EXECUTIVE ORDER NO. 286
EXECUTIVE ORDER NO. 286 -
PROMULGATING THE FOURTH 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 I
nvestment 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 Fourth Regular Foreign
Investment Negative List in view of the expiration of the existing list
on 23 October 2000 and to reflect changes to List A and B provided in
new laws and recommended by concerned government agencies;
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 Fourth Regular
Foreign Investment 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 RA 7042 as amended, and of 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 Order shall take effect on 24 October
2000.
Done in the City of Manila,
this 24th day of August, in the year of our Lord, Two
Thousand.
“ANNEX A”
FOURTH 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
(Art. XII, Sec. 14 of the
Constitution; Sec. 1 of Republic Act No. 5181)
3. Retail
trade enterprises with paid-up capital of less than US$2,500,000 (Sec.
5 of RA 8762)
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 Presidential Decree No.
449)
9.
Manufacture, repair, stockpiling and/or distribution of nuclear weapons
(Art. II, Sec. 8 of the Constitution) 2
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) 2
11.
Manufacture of firecrackers and other pyrotechnic devices (Sec. 5 of RA
7183)
Up to Twenty-Five Percent (25%)
Foreign Equity
12. Private
recruitment, whether for local or overseas employment (Art. 27 of PD
442)
13. 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)
Up to Thirty Percent (30%)
Foreign Equity
14.
Advertising (Art. XVI, Sec. 11 of the Constitution)
Up to Forty Percent (40%)
Foreign Equity
15.
Exploration, development and utilization of natural resources (Art.
XII, Sec. 2 of the Constitution) 3
16. Ownership
of private lands (Art. XII, Sec. 7 of the Constitution; Ch. 5, Sec. 22
of CA 141)
17. Operation
and management of public utilities (Art. XII, Sec. 11 of the
Constitution; Sec. 16 of CA 146)
18.
Ownership/establishment and administration of educational institutions
(Art. XIV, Sec. 4 of the Constitution)
19. 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 4 (Sec. 5 of PD 194; Sec. 15 of RA 8762)
20. 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)
21. Contracts
for the construction of defense-related structures (Sec. 1 of CA 541)
22. 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)
23. Operation
of deep sea commercial fishing vessels (Sec. 27 of RA 8550)
24. Adjustment
companies (Sec. 323 of PD 612 as amended by PD 1814)
25. Ownership
of condominiums 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
26. Financing
companies regulated by the Securities and Exchange Commission (SEC)
(Sec. 6 of RA 5980 as amended by RA 8556) 5
27. Investment
houses regulated by the SEC (Sec. 5 of PD 129 as amended by RA 8366) 5
28. Retail
trade enterprises with a minimum paid-up capital of US$2,500,000 but
less than US$7,500,000 (Sec. 5 of RA 8762) 6
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
(RA 7042 as amended by RA 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, 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 Department of National
Defense (RA 7042 as amended by RA 8179)
3. Manufacture
and distribution of dangerous drugs (RA 7042 as amended by RA 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
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)
Footnotes
1. This is limited to Filipino
citizens save in cases prescribed by law
2. Domestic investments are also prohibited
(Art. II, Sec. 8 of the Constitution; Conventions/Treaties to which the
Philippines is a signatory)
3. Full foreign participation is allowed
through financial or technical assistance agreement with the President
(Art. XII, Sec. 2 of the Constitution)
4. 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)
5. 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 5980 as amended by RA 8556; PD 129 as amended by RA 8366)
6. Full foreign participation shall be allowed
after 25 March 2002 but in no case shall investments for establishing a
store be less than US$830,000. Full foreign participation is currently
allowed in the following categories: C) Enterprises with a paid-up
capital of US$7,500,000 or more, provided that investments for
establishing a store should not be less than US$830,000; and D)
Enterprises 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)