Ownership of Philippine Land by Foreigners

Aliens, as a general rule, are not allowed to own real property in the Philippines. By “aliens”, we don’t mean creatures from outer space, but persons who are citizens of other countries. By “general rule”, we mean that there are certain exceptions, and two of such exceptions are discussed below.

The prohibition on foreigners owning Philippine lands is embodied in no less than the Philippine Constitution. This, in fact, is one of the usual reason cited by those who want to revise or amend the Constitution.ย  The Constitution provides:

“Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain.” (Article XII, Section 7)

It’s clear from this provision that private land may be transferred only to persons or entitles who/which has the capacity “to acquire or hold lands of the public domain.” Those who are qualified to acquire or hold lands of the public domain are as follows:

  1. Filipino citizens.
  2. Corporations at least 60% of the capital of which is owned by Filipinos.

In other words, the Constitution explicitly prohibits non-Filipinos from acquiring or holding title to private lands. Among the exceptions are as follows: (1) transfer to an alien by way of legal succession; or (2) if the acquisition was made by a former natural-born citizen. The 1987 Constitution provides that:

“Notwithstanding the provisions of Section 7 of this Article, a natural-born citizen of the Philippines who has lost his Philippine citizenship may be a transferee of private lands, subject to limitations provided by law.” (Art. XII, Sec. 8)

The Supreme Court reiterated this general rule in a recent case (Borromeo vs. Descallar, G.R. No. 159310, 24 February 2009). The Court also reiterated the consistent ruling that if land is invalidly transferred to an alien who subsequently becomes a Filipino citizen or transfers it to a Filipino, the flaw in the original transaction is considered cured and the title of the transferee is rendered valid.

There are other exceptions to the prohibition on aliens owning real property in the Philippines, like full ownership by foreigners of condominium units, but this shall be the subject of future discussions.

For this article, let’s have this discussion — should foreigners be allowed to own land in the Philippines? Comments below.

33 thoughts on “Ownership of Philippine Land by Foreigners

  1. cory

    The US should ban Philippines citizens from owning any property in the USA. This should also include any immigration processes. Funny how all the countries say you can do this or that but if the US did the same thing they would cry foul. Oh how hypocritical that is… should be common practice to only allow what you yourself are allowed. Some of the comments in this blog are the same people that would scream bloody murder if the US block Philippine peeps from coming to the US to work :/

    Reply
  2. Lunkan

    Well. I’m a foreigner, but I agree some with BOTH sides anyway ! ๐Ÿ™‚

    I’m AGAINST leting big foreign companies to buy MUCH land for mining, forestry or farming.

    BUT it’s BAD to not let foreigners buy some hektares of land to start BUSINESS on. I think mainly of factories REFINING products, which rural Philippines produce allready.

    “Foreign investors are still given the opportunity to own land if they invest in Philippine corporations and corporations wherein 60% of which is owned by Filipinos.”
    Yes, I know, but few foreign businessmen are stupid enough to be prepared to pay 100 % and only get 40 % ๐Ÿ™‚
    I know it’s possible to establish a company in an economic zone, BUT:
    /at least in the zones I have heared of costs in, it’s EXPENSIVE…
    /the zones are in CITIES, and I want to live and have my production business RURAL where more jobs are MOST NEEDED so Filipinos DON’T need to move away from home provinces to allready polluted and over crowded cities…

    I don’t have so much capital to invest myself, but I know some rich foreigners, who are interested in investing in the Philippines, BUT NOT if they get only 40 % when they pay whole…

    So I believe the Philippines LOOSE many work opportunities by this law…

    Reply
  3. Jan

    My Filipina partner and me have been together since 15 years, both of us living and working in Europe. I’m a German man in the late 40s. Both of us have visited the Philippines several times together and spent the time with her family.
    I would like to invest and start a business in northern Mindanao, which has a lot of unemployed. This business would employ locals at better conditions than those set by Filipino labour law (my terms and conditions would be close to European labour law, especially concerning pay, medical insurance and paid leave). Most of the profits from this business would stay within the Philippines (except for what I would need for investments in products only available abroad, or for myswelf an occasional trip back to Europe to visit my family).
    But I want to be in control, as not to be ripped off like my uncle, who “invested” almost a quarter of a million Euros in the Philippines, paying for businesses and land purchased in the name of his ex-in-law’s. After theyfound out that there was no more money coming in from Europe, they dumped him. He effectively got a large family out of a squatter area and made them millionaires. But as for himself, today he is back in Germany, living of social welfare and suffering from cancer. All his savings are gone and he is too old to get a job.

    It is not that I do not trust my Pinay fiancรฉe or that I don’t like her family. It is simply that I’m getting too old to start all over again. I simply cannot afford to gamble with all my old age savings.

    Reply
  4. Jan

    Added to my last comment (since editing is not possible):

    What I wrote above applies to a small to medium sized business and property for own use. I noticed that large, multinational corporations have no problem in getting whatever they need.

    as for bigger investments by foreigners, e.g. if I want to build a factory which costs 100 million dollars, I will have to find a Filipino, who can invest 60 million dollars as per the 60% rule. There are not many around who can do this. This means the law ensures that always the same families (also represented in the political dynasties) will have their fingers in the pot. Additionally I would have to entrust them with all my production and manufacturing secrets.
    Even worse is the recent amendment to the law about work permits for foreigners. Not only can a foreign resident (even a spouse of a Filipino citizen) only get a job if there is no Filipino available or willing, he also has to train his Filipino replacement, who will make him redundant as soon as the training is over.

    Reply
  5. Denny

    Aw, this was a very good post. Taking a few minutes and actual effort to make a great article? but what can I say? I put things off a lot and never manage to get anything done.|

    Reply
  6. David t

    Joseph your comments are totally insulting to all people including Filipinos, Why do you think it is necessary to make such remarks? It only shows you up to be a foul mouthed, ignorant person. I have lived here 50% of the time since 2004, now permanently. I owned a taxi company in Cebu employing around 25 drivers plus mechanics and office staff. I sold in the end because of huge problems with some of the drivers. Now retired, I bring in 42000 peso a month to your economy, why can i not buy a modest amount of land and a house? is it too much to ask? Especially as you can buy any property of any size in the UK and get a mortgage to buy it if you can afford. I do not ask for that only a modest piece of land that woulf be my refuge.

    Reply
  7. Ellah

    We are planning to acquire the excees land not more than 2 meters beside our land we owned and its a residential areas. What we should do?

    Reply
  8. Rob

    The logic of not allowing foreigners to own land is flawed.

    Foreigners living in the Philippines ought to have the right to at least own the house that they are living in even if the Philippines wishes to restrict ownership to only that.

    How is it fair that Filipino migrating overseas can own land in the countries that they migrate to, but that foreigners migrating to the Philippines are refused the same. IF the Philippines wants to restrict land ownership to only local people, then let’s pass a law in the Philippines that makes it illegal for Filipino to own land overseas as well. Fair is fair!

    The reason the USA is an economic powerhouse is because it has allowed ANYONE to migrate there that is not a criminal and is willing to work hard and allows them equal opportunity to the local population and does not restrict that. Consequently, immigrants have built the USA and made it prosperous.

    A person willing to leave home to create a life elsewhere normally works harder and contributes more to the economy than someone too scared to leave home to find their fortune. Thus immigrants create a lot more wealth than locals in ANY country in the world.

    In the PHilippines you restrict that and discourage it. But make no mistake, this is only to the benefit of local businessmen who can then charge outrageous prices and provide horrible service with no fear of competition! Think PLDT, Globe, etc. These are the ones benefitting from the mentality of preventing foreigners coming here to compete. And nobody wants to come here and compete if they cannot even own their own house and are forced to pay ridiculous rents instead!

    Reply
    1. David

      Not all migrants are hard working unfortunately in Europe they can sit on the backsides while the stae pays them money, in most cases more than enough to not bother to work

      Reply
  9. Francois

    If a foreigner can purchase land in his Filipino wife’s name, can he also purchase land in his Filipino child’s name?

    Reply
  10. Gregman

    I have a friend who has lived in the phillipines for tbe pasy 7 years now and has a 4yr and 1 yr to lovely filipina lady. He built a 3 storey; block of 6 apartments with small shop spaces below with his own money in a province of the phillipines. He previously sold a small house that was in his eldest sons name (as obviously no foreigner can own land and he isnt married to this lady altho they are v haappy together) so this apartment block is also in his sons name. He now wants to move back to australia now permanently with his new family so found a buyer who is an expat (who is married to a filipino woman for 20 yrs and lived there for 30) got all documenfs signed with lawyers who were confident it would go thru as same judge allowed sale of first small house 2 years prior. But denied??!! Why…?? How can he find out what he can do or what has happened

    Reply
  11. Clarence

    I am planning to marry a Filipina Woman. .I had planned to invest in real estate. .renting condos and apartments.
    Now after reading comments here I’m skeptical about my plan.
    Even though trust is the foundation of a marriage. .divorce. ..surprises happen.

    Reply
  12. Ghee

    I’m a filipina and in a relationship with an American. We are NOT married and we have a child. Can he buy a lot and put their both names as the owner? If not, can he put it under our child’s name even if our child is only 1year old?

    Reply
  13. Jacob

    Question:

    A family corporation is created and such corporation owns real property. A Filipino majority stockholder dies
    and her legal heirs are her children most of whom are american citizens. if legal succession is followed then the corporation would become more than 60% foreign owned. Does that mean that the family corp. now foreign majority owned corporation would in effect own real property here in the Philippines? is that allowed or would it fall within the exceptions.
    thanks for academic purposes ๐Ÿ™‚

    Reply
  14. steve

    a foreigner who, after five years of residence shall take Philippine citizenship can ‘buy land in the Philippines?

    Reply

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