A prominent business group representing domestic manufacturers and producers is urging the government to implement safeguards to protect the local industry from a potential influx of foreign investors following the passage of a bill extending long-term lease contracts.

The Federation of Philippine Industries (FPI) stated that the enactment of Republic Act (RA) No. 12252 represents a “bold step forward” towards making the country a serious player in attracting long-term foreign investments.

Signed by President Marcos last week, the law amends the Investors’ Lease Act by extending the maximum lease period for private lands to 99 years, replacing the previous rule of 50 years and a one-time renewal of up to 25 years.

The FPI stated that this law could help generate jobs and drive industrial growth in key sectors, including manufacturing, agriculture, and tourism.

The industry group, however, warned that the law should be “carefully calibrated” to protect local industries that have long served their communities.

“This includes integrating mechanisms for local preference, particularly in areas vulnerable to land competition and possible market displacement, so that Filipino manufacturers and MSMEs are not sidelined by large-scale foreign entrants,” the FPI said in a statement penned by its chairman, Elizabeth Lee.

“Thoughtful execution is key to help balance investment inflows with the continued vitality of domestic enterprise,” it added.

Under the law, the FPI stated that the government must enforce the requirement that leases be registered and tied to approved investments, with projects commencing within three years, and misuse carrying strict penalties.

“These guardrails help ensure foreign capital builds—not displaces—local industry,” it said.

The FPI said it is open to engage with the government in the crafting of the implementing rules and regulations (IRR) to ensure that the country reaps the benefits of foreign investments without sidetracking the development of long-standing domestic industries.

The Department of Trade and Industry (DTI), through the Board of Investments (BOI) and Land Registration Authority (LRA), was tasked to issue the IRR within 90 days from the law’s effectivity.

In a statement over the weekend, the Philippine Economic Zone Authority (PEZA) said it will leverage the amended Investors’ Lease Act to further attract and retain long-term foreign investments in the country.

The PEZA said it expects the new law to strengthen investor confidence since it guarantees stability, predictability, and legal clarity in land use.

The investment promotion agency said this will help foreign investors establish brick-and-mortar facilities under a predictable long-term lease agreement instead of purchasing land upfront under the 60-40 rule.

Under the Constitution, ownership of private land is limited to Filipino citizens and corporations that are at least 60 percent Filipino-owned.

“This will help lower entry barriers, reduce investment risk, and make the Philippines a more attractive hub for global business,” the PEZA said.

With the reformed policy on land leases, the agency said this would level the playing field for the country amid the growing competition within Southeast Asia.

The PEZA noted that the likes of Singapore, Malaysia, and Thailand have long offered 99-year leases for foreign investors.

According to the 2025 World Investment Report of the United Nations Conference on Trade and Development (UNCTAD), the Philippines ranked sixth in Southeast Asia in attracting foreign direct investments (FDIs) last year.

FDI inflows reached $8.94 billion in 2024, trailing behind Singapore ($143.35 billion), Indonesia ($24.21 billion), Vietnam ($20.17 billion), Malaysia ($11.26 billion), and Thailand ($10.58 billion).

For the first five months, net inflows of FDI fell 27 percent to $2.96 billion from $4.04 billion during the same period last year, according to the Bangko Sentral ng Pilipinas (BSP).

The PEZA, meanwhile, has approved investments worth ₱105.83 billion from January to August, up 72 percent from ₱61.69 billion last year.