The Department of Trade and Industry (DTI) is looking to shift incentives registration from the Philippine Economic Zone Authority (PEZA) to the Board of Investments (BOI) as it aims to address work from home issues.
“The pandemic has shown that work from home for [business process outsourcing] BPOs could be a viable alternative. In fact, it’s a preferred alternative by many employees in the BPO sector,” Trade Secretary Alfredo E. Pascual said at the 43rd National Conference of Employers in Pasay City.
With this, the Trade chief bared that they are already addressing the issue and certain solutions are being considered, such as “the possibility of shifting incentives registration from PEZA to [Board of Investments] BOI,” among others.
Pascual noted that “BOI is not subjected to the same rule about the portion of the business that can be done outside PEZA-registered enterprises.”
The Trade chief noted that another solution being looked at is the amendment of a certain law. He said they are trying to see if it is an “efficient way” of addressing the work from home (WFH) issue.
In a statement released last June 29 by the IT and Business Process Association of the Philippines (IBPAP), President and CEO Jack Madrid said the organization believes that long-term implementation of WFH or hybrid work can be better addressed through the continued study and eventual amendment of Section 309 of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law, or the possible revision of the applicable portions of its Implementing Rules and Regulations (IRR).
In June, Madrid said amending the said provision will be an important undertaking that IBPAP and its partners in the government will jointly and collaboratively work on for the global competitiveness of the Information Technology and Business Process Management (IT-BPM) industry.
In fact, just last Tuesday, at a virtual event which Madrid attended, he said he is hopeful that IBPAP, along with the Department of Labor and Employment (DOLE) could harmonize the Telecommuting Act with Section 309 of the CREATE law.
Republic Act No. 11165 or the Telecommuting Act aims to protect the rights of workers and promote their welfare, especially in the light of technological developments that have opened up new and alternative avenues for employees to carry out their work, such as telecommuting and other flexible work arrangements.
Meanwhile, Section 309 of the CREATE law 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 Freeport being administered by the Investment Promotion Agency in which the project or activity is registered.”
Last Tuesday, during the virtual event, Madrid noted that there have been ongoing discussions “and confusion from some of our investors on the Peza versus BOI with the work from home hybrid overhang that is not quite settled yet.”
During the discussions, Madrid said they discussed the pros and cons of BOI and Peza, noting that investment promotion agencies (IPAs) should have very similar privileges and incentives but because of the WFH/Hybrid issue, he said “there needs some more harmonization moving forward.”
“And so we have provided the inputs of our members as well as our leaders in the industry, providing inputs on what we could do to further harmonize the [implementing rules and regulations] IRR of the [Strategic Investment Priorities Plan] SIPP, we provided this input to the BOI,” said Madrid on Tuesday.
The IBPAP chief said this conversation is still ongoing but they hope that “this will happen very soon” so that potential investors and those adding new projects to the IT-BPM industry can get more clarity and transparency, allowing them to make best decisions depending on their investment priority.
In the June 29 statement, Madrid underscored that while incentives have been made uniform across the different IPAs through the CREATE law, “the policies that govern the administration and supervision of registered enterprises among IPAs are not uniform and transfers of registration from one IPA to another may not be easy.”
Madrid earlier said registering with IPAs such as the BOI and Peza is an important, complex decision made by companies based on their business goals, priorities and investment criteria.