The Fiscal and Incentives Review Board (FIRB) has approved the extension of the work-from-home (WFH) set-up in businesses located in economic zones in the country until September this year, according to the Philippine Economic Zone Authority (PEZA).
PEZA director-general Charito Plaza said the Department of Trade and Industry and the FIRB agreed to extend the WFH tack after considering mobility issues due to rising crude oil prices and other factors affecting the ITBPM (information technology and business process management) industry.
“It’s not in writing yet, but we expect the memo to be issued on or before June 29, in time for the turnover of leadership to the new administration,” Plaza said in a webinar Wednesday organized by the American Chamber of Commerce of the Philippines (AmCham).
“I hope this will put a close to our very controversial WFH issue.
Nevertheless, the damage has already been done. It was embarrassing enough that our registered business enterprises (RBEs) were subjected to surprise audit visits by the Bureau of Internal Revenue (BIR),” she added.
The BIR authorized surprise audits to keep track of the ITBPM industry’s compliance with the back-to-office directive announced last March. Companies found not following the directive were stripped of incentives.
PEZA has been proactively pursuing the WFH extension since early 2022, as this is the wish of many ITBPM companies supporting millions of workers under the WFH set-up.
The 70/30 work arrangement, where 70 percent of a firm’s workforce reports onsite while the 30 percent work remotely, will be in place until September 12, 2022; after that, all ITBPM firms are expected to observe 100 percent compliance to onsite or in-office work arrangement.
Plaza noted the decision of the FIRB to discontinue WFH ahead of the lifting of the state of calamity due to COVID-19 in the country by the new President “is a form of blackmail.”
“Why are we blackmailing our investors, especially in PEZA? When we registered them, we have a contract with them that these are the incentives that we’re going to provide them,” she said.
Plaza stressed the WFH scheme had been conceptualized even before the passage of Republic Act No. 11165 or the Telecommuting Act enacted on December 20, 2018—well before the start of the COVID-19 pandemic.
After its leadership turnover, PEZA intends to institutionalize the hybrid/WFH set-up, not only to keep workers but also to clip the increasing numbers of unregistered or underground ITPBM companies, many of which were found in Cebu.
“These companies are operating illegally. They pay as much as P40,000 per worker, up until the duration of the project. They do not pay taxes to the government and do not provide security of tenure to workers. The biggest loser here is the government,” Plaza said.
PEZA said 423 ITBPM firms petitioned the government to institutionalize the hybrid work scheme after the September 2022 extension lapses.
“The hybrid scheme must be institutionalized by the incoming Marcos administration, as we need to harmonize our laws and policies on this matter,” Plaza said.
