Land rights remain central to project development in the Philippines – not only as a matter of property law, but increasingly as a core environmental, social and governance (ESG) consideration. While constitutional restrictions on foreign land ownership continue to define the legal landscape, recent legislative and regulatory developments signal a calibrated policy direction: strengthening governance through clearer tenure rules, advancing social objectives through infrastructure delivery and fair compensation, and reinforcing environmental safeguards in land-use planning.
For developers and investors, these reforms materially affect how projects are structured, financed and sequenced across infrastructure, industrial and renewable energy sectors. Land tenure is no longer a purely transactional issue; it is now closely intertwined with ESG risk management and long-term value creation.
Extended lease tenure: Governance and capital stability
Senior Partner
Sarmiento Loriega Law Office
Metro Manila
Republic Act No. 12252, enacted in September 2025, amended the Investors’ Lease Act to allow foreign investors to lease private land for up to 99 years, replacing the previous 50-year term renewable for 25 years. The reform applies to priority investments — including industrial, tourism, agro-industrial and renewable energy projects — registered under the Foreign Investments Act. The reform enhances legal certainty and transparency. The Implementing Rules and Regulations require long-term leases to be annotated on the land title, ensuring enforceability against third parties. They also allow termination if the approved investment fails to proceed, aligning land use with declared project purposes.
For ESG-oriented capital, a 99-year lease materially improves tenure security for long-horizon projects, enhancing bankability and facilitating sustainable financing structures. Although foreign ownership remains constitutionally prohibited, near-perpetual leasehold use aligns Philippine practice more closely with regional norms, reducing structural risk premiums in cross-border investment. Non-compliance carries serious consequences. Contracts executed in violation of RA 12252 are void ab initio, with fines from PHP1 million to PHP10 million or imprisonment of six months to six years. These penalties reinforce the ESG governance pillar: adherence to statutory limits and lawful land use is foundational.
Right-of-way reform and social equity
RA No. 12289, the Accelerated and Reformed Right-of-Way (ARROW) Act, streamlines land acquisition for national government and private infrastructure projects serving the public. Roads, railways, transmission lines, and water and power systems have historically faced delays from valuation disputes and compensation uncertainty. The ARROW Act addresses these inefficiencies by emphasising prompt and just compensation, and a more consistent valuation framework. Private entities exercising delegated eminent domain powers remain subject to constitutional ownership restrictions. Titles must reflect restrictions on disposal or transfer, and government acquisition requires reimbursement at cost. Improvements are compensated at replacement value. These safeguards reinforce governance controls and discourage speculative land accumulation.
Agricultural land use: Environmental, food security
While lease and right-of-way reforms improve tenure certainty, land-use controls have tightened in recognition of environmental and food security imperatives. In January 2026, the Department of Agriculture imposed a six-month moratorium on new applications for Certificates of Land Use Reclassification, citing food security concerns. The moratorium reflects the environmental and social dimensions of ESG: safeguarding agricultural capacity, preserving food supply resilience and ensuring that land-use decisions align with sustainability objectives. For developers, early stage land-use diligence and alignment with local planning instruments are now critical ESG considerations.
Renewable energy, forest land use
Forest lands remain inalienable lands of the public domain and cannot be privately owned. In June 2025, the Department of Environment and Natural Resources issued Administrative Order No. 2025-22, establishing the Sustainable Forest Land Management Agreement (SFLMA) as a unified, renewable 25-year tenure instrument governing sustainable forest land use.
The SFLMA consolidates prior forest tenure arrangements into a more coherent framework. Renewable energy related uses may be accommodated, subject to environmental compliance and indigenous peoples’ rights requirements.
Land reforms reshape ESG strategy
Recent reforms reflect a more deliberate Philippine land policy: extended tenure for defined productive investments, streamlined acquisition for public infrastructure, and tighter controls where environmental or food security concerns demand restraint. For developers and investors, land strategy is increasingly inseparable from ESG strategy.
Bryan A San Juan is a senior partner at Sarmiento Loriega Law Office in Metro Manilla
Sarmiento Loriega Law Office29th Floor, Discovery Suites Centre,
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Pasig City, Philippines 1600
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