Republic Act No. 11647

Section 2 of Republic Act No. 7042 (R.A. No. 7042), as amended by Republic

Act No. 8179, otherwise known as the "Foreign Investments Act of 1991," is hereby

amended to read as follows:

• Section 2  Declaration of Policy.

  Recognizing that increased capital and technology benefits the Philippines and that global

  and regional economies affect the Philippine economy, it is the policy of the

  State to attract, promote and welcome productive investments from foreign individuals,

  partnerships, corporations, and governments, including their political subdivisions,

  in activities which significantly contribute to sustainable, inclusive, resilient,

  and innovative economic growth, productivity, global competitiveness, employment

  creation, technological advancement, and countrywide development to the extent

  that foreign investment is allowed in such activity by the Constitution and relevant

  laws, and consistent with the protection of national security. Foreign investments

  shall be encouraged in enterprises that significantly expand livelihood and employment

  opportunities for Filipinos; enhance economic value of agricultural products;

  promote the welfare of Filipino consumer; expand the scope, quality and volume

  of exports and their access to foreign markets; and/or transfer relevant technologies

  in agriculture, industry and support services. Foreign investments shall be welcome

  as a supplement to Filipino capital and technology in those enterprises serving

  mainly the domestic market.

  • The State shall promote accountability and

    integrity in public office, as well as the promotion and administration of efficient

    public service to entice foreign investments.

  • Foreign investments shall

    be conducted based on the principles of transparency, reciprocity, equity and

    economic cooperation.

    x x x

Section 3 of R.A. No. 7042 is hereby further amended to read as follows:

• Section 3  Definitions.

  As used in this Act:

  x x x

  • b

    the term "investment" shall mean equity participation in any enterprise, organized or existing under the laws of the Philippines and duly recorded in the enterprise's stock and transfer book, or any equivalent registry of ownership;

  • c

    the term "foreign investment" shall mean an equity investment made by non-Philippine national in the form of foreign exchange and/or other assets actually transferred to the Philippines and duly registered with the Bangko Sentral ng Pilipinas;

  • d

    x x x

  • e

    x x x

  • f

    x x x

  • g

    x x x

  • h

    the term "practice of profession" shall mean an activity or undertaking rendered and performed by a registered and duly licensed professional or holder of a special temporary permit as defined in the scope of practice of a professional regulatory law; and

  • i

    the term "pipeline transaction" shall mean the sector which includes transport of goods or materials through a pipeline such as crude, refined, petroleum, natural gas, biofuels, and other chemically stable substance.

Section 4 of R.A. No. 7042 is hereby amended to read as follows:

• Section 4  Inter-Agency Investment Promotion Coordination Committee.

  There is hereby created the "Inter-Agency Investment Promotion Coordination

  Committee", hereinafter referred to as the "IIPCC", which shall be the body that

  will integrate all promotion and facilitation efforts to encourage foreign investments

  in the country. The Department of Trade and Industry (DTI) shall act as the IIPCC''s

  lead agency. The IIPCC shall be composed of the:

  • a

    Secretary of the DTI, to preside as Chairperson;

  • b

    Secretary/Undersecretary of the Department of Finance (DOF) as Vice-Chairperson;

  • c

    One (1) representative from the DTI-Board of Investments (BOI);

  • d

    One (1) representative from the DTI-Philippine Economic Zone Authority (PEZA);

  • e

    One (1) representative from the Department Affairs (DFA), Office of the Undersecretary for Multilateral Affairs and International Economic Relations (OUMAIER);

  • f

    One (1) representative from the National Economic and Development Authority (NEDA);

  • g

    One (1) representative from the Department of Information and Communications Technology (DICT);

  • h

    One (1) representative from the Commission on Higher Education (CHED);

  • i

    One (1) representative from the Technical Education and Skills Development Authority (TESDA); and

  • j

    Four (4) representatives composed of one (1) representative each from the National Capital Region, Luzon, Visayas and Mindanao, to be chosen from a list of nominees prepared and submitted by nationally recognized leading industry or business chambers, who shall be of known competence, probity, integrity and expertise in any of the fields of investment, advertising, banking, finance management and law, with at least ten (10) years of outstanding management or leadership experience.

  • The Chairperson may from time to time,

    as a particular foreign investment may require, request the participation of other

    government departments and agencies or instrumentalities, local government units

    (LGUs), nongovernmental organizations (NGOs) and local business chambers and enterprises.

  • The IIPCC shall coordinate and, when necessary, partner with and assist the Bases

    Conversion nd Development Authority (BCDA), Authority of the Freeport Area of

    Bataan (AFAB), Clark Development Corporation (CDC), Subic Bay Metropolitan Authority

    (SBMA), Cagayan Economic Zone Authority (CEZA), John Hay Management Corporation

    (JHMC), Poro Point Management Corporation (PPMC), Zamboanga City Special Economic

    Zone Authority (ZCSEZA), PHIVIDEC Industrial Authority (PIA), Aurora Pacific Economic

    Zone and Freeport Authority (APECO), Tourism Infrastructure and Enterprise Zone

    Authority (TIEZA) and all other similar existing authorities or that may be created

    by law, in promoting foreign investments to the country: Provided, That

    this shall not include the administration, design, and grant of fiscal incentives.

  • The BOI is designated as the secretariat of the IIPCC, implementing its policies and resolutions.

A new section of R.A. No. 7042, as amended, is inserted as Section 4-A to read as follows:

• Section 4-A  Powers and Functions of the IIPCC.
  • a

    To establish both a medium-and-long-term Foreign Investment Promotion and Marketing

    Plan (FIPMP), coordinating all xisting investment development plans and programs

    under the BOI, PEZA, and various investment promotion agencies (IPAs), LGUs, and

    other agencies, as delinated in Section 4-B of this Act;

  • b

    To design a comprehensive marketing strategy and campaign, promoting the country as a desirable

    investment area;

  • c

    To support inbound and outbound foreign direct and

    trade missions for new international markets to explore the country as a possible

    location to do business;

  • d

    To encourage and support research and development

    in priority areas indicated by the FIPMP;

  • e

    To monitor actual performance

    against measurable and timebound targets in the FIPMP, to include job generation;

  • f

    To submit annual evaluation and reports to the President of the Philippines and

    the Congress regarding the activities of the IIPCC;

  • g

    To establish and

    regularly update an online database including a directory of ready local partners

    from priority sectors under the FIPMP, as a tool for promoting investments and

    business matching in local supply chains; and

  • h

    To support local government

    efforts to promote foreign direct investments, expedite compliance with national

    requirements and address investors in their different localities involved with

    said foreign investments.

A new section of R.A. No. 7042, as amended, is inserted as Section 4-B

to read as follows:

• Section 4-B  Development of the Foreign Investment Promotion and Marketing Plan (FIPMP).

  A comprehensive and strategic Foreign Investment

  Promotion and Marketing Plan (FIPMP) shall be developed by the IIPCC for the medium

  five-year and the long-term ten-year plan" Provided, That it is based

  on competitive advantages, natural resources, skill and educational development,

  traditional linkages, and international market potential, and it is fully consistent

  with the strategic investment priorities plan under Title XIII of the National

  Internal Revenue Code, as amended: Provided, further, That an online

  portal containing the FIPMP shall thereafter be uploaded, containing further details

  such as the IIPCC''s procedure, contacts, schedules, among others.

  • Said database should also include a directory of local enterprises capable and willing

    to partner with potential foreign investors. The IIPCC shall consult local chambers

    of commerce, sectoral, business groups, and other individual partners whenever

    foreign applicants seek partners, subcontractors, suppliers, and other local business

    counterparts.

  • Similarly, Department of Education (DepEd), CHED, TESDA,

    Department of Labor and Employment (DOLE), the Professional Regulation Commission

    (PRC), and other training agencies involved in education and skills development

    shall likewise direct curriculum and training efforts toward manpower requirements

    of the FIPMP.

  • The IIPCC shall coordinate with the concerned government

    agencies to ensure their alignment with the FIPMP.

  • DTI shall promulgate such rules and regulations necessary to implement this provision.

Section 5 of R.A. No. 7042, as amended, is hereby amended to read as follows:

• Section 5  Registration of Investments of Non-Philippine Nationals.

  Without need of prior approval, a non-Philippine national, as that term is defined in

  Section 3(a), and not otherwise disqualified by law may, upon registration with

  the Securities and Exchange Commission (SEC), or the DTI in the case of single

  proprietorships, do business as defined in Section 3(d) of this Act or invest

  in a domestic enterprise up to one hundred percent (100%) of its capital, unless

  participation of non-Philippine nationals in the enterprise is prohibited or limited

  to a smaller percentage by existing law and/or under the provisions of this Act.

  The SEC or the DTI, as the case may be, shall not impose any limitations on the

  extent of foreign ownership in an enterprise additional to those provided in this

  Act: Provided, however, That any enterprise seeking to avail of incentives

  under the Omnibus Investment Code of 1987 must apply for registration with the

  BOI, which shall process such application for registration in accordance with

  the criteria for evaluation prescribed in said Code: Provided, finally, That

  a non-Philippine national intending to engage in the same line of business as

  an existing joint venture, in which he or his majority shareholder is a substantial

  partner, must disclose the fact and the names and addresses of the partners in

  the existing joint venture in his application for registration with SEC. During

  the transitory period as provided in Section 15 hereof, SEC shall disallow registration

  of the applying non-Philippine national if the existing joint venture enterprise,

  particularly the Filipino partners therein, can reasonably prove the domestic

  market activities to be undertaken by SEC shall effect registration of any enterprise

  applying under this Act within fifteen (15) days upon submission of completed

  requirements.

Section 6 of R.A. No. 7042, as amended, is hereby amended to read as follows:

• Section 6  Foreign Investment in Export Enterprises.

  Foreign investment in export enterprise whose products and services do not fall within Lists A and B

  of the Foreign Investment Negative List provided under Section 8 hereof is allowed

  up to one hundred percent (100%) ownership.

  • Export enterprise which are non-Philippine nationals shall register with BOI and submit the reports that may

    be required to ensure continuing compliance of the export enterprise with its

    export requirement. BOI shall advise SEC or STI, as the case may be, of any export

    enterprise that fails to meet the export ration requirement. The SEC or DTI shall

    thereupon order the non-complying export enterprise to reduce its sales to the

    domestic market to not more than forty percent (40%) of its total production;

    failure to comply with such SEC or DTI order, without justifiable reason, shall

    subject the enterprise to cancellation of SEC or DTI registration, and/or the

    penalties provided in Section 14 hereof.

  • Export enterprise shall register

    and comply with the export requirements in accordance with Title XIII of the National

    Internal Revenue Code (NIRC), as amended, for purpose of availing any tax incentive

    or benefit.

Section 8 of R.A. No. 7042, as amended, is hereby further amended to read as follows:

• Section 8  List of Investment Areas Reserved to Philippine Nationals (Foreign Investment Negative List).

  x x x

  • a

    x x x

  • b

    x x x

    • 1

      which are defense-related activities, requiring prior clearance

      and authorization from Department of National Defense (DND) to engage in such

      activity, such as the manufacture, repair, storage and/or distribution of firearms,

      ammunition, lethal weapons, military ordinance, explosives, pyrotechnics and similar

      materials, unless such manufacturing or repair activity is specifically authorized

      by the Secretary of National Defense; or

    • 2

      x x x

  • Except as otherwise provided under Republic Act No. 8762, otherwise known as the Retail Trade Liberalization

    Act of 2000 and other relevant laws, micro and small domestic market enterprise

    with paid-in equity capital less than the equivalent of Two hundred thousand US

    dollar (US$200,000.00). are reserved to Philippine nationals: Provided, That

    if: (1) they involve advanced technology as determined by the Department of Science

    and Technology, or (2) they are endorsed as startup or startup enablers by the

    lead host agencies pursuant to Republic Act No. 11337, otherwise known as the

    Innovative Startup Act; or (3) a majority of their direct employees are Filipinos,

    but in no case shall the number of Filipino employees be less than fifteen (15),

    than a minimum paid-in capital of One hundred thousand US dollars (US$100,000.00)

    shall be allowed to non-Philippine nationals: Provided, further, That

    registered foreign enterprises employing foreign nationals and enjoying fiscal

    incentive shall implement an understudy or skills development program to ensure

    the transfer of technology or skills to Filipinos. Compliance with this requirement

    shall be regularly monitored by the DOLE.

  • Nothing in this Act shall operate

    as a cause for termination of employees hired prior to the effectivity of this

    Act. In all cases, the provisions of Presidential Decree No. 442, otherwise known

    as the "Labor Code of the Philippines" and other applicable laws, rules and regulations

    issued by DOLE shall prevail.

  • Amendments to List B may be made upon recommendation

    of the Secretary of National Defense, or the Secretary of Health, endorses by

    the NEDA, or upon recommendation motu propio, of NEDA, approved by the

    President, and promulgated through the issuance of the Foreign Investment Negative

    List by Executive Order.

  • x x x

  • Amendments to the Foreign Investment

    Negative List shall not be made more often than once every two (2) years: *Provided,

    *That the NEDA, in consultation and cooperation with the BOI, DTI, SEC, DICT,

    IPAs and other pertinent government agencies, shall, every two (2) years, (i)

    review the Foreign Investment Negative List, and (ii) submit to Congress an analysis

    of foreign investment performance economic activities of the industries under

    the Foreign Investment Negative List and the reasons for the recommended amendments,

    if any: Provided, further, That NEDA shall recommend to Congress investment-related

    matters requiring necessary legislation.

A new section of R.A. No. 7042, as amended, is inserted as Section 16 to

read as follows:

• Section 16  Review of Strategic Industries.

  Upon the order of the President, the IIPCC, in coordination with the National Security

  Council (NSC), and the NEDA, shall review foreign investments involving military-related

  industries, cyber infrastructure, pipeline transportation, or such other activities

  which may threaten territorial integrity and the safety, security and well-being

  of Filipino citizens, when:

  • a

    Made by a foreign government-controlled entity or state-owned enterprises except independent pension funds, sovereign wealth funds and multi-national banks; or

  • b

    Located in geographical areas critical to national security.

  • Any recommendation to suspend, prohibit,

    or otherwise limit a reviewed foreign investment under this section shall be transmitted

    to the Office of the President for appropriate action.

A new section of R.A. No. 7042, as amended, is inserted as Section 17 to read as follows:

• Section 17  Anti-Graft Practices in Foreign Investment Promotions.

  Public officials and employees involved in foreign investment promotions

  shall uphold the highest standards of public service, accountability, and integrity.

  Accordingly, any public official or employee involved in foreign investment promotions

  who sahll commit any of the acts under Section 3 of Republic Act No. 3019, as

  amended, otherwise known as the Anti-Graft and Corrupt Practices Act, shall, in

  additional to the penalties provided under Section 9(a) of the said Act, be punished

  by a fine of not less than Two million pesos (P2,000,000.00) but not more than

  Five million pesos (P5,000,000.00).

A new section of R.A. No. 7042, as amended, is inserted as Section 18 to

read as follows:

• Section 18  Non-Applicability.

  This Act shall not apply to banking and other financial institutions which are governed and regulated

  by Republic Act No. 8791, otherwise known as "The General Banking Law of 2000"

  and other laws under the supervision of the Bangko Sentral ng Pilipinas. Moreover,

  this Act shall not apply to the practice of professions that are covered by specific

  laws and fall under the jurisdiction of various Professional Regulatory Boards

  (PRBs) or any other equivalent regulating body, or those subject to reciprocity

  agreements with other countries.

  • To the extent applicable, and provided

    that the necessary licenses, work permits and visas are properly secured from

    the relevant government agencies, any occupation, employment or practice of profession

    not covered by any special law or reciprocity agreement as provided in the previous

    paragraph shall be subject to the provisions of this Act.

The remaining sections in R.A. No. 7042, as amended, are hereby renumbered

accordingly.

For purposes of implementing this Act, the amount of Fifty million pesos (P50,000,000.00) from the Contingent Fund of the General Appropriations Act for the current fiscal year is hereby appropriated and shall be released to the IIPCC. Thereafter, the amounts necessary to carry out this Act shall be included in the General Appropriations Act (GAA).

The NEA, in consultation with the DTI and the DOF, is hereby directed to amend the existing rules and regulations necessary for the efficient implementation of this Act.

Republic Act No. 7042, as amended, is hereby amended, All laws, decrees, orders, rules and regulations or other issuances or parts thereof inconsistent with the provisions of this Act are hereby repealed or modified accordingly.

If any portion or provision of this Act is declared unconstitutional, the remainder of this Act or any provision not affected thereby shall remain in force and effect.

This Act shall take effect after fifteen (15) days following its publication

in the Official Gazette or in a newspaper of general circulation in the

Philippines.