DOJ: Utilization Of RE Resources Not Subject To Foreign Ownership Restrictions

The Philippine Department of Justice ("DOJ") has issued an opinion to the effect that the exploration, development and utilization ("EDU") of solar, wind, hydro and ocean or tidal energy sources is not subject to the forty percent (40%) foreign equity limitation under Article XII, Section 2 of the Philippine Constitution.

Prior to the opinion, the Philippine Department of Energy ("DOE") has required that corporation applicants for renewable energy ("RE") contracts (subject to exceptions in case of geothermal resources and biomass) be at least sixty percent (60%) Filipino-owned. This is based on the understanding that exploitation of RE resources constitutes EDU of natural resources which, under Article XII, Section 2 of the Philippine Constitution, may only be undertaken by the State or by Filipino citizens or corporations or associations at sixty percent (60%) of whose capital is owned by Filipino citizens. This limitation has hampered foreign investments in and,