Peza rule on 50% remote work out soon

FILE PHOTO: Philippine Economic Zone Authority (Peza) Director General Tereso Panga. CONTRIBUTED PHOTO

MANILA, Philippines — The Philippine Economic Zone Authority (Peza) is set to release new guidelines this month for businesses under its jurisdiction, allowing them to keep up to 50 percent of their workforce under work from home (WFH) setup without losing their fiscal incentives.

Peza director general Tereso Panga said the guidelines giving the 50-percent WFH flexibility would clarify and streamline remote work policies within its economic zones.

“And if they’re [located]outside [our economic zones], they can even do 100 percent [WFH]. So, we need not be as strict as before with the guidelines,” Panga told reporters on the sidelines of the launch of their sustainability reporting program in Pasay late Tuesday afternoon.

Peza, one of the investment promotions agencies of the Department of Trade and Industry, requires registered firms to conduct their business operations within designated economic zones to qualify for tax incentives.

READ: ‘WFH culture in BPO sector here to stay’

Pandemic roots

However, at the height of the lockdowns during the COVID-19 pandemic, employees of these registered firms were allowed to work remotely as a health and safety measure.

READ: BPO firms allowed to keep WFH option

The remote work allowance eventually ended in 2022, with the interagency Fiscal Incentives Review Board issuing a decision in September of that year allowing Peza-registered firms to transfer their registration to the Board of Investments (BOI). This move allowed firms to continue implementing WFH arrangements while remaining eligible for tax incentives, as the BOI does not impose the same location-based restrictions as Peza.

The 50-percent WFH threshold is in line with the provisions of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act.

Peza-accredited firms enjoy a number of fiscal and nonfiscal incentives, including income tax holidays, special corporate income tax rates, or enhanced deductions, among others.

According to records from the government investment promotions agency, more than 440 registered companies applied to transfer their registration to the BOI following the decision.

To date, more than 4,380 registered companies are operating within Peza’s network of at least 423 economic zones. INQ