VISA FREE ENTRY TO INDIAN NATIONALS

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Indian nationals may enter the Philippines visa free at any port of entry for as long as they possess the following requirements:

  1. Passport with validity of at least six (6) months beyond the contemplated stay;
  2. Return or onward ticket to the next country of destination;
  3. Valid and current AMERICAN, JAPANESE, AUSTRALIAN, CANADIAN, SHENGEN, SINGAPORE, or UNITED KINGDOM visa (AJACSSUK) or permanent residence permit;
  4. No derogatory record (i.e., watchlist or blacklist) with the Bureau of Immigration.

They will be issued an initial authorized stay of fourteen (14) days. This may be extended for another seven (7) days for a maximum of twenty-one (21) days.

This admission cannot be extended beyond twenty-one (21) days and cannot be converted to other visa categories.

VISA FREE ENTRY TO CHINESE NATIONALS

Chinese nationals may be granted VISA FREE ENTRY to the Philippines for a stay of up to seven (7) days provided that the possess the following requirements:

  1. Passport valid for at least six (6) months beyond the contemplated stay;
  2. Return or onward ticket to the next country of destination;
  3. Any of the following valid and current visas: AMERICAN, JAPANESE, AUSTRALIAN, CANADIAN, or SHENGEN
  4. No derogatory record (i.e., watchlist or blacklist) with the Bureau of Immigration (BI)
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The seven (7) day visa entry may be extended by an additional fourteen (14) days for a maximum of twenty-one (21) days.

A Chinese  national who enters the Philippines under this type of admission cannot extend his or her stay.

This admission cannot be converted into other Philippine visa types which would allow further stay in the country.  This admission program is primarily for promotion and encouragement of tourism for Chinese nationals.

Dentists, optometrists, and doctors are exempted from business permits. How about other professionals?

The DILG issued Memorandum Circular 2016-170 on November 28, 2016 exempting medical and dental clinics from obtaining business permits or mayor’s permits for their operation.

It declared that medical and dental clinics used for medical and dental checkups and for medical and dental procedures are a direct consequence of the practice of one’s profession, and therefore exempt from payment of business or mayor’s permit, provided that the practitioners pay the corresponding profession tax (PTR) for practice of their profession.

The DILG issued the circular because it noticed that several local governments were still requiring medical and dental clinics to pay for business permits despite a previous 1999 decision of the Secretary of Finance giving an opinion that professions requiring professions requiring government examination, like dentists and doctors, are required to pay professional tax, “but are exempted from payment of mayor’s permit or license fee for the practice of such profession. Medical clinics, as a direct consequence of the practice of such profession cannot be be imposed with a graduated tax on the premise that it is a business establishment offering to render professional service.”

Dentists were explicitly exempted as early as 1999. The decision was reiterated by the DILG in August 2013. Many of my dentist friends had never applied for mayor’s permits since they opened their own clinics.

With doctors, though, it depends. Those with strong organizations in the provinces don’t pay. Most others pay because they knew no better.

Strangely, the DILG also noted a trial court decision that declared that an optometric clinic should be exempted from payment of a business or mayor’s permit because it is an indispensable part or ingredient of the profession of an optometrist. It appears to have confused optometry with opthalmology and thought that it was considered as medical practice. In any case, optometry is a profession.

One last thing. Note that the local government may require a business permit if clinics have established shops for the purpose of generating income from sales of products (i.e., medicines in case of medical clinics, glasses in case of optometry clinics, toothpaste, toothbrushes, etc., in case of dental clinics).

The circular settled the issue for dentists, doctors, and optometrists.

What about the other professions?

Many lawyers and law offices do not apply for business permits because they know the law, can argue it credibly, and have the additional capability to file a complaint with the Ombudsman that is serious enough to convince a local government employee not to put his job on the line to prosecute them.

But it’s also odd that many law offices still pay for business permits because it’s something they have been doing for a long time. One even waits smugly for a case to be filed against a non-paying law office to serve as a lesson. But no cases have even been filed.

How about engineers, architects, interior designers, accountants, real estate brokers, etc.?

Under section 139 of the Local Government Code, a person authorized to practice his profession shall pay the professional tax (PTR) to the LGU where he practices his profession or where he maintains his principal office (in case he practices his profession in multiple cities). He shall be entitled to practice his profession in any part of the Philippines without being subjected to any other national or local tax, license, or fee for the practice of such profession (note that income tax and VAT to the BIR are NOT taxes for the practice of a profession).

The practice of a profession is defined as an activity or undertaking rendered by a registered and licensed professional who is regulated by the Professional Regulation Commission (PRC) or the Supreme Court (in case of lawyers). Professionals those who are licensed after passing a government exam by the PRC or the Supreme Court.

Under the law, ALL professionals and the offices they manage as part of their profession are exempted from payment of business permits. The exemption is been in place since 1991, when the Local Government Code came into effect.

It is now 2016. More than 25 years have passed and many professionals are still applying for business permits in their respective local governments. That’s a lot like giving to charity, so maybe we should not make it an issue, right? It’s okay if that’s how you feel.

But those who think otherwise should look squarely at their respective professional organizations and ask why they’ve never questioned this since 1991.

Only one professional organization questioned why they were still required to pay for a mayor’s permits, and their constituents (dentists) have been exempted since 1999.

How about the organizations of architects, real estate brokers, interior designers, engineers, etc.? It surprises me as well that the professional organization of lawyers, the Integrated Bar of the Philippines, has not filed a case for its constituent lawyers. Why have none filed a case? I find it strange that they spend for many activities, but a case to free its constituents from payment of business permits seems beneath them.

The law has been around since 1991. The case for dentists was won in 1999, and it explained fully the exemption. Other professional organizations could use that verbatim as an argument for their respective cases.

To professionals who read this, I think it’s time for you to look to your professional organizations, remind them of how much you pay in annual dues, and then ask them to start taking care of this by filing a case for your profession, or maybe to lobby your profession’s inclusion in a new DILG circular on exemption of applications for business or mayor’s permits.

 

When to downgrade a Philippine work visa

[THIS WEBSITE WILL NO LONGER BE UPDATED. PLEASE CLICK HERE TO SEE THE UPDATED VERSION: When to downgrade a Philippine work visa ]

When should a Philippine work visa be downgraded? Why should it be downgraded? What happens if it isn’t downgraded? We explore the answer to these questions below.

 

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Screen capture from the Bureau of Immigration website  (www.immigration.gov.ph)

 

Foreign nationals who wish to change their status to temporary visitor or tourist (9a) visa should apply for downgrading of their present visa.

Companies terminating the employment of a foreign national for whatever reason usually file an application to downgrade his visa status to a 9a visa. This gives the foreign national a period of time after his employment to fix his affairs, or maybe take a vacation before he leaves the country.

But note that on the date that the downgrade application is approved, the foreign national will no longer be allowed to work in any capacity in the Philippines. If the Bureau of Immigration were to make an inspection and discover that the company is allowing the foreigner to work after the downgrade, it would constitute a violation of the Immigration Act and will result to penal sanctions for both the company and the foreign employee.

Because of this, some companies won’t downgrade the visa of their employees, but will have them leave on or before the last day of their contract and let the work visa expire abroad. There are consequences to this, depending on the type of work visa issued.
There are many issues on downgrading, which is why companies consult immigration lawyers to ensure that they get the proper legal advice. 

Under immigration law, a foreigner may only work in the Philippines if he has a work visa or a special work permit (this is different from the Alien Employment Permit or AEP).
Generally, a work visa is downgraded to a temporary visitor’s (9a) visa when the foreign national is resigning or has resigned from the company.  

The company should submit an application to downgrade the foreigner’s visa a few days before termination of his employment to end any employer-employee relation between them. This is to avoid any liability or legal complications if he were to commit a violation of law during the remainder of his stay in the country.  
 
When the downgrade is approved, any working relationship between the foreigner and the company is prohibited. It is a violation of the legal requirement for a work visa or permit and will be punished accordingly if discovered. 
 
If a company wants to employ the foreign national up to the last day of the work visa, it should not file an application to downgrade it (i.e., the foreigner leaves on the last day of his allowed visa stay, or a few days before). The foreigner can actually leave without downgrading.  

In such instances, though, immigration law requires the company to secure a clearance and cancellation of the foreigner’s alien certificate of registration. This would allow the foreigner to leave without any problem, and allow him to work with the company to the very last day.  
There are instances wherein some BI-accredited agencies suggest that the company apply for a downgrade. This is problematic because it exposes the company to penalties for violation of immigration laws if the downgrade is granted while the foreigner still works for the company. This only benefits the former because the company pays fees for something it does not need, while it also exposes itself to liability.  

Another reason for to apply for a downgrade is for changes in employment without having to leave the country. Philippine immigration laws only allow conversion from to a work visa from a 9a visa. If a foreigner were to change employment and go to a different company, he would have to downgrade his current visa and then file a new application for a work visa. This is the normal work process and cannot be short-circuited.


WHAT IS THE EFFECT OF NOT DOWNGRADING OR SECURING A CLEARANCE CERTIFICATE? 

At this point, we have to differentiate between the different kinds of work visas. The effect of not downgrading or securing a clearance certificate depends on the work visa issued. Only the work visas covered under section 9 of the Immigration Act (such as 9d and 9g visas) are required to secure a clearance.  The RHQ and ROHQ visas are exempted from all BI clearances, hence, there is no effect if these visas expire while the foreign national is abroad. The 47a2 visa is a special visa that also does not require downgrading. 

If a foreign national with a section 9 visa does not secure a downgrade or an ECC-CE, he is considered to have an expired work visa if he is abroad when his visa expires. Technically, he cannot obtain another visa until he has his expired visa cancelled.
This can be a problem considering that the only way to have it cancelled is to have the BI in the Philippines cancel it. This cannot be done abroad. It can only be done in the Philippines. That’s a problem because the foreign national will not be given a visa to go to the Philippines to cancel it. That becomes a problem for all concerned. This is precisely why companies should check with an immigration lawyer – to ensure they get the proper legal advice.  

There are ways around it. 

If the foreign national is covered under the balikbayan law, or is from a country whose citizens are allowed visa-free entry into the Philippines, they will usually be allowed to enter the country without securing a visa. When they enter the country, they will not need to downgrade their expired visa because their status will be considered as that of a 9a visa.
However, if the foreigner is a restricted foreign national, he will be required to apply for a visa in the Philippine embassy.  

When he applies for a visa, the embassy will note that he has an expired visa and will not provide him one unless he secures clearance from the BI. But since the foreign national cannot file for clearance with the BI because he couldn’t even enter the country, he definitely will be at a quandary.   

The remedy is to give notice to the BI that the foreign national has left the country for good, and then apply for cancellation of the foreigner’s ACR I-Card.
The BI will run a clearance before cancellation of the ACR I-Card. Once the ACR I-Card is cancelled, it will have the effect of cancellation of the work visa. Thereafter, the foreign national may now apply for a new visa.  Lawyers can do this for their clients.  

Note that one may need legal advice if problems are encountered, or better yet, to prevent any problems. Some of the problems are on case-to-case basis. Should you need legal representation for your immigration cases, feel free to message me.

Due Process and the Generals

President Duterte gave the names of five generals allegedly involved in the drug trade. 

Three of them are still in the service. They have been relieved from their posts, but are still ranking generals with pay and all the benefits. The two are retired, but they still enjoy the benefits of their retirement. Except for naming them, no criminal case has yet been filed, and only the three in service face administrative investigation, otherwise, they all still enjoy the benefits of their status.

Was there are violation of due process? Of course not. There is no violation of due process.
Due process requires that a process be undertaken to prove guilt or liability. It is a process that is every person’s due – hence the technical term, “due process.” 

It requires that a person be informed of the charges against him, allows him to participate and give evidence on his behalf, and then allows a neutral party to rule on his case after examining everything on the table. If no such process is performed, or if any step is removed, then there is a violation of due process.

The three who are still part of the service have the opportunity to establish their innocence. Their case is now with the NAPOLCOM and they are being given every opportunity to defend themselves. Until then, they are generals who deserve the benefits of their rank and station, and will remain as such unless their guilt is proven.

I disagree with those who have said that they were stripped of their positions without any trial or proceeding – hence, a violation of due process.

The president has absolute control and discretion over the Executive Department. Those in the Executive serve at his pleasure (save for those exceptions provided by law). He can replace people for any reason under the sun. 
He did not trust the three generals, so he replaced them. It was that simple. But he did not strip them of their rank, their pay, or their benefits. That would have been a violation of due process. In fact, the President was very lenient on them – he warned them and called them out by name, so that there were no surprises.

I disagree with people who say that the President exposed them to trial in the court of public opinion, and therefore, committed a violation of due process.

The court of public opinion is not a real court, and is not covered by the definition of due process. How can there be a violation of due process when there is no case pending in a court, tribunal, or administrative agency? How can there be a violation of due process when nothing was taken from a person? How can there be a violation of due process when there is no official declaration of guilt or liability?

A public officer is ALWAYS in the public eye, and all accusations against them are fair game in the court of public opinion. It is for this reason that they are not covered by the provisions on libel – one can say anything against them and not be liable for libel unless what was said was malicious and based on lies.

For a president to expose said generals to the court of public opinion is not a violation of due process. I would even say that it was his right to do so, for as long as his accusations are based on the truth. The proceedings before the NAPOLCOM will give due process to the generals.

In the meantime, they can also clear their names in the court of public opinion by using the media and social media as an avenue to prove their innocence. It’s a free media we have, and an unregulated social media. Censorship will not be an issue.

As to the two retired generals, they have nothing to fear. I do not know if their case has been endorsed for investigation. But their freedoms, their rights, and their benefits have not been curtailed or taken away. If they want, they could prove their case in the court of public opinion. 

There is no violation of due process if no freedom, right, or benefit is taken from you by the state. These may only be taken from you after a legal process. We have neither instance in the case of the five generals.

Visa Downgrade with Orders to Leave

[THIS SITE IS NO LONGER UPDATED. PLEASE LOOK AT THE UPDATED ARTICLE HERE: “Order to Leave” in your visa downgrade ]

Philippine law allows conversion of visas ONLY from a temporary visitor’s (9a) visa. If a foreign national has a different visa status when he enters the country, he will be required to downgrade his visa to a 9a visa before he could convert to another. (Conversions to other visa types are allowed whether one enters under tourist, business, or balikbayan 9a visas).

However, there are three visa types which will contain an Order to Leave when they are downgraded. Immigration Administrative Order No. SBM-2013-013 enumerates them as follows:

(1) Where the visa to be downgraded is Section 9f/Student visa under Commonwealth Act No. 613 or the Philippine Immigration Act (PIA) of 1940, as amended, regardless of total or
cumulative period;

(2) Where the visa to be downgraded is a non-immigrant category and the total or cumulative period within the country exceeds 5 years;

(3) Where there is a badge of fraud or fact that casts suspicionon the applicant’s visa [Badge  of fraud examples: Insufficient explanation in downgrading from Temporary Resident Visa (TRV) by marriage; Derogatory information provided by employer when downgrading from a 9g visa, etc.]

The foreign national may file a letter with the Office of the Commissioner requesting for reconsideration (MR) from the order to leave under numbers (2) and (3) on valid and exceptional grounds, and upon payment of the MR fee.There is no MR available to holders of student visas (9f).

The Bureau of Immigration has allowed non-immigrant foreign nationals whose stay in the country exceeds 5 years to stay (after filing a MR) on the ground that they are applying for a different visa status (i.e., immigrant visa, retirement visa, etc.), to take care of his minor child with an unemployed common law (unmarried) spouse, etc. The grounds to justify stay, however, are reviewed and approved on a case-to-case basis.

The Order to Leave should not to be confused with deportation. The effect is not the same, and it will not put the foreign national on the immigration blacklist. These rules are in implementation of the strict requirements of the Philippine Immigration Act of 1940, a very restrictive law which was issued before globalization was en vogue (it was enacted before World War II).

The foreign national may even come  back on the same day and will be allowed entry into the Philippines under a new 9a visa period if he is not a restricted foreign national. Please note, however, that he must still present an exit flight ticket to the immigration officer upon entry along with his passport.

A small reminder should be made to holders of Special Non-Immigrant 47a2 visas, commonly known as PEZA visas. The new regulations will not allow holders of these visas to change their status to another non-immigrant status without departing from the country.  If they stay beyond expiration of their 47a2 visa, they will have to update their stay with the bureau, but they will not be downgraded. They will instead be issued an order to leave.

Grace Poe’s “Misrepresentation” in terms of Residency

(Backdrop: After Grace Poe filed her Certificate of Candidacy (CoC) for president, several cases were filed before the COMELEC. These cases were raffled to different divisions, and these divisions had to decide the case before them independent of the others. This is why two divisions issued separate decisions. Both divisions declared that Grace Poe made material misrepresentations with regard to filling out her CoC. One division declared that her misrepresentation was only with regard to the fact of her residency (not citizenship).  The other division declared that there was misrepresentation with regard to BOTH citizenship and length of residence.)

 I don’t think that Grace Poe intended to misrepresent herself as a natural-born citizen. Even now, many lawyers have different opinions on the citizenship of foundlings. Only the Supreme Court can declare her citizenship status with finality. This is a difficult question of law, and it would be unfair to say that she misrepresented her citizenship when even legal experts don’t agree on the status of her citizenship.

Let’s instead look at what the COMELEC divisions commonly agreed on – her misrepresentation of residency. Assuming that Poe can be considered a natural-born citizen, when should she be considered a resident? Did she misrepresent her residency? 

Two COMELEC divisions both found that she misrepresented her residency to make it appear that she was qualified to run for the presidency. 

The best indication was the inconsistency between that her CoC for Senator and for President. 

She stated in her CoC for senator that she would have been a resident of the Philippines for 6 years and 6 months by May 13, 2013. That means that she considered her residence to have started from November 2006. However, when she filed her CoC for president, she stated that she was a resident for 10 years and 11 months. This would mean that she was a resident since May 2005!  

Poe reasoned that it was an “honest mistake” on her part, but did not adduce any evidence to prove this. Neither did she ever have that fact corrected, and it only came up again when she filed her CoC for president.

Both COMELEC decisions noted that her allegation of “honest mistake” had nothing to back it up. This stark inconsistency was considered a clear indication of her intent to hide the fact of her residency and to mislead the Filipino electorate.

  
But it isn’t just because of this inconsistency that the COMELEC declared her to have materially misrepresented her residency. The COMELEC went further to discuss WHEN she could have been considered to have become a resident of the Philippines. 

The decision in the first case declared that Poe could have only become a resident when she re-acquired her Filipino citizenship (assuming that she was natural-born) when she took her Oath of Allegiance on July 2006. 

  
The case of Coquilla v. COMELEC clarified that a former Filipino who became a US citizen had no right to reside in the Philippines unless immigration laws allow him to stay as a temporary visitor or a resident alien. The person in that case even went so far as to get a community tax certificate (cedula) and to spread the word that he was going to run for local office. The Supreme Court said that even these acts demonstrating his intent to establish his residency cannot be counted because he had no right to reside here. Since he had no right to reside in the Philippines, he cannot be considered to have acquired residency. The SC stated:

“In the case at bar, petitioner lost his domicile of origin in Oras by becoming a U.S. citizen after enlisting in the U.S. Navy in 1965. From then on and until November 10, 2000, when he reacquired Philippine citizenship, petitioner was an alien without any right to reside in the Philippines save as our immigration laws may have allowed him to stay as a visitor or as a resident alien.”

Grace Poe was in the country from December 2004, and left the country several times using her US passport. Each time she arrived, it was stamped with a temporary visitor’s visa.  She allegedly only became a Filipino citizen again in July 2006. 

So her stay in the country from December 2004 to July 2006 cannot be counted to her residency because she had no right to reside here. At most, she was only a temporary visitor. She never had her visa stamp amended. And since she left and came back several times with the same visa, she can’t deny this legal conclusion.

The second COMELEC decision was kinder on Poe because it implicitly would have counted the period as part of her residency if she were in the Philippines under an immigrant visa even if she were still an alien. Unfortunately for Poe, she was here on a temporary visitor’s Balikbayan visa, not an immigrant visa.

Why is visa status important?

A visa is a conditional authorization given to a foreigner by a state. It is evidence that you have the permission of a country to enter its borders, and gives conditions for your stay. It determines your residency status in the country you enter. Only foreigners are required visas.

An alien that enters the country has a visa stamped on her passport to make her aware of her status and how long she is permitted to stay. By entering and leaving the country several times with a temporary visitor’s visa, Grace Poe was continually aware of her status as a non-resident alien. She was a non-resident alien up to that point when she took her oath of allegiance. To declare otherwise is to misrepresent herself in an attempt to deceive the public.

It also appears that Poe did not even have an alien certificate of registration (ACR I-Card) to prove that she is a registered resident alien. This is further indication that she can’t even be considered a resident of the country.

In fact the second COMELEC decision noted that becoming a citizen is not enough to establish residency and cited Supreme Court cases as basis. Poe should have also demonstrated an intent to reside here. The first indication of that was when she registered as a voter in San Juan on August 2006. Hence, assuming that she actually re-acquired her citizenship, she could only be considered a resident starting August 2006.

One last thing. Her publicists seem to argue that it is the intent to reside here that is important. That’s not accurate. She has to be physically present, have a right to reside, along with an intent to reside, and perform acts that demonstrate her intent to reside. But the visa stamps on her US passport are conclusive evidence of her status as a non-resident. It’s difficult to escape that.

People say that it should be left to the electorate to decide on Poe’s candidacy. The Supreme Court declared something that can be raised as a counter-argument:

“The ballot cannot override the constitutional and statutory requirements for qualifications and disqualifications of candidates. When the law requires certain qualifications to be possessed or that certain disqualifications be not possessed by persons desiring to serve as elective public officials, those qualifications must be met before one even becomes a candidate. When a person who is not qualified is voted for and eventually garners the highest number of votes, even the will of the electorate expressed through the ballot cannot cure the defect in the qualifications of the candidate. To rule otherwise is to trample upon and rent asunder the very law that sets forth the qualifications and disqualifications of candidates. We might as well write off our election laws if the voice of the electorate is the sole determinant of who should be proclaimed worthy to occupy elective positions in our republic.”

Tax Situs Problems in Electronic Commerce

Electronic commerce transactions have the same tax treatment as their hard-copy equivalent. But one of the problems we should be experiencing with the increasing complexity of the e-commerce ecosystem will be that of tax situs.

The provision in the Philippine E-Commerce law which deals with tax situs is section 23, which attributes a place of dispatch and receipt of electronic data messages.

Under the law, an electronic document is deemed dispatched at the place where the originator has its place of business (or residence, if he has no place of business), and is received at the place where the addressee has its place of of business (or residence, if no place of business), even when either of them use a mobile device to transmit or receive the electronic document evidencing the transaction.

Note that it does not matter where the transaction took place. What matters is the place of business of the originator and the receiver . This rule shall apply to determine the tax situs of an e-commerce transaction.

This provision has to be read in tandem with section 18 on attribution of electronic data messages, which tells us that an electronic message is deemed to be that of the originator if it was sent by (a) a person who had authority to act on behalf of the originator with respect to that electronic message, or by (b) an information system programmed by or on behalf of the originator to operate automatically.

It also has to be read with section 22 which deals with when a receiver receives the electronic message.

It now looks easy to determine where a transaction originates and where it is accepted and consented to.

In transactions involving two parties, tax situs is easy. The only problem which needs to be answered is where the transaction was considered perfected. Of course, that requires an in-depth study of the transaction. One needs to determine who made the offer and who accepted the offer. Acceptance is usually considered as the point wherein the transaction is perfected. The place of perfection is where the tax is levied.

When more than two parties are involved, however, this can become muddled. This happens when there are several corporations involved in the transaction.
What happens, for example, if corporations from several jurisdictions are involved in a transaction? If corporation A were to solicit orders for the product of corporation B, and corporation C buys a product solicited by A, where did perfection of a contract occur? Who among the three are considered the originator or the addressee?

When C responded to the advertisement of A, was he making an offer to purchase which was passed onto B, or was B using A as an agent to offer his products to C?

The answer to the question will tell us where the contract of sale was perfected and will give us the tax situs.

If it is shown that C was making an offer to purchase to A, and that A accepted the offer, then tax situs is in the place of business of A. If it were C that was accepting the offer and B was merely using A as its agent or conduit, then tax situs is in the place of business of C. If C used A as an agent to make an offer to B, then tax situs in in the place of business of B. If A, B, and C have offices in different countries, how and where will B be taxed for sale of its product?

Tax situs is not just dependent on what transaction was made, what relation the parties have to each other, how it was made, and where the residence of the parties are.

In addition, the originator and the addressee may even agree as to where an e-document is dispatched and received. This means that they can determine where their transactions can be perfected. This means that they can determine their tax situs on their own. The flexibility this gives is almost appalling in scope.

How about those transactions between multiple suppliers who are in an online store or marketplace like eBay or Amazon? Where is tax situs and how could it be determined?

What about transactions that use alternative forms of compensation like Bitcoin, credits, ex-deals, or barter? Are these even covered by tax situs laws? I can make strong arguments for and against either position.

In the future, many more forms of these transactions will occur in cyberspace. The ability to determine how to tax these transactions will be important for the government. Otherwise, the state will lose out on revenue generation for public benefit. It also opens up avenues for money laundering and opportunities to sabotage economies.

Can a Foundling be a Natural-Born Citizen? (Arguments on the Citizenship of Grace Poe)

 In a Philippine election, a candidate will be disqualified if she is not a Filipino citizen. If she wants to be President or Vice-President, she also has to be a natural-born Filipino.

When Grace Poe’s citizenship is questioned, she will have to prove her citizenship, as well as whether she is naturalized or natural-born.

She can only be a natural-born Filipino if she was born to a Filipino mother or father. There is no other way. But since she does not know her biological parents, or their citizenship, could she be considered Filipino? And if she is a Filipino citizen, is she natural-born or naturalized?

A foundling is an abandoned child whose parents or relatives are unknown. Nobody knows if her biological parents are Filipino. A person who looks Filipino could be a foreigner – for example, if she was born of a Malaysian father and an Italian mother. On the other hand, a blonde, blue-eyed girl can be a natural-born Filipino if she was born to naturalized Caucasian parents.

Citizenship is governed by only one law – the Philippine Constitution, (of which there are three versions – the 1935, 1973, and 1987 Constitutions).

Under the 1973 and 1987 Constitutions, those born of Filipino fathers or mothers are Filipino citizens. But if a person with a Filipino mother and an alien father was born before January 17, 1973, that person can only be a Filipino citizen if she elects Philippine citizenship some time upon reaching the age of majority. If she does not, then she would not be considered Filipino. (This was because under the 1935 Constitution, which was in effect before the 1973 Constitution, Filipino citizenship is automatically granted only to those with Filipino fathers.) If the Filipino mother is unmarried, the child is automatically Filipino. Lastly, a person can be a Filipino citizen if she is naturalized by law.

Legal experts have made their opinions on the citizenship of foundlings. Here are their arguments:

Foundlings cannot be considered citizens unless they prove that one of their biological parents is Filipino.

Legal principles that the Supreme Court had consistently applied in a span of decades find application here.

First of all, the Supreme Court ruled that one who claims to be Filipino must satisfactorily PROVE that she is Filipino, by showing that one of her biological parents are Filipino.

The Supreme Court declared that there can be no presumption of Philippine citizenship. That means that if a foundling cannot prove citizenship, she cannot be considered Filipino.

Secondly, the act of adoption will not confer Filipino citizenship. If the foundling was adopted by a Filipino citizen, this act will not confer citizenship on the child.

Thirdly, the Philippine Constitution does not give a presumption or deem as Filipino those who cannot identify their source of citizenship.

There is a list of persons who are considered citizens. One’s citizenship can be passed by blood (the principle of jus sanguinis), or one becomes a naturalized citizen by action of law. These are the only two ways one can be a citizen.

Many legal experts do not like this position. They feel that it prejudices foundlings rather harshly. They say that it would have weird repercussions. They say, for example, that a lot of street kids are foundlings, and lack documentation of their citizenship. It would be crazy for the State to consider all of them illegal aliens and try to deport them.

However, this belief is exaggerated.

The Supreme Court was rather strict in its doctrine. Their decisions indicate that the only time that a person is required to prove her citizenship is when Filipino citizenship is actually questioned in a proceeding precisely for that purpose. So, that means that if a foundling was registered as a Filipino citizen, there would be no question about her citizenship at all – unless a court case is filed where she must prove it. (Thankfully, the only court cases that may be filed against them for proving citizenship are election cases and petitions for certiorari governing immigration cases.)

Why should the foundling be the one to prove her citizenship? That’s the effect of the Supreme Court’s doctrine that there is no presumption of citizenship – the one who claims to be Filipino must be the one to prove it.

Foundlings should automatically be considered Filipino citizens.

Those of this opinion feel that the State should exercise some compassion with regard to foundlings. After all, it is not their fault that they are foundlings. Instead of making life harder for them, the State, as Parens Patriae (Latin for “parent of the country”), must have compassion and should grant them citizenship. Even if they are blond and blue-eyed and very Caucasian.

The counter-argument to that position is that the Philippines is a government of laws, not of men. Hence the government should act based on the laws that govern it, not simply out of compassion, because nobody should be exempt from the law.

The Supreme Court noted in its decisions that Philippine laws on citizenship are very restrictive. It is so restrictive that the drafters of our Constitution even differentiate between natural-born and naturalized. The Supreme Court has already declared that there is no presumption of citizenship and that one who claims to be Filipino should prove it. It may be harsh, but that’s the law.

The second legal basis is based on international law. Some experts are of the belief that principles of international law require the Philippines to bestow citizenship on foundlings. Two international laws are of notable importance.

The 1930 Hague Convention on Certain Questions Relating to the Conflict of Nationality Law, states in Article 14, “A child whose parents are both unknown shall have the nationality of the country of birth.” The second is the 1961 Convention on Reduction of Statelessness. Article 2 of that convention allows a foundling to be considered to have been born of parents who are citizens of the contracting state. (Exact words: “A foundling found in the territory of a Contracting State shall, in the absence of proof to the contrary, be considered to have been born within the territory of parents possessing the nationality of that State.”).

There is a big problem with that argument – first of all (and most importantly), the Philippines is not a signatory to those international conventions. Those conventions go against the Philippine Constitution (1935, 1973, and 1987) provisions on citizenship. That may be why we never became party to them.

Those who argue in favor of these conventions say that they are now considered “customary international law” and by virtue of the constitutional law principle that “adopts the generally accepted principles of international law as part of the law of the land,” the Philippines has actually adopted these two conventions even though it is not signatory thereto. They believe that these conventions were brought about by international custom and that, because of the length of time that has passed, these conventions have ripened into something that one can derive rights from.

Again, there are problems with that. Any law, whether local or international, which goes against any provision of the Constitution is void. Since these conventions go against our citizenship provisions, then they cannot have an effect here.

Also, international customary laws are those aspects of international law that derive from widespread custom, acceptance, and practice by States. But these conventions cannot be considered customary international law because many countries do not accept them. There are few States that have signed, ratified, and accepted them. Since there is no widespread acceptance of the principles in these conventions, they cannot be considered international custom.

In any case, both conventions do not require the contracting State to bestow citizenship conclusively (i.e., permanently) on the foundling. They allow the state leeway to remove citizenship if it could be shown that the child’s parents are not citizens.

It is possible to harmonize this with the Supreme Court rulings of the past decades. A liberal Supreme Court could declare that there is an international customary law that allows a state to consider foundlings as citizens. However, if citizenship is questioned, the foundling has the burden of proving it. This will allow indigents with no citizenship records to vote, get passports, and not get deported.

NATURAL-BORN OR NATURALIZED?

It gets tricky now.

Let’s assume that the foundling derives Filipino citizenship by virtue of international law or international customary law, and not by virtue of blood ties to a Filipino biological parent.

Is a foundling considered natural-born or naturalized citizen?

The Constitution describes two types of citizens. A natural-born Filipino has more rights than a naturalized Filipino. They are the only ones who are allowed to hold positions in the highest executive, legislative, and judicial offices in the country, as well as the constitutional commissions.

This is how restrictive Philippine laws on citizenship are. (It is so hard to become a naturalized citizen that I actually think naturalized citizens love our country more because of the hassle they take to become a citizen, the huge investment, and the fact that they have greater stake in the country than most natural-born citizens.)

The Philippine Constitution defines a naturalized Filipino as one who became Filipino in accordance with law.

So, if a foundling derives her Filipino citizenship by virtue of international law, then she becomes a Filipino citizen by virtue of law! This makes her a naturalized Filipino citizen.

The constitution states that a natural-born Filipino is one who is a citizen from birth without having to perform any act to acquire or perfect the citizenship. One may argue that a child did not do anything to acquire or perfect citizenship, so she should be considered natural-born.

That’s a bad argument when you see it in the context of Supreme Court rulings.

In the first place, the Supreme Court has ruled that children of foreign nationals who are naturalized are also naturalized Filipinos even though they did not perform any act to acquire citizenship. They are not considered natural-born even when they did not do a thing to obtain their new nationality. They were naturalized in accordance with law. (Note that if the children were born AFTER their parents were naturalized, then they are considered natural-born).

In the second place, under the 1987 Constitution, international law forms part of the laws of the land. However, it does not form part of the Constitution, so that means that international law will not add new qualifications for Filipino citizenship. However, it is considered same level and effect as a law passed by the Legislature.

If these conventions would be considered laws that bestow nationality on foundlings, then any who derive their Filipino citizenship in accordance with them are citizens who were naturalized in accordance with law.

Since the only way to be a natural-born citizen is to have Filipino parents, then foundlings can only be considered natural-born citizens if they can adduce evidence showing that their biological parents are Filipinos.

That’s it. Those are the arguments. Now, we wait until a case is brought, and we’ll see how the Supreme Court would rule.

BPO Policies and Content Development

  

The Philippine economy is now feeling the impact of Business Process Outsourcing (BPO). Fortunately, the country had the educated workforce to support the initial demand. It also had the language facility and cultural background to understand the nuances of several foreign cultures.

Will  the country sustain this growth or not? Will it be able to convert BPO from its present state as merely outsourcing, to something more, like content development and service creation?

It could, provided that it evolves policies that could be used to further development of multi-cultural backgrounds, as well as development of talent and expertise.

The key is education. Not just formal education, but also social, cultural, and skills education.

Ways should be found to remove social stigma against non-formal forms of education. First of all, we have to admit that there is such a stigma. The Philippines produces so many graduates of degree courses that do not apply to a profession later in life. A biology or music graduate becomes a bank manager, and an engineering graduate may be a fashion  designer.  In our country, people know the value of a college education, but they finish a college degree only because they feel a need to have finished college, not because they want to learn certain skill. The older generations do not understand that it no longer takes a college education to succeed in life. Rather it takes skills or talent.

Society must end its fixation with college degrees. It must start thinking in terms of “What do I want to be, and what skills do I need to be that?” That question would determine if he would need formal education or not.

To bring in more BPO contracts, the workforce must have the necessary skills. Not college degrees, but actual skills. To develop skills, one need not go to a formal school. In fact, many BPO companies who require college degrees don’t even have any use for the degrees – they only use it as a guage to profile an applicant. This is a highly inefficient use of skilled manpower and schooling. It would have been better for BPOs to hire somebody who has has skill due to practice and some skill-related education.

Secondly, the government must place measures that would bring about multi-culturalism, while at the same time, preserve what is distinctly Filipino. In other words, it must take steps to expose the masses to Filipino languages (not just Tagalog, but also regional languages like Ilocano, Bisaya, Kapampangan, Waray, etc.) and English. In schools, it must put in some form of multi-cultural exchange or appreciation class. This can take form of watching anime films for elementary or high school students, to watching foreign art films and other forms of foreign entertainment.

Thirdly, practical arts should be given more focus. And by practical arts, I mean that the more modern art forms like digital art, digital photography, and digital film-making should be given recognition. This would not just provide students with skills, and help them see their interest, but also will deepen their appreciation for content development and creation.

Finally, the government should not be so short-sighted as to concentrate on developing the BPO industry alone. The newer BPO companies come here to outsource content creation. The technology that they are bringing in and sharing with their employees can help direct content development in the country. New knowledge and techniques, as well as knowledge of how lucrative creative content contracts are will spur entrepreneurship and help Philippine content developers leverage their skills so that we can start becoming a center for content creation.

South Korea started creation of their brand of animation when they broke away from Japanese anime and started making their own (called Mang-hwa). Maybe in time, the Philippines may have its own brand of animation. It has to start somewhere. But if the government does not recognize the opportunities, content development will be slower.

This was first published on August 16, 2006. It still is relevant almost ten years later, with some additions.