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The IT & Business Process Association of the Philippines gained Philippine Economic Zone Authority support in seeking IT-BPOs’ adoption of hybrid work-from-home scheme
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PEZA and IBPAP seeking Fiscal Incentives Review Board approval for hybrid WFH scheme
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In the meantime, PEZA urges enterprises to comply with FIRB decision to avoid any penalties
The Philippine Economic Zone Authority is supporting the IT & Business Process Association of the Philippines’ (IBPAP) advocacy for hybrid work-from-home (WFH) arrangements for information technology-business process outsourcing (IT-BPO) firms from April 1 to December 2022.
“As IT-BPM employees have an overwhelming preference for a balanced, hybrid work arrangement, we are working with our government partners [like PEZA] to provide the industry a smooth transition to onsite operations towards a WFH/hybrid model in the longer term,” IBPAP president and chief executive officer Jack Madrid said.
Under the hybrid arrangement, the employer and employees agree on the percentage of WFH and those physically reporting to office depending on the position or functions of the employee.
“We are constantly in talks with IBPAP to still look into ways to include WFH or a hybrid work model in the IT-BPO sector’s operation in the Philippines. We should learn from the likes of India, one of our top competitors for IT-BPOs, wherein they are adjusting policies and tax breaks to adopt a hybrid work arrangement,” PEZA director-general Charito Plaza said in a statement.
Plaza said PEZA supports the hybrid working model for the following reasons:
- The increase in fuel and gas prices and its impact on prices of goods is making transportation costly for workers;
- The pandemic is not yet over although the country is now on Alert Level 1;
- The IT-BPOs invested in equipment that enabled their workers to work from home in a way that going back to 100% onsite should not be a sudden and immediate move; and
- Adopting WFH also helps decongest traffic.
“The recommendation is consistent with the Telecommuting Law (Republic Act No. 11165) – a legislation since 2018 that recognizes ‘working from an alternative workplace with the use of telecommunication and/or computer technologies’– which preceded the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act (RA 11534),” Plaza pointed out.
She said this “is in line with the emerging alternative work schemes implemented by India and other economies, realizing that remote work is here to stay and as an innovative solution to be able to sustain particularly their booming IT services industry.”
“We need to consider that we are not only dealing with the impact of the COVID pandemic, but also the domino effect of the ongoing war in Ukraine and Russia on the global market. The least we can do is help bring back our thriving economy, but not at the expense of our investors who help keep our economy afloat,” Plaza said.
Plaza said her agency and IBPAP are doing their best effort to convince the FIRB to consider the hybrid WFH scheme “with its three schedules proposed to adopt the 60:40, 40:60, or 50:50 staggered implementations and let the new administration determine the appropriate work scheme considering the suggestion.” She noted that the national state of calamity is effective until September 2022.
The suggestion comes after FIRB last February denied requests to extend the WFH arrangement under FIRB Resolution No. 19-21. The resolution mandates that the WFH arrangement for registered information technology-business process management enterprises should not exceed 90% of the total workforce only until March 31.
The PEZA Board recommended to FIRB in January the approval of a policy that would allow its registered IT-BPO enterprises to operate under a WFH arrangement without a requirement for 10% onsite capacity until September 12, 2022, without diminution of fiscal incentives.
In recognition of FIRB’s February decision and given its oversight functions under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law, PEZA released Memorandum Circular 2022-18 that states the FIRB-approved WFH will now cease on March 31 and that IT-BPO companies are now to conduct all activities or projects onsite starting April 1.
The authority said it had been receiving messages from workers of registered IT-BPOs raising concerns about costs, health, and safety regarding the return to office mandate.
READ: BIR: IT-BPOs must pay income tax for unapproved WFH
“PEZA will still file its appeal for reconsideration of the denial by the FIRB. We hear the concerns of our investors and their workers and we will continue to lobby for(the hybrid WFH scheme). In the meantime, I call on our enterprises to follow the decision of the FIRB to avoid any penalties,” Plaza said.
