PEZA-Accredited IT-BPO Firms Can Operate 70-30 Hybrid Work

Information technology-business process outsourcing (IT-BPO) companies can operate on a hybrid set-up, as the Fiscal Incentives Review Board (FIRB) approved the work arrangement. 

Firms registered under Philippine Economic Zone Authority (PEZA) are allowed to have 70 percent on-site and 30 percent on remote work until September 30, 2022, Manila Bulletin reported. September 30 is the end of the state of national health emergency declaration of President Duterte.

According to PEZA, the approval was communicated to the IT Business Process Association of the Philippines (IBPAP). The official written statement from FIRB will be issued on June 29, the day before the new administration assumes office.

Earlier this year, IT-BPO firms were urged to return to the office to maintain tax incentives. Industry workers went back to the workplace on April 1, in compliance with FIRB’s resolution on the non-extension of the work-from-home scheme.

Preference for Hybrid Arrangement

Leaning towards a mix of office and remote work set-up, the IBPAP appealed for legislative measures that would permit long-term implementation of hybrid work, like those in India, Poland, and Malaysia, as mentioned in this GMA News Online report.

The group revealed that amid the work-from-home arrangement, the industry surpassed its growth target. The number of full-time workers in the IT-BPM sector grew by 120,000 in 2021, reaching 1.44 million in the total number of employees in the Philippines. In terms of revenues, the sector registered a 10.6 percent increase from 2020 to 2021, raking in US$29.49 billion.

Describing 2021 growth figures as “beyond recovery” from the pandemic, IBPAP said that it’s a “resurgence” of the local industry. 

Aside from improved confidence in remote work schemes, the association attributes the growth to pent-up demand from global customers and the continued development in related industries, namely e-commerce, fintech, healthcare, and technology. 

IBPAP expressed optimism that this growth will continue in 2022. Thus, they are planning to recruit 1.43M full-time workers and bring in US$29.1B worth of revenues this year.

Labor groups, such as the Bukluran ng Manggagawang Pilipino and Alliance of Call Center Workers, are pushing for a hybrid work arrangement, Manila Times reported. They cited the cost savings and the documented productivity offered by the set-up.

Flexible Work Set-Up on the Policy Level

In a separate Manila Bulletin report, incoming trade and industry secretary Alfredo Pascual said that he’s open to the application of hybrid work arrangements for PEZA-accredited BPO firms. He said that he will not regulate the hybrid setup, allowing companies to decide the best work scheme for their employees and operations.

He pointed out that manufacturing companies require being on-site to run machines. But work that demands “mental inputs” can be performed remotely.

Amid the rising costs of fuel and transportation, Senator Sherwin Gatchalian urged both the private sector and government agencies to implement a flexible work setup, as reported by Manila Bulletin

Aside from saving money on gas, he said that letting employees work from home (WFH) can help avoid traffic congestion, save time, and eliminate daily commutes. 

To promote the WFH set-up, Gatchalian, together with Tolentino, submitted Senate Bill No. 1706, which seeks to grant employees a P25 reduction from their taxable income for every hour of work rendered under the WFH set-up. 

Additionally, the legislative measure will make allowances and other benefits of employees related to telecommuting non-taxable. The tax incentive will not exceed P2,000 per month.

Meanwhile, employers can claim an additional 50 percent income tax deduction for allowances given within the specified ceiling.

Hybrid Work’s Impact on Residential and Office Market

As the hybrid model becomes the new norm at work, experts in the real estate sector foresee a change in office take up and home purchase. This will be one of the topics to be discussed in the upcoming The Outlook 2022: Philippine Real Estate Conference. 

Prominent personalities from various notable property companies will talk about the tech infrastructure required to support WFH, the long-term impact of remote work on commercial real estate, and the new technologies implemented in the physical workplace to promote the well-being of those working on site, among other topics. 

The in-person event will be held on August 31, 2022 at the Shang-ri La Fort, Bonifacio Global City in Taguig. It’s co-presented by KONE, and in partnership with Manila Standard, Business Mirror, Malaya, and Sunstar.

To know more about the event, visit this page.

Sources: Manila Bulletin, GMA News Online, Manila Times

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