PEZA seeks support measures for IT-BPO companies

The Philippine Economic Zone Authority (PEZA) Board has asked the the Fiscal Incentives Review Board (FIRB) to allow its registered IT-BPO enterprises to operate under a Work-From-Home (WFH) arrangement until Sept. 12, 2022 without the 10 percent onsite capacity requirement and no diminution of fiscal incentives.

IBPAP hold an Industry Briefing last February 02, 2022 wherein PEZA provided updates on various matters and addressed concerns especially on the WFH arrangements.

This developed as the PEZA Management recommended to the PEZA Board the approval of the Temporary Measure, citing Rule 23, Section 3 (d) of the Implementing Rules and Regulations of Republic Act No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.

Rule 23 entitled Temporary Measures for Exceptional Circumstances, provides that an IPA may implement temporary measures to support the recovery of registered business enterprises (RBEs) from exceptional circumstances, upon prior approval of the FIRB.

Exceptional circumstances include pandemic, epidemic, war, armed conflict, state of national health emergency, outbreak of diseases, international or regional financial crisis, major disaster such as volcanic eruption, earthquake and super typhoon, or analogous circumstances.

PEZA Board Resolution No. 2022-001 approved on Feb. 7 also asked the FIRB to allow the movement of IT equipment and assets as long as the same is covered by surety bond and appropriate PEZA Permits. There shall be no limitation on the number of IT equipment as long as the RBEs comply with the surety bond and permits.

The resolution also sought that PEZA be authorized to craft its own guidelines for the WFH arrangement under this recommendation as this is peculiar only to PEZA, being the biggest IPA in terms of number of enterprises and owing to multiple IT Centers/Buildings under its jurisdiction which is not applicable to other IPAs and/or economic zone authorities.

PEZA Director General Charito ‘Ching’ Plaza the proposal is merely temporary in consideration of the ongoing pandemic.

PEZA is also appealing for the non-imposition of the penalties under FIRB Resolution No. 19-21 given its possible implications.

“PEZA-registered companies are coping with or recovering from the impacts of the pandemic. If it’s supposed to be a relief measure, we should not penalize the companies; rather, 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,” noted Plaza.

Meantime, both PEZA and the Board of Investments also backed Senate Bill No. 2306 authored by Senator Imee Marcos, which seeks to amend Sec. 309 of the CREATE Law.

Under the proposed amendment, instead of the 50 percent WFH arrangement which is based on revenue, this should be based on total workforce or manpower of the IT enterprise.

Both IPAs also agreed that the percentage should be addressed in the proposed SIPP as the allowable threshold may even be increased to more than 50 percent.

Deputy Director General for Policy and Planning Tereso Panga said the amendment should give a more permanent solution as he cited the McKinsey report that WFH is really part of the new normal post-pandemic.

For his part, IT and Business Process Association of the Philippines (IBPAP) President and CEO Jack Madrid has made an assurance of continued growth of the industry.

“But this would not be possible without the full support of our government partners; and I can’t think of a more strategic and important partner than our partners in PEZA,” Madrid said.

As of November 2021, there are a total of 297 IT parks and centers and 1,273 IT-BPO companies registered with PEZA. These companies and ecozones have contributed a total of 12.33 percent or P328.559 billion of investments, generated $11.537 billion of exports, and created 962,304 direct jobs as of September 2021.