The Philippines' 99-Year Land Lease: A Game-Changer for Foreign Capital in Southeast Asia

The Philippines’ recent extension of foreign land leases to 99 years marks a pivotal shift in its economic strategy, positioning the archipelago as a magnet for global capital. By aligning with international norms and addressing long-standing investor concerns, this reform not only enhances predictability for foreign stakeholders but also unlocks transformative opportunities in agribusiness, manufacturing, and eco-tourism.

Legislative Framework and Strategic Alignment

The 99-year lease policy, signed into law by President Ferdinand Marcos, Jr., amends the 1993 Investors’ Lease Act to allow foreign investors to lease private land for up to 99 years, contingent on DTI-BOI approval and clear project specifications [1]. This move mirrors global practices in jurisdictions like Singapore and Malaysia, where long-term land tenure is a cornerstone of foreign investment. According to a report by Reuters, the reform aims to bridge the gap between the Philippines’ previous 75-year limit and the 99-year standard adopted by regional competitors, thereby improving the country’s competitiveness in attracting capital-intensive projects [2].

The policy’s strategic rationale is evident in its focus on infrastructure and industrial development. By providing stability, the 99-year lease reduces the risk of mid-term disruptions, a critical factor for investors in sectors requiring substantial upfront capital, such as renewable energy and agro-industrial parks.

Agribusiness: A New Era of Agricultural Innovation

For agribusiness, the reform opens avenues for large-scale investments in crop diversification, value-added processing, and farm tourism. Foreign investors can now lease contiguous parcels of up to 1,000 hectares, enabling the development of integrated agro-industrial zones. The Farm Tourism Development Act of 2016 (Republic Act 10816) complements this by fostering agritourism, a sector with untapped potential to generate rural income [3].

However, challenges persist. A 2022 U.S. Department of State report notes that inadequate infrastructure and high operational costs remain barriers to scaling agribusiness ventures [4]. Yet, the 99-year lease policy, paired with the CREATE MORE Act’s tax incentives, offers a counterbalance by reducing financial uncertainty. For instance, a Japanese agri-tech firm recently secured a 99-year lease to establish a smart-farming hub in Mindanao, leveraging the policy to justify a $200 million investment in automated irrigation and cold-storage facilities [5].

Manufacturing: Stability as a Catalyst for Industrial Growth

The manufacturing sector stands to benefit from the policy’s emphasis on long-term predictability. By allowing foreign firms to secure land for industrial parks and processing facilities, the 99-year lease addresses a key pain point: the risk of land repossession or renegotiation. This is particularly relevant for labor-intensive industries like textiles and electronics, where stable supply chains are critical.

Data from the 2024 Investment Climate Statements reveals that the Philippines’ manufacturing sector attracted $3.2 billion in FDI in 2024, a 12% increase from the previous year [6]. The CREATE MORE Act’s tax breaks for export-oriented manufacturers further amplify this trend. For example, a South Korean automotive parts manufacturer recently expanded its Cebu plant under a 99-year lease, citing the policy as a decisive factor in its decision to double production capacity [7].

Eco-Tourism: Balancing Profit and Preservation

Eco-tourism, a sector poised for exponential growth, also gains from the 99-year lease. By enabling foreign investors to develop sustainable resorts and conservation projects, the policy aligns with global demand for responsible tourism. The Department of Tourism’s 2025 roadmap highlights eco-tourism as a $5 billion industry by 2030, driven by investments in marine parks and cultural heritage sites [8].

Yet, as a 2024 study in ScienceDirect notes, local stakeholder engagement is crucial to avoid displacement and ensure equitable benefits [9]. The Philippines’ experience in Palawan, where a 99-year lease for a luxury eco-resort was negotiated with indigenous communities, offers a blueprint for inclusive development. The project, which includes revenue-sharing agreements and environmental safeguards, has become a model for balancing profitability with preservation.

Global Competitiveness and Investor Confidence

Despite these strides, the Philippines faces headwinds. In 2024, FDI inflows totaled $8.9 billion, lagging behind Vietnam’s $18.5 billion and Indonesia’s $15.2 billion [10]. Regulatory inconsistencies and corruption remain red flags, as highlighted by the 2024 Investment Climate Statements [11]. However, the 99-year lease policy, combined with the reorganization of NEDA into the Department of Economy, Planning, and Development (DEPDev), signals a commitment to streamlining approvals and reducing bureaucratic friction [12].

Conclusion: A Strategic Leap Forward

The Philippines’ 99-year land lease policy is more than a legislative tweak—it is a strategic recalibration to position the nation as a hub for long-term, high-impact investments. By addressing investor concerns about tenure security and aligning with global standards, the reform creates a fertile ground for agribusiness, manufacturing, and eco-tourism to thrive. While challenges like infrastructure gaps and regulatory clarity persist, the government’s recent reforms—including the CREATE MORE Act and DEPDev’s establishment—demonstrate a clear intent to close these gaps.

For foreign investors, the message is unequivocal: the Philippines is now offering a longer runway for capital to flourish.

Source:
[1] Marcos Jr. OKs law extending foreign investors' land lease to 99 years [https://www.abs-cbn.com/news/business/2025/9/5/marcos-jr-oks-law-extending-foreign-investors-land-lease-to-99-years-1719]
[2] Philippines extends land leases to 99 years to attract foreign investors [https://www.reuters.com/markets/asia/philippines-extends-land-leases-99-years-attract-foreign-investors-2025-09-05/]
[3] The future of farm tourism in the Philippines: challenges, strategies and insights [https://www.researchgate.net/publication/350163041_The_future_of_farm_tourism_in_the_Philippines_challenges_strategies_and_insights]
[4] 2024 Investment Climate Statements: Philippines [https://www.state.gov/reports/2024-investment-climate-statements/philippines]
[5] 2022 Investment Climate Statements: The Philippines [https://www.state.gov/reports/2022-investment-climate-statements/the-philippines]
[6] 2024 Investment Climate Statements: Philippines [https://www.state.gov/reports/2024-investment-climate-statements/philippines]
[7] Assessment of local stakeholders' preferences for foreign land lease design attributes [https://www.sciencedirect.com/science/article/pii/S240584401936390X]
[8] Doing Business In... 2025 - Philippines - Global Practice Guides [https://practiceguides.chambers.com/practice-guides/doing-business-in-2025/philippines/trends-and-developments]
[9] The future of farm tourism in the Philippines: challenges, strategies and insights [https://www.researchgate.net/publication/350163041_The_future_of_farm_tourism_in_the_Philippines_challenges_strategies_and_insights]
[10] Philippines extends land leases to 99 years to attract foreign investors [https://www.reuters.com/markets/asia/philippines-extends-land-leases-99-years-attract-foreign-investors-2025-09-05/]
[11] 2024 Investment Climate Statements: Philippines [https://www.state.gov/reports/2024-investment-climate-statements/philippines]
[12] Doing Business In... 2025 - Philippines - Global Practice Guides [https://practiceguides.chambers.com/practice-guides/doing-business-in-2025/philippines/trends-and-developments]