IT and Business Process Association of the Philippines (IBPAP) President Jack Madrid said about 150 registered business enterprises (RBEs) under the IT and Business Process Management (IT-BPM) industry have already been endorsed to the Board of Investments (BOI) as of November 27, to adopt up to 100 percent work-from-home (WFH) arrangement.
“As of last night, our update from [Philippine Economic Zone Authority] Peza is that a total of 254 RBEs have applied for this so-called paper transfer, and out of this, 243, over 60 percent have already been endorsed to the BOI; that’s about 150 out of the 243,” Madrid said in a televised interview on Monday.
The IBPAP chief added that the industry expects “this pace” of applications and endorsements to accelerate in the coming days because Peza has given an internal deadline of December 16 for RBEs to express their application for the paper transfer.
Madrid expects the number to be much higher in the coming days, knowing that Peza is “working very hard to process and endorse these applications.”
BOI’s role
Meanwhile, Madrid said once the BOI gets the endorsement of the Peza, the effectivity of the paper transfer should already be “pretty much immediate.”
According to the Memorandum Circular (MC) No. 22-19 issued by the Department of Trade and Industry (DTI), the Fiscal Incentives Review Board (FIRB) issued FIRB Resolution No. 026-22 dated September 14,2022, allowing the affected RBEs in the IT-BPM sector to transfer their registration to the BOI until December 31,2022 and to adopt up to 100 percent WFH arrangement.
The FIRB Resolution cited by the DTI states the “affected RBEs” shall cover those affected RBEs with remaining tax incentives under Section 311 of the National Internal Revenue Code of 1997, as amended, or those with approved incentives on or before September 14,2022 under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law with the concerned Investment Promotion Agency (IPA).
Under this paper transfer registration, BOI will issue a certificate of registration to the transferee RBEs for their conduct of 100 percent WFH. However, Peza earlier clarified that it will continue to administer to them the fiscal and non-fiscal incentives for the “sunset period.”
Moreover, Peza said it would retain the monitoring and reporting of the subject locators’ performance and for other compliance requirements.
The paper transfer of registration will not involve physically relocating the operations of RBEs or giving up the incentives they currently enjoy.
Speaking at the 2022 Investors’ Recognition Day Peza officer-in-charge Tereso O. Panga on Friday cited the need to amend the 27 year-old Peza law, particularly to institutionalize the work-from-home policy so that the BOI and Peza are put on an equal footing, where both can avail of WFH with incentives.
According to the DTI MC No. 22-19, those who did not exercise the option to register with the BOI shall be covered by Section 309 of CREATE, which states: “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 free port being administered by the Investment Promotion Agency in which the project or activity is registered.”
Section 309 of CREATE applies to RBEs registered with Peza. Meanwhile, the BOI is the only IPA not affected by the boundary constraints or zone limits.