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PEZA wants BPO firms to continue WFH arrangements sans 10% onsite capacity requirement

The Philippine Economic Zone Authority (PEZA) is pushing for a policy that would allow information technology (IT) and business process outsourcing (IT-BPO) companies located in economic zones to operate under work-from-home (WFH) arrangements until September 12 of this year without the 10% onsite capacity requirement.

Last September, the Fiscal Incentives Review Board (FIRB) released Resolution 19-21, which allows IT-BPO firms in economic zones to implement 90% WFH arrangements until March 31, 2022.

Outsourcing firms exceeding the 90% WFH threshold cannot enjoy fiscal incentives during the months of their non-compliance with the FIRB resolution.

In its proposal, the PEZA cited Rule 23, Section 3 (d) of the Implementing Rules and Regulations (IRR) of Republic Act 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.

Rule 23 provides that an investment promotion agency may implement temporary measures to support the recovery of registered business enterprises from exceptional circumstances, upon prior approval of the FIRB.

Exceptional circumstances include pandemic, epidemic, war, armed conflict, state of national health emergency, outbreak of diseases, international or regional financial crisis, major disaster such as volcanic eruption, earthquake and super typhoon, or analogous circumstances.

President Rodrigo Duterte has extended the COVID-19 state of calamity in the country until September 12, 2022.

Aside from the suggestion regarding the WFH scheme, the PEZA also submitted the following proposals:

  • Allow the movement of IT equipment and assets as long as the same is covered by surety bond and appropriate PEZA Permits. There shall be no limitation on the number of IT equipment as long as the RBEs comply with the surety bond and permits.
  • Authorize PEZA to craft its own guidelines for the WFH arrangement under this recommendation as this is peculiar only to PEZA, being the biggest IPA in terms of number of enterprises and owing to multiple IT centers/buildings under its jurisdiction which is not applicable to other IPAs and/or economic zone authorities.

“The proposal of PEZA is merely temporary in consideration of the ongoing pandemic…,” said PEZA Director General Charito Plaza.

“The approval of the PEZA Board of our proposed temporary measure was submitted to the FIRB for further approval as required under the rules. We have yet to receive formal notice on the FIRB’s decision regarding our recommendation,” added Plaza.

The PEZA is also appealing for the non-imposition of the penalties under FIRB Resolution No. 19-21 given its possible implications.

“PEZA-registered companies are coping with or recovering from the impacts of the pandemic. If it’s supposed to be a relief measure, we should not penalize the companies; rather, we must continue to assist our registered companies as much as possible given that protecting the livelihoods of millions of Filipinos is an important national interest,” said Plaza.

For his part, IT and Business Process Association of the Philippines (IBPAP) president and CEO Jack Madrid assured that “we will look forward to continuing the growth of the industry in the years to come.”

“But this would not be possible without the full support of our government partners; and I can’t think of a more strategic and important partner than our partners in PEZA,” said Madrid.

As of November 2021, there are 297 IT parks and centers and 1,273 IT-BPO companies registered with PEZA, according to the agency.

These companies and ecozones have contributed a total of 12.33% or P328.559 billion of investments, generated $11.537 billion of exports, and created 962,304 direct jobs as of September 2021, it added. — VBL, GMA News