PASAY CITY -- As the IT & Business Process Association of the Philippines (IBPAP) continues to advocate that IT-BPO companies adopt hybrid work-from-home (WFH) arrangement starting April 01 until the end of December 2022, the Philippine Economic Zone Authority (PEZA) Director General Charito ‘Ching’ Plaza expressed support for such hybrid working arrangement for PEZA-registered IT-BPO enterprises.
“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 its policies and tax breaks to adopt hybrid work arrangement,” noted the Plaza.
Hybrid work model is a flexible model in which employees can work from both onsite and offsite locations. In this arrangement, the employer and employees can agree on percentage of WFH and those physically reporting to office depending on the position or functions of the employee.
According to the PEZA Chief, “PEZA and IBPAP are doing their best effort to have the Fiscal Incentives Review Board (FIRB) consider immediately the HYBRID work 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.”
Meanwhile, IBPAP President and CEO Jack Madrid said in a statement, “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.”
Reasons for adopting Hybrid Working Model
Director General Plaza explained that support to the hybrid working model is because of the following reasons:
The increase of fuel and gas and its effect in increasing prices of goods is making transportation costly for workers;
The pandemic is not yet over although we are now in Alert Level 1;
The IT-BPOs invested during the pandemic for the equipment and enabling their workers to do WFH in a way that going back to 100% onsite should not be a sudden and immediate move; and
Adopting WFH also has benefits for decongesting traffic.
“The recommendation is consistent with the Telecommuting Law (RA 11165) — a legislation since 2018 that recognized “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),” said Plaza.
Further, she noted that “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.”
The Director General also said that PEZA will support IBPAP in its bid to present to the FIRB its proposal for hybrid working model in IT-BPOs and the timeline they will implement this. She noted that the validity of the national state of calamity is effective up to September 2022.
She added, “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 to 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 protect our economy afloat.”
FIRB denies PEZA’s suggestion on WFH
On January 07, 2022, the PEZA Board has approved to recommend to the FIRB the approval of a policy that will allow its registered IT-BPO enterprises to operate under a WFH arrangement without the requirement of 10% onsite capacity until 12 September 2022, without diminution of fiscal incentives.
For the suggestion, PEZA cited Rule 23 Section 3 (d) of the Implementing Rules and Regulations of the CREATE Law.
However, The FIRB denied PEZA’s request for extension of the WFH arrangements for the PEZA-registered IT-BPOs during its February 21 meeting.
In recognition of the decision of the FIRB given its oversight functions under the CREATE Law, PEZA has released Memorandum Circular 2022-18 which states that the FIRB-approved WFH will now cease on March 31, 2022 and IT-BPO companies are now to conduct all activities or projects onsite starting April 01, 2022.
PEZA has been receiving messages from workers of registered IT-BPOs raising concerns about costs, health, and safety regarding the return to office mandate.
“PEZA will still file its appeal for reconsideration on the denial by the FIRB. We hear the concerns of our investors and their workers and we will continue to lobby on it. For the meantime, I call onto our enterprises to follow the decision of the FIRB to avoid any penalties,” appealed Plaza.
The PEZA Chief likewise advised that, “While PEZA as a regulatory agency has to abide by the FIRB’s decision, our locators should already start planning the transition period for their return to office, with workers starting to report on site as decided by the FIRB.”
Plaza remains positive of the FIRB's reconsideration as the IT-BPO sector is one of the biggest contributors to the country's employment and investments as well as digital and technology transfer. (DOST)
