Professional concerns

Can an American certified public accountant join a local auditing company and practice his profession in the Philippines? Can an English lawyer set up an office in the country to render advice on UK law? Can a French doctor operate on a patient in a Philippine hospital without securing a license? Does a Filipino architect who graduated from an American architectural school and passed a US architectural board need to take the Philippine exam as well to sign architectural plans in the Philippines? These are but some of the real life situations that the Professional Regulation Commission (PRC), the Supreme Court and other regulatory agencies need to address as they tackle the issue on who can practice their profession in our country.

Article XII, Section 14 (paragraph 2) of the 1987 Constitution provides that: “The practice of all professions in the Philippines shall be limited to Filipino citizens, save in cases prescribed by law.” This is an example of both a good and bad provision of law. It is good because it sets the general principle that needs to be followed, yet allows Congress to fill in the details. It is a bad provision because the language used is vague and imprecise. It is unclear whether the prohibition refers to the practice of Philippine professions or the generic practice of all professions.

Interestingly, there are existing statutes which allow foreigners to practice their professions under certain conditions. For example, Presidential Decree No. 223 (as amended by PD No. 657) empowers the PRC to grant licenses to foreigners for the practice of their professions, even without a qualifying exam, provided there is a reciprocity arrangement with that foreigner’s state of origin. In this regard, there are currently 31 specific laws (statutes, treaties and executive orders) relating to licensed professions that contain reciprocity provisions. However my four centavos is to subject foreigners who seek to practice their professions in the Philippines to our own standards of fitness and competence by requiring them to take and pass our licensure exams.

As in any public policy debate, there are pros and cons in allowing foreigners to practice their professions here.

The main point raised against liberalizing the practice of professions is the potential unemployment that may arise among the local professionals. Critics argue that the “work-pie” in the Philippines is so small that allowing foreigners to come in would further crowd an already crowded market.

On the other hand, the benefits of opening up the professional services sector are apparent. First, the resulting competition will encourage if not compel local professionals to improve their know-how to be at par with their foreign counterparts. Second, there is a view that the entry of foreign professionals would not cause dislocation but actually create more jobs as foreign professional firms operating here will be on the lookout for Philippine professionals to work with. This has been the experience of Asian countries such as Japan, Singapore and Hong Kong where the entry of foreign professionals spurred direct foreign investment which in turn led to an expansion, instead of a contraction, of the “work-pie.”

Third, allowing foreign firms to set up shop in the country will lead not only to a transfer of technology and skills but also to higher wages that reflect industry standards. Cases in point would be the Metro Manila BPOs of Baker & McKenzie and White & Case, two large international law firms, which employ thousands of Filipinos. Parenthetically, this move may also stem the exodus of Filipino professionals abroad. Finally, by allowing foreigners to practice their professions in the country, the Philippines will be complying with its treaty obligations as a member of the WTO and its being a signatory to the General Agreement on Trade and Services as well as the ASEAN Framework Agreement on Services. And aside from the advantage of being a good global citizen, the country should face the reality that globalization is here to stay and the earlier we accept this fact, the more we can benefit from it.

Let me circle back by providing answers to the questions I raised earlier. 1) Yes, a foreign accountant may be employed by a domestic auditing company but is not allowed to sign any opinions. However, she is allowed to counsel clients and provide oral advice using her own home rules or generally accepted accounting principles. 2) It is unclear whether an English lawyer can set up a Philippine office to provide advice on UK law. However, it is common practice for US and UK lawyers to fly to Manila and negotiate documents governed by their respective laws. There is also no prohibition with respect to a Filipino lawyer who is also qualified in a foreign jurisdiction to open a law office and tie up with a foreign law firm (e.g., Quisumbing Torres tie-up with Baker & McKenzie). As mentioned earlier, there is also no restriction regarding foreign professional firms opening back room offices in the country.

3) There are no apparently government licenses required for a foreign doctor to operate on a patient in the Philippines. However, such foreign doctor need to be sponsored by a Philippine hospital and doctor to perform the operation. 4) A Filipino architect who studied abroad needs to pass the Philippine licensure exam to be able to sign architectural plans for Philippine projects. However, just like foreign accountants, foreign architects can provide design advice on Philippine projects and can collaborate with local firms.

As a young boy learning how to play table tennis, I was advised that the best way to improve your game was to play with players better than you. A similar principle applies in this case. Needless to say, Filipinos are, by and large, naturally competent and predisposed to hard work. All they need is the opportunity and right atmosphere to flourish. My four centavos is that liberalizing our professional services sector will contribute to the creation of such opportunities and an atmosphere conducive to growth.

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“A leader is a dealer in hope.”   — Napoleon Bonaparte

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