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The Philippines prides itself on its tropical weather, pristine beaches, thousand islands, scenic natural wonders, delicious local cuisine, and hospitable people, making it one of the most sought-after travel destinations for tourists looking for recreation and relaxation. For these same reasons, the country makes for an appealing retirement haven not only for Filipino citizens but foreign nationals as well.
Since 1985, the country has been offering the Special Resident Retiree’s Visa (SRRV), a special non-immigrant visa entitling foreign nationals and former natural-born Filipino citizens to reside in the Philippines indefinitely with multiple entry-privileges. Subject to compliance with additional requirements, SRRV holders are also eligible to work, study or invest in the Philippines.
The SRRV is the core product of the Philippine Retirement Authority (PRA). The PRA — formerly known as the Philippine Retirement Park System — is a government-owned and controlled corporation by virtue of Executive Order No. 1037 signed in 1985. The PRA was created as part of an effort to attract foreign investment into the country since the Philippine economy was then coping with its tight foreign exchange situation.
Pursuant to Executive Order No. 26, Series of 2001, the Philippine Retirement Park System was renamed as the PRA. Furthermore, control and supervision were transferred from the Office of the President to the Board of Investments (BoI) under the Department of Trade and Industry in recognition that the BoI is the appropriate government agency responsible for promoting investments in the Philippines in accordance with national policies and priorities.
The PRA is now an attached agency of the Department of Tourism (DoT) and placed under the supervision of its Secretary pursuant to Republic Act No. 9593 or the Tourist Act of 2009. PRA is mandated to develop and promote the Philippines as a retirement haven as a means of accelerating the social and economic development of the country, strengthening its foreign exchange position, and at the same time, providing the best quality of life to the targeted retirees.
Since 2011, the PRA has been offering four different SRRV options for foreign retirees and former Filipinos namely: SRRV Classic, SRRV Smile, SRRV Courtesy and SRRV Human Touch. Foreign nationals or former Filipino citizens who are at least 35 years old may qualify for an SRRV. They may also be joined by their legal spouse and unmarried legitimate or legally adopted children below 21 years old. Specific requirements vary depending on the SRRV option but generally, retirees are required to inwardly remit visa deposits from foreign sources. It is one of the significant qualifications for the SRRV through which the country was able to increase its foreign currency deposit.
SRRV holders enjoy benefits, including, special, non-immigrant status with multiple-entry privileges, exemption from customs duties and taxes for one-time importation of personal effect and household goods worth $7,000 which should not be of commercial quantity and must be availed of within 90 days upon issuance of the SRRV, exemption from the Bureau of Immigration Alien Certificate of Registration Identification Card, and employment in the Philippines upon securing an Alien Employment Permit (AEP) from the Department of Labor and Employment (DoLE), among others. The SRRV is valid for an indefinite period as long as the required visa deposits remain intact, whether as deposits in PRA-accredited banks or as active investments.
Over the years, the country has continued to recognize and reap the benefits of the SRRV program as the foreign currency deposits of SRRV holders continue to increase along with the growing number of applicants each year. By the end of 2018 alone, the PRA reported that the total foreign currency generated for that year amounted to $225,345,304.40, making the cumulative outstanding retirees’ visa deposit from 1985-2018 amount to $520,231,067.51. Notwithstanding the aforesaid reported benefits, the SRRV packages are currently being challenged by the country’s lawmakers. The acceptance and processing of applications for new SRRVs have been suspended effective Oct. 23 until further notice, pending review of the SRRV program and PRA’s compliance with the directives set forth by the PRA’s Board of Trustees.
Based on the records presented during the recent budget hearing of the DoT at the Senate, it was shown that for the past years, Chinese nationals comprise the highest number of foreign retirees in the Philippines and the majority of them are 35 years old. Other nationalities that follow the rank are South Koreans, Indians, Taiwanese, Japanese, Americans, British, Germans and Australians. The Senate questioned PRA’s General Manager/CEO Bienvenido K. Chy, for accepting retirees as young as 35 years old, most of whom are Chinese nationals. Mr. Chy explained that the original age for eligibility was 50 years old and above, with a required bank deposit of at least $75,000. However, in 1993, the age requirement was lowered to 35 years old to open the program to military servicemen who retire early such as the Americans, Taiwanese, and Koreans.
Nevertheless, members of the Senate raised concerns in light of the influx of Chinese nationals and the proliferation of Philippine Offshore Gaming Operators (POGO) in the country. As SRRV holders may engage in employment in the Philippines, young retirees aged 35 years old are most likely to utilize the SRRV to gain employment in the country as long as they secure an AEP from the DoLE, an unintended consequence which may not necessarily be reflective of the intent behind the relevant laws. Instead of opening a window of opportunity for the country from an investment perspective, it may have unduly opened the floodgates to an influx of relatively young foreign nationals, not intending to retire, but looking for gainful employment, effectively bypassing, in some cases, more stringent employment visa requirements. As a result, the PRA was directed to review its policies particularly on age bracket, dollar deposit requirements, and the conversion of these deposits into allowable investments.
While the country significantly benefits from the foreign investments inwardly remitted under the SRRV program, the concessions extended to foreign nationals remain as privileges that may be modified by the Philippine government as it deems fit. As we open our doors to foreign nationals to consider our country as their second home, the grants afforded to them must be balanced with the proper safeguards to prevent abuse. At the end of the day, the promotion of Filipino interests, first and foremost, remains an overriding policy.
This article is for informational and educational purposes only. It is not offered and does not constitute legal advice or legal opinion.
Hannah Lizette S. Manalili is an Associate of the Immigration Department of the Angara Abello Concepcion Regala & Cruz Law Offices or ACCRALAW in Bonifacio Global City, Taguig City, Metro Manila.