FIRB okays 70-30 hybrid work for ITBPO

Published June 23, 2022, 5:20 PM

by Bernie Cahiles-Magkilat

The Fiscal Incentives Review Board (FIRB) has approved the 70-30 hybrid work ratio for IT business process outsourcing (ITBPO) firms registered with the Philippine Economic Zone Authority (PEZA) up to Sept. 30 this year.

PEZA Director General Charito B. Plaza said that DTI Secretary Ramon Lopez, who is also co-chair of the FIRB mentioned that PEZA’s ITBPM enterprises can continue operating 70 percent onsite physical operation and 30 work from home (WFH or remote work) up to Sept. 30, which is the end of the state of national health emergency declaration of President Duterte.

Plaza clarified though that FIRB has yet to make the approval official stating that the information was only relayed to the IT Business Process Association of the Philippines (IBPAP). Plaza said that IBPAP officials conveyed that the FIRB decision will be put in writing or will be released on June 29, a day before the new administration of President-elect Ferdinand Marcos Jr. will official start office.

“So, we’re still waiting for the memo in writing, then we’re going to publish and say this officially to our ITBPOs,” said Plaza at the virtual “Moving to the Philippines: Relocation & Real Estate” forum by the American Chamber of Commerce of the Philippines.

With the FIRB approval, Plaza expressed optimism that the controversial hybrid work arrangement for its registered business enterprises will come to a close.

Plaza, however, cannot hide her frustration over the issue, stating “the damage has actually has already been done” as she cited “worries, embarrassment suffered by our ITBPOS who were subject to surprise inspections by the Bureau of Internal Revenue.”

Plaza further said that since PEZA cannot stay quiet, the BIR suspended conducting surprise audits and visits to its RBEs, but added still “it was a very embarrassing situation.”

“We hope to end this issue already and the new administration will address completely what we expect of hybrid work scheme,” she added.

It could be recalled that PEZA engaged in a word war against the Department of Finance, which oversees the BIR, over the hybrid work policy.

The FIRB allowed PEZA RBEs to operate 90 percent WFH during the pandemic until March 30, 2022. But PEZA had been issuing Letters of Authority to its ITBPOs allowing these firms to operate 70-30 onsite-offsite work arrangement.

The DOF, however, said that ITBPOs have to return to their approved ecozone location 100 percent or lose their tax incentives.