Pasay City – The Philippine Economic Zone Authority (PEZA) has urged registered IT-BPO companies to follow the return-to-office (RTO) order of the Fiscal Incentives Review Board (FIRB) beginning 01 April 2022 in view of applicable regulations in the definition of export enterprises located in ecozones.
According to PEZA Director General Charito ‘Ching’ Plaza, “The allowance of the 90:10 WFH (work-from-home) set-up was just a temporary measure during the pandemic. Now that we’re reopening the economy, we’re going back to the regular ratio required of registered business enterprises (RBEs) inside the ecozones.”
“We are supportive of the proposal of the IT & Business Process Association of the Philippines (IBPAP) to implement hybrid work scheme for the IT-BPO sector, and we hear the concerns of our investors and their individual workers affected by this order; however, we need to follow the regulations as mandated by the law,” noted Plaza.
The Director General said, “Hence, PEZA abides to the decision of the FIRB for 100% on-site work for IT-BPOs, while there is a need to review and establish legal framework in order to implement a hybrid work model.”
It is also worth noting that the PEZA Law (Republic Act No. 7916 or the Special Economic Zones Act of 1995) requires that all registered companies operate within the ecozones in order to enjoy tax incentives.
Chapter III Section 23 of the PEZA Law notes that “Business establishments operating within the ecozones shall be entitled to the fiscal incentives as provided for under P.D. No. 66 or those provided under Book VI of Executive Order No. 226, otherwise known as the Omnibus Investment Code of 1987”.
Plaza said, “At present, PEZA cannot change the ratio unless the laws will be amended to incorporate the adaptation of the hybrid schemes. In the future, we hope to follow the practice of India and the other countries and provide specific ratio on WFH and on-site work arrangements.”
“PEZA supports the hybrid work scheme as it’s been proven effective in the last three years of pandemic. What we can do is to recommend this for the next administration to address. As of now, we have to abide by the existing laws and the decision of the FIRB and help to put back the economy to normal,” she added.
Compliance to regulations of export enterprises
With this, Plaza reiterated its appeal to its locators to adhere to FIRB’s decision to avoid any penalties as provided under the law.
Section 2, Rule 22 of the CREATE Law’s Implementing Rules and Regulations provides that any violation of the provisions of the act, including other related revenue regulations, orders or issuances of the government shall result in revocation or suspension of the incentives or business closure of registered business enterprises.
According to Plaza, “The PEZA management wants the Duterte administration to accomplish much before it ends. We all must contribute to the Administration’s success especially on the trade and economic programs. We should also continue the trust and confidence of our investors and locators who stayed with us despite the pandemic. We should be proud of our contributions in keeping our economy afloat and our country’s total development.”
Further, she noted that “We must continue to assist our registered companies as much as possible given that protecting livelihoods of millions of Filipinos is an important national interest, especially during these trying times.”
The FIRB has already denied PEZA’s appeals to reconsider the extension of the implementation of the WFH arrangement after 31 March 2022, citing that “The WFH arrangement is only a time-bound temporary measure adopted during the surge of the Covid-19 pandemic” and the return-to-office (RTO) order is necessary to help bounce back from this crisis. #