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August 11, 1998
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.
SECTION 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
Section 8 of the Foreign Investments Act of 1991 as amended, and of its
Implementing Rules and Regulations.
SECTION 3 . All orders, issuances, regulations or parts thereof,
which are inconsistent with this Order are hereby revoked or modified
accordingly.
SECTION 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
- Mass Media except recording (Article XVI, Section 11 of the Constitution;
Presidential Memorandum dated 04 May 1994)
- "Times New Roman"'>
Services involving the practice of licensed professions save in cases
prescribed by law
- Engineering
- Aeronautical Engineering
- Agricultural Engineering
- Chemical Engineering
- Civil Engineering
- Electrical Engineering
- Electronics and Communication Engineering
- Geodetic Engineering
- Mechanical Engineering
- Metallurgical Engineering
- Mining Engineering
- Naval Architecture and Marine Engineering
- Sanitary Engineering
- Medicine and Allied Professions
- Medicine
- Medical Technology
- Dentistry
- Midwifery
- Nursing
- Nutrition and Dietetics
- Optometry
- Pharmacy
- Physical and Occupational Therapy
- Radiologic and X-ray Technology
- Veterinary Medicine
- Accountancy
- Architecture
- Criminology
- Chemistry
- Custom Brokerage
- Environmental Planning
- Forestry
- Geology
- Interior Design
- Landscape Architecture
- Librarianship
- Marine Deck Officers
- Marine Engine Officers
- Master Plumbing
- Sugar Technology
- Social Work
- Teaching
(Article XIV, Section 14 of the Constitution; Section 1 of
RA No. 5181)
- Retail Trade (Section 1 of RA No. 1180)
- Cooperatives (Chapter III, Article 26 of RA No. 6938)
- Private Security Agencies (Section 4 of RA No. 5487)
- Small-scale Mining (Section 3 of RA No. 7076)
- Utilization of Marine Resources in archipelagic waters, territorial
sea, and exclusive economic zone (Article XII, Section 2 of the Constitution)
- Ownership, operation and management of cockpits (Section 5 of Presidential
Decree No. 449)
- Manufacture, repair, stockpiling and/or distribution of nuclear weapons
(Article II, Section 8 of the Constitution) 1
- 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
- Manufacture of firecrackers and other pyrotechnic devices (Section
5 of RA No. 7183)
Up to Twenty-Five Percent (25%) Foreign Equity
- Private recruitment, whether for local or overseas employment (Article
27 of Presidential Decree No. 442)
- Contracts for the construction and repair of locally-funded public
works except:
- infrastructure/development projects covered in RA No. 7718; and
- 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;
Section 2a of RA No. 7718)
Up to Thirty Percent (30%) Foreign Equity
- Advertising (Article XVI, Section 11 of the Constitution)
Up to Forty Percent (40%) Foreign Equity
- Exploration, development and utilization of natural resources (Article
XII, Section 2 of the Constitution) 2
- Ownership of private lands (Article XII, Section 7 of the Constitution;
Chapter 5, Section 22 of Commonwealth Act No. 141)
- Operation and management of public utilities (Article XII, Section
11 of the Constitution; Section 16 of Commonwealth Act No. 146)
- Ownership/establishment and administration of educational institutions
(Article XIV, Section 2 of the Constitution)
- Engaging in the rice and corn industry (Presidential Decree No. 194)
- 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)
- Project proponent and facility operator of a BOT project requiring
a public utilities franchise (Article XII, Section 11 of the Constitution;
Section 2a of RA No. 7718)
- Operation of deep sea commercial fishing vessels (Section 27 of RA
No. 8550)
- Adjustment Companies (Section 323 of Presidential Decree No. 612 as
amended by Presidential Decree No. 1814)
- Ownership of condominiums (Section 5 of RA No. 4726)
- Contracts for construction of defense related structures (Commonwealth
Act No. 541)
Up to Sixty Percent (60%) Foreign Equity
- Financing companies regulated by the Securities and Exchange Commission
(SEC) (Section 6 of RA No. 5980 as amended by RA No. 8556) 3
- 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
Up to Forty Percent (40%) Foreign Equity
- Manufacture, repair, storage, and/or distribution used in the manufacture
thereof requiring Philippine National Police (PNP) clearance:
- Firearms (handguns to shotguns), parts of firearms and ammunition
therefor, instruments or implements used or intended to be used
in the manufacture of firearms
- Gunpowder
- Dynamite
- Blasting supplies
- Ingredients used in making explosives:
- Cholorates of potassium and sodium
- Nitrates of ammonium, potassium, sodium barium, Copper (11),
lead (11), calcium and cuprite<
- Nitric acid
- Nitrocellulose
- Perchlorates of ammonium, potassium and sodium
- Dinitrocellulose
- Glycerol
- Amorphous phosphorus
- Hydrogen peroxide
- Strontium nitrate powder
- Toluene
- Telescopic sights, sniperscope and other similar devices (RA No.
7042 as amended by RA No. 8179)
- Manufacture, repair, storage and/or distribution of products requiring
Department of National Defense (DND) clearance:
- Guns and ammunition for warfare
- Military ordinance and parts thereof (e.g., torpedoes, mines,
depthcharges, bombs, grenades, Missiles)
- Gunnery, bombing and firecontrol systems and components
- Guided missiles/missile systems and components
- Tactical aircraft (fixed and rotary-winged), parts and components
thereof
- Space vehicles and component systems
- Combat vessels (air, land and naval) and auxiliaries
- Weapons repair and maintenance equipment
- Military communications equipment
- Night vision equipment
- Stimulated coherent radiation devices, components and accessories
- Armament training devices
- Others as may be determined by the Secretary of the Department
of National Defense (RA No. 7042 as amended by RA No. 8179)
- Manufacture and distribution of dangerous drugs (RA No. 7042 as amended
by RA No. 8179)
- 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)
- Other forms of gambling, e.g., race track operation; (RA No. 7042
as amended by RA No. 8179)
- 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)
- 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
- Domestic investments are also prohibited (Article II, Section 8 of
the Constitution; Conventions/Treaties to which the Philippines is a
signatory)
- Full foreign participation is allowed through financial or technical
assistance agreement with the President (Article XII, Section 11 of
the Constitution)
- 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 (Section 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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