The Philippine Economic Zone Authority asked registered information technology-business process outsourcing companies to follow the return-to-office order issued by the Fiscal Incentives Review Board beginning April 1.
“The allowance of the 90:10 WFH [work-from-home] set-up was just a temporary measure during the pandemic. Now that we’re reopening the economy, we’re going back to the regular ratio required of registered business enterprises inside the ecozones,” said PEZA director-general Charito Plaza.
She said while the agency recognizes the concerns of investors and workers affected by the RTO, PEZA supports the proposal of the IT and Business Process Association of the Philippines to implement hybrid work scheme for the sector. However it was noted that the FIRB directive should take precedence over any proposal.
“Hence, PEZA abides to the decision of the FIRB for 100 percent on-site work for IT-BPOs, while there is a need to review and establish legal framework in order to implement a hybrid work model,” Plaza said.
She said the FIRB was consistent with the PEZA law, otherwise known as Republic Act No. 7916 or the Special Economic Zones Act of 1995 that requires all registered companies within the ecozones to work on-site in order to enjoy tax incentives.
Chapter III Section 23 of the PEZA Law provides that, “business establishments operating within the ecozones shall be entitled to the fiscal incentives as provided for under P.D. No. 66 or those provided under Book VI of Executive Order No. 226, otherwise known as the Omnibus Investment Code of 1987”.
“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 WFH and on-site work arrangements,” Plaza said.
She said PEZA supports the hybrid work scheme which proved effective and even contributed to the growth of the sector at the height 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,” Plaza said.
Plaza reiterated her appeal to locators to adhere to FIRB’s decision to avoid any penalties as provided under the law.
“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, especially during these trying times,” she said.
The FIRB earlier denied PEZA’s appeal to reconsider the extension the WFH arrangement after March 31, 2022.
According to the FIRB, the WFH arrangement is only a time-bound temporary measure adopted during the surge of the COVID-19 pandemic, and the return-to-office order is necessary to help bounce back from the crisis.