The Philippines: An Analysis of Investment Laws, Treaties and Dispute Resolution Mechanisms

Abstract

INTRODUCTION In 2018, the Philippines is the fourth freest economy in Southeast Asia, the 13th among 43 countries in the Asia-Pacific region, and the 61st in the world next to Spain. As of November 2017, the Philippine economy has grown over 6 percent for a ninth consecutive quarter. Indeed, the Philippines is emerging as one of this decade's economic stars with the World Bank predicting growth of more than 6 percent until 2019, underpinned by an ambitious infrastructure building programme and a young and growing population. With approximately 60 percent of the population within the age bracket of 15 – 64 years, a literacy rate of over 95 percent, and an English-speaking population, the Philippines has the manpower to fuel further economic growth. In addition to manpower, the Philippines has a robust domestic and international legal investment regime that aims to ensure and promote investment development, growth and protection. This chapter tackles the legal protections available to a foreign investor in the Philippines, including (i) substantive protections under both domestic laws and investment treaties; and (ii) procedural protections under investor-state dispute settlement (ISDS) remedies. The chapter will also deal with legal trends and future developments in the Philippines relating to foreign investments and ISDS. FOREIGN INVESTMENT: NATIONAL AND INTERNATIONAL LEGAL REGIMES NATIONAL LEGAL REGIME The Philippines encourages foreign investments as reflected in various laws, regulations and court decisions. As of January 2018, according to the Board of Investments (BOI), there are approximately 123 investment-related laws and 14 investment promotion agencies in the Philippines, e.g. the Philippine Economic Zone Authority (PEZA) and other special economic zones. The most important investment-related laws are described below. Commonwealth Act No. 108: The Anti-Dummy Law (ADL) The ADL provides that in all cases in which any constitutional or legal provision requires Philippine or any other specific citizenship as a requisite for the exercise or enjoyment of a right, franchise or privilege, any citizen of the Philippines or of any other specific country who allows his name or citizenship to be used for the purpose of evading such provision, and any alien or foreigner profiting thereby, shall be punished by imprisonment and/or by a fine.