THE Philippine Economic Zone Authority (Peza) has revived its call for a 100-percent work-from-home (WFH) arrangement for the information technology-business process outsourcing (IT-BPO) companies without reducing their fiscal incentives.
The regulator of economic zones, in a statement on Thursday, asked the Fiscal Incentives Review Board (FIRB) anew to approve a policy allowing IT-BPO firms to operate under a WFH scheme without the requirement of 10-percent onsite capacity until September 12.
Earlier, the FIRB approved the extension until March 31, 2022 of WFH arrangements for up to 90 percent of the employees in the IT-BPO sector amid the pandemic.
The investment promotion agency (IPA) is basing its request on a provision of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, particularly the Rule 23 entitled Temporary Measures for Exceptional Circumstances.
That provision allows IPA to implement temporary measures, upon approval of the FIRB, that can help the recovery of registered business enterprises (RBE) from exceptional circumstances.
Such events include pandemic, epidemic, war, armed conflict, state of national health emergency, outbreak of diseases, international or regional financial crisis, major disasters such as volcanic eruption, earthquake and super typhoon, or analogous circumstances.
Peza, apart from the WFH proposal, also asked for other temporary measures, including the “movement of IT equipment and assets as long as the same is covered by surety bond and appropriate Peza permits.”
The regulator said no limitation on the number of IT equipment must be set as long as RBEs have complied with the surety bonds and permits.
The IPA also asked the FIRB to have the authority to develop “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,” Peza Director General Plaza said.
“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,” she added.
Plaza also asked that penalties not be imposed under the FIRB resolution covering the mandated WFH arrangements.
“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 livelihoods of millions of Filipinos is an important national interest,” she said.
In November last year, Plaza told the BusinessMirror that they were no longer appealing their bid to implement a revenue-based WFH scheme for the IT-BPO industry because the FIRB was not responding to their request.
(Related story: Peza backs down on revenue-based WFH, https://businessmirror.com.ph/2021/11/30/peza-backs-down-on-revenue-based-wfh/)
The Peza proposal, which seeks to base the threshold on gross revenues, will allow locators to have 100-percent WFH arrangement for the work force. However, it also means that only 90 percent of the revenues of the activity will be subject to incentives.
According to Peza, there are 297 IT parks and centers and 1,273 IT-BPO firms registered with them as of November 2021. These RBEs have contributed P328.559-billion investments, $11.537-billion export revenues and 962,304 direct jobs generation as of September last year.