MANILA, Philippines - The resurgence of the Philippine economy amid a fragile global economic backdrop has attracted the attention of the international business community.
Foreign firms are setting up shops in the country for the first time while many others are expanding local operations to cater to increasing domestic demand.
Ahead of the expected influx of investments from neighboring countries like Japan, a homegrown accounting firm has partnered with a foreign counterpart to welcome investors from the world’s third largest economy.
Local accounting firm Ramon F. Garcia & Co. (RFG & Co.), a member of global accounting network Crowe Horwath International, has teamed up with co-Crowe Horwath member and Japanese firm Yusei Audit & Co.
“This is a strategic partnership that will strengthen our ties with Japan, and in the process, solidify our current position as one of Asia’s most attractive destinations for business,†said Ramon Garcia, founding and managing partner of RFG.
Garcia said partner Yusei, one of the top audit firms in Japan, reported an increasing number of Japanese companies, most of which are small and medium enterprises (SMEs), interested to invest in the Philippines. Some Japanese firms with exposure abroad like in China are also willing to relocate to the Philippines, he said.
With the partnership, RFG has set up a Japan desk led by Satoko Hashimoto to take care of the needs of Japan SMEs.
The Japan desk will be Crowe Horwath International’s marketing service arm in the Philippines.
Crowe Horwath is a global network composed of more than 150 independent accounting and advisory service firms in over 100 countries.
“Its local presence will enable us to properly service Japanese enterprises in the country, thus increasing our efficiency and making our services more accessible to these companies by breaking down cultural and language barriers,†Garcia said.
Hashimoto said it is the best time to launch a Japan desk for accounting needs of new investors because of the economic condition.
In the first semester, the economic growth accelerated to 7.6 percent from 6.4 percent a year ago. The recent figures allowed the Philippine economy to stay well above the government’s full-year growth target of six to seven percent
Interested Japanese SMEs are in the line of information technology, retail, restaurants and manufacturing, she said.
However, Hashimoto said more Japanese investors will put up businesses in the Philippines, which offers a competent labor force and a geographical advantage, if the country improves its infrastructure.
“I feel very excited because the mere fact that the Philippines is in the radar screen for foreign direct investments (FDI) is something to be proud of,†Garcia said.
In the seven months to July, net FDI inflow climbed 22 percent to $2.615 billion from $2.136 billion in the same period last year, data from the Bangko Sentral ng Pilipinas (BSP) showed.
Fund that flowed into the country were channeled mainly to real estate; manufacturing; financial and insurance activities; wholesale and retail trade; and human, health and social work activities.
The BSP expects net FDI to reach $2.2 billion this year, slightly above the $2 billion in 2012.
Accounting firm RFG, for its part, expects more Japanese clients given its new desk catering to the Japanese investors. So far, RFG has four Japanese clients among its customers that come from the US, Malaysia, Australia, Singapore and Europe.
“Many problems encountered by SMEs is when they get small accounting firms, it stops there on the book keeping side. When they are growing, these small accounting firms have a hard time coping up with growth of the company,†Garcia said.
RFG was founded by Garcia in 1981 with the goal of offering professional consultancy services in the fields of audit, finance, information technology, taxation, accounting, corporate rehabilitation, human resource development, marketing and other business-related activities.
The mid-tier accounting firm has so far serviced more than 700 clients.