Even before ?global village? became a buzzword in the 1960s, there were many forward-looking Filipino leaders who saw that the only way for Filipino enterprises to succeed is to be competitive internationally.

Among them was the much-maligned and misunderstood President Elpidio Quirino, who served as second president of the post-Commonwealth Philippine Republic from 1948 to 1953.

Even then, Quirino already saw that a policy of protectionism is detrimental to the country. He said that Filipino products should be patronized by Filipinos not because they are made in the Philippines but because they are superior in quality and price to products coming from abroad.

More than 50 years after Quirino, the dispute between protectionism and globalization apparently continues as can be seen in the imbroglio among partners of the country?s iconic accountancy firm Sycip Gorres and Velayo (SGV).

It?s ironic that globalization of the practice of accountancy in SGV would be an issue among its partners since SGV was the trailblazer in the Filipinization of the accounting profession.

SGV traces its beginning to the merger in 1953 of Sycip Velayo Jose and Company with Henry Hunter Bayne & Co. which two Filipino accountants Arsenio Reyes and Ramon J Gorres had bought from American partners. The merger resulted in the SGV which then and until now is the largest accounting firm in the Philippines.

Filipinization and protectionism were the trend then, in the 1950s, but the birth of the global village and a borderless world economy has made protectionism an anachronism.

This is the bigger picture in the SGV controversy. Some partners are resisting the partnership of SGV with one of the world?s leading accounting firms, Ernst & Young, while the others say that the partnership with a major international accounting firm is the key to survival and growth in the new global economic order.

The proponents of the global view among the SGV partners say that the accounting industry or any Philippine industry for that matter cannot remain globally competitive if it shuts its doors to outside influence. They point out that accounting requires a continuing education on the part of its professionals. They stress that Philippine accountancy cannot grow intellectually and compete globally if it remains closeted and limited within its own narrow cocoon.

Relevant to the dispute is the comment of former UP Law School Dean Raul Pangalanan who said: ?Protectionism only gives shelter to archaic and unethical practices.?

We have seen this happen. In sectors where protectionism is practiced, foreigners are able to do business anyway by resorting to using dummies to circumvent any legal prohibition.

Advocates of protectionism, on the other hand, cite Section 14, Article XII of the 1987 Constitution which provides ??[t]he practice of all professions in the Philippines shall be limited to Filipino citizens in cases prescribed by law.?

Legal experts, however, say this prohibition no longer applies to accountancy and many other professions after the Philippine ratification of the World Trade Organization (WTO) Agreement in 1994 which included the General Agreement of Trade and Services or GATS.

They stress that the ratification of the WTO has the force of law.

Supreme Court Justice Dante Tinga explained the services referred to in GATS as ?any service in any sector except services supplied in the exercise of government authority.?

Justice Tinga said that the provision of professional legal services is clearly covered by GATS. If this is the case, then accountancy and audit services are also included as part of the WTO Agreement on cross-border practice of professions.

Justice Tinga said: ?Since GATS is part of the WTO Agreement, a treaty which the Philippines ratified in 1994, it has the force of law in this jurisdiction. In any event, any legislation allowing foreigners to practice their profession in the Philippines, following Section 14, Article XII, will pass constitutional muster, except the professions which the Constitution specifically confines to Filipino citizens, such as the management of mass media or the advertising industry.?

Based on Justice Tinga?s explanation, it appears that SGV?s current relationship with the US-based Ernst & Young is allowed by the Constitution.

In fact, other major accounting firms have followed the lead of SGV to ?internationalize?. Isla Lipana and Co. has UK?s PricewaterhouseCoopers as partner, Manabat Sanagustin & Co. has KPMG, and Manabat Delgado Amper & Co. is a member firm of Deloitte Touche Tohmatsu.

It?s surprising some SGV partners are even raising this as an issue since SGV has already entered into the widely practiced international partnership when it became a member firm of Arthur Andersen. SGV?s inherent strengths were highlighted when it survived and emerged even more competitive after the partnership with Andersen ended in 2002.

The trend of integration and cross border practice in the practice of professions is clear in the just concluded 14th Asean summit in Thailand where accountants, doctors and dentists were allowed to practice their professions anywhere in Asean. Under the Asean Mutual Recognition Arrangements, these professionals can work in any of the Asean member countries without being required to pass another board examination.

Earlier, MRAs covered engineers, architects, surveyors and nurses.

SGV founder Washington Sycip said that the internal restructuring agreement which is the bone of contention among the partners is still a work in progress and has still to be finalized. Sycip explained that the agreement would not even make Ernst & Young a co-equal of SGV.

The accountancy industry is highly competitive and the very survival of SGV, an institution in the industry, is in danger if an amicable settlement is not reached among its partners.

However, it is also clear that the firm?s survival is also at stake if it fails to establish alliances with international industry leaders especially at this time when the world economy is in turmoil.