By Erika Denise L. Dizon, Special Features Writer
As the entire region waits for the ASEAN Economic Community (AEC) to get in full swing, affecting all sectors of the economy and millions of Filipinos, the accountancy profession is anticipating dramatic changes and implications for their industry.
In 2014, a pact to promote the mobility of accountants within the region was signed by the 10 ASEAN member states. With the ASEAN Mutual Recognition Arrangement (MRA) on Accountancy Services in the works, industry professionals are optimistic that accountants in the region will have better opportunities once the pact is fully implemented come 2017.
“The challenge is to upgrade and put the accountancy profession at a stage where they have to be globally competitive because we’re aiming to exceed global standards,” Professional Regulatory Commission-Board of Accountancy (PRC-BoA) Chairman Joel T. Torres said in an interview.
Managing Partner & Chief Executive Officer of Navarro Amper & Co. Greg S. Navarro said local accounting professionals are looking forward to the fulfilment of the MRA. “It is still a work in progress. There’s still many barriers or non-trade barriers that prohibit the free flow of people and skilled labor.”
Mr. Navarro said the Philippines is a top talent source for countries like Myanmar, Cambodia, and Laos that need skilled workers to aid their homegrown accountancy firms. With the AEC, the region becomes almost borderless, making the exchange of talent easier.
Asked about the possibility of having more foreign workers in the Philippines when the AEC comes into effect, Mr. Navarro said this may be viable as local conglomerates see how foreign service providers could offer new perspectives and, in effect, help them put their own firms on a par with companies in the region.
“On the other hand, let’s face it, we don’t pay very well. How do we expect a Singaporean to come here if they’re going to get less than a third of what they’re earning? That’s the constraint,” he said, adding that smaller economies within the region also do not have enough talent to send abroad.
Still, the country’s accounting industry has continued to expand, which industry experts attribute to the sustained growth of the economy.
“As a professional services firm, we basically serve the business communities. If business is good, then it follows that our performance is good,” Mr. Navarro said, adding that his company has experienced double-digit growth.
In the past five years, Navarro Amper & Co., the local practice of the Deloitte Touche Tohmatsu Limited Global Network, has seen a 12-15% rise in revenue.
Meanwhile, Roberto G. Manabat, Chairman and CEO of R.G. Manabat & Co., Philippine member firm of KPMG International, said his company’s performance in the last three to five years was “excellent” as its annual compounded growth rate grew by double digits or more than 11%.
“If you benchmark our company’s performance against the Philippine economy, I’d say we are doing good,” said Mr. Manabat.
One facet that is still lacking, however, is the industry-wide implementation of a Quality Assurance Review (QAR) program, PRC-BoA’s Mr. Torres said.
Now categorized under the commission’s key priorities through its “Expanding Horizons (EH)” initiative and a major development in itself, the QAR aims to keep local auditors to their toes as it will regularly monitor the quality of their outputs.
“Maybe in a matter of months, it’s just probably another notch to exceed global standards. With this and other projects being put in place, I think we will now be in the position to hurdle that. There are more than 100 projects in that [EH] strategic plan. That can be the starting point,” Mr. Torres added.
The EH agenda is a six-point plan for the local accountancy profession. The strategies include instituting quality and governance measures; effectively regulating the profession; enhancing image and reputation of accountancy; enhancing stakeholders’ involvement and cooperation; instituting structural changes; and providing communication and assistance mechanisms
But “brain drain” or the emigration of skilled people from a particular country is a serious hurdle to the future of the accounting profession in the Philippines, the industry officials said.
Mr. Torres said there is an ongoing shortage of accountants because demand for these skilled workers spans from national to worldwide. He said many of the Philippines’ young accountants go to the United States, Europe, and the Middle East to look for higher-paying jobs.
“We hope that there can be a reverse drain that will arise,” he said.
To prevent homegrown talent from going out of the country to practice their profession elsewhere, Mr. Torres said the industry should come up with the proper business climate and offer competitive salaries.
Navarro Amper’s Mr. Navarro said: “You really have to improve the economy and have inclusive growth. Even with the impressive growth, it does not really trickle down as we still have a lot of joblessness. The jobless rate does not really move too much so that’s still a challenge.”
The nation’s perennial problems of infrastructure, peace and order, sluggish internet connections, level-playing field, and traffic, among others, also hinder the industry’s growth prospects, as well.
“The constraints will be the constraints in the Philippine economy,” R.G. Manabat’s Mr. Manabat said. “When those have been addressed, everything will flow smoothly.”
Erika Denise L. Dizon (@erikadzn on Twitter) finished BA Journalism from the University of Santo Tomas.