Laws Restricting Foreign Land Ownership in the Philippines hurt Ordinary Filipinos

Any foreigner who has wanted to buy land in the Philippines is, or should be fully aware of, the laws prohibiting foreign land ownership. . These laws are absolute and all encompassing save for one exclusion whereby a foreigner can obtain title to land in the Philippines through hereditary succession. (condos can also be owned by a foreigner however they are considered structures, not land). The statutes banning foreign land ownership are enshrined in the Filipino Constitution and the rationale beyond their enactment is to ensure Filipino land stays in Filipino hands. To sell this concept to the everyday working class(or poorer) Filipinos, some one somewhere seems to have convinced the middle and lower classes that this protectionist concept benefits them because foreign buyers would drive the property values up, effectively barring the lower classes from having the ability to own land. My personal feelings, and that of most economists is that this protectionist principle is seriously flawed. The most serious of these flaws is that foreign investment(with reasonable limitations to protect the national interests) has universally proven to be beneficial to a county and its people.

Without getting into a long drawn out explanation of macro economics, I think it would be easier to provide an example that Filipinos could relate to on a more personal level. If foreign land ownership laws were relaxed, this would most certainly entice more foreigners to purchase property. With more people in the market to buy, price will  rise, however that increase in price will benefit the person(s) selling by giving them more pesos for their land. A smart person would see that as a huge opportunity because then they would be able to sell less land to put the same money in their pocket. Being smart, they can then use that money to send their children to school and attain higher education. Once educated, their children’s chances of earning a better living increase substantially and there is better likelihood that they and their future families will also be able to achieve a better standard of living. The alternative, which is the status quo of today, is that few Filipinos can sell their land and though they hand that land down to their heirs, rarely do the inheritors have enough cash to satisfy the financial requirements of the process of succession. Invariably, the list of “owners” of the family land grows, and the financial burden of estate taxes, subdivision fees, etc, become so burdensome that the land becomes unsaleable. Though the family still owns their little chunk of the Philippines, there is little that they can do with it. The cycle of poverty continues with generation after generation being land rich but cash poor. With a relaxation of foreign ownership of land (with limitations), though their may be a short term hit to Filipinos pride of ownership, future generations will soon become part of a more affluent middle class whereby they will have the ability to then purchase their own properties, and then have the financial wherewithal to actually do something with it. This process has occurred in most first world countries and is absolutely necessary in providing the long term benefits of a financially strong and proud middle class.

Why is the concept of Foreigner land ownership so difficult to see and achieve in the Philippines?

I feel it is because of the elitist nature of Filipino society. There is a huge class divide in the Philippines in which  relatively few families, cabals, clans or whatever you want to call them, are excessively rich , while the vast remainder of Filipinos are extremely poor. For the rich to continue getting richer at the staggering rate they do, they must limit competition. Exclusions on foreign ownership of land limits that competition and they will always be able to buy more land for less money from poor Filipino landowners that have limited options. They are the main beneficiaries of the restricting land ownership laws and it is their best interests to maintain the status quo. They of course cannot use this justification in their public arguments for keeping tight restriction on foreign land ownership, so they have had to wrap the whole issue in the nationalist flag or feed the deeply ingrained Filipino pride of land ownership. The real truth though is, the elite want your land, and they want it cheaply. If this mentality continues, Filipino land will indeed stay in Filipino hands, but those hands will increasingly be of the elite as opposed to the hard working lower classes who really deserve to start achieving a higher standard of living for themselves and their families.

Will foreign land ownership laws change?

The Philippines is changing dramatically. Over the past decade I have seen an incredible shift in this country that I have been visiting and now live in.Ten years ago, the average Filipino seemed to stand in awe of any of their countrymen who had achieved elitist status. These people were put on a pedestal regardless of how they had achieved their successes. Increasingly, that attitude has changed and more and more Filipinos are waking up to the fact that many of these elite, have achieved their success on the back of their less affluent brethren. A clear indication of this shift in thinking is the results of the recent elections. By sweeping Duterte to office and decimating the ranks of the elite government establishment, they seem to have spoken clearly that they arer no longer satisfied with the status quo. They are tired of corrupt government officials that line their own pockets and that of their financial partners. They are weary of the pattern whare the few people at the top  reap huge benefits,while their own poverty never changes. With a new administration coming in, there is hope that the long believed notion that foreign investment is a threat to national interests can be broken down and shown to be false. The presumptive President has already stated he will relax foreign ownership rules of businesses, and maybe when ordinary Filipinos start to feel the benefits of that, the time would become ripe to extend those same changes to foreign land ownership. Maybe then  the Philippines can attain some of the success that their neighboring Asian Tigers have.

Comments

comments