AGRICULTURE
I. MARKET OVERVIEW
The Philippines is in a good position to offer numerous
opportunities to agriculture-oriented investors, thanks
to its strategic location, favourable climactic conditions
and available resources for agriculture.
The country has a land area of 30 million hectares,
9,671 million hectares of which is considered as
agricultural land. Prime agricultural lands are located
around the rural and less populated areas. In the first
quarter of 2016, the agricultural industry grew by 4,4%.
Admittedly, Philippine agriculture does not perform as
well as the services and industrial sectors and remains
vulnerable to extreme weather events, which could
reduce agricultural output.
The Philippines’ agricultural land area is divided into
four categories, namely:
Ì
Arable land amounting to 4,936 million hectares
land area;
Ì
Permanent cropland with a total land area of 4,225
million hectares;
Ì
Permanent pastures with 0,129 million hectares
land area; and
Ì
Forest land area with 0,074 million hectares.
About 12 million Filipinos work in the agricultural sector.
If the country can significantly increase its exports and
imports of agricultural goods, agricultural provinces
would generate much greater revenue, provide more
employment opportunities, and lessen poverty in rural
areas. This is especially important for Mindanao, the
country’s breadbasket that has great underdeveloped
potential for agricultural exports.
II. MAIN LEGISLATIVE FRAMEWORK
Ownership of land in the Philippines is highly regulated
with land ownership reserved for persons or entities
considered Philippine nationals or Filipino citizens.
For this purpose, a corporation owned at least 60%
by Filipino citizens is treated as a Philippine national.
Foreigners interested in acquiring land or real property
through aggressive ownership structures must consider
the provisions of the Philippines’ Anti-Dummy Law to
determine how to proceed. A major restriction in the
law is the restriction on the number of foreign members
on the Board of Directors of a landholding company
which is limited to 40% foreign participation. Another
concern is the possible forfeiture of the property if the
provisions of the law are breached.
CREATING BUSINESS OPPORTUNITIES
for EUROPEAN COMPANIES in the PHILIPPINES
This project is co-funded
by the European Union
AGRICULTURE
Exceptions to the restriction on foreigners’ acquisition of
land in the Philippines are the following:
Ì
information, which includes approximated costs and
income regarding the production of each product.
Acquisition before the 1935 constitution;
Philippine producers can now export more than 6 000
Ì
Acquisition through hereditary succession if the products to EU markets at zero or substantially lower tariff
rates using the new Generalized System of Preferences
foreigner is a legal or natural heir;
(GSP+). Products that may avail of the duty free access
Ì
Purchase of not more than 40% interest in a
include coconut and marine products, processed fruit,
condominium project;
prepared food, animal and vegetable fats and oils,
Ì
Purchase by a former natural-born Filipino citizen textiles, garments, headwear, footwear, furniture,
subject to the limitations prescribed by law (naturalumbrellas, and chemicals. Philippines’ exports to the
born Filipinos who acquired foreign citizenship is
EU grew by over 19% in the period January-September
entitled to own up to 1,000 sq. m. of residential
land, and 1 hectare of agricultural or farm land); and 2015 compared to the same period in 2014. This is to
a large extent attributable to GSP+ benefits granted in
Ì
Filipinos who are married to foreigners and who December 2014 (animal products (+157%); fish and
retain their Filipino citizenship.
related products (+41%); cereals, flour, nuts, etc. (+46%);
prepared foodstuffs (+72%); but also chemicals (+42%);
plastics (+46%); wood and wood charcoal (+199%); and
III. MAJOR OPPORTUNITIES FOR EU
footwear (+230%)). European agriculture companies can
BUSINESSES
develop joint venture partnerships with export-oriented
Agricultural exports present great opportunity for foreign Philippine agribusinesses to take advantage of this
investors. Investors may refer to Philippine Agribusiness preferential trade arrangement.
Investment Opportunities by the Department of
Agriculture published in 2013. It includes details on the
widely known crops, fishery, processed fruits and meat
processing recipes in the Philippines. It includes detailed
CREATING BUSINESS OPPORTUNITIES
for EUROPEAN COMPANIES in the PHILIPPINES
This project is co-funded
by the European Union