The Philippine Economic Zone Authority (Peza) is set to meet with information technology-business process management (IT-BPM) firms today (Friday) to discuss the next steps after the Fiscal Incentives Review Board (FIRB) rejected its proposal to base the work-from-home (WFH) threshold on gross revenues instead of work force.
Peza Director General Charito Plaza told the BusinessMirror they are meeting with the IT Business Process Association of the Philippines (Ibpap) to discuss preparations for complying with the FIRB ruling putting a 90-percent WFH limit based on manpower deployment.
“It’s best that we get their inputs first if we need to appeal to FIRB,” she said.
On Wednesday, Finance Assistant Secretary and FIRB Secretariat Head Juvy C. Danofrata said that Peza’s plea was denied because it is “not consistent with the economic strategy of the government to gradually and safely reopen the economy.”
Danofrata described the FIRB resolution regarding the WFH scheme as already “reasonable,” noting that activities should be held in the economic zones in the first place.
The FIRB has approved the extension until March 31, 2022, of WFH arrangements for up to 90 percent of employees in the IT-BPM sector.
However, the regulator of ecozones offered an opposing sentiment.
“Peza’s request is consistent with the IATF [Inter-Agency Task Force] objective to gradually and safely reopen the economy,” Plaza said.
She stressed that requiring IT-BPM workers to physically report for work may expose them to Covid-19 infection. The sector currently has a 22-percent vaccination rate, Plaza shared.
The Peza proposal, which seeks to base the threshold on gross revenues, means the locators will be allowed to have 100-percent WFH arrangement for work force but it also means that only 90 percent of the revenues of the activity will be subject to incentives. She said the proposal is also for the interim while the national state of calamity is in effect.
“In addition, the very nature of the IT sector’s activity being IT-enabled allows the IT companies to continue on with their business operations under a WFH arrangement. They have adopted this work scheme since day 1 and thus, they have been keeping the economy afloat with their continuous operations,” Plaza said.
Still, Plaza said they “appreciate” the FIRB’s decision on 90-percent WFH cap proposed by Peza and Ibpap previously.
“This is more a policy consideration and thus, it goes beyond what is strictly provided in the law—no arguments. And this is where government can be more responsive to the needs of the industry during the pandemic. After all, our bigger objective is how we can keep and nurture especially the existing investors and preserve the jobs, exports and other economic opportunities created by the IT sector. This is the more effective stimulus for them to encourage their stay in the country,” she said.
Meanwhile, Plaza said “we can be overly strict and legalistic with our regulations and in the end lose all our gains once IT companies shut down or downscale their operations in the country.”
The FIRB co-chair, the Department of Trade and Industry (DTI), for its part agreed that the current WFH arrangement was “very reasonable already,” noting that the policy was based on consultations with the industries.
“Moreover, you can see that the country is gradually and safely moving to more reopening of the economy into the new normal with increasing vaccination rate, the reduction in Covid cases and HCUR [hospital care utilization rate],” Trade Secretary Ramon Lopez told the BusinessMirror.
Lopez, as such, said they expect more employees reporting for work physically.
Still, the trade official said the hybrid working scheme can improve productivity moving forward.