Could a 100-Year Island Lease Bring the Philippines Long-Term Investment?

The proposal to lease a Philippine island for a century is less about attracting factories than testing whether trusted institutions can draw long-term capital. With the peso recently hitting a record low of ₱64.17 to the US dollar, the idea raises a broader question: can the country build investor confidence through a new institutional model?

The proposal came from the author’s father during a visit to the Philippines. A foreign government would help create a distinct legal and administrative system on one island, while the Philippines kept sovereignty, national defense, and responsibility for essential public services. At the end of the lease, the country would take over an established commercial center and its institutions.

A different kind of economic zone

The Philippines already uses tax incentives and special economic zones to attract businesses. Those zones, however, operate within the country’s national administrative framework. This proposal would go further, giving one island distinct civil and commercial laws, courts, tax rules, and regulatory institutions.

The intended draw is predictability: investors could rely on enforceable contracts, clear regulations, and a judiciary with independence. Separate residency arrangements might also be possible while Filipino citizenship remained intact. The foreign partner would help design institutions and provide judicial expertise and oversight, while the Philippines continued to run healthcare, education, policing, municipal services, and defense.

That distinction sets the proposal apart from an idea Rodrigo Duterte raised in January 2016, when he was a presidential candidate. Duterte suggested leasing islands to multinational companies that could set infrastructure plans and operating rules. The current proposal instead calls for a government-to-government institutional partnership.

It would also require constitutional changes, including provisions for an independent judiciary and a separate immigration system. That makes the concept a test of governance and institutional credibility, rather than simply another package of financial incentives.

What the Hong Kong comparison can—and can’t—show

The historical reference point is Hong Kong. China leased the New Territories to Britain for 99 years in 1898. In the decades that followed, Hong Kong helped bring international capital, expertise, and commerce into Shenzhen and the wider Pearl River Delta. The example suggests that a jurisdiction with distinct institutions can influence development beyond its own borders.

But the comparison doesn’t settle the practical questions for the Philippines. The proposal would need a suitable location, a workable division of responsibilities, and safeguards for residents and both governments. Any island’s potential would need an independent feasibility study, alongside a credible process for gaining the informed consent of affected communities.

Possible partners and regional gains

Singapore is one candidate proposed in the article, though it has expressed no interest in such an arrangement. Its companies face limits on domestic land and labor, and need opportunities to expand internationally. The Johor-Singapore Special Economic Zone reflects one approach: combine Singapore’s financial and technological strengths with regional land and workforce capacity.

A Philippine island could offer another version. Singaporean firms might place manufacturing, logistics, or research campuses there under familiar standards, while keeping headquarters and advanced research in Singapore. The distinguishing feature would be a separate legal and regulatory structure supported by Singaporean institutions, rather than an ordinary industrial park.

Private investors could fund much of the infrastructure, limiting taxpayer exposure for Singapore. The country’s role would be to contribute institutional expertise, not administer territory. The proposal also names South Korea as a possible partner, citing its strengths in advanced manufacturing, engineering, and digital governance. More broadly, it calls for a partner with capable institutions and no territorial ambitions.

A successful center could create demand for agriculture, labor, and materials from nearby provinces, extending investment beyond the island. Ports, industrial parks, and universities might anchor that activity. The potential regional benefit would depend on the project’s location and whether local communities support it.

Sovereignty, guarantees, and the long test

The proposal sets out limits intended to protect Philippine sovereignty: no foreign military bases or territorial claims, and continued Philippine control over national defense and natural resources. It also calls for protecting residents’ citizenship, property rights, and political representation.

The foreign partner would need protection from a future Philippine administration ending the arrangement unilaterally. A constitutionally authorized bilateral treaty, international arbitration, compensation terms, and political-risk insurance could help manage that uncertainty. None would remove it entirely.

The idea’s wider promise is that an island with predictable permits, transparent rules, and efficient dispute resolution might raise expectations for public services and governance across the country. Whether those practices could spread would be as important as the island’s economic output.

That is the proposal’s central bet: one carefully chosen island could offer the Philippines a long-running experiment in institutional credibility, with lessons to carry into future reforms. Quoting then-Prime Minister Lee Kuan Yew’s 1977 remarks in Parliament about Singapore’s need to develop its own institutional approach, the author points to a principle that could guide such an experiment: “We have got to find our own style. We have got to be bold enough to experiment.” – Rappler.com

Dr. Jaemin Park is an adjunct professor at the University of the Philippines College of Public Health and works across Southeast Asia on healthcare financing, medical innovation, and public sector reform.