The ASEAN Economic Community and prospects of cross-border practice of law

The road to the establishment of the ASEAN Community began in 2003 through the Declaration of ASEAN Concord II in Bali, Indonesia, otherwise known as the Bali Concord II. In 2003, with the increasing interdependence between and among ASEAN countries and as a response to the ASEAN Financial Crisis, the ASEAN members declared the establishment of the ASEAN Community. The creation of the ASEAN Community, however, may as well be considered a stimulus to attract leverage in the global economy.

The Bali Concord II was hailed as a “historic step towards regional integration.” It consists of three pillars -- the ASEAN Political-Security Community, the ASEAN Economic Community and the ASEAN Socio-Cultural Community. Each of these pillars has a corresponding road map or a “Blueprint.” Under the Bali Concord II, the ASEAN Economic Community was declared as “the realization of the end-goal of economic integration as outlined in the ASEAN Vision 2020, to create a stable, prosperous and highly competitive ASEAN economic region in which there is a free flow of goods, services, investment, and a freer flow of capital, equitable economic development and reduced poverty and socio-economic disparities in year 2020.”

ASEAN leaders eventually saw the need to accelerate the establishment of the ASEAN Economic Community to 2015 from the original target year of 2020. This acceleration exemplified one step further towards the realization of the ASEAN Community.

Of the three pillars, the ASEAN Economic Community has achieved major steps towards the attainment of a single market production base and towards the integration of a unified economic block. The foundations have been laid towards this integration as far back as 1992 upon the creation of the ASEAN Free Trade Agreement and the subsequent adoption of the Common Effective Preferential Tariff Scheme, which reduced tariff rates for goods originating within the ASEAN.

Keeping in mind the end-goal of regional economic integration, the realization of the AEC, which was formally launched in Dec. 31, 2015, is pursued under four elements or basic initiatives -- single market production base, competitive economic region, equitable economic development, and integration into the global economy. All of these initiatives are defined in detail in the ASEAN Economic Blueprint, which lays down the basic courses of action to achieve integration.

The single production base is comprised of five core elements -- free flow of goods, free flow of services, free flow of investment, free flow of capital, and free flow of skilled labor. For free flow of services, the goal is to create an economic community with a steady access to service suppliers.

Under the ASEAN Economic Blueprint, by 2015, there should be substantially no restrictions on trade in services for all other service sectors. This is necessary for integration requires not only free flow of capital and goods but also steady supply of services. This mandates the ASEAN member-states to allow maximum mobility of people to engage in different service sectors.

Just last year in Kuala Lumpur, the ASEAN countries adopted the ASEAN Community Vision 2025. This ten-year plan seeks to create an ASEAN Community that is “highly integrated and cohesive; competitive, innovative and dynamic; with enhanced connectivity and sectoral cooperation and socially-responsible; and more resilient, inclusive, and people-oriented, people-centered” that is integrated with the global economy.

With the all the road maps set to fast-track a more cohesive economic region, the impacts on different service sectors are inevitable, and legal services is not spared. The provision of legal services to a more diversified clientele is in the horizon and so is a multi-jurisdictional set of corporations and businessmen entering into ventures that are governed by different sets of laws and with various mechanisms of dispute settlement. This is a conducive climate for a new kind of legal practice.

As foreseen by lawyers who have long been engaged in the practice of law, the impact of economic development in the era of integration is inevitable. Thus, it is necessary to look ahead, respond to the possibility of higher demand for legal services and move towards educating a new breed of lawyers who are well-trained and equipped with knowledge obtained through various levels of exposure across the ASEAN and multinational firms, corporations, and international organizations.

The observations are accurate and many articles have been written about how Filipino lawyers must and should prepare for the coming wave of cross-border legal practice.

Atty. Danilo Concepcion, Dean of the University of the Philippines College of Law, has written about “ASEAN Law and the ASEAN Law Student.”

In his article, he points out the challenges in integrating ASEAN Law into the Philippine legal education. Some steps have been taken to introduce ASEAN law in the curriculum. Currently, some institutions like the Ateneo de Manila School of Law and University of the Philippines School of Law have been offering electives that focus on the ASEAN.

The continuing changes as discussed above reflect how Filipino lawyers and law students alike should respond to this stimulus. However, what remains a more interesting aspect is the possibility of bigger changes in so far as the landscape of the practice of law in the Philippines is concerned. We are ready to admit the need to produce a corps of Filipino lawyers who can seek for recognition and be employed as counsels or practitioners abroad, but are we ready to recognize other foreign practitioners in the Philippines?

It must be noted that under Art. XII of the 1987 Constitution, the second paragraph of Sec. 14 states, “The practice of all professions in the Philippines shall be limited to Filipino citizens, save in cases provided for by law.” In the context of the ASEAN integration and in the context of facilitating free flow of services, the 1987 Philippine Constitution allows for the passage of subsequent laws that may allow foreigners to practice a particular profession. However, for the practice of law, Article VIII, Sec. 5 par. 5 remains the pertinent and operational provision as to who can practice law in the Philippines, which reserves to the Supreme Court the power over admission to the practice of law.

Bearing these provisions in mind, the impetus brought by the thrust towards regional economic integration also calls for the need to rethink and revisit the raison d’etre as to why some professions should or should not remain reserved for Filipinos alone. This is indispensable, should full participation and compliance be sought, in light of the formal establishment of the ASEAN Economic Community.

Unless these matters are addressed, the appreciation the full benefits of regional integration will remain incomplete. The free flow of services is a core element in the structure of regional integration. The free flow of legal services necessarily requires a steady supply of practitioners in anticipation of the higher demand for lawyers who engage in cross-border practice of law. Opening ASEAN Member-States’ legal systems might become a necessary derivative of opening up its economic system in the name of regional integration.

The views and opinions expressed in this article are those of the author. This article is for general information and educational purposes only and not offered as and does not constitute legal advice or legal opinion).

Maureen Z. Macaraeg is an Associate of the Litigation and Dispute Resolution Department at the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW).

830-8000

mzmacaraeg@accralaw.com

source:  Businesworld

Infrastructure, accessibility key to Carlson-SM hotels’ growth

DAVAO CITY -- As the Carlson Rezidor Hotel Group and SM Prime Holdings, Inc. prepare to open their third Philippine hotel in December, the partnership is going slowly on expansion plans that depend on improved accessibility outside the country’s major cities.

The upcoming medium-scale hotel under the Park Inn by Radisson brand, located in Clark, Pampanga, will be the first in Luzon after the Radisson Blu in Cebu that opened in 2010 and the Park Inn by Radisson Davao in 2013.

“Slowly and gradually, that portfolio of Park Inn by Radisson hotels will grow and move in secondary and tertiary cities [as] the country continues to grow,” Andre De Jong, Carlson Rezidor vice-president for operations in Southeast Asia and Pacific, said in an interview here.

“We are looking at opportunities that would come in locations where it would make sense. Hence, those destinations at this point in time where there’s a demand for hotels. Other destinations may need a little bit longer to grow, to get connected to and to really justify the existence of 100- or 200-room hotels to make business sense out of that,” he added.

The immediate expansion plans include a hotel in Metro Manila and another in Cebu, in the reclamation area.

“The Philippines is growing infrastructure-wise. Roads, transportation -- everything is improving, and when those places get connected, there will be more business activity, justifying international hotel operations,” he added.

At present, Mr. De Jong said, about 75% of the partnership’s client base consists of local travelers.

The Carlson Rezidor group is also exploring other partnerships, particularly for opportunities in the resort segment for areas such as Palawan and Boracay, two of the country’s known beach destinations.

“Will we see more potential as well? Yes, more so in the resort business, and on the back of improved connectivity and accessibility, these destinations will only grow in popularity,” Mr. De Jong said.

“But, I reckon that would be 2017-2018… they take time,” he added.

For 2016, the hotel management group has 10 hotels lined up for opening across the Asia-Pacific.

ASEAN INTEGRATION
Mr. De Jong said the group also anticipates growth in the hotel industry with the economic integration of the Association of Southeast Asian Nations (ASEAN), beginning December this year.

“If you look at ASEAN as a whole, the hotel business will benefit from that, [given the] convenience of travel when the restrictions are lifted; it would be far easier to get around, be it for leisure or business,” he said.

The Carlson Rezidor has signed up for their first hotel in Vietnam and several in Indonesia.

“There are other developing countries like Myanmar and Cambodia where we see a lot more attractions when it comes to hotel opportunities. These countries offer great opportunities as they grow, open up, [and] stabilize economically and politically,” Mr. De Jong said.

“These countries are individually growing; some are faster, some are more successful, but as a joint platform (ASEAN Economic Community), that growth will only multiply, in my view, as a powerful economy,” he said.

The Carlson Rezidor has more than 1,370 hotels in operation and under development with 220,000 rooms across 110 countries. The group’s brands are Quorvus Collection, Radisson Blu, Radisson, Radisson Red, Park Plaza, Park Inn by Radisson, and Country Inns and Suites by Carlson.

source:  Businessworld

‘Farm sector not ready for Asean integration’

The agriculture sector’s persistent low growth performance continues to drag the economy’s local output, measured as the GDP, and it appears to economists and business leaders to be an arena
where the Philippines has the littlest hope of competing well as the economic fusion of nations under the Asean happens.

This dim view, as indicated by actual historical data, is in stark contrast to a fearless forecast made by Agriculture Secretary Proceso J. Alcala some five years ago that the Philippines should no longer be importing rice by the end of the Aquino administration that is even now winding down its affairs in preparation for an exit some eight months hence.

According to figures presented by Ateneo economics professor Cielito Habito, also the head of the United States Agency for International Development  Trade-
Related Assistance for Development Project, the agricultural sector very nearly contracted in the second quarter this year by growing at a rate of 0.5 percent. Prior to that, the sector posted an expansion  averaging only 1.1 percent in the  first quarter. In contrast to the disappointing performance, the $285-billion  Philippine economy reported a modest 5.6-percent GDP expansion in the second quarter  this year.

In terms of job creation, the country’s unemployment rate
actually moderated to 6.5 percent in July from 6.7 percent a year earlier. The 768,000 new jobs created in the industry and services sector thus far have proven insufficient to compensate for the loss of 877,000 jobs in the agricultural sector the past year alone.

This moderating trend in almost all aspects of the agricultural sector has been noticed also by business leaders like Asia-Pacific Economic Cooperation (Apec) COO Summit COO Guillermo Luz.

Luz said in an earlier exclusive forum with Apec CEO Summit media partner  the BusinessMirrror that the government should start rethinking it’s strategy to win back the Philippines’s former position as the foremost agricultural producer in the region.

Luz said one of the measures that could help the country compete in agricultural production is to revisit the agrarian-reform program, which, according to him, has not worked to the country’s advantage because the resulting smaller farmer landholdings do not produce as much agricultural output as the large landholdings have.

The country’s foremost economist and Finance Undersecretary Gil Beltran has recommended that the Philippines import more rice on top of what it already regularly imports to ward off inflationary pressures on food anticipated in the wake of the devastation wrought by Typhoon Lando on the rice-producing provinces of the country.

According to Beltran, rice production in the so-called food basket of Central Luzon would likely contract by 8.2 percent for the whole year, bringing the total rice production forecast to negative
2.5 percent.

“As of October 20, 2015, the Department of Agriculture has estimated that 360,00 metric tons of palay has been damaged due to Typhoon Lando, of which, 326,000 tons was borne by Central Luzon. Assuming 0.65 conversion rate, total palay loss translates into 234,000 tons of rice, or roughly seven days of annual rice consumption,” Beltran said in the economic bulletin.

source:  Business Mirror

OECD final report on Base Erosion and Profit Shifting (BEPS) -- Overview

(First of two parts)

On Oct. 5, 2015, the Organisation for Economic Co-operation and Development (OECD) issued the final report on all 15 BEPS Action Plans. This caps two years of work started in September 2013, when G20 Leaders endorsed the ambitious and comprehensive Action Plan on BEPS, to restore confidence in the international tax framework which was designed more than a century ago.

According to the OECD (2014), Explanatory Statement, OECD/G20 Base Erosion and Profit Shifting Project, OECD, the current rules have revealed weaknesses that create opportunities for Base Erosion and Profit Shifting, thus requiring a bold move from policy makers to restore confidence in the system and ensure that profits are taxed where economic activities take place and value is created. This package of 13 reports, delivered just two years later, includes new or reinforced international standards as well as concrete measures to help countries tackle BEPS. It represents the results of a major and unparalleled effort by the OECD and G20 countries working together on an equal footing, with the participation of developing countries.

Among the highlights of the OECD Final Reports are the new transfer pricing approach and reinforced international standards on tax treaties, the setting of minimum standards on harmful tax practices, treaty abuse, country-by-country reporting and dispute resolution, action items requiring national legislation particularly in hybrid mismatches and interest restriction, and analytical reports with recommendations concerning digital economy and multilateral instruments.

In this column, we provide an overview of the 15 BEPS Action Plans to give our readers an idea of what to expect in terms of Philippine tax developments in the context of the international tax framework.

Action 1: Addressing the tax challenges of the digital economy

The final report recommends that the list of exceptions to the definition of permanent establishment (PE) be modified to ensure that the listed exceptions are restricted to activities that are “preparatory” or “auxiliary” in character. The report also recommends the issuance of a new fragmentation rule to ensure that the fragmentation of business activities among closely related companies shall not be possible. Modification of the definition of a PE to address artificial arrangements through “conclusion of contracts” agreements between companies belonging to a multinational group is also recommended, along with revisions to the OECD Transfer Pricing Guidelines and the Controlled Foreign Company (CFC) rules.

Action 2: Neutralizing the effects of hybrid mismatch arrangements

The final report recommended that changes be made both to domestic law and the OECD Model Tax Convention in order to neutralize the effects of hybrid mismatch arrangements, which necessarily exploit differences in tax treatment of a single entity or instrument under the laws of two or more tax jurisdictions to achieve double non-taxation including long-term deferral.

Part 1 of the report for Action 2 basically recommends the linking of rules that align the tax treatment of an instrument or entity with the tax treatment in the counterparty jurisdiction but otherwise do not disturb commercial outcomes. Also, Part 2 aims to ensure that hybrid instruments and entities do not abuse the treaty benefits and will not prevent the application of the changes in domestic law as recommended in Part 1.

Action 3: Designing effective controlled foreign company rules

The final report for Action 3 sets out recommendations that will effectively prevent taxpayers from shifting income into foreign subsidiaries. The recommendations were not meant to be minimum standards, but were designed as building blocks to help achieve the said goal.

The action point named six building blocks for the design of effective CFC rules. Briefly, these six building blocks are:

• Definition of CFCs -- How to determine when stockholders have sufficient influence over a foreign company as well as non-corporate entities and their income should be covered by the CFC rules;

• CFC Exemptions and threshold requirements -- CFC rules should only apply to CFCs that are subject to effective tax rates that are meaningfully lower than those applied in the parent jurisdiction;

• Definition of Income -- CFC rules should include a definition of what constitutes CFC income and provides for a non-exhaustive list of approaches or combination of approaches that the CFC rules could use to define CFC income;

• Computation of income -- CFC rules should use the rules of the parent jurisdiction to compute the CFC income to be attributed to shareholders. Moreover, CFC losses should only be offset against the profits of the same CFC or other CFCs in the same jurisdiction;

• Attribution of income -- When possible, the attribution threshold should be tied to the control threshold and the amount of the income to be attributed should be calculated by reference to the proportionate ownership or influence; and

• Prevention and elimination of double taxation -- To ensure that the CFC rules will not eventually lead to double taxation such as the allowance of foreign tax credits.

Action 4: Limiting base erosion involving interest deductions and other financial payments

The final report acknowledges BEPS risks involving interest deductions and other financial payments. To address these risks, the report recommended the “fixed ratio rule” which limits an entity’s net deductions for interest and payments. So as not to restrict a group’s ability to incur third-party debt for non-tax reasons, the report also recommended a “group ratio rule” which would enable an entity with net interest expense above a country’s fixed ratio to deduct interest up to a certain level.

Recognizing that banks and insurance sectors have specific features which must be considered before any rules to address BEPS for this sector are issued, the report recommends the development of suitable and specific rules which will address BEPS risks in these sectors.

Action 5: Countering harmful tax practices more effectively taking into account transparency and Substance

The final report on Action 5 focuses on the definition of substantial activity to assess preferential regimes as well as transparency. This aims to address the concern that preferential regimes are currently being used for artificial profit shifting and lack of transparency in connection with some rulings.

It was agreed by the countries that for purposes of substantial activity, the requirements used to assess preferential regimes should be aligned with the substantial activities that generate them and the agreed approach is called the “nexus approach.”

Action 6: Preventing the granting of treaty benefits in appropriate circumstances

In order to address treaty abuse, it was recommended that treaties between States categorically state that the treaty intends to avoid creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance, including treaty shopping arrangements. Moreover, the introduction of anti-abuse rules, limitation-on-benefits rule and limits on the availability of treaty benefits were recommended to be included in the OECD Model Tax Convention. Where the LOB rule cannot apply, the introduction of a more general anti-abuse rule based on the principal purposes of transactions or arrangements in the OECD Model Tax Convention is proposed.

Action 7: Preventing the artificial avoidance of permanent establishment status

The report for Action 7 primarily recommends the amendment of Article 5 (the Business Profits provision) of the OECD Model Tax Convention. This is to address common tax avoidance strategies which are used to circumvent the PE definition. These strategies allow an entity to operate in a country without creating a PE through commissionaire agreements, activities which are preparatory and auxiliary in character but in reality are in itself core business activities, and the splitting of contracts among closely related parties.

In the second part of this article, we will discuss the remaining Action Plans, including issues on transfer pricing, measuring and monitoring BEPS, and mandatory disclosure, among others.

Ma. Fides A. Balili and Maria Margarita D. Mallari-Acaban are a Partner and a Senior Director, respectively, of SGV & Co.

source:  Businessworld

Should the Philippines join the TPP?

Everybody is agog over the passing of the Trans-Pacific Partnership (TPP). Even people I know that only have a passing interest in international trade are all of a sudden asking, in somewhat hushed, noticeably excited tones, about its implications for the Philippines. So the curmudgeon in me might have been more apparent this time around when my reply revolved a mere two words: not much.

To begin with, nobody outside the negotiators has really studied the TPP. The actual, official texts may be released (particularly by the US) by early next month.

Having said that, the TPP, of course, is an expanded version of the 2005 Trans-Pacific Strategic Economic Partnership Agreement and currently includes as parties Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the United States. The TPP covers almost 40% of the global economy and affects not only tariffs but also services, investment rules, patents (including over pharmaceuticals and even, allegedly, control of public information), agriculture, the environment, and government procurement.

Of those 12 TPP members, the Philippines already has existing free trade relationships with seven -- Association of Southeast Asian Nations (ASEAN) Common Effective Preferential Tariff (CEPT), ASEAN-Australia and New Zealand, ASEAN-Japan, Philippines-Japan Economic Partnership Agreement -- plus the Asia-Pacific Economic Cooperation and the (now unfortunately expired and still awaiting renewal) Generalized Scheme of Preferences (GSP) relationships with the US.

So on that specific regard, one question that we need to ask is how the Philippines is faring with regard to utilizing its already available free trade agreement benefits.

Not much if we’re to judge by the CEPT (with some studies pegging it at a mere 20%) and US GSP (which reportedly has a utilization rate of 70% but with the context that the goods covered only constitute 10% of total Philippine exports to the US).

Heritage Foundation’s Economic Freedom Index is quite instructive in this regard: this 2015, the Philippines overall showed improvement.

But there were concerns raised regarding “open markets”, with “trade freedom” getting a lowered score. Noted, is the average tariff rate at 4.8%. “Domestic companies are favored in government procurement bids. Rice producers are subsidized and protected from competition. Foreign investment in several sectors is restricted.”

For regulatory efficiency, business freedom also showed a lowered score due to the fact that “incorporating a business takes 16 procedures and 34 days. Completing licensing requirements remains time-consuming, taking about three months on average. The labor market remains structurally rigid, with varying degrees of flexibility across economic sectors and regions of the country.”

The 2014-2015 Global Competitiveness Report almost reflects the Economic Freedom Index -- lamenting regulatory inefficiency and red tape and lackluster rule of law. But it does give us good marks in “intensity of local competition.”

The insight that I suggest from the two international reports is twofold: First, we really don’t have an issue as to us being plugged into the international trading system, what with our membership already into the World Trade Organization (WTO), in addition to several free trade agreements.

Finally, the problem is our internal structures that only prevent us from benefitting substantially from international trade.

Of what use is Philippine membership in more trade agreements for ordinary Filipinos if they’re bogged down by red tape and high taxes, amidst world-beating-in-being-horrible airports, the world’s worst traffic, slow online speeds, flooding amidst water shortages, and the incredibly bizarre inability to produce simple drivers licenses and passports?

Now, the position of my fellow experts and commentators on the matter is that membership in more trade agreements such as the TPP will provide external pressure for the Philippines to shape up.

But that is wishful thinking.

For two reasons: One, we’ve long been members in other trade agreements and look at us now. So much for external pressure.

Finally, as a sovereign country, I don’t see the point in wanting the Philippines rendered vulnerable to international litigation simply because our country can’t do things unilaterally because our government officials can’t muster the political will to do what is right.

Besides, note our quite jubilant reaction in the immediate aftermath of the Cancun WTO Ministerial debacle of 2003 (amidst the huge disappointment expressed by the US), immediately followed up by our quite unsubtle public rejection of US invitations to enter into a trade partnership with it right there and then.

This has therefore led, to the present day: when the Philippines expressed public interest in joining the TPP, this was simply responded to with a set of conditions for us to comply with -- improved rule of law, opening up foreign ownership of businesses or property, addressing State ownership of certain industries, strict protection of intellectual property, and so on. Clearly, the US has little patience with flaky allies.

In any event, the TPP still has to go through the constitutional processes of its members. The US, in particular, being already in its presidential election season, may see a TPP vote no earlier than next year.

That should give the Philippines a modicum of time to put its priorities right.

Jemy Gatdula specializes in international economic law (WTO and ASEAN), and teaches international law and legal philosophy at the UA&P School of Law and Governance.

jemygatdula@yahoo.com

www.jemygatdula.blogspot.com

Mr. Gatdula is also on Facebook and Twitter

source:  Businessworld

Cultural diversity in global teams: A wake-up call for AEC

The 21st century is the time of globalization. Boundaries are disappearing among companies, industries, and countries, and competitive pressures simply cannot be ignored. Work teams consisting of people with different cultural backgrounds separated through space and time are one of the critical success factors for the development of companies, whether small or big. Thus, managing cultural diversity is important for them to operate successfully.

The Association of Southeast Asian Nations Economic Community (AEC) is supposed to boost regional trade and production that will deliver free movement of goods, services, skilled labor, and capital in one of the most diverse and fast-moving regions in the world.

As a result of joint ventures, strategic alliances, mergers, and acquisitions, global teams within the AEC are being and will continue to be created. These teams are increasingly becoming “multicultural” so that members of different nationalities have to learn how to work together effectively and efficiently on common projects at different times and in different locations.

Unfortunately, most global teams, whether within or outside of the AEC, are ineffective and still far from delivering the competitive advantage needed to sustain a company’s global capability.

Some cases are in point: first, cultural issues are mostly ignored or at least not valued sufficiently by management. Management guru Geert Hofstede, who studied the value dimensions of cultural differences, concluded that different cultures create differences among team members. The value dimensions of high power distance vs. low power distance, individualism vs. collectivism, masculinity vs. femininity, high vs. low uncertainty avoidance, and long-term vs. short-term orientation, if not managed accurately, can prevent a team from operating successfully.

Second, geographic distance seems to be a major difficulty to overcome despite great progress in communication technology.

Some cultures (particularly Asian cultures) still rely on face-to-face meetings, which involve intensive personal contact to enhance relationships and build trust. Then there are communication styles (i.e., verbal vs. nonverbal, direct vs. indirect, low context vs. high context) that differ among cultures.

A project’s success highly depends on the constant and unhampered flow of communication among team members.

Moreover, problem-solving over distance is critical to global teamwork, and discussions across countries and continents often consume a lot of time.

Third, there’s the work variety of team members. Very frequently, most, if not all, team members work on other projects in their home country. It is almost impossible for them to integrate all their tasks to achieve a balance between their home-country and global-team obligations. This balancing act creates coordination and control issues, which are tough to handle in global teams.

Last, creating a team spirit remains a challenge for global teams.

Large geographic distances make it difficult for team members to build camaraderie. Some cultures, especially the highly individualistic ones, do not usually resort to teamwork in solving problems. They may not have enough experience, and they may think differently about working with people of other nationalities.

People from different cultural backgrounds think differently -- not better; just differently. And different ways of thinking put fresh perspectives on tasks and problems.

The range of available alternatives to solve problems and complete missions becomes enormous.

Whether we’re talking about a meeting held in Bangkok, a project site visit in Jakarta, video conferencing in Singapore, or an inspection in Manila, cultural diversity among global teams has become a reality and therefore must be recognized, understood, and respected throughout the organization.

Beatriz Kaamiño-Tschoepke teaches Organizational Behavior and Human Resource Management at the Ramon V. Del Rosario College of Business of De La Salle University. She is a professional intercultural trainer and consultant in international business, intercultural management, and communication.

cibmworks@gmail.com

source:  Businessworld

Philippines’ Monde Nissin buying British meat substitute firm Quorn for $831M

LONDON/MANILA -- Philippine instant noodles maker Monde Nissin Corp. is buying British meat substitute company Quorn Foods for £550 million ($831 million) to capitalize on rising demand for health foods, in what will be the third largest overseas purchase by a firm in the Southeast Asian nation.

Monde Nissin beat competition from some global food giants to clinch the deal for Quorn, which had sales of £150.3 million in 2014. United Kingdom-based investment firms Exponent Private Equity and Intermediate Capital Group, Quorn’s owners, announced the sale on Wednesday.

The deal comes as Asian firms are increasingly venturing outside home markets in search of targets in the food and drinks sector.

“It’s a matter of diversification,” Augusto Cosio, fund manager at Manila-based First Metro Asset Management Inc, said on Thursday of Monde Nissin’s acquisition of Quorn.

“Their income is already too dependent on one market.”

Reuters had previously reported that Monde Nissin was among the parties to have shown interest in Quorn Foods.

It attracted interest from French yogurt company Danone, Singapore-based Wilmar International, Canadian French fries producer McCain and Ireland’s Kerry Group, sources had said.

Quorn is a mycoprotein meat substitute, made by fermenting a type of fungus. It is sold on its own, in ready-meals or in products that replicate burgers, sausages or chicken fillets.

Quorn Foods aimed to benefit from a trend of consumers eating healthier food and less meat.

It claims that in the past five years it has cut 60 billion calories from consumers’ diets.

Monde Nissin is owned by Betty Ang, the Philippines’ 19th richest person, and is planning an initial public offering as early as next year.

Earlier this year, it bought Australia’s Black Swan, a brand of chilled dips, and Nudie, which sells premium juices.

It has ambitions to do larger deals and emerge as a health and wellness company, according to one person familiar with the company.

The Quorn deal is being funded by Bank of the Philippine Islands (BPI), BDO Unibank, Inc. and Metropolitan Bank & Trust Co., Reginaldo Anthony Cariaso, chief operating officer of BPI’s investment banking subsidiary, told Reuters.

Monde Nissin did not respond to Reuters requests for comment. -- Reuters