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1)
which are defense-related activities, requiring prior clearance and
authorization from Department of National Defense (DND) to engage in
such activity, such as the manufacture, repair, storage and/or
distribution of firearms, ammunition, lethal weapons, military
ordinance, explosives, pyrotechnics and similar materials;
unless such manufacturing or repair activity is specifically
authorized, with a substantial export component, to a non-Philippine
national by the Secretary of National Defense; or
2) which have implications on public health and morals, such as the
manufacture and distribution of dangerous drugs; all forms of
gambling; nightclubs, bars, beerhouses, dance halls; sauna and steam
bathhouses and massage clinics.
“Small and medium-sized domestic market enterprises, with paid-in
equity capital less than the equivalent two hundred thousand US
dollars (US$200,000) are reserved to Philippine nationals, Provided
that if: (1) they involve advanced technology as determined by the
Department of Science and Technology or (2) they employ at least
fifty (50) direct employees, then a minimum paid-in capital of one
hundred thousand US dollars (US$100,000.00) shall be allowed to
non-Philippine nationals.
Amendments to List B may be made upon recommendation of the
Secretary of National Defense, or the Secretary of Health, or the
Secretary of Education, Culture and Sports, endorsed by the NEDA,
approved by the President, and promulgated by a Presidential
Proclamation.
“Transitory Foreign Investment Negative List” established in Sec. 15
hereof shall be replaced at the end of the transitory period by the
first Regular Negative List to be formulated and recommended by NEDA,
following the process and criteria provided in Sections 8 of this
Act.
The first Regular Negative List shall be published not later than
sixty (60) days before the end of the transitory period provided in
said section, and shall become immediately effective at the end of
the transitory period. Subsequent Foreign Investment Negative Lists
shall become effective fifteen (15) days after publication in a
newspaper of general circulation in the Philippines:
Provided, however, That each Foreign Investment Negative List
shall be prospective in operation and shall in no way affect foreign
investment existing on the date of its publication.
“Amendments to List B after promulgation and publication of the
first Regular Foreign Investment Negative List at the end of the
transitory period shall not be made more often than once every two
(2) years”. (As amended by R.A. 8179)
SECTION 9.
Investment Rights of Former Natural-born Filipinos. - For
the purpose of this Act, former natural born citizens of the
Philippines shall have the same investment rights of a
Philippine citizen in Cooperatives under Republic Act No. 6938,
Rural Banks under Republic Act No. 7353, Thrift Banks and Private
Development Banks under Republic Act No. 7906, and Financing
Companies under Republic Act No. 5980. These rights shall not extend
to activities reserved by the Constitution, including (1) the
exercise of profession; (2) in defense related activities under
Section 8 (b) hereof. Unless specifically authorized by the
Secretary of National Defense; and, (3) activities covered by
Republic Act No. 1180 (Retail Trade Act). Republic Act No. 5187
(Security Agency Act), Republic Act No. 7076 (Small Scale Mining
Act), Republic Act No. 3018. As amended (Rice and Corn Industry
Act). And P.D. 449
(Cockpits Operation and Management)”. (As amended by R.A. 8179)
SECTION 10.
Other Rights of Natural Born Citizen Pursuant to the Provisions of
Article XII, Section 8 of the Constitution. - Any natural
born citizen who has lost his Philippine citizenship and who has the
legal capacity to enter into a contract under Philippine laws may be
a transferee of a private land up to a maximum area of five thousand
(5,000) square meters in the case of urban land or three (3)
hectares in the case of rural land to be used by him for business or
other purposes. In the case of married couples, one of them may
avail of the privilege herein granted: Provided, That if both shall
avail of the same, the total area acquired shall not exceed the
maximum herein fixed. In the case the transferee already owns urban
or rural land for business or other purposes, he shall still be
entitled to be a transferee of additional urban or rural land for
business or other purposes which when added to those already owned
by him shall not exceed the maximum areas herein authorized.
A transferee under this Act may acquire not more than two (2) lots
which should be situated in different municipalities or cities
anywhere in the Philippines: Provided, That the total land area
thereof shall not exceed five thousand (5,000) square meters in the
case of urban land or three (3) hectares in the case of rural land
for use by him for business or other purposes. A transferee who has
already acquired urban land shall be disqualified from acquiring
rural land and vice versa”. (As amended by R.A. 8179)
SECTION 11.
Compliance with Environmental Standards. - All industrial
enterprises regardless of nationality of ownership shall comply with
existing rules and regulations to protect and conserve the
environment and meet applicable environmental standards.
SECTION 12.
Consistent Government Action. - No agency, instrumentality
or political subdivision of the Government shall take any action in
conflict with or which will nullify the provisions of this Act, or
any certificate or authority granted hereunder.
SECTION 13.
Implementing Rules and Regulations. - NEDA, in consultation
with BOI, SEC and other government agencies concerned, shall issue
the rules and regulations to implement this
Act within one hundred and twenty (120) days after its effectivity.
A copy of such rules and regulations shall be furnished the Congress
of the Republic of the Philippines.
SECTIOON 14.
Administrative Sanctions. - A person who violates any
provision of this Act or of the terms and conditions of registration
or of the rules and regulations issued pursuant
thereto, or aids or abets in any manner any violation shall be
subject to a fine not exceeding one hundred thousand pesos
(P100,000).
If the offense is committed by a juridical entity, it shall be
subject to a fine in an amount not exceeding ˝ of 1% of total
paid-in capital but not more than five million pesos (P5,000,000).
The president and/or officials responsible thereof shall also be
subject to a fine not exceeding two hundred thousand pesos
(P200,000.00).
In addition to the foregoing, any person, firm or juridical entity
involved shall be subject to forfeiture of all benefits granted
under this Act. SEC shall have the power to impose administrative
sanctions as provided herein for any violation of this Act or its
implementing rules and regulations.
SECTION 15.
Transitory Provisions. - Prior to effectivity of the
implementing rules and regulations of this Act, the provisions of
Book II of Executive Order 226 and its implementing rules and
regulations shall remain in force.
During the initial transitory period of thirty-six (36) months after
issuance of the Rules and Regulations to implement this Act, the
Transitory Foreign Investment Negative List shall consist of the
following:
A. List A:
1. All areas of investment in which foreign ownership is limited by
mandate of Constitution and specific laws.
B. List B:
1. Manufacture, repair, storage and/or distribution of firearms,
ammunition, lethal weapons, military ordnance, explosives,
pyrotechnics and similar materials required by law to be licensed by
and under the continuing regulation of the Department of National
Defense; unless such manufacturing or repair activity is
specifically authorized, with substantial export component, to a
non-Philippine national by the Secretary of National Defense;
2. Manufacture and distribution of dangerous drugs; all forms of
gambling; nightclubs, bars, beerhouses, dance halls; sauna and steam
bathhouses, massage clinics and other like activities regulated by
law because of risks they may pose to public health
and morals;
3. “Small and medium-sized domestic market enterprises with paid-in
equity capital less than the equivalent of Two-hundred thousand US
dollars (US$200,000.00), reserved to Philippine nationals: Provided,
That if: (1) they involve advanced technology as
determined by the Department of Science and Technology or (2) they
employ at least fifty (50) direct employees, then a minimum paid-in
capital of One hundred thousand US dollars (US$100,000.00) shall be
allowed to non-Philippine nationals.
SECTION 16.
Repealing Clause. - Articles forty-four (44) to fifty-six
(56) of Book II of Executive Order No. 226 are hereby repealed.
All other laws or parts of laws inconsistent with the provisions of
this Act are hereby repealed or modified accordingly.
SECTION 17.
Separability Clause. - If any part or section of this Act is
declared unconstitutional for any reason whatsoever, such
declaration shall not in any way affect the other parts or sections
of this Act.
SECTION 18.
Effectivitiy. - This Act take effect from fifteen (15) days
after approval and publication in two (2) newspapers of general
circulation in the Philippines.
Approved,
(SGD) JOSE DE VENECIA, JR.
(SGD) NEPTALI A. GONZALES
Speaker of the House
President of the Senate
of Representatives
This Act, which is a consolidation of Senate Bill No. 1399 and House
Bill No. 5029 was finally passed by the Senate and the House of
Representatives on March 25, 1996.
CAMILO L. SABIO
HEZEL P. GACUTAN
Secretary General
Secretary of the Senate
House of Representatives
Approved: March 28, 1996
(SGD)
FIDEL V. RAMOS
President of the Philippines
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