VAT Ganern!?

There has been a lot of confusion among entrepreneurs, business managers and self-employed professionals with regard to the value-added tax (VAT). As Philippine-based income-earners on the “S” and “B” quadrants of the Cashflow Quadrant® conceptualized by world-renowned personal finance adviser Robert Kiyosaki, it is imperative for us to know the subtle nuances of the VAT regime. Being familiar with these concepts will help us avoid unnecessary expenses due to overpayment—or underpayment—of taxes. Remember, non-payment or underpayment shall also result in penalties and surcharges that may be slapped by the taxing authority on erring taxpayers.

So, how does a VAT-registered seller of goods or services know whether or not to pass on its VAT burden to its customers or clients? What if certain clients claim that we should not pass on to them the VAT burden because of their being VAT-exempt or VAT Zero-Rated? What are their differences and should they be treated?

Pursuant to Section 106 of the National Internal Revenue Code, a.k.a. the Tax Code, VAT is imposed on the gross selling price of the goods or services provided by the VAT-registered seller. It goes on further to define the term ‘gross selling price’, thus—

“The term ‘gross selling price’ means the total amount of money or its equivalent which the purchaser pays or is obligated to pay to the seller in consideration of the sale, barter or exchange of the goods or properties, excluding the value-added tax. The excise tax, if any, on such goods or properties shall form part of the gross selling price.”

On the other hand, Section 108 of the NIRC defines the phrase ‘sale or exchange of services’, thus—

“The phrase ‘sale or exchange of services’ means the performance of all kinds or services in the Philippines for others for a fee, remuneration or consideration, including those performed or rendered by construction and service contractors; stock, real estate, commercial, customs and immigration brokers; lessors of property, whether personal or real; warehousing services; lessors or distributors of cinematographic films; persons engaged in milling processing, manufacturing or repacking goods for others; proprietors, operators or keepers of hotels, motels, resthouses, pension houses, inns, resorts; proprietors or operators of restaurants, refreshment parlors, cafes and other eating places, including clubs and caterers; dealers in securities; lending investors; transportation contractors on their transport of goods or cargoes, including persons who transport goods or cargoes for hire another domestic common carriers by land, air and water relative to their transport of goods or cargoes; services of franchise grantees of telephone and telegraph, radio and television broadcasting and all other franchise grantees except those under Section 119 of this Code; services of banks, non-bank financial intermediaries and finance companies; and non-life insurance companies (except their crop insurances), including surety, fidelity, indemnity and bonding companies; and similar services regardless of whether or not the performance thereof calls for the exercise or use of the physical or mental faculties. The phrase ‘sale or exchange of services’ shall likewise include:

(1) The lease or the use of or the right or privilege to use any copyright, patent, design or model, plan secret formula or process, goodwill, trademark, trade brand or other like property or right;

(2) The lease of the use of, or the right to use of any industrial, commercial or scientific equipment;

(3) The supply of scientific, technical, industrial or commercial knowledge or information;

(4)  The supply of any assistance that is ancillary and subsidiary to and is furnished as a means of enabling the application or enjoyment of any such property, or right as is mentioned in subparagraph (2) or any such knowledge or information as is mentioned in subparagraph (3);

(5)  The supply of services by a nonresident person or his employee in connection with the use of property or rights belonging to, or the installation or operation of any brand, machinery or other apparatus purchased from such nonresident person.

(6)  The supply of technical advice, assistance or services rendered in connection with technical management or administration of any scientific, industrial or commercial undertaking, venture, project or scheme;

(7)  The lease of motion picture films, films, tapes and discs; and

(8)  The lease or the use of or the right to use radio, television, satellite transmission and cable television time.

Lease of properties shall be subject to the tax herein imposed irrespective of the place where the contract of lease or licensing agreement was executed if the property is leased or used in the Philippines.

The term “gross receipts” means the total amount of money or its equivalent representing the contract price, compensation, service fee, rental or royalty, including the amount charged for materials supplied with the services and deposits and advanced payments actually or constructively received during the taxable quarter for the services performed or to be performed for another person, excluding value-added tax.”

For VAT-exempt or non-VAT purchasers, Revenue Regulations 12-2003 provides:

SECTION 4. Treatment of the Output Tax Shifted to the Buyer of Services. – In general, the payor of the income/fee who is a VAT-registered person shall be entitled to claim the output tax paid by the financial institution as an input tax credit. On the other hand, if the payor is not a VAT-registered person, the VAT passed on by the payee shall form part of his cost. Provided, that a VAT receipt/invoice shall be issued by the payee for all the compensation for services received which shall be used as the evidence for the claim of input tax.” (underscoring mine)

For the tax (VAT) treatment of the sale, barter or exchange of goods or sale or exchange of services or lease of properties made by suppliers from the customs territory to the registered Freeport Zone enterprises in the Subic Freeport Zone (SFZ), including the Clark Freeport Zone (CFZ), as well as the Poro Point Freeport Zone (PPFZ), and vice versa pursuant to the provisions of Sections 12 and 15 of Republic Act (RA) No. 7227, as amended by RA 9400, in relation to Sections 106(A)(2)(c) and 108(B)(3) of the Tax Code of 1997, as amended by RA 9337, and implemented by Sections 5, 6, 12, and 13 of Revenue Regulations (RR) No. 4-07 amending Sections 4.106-5, 4.106-6, and 4.108-6 of RR 16-2005, Revenue Memorandum Circular 50-2007 provides a Q&A guide, to wit:

Q1: How will the sale, barter or exchange of goods or properties into the Freeport Zone by suppliers/contractors from the Customs Territory be considered?

A1: Such transactions shall be considered as export sales in accordance with RA 7227, as amended by RA 9400, which provides that the Freeport Zones shall be operated and managed as a separate customs territory. Moreover, Executive Order (EO) No. 226 provides that sales from the Customs Territory to export processing zones are considered as “export sales”.

Q2: What will be the treatment of sale, barter, exchange or lease of goods, properties and sale or exchange of services to a registered Freeport Zone enterprise by sellers/contractors from the Customs Territory?

A2: If the seller is a VAT taxpayer, such sale, barter or exchange shall be subject to VAT at zero (0%) percent. If the seller is a non -VAT taxpayer, the transaction shall be exempt from VAT.

 Q3: What is meant by a “zero-rated” sale and an “exempt” sale?

A3: A zero-rated sale of goods, properties and/or services (by a VAT-registered person) is a taxable transaction for VAT purposes, but shall not result in any output tax. However, the input tax on purchases of goods, properties or services, related to such zero-rated sale, shall be available as tax credit or refund in accordance with existing regulations. Under this type of sale, no VAT shall be shifted or passed-on by VAT-registered sellers/suppliers from the Customs Territory on their sale, barter or exchange of goods, properties or services to the subject registered Freeport Zone enterprises.

A VAT-exempt transaction, on the other hand, refers to the sale of goods, properties or services or the use or lease of properties that is not subject to VAT (output tax) under Section 109 of the Tax Code of 1997, and the seller/supplier is not allowed any tax credit of VAT (input tax) on purchases related to such exempt transaction.

Q4: What is the difference between an automatically zero-rated sale and an effectively zero-rated sale?

A4: An automatically zero-rated sale refers to a sale of goods, properties and services to a Freeport Zone-registered enterprise by a VAT-registered seller/supplier that is regarded as either an export sale or a foreign currency denominated sale under Section 106 of the Tax Code of 1997. An effectively zero-rated sale, on the other hand, refers to the local sale of goods, properties and services by a VAT-registered person to an entity that was granted indirect tax exemption under special laws or international agreements. Since the buyer is exempt from indirect tax, the seller cannot pass on the VAT and therefore, the exemption enjoyed by the buyer shall extend to the seller, making the sale effectively zero-rated.

Q5: What is the coverage of VAT zero-rating?

A5: The zero-rating will cover sale, barter, exchange or lease of all goods, properties and/or services by a VAT-registered seller/contractor from the Customs Territory to a Freeport Zone-registered enterprise and shall include, among others, the following:

  1. The sale/supply of ordinary cars, vehicles, automobiles, specialized vehicles or other transportation equipment, provided that these are used exclusively within the subject special Freeport Zones;
  2. The lease of properties by VAT-registered lessors, provided that such properties are located within the subject Freeport Zones;
  3. The sale/supply of electricity by the National Power Corporation (“NPC”) or by any other VAT-registered seller/supplier from the Customs Territory, to any registered Freeport Zone enterprise engaged in the distribution of power or electricity within the subject Freeport Zones; and
  4. The sale/supply of services, provided such services are rendered or performed within the Freeport Zone.

Q6: Since the Freeport Zones are considered as foreign soil and therefore, a separate tax jurisdiction, what is the VAT treatment of sale, exchange, barter or lease of goods, properties and/or services by a Freeport Zone-registered enterprise or Resident within the Freeport Zone?

A6: Such sale, exchange, barter or lease of goods, properties and services within the subject Freeport Zones shall be exempt from VAT. The following transactions are covered under this exemption:

  1. All transactions between and/or among two registered Freeport Zone Enterprises or Residents;
  2. Consumer goods purchased and consumed within the Freeport Zones;
  3. Sale/supply of services, including power or electricity, by a Freeport Zone-registered enterprise or resident within the Freeport Zone, regardless of whether or not the buyer or customer is a registered Freeport Zone enterprise or Zone Resident, provided that said power/electricity or services are rendered, used or consumed within the Freeport Zone ; and
  4. The lease of properties owned by Freeport Zone-registered enterprises or Residents, provided that such properties are located within the subject Freeport Zones.

Q7: What is the tax treatment for the income of Freeport Zone-registered enterprises derived from sources in the Customs Territory?

A7: Freeport Zone-registered enterprises may generate income from sources within the Customs Territory of up to thirty percent (30%) of its total income from all sources; provided, that should a Freeport Zone-registered enterprise’s income from sources within the Customs Territory exceed

thirty percent (30%) of its total income from all sources, then it shall be subject to the income tax laws of the Customs Territory; provided further, that in any case, customs duties and taxes must be paid with respect to transactions, receipts, income and sales of articles to the Customs Territory and in the Customs Territory.

Q8: What is the tax treatment of sale, barter or exchange of goods and properties by Freeport Zone-registered enterprises to a buyer from the customs territory? (i.e. from the Freeport Zone into the Customs Territory)

A8: The sale, barter or exchange shall be treated as a technical importation made by the buyer in the customs territory. The buyer shall be treated as the importer and shall be imposed the corresponding import taxes and duties prior to release of the goods or merchandise from Customs custody. Any unpaid taxes thereon, aside from being the prime liability of the buyer-importer, shall constitute a lien on such goods or merchandise imported from the Freeport Zone.

Q9: What is the tax treatment of a sale of service or lease of properties (machineries and equipment) by Freeport Zone-registered enterprises to a customer or lessee from the Customs Territory?

A9: The sale of service shall be exempt from VAT if the service is performed or rendered within the Freeport Zone. The lease of properties, on the other hand, shall likewise be exempt from VAT if the property is located within the Freeport Zone. However, if the properties (machineries and equipment) leased by the Freeport Zone registered enterprise is located outside of the Freeport Zone, payments to such enterprise will be considered as royalties and subject to the final withholding VAT of 12%.

Q10: What are the documentary requirements to be submitted by Freeport Zone-registered enterprises to the BIR to be entitled to the tax benefits clarified in this Circular?

A10:    1. Certificate of Registration and Tax Exemption as a Freeport Zone registered Enterprise;

  1. Copies of relevant documentation of the legal status of the business enterprise (Articles of Incorporation, Partnership Agreement, SEC Registration and similar documents) showing, among others, beneficial ownership;
  2. If a corporation, partnership or other business enterprise is organized or constituted outside the Philippines, the name, address of the legal agent of the enterprise in the Freeport Zone accompanied by sworn proof of consent of the agent to serve as such;
  3. Evidence of the physical location of the business enterprise within the Freeport Zone, such as certificate of title, tax declaration, property deed, lease agreement and similar documents;
  4. If previously part of a larger business enterprise doing business elsewhere in the Philippines, evidence of restructuring to exclude all business operations taking place inside the boundaries of the Freeport Zone; and that the unit left to operate inside the Freeport Zone is organized as a separate legal entity.
  5. List of assets comprising the investment to be made; and
  6. Such other documents as the BIR may require.

Please take note that services performed by service providers outside the Freeport/Economic zones are VATable pursuant to the above-quoted RMC. In addition, please remember that VAT-exempt transactions, which are covered by Section 109 of the NIRC is different from VAT Zero-rated and are thus governed by different rules as can be seen from above.

Knowing these rules will help you avoid unnecessary headaches and heartaches brought about by stressful BIR tax audit assessments. Remember, “ignorance of the law excuses no one from compliance therewith” (Article 3, Civil Code).

Advantages of Investing in Mutual Funds

When it comes to investing in the stock market, financial and investment advisers will always caution potential investors that before they place their hard-earned money therein, they should first be all-SET. This means that they should have the Size of funds, Expertise and Time. However, even though a potential stock market investor may not be all-SET, there is still an alternative paper asset that one can invest in — Mutual Funds. Below are the advantages of investing in mutual funds according to the Philippine Investment Funds Association (PIFA) and the Securities and Exchange Commission (SEC) along with my additional comments:

1. Professional Management

One of the main attractions of mutual funds is that it affords its investors, particularly the small ones, the services of full-time professional managers whose job is to analyze the various investment products available in the market and select those that would give the best possible returns to the fund and its shareholders.

2. Low Capital Requirement

Direct investments usually require substantial capital. The minimum investment amounts for Treasury Bills and Commercial paper, for instance, range from P100,000 to P1,000,000 depending on the bank or investment house you are dealing with. This also holds true for stock because while you may be able to buy one “lot” (shares are sold in board lots ranging from 10 shares to 1 million shares depending on the price at which these shares are traded) for as low as P1,000 or P5,000, you may not be able to buy the stock that you really want, especially the blue chip and growth stocks.

3. Diversification

There is a saying that goes, “Do not put all your eggs in one basket.” This adage is especially true in the world of investments which is full of uncertainties. In fact, even King Solomon, the wisest king who has ever lived, said, “But divide your investments among many places, for you do not know what risks might lie ahead (Ecclesiastes 11:2, NLT). There is no such thing as a “sure” thing. An important investment principle that requires holding several securities to reduce the risks associated with investing in individual securities is called diversification. When you invest in a mutual fund, you achieve instant diversification because the fund is required by law to be invested in a wide array of issues and/or securities.

4. Liquidity

Liquidity is the ability to readily convert investments into cash. Other investment products require you to find  buyer so that you can liquidate your investments. That is not the case with mutual fund shares because the fund itself stands ready to buy back these shares at the prevailing Net Asset Value Per Share. While the law provides that redemption proceeds must be given within seven (7) banking days from the date of the redemption request, most funds are able to pay the redemption proceeds within the next day. Mutual Funds are, therefore, considered very liquid investments.

5. Safety

Safety is a very important consideration for most investors. Mutual funds are highly regulated by the Securities and Exchange Commission under the Investment Company Act and its Implementing Rules and Regulations. Mutual funds are prohibited from investing in particular investment products and engaging in certain transactions. They also have to  submit regular reports to  the SEC as well as to their shareholders.

6. Potentially Higher Returns

Because a mutual fund is managed as a single portfolio, it is able to take advantage of certain economies of scale. For instance, with its millions of pesos (or other currency) under management, it can negotiate for lower stockbrokerage fees or higher interest rates on fixed-income instruments. In the end, however, it is still the investment company adviser who really makes the big difference when an individual is faced with this decision — “Will I make direct investments by myself or will I invest in a mutual fund?” Because very few individual investors can match the experience and skill of full-time professional fund managers, the investing public is well advised to invest in a mutual fund instead.

7. Convenience

Mutual funds are purchased directly through SEC-licensed Certified Investment Solicitors (CIS) only. These CIS are usually connected to banks, insurance companies, investment companies, or brokerage firms and normally provide personal, tailor-fit service. Some fund companies have even set up retail centers for investors. Many have payroll deduction plans and some funds, with proper authorization, will deduct and invest on a regular basis a specified amount from the shareholder’s bank account.

Funds offer a variety of services, including preparing monthly or quarterly account statements, automatically debiting additional investments from, or crediting redemption proceeds to, the investors’ bank account; or allowing transfers from one fund to another. Most major mutual fund companies offer extensive record-keeping services to help investors track their transactions and follow their funds’ performance via phone, text message, or the internet.

8. Transparency

Investment company advisers (such as Philam Asset Management, Inc.) provide investors with updated information pertaining to the fund. All material facts are disclosed to investors as required by the SEC.

9.  Flexibility

Investors are allowed to modify investment strategies over time by transferring or moving from one fund to another within a mutual fund family.

The Process of Pastoral Counseling

Pastoral Counseling is not a lecture but a process. As students, this has been pounded to us over and over again. The tendency to monologue during counseling sessions for those in the teaching and preaching ministry are very high. However, as discussed in my previous articles, it is also by those in the said ministry that pastoral or nouthetic counseling are best conducted because it is to them that God has entrusted the spiritual, psychological, and sometimes, even physiological care of His flock. So what exactly is this process?

Obviously, the very first stage of counseling is making the contact. These contacts are not only limited to the formal arrangements made by the parishioner or client with the counselor but also during informal settings, including what Dr. Harold Sala in his Counseling Friends in Need, refers to as “peer counseling.” These informal meetings often occur during social gatherings such as parties, family reunions, funerals, weddings, parent-teacher associations, and the like. That is why, according to Dr. Wayne Oates in his An Introduction to Pastoral Counseling, “The pastor and other religious workers, therefore, can never become so professional in their pictures of themselves that they underestimate the importance of informal relationships both as powerful ministries in and of themselves and as points of vital contact for beginning more formal counseling relationships.”

Aside from informal settings, the initial contact may also be in the form of formal pastoral visitation and counseling. In smaller congregations such as community or house churches, pastoral house visitation of parishioners are quite common. However, as far as megachurches are concerned, this practice seems highly impractical if not altogether humanly impossible unless the pastoral complement of the church is large enough to cover each and every household in their membership. To alleviate this, house visitations are usually delegated to the deacons or discipleship group leaders who have a more personal and intimate relationship with their respective group members. Nevertheless, pastoral visits, whether done by the pastor himself or other church leaders gives the ministers a opportunity to know their flock better. This enables them to effectively assess their members’ current situation in life such as their economic status, vocational issues, and interfamily tensions, which in turn helps them in counseling their people when the need arises.

On the side of the parishioners, pastoral visits give them a sense of value and belonging to the local church they are members of. Such feeling aids them in their ability to perceive their minister as someone who truly cares for them thus making it easier for them to open up their problems for counseling. Finally, pastoral visiting helps establish that relationship of rapport, of confidence and affection, between counselor and client without which the entire procedure is impossible.

Ethics in Pastoral Counseling

As with most, if not all professions, pastoral counseling as a profession also has its own ethical standards. Ethical standards are essential to all kinds of professions, especially to those which particularly deal directly with confidential information such as counseling. This is why as with lawyers and physicians who are involved in legal and medical counseling respectively, information gathered through the practice of their professions are considered privileged and hence cannot be legally forced out of the professional except for specific valid reasons as determined by law and the courts of justice.

The confidential treatment of all personal information is first and foremost the backbone of any of the counseling professions and this is no less true for the ministry of pastoral counseling. People come to professional counselors because they trust that the counselor, being a licensed professional or ordained minister, would handle their personal information in strict confidentiality. Otherwise, potential clients will become afraid to share their deepest and darkest secrets, which are usually the cause of their problems, to the counselor. According to Dr. Narramore in his authoritative book, The Psychology of Counseling, the counselee wants understanding, sympathy and respect for the seriousness of his or her situation. Although there are several other areas of ethical concern in counseling, the manner of handling confidential information, both verbal and written, is of utmost importance. To stress the gravity of this, let me give an example from my own job as a project attorney at Integreon, a knowledge process outsourcing company. In our office, we have what they call service delivery centers where we actually perform our work, which is to review, sort, and tag thousands of documents for use as evidence in litigation. In order to protect the confidentiality of the sensitive documents that come our way, we are not allowed to bring inside the delivery center any mobile phone, data storage device or even pieces of paper unless we shred it on our way out.

Another important area of ethical concern for pastoral counselors and ordained ministers is propriety in dealing with counselees of the opposite sex, especially if one or both of them are married. This involves conducting the counseling session in an appropriate place, limiting physical contact to the shaking of hands, and avoiding emotional attachment and dependency brought about by probing for unnecessary intimate details. To be sure, it is well to keep in mind that when your own personal desires are unsatisfied, it is easy to be unconsciously seductive toward another person.

Lastly, a counselor should recognize his limitations and learn to refer to other professionals, such as physicians or lawyers who may be more competent to handle his client’s medical or legal problems.

The Methods of Pastoral Counseling

As with all new lawyers, after I took my oath and signed the Roll of Attorneys, thereby becoming a full-fledged licensed counselor and attorney-at-law, I was so excited to begin my practice. However, little did I know that law school did not prepare me to do so! Yes, I knew the law, both substantive and procedural, but I knew nothing about the professional or “business” aspect of building my own law office. I realized that I did not know how to properly set up and conduct an interview with a prospective client and worse, I had no idea how much to charge for my services! I was so dumbfounded that I just tried calling up older and more experienced lawyers to ask them for some advice. The only thing was, there were almost as many different methods and styles as there are law practitioners. During that time, and even now after six years of law practice, I really wished that all law schools would include in their curriculum a subject on “How to Set Up and Manage a Law Office.”

Likewise, the same thing is true with regard to the practice or ministry of pastoral counseling. Fortunately for me, I am now learning in seminary the things that I should have learned in law school, particularly, how to arrange and conduct an effective client interview. According to Dr. Clyde Narramore, a renowned clinical psychologist and counselor, effective counselors are conscious of details and thus give careful thought to such arrangements as: (a) setting the appointment; (b) preparing the interview; (c) beginning the interview; (d) determining the length of the interview; (e) closing the interview; (f) recording the interview; and (g) handling persistent cases. In his seminal book, The Psychology of Counseling, he provides basic guidelines therefor. He further stressed that counseling is different from a lecture or seminar where one person merely passes on information to other people because in counseling, both the counselor and the counselee undergo a process which doesn’t necessarily end after one session.

Dr, Narramore also discussed the need for counselors to give their best attention to their clients taking into account not only the latter’s words but also their demeanor in order for the former to adequately assess and analyze the latter’s problems and hence, provide effective solutions. That is why in setting an appointment, possible distractions must be minimized if not totally eliminated so that not even the minutest detail can escape the attention of the counselor. Lastly, Dr. Narramore stressed the value of discussion. He said that contrary to popular belief that “talk is cheap,” talking actually helps a person think clearly by putting into words the concepts he has in mind. In doing so, good ideas are sifted from bad ones. It helps us define just what we really do think. It shows up the true issue and points out possible danger or good.

Due to their similarities, the lessons I am currently learning about pastoral counseling can also readily be applied to legal counseling. Observing these basic steps will certainly make one a good counselor, whether pastoral or legal.

The Role of the Holy Spirit in Counseling

Before Jesus Christ ascended into heaven, He promised His disciples that He would not leave them orphans but would send them another Paraclete Whom He identified as the Spirit of truth (John 14:16-17). In English translations of the Bible, the Greek word ‘Paraclete’ in the above-cited passage is rendered either as ‘Advocate’ or ‘Helper.’ In addition to those however, the most appropriate translation of that word in the context of our topic is that of ‘Counselor.’ Although Jesus was and is definitely the Great Counselor while He walked the earth, the Counselor who remained on earth to guide Jesus’ disciples is the Holy Spirit. Jesus said that the Holy Spirit will remind His disciples everything that He taught them—and that includes us modern-day Christians.

In referring to the third Person of the triune God, the word ‘holy’ is most commonly used. According to Jay Adams, the Holy Spirit is called holy not only because He is to be distinguished from all other spirits, and in particular from unclean spirits, but also because He is the Source of all holiness. He further states that “the holiness of God’s people that results from their sanctification by the Holy Spirit must be attributed entirely to Him as He works through His Word.

As pastors and nouthetic counselors entrusted by Jesus to take care and watch over His flock (Acts 20:28), we are to trust in the Lord with all our hearts and lean not on our own understanding. We should acknowledge Him in all our ways and He will make our paths straight (Proverbs 3:5-6). Instead of relying on human wisdom as set forth in the various philosophical systems of the world, it is only through the help of the Holy Spirit and by our reliance on the truth of God’s Word in Sacred Scripture that we can truly be effective in guiding His people out of the problems they are facing. By being faithful to God’s calling and direction, we bring glory to His name.

The Role of the Church in Pastoral Counseling

Pastoral counseling, as its name implies, happens in the context of the church. As the pastor is the person primarily responsible for the job, his role as the leader of the flock Christ has entrusted to him is indispensable to his duty as counselor. The pastor’s knowledge of of the conduct in the church of the people under his care provides clues to a deeper understanding of their psychological and spiritual condition.

According to Samuel Southard, “One of the characteristics of the Christian church is its ability to demonstrate God’s love through human relationships. In the Christian fellowship a believer may find tangible expression of the supernatural grace that endows his life.” He further stated that the standard for the Christian’s life among men is the relationship which exists between Christ and his disciples in such a way that to walk worthy of God’s calling is to forebear one another in love and walk honorably among men. Most importantly, the church is not to be defined just in terms of relationships among men but in terms of the quality of the relationship that exists among men because they have become sons of God. The church provides a purpose for living and the fellowship through which love may be made real.

The setting and atmosphere of the church is the best condition to facilitate the effectiveness of the counseling ministry. This includes the relationship between the pastor and his flock and the flock among themselves. In fact, whenever I tell my wife that we should go and seek counseling, she would always tell me that she wants someone whom we can trust. The adage, “People don’t care how much you know until they know how much you care” is absolutely true when it comes to counseling. Most people, especially Filipinos, will not listen to some stranger telling them how to run their lives. Instead of looking at the educational and professional attainments of the counselor—no matter how important that is—they will need someone who they trust. Someone whom they will entrust with their deepest secrets and innermost turmoils. And what better place to look for aside from one’s biological family than one’s spiritual family?

The Counselor

One of the most important elements of counseling is the counselor himself and according to Adams in his The Christian Counselor’s Manual, “While every Christian must become a counselor to his fellow Christians, the work of counseling as a special calling is assigned particularly to the pastor.”

Corollary to this is his apparent antagonism towards the “science” of psychiatry, positing that biblically, there is no warrant for acknowledging its existence as a separate and distinct discipline because there are only three specified sources of personal problems in living, namely: demonic activity, personal sin, and organic illness, and that all options are covered under these three heads, leaving no room for a fourth—non-organic mental illness. So, there is therefore no place in a biblical scheme for the psychiatrist as a separate practitioner. The same is true with respect to his view on non-directive counseling saying that those words represent a contradiction of terms.

As ordained Christian ministers are the ones specifically tasked to do the work of counseling, the qualifications of a counselor are the same as those of a minister. To be an effective nouthetic counselor, one must possess the following: (a) adequate scriptural knowledge of the will of God; (b) divine wisdom in one’s relationships to others; and (c) good will and concern for other members of the body of Christ. In short, he must be convinced that the Bible is true and be ready and able to direct others to its promises with assurance and conviction. The counselor, as an ordained man of God, exercises the full authority for counseling that Christ gave to the organized church. As such, he must also exhibit faithful obedience to God’s Word in his daily life.

Aside from the qualifications discussed above, the emotional health and attitudes of the counselor are likewise vitally important. A person who is undergoing emotional turmoil due to his own personal problems may not be in the best condition to counsel others. He will be out of focus, distracted by his own issues that he would not be able to listen attentively and effectively process the information his counselee is sharing. Moreover, the emotionally disturbed counselor’s judgment might become clouded and colored by his own biases and desired solutions to his own problems.

As the person primarily responsible in helping other people deal with their life problems and issues, the minister must see to it that before he enters the counseling room or office and meets with his counselees, his emotional and mental disposition is well-balanced and free from any distractions that may affect his performance and functions as such. To help achieve this, the help and guidance of the Holy Spirit is indispensable, which can be gained through prayer and meditation on God’s Word.

The Counselee

In reading chapter four of The Christian Counselor’s Manual by Adams, I found some important things that a Christian counselor needs to know and realize before he proceeds with the counseling proper.

The first is that as Christians who regularly read and meditate on God’s Word, we already know a lot about human nature. Even in the study of theology in seminary where the Bible is our primary and only infallible source of truth, the topic of anthropology is included. As the Bible contains the truths of God relative to His creation, coupled with intense observation of verbal and non-verbal messages put across by our counselee, we are able to effectively diagnose the main problems that commonly beset man. According to Adams, there are three sources of information available to the Christian or pastoral counselor with the first one being primary and foundational and the other two secondary and derivative, to wit: (1) the Scriptures, as mentioned above; (2) the counselor’s and others’ experiences; and (3) the dynamics of his own sinful heart. While the first source is inerrant and infallible being the Word of God, the interpretations of the second and third sources are subject to the first.

The second thing that pastoral counselors need to remember is that the Bible contains every solution to every human problem. Of course, this does not mean that it contains the solutions to every mathematical or scientific problem but that which relates to the nature of man in relation to his God. In other words, those relating to faith and morals. In fact, these are the only kinds of issues that truly have eternal significance. Jesus, being both fully God and fully human, knows and understands all the problems, difficulties, and temptations that all men face. As a man, he himself faced the same temptations and yet did not sin.

Third, in view of the foregoing, we also need to know how to properly apply the truths of Scripture to the issues of our counselees. We can do this by going through our counselee’s history so as to correctly understand his or her situation well. Otherwise, our diagnosis of the real problem may be faulty or at best, incomplete. We have to learn how to listen carefully with patient endurance guided by the Holy Spirit and the truths of Scripture in interpreting the signs.

Fourth and last, we have to take confidence that our counselees can indeed change. This is a very crucial plank in the Christian counselor’s platform. Even though modern psychologists and psychiatrists seem to have given up on a seemingly “mental” patient, we, as Christian counselors should not give up easily but instead see the root cause of the problem as it relates to our sinful nature which is not beyond the redemptive powers of the Blood of Christ. The idea itself of being “born again” signifies a radical change in our being. It not only illustrates a cleansing or repairs of a certain person but a total change of that person’s nature. Everywhere the Scriptures either demand change or assume its possibility. Knowing such truth gives the Christian counselor hope that his labor shall bear fruit because he knows that God is in the business of changing lives.

Counseling and the Bible

Pastoral counseling would not be as such without the Bible. As Christians, our primary source of wisdom for faith and morals is Sacred Scripture. Without the Word of God, our counsel may only be based on the hollow and deceptive philosophies of man. According to Allen Brabham: “The shepherd role of the pastor, the closeness that exists between pastor and parishioners, and the working of the Spirit through Scripture afford pastoral counselors an ideal teaching opportunity.” However, pastoral counseling is more than just teaching, otherwise, it would have no difference with preaching, which is primarily didactic in nature. While counseling also involves teaching, it is in reality a sharing of one’s life in God in a more personal and individualized manner.

St. Paul the apostle said that “All Scripture is breathed out by God and profitable for teaching, for reproof, for correction, and for training in righteousness, that the man of God may be competent, equipped for every good work” (2 Timothy 3:16-17, ESV). Moreover, the author of Hebrews posits that “For the word of God is living and active, sharper than any two-edged sword, piercing to the division of soul and of spirit, of joints and of marrow, and discerning the thoughts and intentions of the heart” (4:12, ESV). It is clear that unlike the wisdom of man, when correctly used, the Word of God has power, power to affect and change people’s lives. Jesus himself prayed to the Father that his disciples shall be sanctified by the truth, and this truth is the Word of God (John 17:17) as Jesus himself is the “way the truth and the life” (John 14:6).

Some people may counter by saying that the Bible is an outdated ancient document irrelevant to our present-day issues and problems. Granting that we in the 21st century are culturally, linguistically, and chronologically far apart from biblical times, surely nonetheless, the issues and circumstances illustrated and addressed in the Bible are human issues which transcend time, language, and culture. Because the Bible is the Word of God, it is just as immutable and eternal as its divine Author. The Word of God convicts man of sin; it brings the message of salvation; it produces faith; it ushers in new life; offers cleansing to the believer; gives unerring guidance; it offers discernment; produces knowledge; and offers protection against sin.

Of course, as pastoral counselors, we must be careful in our use of Scripture. The apostle Paul exhorted the young bishop Timothy to keep a close watch on himself and on his teaching, for by doing so, he will save both himself and his hearers (1 Timothy 4:16). This he could do by doing his best to present himself to God as one approved, a worker who has no need to be ashamed, rightly handling the word of truth (2 Timothy 2:15). Just like in preaching, we should likewise observe good and established rules of hermeneutics when quoting and applying Scripture to the various situations of our counselees.

The Bible is a Christian counselor’s best manual as it was authored by God who created us. As said in the movie “The Guru,” The B.I.B.L.E. is our Basic Instructions Before Leaving Earth.