The Philippine Economic Zone Authority (Peza) warned on Thursday that registered business process outsourcing (BPO) firms may take significant hits, including loss of highly skilled employees, among others, if the government does not extend the period allowing this industry to keep their tax perks while under a 30-percent work-from-home (WFH) setup.
Peza officer in charge and Deputy Director General for Policy and Planning Tereso Panga said this was but one of the possible consequences if the government would decide not to extend this measure which was set to end on Sept. 12.
“Based on our [registered business entities], it is actually their workers that demand an alternative work arrangement,” Panga said, highlighting as well that these firms may lose highly skilled employees who would look for opportunities where they could work from home.
Panga highlighted the downside of this loss of competitiveness and employee retention for such firms given the rising reports on unregulated operations of underground, offshore-based information technology (IT) companies.
These underground firms are able to attract Filipino talents to work for them under a work-from-home setup without the proper permits and payment of taxes, Panga noted.
Exodus feared
The Peza official added that these firms may also decide to cancel their registration with them and setup their business outside the Philippines instead where hybrid setups are considered legal with entitlement to fiscal incentives.
“This will result in the unemployment of thousands of Filipinos,” he said.
Panga said the government can be more proactive and responsive to the needs of ecozone locators if it will grant the extension.
“This is not the time for the government to be legalistic with its interpretation of the law especially if it involves implementation of a policy that is well within the purview of the [investment promotion agencies],” Panga said further.
Two days ago, IT & Business Process Association of the Philippines, Inc. (IBPAP) president Jack Madrid said he was “perplexed” at how the importance of a flexible work setup couldn’t be understood by some, particularly for an industry that leads in job creation and foreign exchange revenue.
Back in August, IBPAP said the sector is expected to grow its revenues by up to 10 percent and its full-time employees by up to 8 percent this year.
In 2021, IBPAP said the industry recorded $29.49 billion in revenue, which is up 10.6 percent from the previous year. The number of full-time employees also climbed by 120,000 last year, bringing its overall head count to 1.44 million people.