Aliens, as a general rule, are not allowed to own real property in the Philippines. By “alien”, we don’t mean creatures from outer space, but persons who are citizens of other countries. By “general rule”, we mean that there are certain exceptions, and two of such exceptions are discussed below.
The prohibition on foreigners owning Philippine lands is embodied in no less than the Philippine Constitution. This, in fact, is one of the usual reason cited by those who want to revise or amend the Constitution. The Constitution provides:
“Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain.” (Article XII, Section 7)
It’s clear from this provision that private land may be transferred only to persons or entitles who/which has the capacity “to acquire or hold lands of the public domain.” Those who are qualified to acquire or hold lands of the public domain are as follows:
1. Filipino citizens.
2. Corporations at least 60% of the capital of which is owned by Filipinos.
In other words, the Constitution explicitly prohibits non-Filipinos from acquiring or holding title to private lands. Among the exceptions are as follows: (1) transfer to an alien by way of legal succession; or (2) if the acquisition was made by a former natural-born citizen. The 1987 Constitution provides that:
“Notwithstanding the provisions of Section 7 of this Article, a natural-born citizen of the Philippines who has lost his Philippine citizenship may be a transferee of private lands, subject to limitations provided by law.” (Art. XII, Sec. 8)
The Supreme Court reiterated this general rule in a recent case (Borromeo vs. Descallar, G.R. No. 159310, 24 February 2009). The Court also reiterated the consistent ruling that if land is invalidly transferred to an alien who subsequently becomes a Filipino citizen or transfers it to a Filipino, the flaw in the original transaction is considered cured and the title of the transferee is rendered valid.
There are other exceptions to the prohibition on aliens owning real property in the Philippines, like full ownership by foreigners of condominium units, but this shall be the subject of future discussions.