28 June 2021 – DTI favors extension of WFH setup in IT-BPM sector

by Louella Desiderio (The Philippine Star), 28 Jun 2021

MANILA, Philippines — The Department of Trade and Industry (DTI) is recommending the extension of the work-from-home authorization given to information technology business process management (IT-BPM) firms beyond September this year.

“In the next meeting of FIRB (Fiscal Incentives Review Board), we will already be proposing a resolution for the FIRB to approve the work-from-home arrangement even beyond Sept. 12,” Trade Undersecretary and Board of Investments (BOI) managing head Ceferino Rodolfo said during the 42nd National Conference of Employers.

Information Technology and Business Process Association of the Philippines (IBPAP) chair Benedict Hernandez said earlier the industry, which is looking at implementing a hybrid work model covering both remote working and reporting on site in the long term to stay competitive, would want the WFH authorization approved by the Philippine Economic Zone Authority (PEZA) until Sept. 12 to be extended.

Last year, the PEZA issued a board resolution allowing IT enterprises in economic zones to implement WFH arrangements equivalent to up to 90 percent of total revenues until Sept. 12 of this year amid the coronavirus pandemic.

Hernandez said the implementing rules and regulations (IRR) of the Corporate Recovery and Tax Incentives for Enterprises Act, which reduces the country’s corporate income tax rate and modernizes the incentives system, provides a way to extend the WFH authorization even after Sept.12 this year.

Under Rule 23 of the CREATE Act’s IRR, an investment promotion agency may implement temporary measures, upon approval of the FIRB, to help registered business enterprises recover from exceptional circumstances including a pandemic, national emergency and major disasters.

FIRB is composed of the Finance Secretary as chairperson, Trade Secretary as co-chairperson, as well as the Executive Secretary, Budget Secretary, and the National Economic and Development Authority director general as members.

“I’m just not sure if we can get the ceiling level of 90 percent work-from-home or it will be reduced. We cannot promise that at the moment, but we will see,” Rodolfo said.

He said the DTI is in close discussions with IBPAP on the matter.

Aside from extending the WFH arrangement, he said the DTI is also working with the Department of Finance (DOF) and other government agencies for the removal of the location restrictions in the National Capital Region (NCR) for business process outsourcing (BPO) firms that intend to register with the government for incentives.

Based on discussions with the DOF, he said it may be possible to remove the location restriction, but the ban on new proclamations of IT zones would have to stay.

While there would be no additional IT zones to be proclaimed in NCR, he said there are leasable spaces previously occupied by Philippine offshore gaming operators that BPOs may take advantage of.

The country’s IT-BPM industry ended 2020 with revenues of $26.7 billion and total headcount of 1.32 million direct employees.