PEZA ready to extend 30% WFH limit to March

MANILA, Philippines — The Philippine Economic Zone Authority (PEZA)  is prepared to extend the letters of authority (LOA) allowing information technology (IT) locators to implement a 30 percent work from home (WFH) limit until March 2023.

PEZA officer in charge and deputy director general for policy and planning Tereso Panga said the extension only covers IT locators registered with PEZA prior to the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) Law.

“These were the locators that were initially issued WFH LOAs in March 2022 with a validity period up to Sept. 12, 2022, which was sustained by the Fiscal Incentives Review Board (FIRB),”Panga said in a statement.

In a Viber message, Panga said the PEZA management action on the matter would be presented to the board today.

He confirmed that the said extension is “approved in principle”.

“With PBBM’s pronouncement to extend the national state of calamity until end of the year, we expect FIRB to issue a supporting resolution to allow the extension of 30 percent WFH limit for the same period which will benefit as well the RBEs (registered business enterprises) covered by the CREATE regime,”Panga said.

He said the extension of the 30 percent WFH limit until March 2023 is in keeping with the one year validity period of LOAs issued by PEZA and in support of the IT and Business Process Association of the Philippines (IBPAP)’s request for a longer WFH authority so that the locators can plan better for the work schedule of their employees vis-a-vis increasing market demands.

“PEZA has been implementing its policy on 30 percent WFH limit prior to the enactment of the Telecommuting and CREATE laws; thus, it is covered by the sunset provision of the CREATE,”Panga said.

He said the agency is working closely with the Board of Investments (BOI) and the FIRB on how to institutionalize the hybrid workplace particularly for ecozone export-oriented locators that are required to operate in their designated IT centers.

Since the Philippines is still in a national state of calamity, Panga said PEZA would  request the FIRB for the waiver of penalties, such as the withdrawal of fiscal and non-fiscal incentives, for any breach of the 30 percent WFH limit--other than those penalties prescribed in the PEZA LOAs issued to its locators.

Panga said the PEZA recently met with the FIRB-Technical Working Group (FIRB-TWG) to iron out the stringent penalties and conditions as imposed additionally by the Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC) that are inconsistent with the CREATE and FIRB resolutions, and which were issued without prior consultation with the investment promotion agencies (IPAs).

“This regulatory incoherence will surely impact on the viability of existing and prospective IT investors of PEZA,”Panga said.

PEZA is banking on the support of Trade Secretary Alfredo Pascual and the FIRB to sustain the industry’s appeal --given the mounting call of some Senators to liberalize the WFH policy in order for the locators to keep their incentives while availing of the flexiwork and as a measure to attract more investments into the country.

“We feel that the government can be more proactive and responsive to the needs of ecozone locators if it will extend to them the WFH privileges under a hybrid work set-up,”Panga said.

“This solution will not only put PEZA on equal footing with the BOI since both agencies offer the same incentives to their RBEs (whether domestic or export-market oriented), but will also make the Philippines apace with India and other forward-thinking economies that have adopted WFH and hybrid work as the new normal,”he said.