IT-BPO firms’ WFH deal extended till March

THE information technology and business process outsourcing sector, a pillar of the economy, has gotten a reprieve of sorts in its long-running dispute with regulators on the application of hybrid work arrangements in economic zones without forfeiting locators’ incentives.

IT and Business Process Association of the Philippines (IBPAP) members were told by the Philippine Economic Zone Authority (PEZA) they can extend work-from-home arrangements until March 2023. 

“Our partners in PEZA have recently advised IBPAP members that the 30 percent work-from-home arrangement [can] be

extended through the end of March 2023 and that is well within the PEZA law,” said IBPAP President and CEO Jack Madrid at a virtual event on Tuesday.

This, Madrid said, as the letters of authority (LOAs) granted by PEZA to allow 30-percent WFH arrangement are set to expire on September 12. 

In June, Madrid said the LOAs enabled companies to accommodate the strong preferences of their employees and execute a smooth, phased return to on-site operations in the immediate term before a permanent WFH or hybrid work policy is established. 

Meanwhile, Madrid said during the virtual event that IBPAP had numerous talks with key government partners as the flagship organization for the IT-BPM industry gears towards a more permanent hybrid work set-up. 

“We’ve had a number of very productive meetings with different government partners who have all expressed support for the need for a more predictable and longer term work from home policy,” said Madrid. 

On regulatory efforts being done, the IBPAP chief bared that they have been coordinating with the Department of Labor and Employment (DOLE), who Madrid said is now reviewing the Telecommuting Act “and how we can harmonize that with Section 309 of [Corporate Recovery and Tax Incentives for Enterprises] CREATE.” 

Section 309 of the CREATE law or the Republic Act No. 11534 partly reads: “A qualified registered project or activity under an Investment Promotion Agency administering an economic zone or Freeport shall be exclusively conducted or operated within the geographical boundaries of the zone or Freeport being administered by the Investment Promotion Agency in which the project or activity is registered.” 

Under this provision, only registered business enterprises (RBEs) performing activities within their respective geographical boundaries of the zone or Freeport are entitled to the incentives provided in the Create law.

Madrid said they also had meetings with the Department of Trade and Industry (DTI) and Trade Secretary Alfredo E. Pascual also expressed support for the WFH and hybrid move. The IBPAP chief said they have yet to meet with National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan next week. 

In May, Madrid said the LOA provides necessary relief to address the cost and competitiveness pressures that the IT-BPM industry has been under since the pandemic began. Moreover, it gives affected organizations leeway to transition and set up their offices for returning employees as they strengthen their immediate-term strategies amid continuing global shifts. 

The IT-BPM industry successfully navigated the pandemic, recording 10.6-percent growth from 2020 levels to $29.49 billion in 2021, surpassing its recalibrated target for 2022. Meanwhile, its employment figures recorded a 9.1-percent growth compared to 2020, or an increase by 120,000 full-time employees, bringing the sector’s total headcount to 1.44 million in 2021.

Image credits: PITON-Global