PEZA OKs transfer of P14 billion IT-BPM projects to BOI

MANILA, Philippines — Over 160 information technology- business process management (IT-BPM) projects have been endorsed for registration by the Philippine Economic Zone Authority (PEZA) to the Board of Investments (BOI), in line with the policy allowing IT-BPM firms to adopt a 100 percent work from home (WFH) set up.

In a statement, the BOI said PEZA has endorsed 163 IT-BPM projects valued at P13.9 billion as of Nov. 17.

“BOI is currently processing 55 out of 163 projects that have already paid the administrative fee,” the agency said.

In September, the Fiscal Incentives Review Board (FIRB) issued Resolution  026- 22 that allows registered business enterprises (RBEs) under the IT-BPM sector to adopt up to 100 percent WFH arrangement by transferring their registration to the BOI from PEZA.

Among the RBEs that can exercise the option to register with BOI are those that have remaining tax incentives under Section 311 of  the National Internal Revenue Code of 1997 and RBEs with approved incentives on or before Sept. 14, under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) with the concerned investment promotion agency (IPA).

“They shall have until Dec 31, 2022 to exercise the option to register with BOI. Those who did not exercise the option shall no longer be allowed to register and shall be covered by Sec. 309 of CREATE,”the BOI said.

In October, PEZA officer-in-charge and deputy director general for Policy and Planning Tereso Panga assured the IT-BPM sector of the agency’s full support and assistance in the transfer of registration to allow the implementation of 100 percent WFH arrangements.

“With government’s role as enablers of business and facilitators of value creation, PEZA will continue to enhance its ease and cost of doing business. We in PEZA always strive to provide the best business ecosystem in the ecozones so we can continue to attract more investments and sustain the growth of this winner sector,”Panga said earlier.

The statement comes as the Department of Trade and Industry (DTI), as supported by the FIRB, released memorandum circular (MC) 22-19, which contains the guidelines on the transfer of registration of IT-BPO companies to the BOI to allow 100 percent WFH.

To supplement DTI MC 22-19, which details the procedures on the registration of PEZA-registered IT-BPO companies with the BOI, the PEZA has issued memorandum circular 2022- 067 to guide its locator companies on the said transfer.

“The guidelines provide, among others, that the eligible IT locators will have until Dec. 31 to avail of the paper transfer of registration,” the PEZA said.

Under this arrangement, the BOI will issue a certificate of registration to the transferee RBEs for their conduct of 100 percent WFH while the PEZA will continue to administer to them the fiscal and non-fiscal incentives for the sunset period.

PEZA said it would retain the monitoring and reporting of the subject locators’ performance and for other compliance requirements.

The PEZA, however, indicated additional reminders for its IT-BPO companies availing of the transfer such as maintaining an office inside PEZA-registered IT centers/buildings.

“This is necessary in order for PEZA to retain its authority/jurisdiction over the transferee RBEs, which are required under the rules to operate inside the economic zone,”Panga said.

The PEZA said failure to comply with this mandatory requirement would result in the cancellation of its registration with PEZA as an IT enterprise and subsequently, its registration with BOI.

Moreover, Panga said they consider the IT locators’ paper transfer of registration from PEZA to BOI as an interim measure to preserve their export enterprise status as they avail of 100 percent WFH arrangement with full incentives.

“We hope that in the immediate term, a new law or policy will be put in place to institutionalize hybrid workplace for ecozone IT locators to avail of increased WFH threshold with incentives and for the transferee RBEs to retain their PEZA status so they can benefit from the agency’s one-stop service and the IT centers’ conducive business environment,”he said.

“In all these, we expect that PEZA will retain its mandate to promote and facilitate investments and keep the separate customs territory status vested in the ecozones to ensure the competitiveness of our IT sector,”Panga said.

The PEZA official stressed the importance of private and public sector collaboration in growing the IT-BPM industry.

“Through public and private sector innovation and cross-sector collaboration, PEZA and partner government agencies, academic institutions and ecozone industry associations can all contribute to accelerating growth of the IT sector as the IT & Business Process Association of the Philippines (IBPAP) and the Contact Center Association of the Philippines (CCAP) embark on their  ambitious goal of generating 1.1 million new jobs and $59 billion in export revenues in 6 years as part of the Philippine IT-BPM Industry Roadmap 2028,”Panga said.

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 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 explained that 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.