SECOND REGULAR FOREIGN INVESTMENT NEGATIVE LIST

WHEREAS, Republic Act (RA) 8179, which amends
RA 7042 also known as the Foreign Investments Act (FIA) of 1991,
provides that the Regular Foreign Investment Negative List (RFINL) shall
consist only of Lists A and B;

WHEREAS, Section 5,
Rule VIII of the amended Implementing Rules and Regulations (IRR) of the
FIA as amended, provides that each RFINL shall remain in force only for
two years;

WHEREAS, the first RFINL which took
effect on 24 October 1994 shall expire on 23 October
1996;

WHEREAS, there is a need to formulate a second
RFINL to reflect amendments made by RA 8179 and changes to Lists A and B
as recommended by concerned government
agencies;

NOW, THEREFORE, I, FIDEL V. RAMOS,
President of the Republic of the Philippines, by virtue of the powers
vested in me by the FIA of 1991 as amended, do hereby
order:

SECTION 1. Only investment areas/activities
listed in “Annex A^*” hereof, also known as the second Regular Foreign
Investment Negative List, shall be reserved to Philippine Nationals. The
extent of foreign equity participation in these areas shall be limited
to the percentages indicated in the List.

SECTION 2.
Any amendment to List A may be made at any time to reflect changes
instituted in specific laws while amendments to List B shall not be made
more often than once every two years, pursuant to Section 8 of the FIA
as amended and Rule VIII of its amended IRR.

SECTION
3. All orders, issuances, rules and regulations or parts thereof, which
are inconsistent with this Executive Order are hereby revoked or
modified accordingly.

SECTION 4. This Executive Order
shall take effect immediately after the end of the effectivity of the
first RFINL on 24 October 1996.

Adopted: 20 Aug.
1996

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^* See Appendix
3

“ANNEX
A”

SECOND REGULAR FOREIGN
INVESTMENT NEGATIVE LIST

LIST A: FOREIGN OWNERSHIP IS
LIMITED BY MANDATE OF THE CONSTITUTION AND SPECIFIC
LAWS

NO FOREIGN
EQUITY

1. Mass Media except
recording (Article XVI, Section 11 of the Constitution; Presidential
Memorandum dated 04 May 1994)

2. Services involving
the practice of licensed professions save in cases prescribed by
law

a) Engineering

i. Aeronautical
Engineering

ii. Agricultural
Engineering

iii. Chemical
Engineering

iv. Civil
Engineering

v. Electrical
Engineering

vi. Electronics and Communication
Engineering

vii. Geodetic
Engineering

viii. Mechanical
Engineering

ix. Metallurgical
Engineering

x. Mining
Engineering

xi. Naval Architecture and Marine
Engineering

xii. Sanitary
Engineering

b) Medicine and Allied
Professions

i. Dentistry

ii.
Medical Technology

iii.
Midwifery

iv. Nursing

v. Nutrition
and Dietetics

vi. Optometry

vii.
Pharmacy

viii. Physical and Occupational
Therapy

ix. Radiologic and X-ray
Technology

x. Veterinary
Medicine

c) Accountancy

d)
Architecture

e) Criminology

f)
Chemistry

g) Custom Brokerage

h)
Environmental Planning

i)
Forestry

j) Geology

k) Interior
Design

l) Landscape
Architecture

m) Law

n)
Librarianship

o) Marine Deck
Officers

p) Marine Engine
Officers

q) Master Plumbing

r)
Sugar Technology

s) Social Work

t)
Teaching

(Article XIV, Section 14 of the
Constitution; Section 1 of RA No. 5181)

3. Retail
Trade (Section 1 of RA No. 1180)

4. Cooperatives
(Chapter III, Article 26 of RA No. 6938)

5. Private
Security Agencies (Section 4 of RA No. 5487)

6.
Small-scale Mining (Section 3 of RA No. 7076)

7.
Utilization of Marine Resources in archipelagic waters, territorial sea,
and exclusive economic zone (Article XII, Section 2 of the
Constitution)

8. Ownership, operation and management
of cockpits (Section 5 of Presidential Decree No.
449)

9. Manufacture, repair, stockpiling and/or
distribution of nuclear weapons (Article II, Section 8 of the
Constitution)

10. Manufacture, repair, stockpiling
and/or distribution of biological, chemical and radiological weapons
(Various treaties to which the Philippines is a signatory and
conventions supported by the Philippines)^*

UP TO
TWENTY-FIVE PERCENT (25%) FOREIGN
EQUITY

11. Private
recruitment, whether for local or overseas employment (Article 27 of
Presidential Decree No. 442)

12. Contracts for the
construction and repair of locally-funded public works
except:

a) infrastructure/development projects
covered in RA No. 7718; and

b) projects which are
foreign funded or assisted and required to undergo international
competitive bidding (Commonwealth Act No. 541; Presidential Decree 1594;
Letter of Instruction 630; Section 2a of RA No.
7718)

UP TO THIRTY PERCENT
(30%) FOREIGN EQUITY

13.
Advertising (Article XVI, Section 11 of the
Constitution)

UP TO FORTY
PERCENT (40%) FOREIGN
EQUITY

14. Exploration,
development and utilization of natural resources (Article XII, Section 2
of the Constitution)^**

15. Ownership of private lands
(Article XII, Section 7 of the Constitution; Chapter 5, Section 22 of
Commonwealth Act No. 141)

16. Operation and
management of public utilities (Article XII, Section 11 of the
Constitution; Section 16 of Commonwealth Act No.
146)

17. Ownership/establishment and administration
of educational institutions (Article XIV, Section 2 of the
Constitution)

18. Engaging in the rice and corn
industry (Presidential Decree No. 194)

19. Financing
companies regulated by the Securities and Exchange Commission (SEC)
Section 6 of RA No. 5980)

20. Contracts for the
supply of materials, goods and commodities to government-owned or
controlled corporation, company, agency or municipal corporation
(Section 1 of RA No. 5183)

21. Contracts for the
construction of defense-related structures (e.g., land, air, sea and
coastal defenses, arsenals, barracks, depots, hangars, landing fields,
quarters and hospitals) (Commonwealth Act No.
541)

22. Project proponent and facility operator of a
BOT project requiring a public utilities franchise (Article XII,
Section 11 of the Constitution; Section 2a of RA No.
7718)

23. Private domestic construction contracts
(Republic Act 4566; Article XIV, Section 14 of the
Constitution)

LIST
B

FOREIGN OWNERSHIP IS LIMITED FOR REASONS OF
SECURITY, DEFENSE, RISK TO HEALTH AND MORALS AND PROTECTION OF SMALL-AND
MEDIUM-SCALE ENTERPRISES

UP TO FORTY
PERCENT (40 %) FOREIGN
EQUITY

1. Manufacture,
repair, storage, and/or distribution used in the manufacture thereof
requiring Philippine National Police (PNP)
clearance:

a) Firearms (handguns to shotguns), parts
of firearms and ammunition therefor, instruments or implements used or
intended to be used in the manufacture of firearms

b)
Gunpowder

c) Dynamite

d) Blasting
supplies

e) Ingredients used in making
explosives:

i. Cholorates of potassium and
sodium

ii. Nitrates of ammonium, potassium, sodium
barrium, copper (11), lead (11), calcium and
cuprite

iii. Nitric Acid

iv.
Nitrocellulose

v. Perchlorates of ammonium, potassium
and sodium

vi.
Dinitrocellulose

vii.
Glycerol

viii. Amorphous
phosphorus

ix. Hydrogen
peroxide

x. Strontium nitrate
powder

xi. Toluene

f) Telescopic
sights, sniperscope and other similar devices (RA No. 7042 as amended by
RA No. 8179)

2. Manufacture, repair, storage and/or
distribution of products requiring Department of National Defense (DND)
clearance:

a) Guns and ammunition for
warfare

b) Military ordnance and parts thereof (e.g.,
torpedoes, mines, depthcharges, bombs, grenades,
missiles)

c) Gunnery, bombing and firecontrol systems
and components

d) Guided missiles/missile systems
and components

e) Tactical aircraft (fixed and
rotary-winged), parts and components thereof

f) Space
vehicles and component systems

g) Combat vessels
(air, land and naval) and auxiliaries

h) Weapons
repair and maintenance equipment

i) Military
communications equipment

j) Night vision
equipment

k) Stimulated coherent radiation devices,
components and accessories

l) Armament training
devices

(RA No. 7042 as amended by RA No.
8179)

3. Manufacture and distribution of dangerous
drugs (RA No. 7042 as amended by RA No. 8179)

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^* Domestic
investment are also prohibited (Article II, Section 8 of the
Constitution; Convention/Treaties to which the Philippines is a
signatory)

^** Full foreign participation is allowed through
financial or technical assistance agreement with the President (Article
XII, Section 11 of the Constitution)