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PEZA backs IT locators, appeals for exemption and reconsideration re FIRB Resolution No. 21-19

PEZA backs IT locators, appeals for exemption and reconsideration re FIRB Resolution No. 21-19
September 27, 2021
PEZA backs IT locators, appeals for exemption and reconsideration re FIRB Resolution No. 21-19

PEZA backs IT locators, appeals for exemption and reconsideration re FIRB Resolution No. 21-19

27 September 2021 (Monday)

Pasay City – In response to the concerns of the IT-BPO sector, Philippine Economic Zone Authority (PEZA) Director General Charito “Ching” Plaza has once again appealed to the Department of Finance (DOF) and the Department of Trade and Industry (DTI) for the exemption of IT-BPO companies from the implementation of the work-from-home (WFH) guidelines under the Fiscal Incentives Review Board (FIRB) Resolution No. 21-19.

In a letter to DOF Secretary Carlos Dominguez and DTI Secretary Ramon Lopez, PEZA has backed the request of its IT-BPO locators to reconsider maintaining the WFH arrangement that PEZA implemented at the beginning of the pandemic under Memorandum Circular (MC) No. 2020-011 dated 05 March 2020 and was further extended under various MCs until 12 September 2021. Under PEZA directives, registered IT enterprises were allowed to engage in WFH operations to the extent of up to 90% of their total revenues.

“The present appeal of the IT Enterprises is anchored on the threat posed by the Delta variant of COVID-19 to its employees which is considered more contagious,” noted Plaza.

“Many of our locators are reeling from the effects of this pandemic, but they are continuing operations to comply with the global supply and demand. This continues to help us to keep the jobs of our people and our economy afloat. The little we can do is to assist them in matters such as this,” she explained.

FIRB Resolution No. 21-19

In recognition of the authority of the FIRB over the IPAs, the PEZA Board recommended the extension of the WFH arrangement. Under Resolution No. 21-206 dated 06 July 2021, PEZA requested that the extension of the WFH arrangement shall be based on the gross revenue of the IT enterprises.

The FIRB has approved the extension and PEZA has released MC no. 2021-049 in adherence to the directives of FIRB. However, under FIRB Resolution No. 21-19, IT-BPO companies are directed to maintain at least 10% of their total employees onsite.

“This directive poses a problem because a number of employees are understandably hesitant to report to work because of the surge in the number of infections and the over-capacity of the hospitals in case they get infected by the virus. While the enterprises are grateful for the extension of the WFH arrangement, the health and safety of their employees is still their primordial consideration,” explained Plaza.

Likewise, the PEZA Chief added that “This will defeat the purpose of the extension of the WFH arrangement which is to limit the mobility of workers and lessen the pressure on public transport because they will contribute to the number of people outside even if it is possible for them to perform their jobs within the confines of their respective homes.”

Threshold for WFH arrangements

Accordingly, PEZA has appealed to the FIRB to reinstate the basis of the threshold of the WFH arrangement to gross revenue instead of the total workforce as a temporary measure available to IT enterprises. This is to support their recovery and protect their employees from the risks of contracting COVID-19 in the workplace.

The revenue-based computation of the threshold shall afford more protection to the employees and is more in keeping of the intent of the resolution.

Likewise, the IT & Business Process Association of the Philippines (IBPAP) has stated that the clarification on the threshold is “a fair treatment considering that any breach that might happen would only be due to compelling circumstances such as putting the health and safety of employees as more paramount. In light of the recent surges in COVID cases, our member companies are heeding the call of the National Government to place as many of their employees under WFH as possible so as not to expose them to the risk of catching COVID-19 when going out to work.”

Further, IBPAP explained, “Our members are registered enterprises that aim to maintain their export revenue commitments and keep their people to ensure seamless delivery of services. However, there are factors affecting revenue and employee attrition that are beyond the control of the enterprise.”

As such, PEZA also requested for leniency on the imposition of the penalty as the enterprises are struggling to comply with the latest directive from the FIRB.

“We need to unite all our efforts to combat this crisis and to help revive our economy. Let us do our best to provide assistance to our investors and merge our collaborative initiatives for our country and our people,” noted Director General Plaza.