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Manila Bulletin devider Business devider PEZA invokes laws to press 30-70 hybrid work arrangement

PEZA invokes laws to press 30-70 hybrid work arrangement

Published Mar 15, 2022 01:54 pm

The Philippine Economic Zone Authority (PEZA) is invoking its existing rules allowing 30 percent local sales for export-oriented enterprises to bolster its position supporting the IT business process management (ITBPM) industry’s clamor for a 30-70 (work from home-onsite) hybrid work arrangement.

Philippine Economic Zone Authority

Tereso Panga, PEZA deputy director general, cited two bases—30 percent domestic sales allowance to registered enterprises under PEZA rules and the telecommuting law -- for its support on the position of the IT Business Process Association of the Philippines (IBPAP) to institutionalize a hybrid work arrangement.

Panga explained that under the PEZA rules, their registered export-oriented enterprises are allowed to sell up to 30 percent to the domestic market or outside of the economic zone as long as they are able to meet the minimum 70 percent export threshold.

Conversely, Panga said this policy must also translate to PEZA-registered IBPM enterprises being allowed to operate 30 percent WFH and 70 percent onsite at their approved ecozone parks or IT buildings/centers.

The other basis is the telecommuting law in the country. In 2019, Congress enacted the first legislation recognizing telecommuting or “working from an alternative workplace with the use of telecommunication and/or computer technologies” — or Republic Act No. 11165, otherwise known as the Telecommuting Act.

“Hybrid work arrangement (WFH and physical reporting) is the new trend/normal,” said Panga adding that India, Philippines competitor in the IT sector, allows for 100 percent WFH.

IBPAP would like to institutionalize a hybrid WFH-onsite work arrangement in the country. During the pandemic, IBPM firms registered with PEZA were allowed to operate 90 percent WFH until March 30, 2022. IBPAP has called for the extension of this arrangement, but the Fiscal and Incentives Review Board denied the petition as the government has already reopened the economy.

FIRB said PEZA IBPM enterprises must go back to their physical offices or at their sites in ecozones registered with the PEZA to continue enjoying their tax and fiscal incentives.

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