Executive Order No. 113 (2026): Key Highlights and Legal Implications Promulgating the 13th Regular Foreign Investment Negative List (RFINL)

I. Overview

On 13 April 2026, President Ferdinand R. Marcos, Jr. issued Executive Order No. 113, adopting the 13th Regular Foreign Investment Negative List (RFINL) pursuant to:

1. Section 10, Article XII of the 1987 Constitution (State regulation of foreign investments); and

2. Republic Act No. 7042 (Foreign Investments Act of 1991), as amended.

The issuance updates the 12th RFINL and reflects the government’s continuing policy to liberalize foreign investment participation, subject to constitutional and statutory limitations.

II. Structure of the Negative List

The RFINL maintains the traditional bifurcated structure:

A. List A: Constitutionally and Statutorily Restricted Sectors

These are areas where foreign equity is limited or prohibited by the Constitution or specific laws.

1. Fully Reserved to Filipinos (0% Foreign Equity)

Includes:

• Mass media (with limited exceptions for internet-based carriage services)

• Practice of professions (e.g., architecture, subject to reciprocity rules)

• Cooperatives

• Private security agencies

• Small-scale mining

• Utilization of natural resources (subject to constitutional regime)

• Cockpit operations

• Manufacture of weapons of mass destruction and anti-personnel devices

• Firecracker and pyrotechnics retail/manufacture

2. Partially Open Sectors

• Up to 25% foreign equity:

  1. Private recruitment (local and overseas employment)

  2. Defense-related construction contracts

• Up to 30% foreign equity:

  1. Advertising

• Up to 40% foreign equity (general constitutional ceiling):

  1. Natural resource exploitation (with exceptions for renewable energy)

  2. Ownership of private lands (subject to statutory exceptions)

  3. Public utilities

  4. Educational institutions (with limited exceptions)

  5. Retail trade (below ₱25M capitalization threshold)

  6. Fisheries and commercial fishing

  7. Condominium ownership (subject to condo law limits)

B. List B: Restrictions Based on Policy Considerations

These are sectors restricted for reasons of:

1. National security

2. Defense

3. Public health and morals

4. Protection of small and medium enterprises (SMEs)

Up to 40% Foreign Equity

Includes:

1. Manufacture/distribution of firearms, explosives, and sensitive chemicals (subject to PNP clearance)

2. Defense-related industries

3. Dangerous drugs (regulated activities)

4. Gambling (except PAGCOR-authorized investments)

5. Sauna, massage clinics, and similar establishments

6. Micro and small domestic enterprises below capital thresholds

Special Category (SMEs with Technology Component)

Certain technology-driven startups may qualify for exceptions, provided:

1. Endorsed by DOST/DTI/DICT, or

2. Meet employment and capitalization thresholds

III. Notable Liberalization Measures

1. Expanded Foreign Participation in Telecommunications

• Up to 100% foreign ownership allowed subject to reciprocity

• Otherwise, capped at 50%

This aligns with amendments under the Public Service Act (RA 11659) and signals continued liberalization of critical infrastructure sectors.

2. Clarification on Renewable Energy

• Renewable energy (solar, wind, hydro, ocean/tidal) is not treated as “natural resources” for purposes of the 40% cap

• Thus, full foreign ownership is effectively allowed, consistent with DOE issuances and DOJ opinions

3. Recognition of Reciprocity in Professional Practice

• Foreign professionals may participate through corporations if reciprocity exists, subject to regulatory board limitations

IV. Legal and Regulatory Framework

EO 113 operates within the following legal architecture:

1. 1987 Constitution (Art. XII & XIV)

2. RA 7042 (Foreign Investments Act), as amended by RA 8179 and RA 11647

3. RA 11659 (Public Service Act amendments)

4. RA 11595 (Retail Trade Liberalization Act)

5. Sector-specific laws (e.g., Fisheries Code, Condominium Act, Cooperative Code)

The Executive Order does not create new restrictions, but rather consolidates and updates existing ones while aligning with recent liberalization statutes.

V. Administrative Provisions

1. Amendments:

   1. List A — anytime (to reflect statutory changes)

   2. List B — every two (2) years

2. Separability Clause: Invalid provisions do not affect the rest

3. Repealing Clause: Inconsistent issuances are deemed modified or repealed

4. Effectivity:

   1. Fifteen (15) days after publication

VI. Practical Implications

For Foreign Investors

1. Greater clarity and expanded entry points, particularly in:

   1. Telecommunications

   2. Renewable energy

   3. Technology startups

For Philippine Corporations

1. Need to restructure equity and compliance frameworks

2. Increased competition in partially liberalized sectors

For Legal Practitioners

1. Heightened importance of:

   1. Equity structuring and compliance audits

   2. Regulatory due diligence across sector-specific laws

   3. Advising on reciprocity and ownership ceilings

VII. Importance

Executive Order No. 113 reinforces the Philippines’ calibrated approach to foreign investment, balancing constitutional protectionism with strategic liberalization.

It signals a pro-investment regulatory environment, while preserving restrictions in sectors deemed critical to national interest, security, and socio-economic stability.