August 24, 2022

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PEZA will ask board to extend 30% WFH for BPOs until March

By Revin Mikhael D. Ochave, Reporter

THE Philippine Economic Zone Authority (PEZA) confirmed that it plans to extend 30% work-from-home (WFH) arrangements for registered information technology and business process outsourcing (IT-BPO) firms to March, with final approval of the policy expected at its next board meeting.

“Yes, we confirm this. It is purely (an) extension,” PEZA Officer-in-Charge and Deputy Director General for Policy and Planning Tereso O. Panga said in a Viber message to BusinessWorld.

“The extension is for presentation to the PEZA board meeting on Friday, Aug. 26. It is already approved in principle,” he added.

Jack Madrid, president of the IT & Business Process Association of the Philippines (IBPAP), said on Aug. 23 that the group received notice from PEZA of the March extension.

“PEZA management is prepared to extend the letters of authority (LoAs) allowing for 30% WFH until March 2023 for IT locators registered with PEZA prior to the passage of Republic Act No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law. These were the locators that were initially issued WFH LoAs in March 2022 with a validity period up to Sept. 12, 2022, which was sustained by the Fiscal Incentives Review Board (FIRB),” Mr. Panga said in a separate statement.

“With President Ferdinand R. Marcos, Jr.’s (extension of) the state of calamity until end of the year, we expect FIRB to issue a supporting resolution to allow the extension of 30% WFH limit for the same period which will benefit as well the registered business enterprises (RBEs) covered by the CREATE regime,” he added.

The FIRB, which oversees incentives policy, issued on June 21 Resolution No. 017-22, which temporarily permitted registered IT-BPO firms to operate 70% onsite and 30% WFH until Sept. 12 while retaining their fiscal incentives under CREATE.

The FIRB had allowed companies in Resolution No. 19-21 in August 2021 to adopt 90% WFH and 10% onsite work while retaining tax incentives, as a pandemic safety measure. The resolution expired on April 1, which triggered the return of largely on-site work.  

“The extension of the 30% WFH limit until March 2023 is in keeping with the one-year validity period of LoAs issued by PEZA and in support of the IBPAP’s request for a longer WFH authority so that the locators can plan work schedules better vis-a-vis increasing market demand,” Mr. Panga said.

“PEZA had been implementing a policy of 30% WFH prior to the enactment of the Telecommuting and CREATE laws; thus, it is covered by the sunset provision of the CREATE,” he added.

Asked to comment, Alliance of Call Center Workers Co-Convenor Emman D. David said via mobile phone that the group welcomes the extension, but expressed a preference for 90% WFH.

“That said, our fight for the reinstatement of previous WFH arrangements (90% WFH) continues. We will keep on engaging the pertinent government agencies in pursuit of this goal,” Mr. David said.

Amit Jagga, Concentrix Philippines country leader, said in a Viber message that tax incentives are important to help the growth of the local IT-BPO industry.

“Concentrix and the industry have always advocated that the government strongly consider extending help through the continuous grant of fiscal incentives, which other countries have done based on the understanding that, as exporters of services, the outsourcing industry must remain competitive,” Mr. Jagga said.

“It is therefore clear that tax incentives are necessary for the industry to be able to grow and realize its potential to add tens of thousands of jobs,” he added.

At a conference on Wednesday, Trade Secretary Alfredo E. Pascual said that the government is finding ways to address the WFH arrangements sought by the industry. 

“The pandemic has shown that WFH for IT-BPOs can be a viable alternative, in fact it is a preferred alternative by many employees in the IT-BPO sector. And we are addressing that. There are solutions,” Mr. Pascual said.

“We are trying to see whether an amendment of the law is the more efficient way of doing it. But there is also the possibility of shifting the incentives registration from PEZA to the Board of Investments (BoI). BoI is not subject to the same rule about the share of the business that can be performed outside (economic zones by) PEZA-registered enterprises,” he added.

Labor Secretary Bienvenido E. Laguesma said the government is currently in the process of revising the implementing rules and regulations of the Telecommuting Law.

“While legislation is the long route, we are now in the process of revising the IRR of RA 11165, the Telecommuting Law, with respect to WFH arrangements and we would like to come up with the revised IRR before the end of the (Sept. 12) extension,” Mr. Laguesma said.

The law allows private companies to offer WFH and other alternative work arrangements to their employees.