EIGHTEENTH CONGRESS OF THE 
]
REPUBLIC OF THE PHILIPPINES 
]
F irs t R eg u lar Session 
]
SENATE
S.B. No. 
919
pisut
•If AUG 19 PI 37
RECEIVrC 6V.
In tro d u ced  by SEN. WIN GATCHALIAN
AN ACT
AMENDING REPUBLIC ACT NO. 7042,
OTHERWISE KNOWN AS THE FOREIGN INVESTMENTS ACT OF 1991, 
AS AMENDED BY REPUBLIC ACT NO. 8179,
AND FOR OTHER PURPOSES
EXPLANATORY NOTE
Twenty-eight years from the enactm ent of Republic Act No. 7042, 
otherwise known as the Foreign Investm ents Act of 1991 (FIA), our current 
foreign investm ent regime and policies are still relatively restrictive, standing 
in the way of economic attractiveness and employment opportunities. We 
rem ain a relatively unattractive investm ent destination, because our 
investm ent laws are less open and generally more inhibitory compared to 
those of our neighbors in the ASEAN. Given the current global and regional 
economic climate, there is a need to take a look at the FIA in its current form 
and face the fact that it may not be living up to its potential as a vital piece of 
legislation.
This bill proposes to am end several provisions of the FIA, which will 
help u s take advantage of global and regional economic dynamics. If passed 
into law, this bill could help m ake the Philippines more attractive as an 
investm ent destination which, in turn, could open up more employment 
opportunities for the Filipino people.


First, the updated policy declaration puts a prem ium  on the m ajor role 
played by technological advancem ents as well as global and regional economic 
realities on the Philippine economy.
Second, the removal of “the practice of all professions” from the 
coverage of the law m eans th at the law now applies only to foreign 
investm ents, and not to the practice of professions in the Philippines by 
foreigners. It leaves the practice of professions under the am bit of the specific 
laws th at govern and regulate them . This seeks to encourage foreign 
professionals to come to the country to share their knowledge, expertise, skills 
and technical know-how to u s Filipinos. This transfer of knowledge and 
technology will, in turn, help the country attract more businesses th at require 
high-skilled and knowledge workers.
Third, the requirem ent of an annual review of the Foreign Investm ent 
Negative List ensures that our economic policies with regard to foreign 
investm ents are constantly in line and up to date with rapidly changing global 
and regional economic realities. This allows u s to m aintain a more competitive 
position vis-a-vis our ASEAN neighbors in term s of attracting businesses that 
may be wary of restrictive policies and regulations.
Fourth, this proposal also provides for a review m echanism  over foreign 
investm ent transactions that threaten to im pair national security, ensuring 
th at the State does not take for granted national security issues in the nam e 
of gaining more FDls.
Finally, the establishm ent of a web portal to serve as a central database 
to be m aintained by the Board of Investm ents, in coordination with other 
relevant agencies, will certadnly m ake it easier for investors to learn about the 
country’s pertinent laws, rules and regulations, and policies, including 
restrictions, on foreign investm ents. This will provide potential foreign 
investors access to w hat legal and practical issues they might need to face -  
sending a clear message th at transparency and ease of doing business are as 
im portant to the State as it is to businesses and investors.
Taken together, these am endm ents will result in a foreign investm ent 
regime th at is more fine-tuned to the changing economic climate and its 
accom panying dem ands. O ur receptiveness to these changes may very well


determ ine w hether we can live up to our true economic potential or rem ain in 
the doldrum s com pared to our next-door neighbors.
It is high time for our country to start enjoying the economic benefits 
th at our neighbors have reaped from foreign investm ents for the longest time. 
I earnestly seek for this m easure’s immediate passage.


]
EIGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
]
F ir s t R e g u la r Session 
]
SENATE
S.B. No. 919
S e n a te
• a t t  •! t||t
*lf AUG 19 PI
R K E IV E O SY :
In tro d u ce d  by SEN. WIN GATCHALIAN
AN ACT
AMENDING REPUBLIC ACT NO. 7042,
OTHERWISE KNOWN AS THE FOREIGN INVESTMENTS ACT OF 1991, 
AS AMENDED BY REPUBLIC ACT NO. 8179,
AND FOR OTHER PURPOSES
Be it enacted by the Senate and the H ouse of Representatives of the 
Philippines in Congress assem bled:
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Section 1. Short Title. -  Section 2 of Republic Act No. 7042 (R.A. 7042),
2 
as am ended by Republic Act No. 8179, otherwise known as the Foreign
3 
Investm ents Act of 1991, is hereby am ended to read as follows:
4 
“Sec. 2. Declaration of Policy. -  RECOGNIZING THAT
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INCREASED CAPITAL AND TECHNOLOGY BENEFITS THE
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PHILIPPINES 
AND 
THAT 
GLOBAL 
AND 
REGIONAL
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ECONOMIES AFFECT THE PHILIPPINE ECONOMY, [i]t is the
8 
policy of the State to attract, promote and welcome productive
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investm ents 
from 
foreign 
individuals, 
partnerships,
10 
corporations, 
and governments, 
including their political
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subdivisions, in activities which significantly contribute to
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[national industrialization and socioeconomic development]
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SUSTAINABLE 
INCLUSIVE 
ECONOMIC 
GROWTH,
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PRODUCTIVITY, 
GLOBAL 
COMPETITIVENESS,


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EMPLOYMENT 
CREATION, 
TECHNOLOGICAL
ADVANCEMENT, AND COUNTRYWIDE DEVELOPMENT to
the extent th at foreign investm ent is allowed in such activity by 
the Constitution and relevant laws, AND CONSISTENT WITH 
THE PROTECTION OF NATIONAL SECURITY. 
Foreign 
investm ents 
shall 
be 
encouraged 
in 
enterprises 
that 
significantly expand livelihood and employment opportunities 
for 
Filipinos; 
enhance 
economic 
value 
of 
[farm] 
AGRICULTURAL products; promote the welfare of Filipino 
consum ers; expand the scope, quality and volume of exports 
and their access to foreign m arkets; an d /o r transfer relevant 
technologies in agriculture, industry and support services. 
Foreign investm ents shall be welcome as a supplem ent to 
Filipino capital and technology in those enterprises serving 
mainly the domestic m arket, xxx”
Sec. 2. Section 3 of R.A. 7042 is hereby am ended to read as follows; 
“Sec. 3. Definitions. -  As used in this Act: 
xxx
b) the term  “investm ent” shall m ean equity participation 
in any enterprise organized and existing under the laws of the 
Philippines 
AND 
DULY 
RECORDED 
IN 
THE 
STOCK 
TRANSFER 
BOOK, 
OR 
ITS 
EQUIVALENT, 
OF 
THE 
ENTERPRISE.”
Sec. 3. Section 4 of R.A. 7042 is hereby am ended to read as follows: 
“Sec. 4. Scope. -  This Act shall not apply to banking and 
other financial institutions which are governed and regulated 
by the General Banking Act and other laws under the 
supervision of the [Central Bank] BANGKO SENTRAL NG 
PILIPINAS, AND THE PRACTICE OF PROFESSIONS.”


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Sec. 4. The Foreign Investm ents Act, as am ended, is further am ended
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by inserting a new section designated as Section 11 to read as follows;
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Sec. 
11 
-  
THE 
NATIONAL 
ECONOMIC 
AND
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DEVELOPMENT AUTHORITY (NEDA), IN COOPERATION
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AND CONSULTATION WITH THE BOARD OF INVESTMENTS
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(BOI), THE DEPARTMENT OF TRADE AND INDUSTRY (DTI),
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THE SECURITIES AND EXCHANGE COMMISSION (SEC),
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THE 
DEPARTMENT 
OF 
INFORMATION 
AND
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COMMUNICATIONS TECHNOLOGY (DICT), INVESTMENT
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PROMOTION AGENCIES (IPAs), AND OTHER PERTINENT
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GOVERNMENT AGENCIES, SHALL CONDUCT AN ANNUAL
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REVIEW OF THE FOREIGN INVESTMENT NEGATIVE LIST
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AND SUBMIT TO CONGRESS EVERY APRIL 30 OF THE
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YEAR THE OUTPUT OF THE STAKEHOLDERS’ ANALYSIS
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ON THE CONTRIBUTION TO THE ECONOMY OF THE
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INVESTMENT AREAS, INDUSTRIES OR SECTORS THAT
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WILL BE LIBERALIZED AND EXCLUDED IN THE FOREIGN
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INVESTMENT NEGATIVE LIST. 
IT SHALL LIKEWISE
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RECOMMEND 
TO 
CONGRESS 
INVESTMENT-RELATED
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MATTERS REQUIRING NECESSARY LEGISLATION, (n)
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Sec. 5. The Foreign Investm ents Act, as am ended, is further am ended
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by inserting a new section designated as Section 12 to read as follows:
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Sec. 12 -  THE NEDA, THE NATIONAL SECURITY
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COUNCIL 
(NSC), 
AND 
OTHER 
APPROPRIATE
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DEPARTMENTS OR AGENCIES WITH THE EXPERTISE AND
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KNOWLEDGE OF THE RELEVANT ISSUES, SHALL INITIATE
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A REVIEW OF ANY FOREIGN INVESTMENT TRANSACTION
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THAT THREATENS TO IMPAIR THE NATIONAL SECURITY
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OF THE REPUBLIC OF THE PHILIPPINES. THE REVIEW
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SHALL INCLUDE, AMONG OTHERS, A DETERMINATION OF
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THE EFFECTS OF SUCH FOREIGN INVESTMENT ON
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NATIONAL 
SECURITY, 
THE 
NEGOTIATION 
OF 
ANY


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MITIGATION AGREEMENTS, AND THE RESTRUCTURING
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OR MODIFICATION OF THE SUBJECT TRANSACTION. ANY
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RECOMMENDATION INVOLVING THE SUSPENSION OR
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PROHIBITION OF ANY QUESTIONED TRANSACTION SHALL
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BE TRANSMITTED TO THE OFFICE OF THE PRESIDENT
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FOR APPROPRIATE ACTION. THE IMPLEMENTING RULES
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AND REGULATIONS SHALL SET THE PROCESS FOR SUCH
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REVIEW, (n)
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Sec. 6. The Foreign Investm ents Act, as am ended, is further am ended
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by inserting a new section designated as Section 13 to read as follows:
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Sec. 
13 -  IN ORDER TO EFFECTIVELY GUIDE
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INVESTORS ON POTENTIAL AREAS OF INVESTMENTS IN
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THE PHILIPPINES, THE BOI, IN COORDINATION AND
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COOPERATION WITH OTHER GOVERNMENT AGENCIES
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AND IPAs, SHALL MAKE AVAILABLE FOR PUBLIC ACCESS
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A 
JOINT 
WEB 
PORTAL 
THAT 
WILL 
BEAR 
ALL
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INFORMATION PERTINENT TO INVESTMENT POLICIES,
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PROGRAMS, AND PROCEDURES. THE WEB PORTAL SHALL
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ALSO INCLUDE INFORMATION ON RELEVANT INDUSTRIES
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AND 
SERVICES 
THAT 
WILL 
BE 
PROMOTED 
FOR
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INVESTMENTS PURPOSES, A DATABASE OF FILIPINO
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SMALL AND MEDIUM ENTERPRISES THAT COULD BE
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POTENTIAL 
PARTNERS 
OF 
FOREIGN 
INVESTORS,
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REGIONAL 
INVESTMENT 
INFORMATION, 
AND 
SUCH
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OTHER RELEVANT INFORMATION NEEDED IN SETTING UP
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BUSINESS IN THE PHILIPPINES, (n)
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Sec. 7. The NEDA, in coordination with the BOI, SEC, DTI, DICT, IPAs,
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NSC, and other pertinent governm ent agencies, is hereby directed to make
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the necessary am endm ents to the implementing rules and regulations of
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Republic Act No. 7042, as am ended, in order to reflect the changes embodied
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in this Act.


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Sec. 8. Repealing Clause. -  All statutory laws, orders, issuances, rules 
and regulations, a n d /o r parts thereof which are inconsistent with the 
provisions of this Act are hereby repealed or modified accordingly.
Sec. 9. Separability Clause. -  If any portion or provision of this Act is 
declared invalid or unconstitutional, the portions or provisions which are not 
affected shall rem ain valid and in force and effect.
Sec. 10. Effectivity. -  This Act shall take effect fifteen (15) days after its 
publication in the Official Gazette or in a new spaper of general circulation.
Approved,