Trade and Industry Secretary Manuel Roxas II told reporters that the Department of Trade and Industry (DTI), Department of Finance (DOF), Department of Justice (DOJ) and the Land Registration Authority (LRA) are working on a "template lease" that will be applicable to "qualified situations."
According to Roxas, one of the main concerns of foreign investors is the constitutional prohibition against foreign land ownership. Although they are allowed to enter into long-term leases, they can do little else to the land they are leasing, aside from occupying it.
"What we are developing is a leasehold template that would allow foreigners to exercise almost the same rights of ownership that Filipinos enjoy," he explained.
Roxas said the lease would allow foreigners to encumber their leased land and use it in various other transactions. The limits of this lease, he said, is still being worked out. The DOJ is looking at the legal ramifications of allowing foreigners to exercise such rights over their leased landholding.
Since there is a persistently strong resistance against amending the Constitution, Roxas said the various line agencies concerned are looking for ways to make this hybrid lease possible with only administrative measures.
"We initially believe it is possible," he said. "It would only take administrative issuance, I don’t think it would require anything stronger than this."
According to Roxas, the technical working group is developing the template and cases that would fall within this template would be allowed to lease land and enjoy certain privileges of ownership without too much red tape attached.
"Each one of those provisions in the lease would have already been tested by jurisprudence, by decisions of the DOJ so that anybody whose lease follows that template, even foreigners, will be able to enjoy without question, certain privileges of ownership," Roxas explained.
Roxas said the template would allow leasehold owners to mortgage land based on the economic value of the leasehold right. The lease owner would also be allowed to sell the leasehold right up to a certain percent of the value of the entire lease.
"Hopefully this would encourage foreign investors," Roxas said, adding that Cabinet which directed a technical team to study and flesh out the details.
"This is already in practice in various countries like Singapore and Japan which also do not allow foreign land ownership," Roxas said. "We are only beginning to study this, it’s at a very, very early stage of policy development."
This would be apart from the rights and privileges accorded by the Condominium Law which allows foreigners to own up to 40 percent of any vertical property.