Incentive board calls for more BPO on-site work after March

THE information technology-business process management (IT-BPM) industry needs to shift to more on-site work as vaccination rates rise, according to the Fiscal Incentives Review Board (FIRB), which regulates the industry’s eligibility for fiscal incentives. 

In a statement on Wednesday, Finance Secretary and FIRB Chairman Carlos G. Dominguez III said the board, at a Feb. 21 meeting, rejected a petition by the Philippine Economic Zone Authority (PEZA) to extend the work-from-home (WFH) arrangement of registered IT-BPM companies.  

“The WFH arrangement is only a time-bound temporary measure adopted during the surge of the COVID-19 pandemic. Given the increasing vaccination rate of Filipinos nationwide, we can now undertake safe measures for physical reporting of employees, including those working in the IT-BPM firms operating within economic zones (ecozones) and freeports,” Mr. Dominguez said.

The industry’s entitlement to incentives is tied to their use of premises located in economic zones. It was only allowed to resort to WFH due to the public health emergency.

Under FIRB Resolution No. 19-21, registered IT-BPM firms are allowed to offer WFH arrangements to a maximum of 90% of their personnel until March 31.

PEZA had requested an extension of the resolution until Sept. 12 to allow for sufficient time for companies to revive their operations in economic zones.

“The employees’ return to the office will provide more opportunities and pave the way for the recovery of micro, small, and medium enterprises (MSMEs) that depend on IT-BPM employees for their livelihoods,” Mr. Dominguez said.

Metro Manila and 38 other areas were placed under Alert Level 1 between March 1 to 15, which allowed business establishments and public transport to operate at 100% capacity.

Asked to comment, IT & Business Process Association of the Philippines President Jack Madrid said in an e-mail that a majority of the industry’s workers prefer hybrid work arrangements, which combine on-site and work-from-home.

“We support the need to fully reopen the economy. But as IT-BPM employees have an overwhelming preference for a balanced, hybrid work arrangement, we are working with our government partners to provide the industry a smooth transition to on-site operations towards a WFH/hybrid model in the longer term,” Mr. Madrid said.

In a mobile phone message, PEZA Director General Charito B. Plaza said the agency will ask the FIRB to reconsider its WFH ruling.

Ms. Plaza added that ending the WFH arrangement by March 31 would be too abrupt for business process outsourcing (BPO) companies.

“We’ll ask for a reconsideration especially that (the) cost of oil and goods are high. The pandemic is not yet over and large amounts were invested in equipment for WFH arrangements, like laptops,” Ms. Plaza said.

Optum Philippines Managing Director Ivic Mueco said in a separate virtual roundtable on Wednesday that allowing hybrid work arrangements will help the industry find workers anywhere.

“(Hybrid work) would democratize where we find talent. If you want to tap a talent in Zamboanga, Davao, Jolo, or Benguet, as long as the internet connection is stable, we can tap talent anywhere in the Philippines,” Ms. Mueco said.

Meanwhile, the FIRB also rejected PEZA’s petition to remove the moratorium on the development of ecozones in Metro Manila.  

Under Administrative Order No. 18 issued in June 2019, ecozone development in Metro Manila was frozen in order to push investment out to other parts of the country.

“The board stood firm on the Duterte administration’s intention to increase investments outside Metro Manila, and emphasized that AO No. 18 still complements the government’s strategies and policies on rural development, aligned with the objectives of Republic Act No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act,” the FIRB said.

According to Ms. Plaza, the moratorium should be lifted because locators who are interested to expand are discouraged due to lack of necessary facilities in the countryside.

“(This) discouraged locators who want to expand because most of the countryside don’t have much IT infrastructure and facilities yet. (The) moratorium should be lifted as there are still nine cities (in) Metro Manila not hosting IT centers and parks,” Ms. Plaza said. — Revin Mikhael D. Ochave