EIGHTEENTH CONGRESS OE THE ) 
REPUBLIC OE THE PHILIPPINES 
)
First Regular Session 
)
S E N A T E
Senate Bill No.
418
of t II' £?".'( r l ;n*
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JUL 15 A8 56
RECEIVLD BV;
Introduced by Senator ERANCIS N. PANGILINAN
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
Republic Act No. 7042, otherwise known as the Foreign Investments Act of 1991 
(FIA), as amended, was passed in order to attract, promote, and welcome foreign 
investments in activities which contribute to the national industrialization and 
socioeconomic development. After almost three decades since its passage, the FIA must 
be amended in order to keep up with technological and economic advancements in the 
region and the world.
In a study done by the National Tax Research Center (NTRC), the Philippines 
ranks only 6th in the ASEAN region in foreign direct inflows from 2005 to 2016 behind 
Singapore, Indonesia, Malaysia, Vietnam, and Thailand. The NTRC recommended that 
the Philippines "needs [ ] to continually develop and improve its current position in 
terms of [ ] factors affecting the investment climate in order to achieve its social and 
economic goals."
This bill proposes several amendments to the FIA with a view to improving these 
investment climate factors.
Transparency and Ease of Business. This bill seeks to create a joint web portal 
which contains relevant information (e.g., investment policies, industry information, 
potential Filipino partners, and information needed to establish a business in the 
Philippines) to guide investors on potential areas of investment in the Philippines.
Dynamism and Flexibility. Currently, the FIA requires the review of the Foreign 
Investment Negative List once every two years. 
However, to keep up with 
technological and economic developments, this bill proposes the review of the Foreign 
Investment Negative List once a year. The bill also seeks to update FIA's declaration of 
policy to recognize these technological and economic developments.
Practice of Profession. By expressly excluding the practice of profession from the 
scope of the FIA, there shall be no question that the relevant laws governing each 
profession apply to foreign professionals seeking to practice their profession in the 
Philippines - not the FIA.


A version of this measure was filed by Senator Gatchalian in the 17th Congress. 
In view of the foregoing, the passage of this bill is earnestly sought.
FRANCIS wxPANGILIN AN


EIGHTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
S E N A T E
of li:r j’ a ie u t}* 1 2 3 4 5 6 7 8 9 10
*19 
JUL15 A 8 56
Senate Bill No.
RECEIVED 8'
Introduced by Senator FRANCIS N. PANGILINAN
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 House of Representatives of the Republic of the 
Philippines in Congress assembled:
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SECTION 1. Section 2 of Republic Act No. 7042 (R.A. 7042), as amended by
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Republic Act No. 8179, otherwise known as the Foreign Investments Act of 1991, is
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hereby amended to read as follows:
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Section 2. Declaration of Policy. - RECOGNIZING THAT INCREASED
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CAPITAL AND TECHNOLOGY BENEFITS THE PHILIPPINES AND
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THAT GLOBAL AND REGIONAL ECONOMIES AFFECT THE
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PHILIPPINE ECONOMY, [i]t is the policy of the State to attract, promote
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and 
welcome 
productive 
investments 
from 
foreign 
individuals,
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partnerships, corporations, and governments, including their political
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subdivisions, in activities which significantly contribute to [national
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INCLUSIVE ECONOMIC GROWTH, PRODUCTIVITY, GLOBAL
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COMPETITIVENESS, EMPLOYMENT CREATION, TECHNOLOGICAL
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ADVANCEMENT, AND COUNTRYWIDE DEVELOPMENT to the
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extent that foreign investment is allowed in such activity by the
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Constitution and relevant laws. Foreign investments shall be encouraged in
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enterprises that significantly expand livelihood and employment 
opportunities 
for 
Filipinos; 
enhance 
economic 
value 
of 
[farm] 
AGRICULTURAL products; promote the welfare of Filipino consumers; 
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, xxx"
SEC 2. Section 3 of R.A. 7042 is hereby amended to read as follows:
"Section 3. Definitions. - As used in this Act:
XXX
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' STOCK AND TRANSFER BOOK,
OR ITS EQUIVALENT;"
SEC. 3. Section 4 of R.A. 7042 is hereby amended to read as follows:
"Section 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."
SEC. 4. 
The National Economic and Development Authority (NEDA), in 
cooperation and consultation with the Board of Investments (BOI), the Department of 
Trade and Industry (DTI), the Securities and Exchange Commission (SEC), the 
Department of Information and Communications Technology (DICT), investment 
promotion agencies (IPAs), and other pertinent government agencies, shall conduct an 
armual review of the Foreign Investment Negative List and submit to Congress every 
April 30 of the year the output of the stakeholders' analysis on the contribution to the


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economy of the investment areas, industries or sectors that will be liberalized and
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excluded in the Foreign Investment Negative List. It shall likewise recommend to 
Congress investment-related matters requiring necessary legislation.
SEC. 5. In order to effectively guide investors on potential areas of investments in
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the Philippines, the BOl, in coordination and cooperation with the other government
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agencies and IPAs, shall make available for public access a joint web portal that shall
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contain the following: (a) all information pertinent to investment policies, programs,
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and procedures; (b) information on relevant industries and services that will be
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promoted for investment purposes; (c) a database of Filipino small and medium
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enterprises that could be potential partners of foreign investors; (d) regional investment
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information; and (e) such other relevant information needed in setting up businesses in
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the Philippines.
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SEC. 6. The NEDA is hereby directed to make the necessary amendments to the
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implementing rules and regulations of R.A. 7042, as amended, in order to reflect the
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changes embodied in this Act.
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SEC. 7. Repealing Clause. - All statutory laws, orders, issuances, rules and
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regulations, and/or parts thereof which are inconsistent with the provisions of this Act
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are hereby repealed or modified accordingly.
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SEC. 8. Separability Clause. - If any portion or provision of this Act is declared
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invalid or unconstitutional, the portions or provisions which are not affected shall
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remain valid and effective.
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SEC. 9. Effectivity. - This Act shall take effect after fifteen (15) days following the
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publication in the Official Gazette and in two (2) newspapers of general circulation.
Approved,