President Ferdinand Marcos Jr. has signed Executive Order No. 113, promulgating the 13th Regular Foreign Investment Negative List (RFINL) that updates foreign ownership limitations across various sectors of the Philippine economy. The executive order was signed on April 13, 2026, and will take effect 15 days after publication in the Official Gazette or any newspaper of general circulation.
According to the official document released by Malacañang Palace, the new list reflects changes to both Negative Lists A and B, pursuant to existing laws and consistent with the government's policy to ease restrictions on foreign participation in certain investment areas and activities.
The executive order was issued upon the recommendation of the Department of Economy, Planning, and Development (DEPDev), which cited the need to amend the previous 12th RFINL to reflect current regulatory requirements.
Constitutional and Legal Framework
The Foreign Investment Negative List is mandated under Republic Act No. 7042, known as the "Foreign Investments Act of 1991," as amended by RA Nos. 8179 and 11647. This legislation requires the formulation of a regular list covering investment areas and activities open to foreign investors or reserved to Philippine nationals.
Section 10, Article XII of the Constitution provides that the State shall regulate and exercise authority over foreign investments within its national jurisdiction, in accordance with national goals and priorities. The President is authorized under Section 8 of RA No. 7042 to amend the RFINL upon DEPDev's recommendation.
Complete Foreign Ownership Restrictions
List A identifies sectors where foreign ownership is limited by constitutional mandate and specific laws. Ten sectors maintain complete prohibition of foreign equity, including mass media operations, except recording and internet business activities as defined by Department of Justice Opinion No. 40.
The corporate practice of architecture remains exclusively reserved for Filipino citizens, along with cooperatives, except for investments by former natural-born citizens of the Philippines. Private security agencies, as governed by RA No. 11917 or the "Private Security Services Industry Act," also prohibit foreign ownership entirely.
Small-scale mining under RA No. 7076, marine resource utilization in territorial waters, and cockpit operations continue under complete foreign ownership restrictions. The manufacture, repair, stockpiling, and distribution of nuclear, biological, chemical, and radiological weapons remain prohibited for foreign investors, along with firecracker and pyrotechnic device manufacturing and retail.
Limited Foreign Participation Sectors
Several sectors allow restricted foreign participation under varying percentage limits. Private recruitment agencies, whether for local or overseas employment, permit up to 25 percent foreign equity under Article 27 of the Labor Code. Construction contracts for defense-related structures also fall under this 25 percent limitation.
Advertising services allow up to 30 percent foreign ownership as mandated by Section 11(2), Article XVI of the Constitution. A broader range of sectors permits up to 40 percent foreign participation, including retail trade enterprises with paid-up capital below ₱25 million under RA No. 11595.
Natural resource exploration, development, and utilization generally maintain the 40 percent limit, with notable exceptions for renewable energy sources. According to DOJ Opinion No. 21 and Department of Energy Circular DC2022-11-0034, solar, wind, hydro, and ocean or tidal energy projects allow full foreign participation.
Public Utilities and Education Restrictions
Public utility operations remain subject to the 40 percent foreign ownership ceiling under the Constitution and Commonwealth Act No. 146, as amended by RA No. 11659. The updated definition of public utilities includes electricity distribution and transmission, petroleum pipeline systems, water and wastewater distribution, seaports, and public utility vehicles.
Educational institutions maintain the 40 percent limit, with exceptions for schools established by religious groups, institutions serving foreign diplomatic personnel, and facilities providing short-term skills development outside the formal education system as defined in Batas Pambansa Blg. 232.
Rice and corn production, milling, processing, and trading sectors permit foreign investment up to 40 percent, with specific divestment requirements under Presidential Decree No. 194 and NFA Council Resolution No. 193.
Government Procurement and Infrastructure
Government procurement across goods, infrastructure projects, and consulting services generally maintains the 40 percent foreign participation limit. However, infrastructure projects requiring techniques or technologies not adequately possessed by Filipino entities may allow up to 75 percent foreign ownership.
Foreign bidder eligibility depends on treaty provisions, reciprocal rights from the bidder's home country, unavailability of local suppliers, or competitive necessity as outlined in the implementing rules of RA No. 12009, the "New Government Procurement Act."
Security and Defense Considerations
List B covers sectors regulated for security, defense, health, moral, and small enterprise protection reasons. Manufacturing, repair, storage, and distribution of firearms, explosives, and related materials require Philippine National Police clearance and limit foreign ownership to 40 percent.
Defense materiel development, production, and manufacturing under RA No. 12024 maintain the 40 percent restriction, along with dangerous drug distribution and manufacturing as authorized under RA No. 9165.
Telecommunications Exception
Telecommunications operations represent a unique category allowing up to 100 percent foreign equity when the investor's home country provides reciprocal treatment to Philippine nationals. Without such reciprocity, foreign ownership remains capped at 50 percent under RA No. 11659.
Small Enterprise Protection
Micro and small domestic market enterprises with paid-in equity capital below US$200,000 equivalent maintain 40 percent foreign ownership limits. Advanced technology startups endorsed by lead agencies or enterprises employing majority Filipino workers with capital below US$100,000 fall under similar restrictions.
The executive order includes provisions for amendments, stating that Negative List A changes may occur anytime to reflect specific law modifications, while Negative List B amendments cannot exceed once every two years per statutory requirements.
Photo credit: Photo courtesy of Malacañang Palace