CPAs in the Philippines amid globalization
By Ken John B. Asadon
THE Philippine Certified Public Accountant Licensure Exam (CPALE) results for May 2024 were released about a month ago, marking a significant milestone for many aspiring accountants. Out of 10,421 examinees, 3,155 passed, resulting in a passing rate of 30.28 percent. The exams took place from May 26 to 28, 2024, across various testing centers in the country, including Metro Manila, Cebu and Davao.
The impressive passing rate of 30.28 percent highlights the rigorous nature of the CPALE and the dedication required to succeed in this profession. The achievements of these new certified public accountants (CPAs) not only reflect their hard work but also signify a positive step towards addressing the ongoing demand for qualified accountants in the Philippines.
The success of these newly certified accountants has been widely celebrated on social media platforms like Facebook, where numerous congratulatory and inspirational messages were shared. Many of the new CPAs received invitations to speak at graduation ceremonies of their high schools or colleges, while others have already embarked on their professional journeys, securing positions in their desired fields globally.
Speaking globally, globalization has had a significant impact on CPAs in the Philippines, affecting various aspects of their profession and practice.
The Philippines is a major hub for business process outsourcing (BPO). Many accounting services are outsourced to the Philippines due to the high proficiency of CPAs in the Philippines, creating both competition and job opportunities. They have access to job opportunities abroad due to their familiarity with international standards and practices. We have adopted the International Financial Reporting Standards (IFRS), which enhances the comparability of financial statements globally, aligning local practices with international norms. Also, Auditing standards in the Philippines are also aligned with the International Standard on Auditing (ISA), ensuring that audit practices meet global expectations.
Aside from being adaptive globally, the Philippines has a strong cultural affinity with Western countries, particularly the United States, which makes it easier for Filipino BPO workers to understand and communicate with international clients. Based on an article published by Business World on November 2023, the Philippines ranks 20th out of 113 countries in the EF English Proficiency Index (EPI) as of year 2023. This places the country in the "high proficiency" category, which means Filipinos are capable of tasks such as making work presentations, understanding TV shows, and reading newspapers in English. The Philippines is second in Asia, only behind Singapore.
From business owners' perspective, the cost of labor in the Philippines is relatively lower compared to Western countries, providing cost savings for businesses that outsource their processes. According to the Bureau of Labor Statistics (BLS), a unit of the United States Department of Labor, the average salary for CPAs in the US is approximately $119,000 per year. This figure can vary significantly based on factors such as experience, industry, company size, and location. For example, CPAs with less than one year of experience typically earn around $78,000 annually, while those with over 20 years of experience can make up to $150,000 per year.
Globalization opens up opportunities for CPAs in the Philippines to work in different countries without even leaving the country, enhancing their career prospects and allowing them to gain international experience. CPAs working abroad and working from home often earn higher salaries compared to their local counterparts, improving their standard of living. CPAs can serve clients from various parts of the world, expanding their client base and business opportunities.
The migration of CPAs in the Philippines to other countries is a significant contributor to the shortage of qualified professionals within the Philippines. The allure of better compensation packages, more attractive benefits, and enhanced career opportunities often draws CPAs to seek employment abroad. This phenomenon is often referred to as "brain drain."
Globalization plays a vital role in every country's economic growth. It has interconnected nations through technology, and communication, cultural exchange, and technological advancement. While globalization provides significant opportunities for CPAs in the Philippines, it also poses challenges for the local industry due to potential talent shortages.
These challenges can be addressed by expanding accounting education and professional training programs to produce more CPAs and ensure a steady supply of qualified professionals; offering competitive salaries, benefits, and career development opportunities to retain CPAs within the country; implementing remote work options and flexible schedules to attract and retain talent; and policies and initiatives to support the accounting profession, such as scholarships, grants, and professional development programs.
Professional certifications: While not CPAs, non-CPA candidates may hold other pertinent certifications like CIA (certified internal auditor) or CMA (certified management accountant), demonstrating their dedication to professional growth.
By balancing the benefits of globalization with the needs of its local economy, the Philippines can ensure a robust supply of skilled CPAs to support both domestic and international markets.
Ken John B. Asadon, CPA, CTT, MBA is the tax partner of Paguio, Dumayas & Associates, CPAs (PrimeGlobal Philippines), an institutional member of the Association of CPAs in Public Practice (Acpapp). The opinion of the writer does not reflect in any way the opinion of these institutions.
Source: CPAs in the Philippines amid globalization