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Business process outsourcing (BPO) companies should follow the government’s order to return to office if they want to keep their tax breaks, said the Philippine Economic Zone Authority (Peza), while hoping the industry would find better support in the next administration.
Peza said in a statement on Tuesday that BPOs have to follow the decision made by the Fiscal Incentives Review Board (FIRB), even though this ran contrary to what both the industry and the agency were pushing for.
Government guidelines placed earlier in the pandemic allowed the BPO industry, the largest employer in the private sector, to keep its tax breaks while having up to 90 percent of its employees work from home (WFH). This will last only up to the end of March, the FIRB said, even after the BPO industry and Peza asked to extend the deadline until September.
“The allowance of the 90:10 work-from-home setup 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 inside the ecozones,” said Peza director general Charito Plaza.
“We are supportive of the proposal of the IT (information technology) and 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,” she added.
“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 said.
The pandemic has changed the way the industry viewed remote work. IBPAP president Jack Madrid said in a recent Inquirer interview that the industry realized it could grow while working from home.
“We have discovered that our work, the work of our industry, the work being done by the 1.4 million Filipinos, can be done at home,” said Madrid. “We were able to achieve that without sacrificing productivity and customer satisfaction ratings, based on what we have gathered. I think we did not lose any business. In fact, we grew.”
Working from home has helped the industry thrive despite several lockdowns, creating 23,000 new jobs in 2020, just when the crisis pushed the country’s unemployment rate to its peak in 15 years. Its workforce grew further by 8 percent in 2021, adding about 100,000 new jobs, while revenues went up last year by around 12 percent to a total of $28.8 billion, according to IBPAP data. By the end of last year, IBPAP data said around 60 percent of the industry worked from home.
BPO firms abroad, including those in the Philippines’ biggest competitor India, will likely continue to have many of their employees working from home even after the pandemic, according to a previous Inquirer interview with officials of the Everest Group, a research firm that advises Global 1,000 companies in outsourcing their services. India is already adjusting its policies and tax breaks to support work from home. The Philippines, said the officials, should do the same or get left behind.
“At present, Peza cannot change the [workplace] 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,” Plaza said. INQ