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Republika NG Pilipinas: Republic of The Philippines
Republika NG Pilipinas: Republic of The Philippines
Republika ng Pilipinas
Manilaa
Capital 14°35′N
120°58′E
Quezon City
Largest city
14°38′N 121°02′E
Filipino
Official languages English
P.E.S.T.L.E
POLITIC
Corporate Taxes
Tax Rate
The rate is 30% on net income but there are some preferential rates and
exemptions. Preferential rates vary from 2 to 20%. Regional headquarters
Income Tax
are taxed at 10%.
These are taxed like income, except those from selling shares in
companies (5-10% if not exchanged on the Stock Exchange; half of 1% of
Capital Gains Tax the selling price otherwise), and those from selling real estate not used for
business purposes (6%).
Foreign companies are subject to the same tax rates as resident companies.
Capital Gains Taxation
In the Philippines, capital gains are taxed between 5% (on the first PHP 100.000) and
10% thereafter (for unlisted companies securities). Besides, capital gains on property, as
for private individuals, is taxed at 6%.
Main Allowable Deductions and Tax Credits
The Omnibus Investment Code of 1987 and the Special Economic Zone Act of 1995
provide for fiscal incentives such as a suspension of income tax. For any additional
information access the PKF Tax guide on the Philippines.
Other Corporate Taxes
Tax of 3 to 7% on companies in certain sectors (banking, insurance, finance, transport).
Various duties apply at various rates depending on the type of document.
Other Domestic Resources
Consult Doing Business Website, to obtain a summary of the taxes and mandatory
contributions.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The
Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index,
the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the
Higher the Level of Investor Protection.
Accounting Rules
Accounting System
Accounting Standards
PAS (Philippine Accounting Standards)
Accounting Regulation Bodies
Board of Accountancy
Accounting Law
Philippine Accountancy Act of 2004
Difference Between National and International Standards (IAS/IFRS)
In 2005, PAS/PFRS standards were amended to conform completely with IFRS/IAS
standards.
Accounting News
Accounting Times
Journal of Accountancy
Accounting Practices
Tax Year
The fiscal year begins on 1 January and ends on 31 December of the same year.
Accounting Reports
The general balance sheet and/or the declaration written under oath of the non holding of
an annual meeting, and the financial statements.
Publication Requirements
Companies must publish an annual financial report and submit it to the Securities and
Exchange Commission (SEC).
Accountancy Profession
Accountants
The Accounting Standards Council (ASC)
The Economy of the Philippines is the 36th largest in the world, according to 2016 International
Monetary Fund statistics, and is the 3rd largest economy in the ASEAN after Indonesia and Thailand. The
Philippines is also one of the emerging markets.
The Philippines is considered a newly industrialized country, which has an economy transitioning from
one based on agriculture to one based more on services and manufacturing. In 2016, GDP by Purchasing
power parity was estimated to be at $811.726 billion
Primary exports include semiconductors and electronic products, transport equipment, garments,
copper products, petroleum products, coconut oil, and fruits. Major trading partners include the Japan,
China, United States, Singapore, South Korea, the Netherlands, Hong Kong, Germany, Taiwan, and
Thailand. The Philippines has been named as one of the Tiger Cub Economies together with Indonesia,
and Thailand. It is currently one of Asia's fastest growing economies. However, major problems remain,
mainly having to do with alleviating the wide income and growth disparities between the country's
different regions and socioeconomic classes, reducing corruption, and investing in the infrastructure
necessary to ensure future growth.
The Philippine economy is projected to be the 16th biggest in the world by 2050
Economy of the Philippines
From top to bottom. Bonifacio Global City, Ortigas Center, Makati City
Statistics
industry: 33.48%
services: 57.03%
(2015)[4]
Inflation (CPI) 2.5% (November 2016)[5]
Population 21.6%[6]
below poverty
line
Gini coefficient 43.04 (2012)[7]
industry: 15%
(2012 est.)[9]
External
China 12.4%
Singapore 7.3%
Germany 4.1%
Taiwan 3.5%
Thailand 3.4%
Japan 8.4%
Taiwan 7.8%
Singapore 6.8%
Thailand 5.4%
Indonesia 4.5%
Germany 3.8
(2013 est.)[15]
FDI stock $8 billion (April 2016)[17]
Gross external $75.3 billion (2015)[18]
debt
Public finances
Public debt 35.5% of GDP (Q3 2016)[19]
BBB (Domestic)
BBB (Foreign)
Moody's:[23]
Baa2
Outlook: Stable
Fitch:[24]
BBB-
Outlook: Positive
Foreign $85.90 billion (August 2016)[25]
reserves
The Philippine economy has been growing steadily over decades and the International Monetary
Fund in 2014 reported it as the 39th largest economy in the world. However its growth has been
behind that of many of its Asian neighbors, the so-called Asian Tigers, and it is not a part of the
Group of 20 nations. Instead it is grouped in a second tier for emerging markets or newly
industrialized countries. Depending on the analyst, this second tier can go by the name the Next
Eleven or the Tiger Cub Economies.
In the years 2012 and 2013, the Philippines posted high GDP growth rates, reaching 6.8% in 2012
and 7.2% in 2013,[66][67][68]the highest GDP growth rates in Asia for the first two quarters of 2013,
followed by China and Indonesia.[69]
A chart of selected statistics showing trends in the gross domestic product of the Philippines using
data taken from the International Monetary Fund
2016[74]
Year 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979
GDP growth % 4.6 4.9 4.8 9.2 5 6.4 8 5.6 5.2 5.6
Year 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989
GDP growth % 5.149 3.423 3.619 1.875 -7.324 -7.307 3.417 4.312 6.753 6.205
Year 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
GDP growth % 3.037 -0.578 0.338 2.116 4.388 4.679 5.846 5.185 -0.577 3.082
200 200 200 200 200 200 200 200 200 200 201 201 201 201 201 201 201
Year
0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6
GDP
4.41 2.89 3.64 4.97 6.69 4.77 5.24 7.11 4.15 1.14 7.63 6.1[
growth 3.6 6.8 7.2 74] 5.8 6.8
1 4 6 0 8 8 3 7 3 8 2
%
SOCIAL
The current population of the Philippines is 103,377,311 as of Sunday, March 26, 2017,
based on the latest United Nations estimates.
The Philippines population is equivalent to 1.38% of the total world population.
The Philippines ranks number 13 in the list of countries (and dependencies) by
population.
The population density in the Philippines is 348 per Km2 (902 people per mi2).
The total land area is 298,192 Km2 (115,133 sq. miles)
44.8 % of the population is urban (46,543,718 people in 2017)
The median age in the Philippines is 24.4 years.
2017 103,796,832 1.51 % 1,546,699 -120,000 24.4 3.01 348 44.8 % 46,543,718
2016 102,250,133 1.54 % 1,550,738 -120,000 24.4 3.01 343 44.8 % 45,842,660
Education
Education in the Philippines is managed and regulated by the Department of Education (DepEd),
Commission on Higher Education (CHED) and Technical Education and Skills Development Authority
(TESDA). DepEd is responsible for the K–12 basic education; it exercises full and exclusive control over
public schools and nominal regulation over private schools, and it also enforces the national curriculum
that has been put in place since 2013. CHED and TESDA, on the other hand, are responsible for higher
education; CHED regulates the academically-oriented universities and colleges while TESDA oversees the
development of technical and vocational education institutions and programs in the country.
Human rights in the Philippines pertains to the concept, practice, and issues of human rights within the
Philippine archipelago. The concept of "human rights," in the context of the Philippines, pertains mainly
(but is not limited) to the civil and political rights of a person, living in the Philippines by reason of the
1987 Philippines Constitution.
Human rights are a justified set of claims that set moral standards to members of the human race, not
exclusive to a specific community or citizenship.[3] Membership in the human race is the sole
qualification to obtain these rights.[3] Human rights, unlike area-specific conventions of international
laws (e.g. European Convention on Human Rights and International Covenant on Civil and Political Rights
and on Economic, Social and Cultural Rights),[3] are universally justifiable as it pertains to the entire
human race, regardless of geographical location.
Labor Code
Prior to the Marcos Martial Law Era in the Philippines, all labor laws were not codified.[7] President
Marcos tasked a committee from the then-called Department of Labor (now the Department of Labor
and Employment or DOLE) to consolidate all the existing labor laws of the Philippines. The committee
was composed of: Amado G. Inciong, the then Undersecretary of Labor, acting as the chairman of the
committee, Director Ricardo Castro, the head of the subcommittee on Labor Relations, Director Diego
Atienza, the head of the subcommittee on Labor Standards, and Director Rony Diaz, the head of the
subcommittee on Employment and Training. The result was Presidential Decree No. 442 ("PD 442") or
"A Decree Instituting the Labor Code and Consolidating Labor and Social Laws to Afford Protection to
Labor, Promote Employment and Human Resources Development and Insure the Industrial Peace Based
on Social Justice," otherwise known as the "Labor Code of the Philippines". The consolidation was
finished on 1 May 1974 and took effect on 1 November 1974.[8]
The Labor Code is the legal code governing employment practices and labor relations in the Philippines.
The Labor Code stipulates standards in terms of wages and monetary benefits, hours of work, leaves,
rest days, holiday pays, and benefits, among others.
Minimum Wage
Remunerations or earnings paid by an employer to an employee for service rendered are called
wages. Article 99 of the Labor Code of the Philippines stipulates that an employer may go over but never
below minimum wage. Paying below the minimum wage is illegal.[9] The Regional Tripartite Wages and
Productivity Boards is the body that sets the amount for the minimum wage. As in the case of the
Philippines, the minimum wage of a worker depends on where he works.
According to Presidential Decree No. 851, an employer is mandated by law to give his employees
thirteenth month pay. The thirteenth month pay required by law should not be less than one twelfth of
the total basic salary earned by an employee within a calendar year.[10] The thirteenth month pay is
exempted from being taxed by the government. The photo below is from the Department of Labor and
Employment which shows the computation of a hypothetical thirteenth month pay.
Retirement Pay
Article 287 of the Philippine Labor Code states that, the retiring age of an employee is sixty (60)
years or more but not beyond sixty-five (65) years. The retiring employee who has served at least five (5)
years in the said establishment shall be entitled to retirement pay equivalent to at least one-half (1/2)
month salary for every year of service, a fraction of at least six months being considered as one whole
year.[9] "The term 'one-half month salary' shall mean fifteen (15) days plus one twelfth (1/12) of the
thirteenth month pay and the cash equivalent of not more than five (5) days of service incentive
leaves."[9]
Hours of Work
Article 83 and 84 of the Philippine Labor Code, the normal hours of work of an employee shall not
exceed eight (8) hours a day. Hours worked shall include all time that an employee is required to be in
the workplace and all time during which an employee is permitted to work. Short breaks during working
hours shall be counted as hours worked.[9]
Overtime Work
Article 87 of the Philippine Labor Code states that any work that exceeds eight (8) hours is
considered overtime work. This is legal provided that the employee is paid for the overtime work. The
computation for the wage is his regular wage plus at least twenty-five percent (25%) of his hourly wage.
Work performed beyond eight hours on a holiday or rest day shall be paid an additional compensation
equivalent to the rate of the first eight hours on a holiday or rest day plus at least thirty percent (30%)
thereof.[9]
Article 86 of the Philippine Labor Code explains that the night shift is between ten o'clock in the
evening and six o'clock in the morning. A night shift differential is payment of not less than ten percent
(10%) of the regular hourly wage of an employee for each hour of work performed during this time
period.[9]
Rest Days
An employer is required to provide each of his employees a rest period of not less than twenty-four
(24) consecutive hours after every six (6) consecutive normal work days, as stated in Article 91 of the
Philippine Labor Code. The employer shall determine and schedule the weekly rest day of his
employees. He must respect the preference of employees as to their weekly rest day when such
preference is based on religious grounds.[9]
If an employer requires his employee to work on his scheduled rest day, he shall be paid an
additional compensation of at least thirty percent (30%) of his regular wage.[9]
If the employee has no regular work days or rest days, and he is required by his employer to work
on a Sunday and on a holiday, he shall be paid an additional compensation of at least thirty percent
(30%) of his regular wage.[9]
Holiday Pay
Special Non-Working Holiday Pay
If an employee works on 21 August, Ninoy Aquino Day, 1 November, All Saints Day, and/or 31
December, Last Day of the year, his wage will be:
for first eight (8) hours of work - plus thirty percent (30%) of the daily rate
for excess of eight (8) hours of work - plus thirty percent (30%) of hourly rate on said day
If an employee works on 21 August, Ninoy Aquino Day, 1 November, All Saints Day, and/or 31
December, Last Day of the Year and it falls under his rest day, his wage will be
for the first eight (8) hours of work - plus fifty percent (50%) of the daily rate
excess of eight (8) hours of work - plus thirty percent (30%) of hourly rate on said day
Article 93 and 94 of the Philippine Labor Code states that a worker shall be paid his regular daily
wage during regular holidays whether or not the employee goes to work. The employer can require an
employee to work on any holiday but the employee must be paid an amount double his regular wage.[9]
If the holiday falls under the employee's rest day, and he decides to work, his wage for the first
eight (8) hours of his work will be doubled. If he works for more than eight (8) hours, then thirty percent
(30%) of his hourly rate will be added to his wage for that day.
Article 95 of the Philippine Labor Code states that if an employee has given at least one (1) year of
service, he shall be entitled to a yearly service incentive leave of five (5) days with pay.[9]
Paternity Leave
The paternity leave is not found in the Labor Code. The basis for the paternity leave is Republic Act
No. 8187, otherwise known as the "Paternity Leave Act of 1996″. RA 8187 states that a married male
employee is allowed to take 7 days off work with full pay for the first four deliveries.
Maternity Leave
Republic Act No. 7322 states that a pregnant employee who has paid at least three monthly
maternity contributions to the Social Security System in the twelve-month period preceding the
semester of her childbirth, abortion or miscarriage and who is currently employed shall be paid a daily
maternity benefit equivalent to one hundred percent (100%) of her present basic salary, allowances and
other benefits or the cash equivalent of such benefits for sixty (60) for normal delivery a seventy-eight
(78) for caesarian delivery.[11]
The maternity leave can be extended without pay if any illness medically certified are to come as a
result of the pregnancy, delivery, abortion, or miscarriage which leaves the woman unfit to work.[9]
As with the paternity leave, the maternity leave is only valid for the first four deliveries.
Employment of Women
Article 132 of the Labor Code of the Philippines requires employers to:
Provide seats proper for women and let them use these seats when they are free from work or
during work hours provided that they can perform their duties in this position without sacrificing
efficiency.
Establish separate toilet rooms for men and women and provide at least a dressing room for
women.
Determine appropriate minimum age and other standards for retirement or termination in special
occupations such as those of flight attendants and the like.[9]
Discrimination
Article 134 of the Labor Code of the Philippines states that a woman cannot be paid a lesser
compensation than a man for work of equal value.
Favoring a male employee over a female employee with regard to promotion, training
opportunities, study, scholarship grants based on only their sexes is also illegal.[9]
Prohibited Acts
Deprive any woman employee of any of the benefits mentioned above and in Articles 130-136 of
the Labor Code or to terminate any woman employee for the purpose of stopping her from enjoying
said benefits.
Terminate a woman because of her pregnancy while on leave or in confinement due to it.
Discharge or refuse the admission of such woman from returning to her work for fear that she
may again be pregnant.[9]
Security of Tenure
Article 279 of the Labor code discusses that if an employee is already a regular employee, the
employer cannot terminate his services without just cause and due process. An employee unjustly
dismissed from work can return to it without any losses of benefits, privileges, and allowances from the
time he was unjustly dismissed to the time of his actual return.[9]
An employee will be considered a regular employee if he has been able to performs tasks that are
necessary in the business or trade of the employer, except when the employee was hired for a specific
project and its completion also signifies the employee's termination and if the nature of work or services
is seasonal and the employment is for the duration of the season. The employment is said to be casual if
his nature of work has not been covered by the aforementioned sentences. After a year of rendering
service, whether continuous or not, an employee shall be deemed regular, as stated by Article 280 of
the Philippine Labor Code.[9]
Probationary Employment
Article 281 of the Labor Code states that probationary employment should not go over six (6)
months unless it is under an apprenticeship agreement stipulating a longer period. An employee who
continues to work after the probationary period will be considered a regular employee. A probationary
employee may be discharged for a just cause or when he fails to qualify as a regular employee.[9]
Benefits
Social Security Benefits
According to RA 1161, as amended by RA 8282, "The Social Security Program provides a package of
benefits in the event of death, disability, sickness, maternity, and old age. Basically, the Social Security
System (SSS) provides for a replacement of income lost on account of the aforementioned
contingencies."[12] A worker, whether regular or casually employed is entitled to these benefits.
PhilHealth Benefits
According to RA 7875, as amended by RA 9241, "The National Health Insurance Program (NHIP),
formerly known as Medicare, is a health insurance program for SSS members and their dependents
whereby the healthy subsidize the sick who may find themselves in need of financial assistance when
they get hospitalized
ENVIROMENTAL
The Environment of the Philippines is prone to natural disasters, particularly typhoons, floods,
landslides, volcanic eruptions, earthquakes, and tsunamis, lying as it does astride the typhoon belt, in
the active volcanic region known as the Pacific Ring of Fire, and in the geologically unstable region
between the Pacific and Eurasian tectonic plates.
The Philippines also suffers major human-caused environmental degradation aggravated by a high
annual population growth rate, including loss of agricultural lands, deforestation, soil erosion, air and
water pollution, improper disposal of solid and toxic wastes, loss of coral reefs, mismanagement and
abuse of coastal resources, and overfishing.
Environmental issues
Water pollution
The Pasig River in Manila, one of the world's most polluted rivers.[1]
Although water resources become scarce in some regions and seasons, the Philippines as a whole has
more than enough surface and groundwater. However, the neglect of a coherent environmental policy
led to the actual situation, in which 58% of the groundwater is contaminated.[2] The main source of
pollution is untreated domestic and industrial wastewater.[1] Only one third of Philippine river systems
are considered suitable for public water supply.[2]
It is estimated that in 2025, water availability will be marginal in most major cities and in 8 of the 19
major river basins.[3] Besides severe health concerns, water pollution also leads to problems in the
fishing and tourism industries.[4] The national government recognized the problem and since 2004 has
sought to introduce sustainable water resources development management (see below).[5]
Only 5% of the total population is connected to a sewer network. The vast majority uses flush toilets
connected to septic tanks. Since sludge treatment and disposal facilities are rare, most effluents are
discharged without treatment.[6] According to the Asian Development Bank, the Pasig River is one of
the world's most polluted rivers.[1] In March 2008, Manila Water announced that a wastewater
treatment plant will be constructed in Taguig.[7] The first Philippine constructed wetland serving about
700 households was completed in 2006 in a peri-urban area of Bayawan City which has been used to
resettle families that lived along the coast in informal settlements and had no access to safe water
supply and sanitation facilities.[8]
Deforestation
Over the course of the 20th century the forest cover of the Philippines dropped from 70 percent down
to 20 percent.[9] In total, 46 species are endangered, and 4 were already eradicated completely. 3.2
percent of total rainforest has been left. Based on an analysis of land use pattern maps and a road map
an estimated 9.8 million ha of forests were lost in the Philippines from 1934 to 1988.[10] Illegal logging
occurs in the Philippines [11] and intensify flood damage in some areas.[12]
According to scholar Jessica Mathews, short-sighted policies by the Filipino government have
contributed to the high rate of deforestation:
The government regularly granted logging concessions of less than ten years. Since it takes 30–35
years for a second-growth forest to mature, loggers had no incentive to replant. Compounding the error,
flat royalties encouraged the loggers to remove only the most valuable species. A horrendous 40
percent of the harvestable lumber never left the forests but, having been damaged in the logging, rotted
or was burned in place. The unsurprising result of these and related policies is that out of 17 million
hectares of closed forests that flourished early in the century only 1.2 million remain today.[13]
Air Pollution
Due to industrial waste and automobiles, Manila suffers from air pollution,[14][15] affecting 98% of the
population.[16] Annually, the air pollution causes more than 4,000 deaths.[17] Ermita is Manila's most
air polluted district due to open dump sites and industrial waste.[18] According to a report in 2003, The
Pasig River is one of the most polluted rivers in the world with 150 tons of domestic waste and 75 tons
of industrial waste dumped daily.[19]
Government policy
Sustainable Development
Recognizing the need to tackle the environment issues as well as the need to sustain development and
growth, the Philippines came up with the Sustainable Development Strategy.[20] The nation for the
Sustainable Development Strategy includes assimilating environmental considerations in administration,
apposite pricing of natural resources, conservation of biodiversity, rehabilitation of ecosystems, control
of population growth and human resources development, inducing growth in rural areas, promotion of
environmental education, strengthening citizens’ participation, and promoting small to medium-sized
enterprises and sustainable agricultural and forestry practices.[21] One of the initiatives signed in part of
the strategy was the 1992 Earth Summit.
Upon signing the 1992 Earth Summit,[22] the government of Philippines has been constantly looking
into many different initiatives to improve the environmental aspects of the country.
Environmental protection
Currently, the Philippines' Department of Environment and Natural Resources has been busy tracking
down illegal loggers and been spearheading projects to preserve the quality of many remaining rivers
that are not ye