EXECUTIVE ORDER NO. 11
EXECUTIVE ORDER NO. 11 - APPROVING
THE THIRD REGULAR FOREIGN INVESTMENTS NEGATIVE LIST
WHEREAS,
Republic Act 8179, which amends RA 7042 also known as the Foreign
Investments Act of 1991, provides the formulation of a Regular Foreign
Investments Negative List covering the 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
List A and B, has the effectivity of two years pursuant to the
Implementing Rules and Regulations of the Foreign Investments Act of
1991;
WHEREAS, there is a need to formulate the third Foreign Investment
Negative List in view of the expiration of the effectivity of the
existing List on 23 October 1998, as well as to incorporate thereto
those provisions of existing laws on foreign investments;
NOW, THEREFORE, I, JOSEPH EJERCITO ESTRADA, 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 herewith shall be reserved to Philippine
nationals, and hereafter shall be referred to as the Third Regular
Foreign Investments Negative List. The extent of foreign equity
participation in these areas shall be limited to the percentages
indicated 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 the Foreign Investments Act of 1991 as amended, and of
its Implementing Rules and Regulations.
Sec. 3. All orders, issuances, regulations or
parts thereof, which are inconsistent with this Order are hereby
revoked or modified accordingly.
Sec. 4. This Order shall take effect immediately
on 24 October 1998.
DONE, in the City of Manila,
this 11th day of August, in the Year of Our Lord, Nineteen Hundred and
Ninety Eight.
ANNEX A
THIRD 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 (Article XVI, Section 11 of the Constitution; Presidential Memorandum dated 04 May 1994)
2. Services involving the practice of licensed
professions save in cases prescribed by law
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. Custom
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
(Article XIV, Section 14 of the
Constitution; Section 1 of RA No. 5181)
3. Retail Trade (Section 1 of RA No. 1180)
4. Cooperatives (Chapter III, Article 26 of RA No.
6938)
5. Private Security Agencies (Sec. 4 of RA No.
5487)
6. Small-scale Mining (Sec. 3 of RA No. 7076)
7. Utilization of Marine Resources in archipelagic
waters, territorial sea, and exclusive economic zone (Article XII,
Sec. 2 of the Constitution)
8. Ownership, operation and management of cockpits
(Sec. 5 of Presidential Decree No. 449)
9. Manufacture, repair, stockpiling and/or
distribution of nuclear weapons (Article II, Sec. 8 of the
Constitution) 1
10. Manufacture, repair, stockpiling and/or
distribution of biological, chemical and radiological weapons (Various
treaties to which the Philippines is a signatory and conventions
supported by the Philippines) 1
11. Manufacture of firecrackers and other pyrotechnic
devices (Sec. 5 of RA No. 7183)
Up to Twenty-Five Percent (25%) Foreign Equity
12. Private recruitment, whether for local or
overseas employment (Article 27 of Presidential Decree No. 442)
13. Contracts for the construction and repair of
locally-funded public works except:
a.
infrastructure/development projects covered in RA No. 7718; and
b. projects
which are foreign funded or assisted and required to undergo
international competitive bidding (Commonwealth Act No. 541;
Presidential Decree No. 1594; Letter of Instruction No. 630; Sec. 2a
of RA No. 7718)
Up to Thirty Percent (30%) Foreign Equity
14. Advertising (Article XVI, Section 11 of the
Constitution)
Up to Forty Percent (40%) Foreign Equity
15. Exploration, development and utilization of
natural resources (Article XII, Sec. 2 of the Constitution) 2
16. Ownership of private lands (Article XII, Sec. 7 of the Constitution; Chapter 5, Sec. 22 of Commonwealth Act No.
141)
17. Operation and management of public utilities
(Article XII, Section 11 of the Constitution; Section 16 of
Commonwealth Act No. 146)
18. Ownership/establishment and administration of
educational institutions (Article XIV, Sec. 2 of the Constitution)
19. Engaging in the rice and corn industry
(Presidential Decree No. 194)
20. Contracts for the supply of materials, goods and
commodities to government-owned or controlled corporation, company,
agency or municipal corporation (Section 1 of RA No. 5183)
21. Project proponent and facility operator of a BOT
project requiring a public utilities franchise (Article XII, Section 11
of the Constitution; Sec. 2a of RA No. 7718)
22. Operation of deep sea commercial fishing vessels
(Sec. 27 of RA No. 8550)
23. Adjustment Companies (Sec. 323 of Presidential
Decree No. 612 as amended by Presidential Decree No. 1814)
24. Ownership of condominiums (Sec. 5 of RA No.
4726)
25. Contracts for construction of defense related
structures (Commonwealth Act No. 541)
Up to Sixty Percent (60%) Foreign Equity
26. Financing companies regulated by the Securities
and Exchange Commission (SEC) (Sec. 6 of RA No. 5980 as amended by
RA No. 8556) 3
27. Investment houses regulated by the SEC
(Presidential Decree No. 129 as amended by RA No. 8366) 3
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
used in the manufacture thereof 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.
Cholorates 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, sniperscope and other similar devices
(RA No. 7042 as amended by RA No. 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, mines, depthcharges,
bombs, grenades,
Missiles)
c. Gunnery,
bombing and firecontrol 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 Department of National Defense
(RA No. 7042 as amended by RA No. 8179)
3. Manufacture and distribution of dangerous drugs
(RA No. 7042 as amended by RA No. 8179)
4. Sauna and steam bathhouses, massage clinics and
other like activities regulated by law because of risks they impose to
public health and morals (RA No. 7042 as amended by RA No. 8179)
5. Other forms of gambling, e.g., race track
operation; (RA No. 7042 as amended by RA No. 8179)
6. Domestic market enterprises with paid-in equity
capital of less than the equivalent of US$200,000 (RA No. 7042 as
amended by RA No. 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
No. 7042 as amended by RA No. 8179)
Footnotes
1. Domestic investments are also prohibited
(Article II, Sec. 8 of the Constitution; Conventions/Treaties to
which the Philippines is a signatory)
2. Full foreign participation is allowed
through financial or technical assistance agreement with the President
(Article XII, Section 11 of the Constitution)
3. No foreign national may be allowed to own
stock in financing companies or investment houses unless the country of
which he is a national accords the same reciprocal rights to Filipinos
(Sec. 6 of RA No. 5980 as amended by RA No. 8556; Presidential
Decree No. 129 as amended by RA No. 8366).
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