Part 16
The Asian Development Bank (ADB) has a long history of providing support, financial and otherwise, to its constituents since its formation in 1966. The ADB’s mandate was to promote economic and social progress in the Asia-Pacific region. Its first headquarters was located in the city of Manila. The ADB then relocated to its permanent headquarters in Mandaluyong City, Metro Manila.
The Philippines, as a founding member of the ADB, has representation on the ADB’s Board of Directors, which is determined by the country’s shareholding and voting power within the organization. The ADB Charter vests all the powers of the institution in the Board of Governors. All member countries of ADB have representatives to the Board of Governors, including the Philippines, which generally designates the Secretary of Finance to be its representative to the Board. Presently, DOF Secretary Rafael Recto acts as Vice-chairman of the Board of Governors. The Board delegates most of the operational powers to a 12-person Board of Directors.
The Board of Directors is responsible for the direction of the general operations of the bank. The Board (i) takes decisions concerning policies of the bank, and loans, guarantees, investments and technical assistance by the bank; (ii) approves borrowings by the bank; (iii) clears the financial accounts of the bank for approval by the Board of Governors; and (iv) approve the budgets of the bank.
The 12 Executive Directors of the Board of Directors are elected by the Board of Governors. Eight of the 12 are elected from within Asia and the Pacific and four others are elected from outside the region. The Board of Directors performs its duties full time at the headquarters in Mandaluyong. The President of ADB chairs the Board of Directors.
This year, the Philippines was voted as one of the Executive Directors to constitute the Board of Directors. The Philippines representative is Professor Charlotte Justine Sicat, formerly of the University of the Philippines School of Business.
While hosting the ADB headquarters does not guarantee any special treatment in terms of governance, leadership positions or financial concessions, being the host country can provide the Philippines with certain advantages and opportunities.
These include:
1. Increased visibility and influence: The presence of the ADB headquarters in Manila allows the Philippine government to maintain closer ties with the ADB leadership and potentially have greater input in shaping the organization’s policies and priorities.
2. Access to expertise and resources: Philippine officials and professionals can more easily engage with ADB experts, attend events, and leverage the knowledge resources available at the headquarters.
3. Capacity building opportunities: Philippine nationals may have better access to training programs, internships, and employment opportunities, whether as full-time staff or contractual staff, at the ADB headquarters.
It’s worth noting that leadership positions, such as the ADB President and Vice Presidents, are typically filled through a selection process based on qualifications, merit, and major country funder (such as Japan), rather than being tied to the host country.
The ADB, through its long existence, has been pursuing several tax policy and administration initiatives and projects. These range from the extension of loans and technical assistance for tax revenue enhancement programs, pursuing tax advocacies and research, capacity-building activities for the fiscal and tax officials of the member countries, hosting of tax fora and conferences, engaging with other multilateral global institutions in their tax initiatives and programs, the establishment of the Asia Pacific Tax portal, and others.
The Philippines should take advantage of its unique situation of being the host and location of the ADB headquarters, and the presence of Filipinos in influential positions in ADB as officers and consultants, to maximize the benefits and engagements on tax-related activities. These can include its more active involvement in the tax programs of the ADB, including the assumption of leadership roles in these undertakings.
To be continued
Joel L. Tan-Torres was the former Commissioner of the Bureau of Internal Revenue. Previously, he was also the Dean of the University of the Philippines Virata
School of Business, the chairman of the Professional Regulatory Board of Accountancy, Tax partner of Reyes Tacandong & Co. and the SyCip Gorres and Velayo & Co. He is a Certified Public Accountant who garnered No. 1 in the CPA Board Examination of May 1979. He is now back to his tax and consultancy practice and can be contacted at joeltantorress@yahoo.com and his firm JL2T Consultancy.