CREATE MORE ushers in era of hybrid work: Can it drive economic growth?

The work-from-home (WFH) model is on track to become a permanent component of the Philippine business landscape as the CREATE MORE bill—officially known as the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy—nears its final approval.

The bicameral conference committee recently greenlit the bill, which features a reduction in corporate taxes from 25 percent to 20 percent. Another key element attracting attention is Section 26 of the Senate's version of CREATE MORE, which permits registered business enterprises (RBEs) to adopt WFH arrangements for up to 50 percent of their workforce.

Economists interviewed by the Manila Bulletin explained the broader implications of this development, suggesting that the emergence of a hybrid work model—combining remote and in-office work—could have a positive impact on the overall economy.

Carlos Manapat, an economist from the University of Santo Tomas, emphasized that the goal of this transition is to provide workers with "less cost and more output." In essence, this means reducing daily expenses for employees while simultaneously boosting productivity.

“When you go to work, you consume more or less one to two hours to arrive at the office, which is productive in itself… But working online can also make you more productive,” Manapat said in an interview.

“WFH allows us to have more than one job. You could have one that is F2F and another that can be more creative or online.”

Manapat added that the increase in job creation under the WFH arrangements could also boost the country’s gross domestic product (GDP) and decrease production costs.

“This could also lessen the [expenses] for both the employer and employee, and other countries can take interest from us,” he added.

However, this does not mean that working in the office is no longer attractive.

Michael L. Ricafort, Rizal Commercial Banking Corp. (RCBC) chief economist, stated that while CREATE MORE allows remote work, some companies will still need employees to return to their offices for the benefits.

“Some business process outsourcing (BPOs) would shift to 50 percent WFH from purely WFH to enjoy investment incentives,” he said in a separate interview.

Ricafort will also see an increase in foreign investments once the CREATE MORE bill is enacted.

“This would help attract more foreign direct investments (FDIs) into the country with lower corporate income tax and value-added tax exemptions,” the RCBC economist noted.

“More locators would also lead to higher demand for industrial, office, commercial, and office space from foreign investors and expatriates, as well as from additional employment and business or economic opportunities that they entail.”

He also foresees an upward adjustment in BPOs’ office space portfolios since the industry now complies with the rules set by the Philippine Economic Zone Authority (PEZA) for WFH arrangements.

CREATE MORE to fill POGO-vacated offices

With an anticipated increase in FDIs, Manapat and Ricafort believe that businesses will increasingly fill office spaces, including those previously occupied by Philippine Offshore Gaming Operators (POGOs).

“This would partly offset the increase in property vacancies brought about by the POGO ban for the remaining months of 2024,” Ricafort said.

“[The hubs] would be taken up eventually in just a matter of months or year, though [they will be] vacated immediately in view of the ban by the yearend,” he added.

Last July, President Ferdinand Marcos announced a nationwide ban on all POGOs during his third State of the Nation Address. This stemmed from the industry’s alleged illicit activities such as scams, money laundering, human and sex trafficking, among criminal acts.

Understanding that while some people may be reluctant to own space that was formerly a POGO site, Manapat said that those that were taken over by the government will be given away eventually.

“They will only be reluctant if the property is expensive,” Manapat said.