SAINT LOUIS UNIVERSITY

SCHOOL OF ACCOUNTANCY AND BUSINESS MANAGEMENT

Bonifacio St., Baguio City, 2600 Philippines

REACTION PAPER:
FOREIGN CORPORATIONS
TITLE XV
[Batas Pambansa Blg. 68, The Corporation
Code of the Philippines]

MGMT 204
LEGAL ENVIRONMENT OF PHILIPPINE BUSINESS AND CORPORATE ENVIRONMENT

Schedule: 5:30 – 8:30 Wednesday

Room: S523
Professor: Ma. Conception C. Castro-Santiago, AB, MS Pub. Mgmt., Ll. B.

Submitted by: VILLAR, Maan P.

Course: MSBA 1
Submitted on: August 10, 2011
FOREIGN CORPORATIONS
TITLE XV
[Batas Pambansa Blg. 68, The Corporation Code of the Philippines]

There is truth to the cliché that foreign corporations operate in the Philippines to
take advantage of the below market value price of labor and the multitude of resources
that is of plentitude to the country. It may or may not be hearsay that it is easy to
acquire access to these riches and start operations in the country because of the
policies that are not as stringent as found in other countries who are protectionist in its
economic pursuits, putting above its self-interest over the profiteering motives of these
foreign corporations. Although it may benefit the Filipino people, it does so in explicit
means such as generating more employment opportunities but there are more vested
self-interests over the benefits that a corporation either puts up for show or is a mere
effect of its operation. Our laws do not give enough sanction as to the operation of
foreign corporations within the country wherein the powers of a corporation in operation
at another country are to comply with and depend on to validate its existence in that
specific country. A foreign corporation is created by force and contemplation of the laws
of its own domesticity but it is to bow down to the laws of the country where it wishes
to extend its operations because in essence, it can have no legal existence beyond the
bounds of the State or country where it is created.

In extending to foreign corporations the privilege of doing business in the

Philippines the country may prescribe whatever conditions and requirements it deems
fit to impose, such conditions and requirements should not be abusive but reasonable.
The only factor that stops a foreign corporation from doing business in the Philippines is
that if it has not secured a license from the Securities and Exchange Commission as
well as a certificate of authority from the appropriate government agency however the
failure to procure a license in the Philippines does not make a corporation less of a
juridical person. It is however a very easy process to have a corporation extend its
operations in the country because we value international business relations and
diplomatic relations brought about by these dealings more than patronage for our own
businesses and industries which is why the business laws that cover international
corporations operating here in the country are less strenuous than those of other
countries where they are subjected to go through a long process before finally
becoming licensed.

We could say that the Philippines is indeed very accommodating to foreign

corporations and as such it brings both benefits and drawbacks, it is up to the
technocrats who control such situation to assess and bring about the greater good for
its people either by maintaining the same standards or raising it up a notch by imposing
tighter sanctions for foreign corporations existing and operating as well as those who
are wanting to try and make a niche in the Philippines. Problems encountered with
leniency in foreign dealings would be the import dependence of the country, low local
value of exports and high and biased tariffs. Foreign trade is important is raising
national productivity. Advancement in knowledge is made possible by transfer of
technology via imports and technical assistance as well as joint ventures. Informal
education via training and discipline is also enhanced. Resource allocation can be
improved through proper foreign trade policies.