A criminal statute, not fine print
Commonwealth Act No. 108, the Anti-Dummy Law, has been in force since 1936. It does not merely make the nominee arrangement unenforceable — it makes it a felony, and it punishes both directions at once:
Section 1. Penalty.— In all cases in which any constitutional or legal provisions requires Philippine or any other specific citizenship as a requisite for the exercise or enjoyment of a right, franchise or privilege, any citizen of the Philippines or of any other specific country who allows his name or citizenship to be used for the purpose of evading such provision, and any alien or foreigner profiting thereby, shall be punished by imprisonment for not less than five nor more than fifteen years, and by a fine of not less than the value of the right franchise or privilege, which is enjoyed or acquired in violation of the provisions hereof but in no case less than five thousand pesos.
The fact that the citizen of the Philippines or of any specific country charged with a violation of this Act had, at the time of the acquisition of his holdings in the corporations or associations referred to in section two of this Act, no real or personal property, credit or other assets the value of which shall at least be equivalent to said holdings, shall be evidence of a violation of this Act.
Read the second paragraph twice. A nominee holding assets he could never have paid for is, by statute, evidence of the crime. The prosecution does not need your side agreement in writing — the mismatch between the title and the titleholder's means speaks for itself.
Use and control are enough
Section 2-A reaches past the deed. It criminalizes permitting an unqualified person to use, exploit or enjoy property reserved to Filipinos, and even letting him intervene in its management, operation, administration or control. It then adds a second loss on top of the prison term:
Provided, Further, That any person, corporation or association shall, in addition to the penalty imposed herein, forfeit such right, franchise, privilege, and the property or business enjoyed or acquired in violation of the provisions of this Act
Section 3 allows a corporation used for the violation to be dissolved, and Section 3-A pays an informer twenty-five percent of the fine — expressly extending the reward to a dummy who voluntarily reports the arrangement and assists the prosecution, with exemption from penalty. Your nominee has a standing financial incentive, written into the statute, to turn you in.
The common-law presumption
For a buyer living with a Filipino partner, two short sections carry the sharpest edge:
Section 2-B. Any violation of the provisions of this Act by the spouse of any public official, if both live together, shall be cause for the dismissal of such public official.
Section 2-C. The exercise, possession or control by a Filipino citizen having a common-law relationship with an alien of a right, privilege, property or business, the exercise or enjoyment of which is expressly reserved by the Constitution or the laws to citizens of the Philippines, shall constitute a prima facie evidence of violation of the provisions of Section 2-A hereof.
If you cohabit with a Filipino partner who holds land you effectively control, the law presumes the violation and puts the burden on you to explain it away. The civil side of that fact pattern — who actually owns the property — is covered on our Filipino spouse and partner page.
Corporations: control, not paperwork
Only a corporation that is genuinely at least sixty percent Filipino-owned can hold Philippine land. The Supreme Court applies a control test, not a shareholding-on-paper test. In Register of Deeds of Rizal v. Ung Siu Si Temple (G.R. No. L-6776, May 21, 1955, En Banc), even a donation to a Chinese-run religious association — with no capital stock at all — was refused registration:
The fact that the appellant religious organization has no capital stock does not suffice to escape the Constitutional inhibition, since it is admitted that its members are of foreign nationality. The purpose of the sixty per centum requirement is obviously to ensure that corporations or associations allowed to acquire agricultural land or to exploit natural resources shall be controlled by Filipinos; and the spirit of the Constitution demands that in the absence of capital stock, the controlling membership should be composed of Filipino citizens.
A corporation papered to sixty-forty with Filipino names but run for a foreign principal is not a loophole; simulating the Filipino minimum is its own offense under Section 2, and the officers answer for it.
The lawful paths
None of this leaves a Chinese buyer without options. A condominium unit within the foreign quota can be titled in your own name. A lease within statutory limits gives long, legal possession without ownership. And if a structure you are offered smells like a workaround, our page on why the workarounds fail shows how the Supreme Court treats them. Before any money moves, our due diligence engagement examines the title, the seller and the structure and delivers a written report, at a fixed fee typically from ₱100,000. Book a consultation if you have been offered a nominee arrangement — before you sign, not after.
Frequently asked questions
Who can be prosecuted under the Anti-Dummy Law?
Both sides. Section 1 of Commonwealth Act No. 108 punishes the Filipino citizen who allows his name or citizenship to be used to evade a nationality requirement and any alien or foreigner profiting from the arrangement. Where a corporation is used, its president, managers, directors or trustees can be held criminally liable.
What is the penalty for an Anti-Dummy Law violation?
Imprisonment of five to fifteen years and a fine of not less than the value of the right or property acquired, but in no case less than five thousand pesos. On top of the penalty, the property or business acquired in violation of the Act is forfeited, and a corporation used for the violation can be dissolved.
Can a Chinese buyer own Philippine land through a corporation?
Only a corporation that is genuinely at least sixty percent Filipino-owned can hold land, and the Supreme Court applies a control test, not a paperwork test. In Register of Deeds v. Ung Siu Si Temple, the Court looked past the corporate form to the nationality of those in control. Simulating the Filipino ownership requirement is itself a crime under Section 2.
Can my own nominee report the arrangement?
Yes, and the law pays them to do it. Section 3-A gives an informer twenty-five percent of the fine collected, and a dummy who voluntarily reports the violation and assists in the prosecution receives the reward and is exempted from criminal liability. The nominee arrangement builds in a financial incentive for the Filipino nominee to turn on the foreign principal.