MANILA, Philippines — Accommodating flexible work from home (WFH) or hybrid work arrangements is expected to sustain the competitiveness of the country’s information technology-business process management (IT-BPM) sector, according to a professional services and investment management firm.
“Sustaining the Philippines’ competitiveness in the IT-BPM landscape by accommodating flexible WFH/hybrid arrangements will bode well for the country to become a strong investment destination and help the local IT-BPM industry achieve its growth targets,” Colliers Philippines negotiator for office Pia Lorenzo said.
Colliers believes the continuity of incentives under both the Philippine Economic Zone Authority (PEZA) and Board of Investments (BOI) reaffirms the spirit of the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) to equalize the incentives across the different investment promotion agencies and to retain tax incentives under a WFH or hybrid-work scheme.
Earlier this month, the Fiscal Incentives Review Board (FIRB) allowed IT-BPM firms to adopt a 100-percent WFH arrangement by shifting their registration to the BOI from PEZA.
In its board meeting on Sept.14, the FIRB resolved to allow firms in economic zones to adopt up to 100-percent WFH and still enjoy tax incentives if they shift their registration from PEZA to BOI.
“Furthermore, this development minimizes the risk of disruption for existing locators (i.e., additional tax penalties, employee attrition, etc.), which will allow them to focus on growth plans now that the policy moving forward is certain,” Colliers said.
It said that since talent is one of the main drivers for IT-BPM companies to put up business in the country, welcoming policies that will help outsourcing occupiers retain their talent will strengthen the argument to invest in the Philippines.
The Information Technology and Business Process Association of the Philippines (IBPAP) earlier welcomed the FIRB’s move to facilitate the smooth paper transfer of the registration of information technology firms from the PEZA to the BOI.
“After two years of making a case for what the benefits of WFH / hybrid work are, it is great news that the FIRB will be facilitating a smooth paper transfer of the registration of IT-BPM enterprises from PEZA to the BOI,” IBPAP president and CEO Jack Madrid said.
Madrid said this would not involve physically relocating their operations or giving up the incentives that they enjoy.
“This is a wonderful outcome to IBPAP’s staunch advocacy for WFH / hybrid work, and we are extremely thankful to our partners in the government for listening to the sector and its employees in adapting to flexible work arrangements in the future of work,” Madrid said.
He stressed that WFH/hybrid work is a gamechanger for the Philippines and the sustainability of the IT-BPM industry, saying it would be a contributing factor to the ability of the industry to create 1.1 million new direct jobs for Filipinos, generate billions more in revenue, and significantly increase its countryside footprint by 2028.
“We are also grateful to have had the constant assistance and guidance of PEZA and BOI. We will continue to work with them and our other stakeholders to iron out the details and process of this paper transfer,” Madrid said.
Trade Secretary Alfredo Pascual, who also chairs both the PEZA and the BOI, said that up to 100-percent WFH scheme would also be available to IT-BPM firms that would register for tax incentives with the BOI in the future.
The agreed arrangement was one of the options it presented to the FIRB, which is chaired by Finance Secretary Benjamin Diokno.
“From the beginning, our priority has been to secure a solution for the sector’s WFH setup, which has become the new normal post-pandemic,” Pascual said as he acknowledged the contributions of the IT-BPM sector in generating jobs and foreign exchange revenues for the country.