IBPAP welcomes fund for IT-BPO skills upgrade under TRABAHO Bill

MANILA, Philippines — The Information Technology and Business Process Association of the Philippines (IBPAP) welcomes the move of the government to provide a P5 billion fund for the skills upgrade of the industry per year under the Tax Reform for Attracting Better and High Quality Opportunities (TRABAHO) Bill, the second package of the government’s tax reform program, as it would help keep the country’s IT – business process outsourcing sector (BPO) competitive.

IBPAP vice chairman Catherine Ileto said in an interview, the P5 billion fund for the skills of the IT-BPO industry under the TRABAHO Bill is a welcome support from the government.

“I think that would be a good start,” she said.

The TRABAHO Bill seeks to bring down the corporate income tax rate to 20 percent from 30 percent, and modernize the investment tax incentives.

Under Section 312 of House Bill 8083 of the TRABAHO Bill approved on third and final reading by the House of Representatives, the government would be providing a structural adjustment fund to compensate workers to be displaced by the rationalization of fiscal incentives.

For the IT-BPO industry, the government is allocating P5 billion annually for skills upgrade and the amount would be used solely to pay for formal academic or training programs of accredited private or public schools and training centers.

Ileto said as the talent subsidy from the government is not clear for now, the IBPAP is hopeful the group would be given an opportunity to weigh in when the framework for the fund is crafted.

“We do hope the industry association, IBPAP, would have a hand in creating that framework. Again this is something we are looking forward to. It would certainly help us in our drive to convert more in the talent pool. We need to increase the conversion rate,” she said.

She said among the challenges faced by the industry now is attracting talent.

“If you have a pool of 100 applicants, it’s sad. We’re only able to convert 10 out of 100. We cannot do it alone. We certainly need help from the government,” she said.

The fund for the skills upgrade of the IT-BPO industry is also expected to help keep the sector competitive.

As India, which is also being chosen as a location to set up shop by firms engaged in the IT-BPO sector has a campaign called Skill India aiming to train people in different skills, Ileto said a similar program would be a big boost to the industry.

Board of Investments managing head Ceferino Rodolfo said the government is allocating a fund for the skills upgrade of the IT-BPO industry as many firms in the sector are registered with the Philippine Economic Zone Authority (PEZA).

Many of the IT-BPO firms registered with the PEZA are enjoying the five percent gross income earned tax incentive, a tax perk enjoyed by firms upon expiration of the income tax holidays for four to six years.