FOREIGN

INVESTMENTS AND INVESTMENT INCENTIVES LAW

Atty. Jose Maria G. Hofilea


Course Syllabus1


A. Doing Business in the Philippines --Fundamental Concepts

Laws/Regulations

o Philippine Constitution Article VII, Section 20; Article XII, Sections 1, 10
and 21
o Corporation Code Sections 123, 133, 144
o Foreign Investments Act (Republic Act No. 7042 as amended) Section 3
o Implementing Rules of the Foreign Investments Act Rule I

Readings

o Is Foreign Investment Good for Development? SOMO PaperMarch 2008

Cases
o State Investment House v. Citibank (G.R. No. 79926-27; October 17, 1991)
o Marshall-Wells Co v. Elser & Co. (46 Phil 71)
o Marubeni Nederland v. Tensuan (190 SCRA 105)
o Avon Insurance v. Court of Appeals (G.R. No. 97642; August 29, 1997)
o Cargill, Inc. v. Intra Strata Assurance Corporation (G.R. No. 168266; March
15, 2010)
o Garcia v. Executive Secretary G.R. No. 100883; December 2, 1991)
o Steelcase, Inc. v. Design International Selections, Inc. (G.R. No. 171995; April
18, 2012)
o Tuna Processing, Inc. v. Philippine Kingford, Inc. (G.R. No. 185582; February
29, 2012)
o Global Business Holdings, Inc. v. Surecomp Software (G.R. No. 173463;
October 13, 2010)
o B. Van Zuiden Bros. Ltd. V. GTVL Manufacturing Industries, Inc. (G.R. No.
147905; May 28, 2007)
o Agilent Technologies v. Integrated Silicon Technology Philippines
Corporation (G.R. No. 154618; April 14, 2004)
o Alfred Hahn v. Court of Appeals (G.R. No. 113074; January 22, 1997)
o Eriks Pte v. Court of Appeals (267 SCRA 567)
o Georg Grotjahn v. Isnani (235 SCRA 216)
o Litton Mills v. Court of Appeals (256 SCRA 696)
o European Resources & Technologies v. Ingenieuburo (435 SCRA 246)
o General Garments Corp. v. Director of Patents (41 SCRA 50)
o Lorenzo Shipping Corp v Chubb and Sons Inc. (431 SCRA 266)

1 This current Course Syllabus contains the topics to be covered as well as the readings to be

assigned. Readings discussed in class will, where possible, be supplemented with group activities,
site visits to projects funded by foreign investments and lectures by guest speakers.
 o Universal Shipping Lines v. Intermediate Appellate Court (188 SCRA 170)
o MR Holdings Ltd. V. Bajar (380 SCRA 617)


B. Investment Vehicles for Foreign Investments

Topics

o Investment Vehicle Options through which Foreign Investors may Do
Business in the Philippines:

Domestic subsidiary (corporation) or partnership
Branch office
Representative Office
Regional Headquarters

Readings

o All applicable laws (e.g., Corporation Code, Omnibus Investments Act,
Foreign Investments Act) dealing with the general characteristics of each of
the foregoing types of entities.
o Relevant background materials such as the Board of Investments Primer on
Doing Business in the Philippines


C. Introduction to the Foreign Investments Act

Laws/Regulations

o Republic Act 7042 The Foreign Investments Act
o FIA implementing rules and regulations


D. Philippine National Definition, Concept and Issues

Philippine National Definition

o Republic Act 7042
o Republic Act 7042 implementing rules and regulations
o SEC Memorandum Circular No. 8 series of 2013

Cases and Rulings

o Pedro R. Palting v. San Jose Petroleum Incorporated (G.R. No. L-14441,
December 17, 1966)
o Luzon Stevedoring Corporation v. Anti-Dummy Board (G.R. No. L-26094,
August 18, 1972)
o DOJ Opinion No. 18, s. 1989
o SEC Opinion Dated May 30, 1990
o SEC-OGC Opinion No. 22-07 dated December 7, 2007
 o SEC-OGC Opinion No. 10-31 dated December 9, 2010
o Gamboa v. Tevez (G.R. 176579 dated June 28, 2011)
o SEC Opinion 11-44 Dated October 27, 2011
o Gamboa v. Tevez (G.R. 176579 dated October 09, 2012)
o Roy v. Herbosa (G.R. No. 207246, November 22, 2016)
o In the Matter of the Corporate Rehabilitation of Bayan Telecommunications
Inc. (G.R. Nos. 175418-20, December 5, 2012)
o Nara Nickel Mining and Development Corp. et al v. Redmont Consolidated
Mines Corporation (G.R. No. 195580 dated April 21 2014 and January 28,
2015)
o Dissenting Opinion of Justice Leonen in Nara Nickel Mining and
Development Corp. et al v. Redmont Consolidated Mines Corporation (G.R.
No. 195580 dated April 21 2014 and January 28, 2015)


E. Nationality Restrictions in Certain Areas of Economic Activity; Special Issues

Nationality Restrictions set out in the Constitution

o Filipino First Policy

Article XII, Section 10, Constitution
Taada v. Angara [G.R. No. 118295, May 2, 1997]
Manila Prince Hotel v. GSIS [G.R. No. 122156. February 3, 1997]

o Natural Resources

Article XII, Section 2, Constitution
La Bugal Blaan Tribal Association, Inc. vs. Ramos [G.R. 127882.
December 1, 2004] (focus on Financial and Technical Assistance
Agreements issues)
Initiatives for Dialogue and Empowerment v. Power Sector Assets
and Liabilities Management [G.R. No. 192088. October 9, 2012]

o Land Ownership

Article XII, Section 2 and 3, Constitution
Chavez v. Public Estates Authority [G.R. No. 133250. May 6, 2003]
Lee v. Republic [G.R. No. 128195, October 3, 2001]

o Public Utilities

Article XII, Section 11, Constitution
Gamboa v. Tevez [G.R. 176579, 10-09-12 and 06-28-11]
Roy v. Herbosa [G.R. No. 207246, November 22, 2016]
Express Investments v. Bayan Telecommunications [G.R. Nos.
174457-59, 17418-20, 177270, 12-05-12]
JG Summit Holdings, Inc. v. Court of Appeals [G.R. No. 124293.
September 24, 2003; January 31, 2005]
 Bagatsing v. Committee on Privatization G.R. No. 112399. July 14,
1995 and Gonzales v. Lazaro [G.R. No. 115994. July 14, 1995]

o Educational Institutions

Article XIV, Section 4, Constitution
Crisostomo v. Securities and Exchange Commission [G.R. Nos. 89095
and 89555. November 6, 1989]

o Mass Media and Advertising

Article XVI, Section 11, Constitution

o Retail Trade Law

Republic Act No. 8762
Espina et al. v. Zamora [G.R. No. 143855. September 21, 2010.]


F. Anti-Dummy Law

Laws

o Commonwealth Act No. 108, as amended

Cases

o Roque v. Commission on Elections [G.R. No. 188456. September 10,
2009.]
o People v. Quasha [G.R. No. L-6055. June 12, 1953.]
o Sui Bi et al. v. Court of Appeals [G.R. No. 129507. September 29, 2000.]
o Pua et al. v. Court of Appeals [G.R. No. 134992. November 20, 2000.]


G. Foreign Investment Incentives

Laws and Cases

o Omnibus Investments Code -- Executive Order 226 (as amended) (Focus on
Articles 1-2, 27-32, 38-40)

Garcia v. Board of Investments [G.R. No. 92024. November 9, 1990.]
First Lepanto Ceramics, Inc. v. Court of Appeals [G.R. No. 117680.
February 9, 1996.]

o 2014 Investments Priorities Plan
o Special Economic Zone Act (Republic Act No. 7916) (Sections 1-4, 21-36)
o Certain Special Economic Zones Subic, Clark (Republic Act 7227) (Sections
1-3, 12, 15)

 John Hay Peoples Alternative Coalition et al. v. Lim et al. [G.R. No.
119775. October 24, 2003.]
Coconut Oil Refiners Association, Inc. et al. v. Torres et al. [G.R. No.
132527. July 29, 2005.]

Readings

o Primer on Doing Business in the Philippines by the Board of Investments



H. Foreign Exchange Controls

Laws and Regulations

o Bangko Sentral ng Pilipinass Manual of Regulations on Foreign Exchange
Transactions, Part II, which can be accessed through:

http://www.bsp.gov.ph/downloads/Regulations/MORFXT/MORFXT
.pdf
http://www.bsp.gov.ph/downloads/Publications/FAQs/forloans.pd
f

I. The Practice of Foreign Investment and Investments Incentives Law

Topics

o The role of Philippine legal counsel
o Legal Opinions/Closing Opinions
o Anatomy of a Foreign Investment Agreement
o Anatomy of a Foreign Loan Agreement