Basic Info on Philippine Real Estate

Your quick guide and introduction to Philippine laws, regulations, agencies, systems and procedures in the real estate trade and business

Who owns land and other natural resources in the Philippines ? Can they be sold or acquired by private citizens or juridical persons ?

According to The 1987 Philippine Constitution (Sec. 1, Art. XII), all lands and other natural resources, including minerals and other forms of potential energy (like geothermal fields) in principle, at the outset belong to the State, and unless such lands are reclassified by law or pursuant to delegated legislative authority (Sec. 20, R.A. 7160 ) cannot be disposed, sold or conveyed in any manner, in favor of private individuals or juridical personalities.

In the Philippines, what do we mean by the phrase "alienable and disposable lands" ?
The present (1987) Philippine Constitution classified all lands in the country into the following major land use categories : agricultural, forest, mineral and national parks. It went on to prescribe what lands can or should be considered as alienable and disposable lands, and what lands should be reserved or non-alienable by the State. Now the Constitution went on to declare that only public agricultural lands, or lands classified or suitable for agricultural purposes, can be considered as alienable and disposable (that is, sellable ) land. This means that forest lands and mineral lands, as well as declared national park reservations, cannot and are not supposed to be sold to anybody.

Who can buy land in the Philippines ?

Again, our Constitution provides that the acquisition of alienable and disposable public agricultural land , as well as the exploration, development and utilization of other natural resources in the Philippines is reserved, limited and restricted in favor of natural born Filipino citizens. Corporate entities , even if owned or controlled by Filipino citizens, cannot on their own right directly buy or apply for the award of title to alienable and disposable agricultural land. However, Filipino owned or controlled corporations, majority control of which is in the hands of Filipinos, may lease public agricultural land.
What then, can foreigners buy in the Philippines ? What investments can they make in Philippine real estate ?
Well, foreigners can buy condominium units. Under Republic Act 4726, otherwise known as the Condominium Act, provides that no condominium unit can be sold without at the same time selling the corresponding amount of rights, shares or other interests in the condominium management body (The Condominium Corporation), and no one can buy shares in a condominium corporation without at the same time buying a condominium unit. Now the Condominium Act of the Philippines, R.A. 4726, expressly allows foreigners to acquire condominium units and shares in condominium corporations up to not more than 40 % of the total and outstanding capital stock of a Filipino owned or controlled corporation.
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