspublication in a newspaper ofgeneral circulation.

DONE, in the City of Manila, this29th day of October, in the year ofour Lord, Two Thousand andTwelve.

(Sgd) BENIGNO S. AQUINO III

By the President:(Sgd) PAQUITO N. OCHOA, JR.

Executive SecretaryANNEX A

LIST A: FOREIGN OWNERSHIP ISLIMITED BY MANDATE OF THECONSTITUTION AND SPECIFICLAWS

No Foreign Equity

1. Mass media except recording(Art. XVI, Sec. 11 of theConstitution; Presidential

Memorandum dated 04 May1994)

2. Practice of all professions1

a) Engineering

(Art.XII, Sec.14 of theConstitution, Sec. 1 of RA5181)

i. Aeronauticalengineering (PD 1570)

ii. Agricultural engineering(RA 8559)

iii. Chemical engineering(RA 9297)

iv. Civil engineering(RA 1582)

v. Electrical engineering(RA 7920)

vi. Electronics andcommunicationengineering (RA 9292)

vii. Geodetic engineering(RA 8560)

viii.Mechanical engineering(RA 8495)

ix. Metallurgical

engineering (PD 1536)x. Mining engineering(RA 4274)

xi. Naval architecture andmarine engineering(RA 4565)

xii. Sanitary engineering(RA 1364)

b) Medicine and alliedProfessionsi. Medicine (RA 2382 as

amended by RA 4224)ii. Medical technology (RA

5527 as amended byRA 6318, PD 6138, PD498 and PD 1534)

iii. Dentistry (RA 9484)iv. Midwifery (RA 7392)v. Nursing (RA 9173)vi. Nutrition and dietetics

(PD 1286)vii. Optometry (RA 8050)viii.Pharmacy (RA 5921)

1 This is limited to Filipino citizens save in casesprescribed by law

ix. Physical andoccupational therapy(RA 5680)

x. Radiologic and x-raytechnology (RA 7431)

xi. Veterinary medicine(RA 9268)

c) Accountancy (RA 9298)d) Architecture (RA 9266)e) Criminology (RA 6506)f) Chemistry (RA 754)

g) Customs brokerage(RA 9280)

h) Environmental planning(PD 1308)

i) Forestry (RA 6239)j) Geology (RA 4209)k) Interior design (RA 8534)l) Landscape architecture

(RA 9053)m) Law (Art. VIII, Sec. 5 of the

Constitution; Rule 138, Sec.2 of the Rules of Court ofthe Philippines)

n) Librarianship (RA 9246)

o) Marine deck officers(RA 8544)p) Marine engine officers

(RA 8544)q) Master plumbing (RA 1378)r) Sugar technology (RA 5197)s) Social work (RA 4373)t) Teaching (RA 7836)u) Agriculture (RA 8435)v) Fisheries (RA 8550)w) Guidance counseling

(RA 9258)x) Real estate service

(RA 9646)y) Respiratory therapy

(RA 10024)z) Psychology (RA 10029)

3. Retail trade enterprises withpaid-up capital of less thanUS$2,500,000 (Sec. 5 of RA8762)2

2 Full foreign participation is allowed for retail tradeenterprises: (a) with paid-up capital of US$2,500,000or more provided that investments for establishing astore is not less than US$830,000; or (b) specializing inhigh end or luxury products, provided that the paid-upcapital per store is not less than US$250,000 (Sec. 5 ofRA8762)

4. Cooperatives (Ch. III, Art. 26 ofRA 6938)

5. Private security agencies (Sec.4 of RA 5487)

6. Small-scale mining (Sec. 3 ofRA 7076)

7. Utilization of marine resourcesin archipelagic waters, territorialsea, and exclusive economiczone as well as small-scaleutilization of natural resources in

rivers, lakes, bays, and lagoons(Art. XII, Sec. 2 of theConstitution)

8. Ownership, operation andmanagement of cockpits (Sec. 5of PD 449)

9. Manufacture, repair, stockpilingand/or distribution of nuclearweapons (Art. II, Sec. 8 of theConstitution)3

10. Manufacture, repair, stockpilingand/or distribution of biological,chemical and radiologicalweapons and anti-personnel

mines (Various treaties to whichthe Philippines is a signatoryand conventions supported bythe Philippines)

3

11.Manufacture of firecrackers andother pyrotechnic devices (Sec.5 of RA 7183)

Up to Twenty Percent(20%)Foreign Equity

12.Private radio communicationsnetwork (RA 3846)

Up to Twenty-Five Percent(25%)Foreign Equity

13.Private recruitment, whether forlocal or overseas employment(Art. 27 of PD 442)

14.Contracts for the constructionand repair of locally-funded

3 Domestic investments are also prohibited (Art. II,Sec. 8 of the Constitution; Conventions/Treaties towhich the Philippines is a signatory)

public works (Sec. 1 of CA 541,LOI 630) except:a) Infrastructure/ development

projects covered in RA7718; and

b) Projects which are foreignfunded or assisted andrequired to undergointernational competitivebidding (Sec. 2a of RA7718)

15.Contracts for the construction ofdefense-related structures (Sec.1 of CA 541)

Up to Thirty Percent (30%)Foreign Equity

16.Advertising (Art. XVI, Sec. 11 ofthe Constitution)

Up to Forty Percent (40%) ForeignEquity

17.Exploration, development and

utilization of natural resources(Art. XII, Sec. 2 of theConstitution)4

18.Ownership of private lands (Art.XII, Sec. 7 of the Constitution;Ch. 5, Sec. 22 of CA 141; Sec. 4of RA 9182)

19.Operation and management ofpublic utilities (Art. XII, Sec. 11of the Constitution; Sec. 16 ofCA 146)

20.Ownership/establishment andadministration of educationalinstitutions (Art. XIV, Sec. 4 ofthe Constitution)

21.Culture, production, milling,processing, trading exceptingretailing, of rice and corn andacquiring, by barter, purchase orotherwise, rice and corn and theby-products thereof (Sec. 5 ofPD 194)5

4 Full foreign participation is allowed through financialor technical assistance agreement with the President(Art. XII, Sec. 2 of the Constitution)5 Full foreign participation is allowed provided thatwithin the 30-year period fromstart of operation, the

7/28/2019 9th for. Investment Neg. List November 2012

2/2

22.Contracts for the supply ofmaterials, goods andcommodities to government-owned or controlledcorporation, company, agencyor municipal corporation (Sec.1 of RA 5183)

23.Project proponent and facilityoperator of a BOT projectrequiring a public utilitiesfranchise (Art. XII, Sec. 11 of

the Constitution; Sec. 2a of RA7718)

24.Operation of deep seacommercial fishing vessels(Sec. 27 of RA 8550)

25.Adjustment companies (Sec.323 of PD 612 as amended byPD 1814)

26.Ownership of condominiumunits where the common areasin the condominium project areco-owned by the owners of theseparate units or owned by acorporation (Sec. 5 of RA

4726)

Up to Forty-Nine Percent (49%)Foreign Equity

27. Lending companies (Sec.6 ofRA 9474)6

Up to Sixty Percent (60%) ForeignEquity

28.Financing companies regulatedby the SEC (Sec. 6 of RA 5980as amended by RA 8556)6

29.Investment houses regulated bythe SEC (Sec. 5 of PD 129 asamended by RA 8366)6

foreign investor shall divest a minimumof 60 percent oftheir equity to Filipino citizens (Sec. 5 of PD 194; NFACouncil Resolution No. 193 s. 1998)6No foreign national may be allowed to own stock in

financing companies or investment houses unless thecountry of which he is a national accords the samereciprocal rights to Filipinos (Sec. 6 of RA 5980 asamended by RA8556; PD 129 as amended by RA8366)

LIST B: FOREIGN OWNERSHIPIS LIMITED FOR REASONS OFSECURITY, DEFENSE, RISK TOHEALTH AND MORALS ANDPROTECTION OF SMALL- ANDMEDIUM-SCALE ENTERPRISES

Up to Forty Percent (40 %)Foreign Equity

1. Manufacture, repair, storage,

and/or distribution of productsand/or ingredients requiringPhilippine National Police (PNP)clearance:a) Firearms (handguns to

shotguns), parts of firearmsand ammunition therefor,instruments or implementsused or intended to be usedin the manufacture offirearms

b) Gunpowderc) Dynamited) Blasting supplies

e)

Ingredients used in makingexplosives:i. Chlorates of potassium

and sodiumii. Nitrates of ammonium,

potassium, sodium,barium, copper (11),lead (11), calcium andcuprite

iii. Nitric acidiv. Nitrocellulosev. Perchlorates of

ammonium, potassiumand sodium

vi. Dinitrocellulosevii.Glycerolviii.Amorphous phosphorusix. Hydrogen peroxidex. Strontium nitrate

powderxi. Toluene

f) Telescopic sights, sniperscope and other similardevices

However, the manufacture or repairof these items may be authorized by

the Chief of the PNP to non-Philippine nationals; Provided that asubstantial percentage of output, asdetermined by the said agency, isexported. Provided further that theextent of foreign equity ownershipallowed shall be specified in the saidauthority/clearance (RA 7042 asamended by RA 8179)

2. Manufacture, repair, storageand/or distribution of productsrequiring Department of NationalDefense (DND) clearance:a) Guns and ammunition for

warfareb) Military ordnance and parts

thereof (e.g., torpedoes,depth charges, bombs,grenades, missiles)

c) Gunnery, bombing and firecontrol systems andcomponents

d) Guided missiles/missile

systems and componentse) Tactical aircraft (fixed androtary-winged), parts andcomponents thereof

f) Space vehicles andcomponent systems

g) Combat vessels (air, landand naval) and auxiliaries

h) Weapons repair andmaintenance equipment

i) Military communicationsequipment

j) Night vision equipmentk) Stimulated coherent

radiation devices,components andaccessories

l) Armament training devicesm) Other as may be

determined by the Secretaryof the DND

However, the manufacture or repairof these items may be authorized bythe Secretary of the DND to non-Philippine nationals; Provided that asubstantial percentage of output, as

determined by the said agency, isexported. Provided further that theextent of foreign equity ownershipallowed shall be specified in the saidauthority/clearance (RA 7042 asamended by RA 8179)

3. Manufacture and distribution ofdangerous drugs (RA 7042 asamended by RA 8719)

4. Sauna and steam bathhouses,

massage clinics and other likeactivities regulated by lawbecause of risks posed to publichealth and morals (RA 7042 asamended by RA 8179)

5. All forms of gambling (RA 7042as amended by RA 8179),except those covered byinvestment agreements withPAGCOR (RA 9487) operatingwithin special economic zonesadministered by the PhilippineEconomic Zone Authority (RA7916)

6. Domestic market enterpriseswith paid-in equity capital of lessthan the equivalent ofUS$200,000 (RA 7042 asamended by RA 8179)

7. Domestic market enterpriseswhich involve advancedtechnology or employ at leastfifty (50) direct employees withpaid-in-equity capital of lessthan the equivalent ofUS$100,000 (RA 7042 asamended by RA 8179)