Impasse on WFH to impact Philippines

MANILA, Philippines — The impasse on work from home (WFH) or hybrid work arrangement with the Fiscal Incentives Review Board (FIRB) is detrimental to the country’s positioning as an investment destination for the information technology-business process outsourcing (IT-BPM) sector, according to the Information Technology and Business Process Association of the Philippines (IBPAP).

“The long-standing impasse with the FIRB and its very public exchanges with PEZA (Philippine Economic Zone Authority) on the matter of WFH/hybrid work is not only detrimental to our narrative of industry agility, innovation and resilience, but also to our positioning of the Philippines as the IT-BPM investment destination of choice,” IBPAP president and CEO Jack Madrid said in a statement yesterday.

“It has therefore detracted us from what’s truly important — creating more employment and generating more foreign exchange revenue for the country. This has been a recurring problem that has negatively impacted the ease of doing business in the country, as well as the confidence level of our principals and potential clients,” he said.

Last week, the FIRB said there was no legal basis for the extension of the 30 percent WFH capacity for IT locators until March 2023 as the matter remains up for discussion.

It maintained that the extension of the WFH arrangement for the IT-BPM sector beyond Sept. 12 was not final and would still be tackled.

This comes after PEZA said it was ready to extend letters of authority (LOA) allowing for the 30 percent WFH limit until March 2023.

While the approval of the extension was deferred in the last PEZA board meeting on Aug. 26, PEZA officer in charge and deputy director general for policy and planning Tereso Panga said this was “approved in principle.”

“Just need to revise our memo to include the inputs of the board that the 30 percent WFH is a long standing policy of PEZA and not just as a BCP (business continuity plan) measure,” Panga said, adding that this will be pursued in an ad referendum.

IBPAP stands by the PEZA and its power to enable hybrid work for registered business enterprises.

“This long-standing policy is irrefutable legal basis for the continuance of the 30 percent WFH arrangement for IT-BPM companies and the provisions of the PEZA law, which grant the agency authority to oversee the operations of its RBEs, have not been amended based on the opinion of PEZA and other lawyers,” Madrid said.

He stressed that IBPAP’s push to have WFH/hybrid work arrangements goes beyond BCPs related to the COVID-19 pandemic.

“This is more to adapt to global work trends for business flexibility that investors look for and to strengthen our country’s competitiveness in retaining existing and attracting new IT-BPM investors,” Madrid said.

The IBPAP official stressed that the clamor for an overwhelming preference for WFH/hybrid work due to many other justifiable reasons that also have gained tremendous public attention should make the government reconsider allowing such work setup even more compelling.

“Therefore, the FIRB’s dismissal of the collective wisdom of all these parties, who are advocating continued WFH/hybrid work beyond BCP and the pandemic, by citing that it has no legal basis by virtue of the CREATE Law, is shortsighted and inconsistent with the objective of attracting and retaining investors in the country’s biggest job-generating industry and contributor of foreign exchange revenue,” Madrid said.

“If this continues, IT-BPM’s potential to provide 1.1 million new jobs by 2028 will be seriously imperiled,” Madrid pointed out.