Article 21Supplement v1, p. 21

COMMERCIAL LAWS SUPPLEMENT

by him for business or other purposes. A transferee who

has already acquired urban land shall be disqualified

from

acquiring

rural

land

area

and

vice

versa. (as

amended by RA No 8179)

SECTION 9. Determination of Areas of Investment for

Inclusion in List C of the Foreign Investment Negative

List . — Upon petition by a Philippine national engage

therein, an area of investment may be recommended by

NEDA for inclusion in List C of the Foreign Investment

Negative List upon determining that it complies with all

the following criteria:

a) The industry is controlled by firms owned at least sixty

percent (60%) by Filipinos;

b) Industry capacity is ample to meet domestic demand;

c) Sufficient competition exists within the industry;

d) Industry products comply with Philippine standards of

health

and

safety or, in the absence of such, with

international standards, and are reasonably competitive

in quality with similar products in the same price range

imported into the country;

e) Quantitative restrictions are not applied on imports of

directly competing products;

f) The leading firms of the industry substantially comply

with environmental standards; and

g) The prices of industry products are reasonable.

The petition shall be subjected to a public hearing at

which affected parties will have the opportunity to show

whether the petitioner industry adequately serves the

economy and the consumer, in general, and meets the

above stated criteria in particular. NEDA may delegate

evaluation of the petition and conduct of the public

hearing to any government agency having cognizance of

the petitioner industry. The delegated agency shall make

its evaluation report and recommendations to NEDA

which

retains

the

right

and

sole

responsibility

to

determine whether to recommend to the President to

promulgate the area of investment in List C of the

Negative List. An industry or area of investment included

in List C of the Negative List by Presidential Proclamation

shall remain in the said List C for two (2) years, without

prejudice to re-inclusion upon new petition, and due

process.

SECTION 10. Strategic Industries . — Within eighteen (18)

months after the effectivity of this Act, the NEDA Board

shall formulate and publish a list of industries strategic to

the development of the economy. The list shall specify, as

a matter of policy and not as a legal requirement, the

desired

equity

participation

by

Government

and/or

private Filipino investors in each strategic industry. Said

list of strategic industries, as well as the corresponding

desired equity participation of government and/or private

Filipino investors, may be amended by NEDA to reflect

changes in economic needs and policy directions of

Government. The amended list of strategic industries

shall be published concurrently with publication of the

Foreign Investment Negative List.

The term strategic industries shall mean industries that

are characterized by all of the following:

a) Crucial to the accelerated industrialization of the

country,

b)

Require

massive

capital

investments

to

achieve

economies of scale for efficient operations;

c) Require highly specialized or advanced technology

which

necessitates

technology

transfer

and

proven

production techniques in operations;

d)

Characterized

by

strong

backward

and

forward

linkages with most industries existing in the country, and

e)

Generate

substantial

foreign

exchange

savings

through

import

substitution

and

collateral

foreign

exchange earnings through export of part of the output

that will result with the establishment, expansion or

development of the industry.

(Sections 9 and 10 repealed OR modified by RA No

8179)

SECTION 11. Compliance with Environmental Standards .

— All industrial enterprises regardless of nationality of

ownership

shall

comply

with

existing

rules

and

regulations to protect and conserve the environment and

meet applicable environmental standards.

SECTION 12. Consistent Government Action . — No agency,

instrumentality or political subdivision of the Government

shall take any action on conflict with or which will nullify

the provisions of this Act, or any certificate or authority

granted hereunder.

SECTION 13. Implementing Rules and Regulations . —

NEDA,

in

consultation

with

BOI,

SEC

and

other

government agencies concerned, shall issue the rules

and

regulations

to

implement

this

Act

within

one

hundred and twenty (120) days after its effectivity. A copy

of such rules and regulations shall be furnished the

Congress of the Republic of the Philippines.

SECTION 14. Administrative Sanctions . — A person who

violates any provision of this Act or of the terms and

conditions of registration or of the rules and regulations

issued pursuant thereto, or aids or abets in any manner

any violation shall be subject to a fine not exceeding One

hundred thousand pesos (P100,000).

If the offense is committed by a juridical entity, it shall be

subject to a fine in an amount not exceeding ½ of 1% of

total paid-in capital but not more than Five million pesos

(P5,000,000). The president and/or officials responsible

therefor shall also be subject to a fine not exceeding Two

hundred thousand pesos (P200,000).

In addition to the foregoing, any person, firm or juridical

entity involved shall be subject to forfeiture of all benefits

granted under this Act.

SEC

shall

have the power to impose administrative

sanctions as provided herein for any violation of this Act

or its implementing rules and regulations.

SECTION 15. Transitory Provisions . — Prior to effectivity of

the implementing rules and regulations of this Act, the

provisions of Book II of Executive Order 226 and its

implementing rules and regulations shall remain in force.

During

the

initial

transitory

period

of

thirty-six (36)

months after issuance of the Rules and Regulations to

implement this Act, the Transitory Foreign Investment

Negative List shall consist of the following:

A. List A :

1. All areas of investment in which foreign ownership is

limited by mandate of Constitution and specific laws.

B. List B :

1.

Manufacture,

repair, storage and/or distribution of

firearms,

ammunitions,

lethal

weapons,

military

ordinance, explosives, pyrotechnics and similar materials

required

by

law

to

be

licensed

by

and under the

continuing regulation of the Department of National

Defense; unless such manufacturing or repair activity is

specifically

authorized

with

a

substantial

export

component, to a non-Philippine national by the Secretary

of National Defense;

2. Manufacture and distribution of dangerous drugs; all

forms of gambling; nightclubs, bars, beerhouses, dance

halls; sauna and steam bathhouses, massage clinic and

other like activities regulated by law because of risks they

may pose to public health and morals;

3. Small and medium-size domestic market enterprises

with paid-in equity capital or less than the equivalent of

US$500,000, unless they involve advanced technology as

determined

by

the

Department

of

Science

and

Technology, and

4. Export enterprises which utilize raw materials from

depleting natural resources, and with paid-in equity

capital of less than the equivalent US$500,000.

C. List C :

© Compiled by RGL

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