Beginning April 2026, Japan will move away from its long-standing sole custody system, permitting divorced parents to share parental authority. If couples fail to reach an agreement, family courts will step in and decide based on the best interests of the child.

The policy change was presented during a high-level meeting at the CFO on March 26, where CFO Secretary Dante “Klink” Ang II met with a Japanese delegation led by Wako Asato of Kyoto University and representatives from the Japan Federation of Bar Associations (JFBA).

While the reform introduces more flexibility for separated parents, challenges remain, particularly for foreign nationals.

JFBA representative Keiko Kato cautioned that Filipino migrants may struggle to navigate the new system due to language barriers and the limited availability of Japanese lawyers who can effectively assist non-Japanese clients.

To address potential legal gaps arising from Japan’s policy shift, the CFO has proposed a Memorandum of Understanding with the JFBA.

The agreement aims to provide direct legal assistance to Filipinos in Japan, conduct joint information campaigns on legal rights, and update pre-departure training modules to reflect the evolving legal landscape.

The JFBA has expressed openness to the proposal, pending approval from its headquarters.

Japan hosts one of the largest Filipino communities in Asia, with over 300,000 nationals residing in the country. Once dominated by overseas workers, this population has evolved into a more permanent and settled community, including long-term residents, second-generation Filipinos, and families formed through Filipino-Japanese marriages.

As a result, Filipino migrants are particularly vulnerable to changes in Japan’s civil and family laws, especially when cross-border marriages break down.

The custody reform also comes alongside a tightening immigration environment under Japan’s current administration. Foreign residents are expected to face stricter requirements on tax and insurance compliance, as well as more rigorous standards for permanent residency. Language proficiency may also become a factor in visa renewals, with violations potentially resulting in deportation or re-entry bans.

For its part, the CFO, an agency under the Office of the President mandated to safeguard the rights and welfare of overseas Filipinos, underscored its role in preparing migrants for life abroad.

Through programs such as the Pre-Departure Orientation Seminar (PDOS) and the Guidance and Counseling Program (GCP), the agency equips Filipinos with practical knowledge of foreign laws, cultural norms, and potential risks. It also operates a national helpline and screens outbound spouses to prevent cases of trafficking and exploitation.

Established under Batas Pambansa Bilang 79, the CFO focuses on the needs of permanent migrants and Filipinos in cross-border marriages, complementing the work of other agencies such as the Department of Migrant Workers, which primarily serves temporary overseas workers.

With Japan’s legal reforms and immigration policies evolving in tandem, Philippine authorities are moving to ensure that Filipino migrants are better informed, protected, and prepared for the complexities of living and raising families abroad.

To achieve this, the DOF is strengthening coordination between the Revenue Integrity Protection Service (RIPS) and the Revenue Operations Group (ROG), underscoring the DOF’s strict zero-tolerance policy on corruption.

“This collaboration is necessary to build a stronger, more transparent revenue system––one where corruption cannot thrive,” Finance Secretary Frederick D. Go said in a recent news release.

“Hindi natin hahayaang masayang ang bawat pisong pinaghirapan ng ating mga mamamayan. Kaya sisiguraduhin naming mas mabisa ang monitoring, mas mabilis ang pamamahagi ng impormasyon, at mas maayos ang pagpapatupad ng mga patakaran,” he added.

To drive this initiative forward, the DOF recently welcomed the appointment of Rolando T. Ligon Jr. as Undersecretary for the ROG and Supervising Undersecretary for the RIPS to oversee the coordinated operations of both offices.

The RIPS is the DOF’s anti-corruption arm mandated to prevent, detect, and investigate corrupt practices in revenue collection. The office conducts lifestyle checks and fact-finding investigations to ensure officials and employees do not acquire wealth beyond what their lawful income can justify.

Complementing the RIPS’ functions, the ROG oversees and supervises the operations of revenue-generating agencies, such as the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC), ensuring effective revenue administration.

As part of this strengthened collaboration, the RIPS and the ROG are closely monitoring examiners’ compliance with the BIR’s updated guidelines on the issuance of Letters of Authority (LOA) to improve transparency in the audit process and reduce opportunities for abuse, corruption, and revenue loss.

“Through vigilant monitoring, lifestyle checks, and coordinated action, we remain committed to ensuring that public funds are collected lawfully, efficiently, and with integrity for the benefit of the Filipino people,” Secretary Go said.

The event was organized by Manila Bookkeepers, in partnership with the Dutch Chamber of Commerce in the Philippines (DCCP) and the Board of Investments (BOI).

“This session is designed to help businesses move beyond compliance as a requirement, and instead use it as a tool for confidence, clarity, and sustainable growth, which opens many doors for bigger business opportunities in the Philippines,” organizers said.

Speakers included Atty. Bobby Fondevilla, Executive Director and Head of the BOI Investment Assistance Center; Michael Jaurigue, CPA, Director of Manila Bookkeepers; and Atty. Jose Calsas Jr., CPA, Vice President and Chief Financial Officer of D&V Philippines.

During the seminar, the Manila Bookkeepers experts emphasized the importance of reconciliation, proper documentation, and timely tax filing to avoid audit findings.

Mr. Jaurigue discussed the technical aspects of common audit risks and recommended best practices in reconciliation and record-keeping to strengthen tax compliance.

Atty. Calsas shared practical guidance for companies navigating tax compliance and highlighted how strong bookkeeping systems can help prevent costly disputes with tax authorities.

Meanwhile, Atty. Fondevilla highlighted the BOI’s role in supporting investors and businesses of all sizes through investment facilitation programs and regulatory reforms.

Under its “Regulatory Reforms and Investment Facilitation Incentives,” the BOI aims to “boost investments in industries and in the countryside, aiming for both job generation and balanced economic development.”

Fondevilla also introduced programs such as the Strategic Investor Aftercare Program (SIAP), Key Accounts Management System (KAMS), and BOI-LOKAL, which are designed to help businesses navigate regulatory requirements and grow their operations.

Experts said adopting an “always audit-ready” mindset, supported by strong bookkeeping and proactive compliance, can help companies avoid penalties while protecting their reputation and supporting long-term growth.

The phrase, highlighted during the presentation of global tax policy expert and Chief Tax Advisor of Asian Consulting Group (ACG) Mon Abrea, reflects a growing sentiment among taxpayers and investors — that while Filipinos face multiple layers of taxes, the ease of compliance and quality of public services remain below expectations.

More importantly, it points to a deeper issue: The problem is not just how much we tax, but how the system is designed and administered.

Watch Abrea’s presentation here: https://youtu.be/cC5WinAbGFA

Organized by the Anti-Red Tape Authority (ARTA) in collaboration with the Asian Development Bank (ADB), the briefing gathered key government officials, including representatives from the Department of Finance (DOF), Bureau of Internal Revenue (BIR), and Bureau of Customs (BOC), to advance fiscal compliance, transparency, and seamless government processes.

The event was attended by members of the diplomatic corps, foreign chambers of commerce, industry leaders, and policymakers — reflecting strong public-private collaboration in improving the country’s business environment.

A system that burdens growth

The Philippines continues to face governance and competitiveness challenges. With a Corruption Perceptions Index (CPI) score of 32/100, investor confidence remains constrained, while businesses deal with: complex and overlapping tax rules, high compliance costs, frequent audits and discretionary enforcement, and delays in VAT refunds and approvals.

The result is a system that is heavy on compliance, but light on efficiency and service delivery. This imbalance discourages investment, weakens voluntary compliance, and ultimately limits revenue potential.

While reforms have improved ease of doing business, ease of paying taxes remains a key bottleneck.

Globally competitive economies focus not only on tax rates but on predictability, transparency, and efficiency. Countries such as Singapore, Vietnam, and Indonesia have invested heavily in digitalization and streamlined systems to attract investors.

For the Philippines, improving competitiveness requires modernizing tax administration — not just adjusting tax policy.

From red tape to red carpet

At the EODB briefing, government leaders emphasized that ease of doing business is ultimately about building trust — between the government, taxpayers, and investors.

Transforming the Philippines into an investment destination requires moving from red tape to red carpet.

This means reducing discretion, simplifying processes, and making compliance easier and more predictable.

A comprehensive reform agenda for competitiveness was presented to align the Philippines with global standards:

• AI-driven, risk-based audit to target large-scale tax evasion instead of burdening MSMEs
• Adoption of the OECD Global Minimum Tax to capture fair revenues from multinational enterprises
• Reducing VAT from 12% to 10%, while strengthening enforcement to broaden the base
• Increasing income tax exemptions to provide relief to workers
• Lifting bank secrecy for tax enforcement to improve transparency
• Imposing a recovery tax on unexplained wealth to deter corruption

At the institutional level, a more structural reform is proposed: The creation of a National Revenue Authority, integrating tax and customs systems to improve efficiency, data sharing, and accountability.

Taking the conversation global

These reforms are part of a broader effort to position the Philippines as a competitive investment destination.

On February 26, 2026, the Asian Consulting Group (ACG) will launch the 2026 International Tax and Investment Roadshow, covering key cities across Asia, the Middle East, Europe, North America, and Australia.

Alongside it is the launch of the book: WHY INVEST IN THE PHILIPPINES? — CREATE MORE Edition: A practical guide for global investors, bringing together insights from economic managers, ambassadors, and industry leaders.

The Philippines has strong economic fundamentals — but unlocking its full potential requires restoring trust in its institutions.

Tax reform is not just about raising revenues. It is about creating a system that is fair, efficient, and predictable. Because in today’s global economy, countries do not compete on tax rates alone. They compete on trust.

And until taxpayers feel that they are served as much as they are taxed, the Philippines will remain overtaxed but underserved.

To invite Mr. Abrea for interviews or briefings, email consult@acg.ph.

**

Mon Abrea is a tax policy expert and the founder and chief tax advisor of Asian Consulting Group, advising governments, multinational firms, and investors on tax reform and investment strategy. He holds degrees and executive training from Harvard University, Duke University, and the University of Oxford.

“A fair, predictable, and well-enforced tax system is one of the strongest anti-corruption tools a country can have — and one of the most powerful signals to serious investors,” Abrea said.

Here are the 10 key reforms he says can reduce corruption risks while protecting Filipino workers and MSMEs:

1. AI-Driven, risk-based audits

Use artificial intelligence (AI) and data analytics to target large-scale tax evasion and corruption, instead of harassing small businesses. This shifts enforcement toward big offenders while shielding MSMEs from abusive audits.

2. Adopt the OECD global minimum tax

Immediately implement the OECD/G20 Global Minimum Tax (QDMTT) so multinational profits are taxed fairly in the Philippines protecting national revenue and reducing aggressive tax avoidance.

3. Raise income tax exemptions for workers

Increase exemptions to boost take-home pay, expand consumption, and reduce pressure on ordinary wage earners shifting the system away from overtaxing compliant individuals.

4. Cut VAT from 12% to 10% — but tighten compliance

Lower rates while strengthening digital enforcement to broaden the base and reduce leakages — proving that efficiency, not high rates, drives revenue integrity.

5. Scrap distortionary and corruption-prone taxes

Abolish taxes that create loopholes and discretion, including travel tax, DST (documentary stamp tax) on MSME loans and insurance, taxes on regular savings, condominium capital gains, amusement taxes, arbitrary local levies

6. Shift estate and donor’s taxes to a wealth-based system

Replace current structures with a progressive wealth tax targeting ultra-high-net-worth individuals, closing avoidance channels often used to hide large asset transfers.

7. Lift bank secrecy for anti-corruption enforcement

Mandate real-time financial data sharing among the BIR, AMLC, Ombudsman, COA, and other agencies to accelerate detection of illicit wealth.

8. Impose a 200% recovery tax on unexplained wealth

Introduce a severe financial penalty, full forfeiture, and automatic, perpetual disqualification from public office for corrupt officials and beneficiaries.

9. Integrate carbon pricing into excise taxes

Promote environmental sustainability through tax design that discourages pollution while minimizing inflationary impact.

10. Replace BIR and Customs with a National Revenue Authority

Abolish both agencies and create a professionally managed National Revenue Authority (NRA) modeled after Singapore’s IRAS, insulated from political interference and powered by full digital, AI, and blockchain systems.

“High tax rates with weak enforcement punish honest taxpayers and small businesses while rewarding corruption,” Abrea added. “The answer is smarter taxation — not heavier taxation.”

Abrea argues that taken together, these reforms can reduce corruption, lower business costs, and position the Philippines as one of ASEAN’s most investment-ready economies.

INVITATION

Mon Abrea is available for media and podcast interviews, panel discussions, and policy briefings while in Manila.

Topics: tax reform, anti-corruption policy, OECD Global Minimum Tax, MSME protection, investment competitiveness, and fiscal modernization.

For interview or invitations, please contact: consult@acg.ph or +63 917 801 0191

Mon Abrea is a globally recognized tax policy expert and trusted advisor to policymakers, multinational corporations, and international investors. He is the Founder and Chief Tax Advisor of Asian Consulting Group (ACG), a leading tax and investment advisory firm headquartered in the Philippines with satellite offices in Singapore, Australia, and strategic markets in the United States and Europe. His work focuses on globally aligned tax reform, cross-border investment structuring, ESG-driven incentives, and technology-enabled tax administration.

In a joint clarification released last week (Jan. 19), the Department of Budget and Management (DBM), Department of Trade and Industry (DTI), and Department of Finance (DOF) said the veto does not mean the Marcos administration is withdrawing support for the automotive industry.

Instead, agencies said there are still funds under the 2025 General Appropriations Act (GAA) that can be used to pay validated obligations to participating firms in a legal and orderly way.

“The government’s position is clear: We will not abandon the auto industry. Obligations supported by issued and validated TPCs will be paid in a legal, orderly, and responsible manner, consistent with our fiscal space and established budgetary rules,” said DBM Secretary Rolly U. Toledo.

Officials explained that payments may be sourced from an existing line item for CARS fiscal support arrearages under the DTI-Board of Investments (BOI) budget, using declared savings from other agencies, subject to presidential approval and budget rules.

The government said it already has the capacity to settle dues based on Tax Payment Certificates (TPCs) that have been issued and validated. Beneficiaries include major car manufacturers such as Toyota and Mitsubishi, as well as qualified auto-parts producers.

Any remaining validated claims not yet covered by TPCs may be proposed for funding in the 2027 national budget, agencies added.

DTI Secretary Cristina A. Roque stressed that the industry remains a key partner in economic growth.

“The government recognizes the automotive industry’s vital role in job creation, technology development, and industrial growth. We are committed to ensuring that the incentives under the CARS Program continue to encourage investors to do business in the Philippines. The industry can expect continued partnership to ensure that the program is implemented in line with its intended objectives,” Roque said.

Finance Secretary Frederick D. Go echoed the commitment to investors.

“President Ferdinand R. Marcos, Jr. has given clear direction that the government must honor the commitments it made to investors who placed their trust in the Philippines. The CARS Program is a key pillar of our strategy to strengthen local manufacturing, and we will ensure that legitimate obligations are paid — consistent with the law and within the capacity of public funds,” Go said.

“Our message to the auto industry is clear: do not worry — you remain part of the government’s long-term plan for industrial development, jobs creation, and economic growth,” he added.

The agencies emphasized that claim validation is still ongoing, with the DTI ensuring all submissions comply with program rules before any funds are released.

The CARS Program, created in 2015, is designed to revive local vehicle and parts manufacturing through performance-based incentives. The Philippine auto market sold about 475,000 vehicles in 2024 and supports an estimated over 400,000 direct and indirect jobs, highlighting the sector’s importance to manufacturing and employment.

That question anchors Season 4, Episode 12 of The Loida Lewis Podcast, where Filipino-American philanthropist Loida Lewis sits down with global tax policy expert Mon Abrea, widely known as “The Philippine Tax Whiz.”

Moving beyond headlines, the episode confronts a reality millions of Filipinos face every rainy season: submerged communities, disrupted livelihoods, and lives at risk while funds meant to prevent disasters show little measurable impact.

Flood-control spending remains one of the largest national budget items, but as Abrea underscores, the problem is not spending but governance.

“Public funds must translate into public protection,” Abrea says. “When communities remain underwater despite massive allocations, it signals a breakdown in transparency, accountability, or both.”

Lewis and Abrea unpack how weak disclosure, fragmented project monitoring, and limited public access to information undermine results.

Transparency, they argue, isn’t merely publishing numbers; it’s enabling citizens to trace decisions, follow the money, and see outcomes.

Taxpayer empowerment is a core theme. Abrea reminds listeners that Filipinos are stakeholders, not bystanders.

“Taxes are not donations,” he says. “They are investments in public safety, dignity, and opportunity.”

Lewis echoes the call, stressing civic courage and ethical leadership, especially for communities bearing the brunt of flooding. For her, leadership is a moral choice.

“Leadership is not about position,” Lewis said. “It’s about responsibility, especially to those who have the least but suffer the most.”

As climate risks intensify and scrutiny of public spending grows, the episode lands at a critical moment: challenging policymakers, business leaders, and citizens to rethink how funds are managed and how leadership is measured.

The takeaway is clear: transparency isn’t optional, and accountability isn’t political; they are fundamental.

Watch or listen now:

YouTube: @theloidalewispodcast

Spotify: tinyurl.com/TheLoidaLewisPodcast

Apple Podcasts: tinyurl.com/apple-TheLoidaLewisPod

Full episode: https://youtu.be/hJg-TYmWImA?si=MgL0RRcdbPhzEXKN

Send questions for Mrs. Loida: askloidalewis@gmail.com

As global tax policy expert and chief tax advisor of Asian Consulting Group (ACG), Abrea advises governments, multinational corporations, and foreign investors on designing tax systems that are competitive, transparent, and aligned with international standards. His work consistently emphasizes tax certainty, efficient refund mechanisms, and credibility as the real foundations of long-term investment.

That leadership earned him international recognition in 2025, including being named TOFA-Most Influential Filipino in the World, alongside awards for excellence in taxation and business leadership, signaling the growing relevance of Filipino expertise in global policy circles.

Abrea’s approach is shaped by a rare interdisciplinary background: public administration from Harvard University, executive tax policy training at Duke Sanford School of Public Policy, and advanced certification in climate and sustainability policy from University of Oxford. This blend allows him to frame tax reform not just as a fiscal tool, but as a lever for sustainable growth.

In 2025, Abrea led an extensive international roadshow across more than 30 countries in Asia, Australia, Europe, Canada, and the United States, promoting ESG-aligned investment in the Philippines and globally credible reforms. He reinforced these themes as Lead Convenor of the International Tax and Investment Conference, where discussions covered the OECD Global Minimum Tax, CREATE MORE, electronic VAT refund reforms, and improved taxpayer services for registered enterprises.

His thought leadership also expanded globally through Without Climate Change, the second volume of his Reimagining the World series, launched in major financial and policy hubs including New York, London, Singapore, and Sydney, linking climate action directly to fiscal and investment policy.

Across diplomacy, business, and policy platforms, Abrea’s message in 2025 was clear: sound tax policy, anchored in integrity and global alignment, is indispensable to sustainable investment, economic competitiveness, and public trust.

Opening the conference, Undersecretary for Administration Ma. Theresa B. Dizon-De Vega stressed that protocol is not mere paperwork but a core test of the country’s credibility as a host state.

“Clear and predictable processes are essential to how the international community experiences the Philippines as host state,” she said, calling for consistent, well-coordinated procedures across government.

Organized by the DFA Office of Protocol, the meeting brought together key agencies whose systems directly affect diplomatic operations, including the Department of Finance (DOF), Bureau of Internal Revenue (BIR), Bureau of Customs (BOC), Land Transportation Office (LTO), and the New NAIA Infrastructure Corporation (NNIC), alongside members of the diplomatic corps and their staff.

The DFA presented a package of reforms, including streamlined endorsement forms and integration with its Quality Management System (QMS), aimed at standardizing transactions, strengthening document security, and improving traceability.

The changes cover high-impact services such as accreditation, tax privileges, vehicle registration, and airport facilitation—areas where delays and inconsistencies have long frustrated foreign missions.

Partner agencies outlined parallel upgrades: the LTO’s Land Transportation Management System (LTMS) for diplomatic vehicles and licenses; the DOF Revenue Office’s e-TESLite platform for tax-exempt importations; BIR policies on tax exemption documents for goods and services of resident missions; updated customs rules on taxes for the disposal of tax-exempt imported vehicles; and NNIC’s procedures for airport access and facilitation.

Diplomats actively weighed in during the open forum, raising operational concerns and offering feedback to fine-tune the reforms—an exchange that underscored the importance of sustained dialogue between government and the diplomatic community.

Closing the conference, Assistant Secretary and Chief of Protocol Ariel Rodelas Peñaranda framed the effort as both practical and principled. Inter-agency coordination in protocol, he said, is “both an administrative necessity and a diplomatic responsibility,” adding that the reforms are meant to support foreign missions while reinforcing the Philippines’ standing as a reliable, responsive host country.

The DFA and participating agencies committed to follow through on the issues raised, signaling that the December conference is a starting point—not the end—of a broader overhaul of diplomatic protocol services.

Finance Secretary Frederick D. Go said the new rules establish a simpler, more predictable fiscal regime, an essential factor in unlocking fresh mining investments that have been sidelined by regulatory uncertainty and complex tax structures.

The measure supports President Ferdinand R. Marcos Jr.’s push for a clearer and more accountable framework for developing the country’s mineral resources, ensuring both investor confidence and a fairer government take.

“This is a critical step forward in unlocking the full economic potential of the mining sector while maintaining safeguards for transparency, accountability, and protection of the environment,” Go said in a news release.

Signed into law on September 4, 2025, Republic Act No. 12253 removes overlapping and inconsistent tax treatments across different mining agreements. The Department of Finance (DOF) said the streamlined system lowers compliance risks for investors while strengthening the government’s ability to collect revenues efficiently.

Based on DOF estimates, the law will generate an average of ₱6.3 billion a year in incremental revenues from existing mining operations alone. Officials said significantly higher collections are expected as new capital enters the sector and previously stalled projects move forward under the more stable fiscal regime.

The IRR clarifies the tax base for royalties and windfall profits taxes, including allowable deductions and the treatment of gross output, key details closely watched by investors in evaluating project viability. It also formalizes filing, payment, and reconciliation procedures, with the Bureau of Internal Revenue (BIR) designated as the primary collecting agency.

To protect public revenues, the rules strengthen audit and monitoring provisions, mandate public disclosure of requirements, and institutionalize coordination among the BIR, Bureau of Customs, and other agencies. Project-level “ring-fencing” is also enforced to ensure taxes are properly accounted for on a per-project basis.

Go said the government will work closely with the Department of Environment and Natural Resources, revenue agencies, local governments, and industry stakeholders to ensure the law’s effective implementation.

Economic managers view the new fiscal regime as a pivotal reform that can draw larger, more responsible mining investments while delivering a steady and transparent revenue stream for the state and host communities.