Villanueva files bill allowing firms in ecozones to adopt work-from-home setup

Senate Majority Leader Joel Villanueva has filed a bill seeking to allow business enterprises located in economic zones and freeports to enter into voluntary hybrid work arrangements without losing their tax incentives.

Senate Bill 135 seeks to amend Section 309 of the National Internal Revenue Code as amended by Republic Act 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.

In explaining the intent of the bill, Villanueva cited RA 11165 or the Telecommuting or Work From Home Law which recognized the need to promote the welfare of employees in light of technological developments that opened up alternative avenues for employees to carry our their work.

"At the time of its passage, the Act was principally meant to address the worsening traffic situation in Metro Manila and to promote work-life balance. Two years after its passage, the WFH Law became pivotal as the Filipino labor force shifted to alternative modes of work, especially online, because of the national lockdown brought about by the COVID-19 pandemic," he said in his explanatory note.

In the Philippines, Villanueva said the WFH arrangement is instrumental in the Information Technology-Business Process Outsourcing (IT-BPO) industry amid the national lockdowns.

He noted that this arrangement had even created 23,000 new jobs in 2020 and another 100,000 new jobs in 2021.

Meanwhile, the senator said revenues have increased by around 12% in 2021 reaching a total of $28.8 billion.

However, Villanueva noted that the Telecommuting Act's merits have not been fully realized for the IT-BPO sector as the Fiscal Incentive Review Board (FIRB) required employees of the sector to return to their offices located in economic zones by April 1, otherwise, the employers will lose their tax incentives.

"This order was made despite the clamor of IT-BPO employees to continue with WFH arrangements, in light of the ongoing COVID-19 pandemic, rising fuel prices and unprecedented inflation," Villanueva said.

"Indeed, adaptability has helped our country survive this pandemic, and we must ensure that flexibility emanates from our laws in light of the rapid technological developments and global best practices," he added.

In a privilege speech Tuesday, Senator Grace Poe warned of a possible exodus by major international companies should the FIRB continue its "heavy-handed" policies, such as its opposition to hybrid work arrangements for IT-BPO companies.

Poe raised the "impasse" between the FIRB and Philippine Economic Zone Authority (PEZA)-registered firms on the policy of onsite and remote work. — Hana Bordey/RSJ, GMA News