I. Introduction

The prohibition against full foreign ownership of land in the Philippines is one of the most enduring and contested features of the country’s constitutional and economic architecture. It sits at the intersection of national patrimony, social justice, and economic development, and it shapes the country’s attractiveness to foreign investors.

The recurrent proposal to allow 100% foreign ownership of land—whether through constitutional amendment or significant statutory reform—raises complex questions:

Is land a commodity that should be freely alienable to all, or a national resource reserved for Filipinos?
Would allowing foreign ownership catalyze growth and investment, or deepen inequality and dispossession?
How would such a reform interact with agrarian reform, indigenous peoples’ rights, urban housing, and national security?

This article surveys the Philippine legal framework on land ownership, traces the historical and jurisprudential background of the current restrictions, and examines the legal and economic implications of allowing full foreign ownership, including possible models and safeguards.

II. Existing Legal Framework on Foreign Ownership of Land

A. Constitutional Provisions

The central legal barrier to 100% foreign ownership of land is found in Article XII (National Economy and Patrimony) of the 1987 Constitution.

Key provisions:

Public lands and natural resources (Art. XII, Sec. 2)
- All lands of the public domain, waters, minerals, coal, petroleum, and other natural resources are owned by the State.
- With respect to land: alienable and disposable lands of the public domain may be leased to, but not acquired in fee simple by, private corporations, and only to those at least 60% owned by Filipino citizens.
Private lands (Art. XII, Sec. 7)
- Private lands may be transferred only to:
  - Filipino citizens, and
  - Corporations or associations at least 60% Filipino-owned, except in cases of hereditary succession.
Nationalization principle (Art. XII, Sec. 10–11)
- Congress is mandated to reserve certain areas of investment to Filipino citizens or majority Filipino-owned corporations.
- Public utilities and specific strategic industries are reserved to Filipino-owned entities.

These provisions together create a constitutional nationality requirement for land ownership: foreigners generally cannot own land, and corporations owning land must be at least 60% Filipino-owned.

B. Statutory and Regulatory Framework

Public Land Act (Commonwealth Act No. 141)
- Governs classification and disposition of lands of the public domain.
- Acquisition by individuals is restricted to Filipino citizens.
- Corporations may only lease, not acquire, public agricultural lands, and must be at least 60% Filipino.
Civil Code of the Philippines
- Recognizes freedom of contract and property rights but is always subject to constitutional limitations.
- Provisions on sale, donation, succession, and co-ownership apply, but transfers of land to foreigners are constrained by the Constitution.
Anti-Dummy Law (Commonwealth Act No. 108, as amended)
- Prohibits the use of Filipino “dummies” to circumvent nationality restrictions.
- Penalizes schemes where foreigners effectively control land or enterprises reserved to Filipino citizens, despite nominal Filipino ownership.
Condominium Act (Republic Act No. 4726)
- Allows foreign ownership of condominium units, provided that not more than 40% of the total and outstanding capital stock of the condominium corporation is foreign-owned.
- This is often misunderstood as “foreigners can own land through condos,” but technically the corporation holds title to the land; foreigners own condominium units and an undivided interest in the corporation, subject to the 40% cap.
Foreign Investments Act (Republic Act No. 7042, as amended)
- Provides the framework for foreign participation in Philippine enterprises.
- The Foreign Investment Negative List (FINL) periodically lists activities restricted to Filipinos or subject to nationality caps. Land ownership remains governed by the Constitution, not merely the FINL.
Land Lease to Foreigners
- Foreign individuals and entities may lease private land (commonly up to 25 years, renewable for another 25) under various laws and regulations.
- Long-term leases are a key existing mechanism for foreign investors in tourism, industrial estates, and commercial developments.

C. Present Avenues for Foreign Participation in Land-Related Interests

Even under restrictive rules, foreigners can:

Own condominium units within the 40% foreign limit.
Lease land long term for business or residence.
Acquire land by hereditary succession (if falling under the constitutional exception).
Hold land indirectly through Filipino-majority corporations (subject to Anti-Dummy safeguards).
Enjoy usufruct, long-term lease, or other real rights short of ownership.

These mechanisms mitigate, but do not eliminate, the barrier that the nationality requirement poses to foreign investors.

III. Historical and Jurisprudential Background

A. From Colonial Regimes to the 1935 Constitution

Under Spanish and later American rule, land policy was shaped by colonial interests and land grants, producing large estates and significant land inequality. Nationalist sentiment grew against foreign and elite control over land, culminating in the inclusion of patrimonial provisions in the 1935 Constitution:

Reserved the exploitation and development of natural resources and ownership of public lands to Filipino citizens or corporations at least 60% Filipino-owned.
Embedded the notion that land and natural resources are part of the nation’s “patrimony” and should primarily benefit Filipinos.

B. 1973 and 1987 Constitutions

The 1973 Constitution retained and refined these restrictions. The 1987 Constitution, drafted in the aftermath of the Marcos regime, preserved the core nationalist framework, emphasizing:

Filipino control over the national economy and patrimony;
Social justice, agrarian reform, and protection of marginalized sectors such as farmers and indigenous peoples.

Thus, the present restrictions have deep historical roots and political symbolism, not just economic rationale.

C. Key Supreme Court Decisions

While not exhaustive, several decisions are crucial to understanding the legal landscape:

Krivenko v. Register of Deeds
- A foreign national attempted to register residential land in his name.
- The Court held that foreigners cannot acquire even residential land, interpreting constitutional provisions strictly to bar foreign landownership, except as explicitly allowed (e.g., hereditary succession).
Republic v. Quasha
- Addressed the transition from pre- to post-constitutional regimes regarding foreign property rights.
- Emphasized that constitutional provisions on land ownership and nationalization can validly reconfigure foreign property rights, subject to vested rights doctrine.
Gamboa v. Teves (though focused on public utilities and the term “capital”)
- The Court interpreted “capital” in the 60–40 rule as referring to voting shares that confer control, not merely total equity.
- This tightened enforcement of nationality requirements and had implications for corporations holding land.
Other cases reinforce:
- Strict construction against foreign ownership;
- The State’s authority and duty to enforce constitutional nationality restrictions, including nullifying void transfers.

Together, jurisprudence underscores that current restrictions are not mere policy choices; they are entrenched constitutional commands rigorously enforced by the courts.

IV. Arguments for Allowing 100% Foreign Ownership of Land

A. Economic Growth and Foreign Direct Investment (FDI)

Attractiveness to Foreign Investors
- Ownership—rather than leasehold—gives investors greater security for long-term capital-intensive projects (manufacturing plants, logistics hubs, data centers, tourism estates).
- Land can be used as collateral, reducing financing costs and increasing investment scale.
Signal of Openness and Stability
- Liberalizing land ownership may be seen as a strong signal that the Philippines is committed to open and rules-based economic policy, potentially improving its standing relative to regional peers.
Development of Idle Lands
- Foreign participation could help develop underutilized or idle lands, especially in areas where domestic capital is scarce.
- Could spur infrastructure, housing, and industrial development, particularly outside Metro Manila.
Spillover Effects
- Land development often brings employment, ancillary services, and local government revenues.
- May encourage technology transfer, skills development, and integration into global value chains.

B. Regional Competitiveness and Integration

Many neighboring countries allow some form of foreign land ownership, at least for specific uses or subject to conditions.
Maintaining a strict prohibition may be seen as a competitive disadvantage in attracting investment, especially as ASEAN economic integration deepens.

C. Rule of Law and Transparency

Prohibition encourages circumvention via dummies and complex corporate structures.
Legalizing foreign land ownership could:
- Reduce illegal arrangements;
- Increase transparency through proper registration of beneficial ownership;
- Facilitate proper taxation and regulation of landholdings.

D. Alignment with Modern Commercial Practices

In a globalized economy, immovable property rights for foreign investors are increasingly normalized.
Allowing foreign ownership could modernize Philippine property law, integrating it more closely with international investment norms and facilitating cross-border transactions.

V. Arguments Against Allowing 100% Foreign Ownership

A. National Patrimony and Constitutional Values

Symbolic and Substantive Control
- Land is not merely a commodity; it is tied to identity, sovereignty, and culture.
- Constitutional framers viewed control over land and natural resources as essential to self-determination after periods of colonial subjugation.
Fear of Foreign Dominance
- Allowing foreign ownership is perceived as opening the door to concentration of land in foreign hands, especially in prime urban and coastal areas.

B. Social Justice, Agrarian Reform, and Inequality

Existing Land Inequality
- The Philippines already suffers from highly skewed land distribution, historically favoring elites.
- Introducing foreign demand might drive up land prices, making it harder for small farmers, urban poor, and lower-income Filipinos to access land.
Interaction with Agrarian Reform
- Programs like the Comprehensive Agrarian Reform Program (CARP/CARPER) seek to redistribute land to landless farmers.
- Full liberalization could:
  - Encourage landowners to sell to foreign buyers instead of agrarian reform beneficiaries;
  - Make expropriation and just compensation much more expensive.
Urban Housing and Informal Settlers
- Rapid increases in land prices could worsen housing affordability, exacerbate informal settlements, and strain existing social housing programs.

C. Indigenous Peoples’ Rights and Ancestral Domain

The Indigenous Peoples’ Rights Act (IPRA) recognizes ancestral domains and grants indigenous cultural communities rights of ownership and management.
Concerns include:
- Commercial pressures leading to voluntary but economically coerced transfers or leases;
- Potential weakening of cultural integrity and traditional land stewardship;
- Environmental impacts on sacred and ecologically sensitive areas.

Even if law formally protects ancestral domains from sale, economic and political asymmetry raises fears of indirect dispossession.

D. National Security and Strategic Concerns

Certain lands (e.g., border areas, coastal zones, islands near strategic waterways, areas near military installations) have security implications.
Foreign ownership of land in such areas could:
- Facilitate espionage or strategic positioning;
- Complicate State response during emergencies or conflict.

Many states maintain restrictions on foreign ownership near borders and critical infrastructure for similar reasons.

E. Land Speculation and Real Estate Bubbles

Foreign buyers may purchase land primarily for speculation, not productive use, inflating prices and contributing to real estate bubbles.
The gains accrue to current landowners and developers, while young families, farmers, and small enterprises face higher entry barriers.

F. Administrative Capacity and Governance

Effective liberalization presupposes strong:
- Land titling and registration systems;
- Tax administration;
- Monitoring of beneficial ownership.
Weaknesses in these areas raise concerns that liberalization might worsen corruption, land grabbing, and regulatory capture.

VI. Legal Pathways for Liberalization

Allowing 100% foreign land ownership would require constitutional and statutory changes, given the explicit constitutional prohibitions.

A. Constitutional Amendment or Revision

Modes of Change

Under the 1987 Constitution, amendments or revisions may be proposed by:
- Congress, acting as a Constituent Assembly (Con-Ass);
- A Constitutional Convention (Con-Con);
- People’s Initiative (subject to stringent requirements).
Possible Approaches
- Full deletion of nationality restrictions:
  - Remove or substantially alter Article XII, Sections 2, 3, 7, and related provisions.
  - Replace with a more neutral property clause subject to ordinary legislation.
- “Unless otherwise provided by law” clauses:
  - Introduce a qualifier allowing Congress to relax restrictions by statute.
  - This approach preserves constitutional recognition of national patrimony while giving the legislature flexibility.
- Targeted amendments:
  - Allow foreign ownership only for certain land classifications (e.g., industrial, commercial, not agricultural or residential).
  - Restrict foreign ownership in strategic or ecologically sensitive areas.
Revision vs. Amendment
- A revision involves a fundamental change in the Constitution’s structure or philosophy.
- Critics may argue that dismantling patrimonial provisions amounts to a revision, necessitating a more participatory process (e.g., Con-Con).

B. Statutory and Regulatory Adjustments

Once the Constitution is amended, Congress would have to enact or revise laws such as:

Public Land Act (to allow foreign acquisition of public lands under specified conditions);
Civil Code and special land laws (to allow transfer of private land to foreign nationals);
Condominium Act (to recalibrate or possibly remove the 40% limit);
Anti-Dummy Law (to re-focus on sectors still subject to nationality limitations, if any remain);
Foreign Investments Act and FINL (to reflect the new regime).

C. Transition Rules and Vested Rights

Legal change would need clear transition provisions:

Treatment of foreigners who currently hold land indirectly (via dummies or questionable structures);
Respect for vested rights of existing owners;
Possible amnesty or regularization programs for foreign investors in gray areas, conditioned on compliance and proper disclosure.

VII. Regulatory Design Options If Liberalization Is Adopted

Full liberalization need not be absolute. Many countries allow foreign ownership subject to conditions. Possible models include:

A. Use-Based Restrictions

Allow foreign ownership of land only for specific uses:
- Industrial, commercial, tourism, logistics, infrastructure;
- Limit or prohibit foreign ownership of agricultural and residential lands to protect food security and housing access.

B. Geographic Restrictions

Restrict foreign ownership in:
- Border provinces;
- Small offshore islands;
- Areas near military bases or critical infrastructure;
- Environmentally protected areas (e.g., national parks, key biodiversity areas).

C. Size and Concentration Caps

Impose limits on:
- Maximum hectares per foreign person or entity;
- Aggregate foreign ownership in a province, region, or city.

This reduces risk of land monopolization and preserves policy space.

D. National Security Review Mechanism

Establish a screening regime for foreign land acquisitions:
- Applications reviewed for national security, public order, and public health considerations;
- Modeled on foreign investment review systems seen in other jurisdictions.

E. Transparency and Beneficial Ownership

Require disclosure of ultimate beneficial owners of landholding entities.
Strengthen land registries to record not only formal titleholders but also beneficial ownership and encumbrances.
Integrate with anti-money laundering systems to curb illicit capital inflows.

F. Protection of Indigenous Peoples and Agrarian Reform

Explicitly exempt ancestral domains and lands under agrarian reform coverage from foreign acquisition:
- Maintain stringent safeguards against waiver, sale, or encumbrance that undermine social justice objectives.
Provide clearer rules on:
- Foreign leases of agrarian reform lands;
- Joint ventures with agrarian reform beneficiaries and indigenous communities, with adequate safeguards.

G. Taxation and Land Value Capture

Use property taxes, capital gains taxes, and land value capture instruments to:
- Prevent speculative hoarding;
- Ensure local communities benefit from rising land values due to foreign-driven development.

VIII. Interaction with Existing Legal Regimes

Any reform on foreign land ownership cannot be isolated from related regimes.

A. Agrarian Reform (CARP/CARPER)

Liberalization must address:
- Eligibility of agrarian lands for foreign purchase;
- Rules on conversion of agricultural land to non-agricultural use;
- Protection of agrarian reform beneficiaries from losing their awarded lands through distress sales.

Potential measures:

Mandatory cooling-off periods, legal counseling, and minimum floor prices for sales;
State or community right of first refusal.

B. Urban Development and Housing Laws

Laws on urban development and housing seek to provide housing for underprivileged and homeless citizens.
Liberalization could:
- Require inclusionary zoning, where foreign-led developments must allocate a portion for social housing;
- Impose impact fees to fund local infrastructure and social services.

C. Local Government Code and Land Use Planning

Local government units (LGUs) exercise significant powers over land use, zoning, and local taxation.
Liberalization would:
- Necessitate updating Comprehensive Land Use Plans (CLUPs);
- Increase the importance of local governance in managing foreign land acquisitions, raising concerns about local-level corruption or capture.

D. Environmental Laws

Laws on protected areas, environmental impact assessment, and coastal zone management must be re-examined:
- Foreign-owned resorts or industrial projects in sensitive areas could have substantial environmental impacts.
- Stronger enforcement capacity would be essential.

E. Foreign Investment and Corporate Laws

Changes to land rules may trigger corresponding reforms in:
- Corporate structuring (since land ownership can influence corporate location choices);
- Special economic zone laws, where land ownership is integral to investment incentives.

IX. International Law and Treaty Considerations

A. Bilateral Investment Treaties (BITs) and Investment Chapters in FTAs

The Philippines has investment treaties that provide:
- National treatment and most-favored-nation treatment (subject to exceptions);
- Protection against expropriation without compensation;
- Access to international arbitration.

Liberalization may:

Expand the pool of foreign investors protected by these treaties;
Increase exposure to investment arbitration if future governments seek to re-regulate or reverse liberalization.

B. Non-Discrimination and Reservations

If foreign ownership is allowed but limited by nationality (e.g., different rules for certain countries), treaty commitments on non-discrimination must be carefully managed.
The Philippines may need to update or clarify its schedule of reservations under certain agreements.

C. Human Rights Obligations

International commitments on:
- Right to adequate housing;
- Right to food;
- Rights of indigenous peoples; remain binding regardless of economic policy.

The State must ensure that foreign land acquisitions do not result in forced evictions, land grabbing, or denial of subsistence.

X. Possible Reform Scenarios and Policy Choices

The debate on 100% foreign land ownership can be framed in terms of scenarios rather than a simple yes/no choice.

Scenario 1: Status Quo

Maintain current constitutional and legal restrictions.
Focus on:
- Improving land titling, cadastral surveys, and registration;
- Strengthening enforcement of Anti-Dummy and other laws;
- Enhancing investment climate through other reforms (infrastructure, ease of doing business, governance).

Pros: Preserves constitutional patrimony, avoids social and political backlash. Cons: May limit FDI and perpetuate circumvention and opacity.

Scenario 2: Partial Liberalization with Strong Safeguards

Amend the Constitution to allow Congress to liberalize by ordinary law, then:
- Permit foreign ownership for certain land uses (industrial, commercial) and in certain zones;
- Strictly protect agricultural, ancestral, and socialized housing lands;
- Impose size caps, national security review, and transparency requirements.

Pros: Balances economic competitiveness with social justice and security. Cons: Complex to administer; risk of loopholes and uneven implementation.

Scenario 3: Broad Liberalization with Limited Exceptions

Allow foreign ownership for most types of land, subject only to:
- Narrow national security and environmental exceptions;
- General regulatory controls applicable to all owners.

Pros: Maximal signal to investors; may significantly increase capital inflows. Cons: Heightened risk of land concentration, speculation, displacement, and political backlash; requires very strong institutions to manage.

XI. Conclusion

The proposal to allow 100% foreign ownership of land in the Philippines is not merely a technical legal amendment or an investment policy tweak. It is a foundational decision about how the nation conceives of its land: as a protected national patrimony reserved primarily for Filipinos, or as an asset integrated into global capital markets with foreign and local owners subject to common regulation.

From a strictly legal perspective, substantial liberalization cannot be achieved without constitutional change, supported by comprehensive statutory and regulatory reforms. From an economic perspective, the potential benefits in terms of investment and development must be weighed against risks of inequality, dispossession, and security concerns. Social justice, indigenous rights, agrarian reform, and environmental protection must sit at the center of the analysis, not at its margins.

Ultimately, the debate calls for informed public deliberation, rigorous impact assessment, and careful institutional design. Whether the Philippines maintains its current restrictions or opts for calibrated liberalization, the law must ensure that land—however owned—serves the broader constitutional goals of a just, equitable, and sustainable national community.