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A stronger tomorrow: Why CSR must be built gradually, not overnight

by Contributor
written by Contributor

ONE MOMENT we are celebrating the New Year, and before we know it, we are already nearing the middle of the year—a time when Filipinos know all too well as the onset of the rainy season. And when disasters strike, they expose not just vulnerabilities but the limits of short-term solutions. 

Recent events have reminded us that real progress cannot come from abrupt changes or one-time fixes. Whether in public governance, community development, or corporate responsibility, meaningful transformation must be nurtured over time, strengthened through consistency, and sustained through shared commitment. 

In the past months, the public has been vocal about controversies surrounding flood-control projects, damaged waterways, and development plans that appear to favor commercial interests over public welfare. But while issues like these continue to expose systemic challenges, Filipinos have a deeper sentiment in mind. They want institutions to take responsibility and contribute to long-term solutions instead of temporary fixes.  

And yet amid these realities, the Philippines has always relied on one thing to pull itself forward, the concept of “bayanihan”. Long before corporate social responsibility (CSR), Filipinos practiced collective care and mutual support. 

True nation-building, much like bayanihan, is not achieved overnight. And the Philippines path towards this lies in progress that evolves gradually and purposefully. 

Strategic imperative of CSR in businesses 

There was a time when CSR was viewed as a charitable side activity. Something that is good to have, but not essential.  

Global trends show that CSR now plays a significant role in business success. In fact, research has shown that a competitive employer brand is increasingly linked to a company’s positive social impact. Paychex also reported that 57% of business leaders are realising that to attract and retain top talent, they need to contribute to building strong and livable communities and not just offer competitive salaries to have a sustainable talent pipeline, stronger consumer trust, and higher long-term profitability. 

Gen Z and millennial workers in particular are pushing CSR to the forefront. Younger professionals want to work for organisations that represent their values, and they are willing to walk away from those that don’t. 

Why CSR matters now more than ever 

The social and business gains of CSR continually reinforce one another. The more companies engage in socially responsible initiatives, the more opportunities they unlock, such as enhanced brand reputation and customer loyalty, since most consumers prefer brands that align with their values; having greater employee attraction and retention as purpose-driven workplaces perform better, especially among those who value ethics and advocacy; and operational efficiency and innovation because sustainability inspires new business models and reduces long-term operational costs. 

CSR in action through the spirit of P&Ause 

At P&A Grant Thornton, we uphold the value of helping people within and beyond the Firm. Initiatives like P&A for a Cause (P&Ause) demonstrate how CSR can make corporate work meaningful, not only for beneficiaries, but for the volunteers who participate. These initiatives have been evident for the past year as we have reached 10 communities and projects with more than 6500 beneficiaries, involving donation drives from various typhoon victims, schools needing supplies, and other initiatives such as tree-planting, blood donation drives, senior citizen outreach, and Christmas donation drives for children in need.  

Through programs that promote education, community development, and environmental responsibility, P&Ause embodies the belief that business success should coexist with social contribution. 

While organisations cannot solve every nationwide challenge, every effort, whether sustainability, livelihood support, youth empowerment, or disaster response, creates ripples of change. And the more businesses join in, the stronger the impact becomes. 

Sustaining progress through purposeful action 

With the nation approaching yet another rainy season, we are reminded that true progress lies with long-term protection for communities. Infrastructure alone cannot keep communities safe; that is why it takes collective responsibility from Filipinos, the government, and our business organisations.  

CSR alone cannot prevent floods. But CSR can help rebuild mangroves that protect coasts. It can support climate education, reforestation, sustainable housing, and community disaster preparedness. It can also empower livelihoods so that families do not lose everything each time a disaster strikes. CSR, when done right, reinforces the systems that keep communities safe, thriving, and resilient. 

Real impact does not come from isolated efforts or short-term responses. Instead, they are built through sustained commitment—by continuing the good work that has already begun, deepening our commitments, and steadily shaping a future that is inclusive and compassionate.  Because when businesses embrace a deeper sense of purpose, they help build a Philippines where progress is not swept away by every flood but protected by the collective will to uplift and stand for each other.

Maine Sanchez-Jimenez is a Manager for the Tax Advisory & Compliance Practice Area at P&A Grant Thornton. One of the leading audit, tax, advisory, and outsourcing firms in the Philippines, P&A Grant Thornton is composed of 29 Partners and 1,500 staff members. We’d like to hear from you! Connect with us on LinkedIn and like us on Facebook: P&A Grant Thornton and email your comments to business.development@ph.gt.com. For more information, visit our website: www.grantthornton.com.ph.

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BCP and IT disaster recovery: A Mindanao reality in an age of geopolitical shock 

by Contributor
written by Contributor

FOR MINDANAO businesses, conflict in the Middle East is not a distant headline. It shows up as volatile fuel and logistics costs, delayed shipments of parts and raw materials, and heightened fraud risks as criminals exploit uncertainty. Meanwhile, day-to-day operations now depend on digital tools. This is why Business Continuity Planning (BCP) and an IT Disaster Recovery Plan (IT DRP) must be treated as board-level priorities: they protect revenue, customer trust, and employee safety when disruption becomes the norm. 

Technology: Resilience by design, not by hope

Global evidence points to a “new normal” where cyber threats and systemic disruptions track closely with geopolitical tension and supply-chain complexity. The World Economic Forum notes that cyberspace is becoming more complex amid geopolitical uncertainty and supply-chain interdependencies, with many organizations reporting a rise in cyber risks. The International Monetary Fund similarly observes that cyberattacks have more than doubled since the pandemic and that heightened geopolitical tensions raise the risk of cyber incidents with systemic consequences. For Mindanao enterprises, this means assuming that a price shock, a connectivity interruption, and a cyber incident can occur close together—and planning accordingly. 

A technology-focused continuity strategy starts by placing mission-critical systems where they can recover fast. With datacenters being tagged as kinetic military targets, cloud platforms, when architected correctly, enable geographic redundancy and automated restoration that are difficult to replicate cost-effectively in purely on-premise environments. But cloud resilience must be paired with cybersecurity—identity controls, multi-factor authentication, endpoint protection, and monitoring—because availability without security can accelerate the spread of an attack. Connectivity also needs redundancy: secondary links, mobile hotspots, and, where feasible, satellite internet should be pre-arranged and tested, especially for distributed branches and field teams. 

Process: Continuity is a business-wide discipline

Technology alone cannot deliver continuity if the business has not agreed on priorities, tolerable downtime, and decision rights. ISO 22301—the leading international standard for business continuity—frames continuity as a documented management system that organizations establish, implement, monitor, review, maintain, and continually improve so they can continue delivering products and services during disruption. That language matters: BCP and IT DRP are not “IT documents,” but enterprise playbooks owned by leadership and executed across operations, finance, HR, facilities, supply chain, and customer-facing teams. 

A well-documented BCP should describe how the organization keeps critical services running: alternative suppliers, manual workarounds, minimum staffing, cash and payment contingencies, and customer/regulatory communications. The IT DRP should then specify how systems recover—recovery time objectives (RTO), recovery point objectives (RPO), restoration steps, access procedures, and role assignments. Both plans should be reviewed and tested at least annually, because systems, vendors, threat tactics, and business priorities change. Even a simple, tested call-tree or mass-notification process can quickly confirm employee welfare, validate contact details, and identify who can operate critical functions.  

People: Plan for human realities, not perfect attendance

In an emergency, people prioritise safety and family first—especially in the first 72 hours, when evacuation, power and water interruptions, blocked roads or transportation disruptions, and immediate household needs take precedence. From a Philippine perspective—where hazards can compound—organizations should plan for at least three days when some employees, including IT staff, may be unreachable. That means IT infrastructure and services must “run resiliently” with minimal human intervention during that period, supported by automation, clear runbooks, and pre-authorised vendor or managed-service assistance. To support this, pre-stage offline contact lists, emergency cash advances, and clear guidance on when to switch to remote work or skeletal operations, so employees are not forced to choose between safety and compliance alone today. 

Building IT capacity is therefore essential. A one-person IT function is a single point of failure: if that person is unavailable, recovery can stall at the worst time. Form resilient teams with backups for critical roles, cross-train staff, and ensure secure access to procedures and credentials for alternates. Train employees to work remotely using approved tools and secure devices so operations can shift quickly without improvisation. Finally, elevate vigilance against crisis-driven phishing. IBM’s X-Force reports an 84% year-over-year increase in phishing emails delivering infostealers, underscoring how attackers scale credential theft precisely when people are distracted by disruptive events. Strong authentication, verification steps for payment changes, and continuous awareness can prevent a disruption from becoming a breach.  

Continuity is survivability

Geopolitical conflict will continue to drive operational shocks and cyber opportunism, and credible global assessments show cyber risk rising in step with geopolitical uncertainty and interconnected supply chains. For Mindanao businesses, the practical response is clear: expect disruption, design for resilience, and rehearse recovery. Cybersecurity, BCP, and IT DRP are no longer “nice to have.” They are essential capabilities that protect people, preserve customer confidence, and keep enterprises serving their communities—even when the world becomes unpredictable. 

Leonard Duque is a Director and Chief Information Officer for the Technology Solutions Group at P&A Grant Thornton. One of the leading audit, tax, advisory, and outsourcing firms in the Philippines, P&A Grant Thornton is composed of 29 Partners and 1,500 staff members. We’d like to hear from you! Connect with us on LinkedIn and like us on Facebook: P&A Grant Thornton and email your comments to business.development@ph.gt.com. For more information, visit our website: www.grantthornton.com.ph.

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Adapting to Change: How payroll professionals thrive in the Philippines

by Contributor
written by Contributor

EVERY March, I fall into a familiar routine—one that feels almost comforting. Before the rest of the office starts buzzing, I’m already at my desk with a warm cup of coffee, staring at the payroll calendar like it’s an old friend I know a little too well.

Payroll has never been just a collection of numbers for me. It’s rent payments. Grocery budgets. Tuition fees. Quiet hopes. Private struggles. In many ways, it’s the heartbeat of people’s everyday lives.

And in 2026, with all the changes happening around us, that responsibility feels even heavier—but also more meaningful.
The calm after the tax storm

TRAIN Law continues to shape the tax landscape, and at this point, it feels like second nature. The updated tax tables still reflect the same progressive structure—relief for those earning less and precision demanded from those of us doing the computations. The taxexempt ceiling of ₱250,000 per year and the 35% highest bracket remain untouched.

I often tell new HR staff, “Before anything else, separate taxable from non-taxable earnings.”

It’s amazing how a small misclassification—night diff here, a holiday premium there—can snowball into bigger problems by yearend. You don’t just risk BIR penalties; you risk losing people’s trust.

But what’s taking centre stage this year is the Ease of Paying Taxes (EOPT) Act. And honestly, it feels like a breath of fresh air. No more annual registration fee. A cleaner invoicing system. The freedom to file anywhere without worrying about wrong venue penalties is a game changer. It means more coordination with accounting, yes — but fewer headaches. And in payroll, that’s a victory worth celebrating.

The big three: SSS, PhilHealth, and PagIBIG

The big three: SSS, PHilHeath, and PagIBIG

The 15% contribution rate stays the same for 2026. No surprises, no new rules—and in our line of work, that’s rare. The familiar MSC range of ₱5,000 to ₱35,000 is still our guide.

Employees often notice the MySSS Pension Booster, especially those whose Monthly Salary Credit (MSC) is above ₱20,000. This program is actually the same as the old WISP or WISP Plus—only the name has changed. Its main purpose remains the same: to help members build a bigger retirement fund on top of their regular SSS pension.

I’ve seen how people react when they understand it better—shoulders relax, and suddenly savings for the future doesn’t feel like a burden but a quiet reassurance.

Meanwhile, after years of incremental increases, PhilHealth is finally taking a breather. The premium stays at 5% of the monthly salary, shared equally between employer and employee, with the same ₱10,000 floor and ₱100,000 ceiling.

In a world where everything keeps getting more expensive, this kind of stability feels like a small gift.

PagIBIG remains steady too. Since Circular 460 raised the maximum fund salary to ₱10,000, workers and employers have been contributing ₱200 each — and that continues in 2026.

Sometimes employees would ask, “Ma’am, will PagIBIG increase again?”

And I’d tell them, “Not this year.”

You’d be surprised how much relief those four words can bring.

The ever-evolving wage story

Wage Order NCR26 has been our guide since July, and it continues to shape the 2026 salary structure. The ₱50 increase, setting the nonagriculture daily rate at ₱695—or ₱658 for agriculture, retail, service, and small manufacturing—remains in place.

Then February brought something new for kasambahays: Wage Order NCRDW06, raising their monthly minimum to ₱7,800. Domestic workers often get overlooked in compliance discussions, but their rights matter just as much.
On paper, these adjustments may look small. In real life, they’re dignity translated into pesos.

Holidays: February’s reminders, March’s quiet

February kept payroll teams like ours busy. Chinese New Year on February 17 demanded the usual “no work, no pay” calculation unless company policy said otherwise. A week later, on February 25, the EDSA anniversary was tagged as a special working day — meaning regular pay only.

These sound simple, but holiday pay rules always manage to confuse someone, somewhere. DOLE’s Labour Advisory No. 012026 helped, but vigilance still wins the day.

13th month reflections: what it all means

Even though the rush ended in December, its echoes always follow us into January and February. DOLE required all employers to submit their 13thmonth reports by January 15. No exemptions. No shortcuts.

Every time I compute (Total Basic Salary Earned ÷ 12), I remember how much families count on this benefit. It arrives right when people need it most—and every peso counts.

Payroll will never be glamorous. It won’t trend on social media or make frontpage news. But it’s quiet work that keeps everything else moving.

Behind every payslip is a person.
Behind every deduction, a safeguard.
Behind every rule, a responsibility.

And as I step forward into March 2026—with its computations, reconciliations, and countless checks—I hold onto the truth that grounds me:

Payroll is service. Payroll is trust. Payroll is care.

And that makes all the difference.

Menchie Mendiola is a Senior Payroll Manager for the Business Process Solutions Practice Area at P&A Grant Thornton. One of the leading audit, tax, advisory, and outsourcing firms in the Philippines, P&A Grant Thornton is composed of 29 Partners and 1,500 staff members. We’d like to hear from you! Connect with us on LinkedIn and like us on Facebook: P&A Grant Thornton and email your comments to business.development@ph.gt.com. For more information, visit our website: www.grantthornton.com.ph.

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LINE OF SIGHT | Beyond systems and controls: human capital as the driver of performance 

by Contributor
written by Contributor

IN AN increasingly complex and competitive workplace, organizations are recognizing that their most sustainable source of value lies not in technology or systems alone, but in their people. Human capital—the collective knowledge, skills, experiences, and values of the workforce—has evolved from a functional resource into a strategic asset that directly shapes organizational performance, adaptability, and long-term resilience.

The contribution of human capital extends well beyond productivity and efficiency metrics. It influences how individuals engage with their work, how effectively strategies are translated into action, and how diverse segments of the workforce collaborate to create value. This influence is most evident across three interconnected dimensions: the dynamic between inspiration and motivation, the balance organizations must strike between effectiveness and efficiency, and the integration of generational differences, diversity, and equality in the modern workplace. This article examines how human capital functions as a unifying and enabling force across these areas, illustrating how purpose-driven engagement, disciplined yet adaptive execution, and inclusive practices transform human capital from a support function into a central driver of sustained organizational success.

Motivation vs. inspiration: the depth of human engagement

In a finance-driven organization, motivation has traditionally played a dominant role in shaping performance. Targets, bonuses, compliance requirements, and strict deadlines effectively direct effort and ensure accuracy, timeliness, and regulatory adherence. Finance operations teams, for example, are often guided by key performance indicators such as month-end close timelines, reporting error rates, and audit findings, while investment- or sales-related finance roles rely on incentive structures to drive revenue generation and portfolio performance. In these contexts, human capital enables motivation by ensuring employees possess the technical expertise and discipline needed to meet demanding standards.

However, while motivation secures compliance and output, it rarely sustains higher-order contribution on its own. Inspiration becomes essential in finance environments because of their complexity, risk exposure, and reliance on judgment. A financial analyst may be motivated to produce accurate forecasts to meet deadlines, but inspiration drives deeper analysis—questioning assumptions, identifying emerging risks, and proactively advising business leaders on alternative scenarios. Similarly, in risk management or audit functions, motivated employees may follow established checklists, while inspired professionals are more likely to challenge controls, raise concerns early, and help prevent long-term financial or reputational harm.

The distinction between motivation and inspiration is especially visible during periods of change, such as system implementations, regulatory updates, or economic uncertainty. When finance teams are driven primarily by deadlines and compliance, transformation initiatives are often viewed as additional workload or risk. By contrast, when leaders connect change efforts to purposes such as strengthening financial integrity, improving decision support, or enhancing transparency, employees are more likely to engage constructively. During a finance system transformation, for example, motivated team members may complete data migration tasks as assigned, while inspired colleagues contribute process improvements, suggest innovation opportunities, or support peers through the transition.

Leadership plays a critical role in cultivating inspiration by shaping how finance work is understood and valued. While motivation is often driven by compensation structures and performance metrics, inspiration emerges through leadership behaviour, communication, and trust. When leaders link accurate reporting to strategic decision-making and strong controls to organizational sustainability, finance professionals move beyond routine execution to see themselves as trusted advisors and stewards of organizational value. Ultimately, the strategic value of human capital in finance lies in integrating motivation with inspiration—combining discipline and incentives with purpose and judgement to enable long-term performance and resilience.

Efficiency and effectiveness: human capital as a strategic multiplier

In finance and accounting, efficiency and effectiveness must work together to produce reliable information and support sound decision-making. Efficiency focuses on completing tasks accurately and on time through standardised processes, while effectiveness ensures that those tasks lead to the right conclusions and actions. Both are essential to financial integrity and business performance.

This balance is clearly illustrated during the month-end close process. An efficient accounting team follows a structured close calendar, uses automated journal entries, and completes reconciliations within defined timelines, allowing reports to be issued on schedule with minimal rework.  

Effectiveness, however, is demonstrated when accountants go beyond checklists by investigating unusual variances, questioning one-off entries, or identifying discrepancies between financial results and business activity. An on-time close process that overlooks these signals may be efficient, but it is not effective.

In financial planning and analysis (FP&A), efficiency often comes from standardised templates and forecasting models that allow for quick updates and consistent reporting. Analysts may efficiently refresh forecasts using predefined tools, yet effectiveness emerges when they adjust assumptions in response to changing market conditions—such as rising costs or shifts in demand—and clearly communicate the implications to leadership. Here, the value of human capital lies in knowing when to rely on models and when to apply judgment and insight.

These examples show that while efficiency provides structure and consistency, effectiveness depends on the ability of finance professionals to exercise experience and judgement within that structure. Human capital enables this balance, allowing teams to deliver timely and accurate information while also providing insights that support better decisions and long-term organizational success.

Generational differences: human capital as an integrative force

The modern finance and accounting workplace is increasingly multigenerational, bringing together professionals shaped by different economic, technological, and social contexts. These differences often lead to varying expectations around leadership, communication, learning, and work-life integration. When left unmanaged, they can result in misalignment; for example, when younger finance analysts expect frequent feedback on variance analysis or forecasting assumptions, while senior accountants view autonomy and minimal supervision as a sign of trust. Flexible or hybrid work arrangements can also create tension in teams accustomed to traditional, office-based controls during audits or month-end close.

Viewed through a human capital lens, however, generational diversity becomes a source of complementarity rather than friction. Experienced finance professionals contribute institutional knowledge, regulatory expertise, and risk judgment, such as interpreting new accounting standards or identifying control weaknesses. Younger team members, in turn, introduce automation tools, data visualisation techniques, and workflow platforms that improve reporting speed and accuracy. For instance, a junior accountant’s proposal to automate reconciliations may be strengthened through guidance from a senior reviewer who ensures appropriate controls, allowing both perspectives to shape stronger outcomes.

Human capital development is critical in bridging these differences through structured mentoring, equal access to training and stretch assignments, and fair performance evaluation that values both technical expertise and innovation. When finance leaders model respect, openness, and inclusion—such as by inviting diverse viewpoints during planning discussions or control reviews—they create psychologically safe environments where all employees can contribute meaningfully. As a result, generational diversity translates into stronger collaboration, higher engagement, improved risk management, and sustained innovation, reinforcing the organization’s long-term financial resilience and credibility.

Call to action

In the end, the future of work in accounting and finance will not be defined solely by faster systems, tighter controls, or more sophisticated models, but by how thoughtfully organizations engage the people behind them. Processes can ensure efficiency and rules can enforce compliance, but only human capital can provide the judgment, integrity, and insight required when situations fall outside predefined structures. As finance work becomes more complex and interconnected, the critical question is no longer whether organizations have the right systems in place, but whether they are creating the conditions for their people to think critically, act responsibly, and contribute with purpose. How that question is answered will ultimately shape not only performance, but also trust, resilience, and long-term value.

Robert dela Cruz is a Director for the Business Process Solutions Practice Area at P&A Grant Thornton. One of the leading audit, tax, advisory, and outsourcing firms in the Philippines, P&A Grant Thornton is composed of 29 Partners and 1,500 staff members. We’d like to hear from you! Connect with us on LinkedIn and like us on Facebook: P&A Grant Thornton and email your comments to business.development@ph.gt.com. For more information, visit our website: www.grantthornton.com.ph.

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Let the OD consultants in, they know where to look

by Contributor
written by Contributor

ORGANIZATIONS today face a paradox: they strive for efficiency and innovation, yet often overlook the hidden dynamics that hold them back. Every organization has blind spots—those ingrained habits, outdated processes, and entrenched practices, along with unspoken assumptions, that quietly drain energy and limit growth. In today’s fast-changing environment, these blind spots aren’t just obstacles—they’re risks. This is where organization development (OD) consultants step in. They know where to look and how to transform those challenges into pathways for growth and resilience.

OD is not about quick fixes or abstract theories; it’s about unlocking the potential already within your organizations. By redirecting information, energy, and resources often lost to unproductive channels, OD builds systems that anticipate change and empower people to thrive. The challenge is that these blind spots are hard to see from the inside. Leaders and teams grow accustomed to “the way things are,” even when those ways no longer serve them.

That’s why OD consultants matter. They bring fresh eyes and frameworks to uncover what insiders can’t see—patterns beneath the surface, cultural norms shaping behavior, and processes that have quietly ossified over time. Their role is not to criticise but to collaborate, challenge, and calibrate, helping organizations transform hidden problems into opportunities for growth.

Action research: a foundation for meaningful change

Action research complements OD by providing a participatory approach to diagnosing and solving organizational challenges. It combines reflection and action, theory and practice, ensuring that solutions are practical, inclusive, and grounded in real experiences. Together, OD and action research foster workplaces that learn continuously, adapt authentically, and thrive in complexity.

At its core, the action research model, developed by Kurt Lewin and considered a cornerstone of OD, is an iterative process of diagnosing, acting, and evaluating to drive organizational change. What makes this model powerful is its emphasis on collaboration between consultants and employees to identify issues and co-create solutions. Rather than imposing solutions from the outside, it invites employees, leaders, and stakeholders to become co-creators of knowledge. This democratic process builds trust, ownership, and authentic dialogue—critical ingredients for sustainable change.

The process unfolds in four key stages:

  • Diagnosis: Gather data through surveys, interviews, or focus groups to identify organizational pain points, such as low employee engagement or inefficient processes.
  • Action planning: Collaboratively design interventions, such as training programmes, process redesigns, or cultural initiatives.
  • Implementation: Execute the plan with active stakeholder involvement to ensure buy-in and ownership.
  • Evaluation: Assess outcomes and refine interventions iteratively, creating a cycle of continuous improvement.

Action research is not just a tool; it is a mindset that empowers organizations to learn continuously and evolve with purpose. Its flexibility across individual, team, and organizational levels makes it a natural partner for OD consultants, who use its insights to uncover blind spots and design interventions that are both systemic and human-centred.

organizational development interventions: when and how to use them

Once blind spots are identified and action research has provided a clear understanding of underlying issues, the next step is implementing targeted interventions. OD interventions are not random activities; they are strategic tools designed to address specific organizational challenges, and their success depends on timing and thoughtful application. These interventions translate insights from action research into practical solutions that empower individuals, strengthen relationships, and transform organizational systems.

At the individual level, interventions such as career planning and development are essential when employees seek clarity on growth opportunities or when retention is a priority. These programmes align personal aspirations with organizational goals through workshops and competency mapping. Coaching and counselling become critical for leadership development or when performance gaps stem from behavioural or emotional issues; structured sessions focused on feedback and skill-building help individuals thrive. Similarly, education and training are indispensable during organizational change or when new skills are required, using blended learning approaches to ensure engagement and adaptability.

For interpersonal dynamics, interventions like third-party peacemaking are vital when unresolved conflicts disrupt collaboration. A neutral facilitator mediates discussions, clarifies issues, and establishes agreements for future interaction. Role negotiation techniques are useful when unclear responsibilities create tension; structured dialogues help clarify roles and authority boundaries. In increasingly diverse workplaces, global and workforce diversity programmes foster inclusion and equity through training and policy development, ensuring that cultural differences become strengths rather than barriers.

At the team and group level, interventions such as self-managed teams empower employees and enhance agility, particularly in organizations seeking decentralised decision-making. These require training in governance and accountability systems. Process consultation is effective when teams struggle with communication or problem-solving; here, OD consultants observe interactions and guide improvements without prescribing rigid solutions. Small groups focused on continuous improvement are ideal for operational efficiency and employee engagement.

For intergroup relations, intergroup team building addresses friction between departments by surfacing perceptions and building shared goals, while organizational mirroring facilitates feedback between groups to correct behaviours that impact collaboration. At the organizational level, Schein’s cultural analysis is critical during mergers or cultural shifts, diagnosing underlying assumptions and designing alignment strategies. Survey feedback helps gauge employee perceptions and identify systemic issues, enabling transparent action planning. Finally, structural interventions like socio-technical systems design balance technological changes with human needs, while reengineering streamlines outdated processes to enhance competitiveness.

These interventions represent some of the most widely adopted and effective approaches that OD practitioners use to address organizational challenges. They are not one-size-fits-all solutions but examples of strategies that can be tailored to the unique needs of each organization. 

Strategic shifts in OD consulting: preparing for what’s next

organization development is no longer limited to addressing blind spots or improving processes—it is evolving into a strategic function that anticipates future disruptions. Today’s OD consultants are embracing AI-driven skills development, helping organizations move from reactive training to proactive learning strategies that close skills gaps before they impact performance. Leadership adaptability has also become a critical focus, with executives expected to manage complex priorities such as AI integration, hybrid work models, and ESG commitments. These shifts demand OD interventions that are agile, data-informed, and deeply aligned with organizational purpose.

The future of OD consulting is about designing organizations that thrive in uncertainty. This includes implementing hyper-flexible work models, leveraging external workforce intelligence, and embedding succession planning as a core strategic priority. Consultants are increasingly using benchmarking and iterative design processes to move beyond rigid hierarchies toward adaptive structures. With over 75% of organizations already incorporating AI into their operations, OD practitioners must guide organizations in balancing technology adoption with human-centred practices. In this new landscape, OD consultants don’t just know where to look—they help organizations see what’s coming and prepare for it.

Mithi Sandalo is a Senior Managing Consultant for the Advisory Services Practice Area at P&A Grant Thornton. One of the leading audit, tax, advisory, and outsourcing firms in the Philippines, P&A Grant Thornton is composed of 29 Partners and 1,500 staff members. We’d like to hear from you! Connect with us on LinkedIn and like us on Facebook: P&A Grant Thornton and email your comments to business.development@ph.gt.com. For more information, visit our website: www.grantthornton.com.ph.

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Press any button to continue

by Contributor
written by Contributor

IT WAS the early 2000s, and I was preparing to fight one of the greatest battles of my childhood. My heart is pounding in my chest, every sense sharpened by the countless hours I had spent preparing for this moment.  I had endured setbacks and trained tirelessly again and again. This was it: the ultimate test of patience and skill.  But this scene wasn’t a battlefield marked by war and chaos.  Instead, my opponent was the final boss in one of the most iconic video games of the ’90s.

Da-da-da-da-da-da-da-da-da!

That’s the sound of victory, the music that follows every win.  But that afternoon, the music never played.  I couldn’t defeat the final boss.  The first defeat was tolerable.  The second, a challenge.  By the third, I realised this was no ordinary battle. Hours passed, and still, victory eluded me.  The reason became clear: I simply wasn’t strong enough—yet.

Determined, I made the tough decision to reload my save file to a point before the final battle.  My mission?  To wander, grind, and level up.  It was a repetitive, sometimes tedious process—seeking out smaller battles, gaining experience, and slowly increasing my stats. Eventually, after much persistence, I returned to the final boss, stronger and more prepared, finally earning the right to hear that victorious theme.

Reflecting on this experience, I see a parallel between role-playing games (RPGs) and building a professional career.  In RPGs, you start with nothing—no experience, no gold, no skills, no weapons.  Yet, as you progress, you meet new characters—some pivotal, others fleeting.  Each encounter, each challenge, adds to your experience, raising your level and unlocking new abilities.  Your stats—health, strength, defence, magic—grow with every milestone.  The higher your level, the more formidable you become, and the more complex the challenges you can face.

Gold (or “gil”, in this game) is earned through victories, allowing you to buy better equipment or replenish your resources.  But no matter how much gold you have, certain weapons and skills remain locked until you reach the required level.  Progress is not just about resources; it’s about growth.

Much like in an RPG, a professional career—especially in the field of auditing—begins with humble beginnings.  As a fresh graduate, you start with limited experience and knowledge. Early tasks may seem repetitive, similar to grinding for experience points in a game.  But these foundational experiences are crucial.  Each audit engagement, each client interaction, and each challenge faced is an opportunity to “level up”—to gain new skills and expand your knowledge, as well as your social skills.

Along the way, you encounter mentors, colleagues, and clients—some who will shape your journey, others who will test your patience.  Promotions and new responsibilities are the professional equivalents of unlocking new skills or acquiring powerful equipment in a game.  Just as in the game, there are no shortcuts: you cannot wield the most powerful tools or take on the toughest assignments until you have earned experience.

However, just like in an RPG, the main storyline isn’t the only path to growth. There are countless “side quests”—optional challenges that may not seem essential but often lead to rewards. In my career, these side quests have included coaching and mentoring junior colleagues, joining firm initiatives, or performing administrative tasks. While they might not always be directly tied to promotions, these experiences have enriched my skills, broadened my perspective, and built relationships that proved invaluable during tougher battles.

There will be moments when you face your own “final bosses”—complex accounting issues, tight deadlines, or even an interview for a promotion.  Occasionally, you may fall short. But these setbacks are not failures; they are signals that it’s time to step back, reflect, and invest in further growth.  Perhaps you need to revisit the basics, seek guidance, or take on smaller projects to improve your weaknesses and build your competence.

However, unlike in my experience, real life does not offer the luxury of reloading a previous save file. Every decision, every action—good or bad—becomes part of your story. There are no do-overs or shortcuts to erase mistakes or instantly gain experience. That’s why it’s important to think carefully, plan your career moves, and learn from every challenge along the way. Gaining experience is not the only way to succeed, but it is undeniably one of the most reliable.

Ultimately, whether you’re in auditing or any other field, your career is more than just a series of levels to complete or bosses to defeat. It’s an adventure—with a main storyline, side quests, victories, setbacks, and moments of quiet growth.  Embrace your personal journey and find meaning in both your accomplishments and the grind.  And while we may not hear a victory theme after every success, the satisfaction of knowing we’ve truly earned our achievements is reward enough.

Anthony Waje is a Senior Manager for the Audit & Assurance Practice Area at P&A Grant Thornton. One of the leading audit, tax, advisory, and outsourcing firms in the Philippines, P&A Grant Thornton is composed of 29 Partners and 1,500 staff members. We’d like to hear from you! Connect with us on LinkedIn and like us on Facebook: P&A Grant Thornton and email your comments to business.development@ph.gt.com. For more information, visit our website: www.grantthornton.com.ph.

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LINE OF SIGHT | Auditing with certainty: ascertaining uncertainties in financial statements 

by Contributor
written by Contributor

FINANCIAL statements are the cornerstone of informed decision-making – but beneath the numbers often lie layers of uncertainty. Whether it’s the valuation of assets, recognition of revenue, or assessment of liabilities, ambiguity is inherent in financial reporting. For us auditors, the challenge is not to eliminate uncertainty but rather to navigate it with rigour and independence. Our role is critical: to bring clarity to the unknown so that the public can rely on financial statements with confidence. 

One of the key elements of accounting is measuring transactions or assigning values to the economic impact of an underlying transaction for an entity. For some transactions, the process is straightforward, being based on the actual cost incurred to acquire an asset or settle a liability. However, certain elements of the financial statements may entail estimations and judgments. Standard-setting bodies have responded to this reality by issuing guidance that (1) provides a basis for measurement and (2) sets acceptable limits within which preparers of financial statements can operate during their valuation exercises. 

Ethical accounting and independent auditing 

Estimations and judgments give rise to uncertainty. Ethical accounting and auditing call for integrity amidst such ambiguity. Preparers of financial statements are expected to ensure that their inherent biases do not compromise the objectivity of their reporting. For us auditors, independence is the cornerstone of the profession. We must perform adequate procedures to challenge the assumptions used by management in these estimations and judgments. 

When estimations and judgements are involved, the complexity of our audit work increases. As vanguards of public trust, we must ask probing questions and sign off only when sufficient comfort is achieved, that is, when the risk of being blindsided by unavoidable uncertainty is reduced to an acceptable level. 

Uncertainties in the financial statements 

To better understand how uncertainty manifests in practice, let’s examine specific items in the financial statements and illustrate how these may affect users of financial statements

Asset valuation. Preparers are required to measure certain assets beyond their cost. For example, inventories are recorded based on the costs incurred to bring them to a salable condition. However, users of financial statements are more concerned with how much the unsold inventories can be sold for – whether their realisable values match their recorded costs. A company may report a million pesos’ worth of inventory, but the expected recovery of these assets may already be reduced by half. 

Probable obligations. In some cases, management must assess whether an obligation has been created and, if so, determine the extent of liability. Judgement is critical here. For instance, when legal cases are filed against an entity, the resolution process can be lengthy. This creates a situation where a potential liability is neither settled nor clearly determined as of the reporting date. Management faces both accounting and ethical dilemmas: whether to disclose the facts and their financial impact despite the uncertainty, and more importantly, by how much, if any? Is there a reasonable basis? The uncertainty hinges on how the entity believes the cases will be resolved – favourably or not. Estimates of liability could range from a nominal amount to as much as the entirety of the entity’s assets in extreme cases. 

Revenue recognition. For the sale of goods, transactions are easily tracked – a transaction punched into the point-of-sale machine signifies a definite sale. But in other industries, such as construction, revenue is recognised based on progress measured through physical milestones,

such as the number of floors completed. In a reporting period, a construction firm must estimate the extent of work completed to recognise revenue. If a reasonable basis for estimation cannot be established, assessing revenue becomes difficult. 

Going concern. When reporting financial results, management is required to confirm that the business is expected to continue operating for at least the next twelve months – unless there are clear indications that it may close or significantly downsize. This assessment involves reviewing the company’s performance, cash flow, and future plans to ensure it can meet its obligations and sustain operations. The key judgement involved here is how confident management is in stating that the business will not wind up within the next twelve months. 

These uncertainties underscore the importance of our mindset and approach as auditors. 

Applying professional skepticism 

The public relies on us. They cannot perform the audit themselves; it is logistically impossible. A sign-off from an auditor signifies that the public may place greater confidence in the financials prepared by management. 

Assurance. We perform procedures on an entity’s financial statements to achieve reasonable assurance that management’s representations are free from material misstatements. An audit does not lead to absolute assurance due to inherent limitations. In the context of auditing financial statement items involving uncertainty, we perform procedures not to eliminate such uncertainties, but only to determine if the underlying assumptions used in management’s estimates and judgments are reasonable. 

Independence. In all circumstances, we are required to maintain independence in both mind and appearance. If an element of uncertainty is involved in the balances being audited, we maintain an independent view. This means not relying on management representations but challenging the reasonableness of such assumptions.

Professional skepticism. We ask questions – and then we ask more. We do not stop asking until we are satisfied with the responses, and only when the gathered evidence is both sufficient and appropriate. If management estimates an obligation to be a certain amount, we challenge the basis and evaluate whether it is reasonable. If financial statements show sales based on estimated completion, we ask how completeness is defined.  When management represents that their business will remain a going concern, we ask how they support that assertion. 

Auditing uncertain balances requires a heightened level of skepticism. It is, quite literally, navigating through the unknown. But we dare to ask the hard questions to achieve a reasonable level of certainty amidst the uncertainty. 

The value of reasonably assessed uncertainty 

Some may argue that uncertainties affect mostly “paper items.” That may be true to an extent. But these “paper items” approximate the values of underlying economic transactions that will be realised in the future.

Having an indicative value now is a tool one can use, especially when circumstances demand an urgent financial decision. Relying on a reasonably assessed uncertainty is better than having nothing to rely on at all.

Uncertainty may be inevitable in financial reporting, but it need not be a barrier to trust. When we apply professional skepticism, maintain independence, and challenge assumptions, we transform ambiguity into assurance. In a world where financial decisions hinge on what is reported today, the public depends on us to ensure that even uncertain balances are reasonably assessed.  

That is the true value of auditing with certainty.

——————————————————————————–

Mannel Hernandez is a Senior Manager for the Audit & Assurance Practice Area at P&A Grant Thornton. One of the leading audit, tax, advisory, and outsourcing firms in the Philippines, P&A Grant Thornton is composed of 29 Partners and 1,500 staff members. We’d like to hear from you! Connect with us on LinkedIn and like us on Facebook: P&A Grant Thornton and email your comments to business.development@ph.gt.com. For more information, visit our website: www.grantthornton.com.ph.

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Business Development as a shared responsibility

by Contributor
written by Contributor

IN THE past, companies often relied on word of mouth and organic growth to expand their reach. While these methods still hold value, today’s business landscape calls for a more proactive and strategic approach. Enter Business Development (BD), a dynamic and increasingly vital function that is reshaping how organisations grow, innovate, and thrive. This article explores the evolving role of business development and how each of us, regardless of role, can contribute meaningfully to its success. 

What is Business Development (BD)? 

When you hear the term ‘business development’, what comes to mind? For many, it might immediately bring up thoughts of sales. While the two are closely connected in driving revenue, business development plays a broader and strategic role. At its core, it’s about uncovering new opportunities, building meaningful relationships, and creating lasting value for the organization. It’s not just about closing deals. It’s about opening doors to new possibilities. BD professionals wear many hats, and their role is multifaceted. Here are some of the core responsibilities that define business development: 

  1. Strategic planning and execution
    Business development begins with a clear understanding of the market. Professionals in this field conduct thorough research to identify trends, customer needs, and competitive dynamics. They use these insights to develop well-informed strategies and continuously refine them to align with the organisation’s goals and the evolving business environment. 
  1. Finding new opportunities and driving innovation
    Once a strategy is in place, the focus shifts to identifying areas for growth. This could mean exploring new markets, developing innovative products or services, or forming strategic partnerships. Business development professionals are always looking ahead, seeking ways to create value and stay ahead of the curve. 
  1. Strengthening relationships and building trust
    At the heart of business development is the ability to connect with people. Building strong, authentic relationships with clients, partners, and internal stakeholders is essential. These relationships foster collaboration, loyalty, and long-term success. 
  1. Collaborating across departments
    Business development is most effective when in harmony with other teams. Whether it is aligning with marketing on messaging, supporting sales efforts, or collaborating with product teams to meet market needs, BD helps ensure that everyone is moving in the same direction toward shared goals. 

Developing the business, no matter your role  

You don’t need to have “business development” in your job title to think and act like a business developer. In fact, some of the most impactful BD moments happen outside of formal BD roles. Whether you’re in operations, marketing, finance, or any other department, you have the power to contribute to your organisation’s growth. 

So, how do you start thinking like a business developer?  

Show genuine interest and empathy 

At the heart of business development is the ability to build meaningful human connections. When you take the time to truly understand their needs, goals, and challenges, you begin to earn their trust. Trust is not built overnight. It grows when people feel that you are genuinely listening and that you care about their experience.

Empathy naturally follows when you are fully present in a conversation. It allows you to see things from another person’s perspective and respond in a way that makes them feel supported. 

For example, a team member notices that a client seems overwhelmed during a routine check-in. Instead of diving straight into the agenda, they take a moment to ask how things are going and listen carefully to the client’s concerns. This leads to a deeper understanding of the client’s challenges and opens the door to offering more tailored support.

Asking the right questions opens doors. Instead of jumping into solutions, explore the client’s context: “What’s your biggest challenge right now?” or “What would success look like for you in the next quarter?” These kinds of questions uncover pain points, goals, and areas where support is truly needed. 

Every interaction is a BD Opportunity
Opportunities often come from the most unexpected places. A casual conversation with a colleague, a thoughtful response to a client, or a chance meeting at an event can all lead to meaningful connections. When you approach each interaction with openness and curiosity, you naturally create space for new ideas and partnerships to emerge.

For instance, you might be at a conference and strike up a conversation with someone who shares a business challenge, and it turns out that the challenge is something your company can solve. That simple exchange led to a new opportunity. By being open, curious, and present, you invite new ideas and possibilities. These moments may seem small and spontaneous, but they can open doors to bigger opportunities. 

Look for growth in relationships 

Business development is not about quick wins or one-time transactions. It’s about building relationships that grow over time. You don’t win a client or partner in a single meeting. Business development is about nurturing trust, showing up consistently, and commitment to adding value even when there’s no immediate return.

Think of a colleague who consistently checks in with a long-time client, not to sell but to genuinely ask how things are going, ensure the quality of service remains high, and understand how their needs are evolving. This kind of thoughtful relationship-building fosters loyalty, encourages referrals, and opens the door to deeper collaboration. 

Stay curious and solution-oriented 

Curiosity is the spark that drives innovation. Business developers are always asking questions, exploring new ideas, and looking for ways to make things better. No matter your role, you can embrace this mindset by staying engaged, being open to feedback, and taking initiative to solve problems. 

For instance, consider a scenario where several clients begin asking similar questions about a new regulation. Take the initiative to create a short guide and share it with the broader client base. This proactive approach adds value and positions the firm as a trusted advisor. 

Conclusion 

Business development isn’t limited to a title or a department. It’s a way of thinking, a shared responsibility, and something we can all practise in our day-to-day work. It means being curious enough to ask meaningful questions, empathetic enough to truly listen, and bold enough to explore new possibilities.

Every conversation, every collaboration, and every challenge is an opportunity to contribute to growth. When we show up with empathy, stay open to ideas, and look for ways to help others succeed, we help our organisations grow and thrive.

No matter your role, you can contribute to business development by being intentional in how you engage, how you listen, and how you create value through your actions. 

So ask yourself: what’s one way you can practice business development today?

Anna Salvador is a Business Development Manager for the Business Process Solutions Practice Area at P&A Grant Thornton. One of the leading audit, tax, advisory, and outsourcing firms in the Philippines, P&A Grant Thornton is composed of 29 Partners and 1,500 staff members. We’d like to hear from you! Connect with us on LinkedIn and like us on Facebook: P&A Grant Thornton and email your comments to business.development@ph.gt.com. For more information, visit our website: www.grantthornton.com.ph.

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LINE OF SIGHT | Safeguarding public funds: The role of tax clearance in nation-building

by Contributor
written by Contributor

INEVITABLE is the fact that taxes and public contracts will remain deeply intertwined. This is because every peso collected from taxpayers provides the primary funding for government projects, and strict tax compliance is a statutory and continuing requirement for contractors seeking to partner with the government in delivering these projects.

In this context, securing a tax clearance becomes increasingly vital, not merely as a formality, but as a measure to ensure that only qualified and compliant contractors are entrusted with public funds. This requirement has never been more important, especially with the recent discussions in both mainstream and social media regarding the alleged irregularities in public contracts. If these allegations are proven to be true, they could erode public trust and lead to the misuse of taxpayers’ hard-earned contributions intended for national development.

In response to these concerns, the Commissioner of Internal Revenue, Romeo Lumagui Jr, has issued a directive for all Bureau of Internal Revenue (BIR) offices to conduct parallel tax fraud investigations on contractors linked to the allegedly anomalous flood control projects. In this directive, the BIR will audit the tax compliance of these entities, and those found to have underpaid or evaded taxes may be denied updated tax clearance, disqualified from future government procurements, and suspended from final settlement of existing contracts.

With this, the role of a tax clearance and its integrity is crucial, as it serves as one of the means to ensure compliance and accountability of every contractor. It is not merely a certificate of tax compliance but a declaration of commitment to paying fair and accurate taxes to the government. In public projects, tax clearances are required in two stages: (1) before the bidding and award, and (2) before the final settlement or payment for the goods delivered or services rendered to the government.

Pre-bid tax clearance

The requirement for a tax clearance before a government contract is awarded to a contractor is an indispensable part of the procurement process. This requirement is anchored in Executive Order (EO) No. 398, series of 2005, which mandates that the submission of tax returns, along with proof of payment and a valid tax clearance, is a prerequisite for participating in the bidding process for public projects. This mandate is further reinforced by the 2016 Implementing Rules and Regulations (IRR) of Republic Act (RA) No. 9184, also known as the Government Procurement Reform Act, which requires bidders to upload, maintain, and update their tax clearance in the Philippine Government Electronic Procurement System (PhilGEPS). Under the law, the tax clearance serves as official proof of the bidder’s timely and complete payment of taxes.

To further implement the law, the BIR issued Revenue Regulations (RR) No. 3-2005, as amended by RR No. 1-2016, requiring the submission of the Sworn Application Form for Tax Clearance Certificate for Bidding Purposes, available on the BIR’s Official Website, along with the necessary documentary requirements.

To be issued a six-month valid tax clearance, applicants must be fully compliant with the criteria set forth in the regulations, which include having no unpaid annual registration fees, no active “stop-filer” cases, and no pending criminal charges with the Department of Justice (DOJ) or any competent court. Additionally, new applicants must be regular users of the BIR’s Electronic Filing and Payment System (eFPS) for at least two consecutive months. Applicants must not have any delinquent tax accounts.

However, tax assessments that have been timely protested, whether administratively or judicially, are not considered delinquent, in accordance with RR No. 12-99, as amended. In certain cases, applicants with tax assessments under judicial dispute or subject to abatement or compromise settlement under Section 204 of the Tax Code may still be eligible for a tax clearance, provided they secure an escrow deposit with an authorised agent bank equivalent to the disputed tax liabilities.

Under the IRR of R.A. No. 9184, a bidder’s failure to submit a valid and unexpired tax clearance during the post-qualification stage will result in their automatic disqualification.

Tax clearance before final settlement of government contracts

The need for tax clearance does not end with the contract’s award, as compliance with tax laws and regulations is a continuing requirement. With this, a separate tax clearance, known as the Tax Clearance Certificate for Final Settlement of Government Contracts (TCFG), is required for the final payment to the contractor. EO No. 398 provides for the entitlement of the government to suspend payment for any goods or services delivered by the private contractor to the procuring government entity should it fail to pay and file its taxes on time. This requirement is reinforced by RR No. 17-2024, as supplemented by Revenue Memorandum Order No. 002-2025.

To secure a TCFG, applicants must submit a duly accomplished Sworn Application Form for TCFG, available on the BIR’s Official Website, along with a certification from the concerned government agency on the final collectible payment due to the contractor, including other documentary requirements. Upon receipt of the complete application, the BIR will conduct a verification to ensure that all tax liabilities and obligations related to the project have been fully settled and complied with.

The consequence of failing to secure a TCFG is the non-release of final payment for the project, as provided under RR No. 17-2024. The government agency cannot legally settle the remaining balance until the contractor provides this clearance. Additionally, those found to be engaged in and charged with tax evasion can be disqualified from participating in public contracts, as the absence of a pending criminal charge with the DOJ or any competent court is a requirement to be issued a tax clearance under RR No. 3-2005, as amended by RR No. 1-2016.

Tax clearance as a safeguard

The requirement for tax clearance is one of the safeguards employed by the government to uphold transparency and accountability in public projects. It is a mechanism that identifies non-compliant contractors at the onset and ensures continued compliance with tax laws and regulations throughout the project.

By strictly enforcing compliance with this requirement and preserving its integrity, the government not only secures revenue for public services but also emphasises the requirement that those who seek to engage in government contracts must be committed to comply with tax and other laws. Aside from the execution of the directive of the Commissioner to investigate the allegedly anomalous contractors, the consistent implementation and compliance with the rules governing tax clearances will send a clear message that partnership with the government demands not only competence but also integrity, accountability, and a genuine commitment to nation-building.

Paul Santos is a Manager for the Tax Advisory & Compliance Practice Area at P&A Grant Thornton. One of the leading audit, tax, advisory, and outsourcing firms in the Philippines, P&A Grant Thornton is composed of 29 Partners and 1,500 staff members. We’d like to hear from you! Connect with us on LinkedIn and like us on Facebook: P&A Grant Thornton and email your comments to business.development@ph.gt.com. For more information, visit our website: www.grantthornton.com.ph.

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LINE OF SIGHT | CMEPA implementation gains momentum: BIR issues regulations

by Contributor
written by Contributor

SINCE the Capital Markets Efficiency Promotion Act (CMEPA) took effect on July 1, 2025, a wave of social media posts has stirred public concern over a supposed “20% tax on savings.” Filipino netizens were alarmed by the misleading posts suggesting that their actual bank savings are now subject to a 20% tax, prompting widespread online reactions. 

To set the record straight, the Department of Finance clarified that the 20% final withholding tax applies only to the interest earned on bank deposits, not the principal savings. More importantly, this is not a new tax. It has long been in effect, well before CMEPA was enacted.  

As the law’s provisions begin to roll out, it is crucial for taxpayers to understand the amendments introduced by CMEPA to avoid confusion leading to misinformation. On August 5 and 8, 2025, the Bureau of Internal Revenue (BIR) released a series of implementing regulations for public guidance. Below is a summary of these key updates. 

Revenue Regulation (RR) No. 18-2025 

Effective July 1, 2025,  pickup trucks are no longer exempt from excise tax under the newly implemented CMEPA. Under Section 18 of the law, the exemption was repealed, aligning pickups with other taxable vehicle categories. Meanwhile, purely electric vehicles remain exempt, while hybrid vehicles are now subject to a 50% excise tax, depending on their net selling price. 

In relation to this, RR No. 18-2025 requires manufacturers, assemblers, or importers to file/submit within 15 days from the effectivity of the regulation:  

  1. A sworn statement on all brands/models of pick-ups as of June 30, 2025; and 
  2. A notarised list of inventory of on-hand completely built-up pick-ups, including completely knocked-down and semi-knocked-down units that are located within their plant, storage facility, or warehouse, or the customs premises, and those in transit for which import entries have been filed with the Bureau of Customs (BOC) on or before June 30, 2025. 

The regulation clarifies that the excise tax will not apply to pick-up units included in the duly submitted inventory list as of June 30, 2025, and those units in transit for which import entries have been filed with the BOC on or before June 30, 2025, and withdrawn on or after July 1, 2025. 

RR No. 19-2025  

As introduced by CMEPA, the revised Documentary Stamp Tax (DST) rate of 75% of 1% is now imposed on the original issuance of shares (Section 174), bonds, debentures, and certificates of stock or indebtedness issued in foreign countries (Section 176), and debt instruments (Section 179). This revised rate applies to transactions made or accomplished on or after July 1, 2025. 

To clarify regarding loan-related instruments, RR No. 19-2025 provides that when a loan agreement, promissory note, mortgage, security over personal property, or other related contracts are simultaneously issued and executed, only one DST shall be imposed based on the instrument that yields the highest tax. On the other hand, if only one instrument is prepared, signed, or executed to cover a loan agreement, promissory note, pledge, or mortgage, the DST prescribed under Section 195 of the Tax Code, covering mortgages, pledges, and deeds of trust, shall apply. In such cases, the tax must be computed based on the full amount of the loan or credit granted, and the instrument shall be treated as covering a single taxable transaction. 

RR No. 20-2025 

The regulation outlines the updated procedures for remittance and compliance related to stock transaction tax (STT), aiming to simplify taxation and encourage broader participation in capital markets. To recall, under CMEPA, the reduced 1/10 of 1% STT of the gross selling price is imposed on the sale, exchange, or other disposition of shares of stock and other securities listed through a local stock exchange and on domestic shares listed and traded through a foreign stock exchange.  

For transactions involving shares and other securities listed and traded in a local stock exchange, the stockbroker who facilitated the sale is responsible for collecting and remitting the tax to the BIR within five (5) banking days from the date of collection. The stockbroker must also submit a true and complete return detailing all the transactions. On the other hand, for transactions involving shares and other securities listed and traded in a foreign stock exchange, the responsibility to collect and remit the tax within ten (10) banking days and comply with the reportorial requirements falls on the selling shareholder, either personally or through a stockbroker or an authorised representative.  

 The regulation emphasises that ownership or title to the shares cannot be transferred without payment of the corresponding tax. Additionally, the regulation provides that the sale or exchange of stock and other securities listed and traded through a local or foreign stock exchange by a licensed dealer in securities acting for their own account in the ordinary course of business is considered ordinary income subject to graduated rates for individual and regular corporate tax for corporations. 

RR No. 21-2025  

The regulation outlines the updated tax rates for the passive income of different types of taxpayers as amended by CMEPA. It clarifies that passive income refers to earnings derived from sources that do not require active engagement in trade or business and are not subject to VAT. It explicitly excludes income generated from the active pursuit of a corporation’s primary purpose and income already covered by VAT.  

Additionally, the regulation provides guidance for dealers in securities or other financial intermediaries. For one, they are allowed to claim losses from wash sales of stock or securities, provided such loss arises out of transactions made in the ordinary course of their business. Moreover, the limitation on capital losses does not apply to them.   

Lastly, the regulation preserves any tax exemption or preferential rate applicable to financial instruments issued or transacted prior to July 1, 2025.  These instruments shall remain subject to the prevailing rate at the time of issuance for the duration of their maturity, subject to the following conditions: 

  1. The financial instrument was issued or transacted prior to July 1, 2025, as evidenced by the instrument itself or any other relevant government agreement (written or electronic); 
  2. The instrument or agreement provides for the maturity period of the financial instrument to be beyond July 1, 2025; and, 
  3. There is no change in the maturity date or remaining period of coverage from that of the original document or agreement, and no renewal or issuance of a new instrument to replace the old ones, starting July 1, 2025.   

RR No. 22-2025 

The regulation cites scenarios where an employer may claim as a deduction the contributions it made to its employees’ Personal Equity and Retirement Account (PERA), including an additional 50% of its contributions as introduced by CMEPA. 

 This additional 50% deduction only applies if the following conditions are met: 

  1. Employers should have contributed an amount at least equal to the contributions of their employees; and, 
  2. Employers should have contributed to all of their employees’ PERA. 

These deductions apply to qualified employers’ contributions made to PERA on or after July 1, 2025.   

Conclusion 

CMEPA marks a pivotal shift in the Philippine tax landscape, introducing reforms designed to modernise financial regulations, foster capital market efficiency, and enhance transparency. With the BIR now issuing the implementing regulations, both the taxpayers and businesses are better equipped to navigate the changes and ensure full compliance with the law.  These clarifications aim to ensure consistency in tax treatment and provide certainty for investors and financial institutions navigating the transition under CMEPA. 

Proper information dissemination is essential to prevent the spread of misinformation, particularly on social media. It is crucial that government agencies, media outlets, and civic organisations work together to ensure that accurate and timely information reaches the public. At the same time, citizens have a shared responsibility to stay informed and verify facts before sharing content online. In an era where misinformation can spread rapidly, critical thinking and digital responsibility are more important than ever. 

Atty. Tonee Rose M. Palomeno is a Manager for the Tax Advisory and Compliance Practice Area at P&A Grant Thornton. One of the leading audit, tax, advisory, and outsourcing firms in the Philippines, P&A Grant Thornton is composed of 29 Partners and 1,500 staff members. We’d like to hear from you! Connect with us on LinkedIn and like us on Facebook: P&A Grant Thornton and email your comments to business.development@ph.gt.com. For more information, visit our website: www.grantthornton.com.ph.

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