Aida Araceli G. Roxas-Rivera and Christianne Grace F. Salonga
The Philippine government issued 13 April 2026 the 13th Regular Foreign Investment Negative List (FINL) through Executive Order No. 113, which defines the scope and limits of foreign participation in various economic activities pursuant to the Foreign Investments Act of 1991, as amended.
Executive Order No. 113 shall take effect on 02 May 2026, or fifteen (15) days following its publication on 17 April 2026 in a newspaper of general circulation.
The FINL remains the principal regulatory framework governing foreign equity participation, classifying investment areas into List A, which covers sectors where foreign ownership is limited by the Constitution and specific laws, and List B, which identifies areas where restrictions are imposed for reasons of national security, defense, public health and morals, and the protection of micro and small enterprises.
A copy of Executive Order No. 113 may be accessed here: tinyurl.com/39bx5rwk
Policy Direction: Continuity with Targeted Liberalization
The 13th FINL adopts a continuity-driven approach. It does not introduce a structural overhaul of existing restrictions, but instead consolidates prior liberalization measures, including amendments to the Public Service Act and the Retail Trade Liberalization Act.
At the same time, it reflects a more deliberate calibration of the investment regime, maintaining baseline restrictions while clarifying areas where foreign participation may expand. The result is a framework that is not necessarily simpler, but more precise and increasingly outcome-driven, particularly in sectors aligned with national development priorities.
Core Restrictions: Largely Unchanged
Restrictions under List A remain substantially intact. Sectors reserved exclusively to Philippine nationals continue to include mass media (subject to limited exceptions), the practice of professions (subject to reciprocity and specific laws), cooperatives, private security agencies, and small-scale mining.
Foreign ownership caps likewise continue to apply across key sectors, including:
• 25% cap – private recruitment and defense-related construction
• 30% cap – advertising
• 40% cap – including public utilities, natural resources, educational institutions, land ownership, and certain government procurement activities
These limitations remain grounded in constitutional and statutory mandates and continue to define the baseline parameters for foreign investment structuring.
Targeted Expansion: Where the Investment Space Has Opened
Notwithstanding this continuity, the 13th FINL introduces targeted clarifications that effectively expand the investment space in specific sectors.
Renewable Energy
The FINL affirms that renewable energy projects—such as solar, wind, hydro, and ocean or tidal energy—may be open to full foreign ownership, consistent with policy treating these activities as outside the constitutional definition of “natural resources” in applicable contexts.
This clarification removes any lingering uncertainty and positions the Philippines as a more viable destination for energy transition investments.
Public Utilities vs. Public Services
While the 40% foreign ownership cap on public utilities remains, the FINL reflects the narrowed scope of what constitutes a public utility under the amended Public Service Act.
The practical effect is significant. A broader range of activities—particularly in transportation, logistics, and infrastructure-related services—may now be treated as public services, and therefore open to increased or full foreign participation.
In this context, regulatory classification is no longer merely technical—it is determinative of investment viability.
Telecommunications
The telecommunications sector adopts a reciprocity-based framework:
• Up to 100% foreign ownership, where reciprocity exists
• Up to 50%, in the absence of reciprocity
This approach requires investors to assess how Philippine investors are treated in their home jurisdictions, as this will directly affect allowable equity participation.
Retail Trade and Infrastructure
The liberalized regime for retail trade is maintained. Foreign investors may fully own retail enterprises, subject to compliance with the PhP25 million minimum paid-up capital requirement and other regulatory conditions.
The FINL likewise continues to recognize the role of foreign participation in infrastructure development and government procurement, including the engagement of foreign contractors and consultants in projects requiring specialized expertise.
Strategic Safeguards: List B
Restrictions under List B remain largely unchanged, continuing to impose foreign ownership limits—generally up to 40%—in sensitive sectors.
These include:
• Defense-related manufacturing and controlled materials
• Gambling and certain regulated establishments
• Micro and small domestic enterprises below prescribed capitalization thresholds
These restrictions reflect enduring policy objectives to safeguard national security, public welfare, and domestic industry competitiveness.
13th FINL at a Glance: What Changed vs. What Stayed the Same
Area | What Changed / Clarified | What Remains the Same | Practical Takeaway |
Renewable Energy | Confirmed up to 100% foreign ownership | Previously subject to interpretative uncertainty | Now a fully open sector for foreign investors |
Public Utilities vs. Public Services | Narrower definition of “public utility” | 40% cap still applied to “public utilities” | More sectors now effectively open |
Telecommunications | Up to 100% foreign ownership subject to reciprocity | 50% cap applies if no reciprocity | Requires jurisdiction-specific analysis |
Retail Trade | Liberalized regime reaffirmed | PhP25M capital requirement retained | Entry remains open but threshold-driven |
Infrastructure/ Procurement | Greater allowance for foreign participation | Subject to procurement laws and regulations | More flexibility for large-scale projects |
Natural Resources | Clarified carve-outs (e.g., renewables) | 40% constitutional cap retained | Requires careful structuring |
List A (Core Restrictions) | No major changes | Core restrictions intact | Baseline unchanged |
List B (Strategic Sectors) | Updated references; reinforced protections | Restrictions (generally up to 40%) retained | Protected sectors remain closed/sensitive |
Conclusion
The 13th FINL reflects a calibrated evolution of Philippine foreign investment policy—one that expands access in priority sectors while maintaining established constitutional and statutory boundaries.
For investors, the framework is becoming more predictable, but also more exacting. Outcomes will increasingly depend on accurate regulatory classification, disciplined structuring, and alignment with policy direction.
This article is for general information only and does not constitute legal advice. Specific advice should be sought for particular transactions or circumstances.