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Long-term land tenure has historically been one of the Philippines’ most significant structural constraints for foreign investors, particularly for capital-intensive projects with extended payback periods. Republic Act No. 12252 directly addresses this issue by allowing foreign investors to lease private land for up to 99 years, materially improving tenure certainty and project bankability.

The law took effect in September 2025, and amends the Investor’s Lease Act. While the constitution prohibits foreign ownership of land, the reform shapes how foreign investors may structure land use for large-scale developments by enhancing leasehold rights.

Policy framework under RA 12252: Philippines’ 99-year lease reform

Consolidated 99-year lease term. RA 12252 replaces the previous two-stage lease structure, with an initial 50-year term and a one-time 25-year extension, with a single consolidated lease term of up to 99 years. Under the previous framework, renewal approval introduced uncertainty at a late stage of the investment cycle, often affecting refinancing, valuation and exit planning.

By removing the renewal requirement, the reform allows investors to define land-use rights over a fixed and predictable horizon. This is particularly relevant for large-scale capital-intensive projects such as industrial facilities, tourism estates, agribusiness projects and environmentally focused developments, where asset lifecycles frequently extend well beyond conventional lease terms.

Registration and enforceability. RA 12252 provides a stronger degree of legal certainty and enforceability for long-term leases. The law clarifies that the registration with the Registry of Deeds is the operative act that renders a lease binding against third parties. Once registered, the lease enjoys protection against competing claims, ensuring that investors’ land-use rights are recognised and enforceable. It may not be the subject of a collateral challenge, nor may it be changed or terminated by any means other than through a direct proceeding. Thus, the law significantly reduces the legal exposure of long-term lease rights by protecting them against indirect challenges and unexpected land access disputes.

Transferability and use as collateral. Registered leasehold interests may be assigned, transferred and/or used as collateral for financing, which enhances the commercial utility of leasehold rights.

The ability to mortgage or otherwise encumber leasehold interests supports more flexible project finance structures. It enables investors to restructure, refinance or divest projects over their lifecycle without undermining land-use security, improving overall asset liquidity.

Regulatory safeguards. The expanded lease privilege is subject to regulatory oversight. Foreign lessees must maintain approved and registered investments under relevant laws, including the Foreign Investments Act and incentive programmes administered by investment promotion agencies. This ensures that extended lease privileges are reserved for investors that deliver real economic value and align with national development priorities.

Under this framework, an investor having approved and registered investments may lease private land for a period of up to 99 years for projects related to industrial development, tourism, agriculture, agro-forestry, environmental conservation and other types of priority sectors.

Foreign investor implications of the Philippines’ 99-year lease reform

For foreign investors, the most immediate benefit of RA 12252 is enhanced certainty of tenure. The introduction of a clearly defined 99-year lease term removes reliance on discretionary renewal approvals, which can affect project continuity and valuation. From a financial standpoint, extended lease tenures significantly improve project bankability. Aligning land-use rights with the economic life of assets lowers refinancing risk, enables longer loan maturities, and strengthens the overall viability of capital intensive investments.

The reform narrows a structural gap between the Philippines and Southeast Asian nations such as Singapore, Malaysia and Indonesia, which allow long-term land tenure arrangements. Because lease duration affects asset valuation, financing structures and risk allocation, RA 12252 enhances the country’s competitiveness for investors assessing multiple jurisdictions.

Broader economic effects of the Philippines’ 99-year lease reform

At a macroeconomic level, the reform is intended to channel foreign capital into productive long-term investment. Longer lease terms encourage deeper capital commitments, higher-quality developments and sustained investment in infrastructure, workforce training and local supply chains. For host communities, this can translate into stable employment, increased economic activity and growth in supporting industries such as logistics, retail and services.

Philippines 99-year lease reform signals stronger investment direction

The long-term lease framework is a measured policy choice that balances investment with national policy constraints. By strengthening the duration and enforceability of land-use rights, the reform contributes to a more structured environment for long-term foreign investment, particularly for projects where land tenure certainty is critical to viability.

Nilo T Divina is a founder and managing partner, Ciselie Marie T Gamo-Sisayan is a partner, and Angel Isah M Romero is an associate at DivinaLaw in Metro Manila

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