An In-depth Study on the Accounting and Financial Industry ... · PDF file2. decribe the structure of accounting and financial services industry ... Philippine accounting and financial

57

An In-depth Study on the Accounting and Financial

Industry In the Philippines

Submitted by:

Dr. Tereso Tullao, Jr.

Project Head

Dr. Teresita Nadurata and

Ms. Nimpha Aquino Senior Researchers

August 17, 2001

58

Table of Contents

page List of Tables ii List of Appendices iv Introduction 1 1. The Industry 2 1.1 Definition and Scope 3 1.2 Structure 7 2.0 Forward Linkage/Market 16 3.0 Backward Linkage/Market 17 4.0 Laws Hindering/Facilitating 18 5.0 Market Potential/Foreign Market Demand 29 5.1 Extent of service rendered abroad 31 5.2 Foreign Market Demand and Competition 33 6.0 Industry Association 39 7.0 Strengths and Weaknesses 40 8.0 Supply Capability 42 8.1 Offered Services 43 8.2 Extent of Services Rendered Abroad 49 By Filipinos through the firms 8.3 Expertise/Technical Competence of Manpower 49 8.4 Quality and Quantity of Training 50 9.0 Opportunities and Threats 51 10.0 Action Plan Enhancing Competitiveness 53 11.0 Performance Monitoring Scheme 55 12.0 Directory 57 Bibliography Appendices

59

List of Tables

Page Table 1 Accounting Services Industry Definition based on the

UN CPC Provisional Code

4 Table 2 Financial Services Industry Definition based on the

UN CPC Provisional Code

5 Table 3 Definition of accounting services industry based on

PSIC

6 Table 4 Definition of financial services industry based on

PSIC

6 Table 5 Accounting and Financial Services Industry Structure 7 Table 6 Average Monthly Wages Rates of Time-Rate

Workers on Full-Time Basis in Selected Industries & Occupations-October, 1997

7 Table 7 Schedule of funds invested in financial activities 9 Table 8 Top 10 Leasing Companies Based on Total assets 10 Table 9 Top 10 Leasing Companies Based on Net income 10 Table 10 Market share of international credit cards 11 Table 11 Net Revenues of International Credit Cards 1998-

1999 (US$billion)

12 Table 12 Advertising Costs of Itnernational Credit Cards-1999 12 Table 13 Total Credit Cards‘ Issued 13 Table 14 Total Credit Cards’ Revenues 13 Table 15 Top Philippine Credit Card Companies 14 Table 16 Top 20 Brokers from January-November, 2000 15 Table 17 Top 10 Companies according to market

capitalization

16 Table 18 Forward linkage for accounting, auditing and

bookkeeping services

16 Table 19 Forward linkage for investment, financing and other

non-banking services

17 Table 20 Supply linkage for Bookkeeping, accounting and

auditing

17 Table 21 Supply linkage for investment financing, and other

non-banking services

18 Table 22 List of Auditing Firms servicing Top 1000

Corporations

30 Table 23 Deployment of Filipino Accounting Services Industry

Professionals, 1996-2000

31 Table 24 Deployment of Filipino Accounting Services Industry

Professionals, 2000

32 Table 25 US Market Sectors 1995-1999 (US$million) 33 Table 26 Market Share of Big Five Accounting Firms-1999 33 Table 27 Selected US Accounting Firms based on 1999

60

Revenues 34 Table 28 US Market Forecasts of Accounting, Auditing and

Bookkeeping 2001-2004

35 Table 29 Sectoral Forecast 2000-2004 ( US$million) 35 Table 30 UK Market Forecasts of Accounting, Auditing and

Bookkeeping 2001-2004

36 Table 31 Percentage Share of Different Sources of Finance by

SMEs

36 Table 32 UK Market Forecasts 2001-2004 38 Table 33 UK Sector Forecasts 2001-2004 (US$million) 38 Table 34 Financial Performance of Top 10 Mutual Funds and

Brokerage

39 Table 35 Association-Regulatory Agencies 40 Table 36 Schedule of Services Offered by Local Auditing

Firms

43 Table 37 Training Needs Analysis 51

61

List of Appendices Page Appendix A SWOT Analysis 70 Appendix B GATS Commitments in Financial Services

Industry

74 Appendix C GATS Commitments in Accountancy by Sub-

Sectors

77 Appendix D Philippine Code of Ethics 79 Appendix E PD-692 The Revised Accountancy Law 89 Appendix F Republic Act 8484 96 Appendix G PSE Rules and Regulations on Fees and

Commissions of Stock Brokers

105 Appendix H PSE Code of Conduct and Professional Ethics for

Traders and Salesmen

107 Appendix I GATS Commitments in Accounting and Financial

Services Industry(Selected Countries)

114

62

Executive Summary

The accounting services industry has faced challenges since the 1990s. Severe pressure have caused a re-examination of the roles of the industry in the economy, the nature of services and processes used to serve clients and the possible effects of liberalization on accounting services. At present, the industry recognizes the future benefits of liberalization like the transfer of technology, improved delivery of services and higher level of income. As the country moves towards globalization, a long-term strategy must be considered in line with the improvement of the accounting professionals to compete in the global market.

The finance services industry in the Philippines has greatly matured over the

past six years. Since 1994, government policies have reflected the previous administration’s commitment to liberalize the financial sector. In spite of the widespread speculation on the condition of the Philippine finance industry, analysts claim the country’s economy still enjoys a good standing among international investors. New foreign players have entered the market, resulting in the introduction of new products and services.

Given this background, and taking into consideration the information

gathered from interviews and various primary and secondary sources, this paper aims to:

1. determine the scope of the accounting and financial services industry 2. decribe the structure of accounting and financial services industry

identify the laws affecting the trade of accounting and financial services industry

3. provide information on existing local and international associations and their efforts towards enhancing competitiveness of accounting and financial services industries

4. determine the existing and potential market in the industry 5. determine the degree of competitiveness of the Philippine accounting and

financial services industry 6. propose strategies and plans to enhance the competitiveness of the

Philippine accounting and financial services industry 7. identify strategies necessary in the implementation of a performance

monitoring scheme for the industry

Scope of the Industry

63

The accounting services encompasses auditing, accounting, bookkeeping and related services. Public accounting which comprises the audit and review function adds credibility to financial information. The most prominent function of which is the independent examination of a company’s financial statements and supporting documents. Management accounting is another major category in accounting services which provides business advice and direction on strategic, tactical and operational decisions by drawing on financial data. Other accounting services include: bookkeeping, income tax preparation, business valuations, forensic accounting, tax compliance, investment advice, accounting system organization and design and management advisory services.

A working definition of financial services industry is that group of institutions

that provides four categories of service: • Obtaining funds which includes underwriting, investment banking

services, brokerage services and the provision of loans. • Providing income for those with funds to lend or invest which include

deposit services, brokerage activities, money market funds, mutual funds, life insurance and pension funds.

• Payments services include traditional payments services as well as credit cards, bill-paying services and cash management services and

• Advice on the best way to get the services needed in the first three categories

Structure of the Industry

Industry structure has a strong influence in determining competitive rules. According to Porter, the state of competition in an industry lies on five basic competitive forces, namely industry competitors, suppliers, buyers, potential entrants and substitutes. Understanding how these forces behave may be crucial in determining ways of promoting growth and enhancing competitiveness of the industry.

Firms in the Industry. Unlike most professions, accountancy is largely

practiced at the level of firms or partnerships rather than individuals, with small-scale firms predominant. The largest professional services firms are found in the accountancy field. The very large accounting firms are known collectively as the "Big Five" and these are Sycip, Gorres, Velayo and Co. (SGV); Joaquin Cunanan & Co.; Punongbayan & Araullo; Laya, Mananghaya & Co. and CL Manabat and Co.

The Securities and Exchange Commission’s record as of December 31,

1999, show that financing companies with valid certificates of authority to operate as financing company totaled to 179. Their total assets as of the same period amount to P68.643 Billion or an increase of 32.47% compared to P51.816 Billion in 1998.

64

The Credit Card Association of the Philippines (CCAP) is composed of 16 member card companies and one honorary member. These card companies are Bankard,Inc., RCBC/JCB, Unibancard Corporation, BPI Card Corporation, Hongkong Shanghai Banking Corporation, Ltd., PNB Visa, MBf Card, Inc., Standard Chartered Bank, AIG Philam Bank, American Express International Inc., Citibank, N.A., Equitable Card Network, Inc., Securities Diners International Corp. United Overseas Bank and Union Bank of the Philippines.

The top twenty brokers from the period January to November, 2000 was

headed by ING Baring Securities (Phils), Inc with total shares traded amounting to P64.2 billion. Among the top 20 stock brokers, eight are foreign stock brokers and 12 are local stock brokers. The eight foreign stock brokers are: ING Baring Securities , Merrill Lynch Securities, DBS Securities, CLBA Philippines, ABN AMRO Asia Securities, UBS Warburg Securities, Indoseuz W.I. Carr Securities and HSBC Securities.

Customers. Sycip Gorres Velayo & Co. (SGV) remains to be the country's

largest auditing group preferred by at least 48.4% corporations who had made it to this syear's Top 1000 corporations. SGV audited six of the 10 largest corporations in the country, to wit: Manila Electric Company, Petron Corporation, Texas Instrument (Philippines), Inc., Fujitsu computer Products Corp. of the Philippines, San Miguel Corporation, and Nestle Philippines, Inc. SGV's share of the Top 1000 clientele shrank by 43 companies which was attributed to industry consolidation, with companies either being merged or acquired by other companies.

Joaquin Cunanan & Co. placed second or had 12% share in terms of auditing the Top 1000 corporations. Top companies audited by the firm were Pilipinas Shell, Philippine Long Distance Company, Hitachi Computer Products (Asia) Corporation, Bank of Philippine Island and NEC Computer Storage Philippines.

In third place was Punongbayan & Araullo(P&A) which audited 56 companies. Among large companies audited by P&A were Coca-cola Bottlers Philippines, Inc. Philippine National Bank, Intel Technology Philippines, Inc. Eac Distributors, Inc.

Next in line was Laya Mananghaya & Co., which audited 29 companies from the Top 1000. Large companies audited by Laya Mananghaya were Caltex (Philippines) Inc. Philip Semiconductors Philippines, Inc., TEMIC Automotive Philippines, Inc. and Siemens, Inc.

CL Manabat & Co. audited 18 companies, which include Subic Bay Fuel Co.,Subic Bay Distribution, Sumitronics Philippines, Inc. FR Cement Corp. and the Rohm Mecantile. On the other hand, other auditors garnered at least 1% share in the Top 1000 corporation.(refer to Table 23)

Leasing is still a growing market since it is just being practiced in the

Philippines as compared to developed countries like the USA where leasing is prevalent. The affiliation of the leasing/finance companies to banks and other

65

financing institutions provide them with better and larger marketing network which will bring in more clients.

As per Securities and Exchange records, the revenues earned by the leasing

industry as of December 31, 1999 amount to P7.412 billion, an increase of 20.57% as compared to 1998 figure of 6.147 billion. The industry's gross revenues of P5.9678 billlion were derived from discounts fee, leasing income, interest on direct lending, trading and interest income.

The credit card industry posted a growth of 23.3 percent in the past six years, recording a total of 3.12 million card base by year 2000. Industry value reached P100 billion by the year 2000, growing by 25.9 percent over the same period. Merchant affiliation numbered 30,000 across the nation and with linkages with American Express Card, Diners, JCB, MasterCard and Visa. Nowadays, the credit cards are accepted in at least 14 million merchants internationally. Furthermore, there are 20,000 terminals installed nationwide where the cardholders are assured of fast processing of transactions which leads to employment of 3,496 personnel.

Data from the Philippine Stock Exchange revealed that the financial reports

of broker-dealers disclosed P22.254 billion in total assets and P8.747 billion in total capital as of year 1999. Equity market capitalization expanded to P1.937 billion, a surge of 41.1 percent from the previous year’s market capitalization. Trading turnovers at the Philippine Stock Exchange performed vigorously as average daily trading volume grew by 227.1 percent to 3.780 billion shares with value of P3.111billion, up by 89.6 percent. The year marked a milestone in the history of the Philippine Stock Exchange as two of its five debutantes in 1999, Manulife Financial Corporation (MFC) and ABS-CBN Holdings Corporation (ABSP), were the first of their kind to be listed at the Exchange

Employment. According to National Statistics Office, there are 101 firms

under the accounting services industry, employing a total of 9,997 personnel. In 1997, the financial services industry on the other hand,(leasing, factoring, credit cards and stock brokering) consists of 1,025 firms, with total employment of 59,742.

Filipino CPAs connected with Philippine auditing firms are assigned to work abroad for specific projects. These specific projects are given by the "Big 5" abroad who is directly in charged of these clients. These foreign clients are not clients of the local CPA firms.

Special projects of foreign auditing firms are filled up by auditing staff from the Philippines. The audit staff does not become an employee of the foreign firm. He remains to be an employees of the Philippine firm. The special project takes the form of formal training given to the employee by the local firm. These special arangements materialize because of the affiliation of the Philippine auditing firm with the

66

In the last five years accountants and other related workers worked abroad averaged to eight hundred thirty four per year. Most of these professionals and related workers during the five- year period were deployed to United Arab Emirates, Saudi Arabia, Kuwait, Saipan, Brunei, Bahrain and the United States. In year 2000 , the country deployed 852 persons with the following employment status: Manager, Budgeting and Accounting - 11; Bookkeepers and cashiers -518; Bookkeepers, cashiers and related workers- 61; bookkeeping and calculating machine operators-2 and 260 accountants. The accounting and other accounting related jobs were deployed in various places overseas. 410 were in United Arab Emirates, 129 in Saudi Arabia and 57 in Brunei.

Laws Hindering/Facilitating

In the Philippines, the following are some of the legislations and administrative policies affecting the access of foreign players in the country as well as an overview into the different commitments of different countries under GATS that affects access of the country to different foreign markets

The accountancy profession has been highly regulated for a long time in most countries. As with many other professional services, regulations applied to accountancy services are mainly intended to protect consumers to ensure the quality of services and prevent conflicts of interests. The greatest trade-related concern is the fact that the accounting profession is often regulated in different ways between or within nations.

In addition, professional services have subject to extensive direct and

indirect government regulation. The direct form of regulation occurs through the actions of formal government agencies. The indirect form of regulation occurs when governments delegate professional organizations many of the regulations roles , but even with such delegations many the ultimate regulatory powers are still held by the governments.

The Code of Ethics prohibits the CPA to advertise his professional

attainments or service, except in stating qualifications in applications for employment. However publication of authorship of books, technical reports and studies, lectures or papers delivered in conferences and seminars and similar activities which are beneficial to the profession as a whole are not considered advertising.

In the Philippines, foreign accountants are not allowed to be partners in a Philippine accounting firm or, in most instances, to engage in accounting in the Philippines. As a result, foreign accounting firms usually must affiliate with a local

67

auditing firm in which they hold no equity. In addition, such local auditing firms are limited in their ability to use the international name of the firm.

Foreign accountants are permitted to practice in the Philippines, however, provided that they have been resident for three years, have passed the licensure examination, and have come from home countries that afford reciprocity. Another means by which foreign professionals may enter the Philippines is the presence of foreign reciprocity provisions in the laws governing the practice of a specific profession. These conditions make it easier for foreigners in certain professions to enter the Philippines.

At present, Batas Pambansa Blg. 178 or otherwise known as the Revised

Securities Act is an act regulating the securities market. However, with the changes occurring globally, there is a need to align the country’s securities market with these new developments.

Financial equipment leasing is supervised by the Securities and Exchange

Commission (SEC) but is regulated by the Bangko Sentral ng Philipinas (BSP) on monetary matters in accordance with the provisions of the Finance Company Act of 1969.

Though there is no specific legislation on leasing in the country, Philippine leasing and finance companies operate according to the provisions laid out in the Civil Code of the Philippines Republic Act 386 Articles 1643-1644, The Rules and Regulations of Republic Act No. 5980, otherwise known as the Financing Company Act of 1969, and Revenue Regulations No. 19-86. Article 1643 of the Civil Code of the Philippines defines the concept of leasing in the country. The Finance Company Act establishes the supervising authority of the SEC over the leasing industry while Revenue Regulations No. 19-86, as formulated by Philippine Association of Finance Companies, Inc. (PAFCI) and the Bureau of Internal Revenue, details the major differences of an operating lease, finance lease and a conditional sale, explains the accounting and tax treatment of lease transactions and establishes the depreciable life of leaseable assets for accounting purposes.

Foreign Market Demand and Competition

The countries with GATS commitments in accountancy services: Austria, Belgium, Denmark, Finland, France, Germany, Greece, the Netherlands, Ireland, Italy, Luxembourg, Portugal, Spain, Sweden, and United Kingdom. All countries made commitments in accounting, auditing and bookkeeping services. France, Greece and Italy remain unbound with respect to the cross-border supply of accounting and bookkeeping services.

In France, the commercial presence of accounting and bookkeeping service providers can only take place through a SEL (limited liability or limited partnership) or SCP. In France, for statutory audits, commercial presence can take place through any company form except SNC, SCS, and secondary offices. In Ireland, the provision of auditing services must be through partnerships only.

68

The United States made commitments in accounting, auditing and

bookkeeping. Other than barriers caused by domestic regulation, the United States has relatively few restrictions on trade in accountancy services. For market access, sole proprietorships or partnerships are limited to persons licensed as accountants, except in Iowa where accounting firms must incorporate. For market access of natural persons, an in-state office must be maintained for licensure in Arkansas, Connecticut, Iowa, Kansas, Kentucky, Michigan, Minnesota, Nebraska, New Hampshire, New Mexico, Ohio, Vermont and Wyoming. U.S. citizenship is required for licensure in North Carolina.

Market Demand. The UK market for accounting, auditing and bookkeeping

has grown by 1.3% since 1998 to reach a value of £ 10.1 billion (US$16.4 billion) in 1999. Auditing remains the largest sector of the market, followed by accounting for fifty five percent of the total fee income in 1999. On the other hand, the market in UK is forecast to grow by 3% from 1999 to 2004 to reach £10.4 billion (US$16.9 billion) in fee income in 2004.

In 1994, sales by foreign affiliates of U.S. accounting firms totaled $5.7 billion, while purchases totaled only $1.6 billion. European affiliates of U.S. accounting firms generate by far the greatest share of total sales by foreign-based accounting affiliates. In 1994, European-based affiliates of U.S. firms captured 70 percent of total sales, surpassing affiliates in Canada, with 12 percent; and Japan and Australia, each with 4 percent.

The U.S. cross-border exports of accounting, auditing, and bookkeeping services totaled $178 million in 1995, and U.S. cross-border imports totaled $141 million, resulting in a $37-million surplus. During 1990-95, the average annual rate of growth in U.S. imports, measuring 20 percent, exceeded that of exports, measuring 8 percent.

The US market for accounting, auditing and bookkeeping grew from US$10.4 in 1998 to US$84.4 billion in 1999. The total market value increased to seventy percent as information technology increased in complexity. In response to growing market competition, the leading accounting firms have moved into high-margin consultancv services.

The UK market for credit and charge cards has grown by 13% since 1998

to reach a value of nearly £165 billion (US$260 billion) in 1999. The UK credit and charge card market is the most profitable in Europe. In 1999, over 85% of adults in the UK had some form of financial plastic card, compared with 73% in 1991.

The top 1000 issuers of Visa and MasterCard credit cards accounted for

nearly US$1.7 trillion in combined volume of cardholder purchasers worldwide in 1999. Morgan Stanley Dean Witter & Company’s net revenue reached US$33.9 billion in 1999, a 9.0% increase from 1998. American Express Company’s net revenues on the other hand rose to US$21.3 billion in the same period.

The market in the US is forecast to grow 48.6% over the forecast period to

a value of US$142.4 billion in 2004. Success in the market is expected to become

69

more market driven then in the past, forcing companies to adapt to shifting demand rather than rely on a relatively static code of regulation. Increasing globalization of the economy is affecting the worldwide accounting profession to both understand and respond through international accountancy bodies.

In the article written on financing of small firms in United Kingdom, Lund

(1998) identified the sources of external finance by small and medium companies in UK. The percentage share of different sources of finance, the percentage share of finance during 1987-90 and 1995-97 shows an impressive shift. The share of leasing has grown from 16% (1987-90) to 27.1%(1995-97).

Data published in Leaseurope revealed that in 1998, the number of leasing

players in Europe came down from 1212 to 1035. However in the same year, the business volume grew from 104.1bn euros in 1997 to 117.3bn euros in 1998, a growtn of 112.6%. United Kingdom leads the European market with a market share of 37.8% of the market. Germany ranks second with a share of 20%, France 11.2% and Italy 7.8%.

According to the survey released by Equipment Leasing Association (ELA), United States indicates that the market acceptability of leasing is growing, most especially in the equipment and computer segment. 70% of the respondents pointed out that they would like the company to provide maintenance. This value added services may be considered as the key to differentiating between various provided of leased equipment. American leasing has grown about 20% in year 1998. The bank-lessors reported a growth rate of 35.8%, independent leasing companies reflected a 17.7% increase while captive leasing companies showed a 10.5% increase. The study stated further that leasing company had stable profitability and that average return on assets was 1.4% and average return on equity was 12.5%. Industry Associations

The Securities and Exchange Commission (SEC) and the Bureau of Internal

Revenue(BIR) were established in 1939. They required the submission of financial statements audited by CPAs. Other regulatory bodies like the Commission on Audit and the Bangko Sentral ng Pilipinas require also the submission of audited financial statements. The Accounting Standard Council and the Auditing Standard and Practice Council were formed to oversee the promulgation of accounting and auditing standards used by auditing firms.

Most of the business services sectors have an industry associations. Association vary widely in the services provided to members, but most offer staff training programs, a directory of experts in member firms available for consultation, and client referral services.

In the professional services sector, several recognized industry associations have assisted the Professional Regulation Commission (PRC) in the implementation of the continuing professional education program, and have served

70

as members of the different professional boards that administer the licensure examinations. Through these activities, the industry associations have contributed significantly to the upgrading of the different professions in the country.

The Credit Card Association of the Philippines created a Credit Bureau Task Force to draft standardized credit policies. Based on interview conducted, the association will make every effort to prevent card fraud which comprises low rate as compared to Asia Pacific countries. The association plans to provide security to its clientele by introducing the use of chips in the credit cards which will replace the traditional magnetic stripes within five years.

Moreover, many industry associations have successfully lobbied for the

passage of certain laws that benefit their respective industries, and have strongly opposed certain measures detrimental to their membership. Some of these associations were instrumental in the formulation of laws/policy affecting their own sector. Quality and quantity of Training

Interviews with auditing firms show that firms have their own training programs on technical training, professional development training and industry and functional training. They have local and foreign speakers. Their training programs are offered to the different levels in the audit staff from partners to junior auditors. Training needs are addressed by levels. The division in charged is the training and CPE Division.

Training programs are usually grouped into technical training, professional

development training and industry and functional training. Technical training programs cover manager's awareness program and business awareness program. Professional development program cover skills development modules and support courses. Industry and functional training provides knowledge, skills and abilities needed to service client effectively for each industry and functional group. Opportunities and Threats Accounting

Opportunities. Accounting services industry provides to CPA firms through the supply of well-trained and motivated CPAs from several hundred colleges and programs in accounting. social forces in the form of opportunities to work abroad on additional projects are provided by the "Big 5" firms. There are vast opportunities opened to CPAs in the public practice. This will provide more exposures and experiences and will improve their communication skills. Technological factors like development in information technology will provide venues for more training to employees to keep abreast of new services like assurance services. In addition, foreign consultants can provide us better transfer of technology. The economic growth of a country create greater economic

71

transactions and establishment of commercial firms that need accounting services. Political factors affecting the accounting profession like liberalization of professional services. This will expand markets here and abroad. Furthermore, growth in the Asia-Pacific region and the commitment of Asia Pacific countries under GATS devote an increase in the demand for accounting services.

Threats. The accounting services industry expect threats arising from social factors like feeling less superior to foreign consultants and the fear that CPAs will seek employment abroad through the foreign projects given them. Technological factors like the reduction of employment of CPAs due to the introduction of the paperless audit and dependence on IT. The economic factor of competition with foreign CPAs and foreign consultants will affect economic status of the accounting services industry. Another hindrance is the difficulties of small accounting firms in penetrating the market . Finally, the political factor on the ultimate liberalization of auditing services will affect employment of CPAs, obsolescence of manual operations and procedures due to advanced technological requirements Financial Services

Opportunities. Financial services industry provides opportunities in terms of economic growth. Economic growth is measured in terms of greater savings which are used for diversification of assets. Another opportunity is the need for cash flow improvement arising from vibrant economic activities, thus creating demand for financial services. The commitment of Asean and Pacific countries to GATS on the liberalization of the financial sector causes reforms in the securities market. This reforms require more disclosures which can make the Philippines a safe and stable site for financial services. Opportunity on the technology side, point out that the knowledge and user of technology facilitate leasing, factoring, credit cards and stock broking activities. This knowledge increases efficiency in the delivery of these financial services. The economic factor of improving the buying capacity are facilitated by leasing, factoring, credit cards, and stock broking. They provide temporary facility in the use of credit buying. Politically, opportunities to understand the adverse effects of bankruptcy laws open our eyes to such situations like making good all obligations arising through leasing, credit cards, and stock broking. Finally, the improvement in the credit standing of the country increases the inflows of capital and the need for financial services.

Threats. Dependence on debt to improve one's standing in the community.

Educating takers of these measures will be advised to proper use of leverage. Other threats include macroeconomic instability, huge cost of IT infrastructure, political instability and international perceptions. High budget on IT would deplete budget and other necessary programs. Balancing of all budgetary needs should take into consideration like magnitude of transactions affecting IT. Recommendations:

72

Accounting

Marketing • Affiliate with international accounting firms and allow regional accreditation with

the "Big Five". These international accounting firms provide more opportunities in terms of transfer of technology, more projects for local auditing firms and sharing of technology and knowledge updates.

• Explore new services for the firm like assurance services, information and communication technology, corporate finance, outsourcing, and sustainable accounting. Assurance services require assurers to become more knowledgeable in user decision processes and relevance enhancement activities.

• Create niches for small auditing firms like doing training in less developed countries, doing outsourcing, doing business research, doing entrepreneurial ventures and information technology software in accounting. These are activities that can be done by small auditing firms in order to have market access.

Operations/Technology

• Optimize technical knowledge and application of information technology. • Preparing clients and staff or paperless auditing is a must. • Government should help in making technology affordable through tax

reductions in software and hardware acquisitions.

Human Resources

• Invest more on training programs for people. Human capital development in the long-run reduces training costs. Trainees must see their true value in the company.

• Improve the quality of accounting profession in a wider coverage such as management and financial accounting.

• Joint efforts of academe, government, and industry in the improvement of human capital.

Finance

• Provide enough budget for IT equipment and continuing professional program. • E-Commerce has strong implication on accounting and auditing. Continuing

professional programs will enhance staff competencies need in a globalized accounting environment.

Laws

• Update the Accountancy Law, Code of Ethics, Accounting and Auditing standards

• Awareness of existing regulations and providing trainings for regulators.

73

• Allowing web site advertisements for accounting firms. • Study the feasibility of incorporating a partnership.

Monitoring • Strengthen the cooperation among small auditing firms through the creation of a

formal organization of small auditing firms. • Strengthen the professional organizations(PICPA, ACPAPP,ACPAE,etc.) • Recommend peer /practice review among auditing firms. • Monitor curricular offerings to meet the current demands of industries, new

services for the accounting services industry, inclusion of computer application in accounting subjects.

• Envision a discipline which is not limited only to accountancy. Financial Services

Marketing • Create selling systems which are customer-oriented. Selling systems which are

customer-focused answers the call for globalization. In globalization, there is a shift of advantage from the provider of services to the user of financial services. Increase the clientele base through personalized services to customers.

• Conduct research on improving services to cope up with changes in selling needs and changes in technology.

• Conduct campaign to educate the users on leasing and factoring activities. Operations/Technology

• Use selective extension of credit to customers based on worthiness of client. • Market products through advanced technology processes. Through internet

transactions, services will reach the customers faster. Prompt statement of accounts can be sent to them. E-commerce application on collection and payments must be studied.

• Provide enough budget for computerization of client's transactions.

Human Resources • Seek more government agencies and associations assistance through offering

of more meaningful services or selling services, interpersonal relationships and updates on laws that affect the industry.

Finance

• Provide more control to cater to the needs of the financing services sector. More capitalization responds to the credit needs with more reasonable interest rates to cater to customers.

74

Laws

• Educate users of fraud, securities and bankruptcy laws, thus compliance will be assured.

• Awareness of existing regulations and providing trainings for regulators. • Follow- up any position papers filed by associations concerning tax-related

matters. • Improvement of tax system.

Monitoring • Monitor performance of the industry through more aggressive intervention of

association of financial services • Set up own internal audit or recommend external audit of finance companies,

brokers and credit card distributors. Internal and external audit

75

An In-depth study on the Accounting and Financial Services Industry in the Philippines.

“Whenever the advance of civilization brought about the necessity of one man being entrusted to some extent the property of another, the advisability of some kind of

check upon the fidelity of the former would become apparent.”

Richard Brown Introduction

The first public accounting firms were formed in the beginning of the 20th century by British chartered accountants. They were followed by American CPAs. After which, some Filipinos obtained CPA certifications in the United States. It was in 1923, where formal recognition was given to the professions with the enactment of the Accountancy Law.

The accounting services industry has faced challenges since the 1990s.

Severe pressure have caused a re-examination of the roles of the industry in the economy, the nature of services and processes used to serve clients and the possible effects of liberalization on accounting services. At present, the industry recognizes the future benefits of liberalization like the transfer of technology, improved delivery of services and higher level of income. As the country moves towards globalization, a long-term strategy must be considered in line with the improvement of the accounting professionals to compete in the global market.

The practice of accountancy in the Philippines has since then been the sole

privilege of Filipino citizens. However, The General Agreement on Trade & Services (GATS), The Asean Framework Agreement on Services (AFAS), and The Bogor Declaration of the member countries of Asia-Pacific Economic Cooperation (APEC) are the three developments that may liberalize the practice.

The finance services industry in the Philippines has greatly matured over the past six years. Since 1994, government policies have reflected the previous administration’s commitment to liberalize the financial sector. In spite of the widespread speculation on the condition of the Philippine finance industry, analysts claim the country’s economy still enjoys a good standing among international investors. New foreign players have entered the market, resulting in the introduction of new products and services.

One special feature of the financial service sector is that its product is a

service. Services are not internationally traded in the same way as goods, and for that reason, domestic financial-service providers face a different form of foreign competition than an industry producing goods. It cannot be protected against foreign competition by border measures, as can producers of goods. Services,

76

being intangible, often cannot be sent from one place to another. The outcome of a service can be dispatched, but not, usually the service itself. Furthermore, the financial sector is heavily regulated, for both fiduciary and monetary -policy purposes

Given this background, and taking into consideration the information gathered from interviews and various primary and secondary sources, this paper aims to:

8. determine the scope of the accounting and financial services industry 9. present the industry structure in both the international and local setting 10. identify the laws affecting the trade of accounting and financial services

industry 11. provide information on existing local and international associations and

their efforts towards enhancing competitiveness of accounting and financial services industries

12. provide information on the market potential and demand in the Asia Pacific, Europe, North America and other regions worldwide

13. identify training needs that could enhance competitiveness of the accounting and financial services industry

14. identify opportunities and threats faced by the accounting and financial services industry

15. determine the degree of competitiveness of the Philippine accounting and financial services industry

16. propose strategies and plans to enhance the competitiveness of the Philippine accounting and financial services industry

17. identify strategies necessary in the implementation of a performance monitoring scheme for the industry

1.0 The Industry

Accountancy offers the opportunity for challenging and rewarding careers in public accounting, industry and government. Most accountants develop client base with a concentration in one or more key industries. CPAs choosing an auditing career in a public accounting firm will progress from starting position of staff assistant, senior auditor, to manager and then to partner. CPAs develop expertise in accounting, auditing and in giving unbiased advise about various topics to improve business performance.

Accountancy has an essential role with respect to the implementation and

enforcement of prudential requirements and other financial regulatory measures. The range of activities undertaken by accountancy firms is also wide and expanding. Based on the article Panorama of EU Industry 1997, a European Commission publication, "There is no strict correspondence between accountancy services and the field of activity of the accounting profession". This is due to the fact that the skills developed by accountancy professionals in order to produce,

77

process, analyze or audit financial information can also be used for other purposes. The outcome has been a major expansion into such areas as taxation services and management consulting.

The Financial services industry generates about $2 trillion a year in

revenues, according to several trade groups, more than 20 million people work in the industry, which encompasses securities, insurance and other financially related concerns.

Financial services companies earn money in a wide variety of ways, though

most revenue tends to come from fees-assessed either as a percentage of a transaction or as a repeating monthly or yearly charge.

1.1 Definition The accounting services encompasses auditing, accounting, bookkeeping

and related services. Public accounting which comprises the audit and review function adds credibility to financial information. The most prominent function of which is the independent examination of a company’s financial statements and supporting documents. Management accounting is another major category in accounting services it provides business advice and direction on strategic, tactical and operational decisions by drawing on financial ata. Other accounting services include: bookkeeping, income tax preparation, business valuations, forensic accounting, tax compliance, investment advice, accounting system organization and design and management advisory services.

The skills developed by the accountancy professional have practical

application in many areas. As a result, accounting firms are expanding the services they offer to include taxation and legal services as well as management consulting. In addition, accounting firms are becoming among the largest suppliers of information technology consultancy services since this was an area of internal expertise and is complementary to establishing accounting systems. The result is that the domain of accountancy services is defined differently in different countries and the boundaries with other regulated professions or non-regulated service providers are increasingly blurred.

A working definition of financial services industry is that group of institutions

that provides four categories of service: • Obtaining funds which includes underwriting, investment banking services,

brokerage services and the provision of loans. • Providing income for those with funds to lend or invest which include deposit

services, brokerage activities, money market funds, mutual funds, life insurance and pension funds.

• Payments services include traditional payments services as well as credit cards, bill-paying services and cash management services and

78

• Advice on the best way to get the services needed in the first three categories

United Nations Central Product Classification (UN CPC) The scope of the Accounting and Financial Services is usually defined based

on the World Trade Organization Sectoral Classification. This definition corresponds to the United Nations Central Product Classification (UN CPC). The Philippine classification and definition is also presented in this section to aid in the analysis of the Philippine Accounting and Financial Services Industry.

Based on the UN Provisional Code, accounting, auditing, bookkeeping

services and financial services falls under “Business Services" of the Services Sectoral Classification List . The corresponding classification number under the United Nations' "Provisional Central Product Classification"(CPC) is 862. Under the Provisional CPC, the category of "Accounting, auditing and bookkeeping services" (CPC 862) is further sub-divided, as follows:

Table 1. Accounting Services Industry Definition based on the UN CPC Provisional Code Accounting and auditing services

Coverage

Financial auditing services (86211)

Examination services of the accounting records and other supporting evidence of an organization for the purpose of expressing an opinion as to whether financial statements of the organization present fairly its position as at a given date and the results of its operations for the period ended on that date in accordance with generally accepted accounting principles.

Accounting review services (86212)

Reviewing services of annual and interim financial statements and other accounting information. The scope of a review is less than that of an audit and therefore the level of assurance provided is lower

Compilation services of financial statements services (86213)

Compilation services of financial statements from information provided by the client. No assurances regarding the accuracy of the resulting statements are provided. Preparation services of business tax returns, when provided as a bundle with the preparation of financial statements for a single fee, are classified here. Exclusion: Business tax preparation services, when provided as separate services, are classified in sub-class 86302 (Business tax preparation and review services).

Other accounting services (86219)

Other accounting services such as attestations, valuations, preparation services of pro forma statements, etc.

Bookkeeping services except tax returns (86220)

Bookkeeping services consisting of classifying and recording business transactions in terms of money or some unit of measurement in the books of account. Exclusion: Bookkeeping services related to tax returns are classified in subclass 86302 (Business tax preparation and review services).

Source: (http://esa.in.org/unsd/cr/registry/regcst.asp)

On the other hand, the financial services industry under study only covered the following subsectors: financial leasing, credit cards, factoring and stock

79

brokering. These are categorized under “ Financial Intermediation and auxiliary services" (CPC 811) which is further sub-divided, as follows:

Table 2. Financial Services Industry Definition based on the UN CPC Provisional Code

Financial Services Coverage Financial leasing services (81122)

Leasing services where the term approximately covers the expected life of the asset and the lessee acquires substantially all the benefits of its use and takes all the risks associated with its ownership. Exclusion: Operational leasing services are classified in division 83, according to the goods leased.

Other credit granting services (8113) Credit card services (861133)

Services consisting of financing the purchase of products by granting point-of-sale credit using plastic cards or tokens.

Services related to securities markets ( 8132) Securities broking services (81321) Securities issue and registration services (81322) Portfolio management services (81323) Other services related to securities (81323)

Services of intermediaries between two or more parties engaged in buying and selling securities. Administrative services related to the issue and registration of securities, e.g. provided in issuing stocks or bonds. Portfolio management services on behalf of clients including decisions about the content of the portfolios. Exclusion: Advisory services on personal financial planning not involving decision-making on behalf of clients are classified in subclass 81332 (Financial consultancy services). Information services on stock quotations and information dissemination services through documents or electronic means. Other services related to securities markets, not elsewhere classified.

Source: (http://esa.in.org/unsd/cr/registry/regcst.asp) Philippine Standard Industrial Classification (PSIC)

The National Statistics Office used the Philippine Standard Industrial

Classification (PSIC) as a basis for the classification of industries and the sub sectors. The accounting services is classified under miscellaneous business activities. The definition of this sub sector follows:

80

Table 3 Definition of accounting services industry based on PSIC Division 74 Miscellaneous Business Activities

Coverage

Legal, Accounting, Bookkeeping and auditing activities, tax consultancy

This group includes • the accounting of commercial transactions for business or others • preparation of financial accounts, examination of financial

accounts and the certification of their accuracy • Preparation of personal and business income tax returns • Related advisory activities and representation on behalf of clients

before tax authorities. Exclusion: Data processing tabulation activities are classified in group 724 (data processing) activities involving management consulting, by units that do not provide accounting and auditing services, e.g. design of accounting systems, cost accounting programs, budgeting procedures, etc. are classified in class 7414 (business and management consulting activities). Bill collection is classified in class 7499)

Sources: 1994 Philippine Standard Industrial Code

Under the Philippine Standard Industrial Classification, the financial leasing, factoring, credit cards and stock brokering are classified under non-bank financial intermediation, n.e.c. Table 4. Definition of the financial services industry based on PSIC Financial Intermediation PSIC 82309

Coverage

Non Bank Financial Intermediation,n.e.c (Group 669) Financial Leasing services (Subclass 66970)

Leasing where the term approximately covers the expected life of the asset and the lessee acquires substantially all the benefits of its use and takes all the risks associated with its ownership. The assess may or may not eventually be transferred. Exclusion: Leasing and renting of real property are classified in division 70 (real estate activities) Operational leasing classified in division 71 (renting of machinery and equipment without operator and of personal and household goods) Fund management activity is classified in class 6702 (pension funding/fund management). Non-financial cooperatives are classified in the major activities they are engaged in.

Activities Auxiliary to financial intermediation, except insurance and pension funding (Group 681)

This group includes dealing in financial markets on behalf of others (e.g. stock broking) and related activities.

Exclusion: Dealing in markets on own account. Is classified in Class 6693 (securities dealership/brokerage).

81

Other credit granting, n.e.c. (Group 661)

This group includes credit card activities.

Sources: 1994 Philippine Standard Industrial Code

1.2 Structure

According to National Statistics Office, there are 101 firms under the accounting services industry, employing a total of 9,997 personnel. In 1997, the financial services industry on the other hand,(leasing, factoring, credit cards and stock brokering) consists of 1,025 firms, with total employment of 59,742. Table 5. Accounting and Financial Services Industry Structure

Description Accounting Financial Services Number of firms 101firms 1,025 firms Employment 9,997 people 59,742 people Gross Revenue P1.334 billion P121.487 billion Total Labor Compensation P2.728 billion P7.101billion

Source: National Statistics Office

In 1997, the wholesale trade industries employed 4,512 accountants, auditors and bookkeeping clerks with an average monthly salary of P10,593. Table 6. Average Monthly Wages Rates of time-Rate Workers on Full Time Basis in Selected Industries & Occupations- October, 1997 Description Time-Rate Workers on

Full time Basis Average Monthly Wage Rates (PhP)

Wholesale Trade and Commission Trade except motor vehicles and motorcycles Accounting & Bookkeeping Clerks 2,545 7,845 Accountants and Auditors 1,967 13,341 Retail Trade except motor vehicles and motorcycles Accounting & Bookkeeping Clerks 1,147 7,950, Accountants and Auditors 3,913 5,818 Hotels & Restaurants Accounting & Bookkeeping Clerks 799 10,229 Accountants and Auditors 1,864 6,517 Banking Institutions except central banking Accounting & Bookkeeping Clerks 235 7,837 Accountants and Auditors 329 13,197 Bookkeepers 180 9,743 Insurance and Pension Funding, except Compulsory Social Security

Accounting & Bookkeeping Clerks 651 8,249 Accountants and Auditors 321 14,329

82

Accounting, Bookkeeping and Auditing Activities, Tax Consultancy Accounting & Bookkeeping Clerks 143 6,484 Accountants and Auditors 1741 9,917 Bookkeepers 61 9,441

Source:1998 Yearbook of Labor Statistics Unlike most professions, accountancy is largely practiced at the level of firms

or partnerships rather than individuals, with small-scale firms predominant. The largest professional services firms are found in the accountancy field. The very large accounting firms are known collectively as the "Big Five" and they employ thousands of professionals internationally. The "Big Five" are Arthur Andersen, operating in 78 countries with a staff of 60,000; Deloitte Touche Tohmatsu, present in 132 countries with over 82,000 employees; Ernst & Young International, also in 132 countries with over 82,000 employees, KPMG International, located in 155 countries with over 85,000 employees,; and PriceWaterhouseCoopers, active in 152 countries with over 140,000 employees.

The internationalization of accountancy firms has reflected that of the clients

they serve. The increased globalization of both goods and services markets will promote continued growth in the practice of international accounting. The high level of recent mergers within the accounting profession reflects a belief in the competitive advantages of being able to offer clients a wider range of services, together with broader geographic coverage.

International accounting services may include the following:

o Providing services domestically to domestic clients on foreign issues

(e.g. advice on foreign taxation);

o Providing services abroad to domestic clients on foreign issues (e.g. investigations of potential foreign acquisitions);

o Providing services abroad to foreign permanent establishments of

domestic clients (e.g. performing the locally-required statutory audit of a foreign subsidiary);

o Undertaking the foreign element of services provided domestically to

domestic clients (e.g. auditing a foreign subsidiary for the purposes of issuing a domestic audit report on the consolidated financial statements of a domestic parent company);

o Providing services abroad to foreign clients on domestic issues (e.g.

advice on domestic taxation to a foreign company);

o Providing services domestically to domestic permanent establishments of foreign clients (e.g.performing the statutory audit of a domestic subsidiary of a foreign parent company);

83

o Undertaking the domestic element of services provided abroad to

foreign clients (e.g. audit a domestic subsidiary for the purposes of issuing a foreign audit report on the consolidated financial statements of a foreign parent company); and

o Providing services abroad to foreign clients on foreign issues (e.g.

acting as liquidator for an insolvent foreign company). Rather than parent firm/subsidiary relationships, world-wide networks have

been formed between independent domestically owned firms. The large networks, like that of the "Big Five", have been created to overcome the effects of restrictive national regulations, including local qualification and licensing requirements. However, such networks may not necessarily be the most efficient management and organization structures for the delivery of accountancy services. Small and medium-sized firms are often placed at a comparative disadvantage because they do not have the resources to form large networks. Individual accountancy professionals are likely to be even more disadvantaged, especially those from small and developing countries.

Financing Services The Securities and Exchange Commission’s record as

of December 31, 1999, show that financing companies with valid certificates of authority to operate as financing company totaled to 179. Their total assets as of the same period amount to P68.643 Billion or an increase of 32.47% compared to P51.816 Billion in 1998. On the other hand, total liabilities amounted to P48.805 Billion in1999, an increase of 40.22% as compared to P34.807 Billion in 1998. The industry capital stock as of the 1999 increased by P3.315 billion from P623 Billion in 1998. Net income obtained from the same period increased by P623 million to P1,203 billion. Funds invested in financing activities, trading account securities, investment in bonds and other debts instrument and equipments and equipment and other properties for lease constitute 67.88% of the industry's total assets of P68.643, to wit: Table 7. Schedule of funds invested in financial activities

Description Amount (In million) %to Total Assets Receivable financed P35,366 51.52% Trading Account Securities 7,435 10.83% Investment in bonds and Other Debt instruments 2,216 3.23 Equipment and Other Properties for Lease 1,579 2.30% Total P46,596 67.88%

Source: Securities and Exchange Commission, 1999 Philippine Finance Association Leasing. Leasing is still a growing market since it is just being practiced in the Philippines as compared to developed countries like the USA where leasing is prevalent. The affiliation of the leasing/finance companies to banks and other

84

financing institutions provide them with better and larger marketing network which will bring in more clients.

Based on Republic Act 8556, companies acting as lessors in financial equipment leasing are required to have a minimum capital as follows: P10,000,000 for companies operating in Metropolitan Manila, P5,000,000 for companies operating in First Class Cities, P2,500,000 for companies operating in Second Class Cities and First Class Municipalities, P1,000,000 for companies operating in Third Class Cities and Second Class Municipalities, P500,000 for companies operating in Fourth Class Cities, Third Class Municipalities and below. However, leasing companies, with valid licenses as of 11 February 1986, were allowed to continue operation even with a P500,000 capital.

As per Securities and Exchange records, the revenues earned by the leasing

industry as of December 31, 1999 amount to P7.412 billion, an increase of 20.57% as compared to 1998 figure of 6.147 billion. The industry's gross revenues of P5.9678 billlion were derived from discounts fee, leasing income, interest on direct lending, trading and interest income.

The industry's expenditures for the period ended December 31, 1999

amounted to P5.586 Billion. These expenses consist of interest/finance charges on borrowed funds, compensation/fringe benefits, provisions for probable losses, taxes and licenses, income tax, depreciation/amortization, litigation expenses, management and other professional fees and other expenses. These amounted to P5.512 billion or 98.68% of the total expenses.

Based on the firms’ resources for the period ended December 31, 1999, the

top ten (10) leasing companies were as follows:

Table 8. Top 10 Leasing Companies Based on Total Assets (In ‘000) Rank Name of Company Total Assets %

1 BPI Capital Corporation 13,562,653 28.77 2 All Asia Capital & Trust 11,667,608 24.75 3 BPI Leasing Corp 4,660,855, 9.89 4 All Asia Capital & Trust 3,506,806 7.44 5 UCPB Leasing & Finance 3,467,124 7.35 6 FEB Leasing & Finance 3,155,733, 6.69 7 BPI Card Finance Corp 2,887,039 6.12 8 Phil Comm. Capital, Inc 1,578,199 3.34 9 People's Credit & Finance Corp 1,350,664 2.86 10 Consolidated Orix Leasing & Finance Corp 1,307,046 2.77 Total 47,143,727 100.0

Source : Brokers Division, Securities and Exchange Commission, February,2000 Philippine Finance Association

Table 9 presents the top ten(10) leasing companies based on the net

income for the period ended December 31, 1999:

85

Table 9. Top 10 Leasing Companies Based on Net Income Rank Name of Company Net Income 1 BPI Capital Corporation 449,505

2 BPI Card Finance Corp 320,543 3 All Asia Capital & Trust 280,990 4 All Asia Capital & Trust 201,497 5 BPI Leasing Corp 190,199 6 UCPB Leasing & Finance 95,630 7 Macondray Finance Corp 95,133 8 UCPB Leasing & Finance 67,639 9 FEB Leasing & Finance 62,708

10 First Malayan Leasing & Finance 30,975 Source : Brokers Division, Securities and Exchange Commission, February,2000, Philippine Finance Association

Credit Cards. The Credit Card Association of the Philippines (CCAP) is

composed of 16 member card companies and one honorary member. These card companies are Bankard,Inc., RCBC/JCB, Unibancard Corporation, BPI Card Corporation, Hongkong Shanghai Banking Corporation, Ltd., PNB Visa, MBf Card, Inc., Standard Chartered Bank, AIG Philam Bank, American Express International Inc., Citibank, N.A., Equitable Card Network, Inc., Securities Diners International Corp. United Overseas Bank and Union Bank of the Philippines.

The credit card industry posted a growth of 23.3 percent in the past six years, with a total of 3.12 million card base by year 2000. Industry value reached P100 billion by the year 2000, growing by 25.9 percent over the same period. Merchant affiliation numbered 30,000 across the nation and with linkages with American Express Card, Diners, JCB, MasterCard and Visa. Nowadays, the credit cards are accepted in at least 14 million merchants internationally. Furthermore, there are 20,000 terminals installed nationwide where the cardholders are assured of fast processing of transactions which leads to employment of 3,496 personnel.

The Visa and MasterCard associations have played important roles in

promoting and ensuring competition in the credit card industry. Almost every financial institution can join Visa and MasterCard and issue credit cards. Many new institutions join every year. Members compete with each other in every dimension that is important to consumers. But they work together through associations to achieve things no member could on its own, nurturing the globally recognized brands, maintaining and improving the sophisticated computer networks for processing transactions, developing new payment methods and expanding the areas in which consumers can use their cards. MasterCard does not earn profits or pay out dividends to members. Visa and MasterCard are open, not for profit joint ventures. The market share of various international credit cards is shown in Table 10.

Table 10. Market Share of International Credit Cards

Companies Market share (%) Visa International 47.1 MasterCard International 26.0

86

American Express Company 19.9 Morgan Stanley Dean Witter & Co. 5.8 Total 100

Source: Euromonitor 2000

The top 1000 issuers of Visa and MasterCard credit cards accounted for nearly US$1.7 trillion in combined volume of cardholder purchasers worldwide in 1999. Morgan Stanley Dean Witter & Company’s net revenue reached US$33.9 billion in 1999, a 9.0% increase from 1998. American Express Company’s net revenues on the other hand rose to US$21.3 billion in the same period. Table 11. Net Revenue of International Credit Cards 1998-1999 (US$billion)

Companies 1998 1999 Morgan Stanley Dean Witter & Co. 31.1 33.9 American Express Company 19.02 21.3 Visa International 2.55 2.8 MasterCard International 1.3 1.4 Total 53.97 59.4 Source: Euromonitor 2000

Master Card International began airing commercials featuring baseball legends Willie Mays, Hank Aaron, George Brett and Barry Bonds in 1999 as part of its "there are some things that money can't buy - for everything else there's MasterCard" campaign.

In 1999, Visa spent the most on advertising amounting to US$268.2 million,

almost ten percent of its net revenue for the same year. Morgan Stanley Dean Witter & Co.,, on the other hand, only spent three percent advertising cost based on its net revenue. American Express was second spending US$198.1 million on advertising in 1999.

Table 12. Advertising Costs of International Credit Cards-1999

Companies US$million Visa International 268.2 American Express Company 198.1 MasterCard International 176.0 Morgan Stanley Dean Witter & Co. 95.7 Total 738.0

Source: Euromonitor 2000

The UK market for credit and charge cards has grown by 13% since 1998 to reach a value of nearly £165 billion (US$260 billion) in 1999. The UK credit and charge card market is the most profitable in Europe. In 1999, over 85% of adults in the UK had some form of financial plastic card, compared with 73% in 1991.

87

Hereunder are details about the three major players in the local credit car industry: Bankard, Inc. RCBC and Equitable Card Network, Inc.

Bankard, Inc., a subsidiary of Philippine Commercial International Bank, Inc.

offers full credit card operations in the Philippines. In 1991, Master Card International granted the company a license to issue credit cards that are accepted by MasterCard's network of affiliated banks and establishments worldwide.

Bankard's services allowed to clients include a separate credit card limit for

installment purchases, exclusive gift certificate certificates, computerized telephone customer service and credit shield which offers credit protection to the cardholder in the event of temporary or permanent unemployment.

In 1995, the company was granted by Visa International a license to acquire merchant billings and to issue credit cards carrying the Visa brand. Bankards, Inc. currently markets the following lines of credit cards:

• Bankard MFI – local credit card which can be reloaded with cash value from P100 to P10,000.

• PCIBank MasterCard – international credit card where cardholders are billed for all purchases in US dollars.

• Bankard MasterCard- credit card which gives the peso global mileage where cardholders’ purchases are billed in pesos.

• Bankard One – first installment smart card program in the credit card and banking industry. It has a microchip that makes charge slips and signatures unnecessary.

• Bankard Visa - another credit card which gives the peso global mileage where cardholders’ purchases are billed in pesos.

• Bankard E-cash – the country’s first cash card with cash value up to P10,000 for daily payments at selected supermarkets, drugstores, etc.

The total credit cards issued by Bankard as of December 31, 1999 totaled

302,856. The holders of which are top managers, professionals, businessmen and employees.

Table 13. Total Credit Cards Issued-1999

Description Cards in Force % Distribution Bankard 139,021 46 MasterCard 44,337 15 Visa 13,739 4 Bankard One 105,759 35 Total 302,856 100

Source: 1999 Bankard Annual Report –Securities and Exchange Commission Revenues accounted for local credit cards amount to P853 million while

international cards totaled to P253 million. As of 1999, Bankard, Inc had 19,886 accredited establishments. Table 14. Total Credit Card Revenues-1999

88

Description Revenue(Million) % Distribution Bankard/ Bankard One 853 77 MasterCard/ Visa 253 23 Total 1,106 100

Source Euromonitor,2000 The Rizal Commercial Banking Corporation’s (RCBC) credit card division

targeted a cardholder base of 60,000 generating at least P1.1 billion in gross billings in year 1999. To remain competitive, the company offered the same credit card features provided by bigger card companies. The interest rate and other fees charged were made more affordable to the cardholders.

The Equitable Card Network, Inc. a subsidiary of Equitable PCI Bank, has

enhanced its standing as the country’s leading payment network . It was in 1979 when Equitable Banking Corporation ("EBC") became a principal member of VISA International Service Association (VISA International) and was permitted to issue local and international VISA credit cards in the Philippines. In 1987, recognizing the high growth potential of the credit card industry, EBC became a principal member of MasterCard International and introduced MasterCard credit cards to the public. With the introduction of a second card, EBC became the first bank to issue two world-renowned credit cards in the country.

Due to its affiliation with the two largest international credit card associations

in the world, Equitable VISA and Equitable MasterCard became an easily recognized brand name in the local card market.

To further strengthen its hold of the market and expand market reach, the

company has pioneered the concept of affiliating selected banks and financial institutions for the issuance of VISA credit cards and/or collection of VISA credit card payments. As a result, Equitable Card and its network of tie-up banks and financial institutions nationwide account for the largest share of the local market in terms of cardholder base and gross sales volume ( http://www.equitablecard.com).

The company increased its card sales volume by 24% in 1999 and earned

22% growth in net income. In the same year the firm holds over 60% of the entire branded cardholder base nationwide.

According to Business World’s Top 1000 Corporation for the year 1999,

among credit card companies in the Philippines, Equitable Card Network, Inc. ranked first with gross income of P1.582 billion, followed by Bankard, Inc. with P1.157 billion in gross margin. (refer to Table 15)

Table 15. Top Philippine Credit Card Companies

Name of Company Gross Income (Php million)

% Net Margin (Php million)

%

Equitable Card Network, Inc 1,582 38.2 312 46.3 Bankard, Inc. 1,157 28.0 116 17.2

89

BPI Card Finance Corp. 904 21.8 214 31.8 Security Diners International Corp. 494 12.0 32 4.7 Total 4,136 100.0 674 100.0

Source: Business World Top 1000 Corporations 2000

Stock Brokering. The stock market has been the beneficiary of the country's economic growth. In 1996, the stock market capitalization increased to P2.076 trillion for 215 listed companies which is 168 times larger than the market capitalization ten years ago. The same positive trend is reflected in the growth of the composite index to around 3,200 points from only 131.9 points in 1995.

Data from the Philippine Stock Exchange revealed that the financial reports

of broker-dealers disclosed P22.254 billion in total assets and P8.747 billion in total capital as of year 1999. Equity market capitalization expanded to P1.937 billion, a surge of 41.1 percent from the previous year’s market capitalization. Trading turnovers at the Philippine Stock Exchange performed vigorously as average daily trading volume grew by 227.1 percent to 3.780 billion shares with value of P3.111billion, up by 89.6 percent. The year marked a milestone in the history of the Philippine Stock Exchange as two of its five debutantes in 1999, Manulife Financial Corporation (MFC) and ABS-CBN Holdings Corporation (ABSP), were the first of their kind to be listed at the Exchange.

The top twenty brokers from the period January to November, 2000 was

headed by ING Baring Securities (Phils), Inc with total shares traded amounting to P64.2 billion. Among the top 20 stock brokers, eight are foreign stock brokers and 12 are local stock brokers. The eight foreign stock brokers are: ING Baring Securities , Merrill Lynch Securities, DBS Securities, CLBA Philippines, ABN AMRO Asia Securities, UBS Warburg Securities, Indoseuz W.I. Carr Securities and HSBC Securities. Table 16. TOP 20 BROKERS from January to November 2000

RANK NAME OF BROKER VALUE % to TOTAL

1 ING Baring Sec. (Phils.), Inc. 64,208,828,095.04 9.61 2 Merrill Lynch Securities Phils., Inc. 41,398,415,609.51 6.19 3 Jardine Fleming Exch. Cap. Sec., Inc. 36,437,636,571.64 5.45 4 DBS Securities Phils., Inc. 24,029,540,062.00 3.60 5 ClBA Philippines, Inc. 20,959,444,413.54 3.14 6 Abacus Securities Corporation 17,842,188,430.63 2.67 7 BPI Securities Corporation 17,893,277,828.77 2.63 8 ABN AMRO Asia Sec. (Philippines) Inc. 16,575,785,954.97 2.48 9 Regis Partners, Inc. 15,534,854,296.05 2.47

10 Wealth Securities, Inc. 15,004,511,610.48 2.24 11 Citisecurities, Inc. 14,461,869,217.08 2.16 12 UBS Warburg Sec. (Phils.) Inc. 14,087,420,159.79 2.10 13 Indoseuz W.I. Carr Sec. (Phils.), Inc. 13,918,504,264.16 2.08 14 HSBC Securities (Philippines), Inc. 12,047,285,741.22 1.80 15 PCCI Securities Brokers Corporation 11,993,007,195.59 1.79

90

16 All Asiasecurities Management Corp. 11,555,205,845.54 1.77 17 ATR-Kim Eng Securities, Inc. 10,636,307,933.09 1.68 18 Solar Securities, Inc. 10,122,979,864.63 1.51 19 OCBC Securities Phils., Inc. 10,008,288,493.19 1.50 20 Tower Securities, Inc. 9,594,591,046.65 1.44

Source: Philippine Stock Exchange, November 2000

A company’s share of stocks may be listed on the Philippine Stock Exchange. Companies with intention to increase their equity financing through this process are required to register to the Securities and Exchange Commission. Table 17 showed Top 10 companies listed in the Philippine Stock Exchange based on their market capitalization. Two are engaged in insurance, two in telecommunications, one in manufacturing, two in banking, one in real estate and one in various business services. Table 17. Top 10 Companies According to Market Capitalization

Rank Name of Company Market Capitalization 1 Manulife Financial Corporation 628,699,344,475.00 2 Sun Life Financial Services of Canada, Inc. 414,153,360,075.00 3 Philippine Long Distance Tel Co.-common 130,567,360,075.00 4 San Miguel Corporation 120,459,930,644.90 5 Ayala Corporation-Common 85,153,136,268.00 6 Bank of Phil. Islands 82,731,186,405.00 7 Metropolitan Bank and Trust Company 54,563,941,730.00 8 Globe Telecom, Inc. – Common 43,132,202,520.00 9 Ayala Land, Inc. 42,538,551,924.00 10 Equitable PCIBank, Inc. 41,802,692,337.50

Source Philippine Stock Exchange, October, 2000 2.0 Forward Linkage/Market Accounting. Based on the 1994 Input-Output Table (refer to Table 18), a significant portion of sales made by accounting, auditing and bookkeeping institutions were heavily concentrated in a few industry groups. The leading market is the tour and travel agencies which accounted for 19.35%. Other markets include financing, telecommunications, hospitals and other service companies. Table 18. Forward linkage for accounting, auditing and bookkeeping services

Industry/Sector

Value (Php ‘000)

Share (%)

Tour and travel agencies 449,890 19.35 Public administration and defense 355,341 15.28 Investment, financing & other non-banking services excluding pawnshops

284,040

12.22

Pawnshops 86,346 3.71 Telegraph service 78,337 3.37

91

Steam 48,908 2.10 Storage & warehousing 37,957 1.63 Private hospitals, sanitaria & similar institutions 36,090 1.55 Postal, messengerial and other comm. services, n.e.c. 31,063 1.33 Railway transport services 26,445 1.13 Others 889,757 38.28

Total 2,324,174 100.00 Source: 1994 Input-Output Tables, National Statistics Coordination Board

Financial Services: Based on the 1994 Input-Output Table (refer to Table 19), a significant portion of sales made by investment financing, and other non-banking service institutions were heavily concentrated in a few industry groups. The leading market is the wholesale and retail trade sector which accounted for 27.77%. Other markets include construction, banking, agriculture, manufacturing and utility sectors.

Table 19. Forward linkage for investment financing, and other non-banking services

Industry/Sector Value (Php ‘000)

Share (%)

Wholesale & retail trade 5,952,410 27.77 Construction 2,498,803 11.66 Banking 724,029 33.79 Chicken 651,609 3.04 Electricity 533,687 2.49 Mfr of ready-made clothing 520,898 2.43 Aquaculture and other fishery activities 438,373 2.04 Ocean,coastal and inland fishing 436,491 2.03 Rice and corn milling 436,107 2.03 Cattle and other livestock 325,734 1.51 Others 8,911,732 41.58

Total 21,429,873 100.0 Source: 1994 Input-Output Tables, National Statistics Coordination Board 3.0. Backward Linkage/Suppliers

Accounting . The suppliers of bookkeeping, accounting and auditing include

the business management and consultancy, manufacturer of articles of paper and paperboard, private education services and other business services. Table 20. Supply Linkage for Bookkeeping, Accounting and Auditing

Industry/Sector Value (Php ‘000)

Share (%)

Business mgt & consultancy and market research services 86,993 16.45 Mfr of articles of paper and paperboard 48,029 9.08

92

Restaurants, cafes & other eating and drinking places 37,684 7.13 Telephone 35127 6.64

Electricity 32,256 6.10

Petroleum refineries 31,343 5.93

Commercial & job printing & other allied industries 30,967 5.86 Letting, operating real estate, residential or non-residential,other real estate activities 30,471 5.76 Private education services 29,834 5.64 Air transport 20,696 3.91 Other business 145,444 27.50 Total 2,362,411 100.00 Source: 1994 Input-Output Tables, National Statistics Coordination Board

Financial Services . The suppliers of investment financing, and other non-banking include banking sector at 22.42%, business management and consultancy at 7.56% and other service oriented businesses. Table 21. Supply Linkage for investment financing, and other non-banking

services Industry/Sector Value

(Php ‘000) Share (%)

Banking and other business services 2,355,943 22.42 Business mgt & consultancy and market research services 794,424 7.56 Detective & protective services 734,683 6.99 Restaurants, cafes & other eating and drinking places 667,796 6.35 Jeepney and autocalesa operation, trycycle and other road transport operation 638,530 6.07 Busline operators 638,530 6.07 Telephone 627,465 5.97 Public utility cars and taxicab operation 472,795 4.50 Air transport 434,353 4.13 Electricity 414,981 3.94 Others 2,726,478 25.95

Total 10,505,978 100.00 Source: 1994 Input-Output Tables, National Statistics Coordination Board 4.0 Laws Hindering/Facilitating

In the Philippines, the following are some of the legislations and administrative policies affecting the access of foreign players in the country as well as an overview into the different commitments of different countries under GATS that affects access of the country to different foreign markets

93

Accounting. The accountancy profession has been highly regulated for a

long time in most countries. As with many other professional services, regulations applied to accountancy services are mainly intended to protect consumers to ensure the quality of services and prevent conflicts of interests. The greatest trade-related concern is the fact that the accounting profession is often regulated in different ways between or within nations.

In addition, professional services have subject to extensive direct and

indirect government regulation. The direct form of regulation occurs through the actions of formal government agencies. The indirect form of regulation occurs when governments delegate professional organizations many of the regulations roles , but even with such delegations many the ultimate regulatory powers are still held by the governments.

This extensive overlay of regulation of many services thus adds important

elements to any efforts to liberalize international trade in professional services. Efforts to liberalize trade have to conform the question as to whether trade in services is compatible with the protections that the regulation is supposed to be providing.

The Code of Ethics prohibits the CPA to advertise his professional

attainments or service, except in stating qualifications in applications for employment. However publication of authorship of books, technical reports and studies, lectures or papers delivered in conferences and seminars and similar activities which are beneficial to the profession as a whole are not considered advertising. However, publication of an announcement is permitted only for the opening of a new office, change in partners, change in office location or telephone numbers, or reorganization of firm or practice, provided it contains basic information essential to the announcement and is of reasonable size. If advertising is prohibited, the firm looks for appropriate means to increase clientele base.

Compliance with the local and international standards/provisions on

independence based on the Code of Ethics impair one's independence. Under PD 692 Revised Accountancy Law, Independence will be considered to be impaired if:

A. During the period of his professional engagements, or at the same time expression his opinion, he,:

1. Had or was committed to acquire any direct or material, indirect financial

interest in the enterprise; or 2. Had any joint , closely held business investment with the enterprise or

any officer, director, or principal stockholder thereof which was material in relation to his firm’s net worth; or

3. Had any loan or from the enterprise or any officer, director or principal stockholders thereof. These later prescription does not apply to the

94

following loans from financial institution when made under normal lending procedures, items and requirements: a) Loans obtained by him or a member of his firm which are not

material in relation to the net worth of the borrower. b) Other secured loans except loans guaranteed members firm which

are otherwise unsecured.

B. During the period covered by the financial statements and during the period of professional engagement or at the time of expressing an opinion he: 1. Was connected with the enterprise as a promoter, underwriter or

voting trustee, a director or officer or in any capacity equivalent to that of a member of management or of an employee; or

2. Was a trustee of any trust, executor, or administrator of any estate if such trust or estate had a direct of material indirect financial interest in the enterprise; or was trustee for any pension or profit sharing trust of the enterprise.

In the Philippines, foreign accountants are not allowed to be partners in a

Philippine accounting firm or, in most instances, to engage in accounting in the Philippines. As a result, foreign accounting firms usually must affiliate with a local auditing firm in which they hold no equity. In addition, such local auditing firms are limited in their ability to use the international name of the firm.

Foreign accountants are permitted to practice in the Philippines, however,

provided that they have been resident for three years, have passed the licensure examination, and have come from home countries that afford reciprocity. Another means by which foreign professionals may enter the Philippines is the presence of foreign reciprocity provisions in the laws governing the practice of a specific profession. These conditions make it easier for foreigners in certain professions to enter the Philippines.

On a worldwide basis, GATS seeks to collapse regulatory barriers to trade

and investment in services, including accountancy and sets out a string of rules to discipline regulatory intervention in the marketplace. The objective of these regulations is to ensure that foreigners enjoy the same privileges as their domestic counterparts and to eliminate discriminatory obstacles to market access by foreign nationals. Article VI of GATS on domestic regulation, contains three important features:

• Governments agree to apply regulations affecting service industries and professions in a reasonable, objective and impartial manner so that they do not act as barriers to trade.

95

• Qualifications requirements and procedures, technical standards and licensing requirements should not constitute unnecessary barriers to trade in services. Further disciplines or rules shall be developed on a sector-by sector basis to make sure such measures are based on objective and transparent criteria, are not more burdensome than necessary to ensure the quality of the service, and, in the case of licensing requirements, do not in themselves serve as restrictions on the supply of the service. International standards should be taken into account in determining compliance with these principles.

• Countries must have adequate procedures in place to verify the

qualifications of professionals from other countries seeking the right to practice within jurisdictions.

In Asia-Pacific, countries with GATS commitments in accountancy were: Australia, Hong Kong, Japan, Korea RP, Malaysia, Maldives, Mongolia, Singapore, Thailand, New Zealand. With the exception of Mongolia and Singapore, these countries made commitments in all three sub-sectors of accountancy. Mongolia made commitments in accounting only, while Singapore made commitments in accounting and auditing.

Australia accords full market access and national treatment to foreign accounting firms providing services through cross-border supply and consumption abroad. Australia’s commitments on commercial presence appear to permit foreign firms to establish and operate effectively, although they may not be registered as auditors and liquidators and at least one equity partner of the firm must be a permanent resident.

With respect to the presence of natural persons, Australia’s limitations remain unbound, although cross-industry commitments permit the entry and temporary stay of executives, senior managers, and specialists for periods up to four years, and business persons for periods up to six months. However, specialists’ entry may be subject to labor market testing, which could adversely affect the entry of foreign accountants.

Hong Kong accords market access and national treatment to foreign firms wishing to establish a commercial presence. However, only citizens of Hong Kong may be licensed to provide auditing services.

Hong Kong limits accounting, auditing and bookkeeping services to auditing and advisory services on matters such as financial management consultancy, company formation and restructuring, raising of capital, debt rescheduling, receivership and liquidation.

Hong Kong is described as an extremely lucrative and important market for the major U.S. accounting firms where a license is not required in order to provide accounting services other than statutory auditing. Foreign firms that wish to provide statutory auditing may register with the Hong Kong Society of Accountants (HKSA) provided that the firm is run by a certified public accountant licensed by the HKSA.

96

Furthermore, foreigners are able to qualify for membership in the HKSA through membership in their local professional associations.

Japan. For market access in Japan, services must be supplied by a natural

person or by an audit corporation (a corporation composed of five or more partners who are accountants qualified as "Konikaikeishi"). Commercial presence is required for an audit corporation. The presence of natural persons is unbound except as indicated in the horizontal commitments.

Korea’s commitments accord market access and national treatment to

foreign firms wishing to provide accounting and bookkeeping services through cross-border supply and consumption abroad, but leave unbound restrictions on the provision of auditing services through these modes.

Korea permits the supply of accounting, bookkeeping, and auditing services

through commercial presences provided they are established as sole proprietorships, auditing task forces, joint accounting offices, or incorporated partnerships run by Certified Public Accountants (CPAs) licensed under the Certified Public Accounting Law. In order to receive such a license, foreign accountants must have two years of experience in Korea after passing the CPA examination.

Korea’s limitations on the presence of natural persons are left unbound,

although cross-industry commitments provide for the entry and temporary stay of executives, senior managers, and specialists for periods up to three years. However, some industry sources still describe the Korean accounting services industry as being essentially closed to foreign firms and others report that language and cultural differences make it difficult for foreign companies to provide accounting services without an affiliation with a Korean accounting firm.

Malaysia. Malaysia scheduled no limitations on cross-border supply and consumption abroad of accounting services, except for a measure requiring auditing services to be authenticated by a Malaysian-licensed auditor. The establishment of a commercial presence in Malaysia can only take place through a locally registered partnership with Malaysian accountants or Malaysian accounting firms, and foreign financial interests may not exceed thirty percent of equity. With respect to the presence of natural persons, Malaysia permits the entry and temporary stay of senior managers and specialists for periods up to five years and notes that residency is required for registration as an accountant.

Despite the shortage of accountants in Malaysia, it is exceedingly difficult for

foreign individuals to practice as accountants. Malaysia accepts only the credentials of other Commonwealth members, requiring all other accountants to undergo a local examination. Foreign firms are permitted to establish a commercial presence through a joint venture with Malaysian firms and to use the foreign firms’ names, but

97

Malaysia’s broad limitation on foreign equity restricts U.S. firms to minority partner status and advertisement of the firms’ services is not permitted.

Although Malaysia has eased restrictions on the movement of natural

persons in recent years, the government still has an official policy for transferring technology and training the Malaysian population. Under these policies, entry visas for foreign nationals are contingent upon the employment of Malaysian understudies.

New Zealand. In what appears to be the least restrictive schedule for accounting services, New Zealand accords full market access and national treatment to foreign firms wishing to provide accounting services through cross-border supply, consumption abroad, and commercial presence. New Zealand’s limitations on the presence of natural persons remain unbound except for measures permitting the entry and temporary stay of executives, senior managers, and specialists for periods up to three years.

Singapore essentially prescribes the provision of accounting services across

borders, noting that public accountants or at least one partner of a foreign firm must be resident in Singapore. However, Singapore allows foreigners to operate under the title of “accountant” without registration or licensing.

Singapore accords market access and national treatment to foreign firms

wishing to provide accounting services through consumption abroad and commercial presence, although the residency requirement applies to the latter.

With respect to the presence of natural persons, Singapore permits the entry

and temporary stay of senior managers and specialists for periods up to three years, but does not accord these individuals national treatment. Market access in Singapore requires that public accountants (at least one of the partners of a firm) be effectively a resident of Singapore. This affects commercial presence and cross-border supply. The presence of natural persons is unbound except as indicated in the horizontal section.

Thailand accords full market access and national treatment only for

accounting services delivered through consumption abroad. With respect to commercial presence, Thailand accords market access subject to a forty nine percent foreign equity limitation and a restriction on the number of foreign shareholders. National treatment is accorded subject to the same proportional equity limitation. Thailand’s limitations on cross-border supply and the presence of natural persons remain unbound.

According to U.S. industry representatives, foreign individuals cannot become accountants in Thailand because they cannot be licensed as CPAs. Consequently, the rendering of accounting services is essentially reserved to Thai nationals with foreign accountants serving only as “business consultants.” In

98

addition, while foreign nationals may work as employees of Thai firms, they reportedly find it difficult to comply with work permit procedures.

India. In India, financial auditing services may only be provided by firms

established as a partnership, but foreign accountants may not be equity partners. India also forbids the use of a firm’s name, a limitation that applies to all but the two U.S. accounting firms that were established prior to the imposition of this rule (Arthur Andersen and Price Waterhouse). Reportedly, this measure does not have a substantial effect because there is broad awareness of relevant foreign affiliations. With respect to the movement of personnel, U.S. industry representatives indicate that they do not encounter difficulties obtaining appropriate visas.

Indonesia. In Indonesia, the market for accounting services has been

expanding due to increased privatization and government policies requiring companies to undergo public audits in order to be registered. However, the national accounting association has successfully opposed initiatives to open the market fully to foreign participation by arguing that there remain problems with mutual recognition of credentials and accounting standards.

As a result, foreign nationals cannot practice under the title of accountant in

Indonesia or become equity partners. Instead, foreign accountants function as “advisors” and auditing reports must be signed by Indonesian nationals. The use of foreign firms’ names is also limited, in that the name of a local firm must be used in conjunction with the international name. U.S. representatives indicate that this creates some confusion among international clients.

One of the greatest difficulties encountered by U.S. accounting firms

operating in Indonesia is obtaining work permits for expatriate personnel. Indonesia reportedly requires foreign firms to justify the need to bring foreign nationals into the country and tries to keep the number of foreign workers, particularly those from other developing countries, to a minimum. According to industry sources, this policy presents a barrier to their effective operations and is somewhat counterproductive. U.S. accounting firms suggest that if foreign staff could move more freely, the firms would be able to develop more quickly and subsequently hire and train more local staff. In addition, U.S. firms observe that since expatriate staff are very expensive, companies have an incentive to develop a highly competent local staff as soon as possible. United States. The United States made commitments in accounting, auditing and bookkeeping. Other than barriers caused by domestic regulation, the United States has relatively few restrictions on trade in accountancy services. For market access, sole proprietorships or partnerships are limited to persons licensed as accountants, except in Iowa where accounting firms must incorporate. For market access of natural persons, an in-state office must be maintained for

99

licensure in Arkansas, Connecticut, Iowa, Kansas, Kentucky, Michigan, Minnesota, Nebraska, New Hampshire, New Mexico, Ohio, Vermont and Wyoming. U.S. citizenship is required for licensure in North Carolina. Under the cross-border trade, data pertaining to accounting services reflect all services delivered by mail or through information networks, or by the temporary entry of personnel to provide accounting services to foreign clients.

Europe. The countries with GATS commitments in accountancy services: Austria, Belgium, Denmark, Finland, France, Germany, Greece, the Netherlands, Ireland, Italy, Luxembourg, Portugal, Spain, Sweden, and United Kingdom. All countries made commitments in accounting, auditing and bookkeeping services. France, Greece and Italy remain unbound with respect to the cross-border supply of accounting and bookkeeping services.

In France, the commercial presence of accounting and bookkeeping service providers can only take place through a SEL (limited liability or limited partnership) or SCP. In France, for statutory audits, commercial presence can take place through any company form except SNC, SCS, and secondary offices. In Ireland, the provision of auditing services must be through partnerships only.

The presence of natural persons supplying accounting or bookkeeping

services is unbound except as indicated in the horizontal section in Austria, Germany, Luxembourg, Netherlands, the United Kingdom and Spain. In addition, Austria, Germany, the Netherlands, and Spain require a university degree and professional qualifications and three years' experience in the sector. Austria also requires examination before the Austrian professional body and the employer must be a member of the relevant professional body in the home country where such body exists.

For both accounting and auditing services in Portugal, commercial presence

must be through professional establishment only. For national treatment of auditing services, foreign auditors in Denmark may enter into partnership with Danish State authorized accountants after obtaining permission from the Danish Commerce and Companies Agency. Natural persons face a residency requirement for auditing services as well. For national treatment in Italy and Portugal, individual auditors are required to be residents.

In Slovenia, commercial presence should take the form of a juridical person. The share of foreign persons in auditing companies may not exceed 49% of the equity. Provision of auditing services must be provided through auditing companies only. For the presence of natural persons there are limitations on natural persons employed by juridical persons.

In Norway, for national treatment of auditing services public certification is required based on a Norwegian exam and two years experience in Norway. Audit

100

reports must be drafted by a Norwegian. Permanent residency in Norway is required. Accounting services shall take place in Norway (not cross-border) but the King may decide that accounting could take place abroad. For authorized accountants, permanent residence in Norway is required as well as a minimum of two years practice in Norway during the five preceding years. Accounting review services and business tax planning and consulting services remain unbound in Norway.

In Liechtenstein, there are no limitations on bookkeeping services except for tax returns; also, the presence of natural persons is unbound except as indicated in the horizontal commitments.

For accounting and auditing services, there is a foreign equity ceiling of forty

nine percent; foreign voting rights may not exceed forty nine percent. At least one member of the administration body authorized to manage and represent must be a Liechtenstein citizen domiciled in Liechtenstein, be in possession of the professional license to act as an auditor, and work full-time for the juridical person. The majority of the members of the administrative body must be in possession of the professional license to act as an auditor.

Despite the remaining barriers to international trade in accounting services, industry representatives believe that the GATS is a useful step toward full liberalization of trade in accounting services. The GATS does this by providing a vehicle for the global harmonization of regulations. The GATS also helps to promote trade liberalization by broadening the definition of “trade” to include movement of capital and people, critical issues for accounting firms.

Finally, the GATS provides a forum in which to address persistent obstacles

such as the mutual recognition of accounting credentials, limitations on foreign equity participation, limitations on the use of the firm name, and restrictions on the entry and temporary stay of essential professional, technical, and managerial personnel. U.S. industry representatives believe that these efforts to harmonize accounting rules will eventually promote significant growth in the global accounting profession.

Financial Services. Securities Regulation Code. At present, Batas Pambansa Blg. 178 or otherwise known as the Revised Securities Act is an act regulating the securities market. However, with the changes occurring globally, there is a need to align the country’s securities market with these new developments. The Securities Regulation Code seeks to institutionalize two core reforms of full disclosure and self-regulation. In addition, it answers the need to be consistent with the practices of stock exchanges around the world in providing market liquidity. The securities market would cease to be a ready and efficient mover of funds from

101

one sector to another if broker-dealer functions are made into separate legal entities. Highlights of the Securities Regulation Code include the following:

1. Insures the independence of the SEC from any government body particularly the Office of the President.

2. Clarifies the roles of the stock exchanges and other self-regulatory organizations (SROs) to act in the interest of investors and the public.

3. Provides a more transparent securities market through full disclosure of material information about public companies to investors.

4. Clarifies prohibited market practices and raises the amount of type of penalties available for violations of the securities laws and their rules for public interest and the protection of investors.

5. Imposes higher standards for market participants consistent with international best practices;

6. Clarifies prohibited market practices and raises the amount of type of penalties available for violations of the securities law;

7. Increases the protections available to minority shareholders of public companies.

Under the Securities Regulation code, the capital market would move to full disclosure regulation from a system of merit regulation. Under the new regulation, investors will be better informed to assess whether an investment in a particular offering is suitable or not. In addition, consistent with international standards, the law institutionalizes the concept of SRO by the market players themselves such as the PSE and other associations as they are in a better position to assess their needs than the SEC.

Regulations Affecting the Leasing Industry. Financial equipment leasing

is supervised by the Securities and Exchange Commission (SEC) but is regulated by the Bangko Sentral ng Philipinas (BSP) on monetary matters in accordance with the provisions of the Finance Company Act of 1969.

Though there is no specific legislation on leasing in the country, Philippine

leasing and finance companies operate according to the provisions laid out in the Civil Code of the Philippines Republic Act 386 Articles 1643-1644, The Rules and Regulations of Republic Act No. 5980, otherwise known as the Financing Company Act of 1969, and Revenue Regulations No. 19-86. Article 1643 of the Civil Code of the Philippines defines the concept of leasing in the country. The Finance Company Act establishes the supervising authority of the SEC over the leasing industry while Revenue Regulations No. 19-86, as formulated by Philippine Association of Finance Companies, Inc. (PAFCI) and the Bureau of Internal Revenue, details the major differences of an operating lease, finance lease and a

102

conditional sale, explains the accounting and tax treatment of lease transactions and establishes the depreciable life of leaseable assets for accounting purposes.

Foreign Ownership in a leasing company is permitted but is limited to 40%

of the total capital. Common reciprocal ownership between two or more leasing companies is permitted but is subject to the following ownership and operating restrictions:

• that it must not violate existing laws and illegal combinations and monopolies in restraint of trade;

• contracts between corporations with interlocking directors are valid,

except in cases of fraud, provided the same is fair and reasonable; management contracts with another corporation should be approved by the stockholders owners the majority of outstanding capital stock and the Board of Directors;

Leasing or financial companies with quasi-banking functions are regulated by the BSP regulations in dealings with their own Directors, Officers; Stockholders and Related Interest. (DOSRI) Ownership of leasing companies by financial institutions is permitted subject to R.A. No. 5980.

Commitments under GATS. The Philippines has not made any specific commitments for the accounting services sub-sector but has standing commitment on financial services. An overview of the commitments under GATS is cited below.

There are horizontal restrictions that summarize broad measures affecting

commercial presence and investment, real estate transaction restrictions, government subsidies or taxation, and temporary movement of natural persons. In addition to these restrictions, developing countries have also established preferences for firms that offer the best terms for transfer of technology. The horizontal commitments supersede any sector-specific commitments. To assess the full extend of trade liberalization, horizontal commitments have to be examined in conjunction with the sector-specific commitments.

• Commercial Presence and Investment Restrictions

The acquisition and control of a domestic business by a foreigner may be subject to investment ceilings, restrictions as to the type of assets that may be held, local incorporation and presence requirements, and government approval. • Real Estate Transaction Restrictions

103

Many countries restrict the purchase of real estate and the acquisition of land. Nationality restrictions and deposit requirements are relatively common. Often, these regulations are established by sub-federal levels of government and as a result tend to be extremely complicated. Rather than impose restrictions on domestic real estate regulations, the GATS rules require transparency and access to information about these rules.

• Government Subsidies or Taxation To clarify issues related to domestic taxation and access to subsidies, member countries provided specific comments in their schedule on this issue. Foreigners may not be eligible for certain subsidies or may, under special circumstances, have to pay a different tax rate. For example, the United States reserves the right to impose higher taxes on a national, resident or corporation of a foreign country where a national, resident or corporation of the United States is being subject to discriminatory or extraterritorial taxes. All countries maintain sovereignty over domestic issues of taxation and subsidization.

• Movement of Natural Persons Generally, the GATS does not prevent a Member from applying measures to regulate the entry of natural persons into, or their temporary stay in, its territory. The movement of natural persons is unbound under most GATS schedules. However, many Members generally committed to allowing temporary entry for measures concerning intra-corporate transferees (managers, executives and specialists), personnel engaged in the establishment of a business, and service salespersons. Permanent entry is not dealt with in the GATS and remains under the authority of local immigration authorities.

Specific commitments made by different countries in Asia

(Singapore, Hong Kong, Japan, Indonesia, Korea, and China), European communities and United States of America are shown in Appendix 1. It specifies commitments based on the four modes of supply namely:

Cross-border supply which is defined to cover services flows

from the territory of one member into the territory of another Member (e.g. banking or architectural services transmitted via telecommunications or mail);

104

Consumption abroad which refers to situations where a service consumer or his/her property moves into another member’s territory to obtain a service (e.g. tourism, ship repair or aircraft maintenance);

Commercial presence which implies that a service supplier of

one member establishes a territorial presence, including through ownership or lease of premises, in another member’s territory to provide a service (e.g. insurance companies or hotel chains); and

Presence of natural persons which consists of persons of one

member entering the territory of another member to supply a service (e.g. accountants, doctors or teachers).

Most countries referred to the Central Product Classification (CPC) in their

schedules. By sub-sector, 65 countries made commitments in accounting, 62 in auditing, and 55 in bookkeeping. The 52 member countries made commitments in all three sub-sectors. Eight countries made commitments in only one sub-sector while nine countries made commitments in two sub-sectors. Details can be found in Appendix B. 5.0. Market Potential/ Market Demand

Accounting: Sycip Gorres Velayo & Co. (SGV) remains to be the country's largest auditing group preferred by at least 48.4% corporations who had made it to this year's Top 1000 corporations. SGV audited six of the 10 largest corporations in the country, to wit: Manila Electric Company, Petron Corporation, Texas Instrument (Philippines), Inc., Fujitsu computer Products Corp. of the Philippines, San Miguel Corporation, and Nestle Philippines, Inc. SGV's share of the Top 1000 clientele shrank by 43 companies which was attributed to industry consolidation, with companies either being merged or acquired by other companies.

Joaquin Cunanan & Co. placed second or had 12% share in terms of

auditing the Top 1000 corporations. Top companies audited by the firm were Pilipinas Shell, Philippine Long Distance Company, Hitachi Computer Products (Asia) Corporation, Bank of Philippine Island and NEC Computer Storage Philippines.

In third place was Punongbayan & Araullo(P&A) which audited 56

companies. Among large companies audited by P&A were Coca-cola Bottlers Philippines, Inc. Philippine National Bank, Intel Technology Philippines, Inc. Eac Distributors, Inc.

Next in line was Laya Mananghaya & Co., which audited 29 companies

from the Top 1000. Large companies audited by Laya Mananghaya were Caltex

105

(Philippines) Inc. Philip Semiconductors Philippines, Inc., TEMIC Automotive Philippines, Inc. and Siemens, Inc.

CL Manabat & Co. audited 18 companies, which include Subic Bay Fuel

Co.,Subic Bay Distribution, Sumitronics Philippines, Inc. FR Cement Corp. and the Rohm Mecantile. On the other hand, other auditors garnered at least 1% share in the Top 1000 corporation.(refer to Table 22)

Table 22. List of Auditing Firms Servicing Top 1000 Corporations

Auditor Companies Audited %

Sycip Gorres Velayo & Co. 484 48.4 Joaquin Cunanan & Co. 122 12.2 Others 122 12.2 Punongbayan & Araullo 56 5.6 Laya Mananghaya & Co. 29 2.9 C.L. Manabat & Co. 18 1.8 Commission on Audit 16 1.6 Unaudited/No auditor 14 1.4 Rufino A. Manzano 12 1.2 Alba, Romeo & Co. 11 1.1 Guzman, Bocaling & Co. 10 1.0 Vicente E. Reyes & Associates 7 ..70 B. Barsabal & Co. 6 .06 Diaz, Murillo, Dalupan 6 .06 Carlos J. Valdez & Associates 4 .04 Eulogio C. Lim 4 .04 Greg R. Isidro Jr. 4 .04 R.S. Bernaldo & Associates 4 .04 San Buenaventura & Co. 4 .04 Banaria, Banaria & Co. 3 .03 Eduardo C. Halili 3 .03 Ildefonso O. Que 3 .03 J.P. Tolentino & Co. 3 .03 Jose Corcuera Baser Labuguen 3 .03 Loly t. Ngo 3 .03 Luis A. Canete & co. 3 .03 Mariano F. Ong 3 .03 U.C. Sazon & Co. 3 .03 A.P. Acyatan & Co. 2 .02 Balmyrson Manuel Valdez 2 .02 Caguiat, Abad & Co. 2 .02 Canlas, Reyes & Co. 2 .02 Cesar R. Marcelo & Associates 2 .02 Cristina G. Supendio 2 .02

Auditor Companies Audited %

Dimatulac, Magsipoc & Co. 2 .02 Edric Anthony B. De Leon 2 .02 Evangelista & Co. 2 .02 Fernandez, Santos & Lopez 2 .02 J.B. Santos & Associates 2 .02

106

J.D. Llovido & Associates 2 .02 Layug, Nebres & Associates 2 .02 Leonardo g. Perez 2 .02 Nelia Yulo Pasco 2 .02 Policarpio c. Tolentino 2 .02 Robert G. Yu 2 .02 Sicangco Menor Villanueva & Co 2 .02 Sta. Ana, Rivera & Co. 2 .02 Tenorio, Larena & Co. 2 .02 Total 1000 100.0

Source Business World Top 1000 Corporation in the Philippines, 2000 5.1 Extent of Services Rendered Abroad

In the last five years accountants and other related workers averaged to

eight hundred thirty four per year. Most of these professionals and related workers during the five- year period were deployed to United Arab Emirates, Saudi Arabia, Kuwait, Saipan, Brunei, Bahrain and the United States.

Table 23. Deployment of Filipino Accounting Services Industry Professionals, 1996-2000

Job Classification 1996 1997 1998 1999 2000 Rank Manager Budgeting And Accounting

13 12 6 8 11 4

Bookkeepers And Cashiers 322 343 331 421 518 1 Bookkeepers Cashiers And Related Workers ( N E C

119 92 104 79 61 3

Bookkeeping And Calculating Machine Operators

1 1 2 5

Accountants 455 410 319 283 260 2 Total 909 858 761 791 852

Source: Philippine Overseas Employment Administration, 2000

In year 2000 , the accounting and other accounting related jobs were deployed in various places overseas. 410 were deployed in United Arab Emirates, 129 in Saudi Arabia and 57 in Brunei.

Table 24. Deployment of Filipino Accounting Services Industry Professionals Per Foreign Country- Year 2000

Country

Manager Budgeting

And Accounting

Bookkeepers And

Cashiers

Bookkeepers

Cashiers And

Bookkeeping And

Calculating Machine

Accountants

Total

107

Related Workers ( N E C)

Operators

Angola 2 4 6 Australia 1 1 Bahrain 17 1 3 21 Brunei 47 1 1 8 57 Cayman Island 2 3 1 6 China 1 1 2 Commonwealth of the Northern Mariana Is,

3

6

9

Diego Garcia 10 4 14 Equatorial Guinea 1 1 2 Federal States of Micronesia

3

3

Guam 1 5 6 Hong Kong 1 1 Indonesia 1 1 Ireland 1 2 3 Jamaica 1 1 Kuwait 29 4 33 Libya 1 1 Madagascar 1 1 Maldives 1 1 Marshall Island 1 4 5 Micronesia 1 2 3 Netherlands Antilles 1 1 Nigeria 1 1 Oman 1 1 Palau 6 3 9 Papua New Guinea 2 1 17 20 Pohnpei 2 2 Qatar 27 1 28 Russia 8 8 Saipan 1 16 17 Saudi Arabia 23 14 92 129 Singapore 6 2 8 Tonga 1 1 United Arab Emirates 352 32 1 25 410 United States 1 37 38 Virgin Islands 1 1 Yemen Republic 1 1 Total 11 518 61 2 260 852

Source: Philippine Overseas Employment Administration, 2000

5.2 Foreign Market Demand and Competition The analysis of the foreign market demand, the opportunities present in the

market, access to foreign markets and limitations were taken from the study conducted by US International Trade Commission(USITC), US Country Commercial

108

Guide (http://www1.usatrade.gov) and International Investment and Services Directorate Industry Canada(http://service2000.ic.gc.ca). The US International Trade Commission's staff in preparation of this data consulted the following companies and organizations: Arthur Andersen and Company, Ernst & Young Inc., the International Federation of Accountants, and Price Waterhouse ECServices, SA.

The U.S. cross-border exports of accounting, auditing, and bookkeeping services totaled $178 million in 1995, and U.S. cross-border imports totaled $141 million, resulting in a $37-million surplus. During 1990-95, the average annual rate of growth in U.S. imports, measuring 20 percent, exceeded that of exports, measuring 8 percent.

In 1994, sales by foreign affiliates of U.S. accounting firms totaled $5.7 billion, while purchases totaled only $1.6 billion. European affiliates of U.S. accounting firms generate by far the greatest share of total sales by foreign-based accounting affiliates. In 1994, European-based affiliates of U.S. firms captured 70 percent of total sales, surpassing affiliates in Canada, with 12 percent; and Japan and Australia, each with 4 percent.

The US market for accounting, auditing and bookkeeping grew from US$10.4 in 1998 to US$84.4 billion in 1999. The total market value increased to seventy percent as information technology increased in complexity. In response to growing market competition, the leading accounting firms have moved into high-margin consultancv services. Table 25. US Market Sectors 1995-1999( US$ million)

Sectors 1995 1999 Accounting and auditing services 18,389.7 27,166.2 Management Consulting 19,880.8 40,324.9 Tax services 11,431.5 16,788.9 Source: Euromonitor 2000 The market share of the Big Five international accounting firms as of 1999 were as follows: Table 26. Market Share of Big Five Accounting Firms-1999

Companies Average Sales Growth(%)

Market Share(%)

Andersen Worlwide 20.1 19.4 PricewaterhouseCoopers 0.0 18.5 Ernst & Young International 16.4 14.9 KPMG Peat Marwick 12.5 14.5 Deloitte Touche Tohmatsu International 15.6 12.6 Source: Euromonitor 2000

109

Table 27 presents the revenue performance in 1999 of leading accounting firms in the U.S. There are approximately 45,000 accounting firms in the United States. These accounting firms are classified into four groups namely: Big Five, second tier, regional and local firms. The Big Five are the five largest firms with offices in the principal cities of the United States as well as major cities throughout the world, the second-tier are not CPA firms engaged in public practice, regional firms are accounting firms concentrated in a more limited geographical area and local firms have one or several offices within the state. The combined revenues for the Big Five exceeded $30 billion in 1999. Table 27. Selected U.S. Accounting Firms based on 1999 revenues No. of Revenue Soruces(%)

Rank by Revenue

Firm

US Revenue

(&Mil)

U.S.

Officers

Partners

Prof. Staff

Actg/ Audit

Tax

MCS/ Others

Big Five 1 Andersen Worldwide 7,824.0 92 2,117 43,434 17% 11% 72% 2 PricewaterhouseCoopers 6,750.0 189 2,938 34,067 35% 20% 45% 3 Ernst & Young 6,375.0 87 2,546 21,880 35% 21% 44% 4 Deloitte & Touche 5,330.0 101 1,913 21,710 30% 18% 52% 5 KPMG 4,656.0 136 1,800 16,000 35% 22% 43% Second Tier 6 H&R Block 1,267.8 8923 3,361 n.a. 0% 100% 0% 7 Century Business

Services 460.0 798 n.a. 5,174 35% 17% 48%

8 RSM McGladrey 381.2 65 369 2,217 36% 31% 32% 9 Grant Thornton 375.0 48 274 2,351 41% 27% 32% 10 BDO Seidman 298.0 42 335 1,438 47% 28% 25% 11 American Express 280.0 63 298 2,414 40% 27% 33% Regional 12 Crowe, Chizek and Co. 144.0 12 111 1,025 28% 15% 57% 14 Plante & Moran 117.4 17 142 780 52% 26% 22% Local 19 Eisner 72.0 3 67 301 38% 20% 42% 32 Anchin, Block & Anchin 32.1 1 34 130 65% 25% 10%

Source: Accounting Today Special Report: Top 100 Firms Study 2000, March 13,2000 The market in the US is forecast to grow 48.6% over the forecast period to

a value of US$142.4 billion in 2004. Success in the market is expected to become more market driven then in the past, forcing companies to adapt to shifting demand rather than rely on a relatively static code of regulation. Increasing globalization of the economy is affecting the worldwide accounting profession to both understand and respond through international accountancy bodies.

110

Table 28. US Market Forecasts of Accounting, Auditing and Bookkeeping 2001 -2004

Year Market Size (US$million) 2001 106.21 2002 117.40 2003 129.50 2004 142.40

Source: Euromonitor 2000

The auditing and accounting services sector is expected to demonstrate the smallest level of growth over the forecast period due to declining audit fees To be competitive CPAs are shifting their focus toward helping clients understand all areas of business performance rather than financial matters alone.

Table 29. Sector Forecasts 2000-2004 (US$million)

Sectors 2000 2004 Management Consulting 47,655.9 79,722 Auditing and accounting services 29,614.7 38,376.5 Tax Services 18,324.8 24,301.5 Source: Euromonitor 2000

The future of accounting is bright according to the US Bureau of Labor Statistics which projects a 34% increase in job openings by the year 2005. Much of this reflects the increasing complexity of corporate transactions and growth in government. Demand is especially high in the tax and health care areas. In year 2000, over 30 states in the US have laws which require a fifth year of education to become a CPA. This change reflects a more competitive business environment and increasing skills requirements because of the rising complexity of many businesses. In the US, there is high demand for individuals who can go beyond technical skills and display good interpersonal abilities, legal knowledge sales abilities and foreign language skills. Accountants are broadening as business globalizes and becomes more team-oriented. http://www.careers-in-accounting.com/

The UK market for accounting, auditing and bookkeeping has grown by 1.3% since 1998 to reach a value of £ 10.1 billion (US$16.4 billion) in 1999. Auditing remains the largest sector of the market, followed by accounting for fifty five percent of the total fee income in 1999. On the other hand, the market in UK is forecast to grow by 3% from 199 to 2004 to reach £10.4 billion (US$16.9 billion) in fee income in 2004.

111

Table 30. UK Market Forecasts of Accounting, Auditing and Bookkeeping 2001 -2004

Year Market Size (£ billion) 2001 10.2 2002 10.3 2003 10.3 2004 10.4

Source: Euromonitor 2000 Financial Services

Leasing United States. According to the survey released by Equipment Leasing

Association (ELA), United States indicates that the market acceptability of leasing is growing, most especially in the equipment and computer segment. 70% of the respondents pointed out that they would like the company to provide maintenance. This value added services may be considered as the key to differentiating between various provided of leased equipment. American leasing has grown about 20% in year 1998. The bank-lessors reported a growth rate of 35.8%, independent leasing companies reflected a 17.7% increase while captive leasing companies showed a 10.5% increase. The study stated further that leasing company had stable profitability and that average return on assets was 1.4% and average return on equity was 12.5%.

Europe. Data published in Leaseurope revelaed that in 1998, the number of

leasing players in Europe came down from 1212 to 1035. However in the same year, the business volume grew from 104.1bn euros in 1997 to 117.3bn euros in 1998, a growtn of 112.6%. United Kingdom leads the European market with a market share of 37.8% of the market. Germany ranks second with a share of 20%, France 11.2% and Italy 7.8%.

In the article written on financing of small firms in United Kingdom, Lund

(1998) identified the sources of external finance by small and medium companies in UK. The percentage share of different sources of finance, the percentage share of finance during 1987-90 and 1995-97 shows an impressive shift. The share of leasing has grown from 16% (1987-90) to 27.1%(1995-97).

Table 31. Percentage share of different sources of finance by SMEs

Period:1995-97 Period: 1987-90 Banks 47.4% 60.6% Leasing 27.1% 16% Factoring 6% 5.7%(inldg. customers) Partners/shareholders 6.1% 7.6% Venture Capital 3.3% 2.9% Trade customers 1.4% Clubbed with factoring Others 8.7% 7.2%

112

Source Equipment Leasing Association-1998 Survey

Russia. Russia may soon promote a national level of leasing company. Russia presently has 11 small leasing company but the need for one company having national presence is being emphasized by the government.

Credit Cards. Based on the 1999 Survey conducted by Asia Banker

Research covering selected Asian countries, credit card business has been an integral part of the banking industry. This proved to be profitable and became instrumental in building client relationship in a new way. Many banks grew their portfolio very fast in the hope that this would provide the success experienced by banks.

The economic crisis in 1997 altered the ability of the cards industry in Asia to

respond to the challenges of growing their business. As the crisis eased. the winners were those banks that had invested in risk management system, collections and a sound grasp of their client base.

The findings on the study conducted by Bacani(1999) on credit cards in Asia

were as follows: • Asian generally don’t like debt. Many of the cards used in Asia are debit

cards, which deduct money from the holders’ bank account after the purchase.

• Visa and MasterCard see opportunities in the increasing numbers of Asian traveling overseas and the liberalization of financial services.

. Based on the same study, China has huge potential with regards to credit

cards. There were only 14 million credit cards issued for its 1.2 billion people. Largely unfettered by government intervention, the Philippines, Indonesia

and India are considered the best credit-card prospects. In Indonesia industry insiders believe that card base can be increased up to 5 million. In India card base is expected to increase to ten million in year 2000. The UK market for credit and charge cards has grown by 13% since 1998 to reach a value of nearly £165 billion (US$260 billion) in 1999. The UK credit and charge card market is the most profitable in Europe. In 1999, over 85% of adults in the UK had some form of financial plastic card, compared with 73% in 1991. The market is forecast to grow by approximately £248 billion in 2004. The market is forecast to become increasingly segmented with card offers and interest rates tailored to particular customer groups, as issuers attempt to win consumers from the competition. However, in the future it is anticipated that stored value functions will be introduced with the possibility of financial and other valuable information being collected about card users. Competition will become fiercer as a wider variety of organizations issue credit card services.

113

Table 32. UK Market Forecasts 2001 -2004

Year Market size £ billion 2001 200.4 2002 216.4 2003 232.6 2004 248.9

By year 2004, credit cards will remain the largest sector, accounting for over 53% of credit and charge card transactions. Debit cards will remain the most dynamic sector, with over 42% growth forecast over the next five years and their share rising to almost 37% of the overall market. Store cards will experience the least growth, with their sector share decreasing to just over 3% of the total market. However, store cards will remain a profitable and powerful weapon for stores anxious to collect valuable marketing information about their customer base. Charge cards will remain popular with a minority of UK consumers, although individual transaction levels will be high ensuring the sector remains important in the market. Heavy investment in the electronic purse is likely to lead to a general acceptance in principle by the public, but problems with establishing a standard and resistance to change will mean that this potential sector's popularity will be restricted in the medium term. Table 33. UK Sector Forecasts 2000-2004(US$ million)

Sectors 2000 2004 Credit cards 97.5

132.4 Debit cards 64.6 91.8 Charge cards 13.3 16.4 Store cards 7.1 8.2 Source Euromonitor 2000

Stock brokering. Table 34 presents the revenue performance of the 1998 leading global mutual funds and brokerage firms. In spite of the threat of online trading, the top 10 brokers’ employment totaled 282,500.

114

Table 34. Financial Performance of Top 10 Mutual Funds and Brokerage Rank Firms Revenue($

millions) % Revenue

Change # of

Employees 1 Merrill Lynch 35,853 13 63,800 2 Morgan Stanley Dean Witter 31,131 15 49,300 3 Salomon Smith Barney 20,637 -4 36,300 4 Lehman Brothers 19,894 18 4,900 5 Fleet Financial Group 10,002 24 35,600 6 The Toronto-Dominion Bank 8,548 15 29,200 7 Bear, Stearns & Co. 7,980 31 9,200 8 Paine Webber 7,250 9 17,800 9 Fidelity 5,878 16 27,900 10 Donaldson,Lufkin & Jenrette 5,407 17 8,500 Source: Forbes, 11/30/98Hoover’s Online; WetFeet.com research analysis 6.0 Industry Associations

The Securities and Exchange Commission (SEC) and the Bureau of Internal

Revenue(BIR) were established in 1939. They required the submission of financial statements audited by CPAs. Other regulatory bodies like the Commission on Audit and the Bangko Sentral ng Pilipinas require also the submission of audited financial statements. The Accounting Standard Council and the Auditing Standard and Practice Council were formed to oversee the promulgation of accounting and auditing standards used by auditing firms.

Most of the business services sectors have an industry associations. Association vary widely in the services provided to members, but most offer staff training programs, a directory of experts in member firms available for consultation, and client referral services.

In the professional services sector, several recognized industry associations have assisted the Professional Regulation Commission (PRC) in the implementation of the continuing professional education program, and have served as members of the different professional boards that administer the licensure examinations. Through these activities, the industry associations have contributed significantly to the upgrading of the different professions in the country.

The Credit Card Association of the Philippines created a Credit Bureau Task

Force to draft standardized credit policies. Cynthia Valenzuela of Unibancard Corp. said the association will make every effort to prevent card fraud which comprises low rate as compared to Asia Pacific countries. The association plans to provide security to its clientele by introducing the use of chips in the credit cards which will replace the traditional magnetic stripes within five years.

115

Moreover, many industry associations have successfully lobbied for the passage of certain laws that benefit their respective industries, and have strongly opposed certain measures detrimental to their membership. Some of these associations were instrumental in the formulation of laws/policy affecting their own sector.

Table 35 lists the names of the associations/regulatory agencies in the

accounting and financial services sector.

Table 35. Association-Regulatory Agencies Subsector Name of industry association

Accounting, auditing, and bookkeeping services; Taxation services

! Philippine Institute of Certified Public Accountants (PICPA) ! Association of CPAs in Commerce and Industry ! Association of CPAs in Education ! Association of CPAs in Public Practice ! Government Association of CPAs

Financial Services ! Philippine Finance Association ! Credit Card Association of the Philippines ! Investment House Association of the Philippines ! Financial Executive Association ! Bangko Sentral ng Pilipinas ! Securities and Exchange Commission ! Philippine Stock Exchange ! Philippine Stock Brokers Association

7.0 Strengths and Weakness

Accounting Strengths The accounting service industry identifies strengths on strong connections

with the Big 5 through the sharing of knowledge, methods and technologies (Tullao 1999). Another strength is the expansion of services (Cabrera, 2000). These services involve giving quality information to decision makers. The ability of the auditing firms to provide more jobs due to value-added services. Value-added services create competitive advantage of their future career. These value-added services show how auditors can improve the efficiency and effectiveness of client’s operations(Boynton, 1999).

Another strength of this industry is the specialization provided to the staff

due to the different client needs. They are exposed to seminars and training. Strengths denied from technological development include firms enthusiastic response to information technology (IT) in terms of budget provision for equipment and training. Strength derived from procurement is the readiness for purchase of IT equipment.

116

. Strengths derived from technological development include firms enthusiastic

response to IT needs in terms of budget provision for equipment and training. Strength derived from procurement is the readiness for purchase of IT equipment and the immediate use of this equipment for needs like the preparation of materials development of ones service, the assurance service.

Weaknesses Foreign markets are limited to special projects provided by Big 5. Partners

from auditing firms who were interviewed cited that foreign special projects are assigned to auditors who are with potentials. As part of their training program, employees are assigned to special project abroad .

The fast turnover of employees entail higher training costs. Based on

interview with partners and human resource department managers, employees stay for a shorter period in auditing firms due to more attractive salary package of multinational companies.

Readiness to use computer requirements but clients’ records are not yet computerized.

Unattractive compensation packages drive away qualified applicants to

auditing firms. Graduates complain about salary packages but remain for a while in auditing firms due to experience and training they get from the auditing firms. Interviews with graduates reveal this weakness of auditing firms.

Financial Services

Strengths

The financial service industry enjoys these strength on the firm infrastructure,

human resources. technological development and procurement.

• Emphasis on the user of services. Based on interview responses. The financial services industry emphasizes the customer-oriented way of delivery of services.

• Minimization of losses due to bad debts:. The proper selection of customers based on creditworthiness minimizes the provision for bad debts. A well-prepared set of criteria to select customers is a management tool to create efficiency in the credit department of financial services (Skousen,2001).

117

• Based on interview responses, they identified other strengths like efficient and effective delivery of services, efficient use of capital and employment of people with technical expertise.

Weaknesses

Weaknesses pointed out in the financial services industry are listed as follows:

• Lack of transparency of credit standing of customers. Interviewees claimed that credit standing information derived by firms are kept confidential. If other financial companies were informed about this information, less credit investigation costs will be incurred. Transparent credit standing information is deterrent to lend money or extend credit if properly informed. Less bad debt losses will be incurred.

• Higher financing costs than traditional loans. Difficulty in looking for

clients is expected when incurring higher financing costs (Spiceland, 2000).

• Other weaknesses in the financial services are : inadequate offerings

of financial services curriculum and budget constraints.

• Cost of leasing , factoring, credit cards and stock broking are observed to be higher than traditional loans.

• Inability to purchase IT equipment due to budget constraints.

• Lack of expertise on financial services can be traced to offerings of needed subjects in the curriculum.

8.0 Supply Capability

There are four areas of specialization for CPAs. CPAs can be engaged in public practice, commerce and industry, education and government. The Philippine Institute of Certified Public Accountants’ (PICPA) members in year 2000 numbered to at least 17,938 CPAs in good standing. From Commerce and Industry, 11,656; Government, 487; Public Practice, 2,689; Education , 1,704 and 1,402 CPAs not classified to a specific sector. Accounting and auditing firms are classified under

118

the area of specialization known as public practice. PD692, Art. 3 of the Revised Accountancy Law defines public practice as….. Practice of accountancy shall constitute in a person be it in his individual capacity as a partner or staff member in an accounting or auditing firm, holding out himself as one skilled in the knowledge, science and practice of accounting and is qualified to render professional services as a CPA; offering or rendering or both to more than one client on a fee basis or otherwise as audit or verification of financial transactions or for

accounting records; the preparation of financial transactions or for accounting records, the preparation, signing of certification for clients of reports of audit, balance sheets, and other financial accounting and related schedules, exhibit statement or report which are to be used for publication or for credit purposes, or to be filed with the court of government agency, or to be used for any other purposes; the installation and revision of accounting systems, the preparation of income tax returns when related to accounting procedures or when he represents client before government agencies on tax matters relating to accounting procedures and recording and presentation of financial facts or data.

A certain public accountant shall be considered in the practice

of his profession, if the nature and character of his employment whether as an office or employee in a private enterprise or educational institution involves decision making requiring professional knowledge in the science of accounting or when he represents his private employer before any government agency on tax matters related to accounting and such employment or position requires that the holder thereof must be a CPA, or if he holds or is appoint to a position in the accounting occupational group in the government or in government owned or controlled corporations including those performing propriety functions where a civil service eligibility as a CPA is a prerequisite.

Table 36. Schedule of Services Offered by Local Auditing Firms

Auditing Firms Affiliation Services Offered

Description

Sycip,Gorres Velayo & Co. The Philippines' premier professional services firm providing assurance and tax services. With a staff of some

Arthur Andersen is a multidisciplinary

professional services firm. It is a

business unit of Andersen Worlwide,

one of the world's largest professional

Assurance Services

SGV provides assurances to management, corporate directors, investors, lenders and others. These include assurances on the reliability of financial and non-financial information, business processes and controls, regulatory compliance, and information used in strategic transactions.

119

With a staff of some 2,000 personnel in 11 offices across the country. SGV &Co. is the largest multidisciplinary professional services organization in the country.

services providers with more than

72,000 personnel in 81 countries. Its

global expertise is conducted by 100

member firms.

Tax Advocacy Services

• Representation before tax and customs authorities, local governments and other government agencies on revenue matters such as tax assessments, refunds and claims assistance.

• Preparation of position papers on revenue measures and industry issues and assistance in drafting revenue bills.

Auditing Firms Affiliation Services Offered

Description

Tax Compliance Services Tax Consultancy Services Business consulting Services Corporate Finance Services Human Capital Services Outsourcing Services

• Tax compliance review of income, business, value added, withholding , local and realty taxes

• Contract tax services • Litigation support services • International and domestic tax advisory services • Planning and implementation of tax strategies to

reduce tax liabilities for taxpayers. • Design and implementation of tax-effective

alternatives for structuring and processing foreign or local investments

• Preparation and filing of all types of tax returns, including US individual tax returns

• Consultancy on revenue legislation, family

wealth and estate planning and executive compensation.

• Help clients create measurable performance improvement and lasting change.

• Assist clients in creating, enhancing and maximizing enterprise value by originating and executing transactions, such as mergers, acquisitions and divestitures;

• Facilitate access to capital markets, • Devise strategies to optimize the value of real

estate assets, • Develop restructuring programs. • Help clients realize the value of their people by

developing unique solutions to attract, mange and retain employee.

• Offer services in the areas of compensation and equity incentives, international employment solutions, people strategy and HR management.

• Retirement, actuarial, and other company benefits.

• Design, implement, and operate certain finance

and accounting business processes to enable clients to sharpen their strategic business focus,

120

Risk Consulting Services

while improving the performance of these essential but non core business activities.

• Help clients understand and manage business

risks that can impact performance and financial results, including risks related to business technology, regulatory compliance, government contracting, fraud, and treasury and trading activities.

Auditing Firms Affiliation Services

Offered Description

Risk Consulting Services

! Help clients focus on the business information required by e-business in strategy, customer interaction, business models and their entire business operation.

Punongbayan & Araullo One of the leading accounting firms in the Philippines, Punongbayan & Araullo (P&A) is carving for itself a competitive edge that focuses on delivering the values that its clients care about. P&A taps Ernst & Young’s expertise as the most innovative firm in the world in the use of audit software. P&A has adopted Ernst & Young’s radically new Audit Innovation vision This means that the perspective of the Firm’s audit professionals is to deliver more value to our clients as part of performing an efficient and effective audit . This has required

Ernst & Young International (EYI) P&A represents Ernst & Young International (EYI) in the Philippines, one of the world's leading professional services firms widely recognized for the quality of its assurance, advisory, tax and management consulting services P&A has direct access to the state of the art technology on professional accounting services, like various software on computer auditing With more than 600 locations worldwide, including 100 in the U.S. as well as operations in 125 countries, EYI reinforces the strength of P&A with its wealth of experience global

Assurance and Advisory Business Services Tax Services Management Consulting Services

P&A provides audit services that go beyond numbers which gives a positive difference to the firm’s audit service. The firm use of the most up-to-date professional techniques and procedures, and thorough understanding of the client’s business. This results in an audit approach that is customized to client needs. To address the complex and fluid challenges laid on local and expatriate businesses by developments in tax policy, P&A’s tax specialists assist clients in making sure they pay the proper taxes, in determining areas where tax savings are possible, and by representing them in tax assessment cases. Specifically, P&A’s tax services cover the following areas: tax opinion and advice; tax compliance audit ; contesting tax assessments; claims for tax refunds; obtaining tax ruling; corporate tax return preparation; expatriate tax service; registration and dissolution of companies/branches . The Management Consulting Services (MCS) mission is to provide business organizations with the best-of-breed system solutions that would enable these organizations to utilize Information Technology in innovating and improving business processes, in attaining work efficiency and productivity, and in enhancing competitive advantage. The Management Consulting Services share Ernst & Young Global Client Consulting's vision of providing its clients access to world-wide knowledge, expertise, and practical innovative solutions to maximize clients' potential across a wide range of markets.

121

reengineering the audit process to improve process, people and technology. Audit Innovation further requires evaluating and enhancing this process continuously.

experience, global reach and the confidence of a market leader.

Accounting And Payroll

P & A provides accounting services mainly to multinational companies which are in the process of starting their operations in the Philippines. Payroll preparation and related services are rendered to organizations that put a premium on the strict confidentiality of compensation information, especially of top-level executives; and also to start-up companies which are still setting up their administrative units.

Auditing Firms Affiliation Services Offered

Description

Joaquin Cunanan & Co. Joaquin Cunanan & Co. is a professional firm committed to provide excellent and distinctive services to its clients. It is also the Philippine member firm of the worldwide Pricewaterhouse Coopers organization. The firm has rendered professional service in the Philippines for over 75 years. Established in 1922, it became a member firm of the Price Waterhouse Worldwide Organization in 1973. On July 1, 1998, the merger of two venerable firms- Price Waterhouse and Coopers & Lybrand- created PricewaterhouseCoopers, now considered the world’s leading professional services organization. Drawing on the knowledge and skills

PriceWaterhouse Cooper is one of the leading accounting firms in the Philippines. It helps the accounting profession and the business community by providing distinctive service to its clients, develops the personal growth and professional expertise of the people and contributes to the economic and social development of the country. Through the years, it has always strived to develop and maintain the reputation of quality accounting and auditing, and management consultancy services. The company wants to determine possible business opportunities available to clients in the Philippines specifically in the area of inward investment, joint venture, technology transfer, and supply of modern

Assurance and Business Advisory Services (ABAS) Tax Services Financial Advisory Services

A combination of technical competence, professional judgment, business knowledge and a dedication to help clients make better decisions. The ABAS organization is designed to effectively cater to particular service requirements, specific market sectors and industries, and even certain business processes. The firm’s tax specialists have helped companies of all sizes minimize tax liabilities and meet tax compliance obligations. Their corporate services include business registrations, reorganization, and securing work visas for expatriates. They can be the effective advocate with tax authorities and other government agencies thus allowing client executives to concentrate on running the company affairs. In this type of service, clients are assisted in reviewing strategic objectives with financial models and industry research to determine optimal financial structures. They advise on mergers and acquisitions, business recovery, project finance and privatization, and valuation. Helps organizations maximize their performance

122

of 155,000 people in 150 countries, they help their clients solve complex business problems and measurably enhance their ability to build value, and manage risk.

equipment.

Auditing Firms Affiliation Services Offered

Description

KPMG Laya, Mananghaya The Firm has since grown into a significant contributor to Philippine business by providing service that adheres to the highest professional standards of audit, tax and management consultancy practice. The professional background and experience of the Firm’s partners and principals continuously provide clients the necessary guidance in reaching solutions to business problems and challenges and in seizing business opportunities.

Laya, Mananghaya is the member firm in the Philippines of KPMG, one of the BIG FIVE accounting firms in the world. KPMG is a leading provider of assurance, tax and legal, consulting and financial advisory services. With a global approach to service delivery. KPMG responds to clients’ complex business challenges with seamless service across industry sectors and national boundaries.

Accountancy and auditing Tax and legal Management consultancy

The Firm provides a range of accountancy and audit services including reports on Financial statements and other forms of assurance such as internal control reviews and acquisition due diligence. The Firm has been appointed the external auditor for a wide range of domestic and international clients in various industries, including corporations listed on the Philippine Stock Exchange, and subsidiaries of clients listed on stock exchanges throughout the world. The Firm’s tax professionals include lawyers whose experience provides a proactive approach to tax planning and organisational structure. They assist in the formation and establishment of new business entities, tax compliance and review, strategic tax efficiency, and representing our clients before revenue authorities. The Firm prepares economic, market and industry analyses. It is also engage in general management consultancy, project development and implementation, management audits, as well as the review and design of systems and procedures. They provide related services, which include human resource, and organisation studies, social science research, financial packaging, and investment advisory services. They also perform education policy work for the Philippines and other Asian countries via the World Bank and the Asian Development Bank. We work with KPMG Consulting for projects which require regional or global input to ensure our clients gain access to the broadest range of business advisors who can best help them meet their goals. For global companies entering the Philippine market, the Firm provide advice on alternative ways of doing business available investment and tax

123

Other professional services

incentives, and assistance in bringing together potential foreign and local partners. They also assist their clients in getting the best transaction deal in mergers, acquisitions take-overs or buyouts.

Auditing Firms Affiliation Services Offered

Description

C. L. Manabat & Co. (CLMC) is committed to providing the best professional world-class services to its clients. It acts not just as advisors but as partners in helping organizations achieve their business objectives by seizing opportunities and sucessfully executing strategies. Moreover, the firm aims to form genuine partnerships with its clients in an atmosphere of mutual trust and understanding.

CLMC is the member firm in the Philippines of Deloitte Touche Tohmatsu, one of the BIG FIVE accounting firms in the world. Deloitte Touche Tohmatsu is one of the world's leading professional service firms, delivering world-class assurance and advisory, tax, and consulting services. More than 82,000 people in over 130 countries serve nearly one-fifth of the world's largest companies as well as large national enterprises, public institutions, and successful fast-growing companies.

Business Consulting Services Financial Advisory Business Development and Strategy

General Business Advisory . Business systems analysis and design . Organizational restructuring . Organization development and planning . Visioning, corporate image enhancement and

public .. relations . Investment planning . Financial restructuring for private and public

placements . Loan syndication

. Industry studies and market research .Project development and implementation . Corporate strategic planning Tax and Corporate Services . Organizing business enterprises . Labor and personnel relations . Fiscal and non-fiscal incentives . Real property taxation and local taxation . Trademark application/registration of licensing

agreements . Income tax preparation/statutory returns . Tax advisory and planning . Tax audit and tax laws compliance evaluation . Review of tax effects of alternative courses of

action Assurance and Advisory Services . Statutory audit . Acquisition audit . Due diligence review . Internal audit . Operations and management audit . Fraud audit . Litigation support Outsourcing Services . Manpower sourcing and executive headhunting

124

. Payroll processing . Bookkeeping services . Business center facilities

Source : Websites of the Big 5 Accounting Firms

8.1. Extent of the service rendered abroad by Filipinos through the firms

Filipino CPAs connected with Philippine auditing firms are assigned to work abroad for specific projects. These specific projects are given by the "Big 5" abroad who is directly in charged of these clients. These foreign clients are not clients of the local CPA firms.

Special projects of foreign auditing firms are filled up by auditing staff from

the Philippines. The audit staff does not become an employee of the foreign firm. He remains to be an employees of the Philippine firm. The special project takes the form of formal training given to the employee by the local firm. These special arrangements materialize because of the affiliation of the Philippine auditing firm with the Big Five.

Being member firms in the "Big 5" draws the following benefits: • Disclosure of being a member-firm • Direct access to transfer of technologies and methodologies • Readiness of special projects to be assigned to member-firms • Dissemination of current developments in accounting • Servicing multinational clients of "Big 5" in the local market.

To avail of these benefits, the member-firms are charged a fee according to

conditions agreed upon.

8.2 Expertise/Technical Competence of Manpower The accounting profession requires a certain amount of technical training,

and most accountants come into the field fresh out of school. Although there are a variety of other jobs that belong to the extended accounting family (bookkeeper, accounts payable clerk, accounts receivable clerk and so on), the high-status positions in this profession come with three letters attached: CPA.

125

Auditing firms maintain an audit staff consisting of partners, managers, directors, senior auditors and staff auditors. These levels in the audit staff need difference requirements and have different responsibilities. The manpower of an auditing firm is composed of managerial employees and technical staff. Interview shows that very few finish their masteral and doctoral studies. The recruitment had hiring system is done through referrals. The assessment of the levels of competence of employees is very satisfactory to outstanding. There is fast turnover of employees as pointed out by the interviewees.

An auditing firm (2000) grouped audit competence measurement into

technical and generic competence. Technical competence refers to specific technical skills, knowledge and abilities that are required for the job.

Generic competence refers to personal attributes than an individual should

bring with them to a job. It covers people management, client management, engagement/practice management involves working with, supervising and developing people. It includes on-the-job coaching, counseling, performance appraisal, career development and the building and leading of terms.

Client management involves the building of relationships with clients, being

responsive to their needs as well as establishing and meeting/exceeding their expectations of service.

Practice management involves the planning of work, assignment of staff,

control of time and costs on the engagement, meeting of deadlines and timely billing of costs. It also includes managing the risks associated with inadequate review and supervision of work.

Practice development requires commercial judgement and business

development skills. It involves the marketing and selling of existing services and products into existing clients, contributing to the development of new services and involvement in community and business activities to promote the firm ( Nadurata 2000).

8.3. Quality and quantity of Training

In a Wall Street Journal on the topic Mitchell Klein, a partner of Fasman,

Klein & Feldstein, an New City, N.Y., accounting firm said:

“Too many people associate accountants with death, tax and bad news and question our integrity because of the big audit failures that major accounting firms have failed to catch.”

Interviews with auditing firms show that firms have their own training

programs on technical training, professional development training and industry and

126

functional training. They have local and foreign speakers. Their training programs are offered to the different levels in the audit staff from partners to junior auditors. Training needs are addressed by levels. The division in charged is the training and CPE Division.

Training programs are usually grouped into technical training, professional

development training and industry and functional training. Technical training programs cover manager's awareness program and business awareness program. Professional development program cover skills development modules and support courses. Industry and functional training provides knowledge, skills and abilities needed to service client effectively for each industry and functional group.

Table 37. Training Needs Analysis Training Programs Description

Technical Training • Managers' awareness • Technical awareness • Business awareness

• Seminar on topical issues • Seminars on technical issues covering accounting, auditing and

taxation updates for partners • Seminars on technical business issues for partners and directors

Professional development training • Skills development • Professional development

• Develop skills that are introduced in core and foundation courses • Address individual training needs • Provide skills training necessary for specific assignments • Seminar covering topics of current and general interest

Industry and functional training Provide staff with the required knowledge skills and abilities needed to service clients effectively.

9.0 Opportunities and Threats Accounting

Opportunities Accounting services industry provides to CPA firms through the supply of

well-trained and motivated CPAs from several hundred colleges and programs in accounting.

Social forces in the form of opportunities to work abroad on additional

projects are provided by the "Big 5" firms. There are vast opportunities opened to

127

CPAs in the public practice. This will provide more exposures and experiences and will improve their communication skills

Technological factors like development in information technology will provide

venues for more training to employees to keep abreast of new services like assurance services. In addition, foreign consultants can provide us better transfer of technology

The economic growth of a country create greater economic transactions and

establishment of commercial firms that need accounting services. Political factors affecting the accounting profession like liberalization of

professional services. This will expand markets here and abroad. Furthermore, growth in the Asia-Pacific region and the commitment of Asia

Pacific countries under GATS devote an increase in the demand for accounting services.

Threats The accounting services industry expect threats arising from social factors

like feeling less superior to foreign consultants and the fear that CPAs will seek employment abroad through the foreign projects given them.

Technological factors like the reduction of employment of CPAs due to the

introduction of the paperless audit and dependence on IT. The economic factor of competition with foreign CPAs and foreign

consultants will affect economic status of the accounting services industry. Another hindrance is the difficulties of small accounting firms in penetrating the market .

Finally, the political factor on the ultimate liberalization of auditing services

will affect employment of CPAs, obsolescence of manual operations and procedures due to advanced technological requirements

Financial Services

Opportunities Financial services industry provides opportunities in terms of economic

growth. Economic growth is measured in terms of greater savings which are used for diversification of assets.

Another opportunity is the need for cash flow improvement arising from

vibrant economic activities, thus creating demand for financial services.

128

The commitment of Asean and Pacific countries to GATS on the liberalization of the financial sector causes reforms in the securities market. This reforms require more disclosures which can make the Philippines a safe and stable site for financial services.

Opportunity on the technology side, point out that the knowledge and user of

technology facilitate leasing, factoring, credit cards and stock broking activities. This knowledge increases efficiency in the delivery of these financial services

The economic factor of improving the buying capacity are facilitated by

leasing, factoring, credit cards, and stock broking. They provide temporary facility in the use of credit buying.

Politically, opportunities to understand the adverse effects of bankruptcy

laws open our eyes to such situations like making good all obligations arising through leasing, credit cards, stock broking and factoring.

Finally, the improvement in the credit standing of the country increases the

inflows of capital and the need for financial services. Threats Dependence on debt to improve one's standing in the community. Educating

takers of these measures will be advised to proper use of leverage. Other threats include macroeconomic instability, huge cost of IT

infrastructure, political instability and international perceptions. High budget on IT would deplete budget and other necessary programs.

Balancing of all budgetary needs should take into consideration like magnitude of transactions affecting IT.

10.0 Action Plan to enhance growth and competitiveness Accounting

Marketing • Affiliate with international accounting firms and allow regional

accreditation with the "Big Five". These international accounting firms provide more opportunities in terms of transfer of technology, more projects for local auditing firms and sharing of technology and knowledge updates.

• Explore new services for the firm like assurance services, information and communication technology, corporate finance, outsourcing, and sustainable accounting. Assurance services require assurers to

129

become more knowledgeable in user decision processes and relevance enhancement activities.

• Create niches for small auditing firms like doing training in less developed countries, doing outsourcing, doing business research, doing entrepreneurial ventures and information technology software in accounting. These are activities that can be done by small auditing firms in order to have market access.

Operations/Technology

• Optimize technical knowledge and application of information technology.

• Preparing clients and staff or paperless auditing is a must. • Government should help in making technology affordable through tax

reductions in software and hardware acquisitions.

Human Resources

• Invest more on training programs for people. Human capital development in the long-run reduces training costs. Trainees must see their true value in the company.

• Improve the quality of accounting profession in a wider coverage such as management and financial accounting.

• Joint efforts of academe, government, and industry in the improvement of human capital.

Finance

• Provide enough budget for IT equipment and continuing professional program.

• E-Commerce has strong implication on accounting and auditing. Continuing professional programs will enhance staff competencies need in a globalized accounting environment.

Laws

• Update the Accountancy Law, Code of Ethics, Accounting and Auditing standards

• Awareness of existing regulations and providing trainings for regulators. • Allowing web site advertisements for accounting firms. • Study the feasibility of incorporating a partnership.

Monitoring • Strengthen the cooperation among small auditing firms through the

creation of a formal organization of small auditing firms.

130

• Strengthen the professional organizations(PICPA, ACPAPP,ACPAE,etc.)

• Recommend peer /practice review among auditing firms. • Monitor curricular offerings to meet the current demands of industries,

new services for the accounting services industry, inclusion of computer application in accounting subjects.

• Envision a discipline which is not limited only to accountancy. Financial Services

Marketing • Create selling systems which are customer-oriented. Selling systems

which are customer-focused answers the call for globalization. In globalization, there is a shift of advantage from the provider of services to the user of financial services. Increase the clientele base through personalized services to customers.

• Conduct research on improving services to cope up with changes in selling needs and changes in technology.

• Conduct campaign to educate the users on leasing and factoring activities.

Operations/Technology

• Use selective extension of credit to customers based on worthiness of client.

• Market products through advanced technology processes. Through internet transactions, services will reach the customers faster. Prompt statement of accounts can be sent to them. E-commerce application on collection and payments must be studied.

• Provide enough budget for computerization of client's transactions.

Human Resources • Seek more government agencies and associations assistance through

offering of more meaningful services or selling services, interpersonal relationships and updates on laws that affect the industry.

Finance

• Provide more control to cater to the needs of the financing services sector. More capitalization responds to the credit needs with more reasonable interest rates to cater to customers.

Laws

• Educate users of fraud, securities and bankruptcy laws, thus compliance will be assured.

• Awareness of existing regulations and providing trainings for regulators.

131

• Follow- up any position papers filed by associations concerning tax-related matters.

• Improvement of tax system. Monitoring

• Monitor performance of the industry through more aggressive intervention of association of financial services

• Set up own internal audit or recommend external audit of finance companies, brokers and credit card distributors. Internal and external audit

11.0 Performance Monitoring System There are many factors affecting the monitoring system. The first factor is the quality of graduates competence which is monitored by school administration, accreditors and CHED officials. They use school evaluation schemes like admission and retention policies of schools, CHED visitation and accreditors criteria. The second factor is monitoring of CPA results by PRC and school administrators through the CPA results. The third factor is aggressiveness of association and government agencies done by associations through monitoring of members performance. The fourth factor is compliance of laws affecting the industry. Government agencies monitor this through reportorial requirements. The fifth factor is advanced technology factors monitored by industry players through self-evaluation. The next factor is extent of research monitored by respective head. This is measured by their research outputs. The last factor is availability of funds which is monitored by the budget offices or head of department can learned through budget variances.

Accounting is coming to be understood as a vital infrastructural element of financial services and as finance becomes more global, accounting too should become more global. Similarly, as large business enterprises generally have become more international, their need for more international accounting services has grown.

There is a need to put up a program that will study an appropriate platform

for the Philippines to be part of globalized accountancy. The major players will be the Professional Regulation Commission (PRC) through the Board of Accountancy, The Philippine Institute of Certified Public Accountants(PICPA), the sectoral organizations - Association of CPAs in government, in education, in commerce and

132

industry and in public practice, the standard setting organizations and the Commission on Higher Education (CHED).

BIBLIOGRAPHY Books Boynton, Willian C.,et.al (2001) Modern Auditing 7th Edition. John Wiley & Sons,

Inc. Konrath, L.F. (1999). Auditing Concepts and Applications (Risk Analysis Approach)

4th ed. South-western College Publishing. Messier, W.F. (1997). Auditing: A Systematic Approach. USA: The McGraw Hill

Co. Inc. Ricchiute, D.N. (1998). Auditing and Assurance Services, 5th end. Cincinnati, Ohio:

Southwestern Publishing. Skousen, K Fred (2000). Intermediate Accounting. Southwestern College

Publishing. Taylor, D.H. and Glezen, W.G (1997). Auditing: An Assertion Approach, 7th ed.

Canada: John Wiley and Sons, Inc. Yost, G.C. (1997). The Audit: Its Environment and Application: An Experiential

Approach. USR, NJC: Prentice Hall.

133

Masteral Theses/Dissertations/Working Paper/Research Incentive Papers Edralin, D (1999). Market Access Issues and Development of Business Services

Published Paper. De La Salle University, Manila Nadurata, T. (1998). Analysis and Prediction of the Performance of DLSU

Accounting Graduates in Auditing Firms and CPA Board Examinations. Published Doctoral Dissertation. De La Salle University.

Tomboc, J. (2000). International Trade of Services. Working Paper. De La Salle

University, Manila. Tullao, T. (2000). Human Resource Requirements of the Final Sector Under a

Liberalization Region. Working Paper. De La Salle University, Manila. ______________. The Liberalization of Professional Services. Working Paper

Series. DLSU, Manila. Journals Bantillo, Pearl (2001). Credit card billings reach P100B

http://www.malaya.com.ph/jan26/busi1.htm, March 16,2001 Behn, Carcello (1997). The Determinants of Audit Client Satisfaction Among

Clients of Big 6 Firm. Cabrera, Ma. Elenita (2000). Future Accounting Education: Preparing for the

Expanding Profession. Determinants of Audit Client Satisfaction. MSA Notes, Sept 2000 Enriquez, S. (1996). Racing Toward a Global Profession. Accountants Journal. Financial Services in the 21th Century, Oct. 1997. Financial Services Strategies in the Euro-Zone Working paper, 1999. Gatts. Examination of the Schedules. Commitments submitted by Asia/Pacific

Trading Partners. Investigation No. 332-374. Publication 3053. August 1997. US International Trade Commission.

Kirk and Hawkes (2000). Electronic Commerce: Changing Information Needs.

AAAA Conference Paper, Singapore.

134

Kirk and Hawkes (2000). Electronic Commerce: The International Impact on

Assurance Services. AAAA Conference Paper, Singapore. Navarro, Rizalino (1998). A New Mindset for Certified Public Accountants.

Accountants Journal. Pobre, H. (1996). General Agreement on Trade in Services. Accountants Journal. Raymond, L. (2000). Electronic Commerce: Implication on Accounting and

Auditing. AAAA Conference Paper, Singapore. The new Mix of Client Services. The CPA Journal, May 2000. Vision of the Accounting Profession for the Third Millennium, Accountants Journal,

March 1998. Websites: http://www.wto.org/wto/whats.new/press http://service2000.ic.gc.ca www.wto.org/english/tratop_e/serv_e/10_assfin.htm www.statcan.ca/english/pgdb/economy/finance.htm http://esa.un.org/unsd/cr/registry/regcst.asp http://www.usatrade.gov http://www.worldroom.com/paper/wrnph/banking/stock2.phtm/ http://www.invoicefactoringonline.com http://www.apmforum.com/emerald/auditing-accounting-in-asia.htm http://www.deloitteap.com/practices/prac-phil.html http://www.21stcapital.com/factoringfees.html http://www.21stcapital.com/procedures.html http://www.chanrobles.com/republicact8484.htm

135

http://www.geocities.com/cianoy/directory.htm http://www.monitordaily.com/mon100/mon100_00/vol00.htm http://www.monitordaily.com/mon100/mon100_00/asset00.htm http://www.strategies.ic.9c.ca/engdoc/alpha.html http://www.directory.google.com/top/regional/europe/united_kingdom/business_and_economy/Financial_Services/Accounting/Finance/ http://www.lafferty.com/manreports/reports.html http://www.citidex.net/2.htm http://www.accountantsonline.com.hk/accounting/fins/hkha.html http://www.asialease.or.id/a-philipn-b.htm http://www.splash.wpfc.com.ph/html/profile.html/products.html http://www.equitable.com.ph/pcileasing/anrep/letter.htm http://www.releasing.ra/leasing_world/world.htm http://www.cclease.com/index.html http://profiles.wisi.com/profiles/financial.htm http://ww.corporate information.com http://www.electronicaccountant.com/html/t100y2k/t100p4.htm http:// 212.240.205.5frame.asp

136

12.0 Directory

PHILIPPINE ACCOUNTING and AUDITING FIRMS ALBA ROMEO & CO Don Chua Lamko Bldg. Mkt filing Tel.# 815-9086/816-7201 ALDAYA NARCISO N & CO. Samanillo Bldg. Tel.# 241-5159 ARCADIO R GARCIA & ASSOC. Arcinas Bldg. QC. Tel# 732-7871 ARCEO ROMEO UR R Santos Bldg. Tel.# 733-1084 ARTILLAGA R C & ASSOCIATES 353 Villareal PC Tel.# 831-4855 ARUEGO JOHNNY C Platinum 2000 SJ Tel.# 723-9779 AYSON RENATO C Regina Bldg. Tel.# 241-5656 B. BARSABAL & CO. 750 Shaw Bvld. Mandaluyong Tel.# 631-6207 BERNADEZ & ASSOCIATES CPA’S Metropolitan Terraces Mkt. Tel.# 899-6625/897-2288 BERNADEZ CEDRIC Madrigal Bldg. Tel.# 242-4834 BUAN ROGELIO L 1320 A Mabini Tel.# 522-4101 BUEVENTURA VICTA & ASSOCIATES LFG Bldg. QC. Tel.# 372-3257

C L MANABAT & COMPANY Salamin Bldg. Mkt. City Tel.# 818-1826/812-0535/810-5737 C M ILAGAN & ASSOCIATES CPA’s 20th Century Bldg. Mandaluyong Tel.# 533-9389 CABEÑERO KATIGBAK CLEMENTE & CO. 77-A Times QC Tel.# 924-0047 CAGULAT ABAD & CO. 1300 Quezon Ave. QC Tel.# 922-1840/372-3531 CALMA RP & CO. Zeta Bldg. Mkti. Tel.# 818-8592 CAPILI FLORA PUBLIC ACCTG SERV 4092 Airport Pque Tel.# 832-0616 CAREER DEVELOPMENT CENTER INC 140 Retiro QC Tel.# 712-3696 CAÑÑO PUBLIC ACCOUNTING SERVICES Young Trade Bldg. QC. Tel.# 911-0293 CARMENCITA O GARCIA & PARTNERS Sedcco Bldg. Mkt. Tel.# 892-5636 CENTENO SERGIO S Arle Bldg. SJ Tel.# 727-2716 CHAN FELIPE C & ASSOCIATES Mla. Textile Mkt. Tel.# 244-0052

57

CHUA HUAY PIN 1013 J Luna Tel.# 245-0974 CONSTANTINO E F & CO. 88 Valero Mkt. Tel.# 889-6105 CORTEZ ARCELI D Republic Supermart Bldg. Tel.# 733-6143 COSCOLLUELA FRANCISCO OSIAS LAGAC & CO Shamrock Condmn Tel.#716-1157 CREUS ASUNCION BONDOC & CO. Cityland Dela Rosa Condmn Mkt. Tel.# 843-7327 CRUZ NAZARIO L 462 Sto. Cristo Tel..# 241-9755 CUSING ANTONIO M 650 Sta. Potenciana Tel.# 527-3623 CUSTODIO NORMA R. Dña Consolacion Bldg. Q.C Tel.# 912-0601 DAN C BAÑAS & CO CPA’s 13 Aries Pque Tel.# 822-3017 DE CASTRO DELA CRUZ & COMPANY CPA’s Heart Bldg. Mkt. Tel.#899-6363/899-6374 DE LEON AUGUSTO C Metro Bank Bldg. Mkti. Tel.#892-0097 DEE SY PUA & CO 1425 J. Fajardo Tel.#781-3421/781-3420 DIAZ L C & CO Don Jacinto Bldg. Mkti. Tel.#840-2364 DIAZ MURILLO DALUPAN Don Jacinto Bldg. Tel.# 894-5892/894-5893/894-5894

DIMAR C B & ASSOCIATES 146 West Ave. QC Tel.# 926-9997 DIZON JOSE A 530 J Luna Tel.#242-0682 DIZON R & CO 126 Dn A Roces QC Tel.# 374-2457 ENER-MA ENTERPRISES Carmen Bldg. PC Tel.# 831-1670 ESGUERRA GERMAN JR. Capt. L Gonzaga Bldg. Tel.#733-0213 ESQYERRA B M & CO 10 Quezon Av QC Tel.# 732-1144 FEDERATED SERVICES INC. Dña Natividad Bldg. QC Tel.# 742-2453/742-2465/742-2468 FERNANDEZ BERRIS & CO. 6778 Ayala Av. Makati Tel.# 816-7679 FERNANDEZ SANTOS & LOPEZ 8th Flr Philbank Bldg. Ayala Mkt. Tel.# 812-8331 FERRER JACINTO C Martinez Bldg. Tel.# 241-3740 FRANCISCO V A & ASSOCIATES 13th PORT AREA Tel.# 527-2381 FUA & ASSOCIATES Danarra Condmn Mkt. Tel.# 896-2574 GARCIA AURORA G 353 Tanduay Tel.# 735-1729 GARCIA ISIDRO B & ASSOCIATES 8063 Estrella Mkt. Tel.# 897-1753

58

GARCIA MATIENZO ALON & CO 1314 Commerce Av. Munt. Tel.# 809-9421 GUZMAN DE E P & CO 134 Timog Av. QC Tel.# 929-3139/927-4817 GUZMAN MARINO A De Veria I Bldg. QC. Tel.# 373-0831 GUZMAN WILBERTO P DE 1619 Rizal Av. KC Tel.#363-4286 IE Estelita Isabelo & Ass SRI Bldg. PC Tel.#833-9674 INDEPENDENCE PUBLIC AGENCY 520-C Z P De Guzman Tel.# 735-7104 J A PASTOR & ASSOCIATES 16 R Del Pan Pque Tel.# 807-4560 J L MARANAN & CO Artex Bldg. Tel.#243-1615 JERRY P TAN & CO CPA’s Madrigal Bldg. Tel.#243-4303 JIMENEZ M A ENTERPRISES INC. Sagittarius Condm Mkt. Tel.# 816-3877 JOAQUIN CUNANAN & CO Human Resources Dept Assurance & Business Advisory Services Tax Services Financial Advisory Services Multinational Bancorp Center Tel.# 845-2728 JOSE LUIS F & ASSOCIATES Phil Banking Bldg. Mkti. Tel.# 817-9194 KATIGBAK & ASSOCIATES Saville Bldg. Mkti. Tel.# 896-7564

LACSA QUIRANTE & CO. 2243 Jose Abad Santos Av Tel.# 563-4728 LAYA MANANGHAYA & CO. 139 Valero Mkt. Tel.#818-9492/893-8507/892-3271 Fax#894-1985 LAYA MANANGHAYA SALGADO & CO 139 Valero Mkt. Tel.# 841-0181/893-6259/893-6257/894-1063/894-1098/894-1779/294-1807 LEE SEVILLA & CO Enterprise Bldg. Tel.#241-0952 LICUANAN CASTRO & ASSOCIATES 109 Sct. Chuatoco QC Tel.#374-4489 LOPEZ ACCTG & AUDITING OFC 1951 J Abad Santos Tel.# 253-3305 LUGO & CO 10 Canada Pque Tel.# 823-7819 LUMBA JOSE F Taft Ofc Ctr PC Tel.#831-0795 M R ORIOLA ACCTG. MGT. Trinity Bldg. Tel.# 523-2770/523-2814/526-2113 M S BANARIA & COMPANY Alforque Bldg. Q.C Tel.# 911-8062 MAMURIC AMADO C 2627 Taft Ave. Tel.#523-1985 MANLAPAS ACCOUNTING OFFICE 8 A Pres Av Pque. Tel.#829-8332 MANSILLA REYNALDO R Carmen Bldg. PC Tel.#831-1670

59

MARIANO NORTURO M Arnel Bldg. Tel.# 243-1611 MATURGO & ASSOCIATES 819 Ilaya Tel.# 241-8441 MELO RUFINO & CO Maritima Bldg. Tel.# 241-6189 METRO COMMERCIAL AGENCY Chua Limco Bldg. Tel.# 241-9361 METROPOLITAN ACCOUNTING Downtown Ctr. Bldg. Tel.# 242-1628 MILLARE ARTHUR J Myers Bldg. Tel. 243-4051 MIRANDA ANTONIO A M Tiaoqui Bldg. Tel.#734-8359 MIRAVITE RICARDO F & ASSOCIATES Pasda Mansion QC Tel.# 374-3284 MORENTE BENJAMIN O 2260 Pasong Tamo Ext. Mkt. Tel.# 819-2896 NR CUSTODIO & ASSOCIATES Dona Consolacion Bldg., QC Tel# 912-5589;912-0601;912-9398 NT SY & CO. CPA’s State Centre Bldg., Juan Luna, Manila Tel#242-2638 OCAMPO, MAURO C 1018 G. Masangkay Binondo, Manila Tel#244-7723 ODSINADA RIVERA & CO. GJ Bldg., QC Tel# 373-3489; Herrerra Tower, Makati Tel#845-0857;845-0865 OGALESCO NELIA T Q. Paredes, Binondo, Manila

Tel#241-6989 OGALESCO PACIANO JR 818 Ongpin, Manila Tel#733-3113 OLLADA, FILIPE & ASSOCIATES 378 Dasmarinas, Manila Tel#241-3758 PAMMIT A P & ASSOCIATES 1360 Leon Guinto Sr. Malate, Manila Tel#524-2534 PASCUAL L R & ASSOCIATES Ledesma Bldg 2, Manila Tel#527-4070 PASCUAL PASCUAL & CO CPAs Ledesma Bldg 2, Manila Tel#527-5485;527-2271 PEOPLE’s ACCTG FIRM & TAX SERVICES 788 Ilaya, Divisoria, Manila Tel#241-8254 PO LAO MARQUEZ & ASSOCIATES 24 Bohol Avenue, QC Tel#928-8242;9242119;845-1660 PRICEWATERHOUSECOOPERS FINANCIAL ADVISORS,INC. Multinational Bancorp, Makati Tel#845-2806 PUNONGBAYAN & ARAULLO, CPAs 20th Tower I The Enterprise Center 6766 Ayala Avenue, Makati Tel#886-551 Fax#886-5511;886-5507;810-9748 R M VELUZ ACCOUNTING FIRM 27 Matalino St, QC Tel#434-0480;434-5783 R S FADO & CO. Cityland 10 Tower 2, Makati Tel#815-6384 RAMON F GARCIA & CO. Manilabankd Bldg. Mkti. Tel.# 892-5831 RAMOS ALEXANDER E & ASSOCIATES 304 F B Harrison PC Tel.# 831-5243

60

REDOR EMERSON P Ayala Life Bldg. Mkti. Tel.# 816-3079 REJANO PAZ NOVENARIO & CO. Victoria Bldg Tel.# 521-2493 REYES EDUARDO J 1010 Bldg. Tel.# 525-7743 REYES JOSE T & CO 260 Dasmarinas Tel.# 241-2380 RONALDO GATDULA ROSALES & CO. Legaspi Tower 200 Bldg. Mkti. Tel.# 817-7090/817-9214/817-7535 ROSARIO ESTRELLITA G DEL 134 Timog Av. QC Tel.# 929-3139 SABATER BENJAMIN G Victoria Bldg. KC Tel.# 364-4117/363-3726 SANDI PERFECTO S 1215 Lincallo Tel.#733-9152 SANTIAGO ACCOUNTING Don Santiago Building Tel.# 521-0078 SANTIAGO GINA R Don Santiago Bldg. Tel.# 523-9036 SANTILLAN FELICIANO S 231 J Luna Tel.# 242-1676 SANTILLAN JIMENEZ & ROQUE Fil-Am Resources Bldg. Tel.# 242-1674 SANTOS & SANTOS BUSINESS AGENCY Chua Limco Bldg. Tel.#241-9365 SAZON SUBA & ASSOCIATES Reza Bldg. QC Tel.# 372-3266

SAZON ULPIANO C & CO. Delta Motors Sales Corp Bldg. QC Tel.# 373-3527 SEVILLA ANTONIO Q 4581 Baron Mkt. Tel. # 897-4078 SYCIP, GORRES, VELAYO & CO. 6760 Ayala Avenue, Makati City Truckline: 8910307 Fax: 8190872 SICANGCO MENOR VILLANUEVA & CO. V Madrigal Bldg. Mkti. Tel.# 816-4463 SICANGCO & PAMINTUAN V Madrigal Bldg. Mkt. Tel.# 816-4463 TAN RR & ASSOCIATES PDCP Bank Center Mkt. Tel.# 817-8469 Madrigal Bldg. Mkt. Tel.# 819-5241 TRUST BUSINESS AGENCY & ACCOUNTING OFC. P Delos Reyes Bldg. Tel.# 241-7141 TULLO EVANGELISTA LIM & CO. 1 Sct. Madrinan QC Tel.# 374-2989 UNGSON TEODORO C Dona Felisa Syjuco Bldg. Tel.# 528-0814 V M TORRES & CO. 18 Mariposa QC Tel.# 727-7423 VALDES CARLOS J & CO CJVC Bldg. Mkti. Tel.# 892-5931 VALERA REYES J ASSOC. 22 Tirad Pass QC Tel.# 712-1522 VALERIO VERGARA MARQUEZ & CO. Burke Bldg. Tel.# 241-5254 VASQUEZ VIRGILIO M

61

361 Barbosa Tel.# 734-9373 VELASCO PLACER A Makati Medical Center Mkt. Tel.# 892-3364 VELOSO ANTONIO A 1319 J A Santos Tel.# 253-3426 VERA CASIANO M De Luzco Bldg. Tel.# 241-3470 VERA LP & CO Vernida IV Bldg. Mkti. Tel.# 818-8964 VICENTE REYES & ASSOCIATES 22 Tirad Pass QC Tel.# 712-4201/743-7942 VILLAMOR JULIO P PDCP Bank Ctr. Mkt. Tel.# 893-6182 VITUG JUANITO I Marvel Bldg. 2 Tel.# 241-7661 VITUG ROMARICO G Equitable Bank Bldg. Tel.# 241-5757

WISCO WILFREDO R Mla Downtown Palace Tel.# 241-1441 YAP & ASSOCIATES 414 Rizal Ave. Tel.# 733-0210 Z P BAÑAS & ASSOCIATES Grd Flr. Daily Star Bldg. 13th Port Area Tel.# 527-2381 ZABARTE EDUARDO & CO Samanillo Bldg. Tel.# 241-4843 4 Mary Mount QC Tel.# 920-7296 Source: 2000-2001 Metro Manila Member

Directory

62

PHILIPPINE CREDIT CARDS SECURITY DINERS INTERNATIONAL CORP. Diners Club Centre, 114 Valero St., Legaspi Village, Makati, City Contact Person: Ms. Elvira Lagrimas Tel.# 810-4521-40/ 812-1272 E-mail: [email protected] RIZAL COMMERCIAL BANKING CORP. Penthouse ITC Bldg., Sen Gil Puyat Contact Person: Ms. Melissa Rodriguez Tel.# 894-9000/899-9523 PNB CREDIT CARD CORPORATION PNB Visa Card-Credit Card Operations Office, 3F Financial Center, PNB Bldg. Roxas, Blvd. Pasay City Contact Person: Mr. Guillermo Facundo Tel.# 526-3474/526-3433/526-3266 THE HONGKONG & SHANGHAI BANKING CORPORATION LIMITED PSC-West Tower Exchange Road Ortigas center, Pasig, City Tel.#636-7300 EQUITABLE CARDNETWORK, INC. 203 Salcedo St., Legaspi Vill. Makati City Tel.# 812-5861/67 CITIBANK N.A Robinson Galleria Corporate Center EDSA cor Ortigas Ave., Quezon, City Tel.# 634-3601/40 BPI EXPRESS CARD CORP. 3/f BPI Bldg., Ayala Ave. Cor Paseo Tel.#818-5541 BANKARD, INC. 24/f PSC Bldg., Exchange Road Ortigas Center, Pasig City Tel.#634-5911/634-6644 BANK OF AMERICA NT & SA 3/f BA Lepanto Bldg., 8747 Paseo Tel.# 815-5789

AMERICAN EXPRESS INTERNATIONAL 4/f Ace Bldg. dela Rosa cor Rada St., Legaspi Village Makati City Contact Person: Ms. Aileen Clemente Tel.#815-9311 to 18/817-3141 Fax # 818-6977 UNICARDD (UNIBANKCARD) PSBANK Tower, Sen. Gil Puyat Ave. Cor. Tindalo St., Makati City Tel.#845-0101 Fax # 845-0118 STANDARD CHARTERED 6788 Ayala Ave., Makati Tel.#830-1111 AIG PHILAM BANK 100C Palanca St., Makati City Tel.#813-7531 UNION BANK SSS(Makati) Bldg., Makati City Tel.#892-0011 UNITED OVERSEAS BANK 411 Quintin Paredes St., Binondo, Manila Tel.#243-0951 AMERICAN EXPRESS 6750 Ayala Ave., Makati City Tel.# 818-6731/840-2401/813-8346/813-8353 BANK OF THE PHILIPPINE ISLAND BPI Bldg. Ayala Ave., Corner Paseo De Roxas, Makati City Tel.#818-5541 to 48 CITIBANK 8741 Paseo De Roxas, Makati City Tel.#995-9999 EQUITABLE BANK Equitable PCI Bank Towers Makati City Tel.#893-8675/818-0825/894-1938/817-3843

63

Philippine Stock Brokers Public Assistance Center Philippine Stock Exchange Tel: +63-2 637-8818; 637-8813 or 636-0122 to 40 Email: [email protected] As of December 1999, there are 149 local and 35 foreign member brokers of the Philippine Stock Exchange. Following is the directory of foreign member brokers: ABN AMRO Asia Securities (Phils.), Inc. 3/F, Pacific Star Building Sen. Gil J. Puyat corner Makati Avenues Makati City Tel: +63-2 811-5706; 891-9851 to 53 Fax: +63-2 812-7909; 819-5849 Apex Phils. Equities Corporation 2/F, Mary Bachrach Building Port Area, Manila Tel: +63-2 527-8888 loc. 249 or 219; 891-9911 Fax: +63-2 527-5291 BNP Prime Peregrine Securities, Inc. 14/F, PCIB Tower 2 Makati Avenue corner H.V. dela Costa Street Makati City Tel: +63-2 891-2681 to 85 Fax: +63-2 751-8196 CDIB Venture Investment (Asia) Ltd. Unit 1002, Antel Corporate Center 139 Valero Street, Salcedo Village Makati City Tel: +63-2 867-2181 Fax: +63-2 867-2349 Christfund Securities (Phils.), Inc. 603 Diamond Building EDSA, Cubao, Quezon City Tel: +63-2 721-4612 Citicorp Securities International (RP), Inc. 5/F, Citibank Centre 8741 Paseo de Roxas Avenue Makati City Tel: +63-2 894-7690 (trading room); 894-7693 to 99 (sales); 891-9561 to 62 (Exchange) Fax: +63-2 894-7014

Credit Lyonnais Securities Phils. Inc. 18/F, Tower 1 The Enterprise Center 6766 Ayala Avenue, Makati City Tel: +63-2 886-5637 to 46 (office); 886-5647 (sales); 891-9386 to 87 (Exchange) Fax: +63-2 886-5692 DBP-Daiwa SB Capital Securities (Phils.) Inc. 18/F, Citibank Tower 8741 Paseo de Roxas Avenue Makati City Tel: +63-2 813-7344 (office); 891-9096 to 98 (Exchange) Fax: +63-2 848-0105 DBS Securities (Phils.), Inc. 10/F-11/F, Sage House Bldg. 110 Herrera Street Legaspi Village, Makati City Tel: +63-2 812-8361 to 68 (office); 891-9131 to 33 (Exchange) Fax: +63-2 815-1113; 815-1141 Email: [email protected] G. K. Goh Securities (Phils.), Inc. 36/F, C/D Rufino Pacific Tower 6784 Ayala Avenue Makati City Tel: +63-2 811-0930 to 33 (office); 891-8582 to 83 (Exchange) Fax: +63-2 811-1150 or 51 Guoco Securities (Phils.), Inc. 15/F, BA Lepanto Building 8747 Paseo de Roxas Avenue Makati City Tel: +63-2 810-6801 to 06 (office); 891-9256 to 58 (Exchange) Fax: +63-2 810-8113 HDI Securities, Inc. 11/F, Tower 1 & Exchange Plaza Ayala Avenue corner Paseo de Roxas Makati City Tel: +63-2 891-9597 to 98; 891-9607 to 09 (office); 891-9502 to 10 (Exchange) Fax: +63-2 891-9597 HSBC Securities (Phils.), Inc. 13/F, Jaka Building 6780 Ayala Avenue Makati City Tel: +63-2 810-5106 (office); 891-9195 to 96 (Exchange) Fax: +63-2 810-5108 Indosuez W. I. Carr Securities (Phils.), Inc.

64

17/F, Citibank Tower 8741 Paseo de Roxas Avenue Makati City Tel: +63-2 848-0906 (Office); 848-0881 to 82; 750-1117 to 18 (Dealing Room) Fax: +63-2 750-5611; 750-5612 ING Baring Securities (Phils.), Inc. 20/F, Tower 1 & Exchange Plaza Ayala Avenue corner Paseo de Roxas Makati City Tel: +63-2 840-8400; 891-9898 (office); 848-5213; 848-5228; 840-8480; 840-8483 (Exchange) Fax: +63-2 891-9777; 891-9797 Email: [email protected] Keppel Securities Philippines, Inc. 9/F, Units 9A-9B, Country Space I Bldg. Sen. Gil J. Puyat Avenue Makati City Tel: +63-2 812-2956 to 58; 812-2966 to 67 (office); 891-975% to 74 (Exchange) Fax: +63-2 813-8938 Magnum International Securities, Inc. Unit 2403, West Tower, PSE Centre Exchange Road, Ortigas Center Pasig City Tel: +63-2 637-0721 to 40 (office) Fax: +63-2 637-3724; 637-3729 Merrill Lynch Securities Philippines, Inc. Unit 19C, Citibank Tower, Citibank Plaza 8741 Paseo de Roxas Avenue Makati City Tel: +63-2 814-5700 (office); 891-9162; 891-9222 (Exchange) Fax: +63-2 814-5768 Nomura Securities Phils., Inc. 18/F, Tower 2, Enterprise Center 6766 Ayala Avenue corner Paseo de Roxas Makati City Tel: +63-2 886-5240 (office); 636-6029 (Exchange) Fax: +63-2 886-5250 Email: [email protected] OCBC Securities (Phils.), Inc. Unit 2502-A, West Tower, PSE Centre Exchange Road, Ortigas Center Pasig City Tel: +63-2 635-5765 Fax: +63-2 635-5766 Orion-Squire Capital, Inc. 18/F Chatham House Condominium 116 Valero corner Herrera Streets Salcedo Village, Makati City

Tel: +63-2 887-1201 to 12 (office); 891-9324 to 28 (Exchange) Fax: +63-2 887-1221 Paragon Strategic Holdings, Inc. c/o Grand Plaza Hotel Corporation 10/F, The Heritage Hotel Manila Roxas Blvd. corner EDSA Extension, Pasay City Tel: +63-2 891-8838 Fax: +63-2 891-8825 Phileoallied Securities (Phils.), Inc. Unit 906, 9/F, Tower 1 & Exchange Plaza Ayala Avenue corner Paseo de Roxas Makati City Tel: +63-2 848-5539; 848-5540 (office); 891-9281 to 83; 759-4035 (Exchange) Fax: +63-2 848-5541 Email: [email protected] Philippine TA Securities, Inc. E-1203 PSE Centre Exchange Road, Ortigas Centre Pasig City Tel: +63-2 636-0856 (office); 891-9265 to 69; 891-9276 to 79 (Exchange) Fax: +63-2 631-7942 Email: [email protected] PJB Pacific Securities (Phils.), Inc. 7/F, World Centre 330 Sen. Gil J. Puyat Avenue Makati City Tel: +63-2 867-8727 to 38 (office); 891-9781 to 84 (Exchange) Fax: +63-2 867-8571 to 72 Email: [email protected] Rashid Hussain Securities (Phils.), Inc. 33/F Rufino Pacific Tower 6784 Ayala Avenue Makati City Tel: +63-2 811-0855 (office); 891-9005 to 07 (Exchange) Fax: +63-2 811-0866; 811-0302 Santander Investment Securities (Phils.), Inc. 27/F, Tower 1 & Exchange Plaza Ayala Avenue corner Paseo de Roxas Makati City Tel: +63-2 848-5847 (office); 848-5836 to 38 (Exchange) Fax: +63-2 848-6554; 759-4190

65

Securities 2000, Inc. 2203-B, West Tower, PSE Centre Exchange Road, Ortigas Centre Pasig City Tel: +63-2 638-0700 to 19 (office); 636-0805; 637-8820; 633-9832 (Exchange) Fax: +63-2 637-9404 Email: [email protected] SG Securities (Phils.), Inc. 21/F, Antel Corporate Centre 139 Valero Street Salcedo Village, Makati City Tel: +63-2 841-0777 (office); 848-5542 to 44; 848-5074 (Exchange) Fax: +63-2 849-2900 Sun Hung Kai Securities (Phils.),Inc. 15/F, Citibank Tower Paseo de Roxas Avenue Makati City Tel: +63-2 813-2041 to 52 (office); 891-9215 to 18 (Exchange) Fax: +63-2 813-2059 TIR Securities (Phils.) Corporation Unit 1007, PSBank Tower Sen. Gil Puyat Ave. corner Tindalo St. Makati City Tel: +63-2 759-3500 to 03 (office); 759-3503 (Exchange) Fax: +63-2 759-3503 UOB Securities (Phils.), Inc. Unit 9-C, Chatham House Condominium 116 Valero corner Herrera Streets Salcedo Village, Makati City Tel. No.: 887-1066 to 69; 887-1170 (office); 634-6257 to 58 (Exchange) Fax: +63-2 887-7972 Vickers Ballas Securities (Phils.), Inc. 5/F, Tower 1 & Exchange Plaza Ayala Avenue corner Paseo de Roxas Makati City Tel: +63-2 759-4488; 848-5726 to 31 (office); 891-9933 to 38 (Exchange) Fax: +63-2 759-4556

Warburg Dillon Read Securities (Phils.), Inc. 19/F, Tower 1 & Exchange Plaza Ayala Avenue corner Paseo de Roxas Makati City Tel. No.: 754-8888 (office); 634-6662; 634-6909; 634-6210 (Exchange) Fax: +63-2 754-8810 Worldsec International Sec. (Phils.) Inc. 10/F, Tower 1 & Exchange Plaza Ayala Avenue corner Paseo de Roxas Makati City Tel: +63-2 848-6360 (office); 891-9915 to 19 (Exchange) Fax: +63-2 848-6373 Email: [email protected]

• http://www.worldroom.com/pages/wrnph/banking/stock2.phtml

Investment House Association of the Philippines (IHAP)

MEMBERS DIRECTORY

66

AB CAPITAL AND INVESTMENT CORP. ADDRESS: 3/F, AsianBank Center, 328 Sen. Gil Puyat Ave., cor. Tordesillas St., Salcedo Village, Makati City TEL: (632) 819-3151 to 65; 819-0611 to 22 FAX: (632) 810-7015 ABACUS CAPITAL & INVESTMENT CORP. ADDRESS: 3/F, Philippine Stock Exchange,

Center, Pasig City

TEL: (632) 634-5104 to 08; 635-5571 to 74 FAX: (632) 634-2108 ALL ASIACAPITAL AND TRUST CORP. ADDRESS: All AsiaCapital Center,

105 Paseo de Roxas, Makati City

TEL: (632) 813-0188; 818-3211 FAX: (632) 817-1728 E-MAIL: [email protected] WEB-SITE: www.allasiacapital.com AMALGAMATED INVESTMENT BANCORPORATIONS ADDRESS: 11/F, Multinational

Bancorporation Centre,

6805 Ayala Ave., Makati City

TEL: (632) 845-2138 to 46 FAX: (632) 845-2187 E-MAIL: [email protected] WEB-SITE: http://user.qinet.net/mktfinance/aib/index.html ASIAN ALLIANCE INVESTMENT CORP. ADDRESS: 22/F, The PEAK 107 Alfaro St.

Salcedo Village, Makati City

TEL: (632) 848-2965 to 72 FAX: (632) 848-2954 to 55 E-MAIL: [email protected] ATR-KIM ENG CAPITAL PARTNERS, INC.

ADDRESS: 17/F, Tower One & Exchange Plaza,

Ayala Triangle, Ayala Ave, Makati City

TEL: (632) 849-8988 FAX: (632) 848-5640 BNP PRIME PEREGRINE INC. ADDRESS: Unit 1501, 15/F Tower One & Exchange Plaza, Ayala Triangle, Ayala Ave. cor. Paseo de Roxas, Makati City TEL: (632) 848-6391 to 98 FAX: (632) 759-4707; 848-6420 BPI CAPITAL CORP. ADDRESS: 6/F, BPI Bldg., Ayala Ave., cor. Paseo de Roxas, Makati City

TEL: (632) 816-9277; 816-9722 FAX: (632) 818-7809; 816-9811 BANCOMMERCE INVESTMENT CORP. ADDRESS: 13/F, Jaka Bldg., 6780 Ayala Ave., Makati City

TEL: (632) 867-3316; 867-3318 FAX: (632) 867-1732 E-MAIL: [email protected] CITICORP CAPITAL PHILIPPINES, INC. ADDRESS: 10/F, Citibank Tower, 8741 Paseo de Roxas, Makati City

TEL: (632) 894-7894 FAX: (632) 894-7349 CONSOLIDATED ORIX LEASING AND FINANCE CORP. ADDRESS: 19/F, Solid Bank Bldg., 777 Paseo de Roxas, 1226 Makati City TEL: (632) 892-0481 to 96 FAX: (632) 815-6387; 817-3529; 811-4533 E-MAIL: [email protected]; [email protected] CORPORATE INVESTMENTS PHILIPPINES, INC. ADDRESS: 22/F, Taipan Place, Emerald Ave., Ortigas Center, Pasig City

TEL: Pres.: (632) 632-9328; Funds Mng’t Group: 637-0581; Merchant Banking Group:

67

632-9223; Operations Group: 632-9227; Investment Mng’t Group: 637-0241; Credit Evaluation & Monitoring: 632-9245; Systems Group: 632-9310 FAX: Pres.: (632) 632-9215; Funds Mng’t Group: 632-9296; Merchant Banking Group: 632-2899; Operations Group: 910-5041; Investment Mng’t Group: 632-9256; Credit Evaluation & Monitoring: 637-2899; Systems Group: 632-9296 DHARMALA CAPITAL INVESTMENT & TRUST COMPANY INC. ADDRESS: 10/F, Dharmala Center, 142 Amorsolo St., Legaspi Village, Makati City

TEL: Trunkline: (632) 840-1401; Trust: 892-5203; Treasury: 840-1539; 840-1540; Corporate Finance: 840-1543 FAX: (632) 840-1546; 840-1936 DHB CAPITAL PHILIPPINES, INC. ADDRESS: 15/F BA Lepanto Bldg., 8747 Paseo de Roxas, Makati City

TEL: (632) 813-6551; 813-6554; 813-6558 to 59; 813-6580 FAX: (632) 813-4104 E-MAIL: [email protected] EAST ASIA (AEA) CAPITAL CORP. ADDRESS: 16 & 17/F Trident Tower, 312 Sen. Gil Puyat Ave., Makati City

TEL: (632) 753-2000 trunkline FAX: (632) 753-2066; 845-2278 EBC INVESTMENTS, INC. ADDRESS: 4/F, Equitable Bank Bldg., Paseo de Roxas cor. Sen. Gil Puyat Ave., Makati City

TEL: (632) 896-5971; 896-5932 FAX: (632) 895-0042 EDUCATIONAL CAPITAL CORP. ADDRESS: 5/F, Concorde Condominium, cor. Salcedo and Benavidez Sts., Legaspi Village, Makati City

TEL: (632)892-8911 to 18 loc. 143, 146; 810-8461; 840-5640 FAX: (632) 840-5639 EXCHANGE CAPITAL CORP.

ADDRESS: 3/F, Corporate Business Centre, 151 Paseo de Roxas, Makati City

TEL: (632) 815-4886 FAX: (632) 816-1383 TELEX: 67766 EXCAP FEB INVESTMENTS, INC. ADDRESS: 16/F, Far East Bank Center Bldg., Sen. Gil Puyat Ave., Makati City

TEL: (632) 845-9888 loc. 9307, 9310 FAX: (632) 891-4503; 891-4424 FILINVEST CAPITAL, INC. ADDRESS: 5/F, Oppen Bldg., 349 Sen. Gil Puyat Ave., Makati City

TEL: (632) 890-5550 to 57; 890-5737 DL; 890-5729 FAX: (632) 890-5555 FIRST METRO INVESTMENT CORP. ADDRESS: 6/F, Metrobank Plaza, Sen. Gil Puyat Ave. Extension, Makati City

TEL: (632) 814-4220; 814-4222 TELEX: RCA 22122 METPH; EASTERN 63555 METMKT PN; GMCR 45344 MB PLAZA GRAND ASIA CAPITAL CORP. ADDRESS: 5/F, Bloomingdale Bldg., 205 Salcedo St., Legaspi Village, Makati City

TEL: (632) 892-2682; 892-2681 or 96 FAX: (632) 812-4055; 815-4692 INSULAR INVESTMENT & TRUST CORP. ADDRESS: 10/F, Insular Life Bldg., 6781 Ayala Ave., Makati City TEL: (632) 815-9416 FAX: (632) 816-0686 INTERNATIONAL CAPITAL CORP. ADDRESS: 14/F, Metrobank Plaza, Sen. Gil J. Puyat Ave., Makati City

TEL: (632) 810-3994 to 98; 810-4201 FAX: (632) 810-3995; 810-5114 INVESTMENT & CAPITAL CORP. OF THE PHILIPPINES ADDRESS: 15/F, Solidbank Bldg., 777 Paseo de Roxas, Makati City

68

TEL: (632) 811-4656 FAX: (632) 819-0941; 841-0287 TELEX: 62146 ICCP PN KEPPEL IVI INVESTMENTS, INC. ADDRESS: 9/F Country Space I Bldg., Sen. Gil Puyat Ave., Makati City

TEL: (632) 812-2956 to 58; 812-2966 to 67; 813-3116 to 18 FAX: (632) 813-8938 LIPPO ASIA INVESTMENT CORP. ADDRESS: 31/F, Rufino Pacific Tower, 6784 Ayala Ave., Makati City

TEL: (632) 811-0947 to 49; 811-0466 to 67; Capital Market: 811-1067; Corporate Finance: 840-3289; Fixed Income: 811-0529 to 31 FAX: (632) 811-0521 MULTINATIONAL INVESTMENT BANCORPORATION ADDRESS: 9/F, Prudential Life Bldg. Ayala Ave., Makati City

TEL: (632) 817-1511 to 15

FAX: (632) 817-7586

NMB CAPITAL, INC.

ADDRESS: Suite 14-C, Valero Tower, 122 Valero St., Salcedo Village, Makati City

TEL: (632) 813-3324

FAX: (632) 813-2821

ORION-SQUIRE CAPITAL, INC.

ADDRESS: Suite 34-D, Rufino Pacific Tower, Ayala Ave. cor. Herrera St. 1200 Makati City

TEL: (632) 811-0938 to 44

FAX: (632) 811-0946

PBC CAPITAL INVESTMENT CORP.

ADDRESS: 7/F, Philbank Bldg., 6778 Ayala Ave. cor. Herrera St., Makati City

TEL: (632) 817-0901

FAX: (632) 751-7538

E-MAIL: [email protected]

PCI CAPITAL CORP.

ADDRESS: 20/F, Equitable PCIBank Tower 1, Makati Ave., cor. H.V. dela Costa St., Makati City

TEL: (632) 840-7000

FAX: (632) 817-8883; 891-2032

TELEX: 22068 PN; 45497 PM

PNB CAPITAL AND INVESTMENT CORP.

ADDRESS: 3/F PNB Financial Center, Roxas Blvd., Pasay City

TEL: (632) 526-3041; 526-3514; 526-3480 to 85

FAX: (632) 526-8484 or 37

E-MAIL: [email protected]

WEBSITE: http://www.philnabank.com/pnbcap.html

PACIFIC ASIA CAPITAL CORP.

ADDRESS: 14/F, Ayala Tower One and Exchange Plaza, Ayala Ave., Makati City

69

TEL: (632) 848-7149 to 52

FAX: (632) 848-6020

PENTACAPITAL INVESTMENT CORP.

ADDRESS: 10/F, ACT Tower, 135 Sen. Gil Puyat Ave., Salcedo Village, Makati City

TEL: (632) 815-8066; 812-5725; 818-3874

FAX: (632) 818-4853

PHILIPPINE COMMERCIAL CAPITAL, INC.

ADDRESS: 7/F, PCCI Bldg., 118 Alfaro St., Salcedo Village, Makati City

TEL: (632) 815-0661; 815-0636; 815-0743; 813-3410

FAX: (632) 816-3057; 813-3415

PHILIPPINE REGIONAL INVESTMENT DEVELOPMENT CORP.

ADDRESS: 28 N. Domingo St., New Manila, Quezon City

TEL: (632) 724-4355; 724-0877

FAX: (632) 724-3290

E-MAIL: [email protected]

RCBC CAPITAL CORP.

ADDRESS: 8/F. Y Tower II, Alfaro cor. Gallardo Sts., Salcedo Village, Makati City

TEL: (632) 818-4321 to 25; 817-3255; 817-3317; 817-3250; 817-7084; 817-3058

FAX: (632) 813-7083

RESOURCES & INVESTMENTS CORPORATE HOUSE, INC.

ADDRESS: Suite 1705-E, East Tower, PSE Center, Exchange Rd., Ortigas Center, Pasig City

TEL: (632) 637-1400 to 06

FAX: (632) 635-2082

E-MAIL: [email protected]

SB CAPITAL INVESTMENT CORP.

ADDRESS: 18/F, Security Bank Centre, 67776 Ayala Ave., Makati City

TEL: (632) 840-3740 to 42; 891-1092 to 95 direct line; 867-6788 loc. 2776 to 27779 trunkline

FAX: (632) 891-1089

TELEX: [email protected]

STATE INVESTMENT TRUST, INC.

ADDRESS: State Centre, 333 Juan Luna St., Binondo, Manila

TEL: (632) 242-1521 to 36

FAX: (632) 242-0614

SUMIGIN METRO INVESTMENT CORP.

ADDRESS: 20/F, Rufino Pacific Tower, 6784 Ayala Ave., Makati City

TEL: (632) 811-0845 to 49

FAX: (632) 811-0876

70

UBP CAPITAL CORP.

ADDRESS: 3/F, SSS Makati Bldg., Ayala Ave., Makati City

TEL: (632) 813-2778; 812-6356 or 59; 892-0011 loc. 2633 or 2634

FAX: (632) 813-2777; 818-9744

UCPB CAPITAL CORP.

ADDRESS: 14/F, UCPB Bldg., Makati Ave., Makati City

TEL: (632) 818-6763; 811-5832,

FAX: (632) 814-2923

UNICAPITAL, INC.

ADDRESS: 3/F, Majalco Bldg., Trasierra cor. Benavidez Sts., Legaspi Village, Makati City

TEL: (632) 892-0991 to 96; 893-6538 to 39

FAX: (632)818-2127

UNITED PACIFIC CAPITAL CORP.

ADDRESS: 12/F, Legaspi Suites, 178 Salcedo St., Legaspi Village, Makati City

TEL: (632) 892-8855; 892-1174 to 75

FAX: (632) 892-0215

E-MAIL: upcc [email protected]

URBANCORP INVESTMENTS, INC.

ADDRESS: 5/F, Urban Bank Center Urban Ave., Makati City

TEL: (632) 812-2501 to 04 843-0843 trunkline; debt & equity underwriting: 840-3031; project finance: 840-3033; USI-research: 840-3034; USI-sales: 840-3035; 840-0809

FAX: (632) 816-4668; 819-1278

WESTMONT INVESTMENT CORP.

ADDRESS: 7/F, Westmont Bank Bldg., 411 Quintin Paredes St., Binondo, Manila

TEL: (632) 243-3252

FAX: (632) 243-0639

58

UK Accounting and Auditing Firms

Grant Thornton http://www.grant-thornton.co.uk/ One of the UK's largest firms of Chartered accountants with offices throughout the country PKF http://www.pkf.co.uk/ PKF is one of the top ten largest firms of accountants in the UK. Lloyd Piggott http://www.lloydpiggott.co.uk Chartered accountants located in Manchester. Provide specialist services to IT contractors and the music and entertainment industry. A.B.Edwards & Co http://www.demon.co.uk/mitreho/abeco/index.htm Chartered accountants providing specialist advice for landowners and farmers PRB Martin Pollins http://www.prbmp.com/ On line accountancy and business advice. Dendy Neville http://dendyneville.co.uk Chartered accountants and business advisers located in Maidstone, Kent. Fletcher Greenwood and Co http://www.fgco.com Chartered accountants and registered auditors based in Bradford. Lubbock Fine http://www.lubbockfine.co.uk Chartered Accountants offering acquisitions and mergers and investment advice.

59

Philip A Beck http://www.insolvency.co.uk/ip/beck.htm Licensed Insolvency Practitioner based in Cambridge. Offers free initial consultation about liquidations, bankruptcy and voluntary arrangements. Burnett Swayne http://www.burnettswayne.co.uk/ Southampton based firm of chartered accountants, registered auditors and chartered tax advisers. H W Fisher http://www.hwfisher.co.uk London based chartered accountants. H & H Associates http://www.hhassociates.co.uk Certified management consultants and chartered accountants. Dennis R. Waters http://www.absite.com/drw/ Chartered accountant based in South West London. RBI World - http://www.rbiworld.com/ Consultants for businesses experiencing international expansion. Berg Kaprov Lewis http://www.bklchart.co.uk/ Chartered accountants based in London. Areas of speciality include services for computer contractors StamfordsHubbard http://www.stamfordshubbard.co.uk Small business accountancy practice in Worcestershire. Winters http://www.winters.co.uk Chartered accountants and registered auditors in London and Surrey.

Francis Clark http://www.francisclark.co.uk/ Chartered accountants located in the West Country. Peter's Elworthy and Moore http://www.pem.co.uk/ Cambridge based company providing accounting services and other financial services. BKL Weeks Green http://www.bkl.co.uk Specialist support for medical, education and agricultural markets. C M O'Brien and Company http://www.sbc.uk.com/ Accountancy services for small businesses in South London and the Southern Home Counties. Hooks http://www.hooks.co.uk Chartered accountants based in the Isle of Wight. Philip Hoyle FCCA - http://www.philiphoyle.co.uk A Chartered Certified Accountant working in a small business accountancy practice in Lancashire. Eacott Worrall http://www.eacott-worrall.co.uk Chartered accountants based in the Thames Valley. Services include setting up UK branches and subsidiaries for overseas companies. Birkett and Co. Ltd - http://www.birkettco.co.uk/ Based in Dorset. Offer accountancy and taxation services to individuals and companies Peter Fairgrieve - http://www.helpforsmallbusiness.co.uk Chartered accountants based in South Wales

60

Lonsdale & Partners - http://www.lonsdale.co.uk North West based firm of chartered accountants. Offering corporate finance and IT services. Berry and Co - http://members.aol.com/berryandco/ Chartered accountants and registered auditors based in Maidstone, Kent Lovewell Blake http://www.lovewell-blake.co.uk East Anglian chartered accountancy practice AGN Shipleys chartered accountants http://www.agnshipleys.com Providing accountancy services, detailed Budget analysis, and tax advice, to individuals and businesses, with offices in London, Godalming and Saffron Walden. Morris & Co http://www.moco.co.uk/ Part of a group of accountancy practices with offices in Chester, Shrewsbury, Welshpool, Wellington and Moreton. Graeme Tremaine and Associates http://www.tremaine.co.uk/ Survey based accountancy practice Jayson Newman http://www.jayson-newman.com Chartered accountants based in London. Provide a full range of financial services regulated by the FSA and offer a specialist division dealing with IT contractors. Saint and Co http://www.users.globalnet.co.uk/~saintco/ Chartered accountancy practice based throughout Cumbria and South West Scotland

Douglas Fairless http://www.douglasfairless.co.uk Chartered certified accountants, registered auditors and chartered tax advisers, located in Liverpool. Essex Abel Hodgkinson http://www.tax-accountants.co.uk Offer accounting and tax advice and services throughout Loughborough, Leicestershire and the East Midlands. Jonathan H. Marshall http://www.jhmarshall.com Provides independent stocktaking, auditing and consultancy service to the catering, licensed and leisure industries. Simpson Wreford and Co. http://www.simpsonwreford.co.uk/ British Chartered Accountants bringing more than 100 years of accounting experience to you via the Internet. John Pointon http://go.to/johnpointon Accounting, tax and company formation services. Blythens http://www.blythens.co.uk Chartered Accountants located in the East Midlands Blythe & Co http://www.blythe7.com/ Chartered Accountants & Registered Auditors who specialise in UK computer contractors. Blain Pritchard http://www.blainpritchard.co.uk

61

Chartered Certified Accountants and Registered Auditors specialising in the small business sector. Accounting & Computer Services http://www.ac-s.co.uk Accounting, computing, training and consultancy services to small businesses in the Mid-Sussex area. Barry Page & Co http://members.aol.com/pagept/ Services for one-man companies such as engineers, computer specialists etc., who may be working through agencies. Adders http://www.adders.co.uk Accountant based in Northampton Demack http://www.demack.co.uk Leyland based firm of Chartered Accountants Accounting & Computer Services http://www.ac-s.co.uk Accounting, computing, training and consultancy services to small businesses in the Mid-Sussex area. David J Beeny & Co. http://www.davidjbeeny.co.uk Chartered accountants and registered auditors in Dartmouth, Devon, UK. Gardiner Hunter & Catt http://www.gardinerhunter.co.uk/ Specialists in services to computer contractors. A C Mole & Sons http://www.acmole.co.uk Chartered accountants and Registered Auditors in Taunton and Bridgwater. Bromhead and Company - http://members.aol.com/bromheadco/

Chartered accountants based in Devon Morgan Griffiths http://www.morgan-griffiths.co.uk Chartered accountants, providing services to businesses and clients across Wales and England. Poynton Accountants http://www.gpbreakspear.co.uk Accountancy services and tax advice, based in Cheshire. David Smith Crosswaite - http://www.smithcrosswaite.co.uk Chartered accountants providing professional services to individuals and businesses nationwide. Morgan Griffiths http://www.morgan-griffiths.co.uk Chartered accountants, providing services to businesses and clients across Wales and England Poynton Accountants - http://www.gpbreakspear.co.uk Accountancy services and tax advice, based in Cheshire. N.R.Barton & Co. - http://www.nrbarton.co.uk Chartered Accountants based in Wigan, Lancashire. Riley and Co - http://www.riley52.demon.co.uk/ Accountants and registered auditors. Bishop Fleming - West Country Chartered Accountants http://www.bishopfleming.co.uk Bishop Fleming are chartered accountants operating from a number of towns and cities in England's West Country.

62

Abel http://www.abel.business.co. uk/acct_index.html Rochester based chartered accountants. Kellys, Chartered Accountants http://www.kellys.uk.co Sussex business advisors providing tax accounting audit consulting and financial services. Specialists in pop groups, media charities and trade associations Willis Scott http://www.willisscott.co.uk Chartered Accountants. Perrys http://www.perrysaccounts.co.uk Chartered and Certified accountants Stephen Quay http://www.stephen-quay-accountancy.co.uk Accountant and TAS Software sales and advice Michael Reader http://www.michaelreader.demon.co.uk Chartered accountant. Cook & Partners http://www.cookpartners.sagenet.co.uk/ Chartered accountants located in Hertford and Stevenage. Chartered Accountants Lancashire Cumbria and Yorkshire http://www.aporwin.co.uk/index.html Chartered Accountants, Lancashire Cumbria and Yorkshire, Accountants for all your Tax, Accountancy and Business Plan requirements Potter and Pollard - http://www.potterandpollard.co.uk Bournemouth Chartered accountants established over 50 years, offering a complete service. Initial consultation is free. Williams Allan - http://www.williamsallan.com/

Windsor based firm offering fixed price financial, management and technology services. Cresswell, Crabtree & Son http://www.cresswells.co.uk West Yorkshire chartered accountants and registered auditors Gardiner, Hunter and Catt http://itaccountant.virtualave.net Accountancy services UK computer contractor with offices close to Heathrow and in Brighton. Marjoram & Co Accountants http://www.marjoram-accountants.co.uk Accountants, VAT and taxation advisors. Based in Braintree and Clacton-On-Sea, Essex Accountant 4 U - http://www.accountant4u.ukgo.com Accountant offering full range of services to businesses throughout the UK. Internet based services Andrews Gibson - http://www.andrewsgibson.co.uk Accountants, taxation and business advisers. The Legg Group http://www.leggacc.co.uk/ Accounting and consulting services based in Maidstone and London. Achilles Accountancy - http://www.achillesaccountancy.co.uk/ Chartered accountants based in Sandbach, Cheshire. Danzig and Co http://danzig.co.uk Chartered Accountants based in Edinburgh Lewis & Co http://www.lewisandco.co.uk

63

Provider of general accountancy services and advice to small businesses in the Tameside area near Mancheste. Felton Associates http://www.feltons.co.uk Chartered accountants located in Wembley. Davidson Consulting http://www.davcon.demon.co.uk Accountants based in Aberdeen. Services include corporate finance and recovery. Online Outsourcing http://www.online- outsourcing. com/ index.htm UK accountancy service. Offers management accounts preparation service online. Kingscott Dix http://www.kingscott-dix.co.uk/ Chartered accountants with offices in Cheltenham and Gloucester. Davis Grant http://www.davisgrant.co.uk Chartered certified accountants and registered auditors. Micro-HELP (Scotland) http://www.mh-s.co.uk/as.htm Accountancy service located in Aberdeen. Browning Hotchkiss and Partners http://www.browninghotchkiss.com Chartered accountants. Site offers details of the Budget 2000. Taylor Rae http://www.taylor-rae.co.uk Chartered accountants and licenced insolvency practitioner. CWR http://www.cwr-accountants.co.uk/

Chartered accountancy practice in Lancaster and Morecambe H W Fisher http://www.hwfisher.co.uk/indexes/indexes.htm London based firm of chartered accountants M J Wood & Co http://www.mjw.co.uk Peterborough based firm of Chartered Certified Accountants and Registered Auditors Robert Dalby Accountancy Services http://www.robertdalby.co.uk Gravesend based accountant in Kent, specialising in expanding companies who cannot yet budget for the full services of in house financial staff. K D Chapman and Co. http://www.kdchapman.co.uk Accountancy and tax consultants. Usher Spiby Chartered Accountants http://www.usherspiby.com Offers full accountancy services and helpful advice on how to increase your profits and save tax.

64

ISA Accountants http://www.isa-accountants.co.uk Accountants, taxation and business advisers. Bay View Small Business Accountancy http://www.incometax.ukaccountant.net Accountant offering affordable accounts preparation, tax, vat, payroll, book-keeping and tax planning services via the internet. Sloan and Company http://www.accountantsloan.com Cheshire based Chartered Accountants offer a professional, prompt and personal attention.

• http://directory.google.com/Top/Regional/Europe/UnitedKingdom/Business_and_Economy/Financial_Services/Accounting/Firms/

UK Stockbrokers Barclays Stockbrokers http://www.barclays-stockbrokers.co.uk/ Share-price look-up and new issues information, with details of execution-only stock dealing by telephone, fee and commission-based advisory services and other products. Killik and Co. http://www.killik.co.uk/ Management and administration of client assets, with several branch offices in the Greater London Area, offering on-line account management and share dealing services to clients. Durlacher Stockbrokers http://www.durlacher.co.uk Durlacher is a research-led, new-media and emerging technologies stockbroker and investment firm, based in the City of London Brewin Dolphin Securities http://www.brewindolphin.co.uk An interactive site featuring share prices, Beginners Guides to the Stockmarket, market news, research and information about the Brewin Dolphin Group Charles Stanley http://www.charles-stanley.co.uk Share dealing on UK and international Stock Exchanges. Stockbrokers: advisory and discretionary portfolio management; execution-only; ISAs; and financial services. Greig Middleton Group http://www.greigmiddleton.co.uk Stockbroker and investment manager with over 20 UK and international offices, providing a personal service which includes share dealing,

65

offshore portfolio management, equity research, PEPs, ISAs and SIPPs The Share Centre http://www.share.co.uk/ Oxford-based stockbrokers with execution-only share dealing services and ISAs. Goy Harris Cartwright http://www.ghcl.co.uk UK stockbroking and investment management house offering internet trading, online portfolio valuation, stock prices, research and daily news. Pilling & Co Stockbrokers http://www.pilling.com/ Independent stockbrokers Since 1893 - provides services for ISAs, PEPs, SIPPs, share dealing, and investment services. European Stockbrokers http://www.europeanstockbrokers.co.uk Stockbrokers specialising in European equity. Sucden Commodity and Futures Brokers http://www.sucden.co.uk/ Commodity broker dealing in metal futures, soft commodities and foreign exchange with online technical analysis of sugar, cocoa, coffee and metal futures. Members of London Metal Exchange, CSCE and LIFFE. A1 Stockbroker http://www.a1stockbroker.com Stockbroker available for share and stockbroking advice Jarvis Investment Management http://www.jarvisim.co.uk/ Execution-only share dealing service and PEP and ISA management from stockbrokers in Tunbridge Wells, Kent.

UK Credit Card Merchant Services CharityCard http://www.charitycard.org/ Unique way for UK tax payers to give more to any charity, any time. Works like a credit card. Tax reclamation can give more for your favourite causes. CharityCard is operated by CAF (Charities Aid Foundation), a registered charity in its own right. Egg http://www.egg.com Credit card provided by Egg Internet bank. Money back and special Egg internet shopping area. Competitive interest rate and links to other financial products. Card offers special internet use safety guarantee. Capital One http://capitalone.co.uk Credit cards with a standard interest rate of 11.9% Goldfish http://www.goldfish.com Product information and application form for the Centrica credit card. Offers points on purchases with special money-off offers. Also Goldfish consumer guides and new investment products, including ISA provided by Norwich Union. American Express United Kingdom http://www.americanexpress.co.uk/ Product information, cash access locator and travel office services, with online account access for card-holders. Company Barclaycard http://www.company.barclaycard.co.uk/ Popular UK company charge card used by 100,000 businesses.

66

Shell Visa Card http://www.shellvisacard.co.uk/ Product information for credit card with no annual fee that lets you collect usage rewards easily. For UK residents only. Marbles http://www.getmarbles.co.uk On-line credit card offered by HFC Bank. Special internet safety guarantee. No annual fee and easy to sign up on-line. Credit Card Merchant Services Limited http://www.creditcardmerchantservices.ltd.uk Providers of online merchant accounts and affordable e-commerce solutions for new or existing businesses. Merchant Services in association with NatWest Bank. Multi-currency processing. Credit Card Buster http://www.creditcard-buster.com Interest free credit cards system. El Mercardo http://www.cablenet.co.uk/pages/mercardo/ourmerchant.php Credit card processing without the need for a Merchant Account. Credit Cards APRs Club http://www.credit-cards-aprs.co.uk/ Provides credit card interest rate comparisons for the UK.

56

US Accounting Associations

1. Academy of Accounting Historians http://weatherhead.cwru.edu/Accounting/ E-mail: [email protected] "The objectives of the Academy are to encourage research, publication, teaching and personal interchanges in all phases of Accounting History and its interrelation with business and economic history." 2. American Accounting Association (AAA) http://www.rutgers.edu/Accounting/raw/aaa/ E-mail: [email protected] "The American Accounting Association promotes worldwide excellence in accounting education, research and practice. Founded in 1916 as the American Association of University Instructors in Accounting, its present name was adopted in 1936. The Association is a voluntary organization of persons interested in accounting education and research." 3. American Association of Hispanic Certified Public Accountants (AAHCPA) http://www.aahcpa.org/ E-mail: [email protected] "The American Association of Hispanic Certified Public Accountants is a national organization with the primary purpose of helping Hispanic students, accountants and CPAs enhance their professional capabilities while expanding Hispanic representation in the nation's work force." The site has a special section for students with information on the CPA exam and becoming a CPA. 4. American Institute of Certified Public Accountants (AICPA) http://www.aicpa.org/

"The American Institute of Certified Public Accountants is the national, professional organization for all Certified Public Accountants. Its mission is to provide members with the resources, information, and leadership that enable them to provide valuable services in the highest professional manner to benefit the public as well as employers and clients." The site has news; information about conferences and CPE products and services; sections especially for educators, students, and members. 5. American Society of Military Comptrollers (ASMC) http://www.asmconline.org/ E-mail: [email protected] "ASMC is the non-profit educational and professional organization for persons, military and civilian, involved in the overall field of military comptrollership." This site provides general information about the organization, membership services, and a list of ASMC chapters by state. It also includes information about the ASMC's awards and research programs, career opportunities, and the armed forces comptroller. 6.American Society of Women Accountants (ASWA) http://www.aswa.org/ E-mail: [email protected] "ASWA was formed in 1938 to increase the opportunities for women in all fields of accounting... Members include partners in national, regional and local CPA firms, financial officers, controllers, academicians, financial analysts and data processing consultants, recent college graduates and women returning to the work force." The site has a directory of chapters, membership information, a schedule of area and national events, and scholarship information for accounting students. 7. American Woman's Society of Certified Public Accountants (AWSCPA) http://www.awscpa.org/ E-mail: [email protected] "Since its creation over seven decades ago, the American Woman's Society of Certified Public Accountants has been the voice of women in the accounting profession.

57

AWSCPA is the only organization devoted exclusively to the support and professional development of women CPAs. The Society is also a leader in addressing these concerns: Gender equity, The glass ceiling, Work and family issues. To accomplish [their] mission, AWSCPA offers in-depth support in six important areas: networking, advocacy, public awareness, leadership, recognition, and education." The site has information about meetings and conferences as well as current job opportunities. Some areas of the site are open to members only. 8.Association of Government Accountants(AGA) http://www.rutgers.edu/Accounting/raw/aga/ E-mail: [email protected] "The Association of Government Accountants is a professional association of more than 15,000 individuals representing executive levels in federal, state and local government agencies and departments." The site has informationon chapters, publications, conferences membership, and employment opportunities. 9. Association of Healthcare Internal Auditors (AHIA) http://www.ahia.org/ E-mail: [email protected] "AHIA is the professional organization for healthcare internal auditors. It is an international nonprofit organization. It is the only organization established for the purpose of fulfilling the professional needs of healthcare internal auditors. 10. Association of Practicing CPAs (APCPA) http://www.ap-cpa.org/ E-mail:[email protected] "The APCPA was established over 33 years ago in order to provide low cost CPE to its members. Much has changed during the past 33 years." Their special features "are [their] RAP sessions and [their] E-Mail Tax Rap." In the E-Mail Tax Rap, which is limited to APCPA members, "you'll ask and answer questions, receive FAQs, information on upcoming meetings and events, share job opportunities, etc

11. Australian Society of Certified Practising Accountants (ASCPA) http://www.cpaonline.com.au/ E-mail: [email protected] The ASCPA is dedicated to the professional development of accountants in Australia. In addition to information about the Society, the site has news and articles related to business, accounting, or tax 12. Certified General Accountants' Association of Canada (CGA-Canada) http://www.cga-canada.org/ E-mail: [email protected] "CGA-Canada is the association of 56,500 certified general accountants and CGA students.Certified General Accountants (CGAs) are professional accountants working in industry, commerce, finance, government and public practice." 13. Clearinghouse for Volunteer Accounting Services (CVAS) http://cpateam.com/cvas/ E-mail: [email protected] "An organization that matches accountants with community organizations. Volunteers share their skills with California's nonprofit organizations through two programs, the Technical Assistance Program and the Board Member Placement Program." The website describes CVAS's services, lists organizations that have been helped, and includes contact information for organizations wishing assistance and professionals who wish to offer their assistance. 14.European Accounting Association (EAA) http://www.bham.ac.uk/EAA/ E-mail: [email protected] "The EAA aims to link together the Europe-wide community of accounting scholars and researchers, to provide a platform for the wider dissemination of European accounting research and to foster and improve research." In addition to information about the organization, "this site contains full details of EAA congresses... These details include all calls, programme details and abstracts for papers presented at the Congress'."

58

15. Financial Accounting Standards Board (FASB) http://www.rutgers.edu/Accounting/raw/fasb/index.html E-mail: [email protected] "The mission of the Financial Accounting Standards Board is to establish and improve standards of financial accounting and reporting for the guidance and education of the public, including issuers, auditors, and users of financial information. About 1,000 corporations, banks, and other organizations are members of the Financial Accounting Foundation. Additionally, about 7,000 public accounting firms and individual CPAs are members through the Accounting Research Association of the American Institute of CPAs." 16.Financial Executives Institute (FEI) http://www.fei.org/ E-mail: [email protected] "We are the preeminent professional association for senior financial executives representing14,000 individuals from over 8,000 corporations throughout the United States and Canada. Membership driven, FEI provides peer networking opportunities, emerging issues alerts, personal and professional development and advocacy services to Chief Financial Officers,Controllers, Treasurers, Tax Executives, Finance and Accounting Professors in academia." 17.Institute of Internal Auditors (IIA) http://www.theiia.org/ E-mail: [email protected] "Established in 1941, The IIA serves more than 60,000 members in internal auditing, governance and internal control, IT audit, education, and security from more than 100 countries." The site includes information about the profession, including certification and career opportunities, as well as descriptions or full text versions of publications, event calendars, news releases, and more. 18.Institute of Management Accountants (IMA) http://www.imanet.org/

E-mail: [email protected] "The IMA is the leading professional organization devoted exclusively to management accounting and financial management as stated in our Mission and Vision Statements. IMA membership helps you stay abreast of the changes affecting the management accounting and financial management professions. It provides new insights and ideas in these evolving fields and gives our members ethical guidance as well." There's information here about the organization, continuing education, certification, and chapters. 19.National Association of Tax Practitioners (NATP) http://www.natptax.com/ E-mail: [email protected] "The National Association of Tax Practitioners (NATP), founded in 1979, is a nonprofit professional association dedicated to excellence in taxation. NATP was formed to serve professionals who work in all areas of tax practice. Members includeCPAs, individual practitioners, enrolled agents, accountants, attorneys, and financial planners." Information about educational programs, their research services, publications, state chapters, and hot issues in the field are available on site. Most services or programs listed are available to both members and nonmembers with members receiving a discounted rate. 20. National Society of Accountants (NSA) http://www.nsacct.org/ E-mail: [email protected] "The National Society of Accountants is a non-profit organization of professionals who provide accounting, tax preparation, financial and estate planning, and management advisory services to an estimated 4 million individuals and business clients. Most of the Society's 17,000 members are sole practitioners or partners in small to mid-size accounting firms."

59

21.National Society of Fund Raising Executives(NSFRE) http://www.nsfre.org/welcome/index.html E-mail: [email protected] "The National Society of Fund Raising Executives (NSFRE) is the professional association for individuals responsible for generating philanthropic support for a wide variety of not-for-profit, charitable organizations. Founded in 1960, NSFRE advances philanthropy through its more than 17,000 members in 149 chapters throughout North America." Included are the Code of Ethical Principles and Standards of Professional Practice, Donor Bill of Rights, guidelines for the "accountable not-for-profit organization," news items, membership and contact information.

60

UK Accounting Associations Institute of Chartered Accountants in England and Wales (ICAEW) http://www.icaew.co.uk Site contains information about the Institute, services to members, press releases and links. Chartered Institute of Management Accountants (CIMA ) http://www.cima.org.uk The professional body spcialising in financial management and cost accounting. The Institute of Chartered Accountants of Scotland ICAS http://www.icas.org.uk Provides a variety of services for both its members and their clients The Association of Accounting Technician( AAT) http://www.aat.co.uk Web site with information about the Association, benefits of membership, and student information The Association of Chartered Certified Accountant (ACCA) http://www.acca,org.uk Website containing information about ACCA and its qualifications, databases and resources and a range of online services

LEASING ASSOCIATIONS

61

Multi-country Associations Association of African Leasing Companies (AFROLEASE) c/o Leasing Company of Nigeria, Ltd., NIDB House,7th Floor, 61/73 Broad Street, Lagos, Nigeria Phone: 234.1.266.6443. Fax: 234.266.6463 the umbrella organization for the national leasing associations of Africa Asian Leasing Association (ASIALEASE the umbrella organization for the national leasing industry associations of Asia. European Computer Leasing & Trading Association (ECLAT) 1285 Stratford Road, Hall Green, Birmingham, West Midlands, B28 9AJ England Phone: 44.121.778.5327. Fax: 44.121.778.5924. E-mail: [email protected]. European organization for computer lessors, brokers, engineering, consultant and transport companies. European Federation of Equipment Leasing Company Associations (LEASEUROPE) Address: Avenue de Tervuren 267, B-1150, Brussels, Belgium. Phone: 32.2.778.0560. Fax: 32.2.778.0579. E-mail: [email protected] the umbrella organization for the national leasing industry associations of Europe Institute of International Container Lessors atin American Leasing Association (FELALEASE) the umbrella organization for the national leasing industry associations of South America. Other Multi-country Associations Association of African Development Finance Institututions (AADFI) Address: 01 BP 1387, Abidjan 01, Cote d'Ivoire. Phone: 225.20.40.90. Fax: 225.22.73.44. E-mail: [email protected].

National United States American Automotive Leasing Association (AALA) Address: 1001 Pennsylvania Ave. NW, Suite 600 South, Washington DC 20004 USA. Phone: 1.202.6224.7292. Fax: 1.202.624.7222. the national fleet-oriented vehicle lessors association. Association for Government Leasing and Finance the national association for equipment lessor's who specialize in leasing to municipal, state and federal governments. Eastern Assocaiton of Equipment Lessors (EALA) Address: 600 Mamaroneck Ave., Harriston, NY10526 USA Phone: 1.914.381.5829 a regional association generally for equipment lessors located in the Eastern United States Equipment Leasing Association (ELA) Address: 4301 N. Fairfax Drive Suite 550, Arlington, VA 22203-1627 USA. Phone: 1.703.527.8655. Fax: 1.703.527.2649. E-mail: [email protected]. the national equipment leasing association for the United States. Mid-America Association of Equipment Lessors formerly IAEL, founded in 1980. Address: 333 W. Wacker Drive, Suite 1750, Chicago IL 60606. National Association of Equipment Lease Brokers (NAELB) Address: P.O. Box 302, Wayne, PA 19087 USA. Phone: 1-800-996-2352. Fax: 1-610.687.4305. E-mail: [email protected]. the national equipment lease brokers' association National Assocaiton of Fleet Administrators (NAFA) Address: 120 Wood Ave. S., Iselin, New Jersey 08830 USA. Phone: 1.201.494.8100. the national vehicle fleet administrators' association. National Vehicle Leasing Association (NVLA)

62

the national vehicle lessors association. Truck Renting and Leasing Association (TRALA) Address: 1725 Duke Street Suite 600, Alexandria VA 22314 USA. United Association of Equipment Leasing(UAEL) Address: 520 Third Street, Suite 201, Oakland, CA 94607-3520. Phone: 1.510.444.9235. Fax: 1.510.444.1346. a national equipment leasing industry association. Wisconsin Association of Equipment Lessors (WAEL) Australia Australian Equipment Lessor Association (AELA) the national equipment leasing association for Australia. Australian Finance Conference (AFC) the National Association of Finance Companies. Australian Fleet Lessors Association the national fleet vehicle lessor's association. Austria Verband Osterreichischer Leasing Gesellschaften the national equipment leasing association for Austria. Belarus Belarusan Lessors' Union Address: PO Box 265, 220098, Minsk--98, Belarus. Phone/Fax: 375.0172.28.60.94. the national equipment leasing association for Belarus Belgium Association Belge des Enteprises de Leasing the national industry association for Belgium. Brasil Associacao Brasileira das Empresas de Leasing the national industry association for Brasil Canada

Canadian Finance and Leasing Association/ Association canadienne de financement et de location (English/Franais) Address: 151 Yonge Street, Suite 1210 Box 7, Toronto, Ontario M5C 2W7, Canada. Phone: 1.416.860.1133. Fax: 1.416.860.1140. E-mail: [email protected] the national industry association for Canada Chile Chilean Leasing Company Association the national industry association for Chile China (including Hong Kong) Hong Kong Equipment Leasing Association the equipment leasing association of Hong Kong Colombia FEDELEASING Phone: 571.622.7350; 571.622.7361; 571.622.7383; 571.622.7384; 571.622.7389. Fax: 571.622.7383. E-mail: [email protected]. the national equipment leasing association for Colombia. Czech Republic Association of Leasing Companies of the Czech Republic the national equipment leasing association of the Czech Republic. Denmark Danske Finansieringsselskabers Forening the national equipment leasing association for Denmark. Finland Finnnish Finance Houses Association the national equipment leasing industry representative group for Finland. France Association Francaise des Societes Financieres the national equipment leasing association of France. Germany Arbeitskreis der Banken und Leasing--Gesellschaften der Auto-Mobilwirtschaft the banks and leasing working group of German automobile manufacturers

63

Bundesverband Deutscher Lesing-Gesellschaften E.V the national equipment leasing association of Germany. Interessenverband Deutscher Leasing-Unternehmen E.V Greece Association of Greek Leasing Companies the national equipment leasing association of Greece Hungary Hungarian Leasing Association the national equipment leasing association of Hungary. India Association of Leasing and Financial Services Companies Address: Agra Building, 1st Floor, 121 M.G. Road, Opp. Bombay University, Fort, Mumbai 400 023 India. Phone: 91.22.267.5400/5500/6409 Fax: 91.22.267.5600. the national equipment leasing association of India. Indonesia Indonesian Leasing Association the national equipment leasing association of Indonesia Ireland Irish Finance Houses Association the association representing the equipment leasing industry in Ireland Israel Israel Equipment Lessors Association the national equipment leasing association for Israel Italy Associazione Italian Leasing (ASSILEA) Address: Piazza di Priscilla, 4-00199, Roma Italia. Phone: 039.06.8621.1271. Fax: 039.06.8621.1214. E-mail: [party's name]@ assilea.it the national equipment leasing association for Italy Japan Japan Leasing Association

the national equipment leasing association for Japan. Korea, South Korea Leasing Association the national equipment leasing association for Korea Luxembourg Association Luxembourgeosie des Societes de Leasing the national equipment leasing association of Luxembourg Malaysia Equipment Leasing Assocation of Malaysia (ELAM) the national equipment leasing association for Malaysia. Mexico Associacion Mexicana de Arrendadoras Finanieras AC the national equipment leasing association of Mexico Morocco Professional Association of Moroccan Lesing Companies (APROBAIL) the national equipment leasing association for Morocco Netherlands Nederlandse Vereniging Leasemaatschappijen the national equipment leasing association for the Netherlands. Vereniging van Nederlandse Autoleasemaatschappijen (VNA) the national vehicle leasing association for the Netherlands Nigeria Equipment Leasing Association of Nigeria (ELAN) the national equipment leasing association for Nigeria. Norway

64

Finansieringsselskapenes Forening ( the Association of Norweigan Finance Houses) the association representing the equipment leasing industry in Norway. Pakistan Leasing Association of Pakistan the national equipment leasing association for Pakistan. Peru Asociacion Peruana de Empresas de Leasing the national equipment leasing association for Peru. Philippines Philippine Association of Finance Companies, Inc. (PAFCI) the association representing the equipment leasing in the Philippines. Poland Association of Leasing Companies in Poland Address: 02-055 Warszawa, ul. Filtrowa 71a m.3, Warsaw, Poland. Phone: 0.22.25.19.43; 0.58.46.84.54. Fax: 0.22.25.19.43; 0.58.46.80.15. the national equipment leasing association for Poland Portugal Associacao Portuguesa de Empresas de Leasing the national equipment leasing association of Portugal Russia Rosleasing the leasing association of the Russian Federation Singapore Leasing Association of Singapore the national equipment leasing association for Singapore South Africa Independent Car Leasing Association (ICRA). Address: PO Box 37589, Valyland, 7978,South Africa. Phone: 27.021.782.6636. Fax: 27.021.782.3316 South African Vehicle Renting and Leasing Association (SAVRALA).

Address: PO Box 2940, Randburg, 2125, South Africa. Phone: 27.011.789.2542. Fax: 27.011.789.4525. Spain Associacion Espanola de Leasing the national equipment leasing association of Spain Lanka--the national equipment leasing association of Sri Lanka. Leasing Association of Sri Lanka Sweden Association of Swedish Finance Houses the national equipment leasing and finance industry trade association of Sweden. Switzerland Verband Schweizerischer Auto-Leasing-Gesellschaften the national association of Swiss auto leasing companies. Verband Schweizerischer Leasing-Berater the national association of Swiss equipment leasing consultants Verband Schweizerischer Leasing-Gesellschaften the national association of Swiss equipment leasing companies Taiwan Taipei Leasing Association the association of Taipei equipment leasing companies Thailand Thailand Leasing Association the national equipment leasing association for Thailand. Turkey Financial Leasing Association of Turkey the national equipment leasing association of Turkey United Kingdom British Lease Brokers Association the national lease brokers association for the United Kingdom British Vehicle Rental and Leasing Association

65

the national auto lease companies association for the United Kingdom Finance and Leasing Association Address: Imperial House, 15-19 Kingsway, London WC2B 6UN England Phone: 44.171.836.6511 Fax: 44.171.420.9600 the national equipment leasing association of the United Kingdom

• http://rosleasing.ru/leasing_world/world. htm

66

67

Table 16 Members with GATS Commitments in Accountancy by Sub-Sectors

Country Accounting Auditing Bokkeeping No. of sub-sectors

Antigua and Barbuda X x x 3 Argentina X x x 3 Aruba X 1 Australia X x x 3 Brazil x x x 3 Brunei Darussalam x 1 Bulgaria x x 2 Canada x x x 3 Chile x x 2 Colombia x x 2 Cuba x x Cyprus x x x 3 Czech Republic x x x 3 Dominican Republic x x 2 Ecuador x x x 3 El Salvador x x 2 European Union (15 countries)

x x x 3

Gambia x x x 3 Guyana x x x 3 Hong Kong x x x 3 Hungary x x x 3 Iceland x x x 3 Israel x 1 Jamaica x x x 3 Japan x x x 3 Korea RP x x x 3 Lesotho x 1 Liechtenstein x x 2 Malawi x x x 3 Malaysia x x x 3 Maldives x x x 3

68

Mexico x x x 3 Magnolia x 1

Morocco x x x 3 Netherlands Antilles x 1 New Zealand x x x 3 Norway x x x 3 Panama x 1 Papua New Guinea x x x 3 Peru x x x 3 Poland x x x 3 Qatar x x x 3 Sierra Leone x x x 3 Singapore x x s Slovak Republic x x x 3 Slovenia x x x 3 Solomon Islands x x x 3 South Africa x 1 Switzerland x x x 3 Thailand x x x 3 Turkey x x x 3 United Arab Emirates x x x 3 United States x x x 3 Venezuela x x 2 Zambia x x x 3 NO. OF COUNTRIES 65 62 55 PCI Leasing and Finance, Inc. is a wholly-owned subsidiary of PCIBank. It is the principal business unit of PCIBank engaged in leasing and financing. PCI Leasing serves commercial clients, providing direct leasing, sale and leaseback arrangements and dollar-denominated leases. The company's financing products include commercial and consumer loans, installment paper purchases, receivable discounting, employee personal loans and receivable factoring. Assets financed include trucks, office equipment, real property and agricultural machinery.

Euromonitor’s forecast by the year 2000, showed that credit cards are to be

the largest sector of the market including North America and Asia-Pacific. North America is expected to remain the largest regional market for all types of card , most especially store cards. North America's share of the store card market is forecast to stand at around 73% in year 2000 while its share of the debit card market should rise steadily after 1995 to around 37% by 2000.

Western Europe's share of the global payment cards market is expected to fall in

the second half of the decade as other regional markets display more buoyancy. The

69

region's share of the debit card sector is for example expected to slip to less than 20% by 2000 compared to almost 32% in 1995.

In the Asia-Pacific region, an increase is expected in all four market sectors

over the next five years. Its share of the global charge card market is forecast to rise from around 22.1% in 1995 to around 32.5% in 2000. Table 26. Regional Market: Forecast Number of Payment Cards in Circulation by Sector 1995/2000 (In Millions)

1995 1996

1997

1998

1999

2000

% growth 1995-2000

North America 1,073.2 1,158.2 1,257.0 1,363.4 1,488.4 1,606.3 49.7 Asia-Pacific 372.2 408.5 464.9 531.8 602.6 687.2 84.6 Western Europe 232.3 239.4 244.9 249.8 253.9 256.9 10.6 Latin America 102.5 113.3 125.4 139.1 154.7 173.3 68.9 Southern Europe 75.5 80.5 85.0 89.2 93.4 97.0 26.8 Eatern Europe 1.2 3.5 8.8 15.9 23.7 30.6 2,450.0 Africa & Middle East

7.9 9.5 11.4 13.6 16.4 19.7 149.4

TOTAL 1,865.9 2,023.1 2,197.4 2,402.8 2,633.1 2,871.0 53.9 Source:Euromonitor: Global Market Information Database

Based on Euromonitor 1995 Global Market Information Database, the number of charge cards in circulation is forecast to increase by more than 50% and to reach almost 85 million by 2000. Most of the expansion will result from increasing rates of ownership in the emerging markets. Demand is also increasing for corporate purchasing charge cards of the type now marketed by American Express. Table 27. World Market: Forecast Number of Payment Cards in Circulation by Sector 1995/2000 (In Millions)

1995 % 2000 % %growth 1995/2000

Credit cards 745.4 40.0 1,194.9 41.6 50.1 Store cards 559.0 35.9 870.9 30.3 30.2 Debit cards 395.2 21.2 720.3 25.1 82.3 Charge cards 55.3 3.0 84.9 3.0 53.5 Total 1,865.9 100.0 2,871.0 100.0 53.9

Source: Euromonitor: 1995 Global Market Information Database Global spending on payment cards is forecast to reach US$3,536.3 billion by

2000, 82.4% increased compared to 1995. Spending on debit cards is expected to increase by 94% in 2000. The full potential of this card is yet to be realized in many markets, a situation which should be corrected as the decade progresses. Debit cards spending in the US is expected to increase four fold by year 2000.

Spending on credit cards is also expected to remain high over the next five years rising by an estimated 89% by 2000. This will be enhanced by an increase in the number of outlets which accept credit cards and by the attractions to card holders of the various card user reward schemes being offered by the major card issuers. It is

70

also expected that first time holders of credit cards will also contribute to the overall increase in the credit cards expenditure levels.

Cash outlay on charge cards is also forecast to increase by over 80% between 1995 and 2000 due to the general trend for higher travel and entertainment spending. Most of the leading charge card companies have devised particularly attractive user reward schemes and expected to result to high spending levels.

On the other hand, spending on store cards is forecast to increase by 50% by 2000. This sector has less scope for large spending rises than the other three types of card. Many stores offered discount schemes in order to sustain average annual increases in store card spending. Table 28. World Market: Forecast Spending On Payment Cards By Sector

1995/2000 US$ billion (constant 1995 prices)

1995

%

2000

% %growth 1995/2000

Credit cards 1,049.0 40.0 1,997.2 55.9 88.5 Store cards 364.1 35.9 705.5 20.0 93.8 Debit cards 327.5 21.2 491.1 13.9 50.0 Charge cards 197.8 3.0 362.5 10.3 83.3 Totals 1,938.4 100.0 3,536.3 100.0 82.4 Source: Euromonitor: Global Market Information Database

Factoring. Factoring is essentially useful to manufacturing, industrial and trading companies which accumulate substantial receivables out of their usual business transactions. This enables cash flow to the client and help sustain sales volume.

A business needs sufficient capital to meet its current commitments but if money is tied up in receivables, the business can be irreparably harmed. Receivables should be converted within a minimum period of time so that the company does not lose its liquidity, exhaust its credit and find its growth potential limited. The firm can reduce its receivables by having better credit policies, better policing of credit or by more diligent collection policies.

Factoring is a sale of accounts receivable on a without recourse, notification basis. In a factoring arrangement, a company sells its accounts receivable to a bank or finance company called factors.

Factors are companies involved in purchasing outright the accounts receivable of their

customers. The factor is responsible for granting credit to the business customers in exchange for their accounts receivable. In other words, the factor assumes all risks in regard to granting credit and collections.

There are two types of factoring payments: with notification and without notification. Under

payments with notification, the customers paid directly to the factor while payment without notification, customers pay directly to the seller of receivables.

Moreover, the factor may withhold a certain percent of the value of accounts receivable as

protection from any customer returns and allowances. The amount withheld is known as "factor's holdback". Final settlement of the factor’s holdback is made only after the factor receivables have been fully collected.

71

1.2 Contribution to the Economy

Table 5 1998 Value (in Million

PhP) % Share to the Economy

Accounting Services GVA Philippine GDP 888,875 Philippine GNP 931,127 Accounting Services Employment pax) 9,997 Philippine Employment (pax) 31,278,000 Financial Services GVA Philippine GDP 888,875 Philippine GNP 931,127 Accounting Services Employment pax) 59,742 Philippine Employment (pax) 31,278,000