[1] Speech delivered by retired Chief Justice ARTEMIO V. PANGANIBAN as Guest Speaker and Inducting Officer during the General Assembly and Induction of Officers of the Philippine Institute of Certified Public Accountants (PICPA) held online on July 3, 2021.
Let me begin by congratulating your newly-inducted National President Marydith “Dolly” Miguel and your other equally-deserving officers. In the interest of transparency, may I disclose, at this point, that Dolly and I have had our friendly encounters in many publicly-listed companies, like PLDT, Metro Pacific Investments Corporation, Meralco, GMA7 Network, etc., she as the partner-in-charge of our external auditor, SGV and Co., and I as a director and chairman or member of these PLCs’ Audit Committees which, as you all know, exercise oversight functions over both the internal and external audit of the company concerned.
When Audit Becomes Especially Difficult
Sometimes, this relationship becomes unusually tough because of special circumstances. For example, as the only Philippine company listed in the New York Stock Exchange, PLDT must follow the federal laws of the United States, particularly the Sarbanes-Oxley Law (or SOX), the regulations of the US Securities and Exchange Commission , the laws of New York state and city, and the Rules of the NY Stock Exchange. Moreover, since PLDT is effectively controlled by the First Pacific Company that is listed in the Hong Kong Stock Exchange, PLDT must also observe Hong Kong laws and the rules of the HK Stock Exchange. Thus, an audit of PLDT requires a reasonable familiarity of these foreign laws and rules, in addition to Philippines laws, regulations of the Securities and Exchange Commission and the rules of the Philippine Stock Exchange.
Nonetheless, whether it be Philippine laws and rules of the Philippine Stock Exchange, or of the US or HK laws and the NYSE or HKSE rules, Dolly always comes out the big winner, always demonstrating her expertise in these foreign and local laws and rules, and always overcoming intense grilling by the members of the Audit Committees concerned. Moreover, she is able to prove that the millions of fees she collects – sometimes in excess of P50 million annually from just one of the companies I mentioned – are reasonable and fair because of her hard work, integrity, independence, accuracy and on-time submission of her reports. Palakpakan po natin ang ating magiting na Pambansang Pangulo, si Dolly Miguel.
Having said that, I do not know what kind of funny wind struck President Dolly that impelled her to invite me to be your inducting officer and guest speaker today. Unlike all of you, I am not a certified public accountant, not even a commerce or business administration graduate. I am just a humble lawyer from a mass-based private university who tried to transform and embrace possibilities and, later surprisingly realized, with the Lord’s blessing, the potential of achieving the dream of every lawyer – to reach the unreachable star of our profession – to be the chief magistrate of our land. Though an accounting ignoramus, may I now try to let that unreachable star shed a little light on my modest knowledge of your profession.
As a Filipino citizen, lawyer and magistrate, I have always espoused my personal legal philosophy of liberty and prosperity under the rule of law. Let me therefore share with you why and how my personal philosophy is relevant to CPAs, CFOs and CEOs of our country.
How L & P Is Relevant to CPAs
Like what I did during my speech at the 12th General Assembly of the Asean Law Association on February 26, 2015, let me explain my philosophy with a famous quotation of Dr. Martin Luther King Jr., “If a man does not have a job or an income, he has neither life nor liberty nor the possibility for the pursuit of happiness.” Let me repeat that, “If a man does not have a job or an income, he has neither life nor liberty nor the possibility for the pursuit of happiness.”
It may seem ironic that I should be citing an American civil rights icon, a foreigner instead of one of our own heroes or spiritual leaders. But I quoted him not because of his nationality, color, gender or religion. I quoted him because of the truth he said so simply but so profoundly.
I cited him because precisely of my belief that truth is eternal and limitless; that truth is not bound by sovereignty, or territory, or ideology, or legality; that what is true in America is also true in the Philippines, in Asia and in the world. And that truth is this: humans need both justice and jobs; freedom and food; ethics and economics; peace and development; liberty and prosperity; these twin beacons must always go together; one is useless without the other.
To repeat, there are certain truths that transcend sovereignties, territories, ideologies and legalities. And one of those truths is this: The best way to conquer poverty, to create wealth and to share prosperity is to unleash the entrepreneurial genius of people by granting them the freedom and the tools to help themselves and society.
Confucius and the Fisherman
Let me prove my thesis by quoting a popular adage from Confucius, “Give a man a fish and you feed him for a day. Teach him to fish and you feed him for a lifetime.” Indeed, to save a fisherman from destitution, we must help him learn how to fish more effectively. We must educate him in the skills needed to catch fish more efficiently, assist him in acquiring a boat, allow him the freedom to sail the vast oceans, and teach him the techniques to market the fish he catches.
Sometimes, some of us fear that the fisherman may get lost and die in the storms that batter the seas; or that he may become selfish and would want to own the entire ocean and its vast resources; or that he may become too rich and powerful and metamorphose into a rival, an enemy, or worse, a master. Such fears of possible misjudgments may indeed happen some of the time. Human arrogance, greed and avarice lurk in all undertakings. But they are the exceptions rather than the rule. We must never stop dreaming for fear that reality may shatter our dreams. That is part of the interesting reality of being human.
On the other hand, I respectfully believe that the goal of government and of law is to provide guarantees and incentives to help the fisherman prosper, to create the institutions to support him, and to promulgate minimal regulations to prevent him from appropriating all the fishing grounds, from keeping all the earnings to himself and from forgetting his obligation to pay reasonable taxes to the government. Indeed, government must inspire him to share his consequential wealth with the rest of society.
Validating the Truth
Let me take you briefly around the world to validate this simple truth. The United States, the most powerful country in the world and the great promoter of liberal democracy and freedom, attained affluence because of the pioneers who defied monarchical tyrannies and started a new nation that unleashed the inventive, innovative and entrepreneurial spirit of people like Thomas Edison, Nikola Tesla, John Rockefeller, Henry Ford, J.P. Morgan, and recently of Bill Gates, Steve Jobs and Jeff Bezos, and of great government leaders like Franklin Delano Roosevelt, Dwight Eisenhower and, now, Joe Biden who provided them with the encouragement to attain their dreams and the good governance to contain their greed and share their wealth.
Then, let us go to China, the second most powerful economy in the world and the prime promoter of the communist system. True, Mao Zedong led the masses in a revolt that dislodged the corrupt and inefficient government born of an outdated monarchy. But it was Deng Xiaoping, and now, Xi Jinping who led, and continue to lead, this nation to unparalleled economic prosperity by unleashing the entrepreneurial ingenuity of the Chinese under the “One-Country-Two-Systems” philosophy, and who opened the gates of entrepreneurship to the likes of Jack Ma, Liu Qiangdong and Wang Wenyin.
Finally, let me bring you to Korea. As a result of World War II, this country was divided into North and South, which unfortunately could not accept their division and engaged in a terrible war that ruined their economies and impoverished their people. Rising from the ruins, South Korea relied on the entrepreneurial spirit of the Korean people and built on their private initiative as well as on the notion that innovation, creativity, freedom and hard work would enable them to conquer their poverty, provide for their family’s well-being and attain affluence.
In contrast, North Korea – despite its technological and military bravado – wallow in abject poverty as a result of its tight grip on creativity and inordinate fear of the entrepreneurship, education, freedom and prosperity of its people.
The peoples of the world have different histories, traditions, cultures, ideologies and mindsets. But I dare say, all of them need liberty and prosperity. Some countries, taking into account their unique backgrounds, start with improving their people’s economic lives first and restrict temporarily in measured stages their political liberty. Some others begin with political liberty thinking that their economy would flourish as a necessary consequence. Still some others rise with a combination of both liberty and prosperity at the very beginning. I think that such differing starts and focus are necessary in the growth of nations. But, I also firmly believe that eventually and inevitably, all the peoples of the world need and deserve liberty and prosperity in equal measure.
Transparency, Accountability, Truth and Sustainability
The big question during this momentous national conference of PICPA is how accountants, business administrators and economists, specifically CPAs, CFOs and CEOs, can be relevant to this philosophy of lives and livelihood? Surely, you are in the forefront of the economy, in the very heart of big, medium and small businesses, which are all dependent on how you evaluate and audit their financial and management performance every quarter and every year, and on how you report your evaluation and audit to their shareholders and investors through the Philippine Stock Exchange, and to the general public through the Securities and Exchange Commission.
Whenever you faithfully characterize your reports with these four values, namely, transparency, accountability, truth, and sustainability (or TATS), you yourselves become purveyors of liberty and prosperity under the rule of law. To repeat, whenever your actions and reports as CPAs are characterized by the four TATS, as they do and should do, you become images and collaborators of Martin Luther King, of Confucius and his fisherman, of Thomas Edison, of J.P. Morgan, of Franklin Delano Roosevelt, of Steve Jobs and even of Deng Xiaoping and Jack Ma.
With your indulgence and patience, let me just take a few more minutes of your time to explain the four TATS. Your work as accountants, financial bosses and chief executives should be transparent in showing, to use a judicial cliché, the truth, the whole truth and nothing but the truth expressed in facts and figures, and in clear and simple language. Truly, transparency that leads to the truth should also show the accountability, if any, of the offices and officers of the corporate organization concerned. Moreover, your truthful and transparent reports will also demonstrate whether the particular enterprise or the particular line of business of the enterprise is sustainable over the short and long term given the political, social, economic and environmental forces besieging it.
To me, these four TATS values are the cornerstones of how you, as CPA, CFOs and CEOs, can truly transform society by embracing the possibilities and realizing the potentials of liberty and prosperity under the rule of law. I stress “under the rule of law” because accountants, like lawyers, are strictly bound to follow laws, rules, regulations and standards, as an essential part of their work as professionals.
A Little Footnote on L & P
Before I end, let me now share a little footnote. During my 75th birthday ten years ago on December 7, 2011, I organized the Foundation for Liberty and Prosperity or FLP to promote my L & P philosophy. Joining me in the original FLP Board of Trustees are jurists and lawyers as well as the leaders of private business led by SGV’s late founder, Washington SyCip. My dear friend Wash did not only join and lend his name to the Foundation. He also contributed a substantial sum. After his death, the multi-awarded and longest-serving governor of the Bangko Sentral ng Pilipinas, Amando M. Tetangco Jr., delightfully agreed to take his place. Another VIP who joined us as an original trustee is a top educator, Dr. Edilberto C. De Jesus, former Secretary of Education, former President of the Far Eastern University (my alma mater) and, later on, President of the Asian Institute of Management (where my dear wife Leni taught for 37 years and where our daughter, Maria Theresa, now teaches).
During FLP’s first 10 years of life, we initiated three education projects: First, the Legal Scholarship Program that grants 20 scholarships of P200,000 per scholar per year to cover tuition, books and stipends; Second, the Dissertation Writing Contest that awards cash prizes from a modest P20,000 to a maximum of P300,000 to 20 winners; and Third, our Professorial Chairs Program that awarded Professorial Chairs to 17 law deans and law professors. You will note that these three initial projects targeted only the law profession.
However, during its coming decade from 2022 onwards, the FLP will expand its reach to award fellowships in Master in Business Administration, with majors in Entrepreneurship and in Sustainability. Recently, as Chairman of FLP, I proposed to the AIM, in cooperation with a top law school based in Makati like Ateneo, UP or FEU, a new curriculum that would lead to an MBA major in Legal Management. AIM President Jikeong Kang welcomed my proposal and promised to study it.
What I am saying is that to celebrate its second decade starting in 2022, the FLP will veer its programs from the purely legal arena to the economic and business fields consistent with justice and jobs, freedom and food, liberty and prosperity. May I now close with an invitation for PICPA and its members to join us in this new direction in safeguarding the liberty and nurturing the prosperity of our people under the rule of law?
Mabuhay po kayo at maraming salamat po.
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