The Fiscal Incentives and Review Board (FIRB) has denied the request from IT business process management (IT-BPM) firms registered with the Philippines Economic Zone Authority (PEZA) to extend their work from home (WFH) arrangement up to September this year.
“FIRB has disapproved our request for WFH extension because we are now in Level 1. They are asking physical presence in ecozones,” said PEZA Director General Charito B. Plaza.
Plaza, however, said they will ask for a reconsideration of the FIRB decision and to extend WFH until September, which is the end of the calamity declaration, as companies have yet to make major adjustments after two years of WFH arrangement for their workers.
At the height of the pandemic, ITBPM firms under PEZA have been allowed to conduct up to 90 percent of their operations under WFH arrangement up to March this year only.
Plaza said the extension up to September is needed by IT-BPM firms to “prepare for the return to ecozones of the workers and also in consideration of the investments of locators on equipment and venue of the WFH workers.”
Despite continuing uncertainties, the IT Business Process Association of the Philippines (IBPAP) estimated that the industry reached an impressive 7-8 percent in headcount to 1.4 million full time employees, and 8-12 percent in revenues to $28.8 billion in 2021.
“They need to make adjustments. Also the level is temporary depending on the condition of the pandemic,” she added.
The Inter Agency Task Force (IATF) for the Management of Emerging Diseases already approved the de-escalation of Metro Manila and 37 others provinces to Level 1, the most relaxed form of restrictions, starting Tuesday, March 1-15.
Trade and Industry Secretary Ramon M. Lopez also urged companies to return to their physical offices or conduct their operations. The WFH arrangement should only be an option.
Lopez, who is also chair of PEZA, said the reason government has encouraged companies and their workers to return to their physical offices is for them to help support and revive the small and medium enterprises. With more people going out, Lopez said, this will create more economic activities and revive the MSMEs.
In its earlier petition for extension, PEZA supported its locators to be allowed to operate until Sept. 12, 2022 under WFH arrangement up to 100 percent without diminution of incentives.
“The proposal of PEZA is merely temporary in consideration of the ongoing pandemic. We are happy to inform everyone that the PEZA Board approved, through a referendum, the management’s proposal under BR No. 2022-001 dated 07 January 2022,” said Plaza.
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.
For their part, IT and Business Process Association of the Philippines (IBPAP) President and CEO Jack Madrid assures that “we will look forward to continue the growth of the industry in the years to come. 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.”
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.