PEZA orders BPOs to return to offices

By Revin Mikhael D. Ochave, Reporter

ALL REGISTERED information technology-business process outsourcing (IT-BPO) firms should comply with the government’s return-to-office order starting April 1, the Philippine Economic Zone Authority (PEZA) said on Tuesday.

In a statement, PEZA Director-General Charito B. Plaza acknowledged the concerns raised by investors and workers who will be affected by the Fiscal Incentives Review Board (FIRB) order for 100% on-site work for registered IT-BPO firms, but said they should follow the law or risk losing tax incentives.

Under Republic Act No. 7916 or PEZA law, all registered companies should operate within the ecozones to be entitled to tax incentives.

“At present, PEZA cannot change the ratio unless the laws will be amended to incorporate the adaptation of the hybrid schemes. In the future, we hope to follow the practice of India and the other countries and provide specific ratio on work-from-home (WFH) and on-site work arrangements,” Ms. Plaza said.

She said there is a need to review and establish a legal framework to implement a hybrid work model for IT-BPM firms that operate within PEZA ecozones.

“PEZA supports the hybrid work scheme as it’s been proven effective in the last three years of the pandemic. What we can do is to recommend this for the next administration to address. As of now, we have to abide by the existing laws and the decision of the FIRB and help to put back the economy to normal,” Ms. Plaza said.

Sought for additional comment, Ms. Plaza said via mobile phone message that the return-to-office order is unlikely to affect potential investments or expansion of IT-BPO firms in the country.

“(There is) no effect because we’re just going back to the regular regime of work and incentives,” Ms. Plaza said.   

Jack Madrid, IT and Business Process Association of the Philippines (IBPAP) president and chief executive officer, said in a Viber message that the group supports the government’s efforts to reopen the economy.   

“We are currently working with all our stakeholders to ensure that our member companies are able to transition into the work arrangement that best suits their operational needs and capabilities and addresses their employees’ welfare and well-being while remaining compliant with government mandates,” Mr. Madrid said.   

At the height of the coronavirus disease 2019 (COVID-19) pandemic, the FIRB allowed IT-BPOs located in economic zones to implement a WFH arrangement for up to 90% of its total workforce until March 31, while still enjoying tax incentives.

PEZA had pushed for the extension of the WFH setup amid soaring fuel prices and the continued threat of COVID-19.

However, the FIRB earlier this month rejected the agency’s appeal, saying the WFH arrangement was a “time-bound temporary measure” that was adopted to allow companies to continue operations amid the COVID-19 surge.

Finance Secretary Carlos G. Dominguez III earlier said IT-BPO companies, which operate within ecozones, can choose to implement WFH arrangements but any tax incentives will be revoked.

“Given the significant reduction in COVID-19 cases and the general economic recovery strategy to enjoin all businesses to do more on-site operations to encourage the revival of the other sectors, particularly the micro-, small-, and medium-sized enterprises around offices, there has been a decision not to extend the 90-10 WFH arrangement,” Trade Secretary Ramon M. Lopez said in a statement on Monday.

He noted firms that operate outside ecozones “have more flexibility as to the degree of WFH arrangements that is suitable to their operations.”

The Alliance of Call Center Workers (ACW) previously said the implementation of a hybrid work arrangement is the only “healthy” compromise for IT-BPO workers. ACW claimed that a significant number of workers would be willing to resign due to the hard transition from a WFH arrangement to on-site work.