By Joseph B.A. Marzan
Iloilo City Mayor Jerry Treñas on Monday said that the national government should continue to talk with the Business Process Outsourcing (BPO) sector and study the possibility of extending or making permanent the work-from-home (WFH) set up.
In his regular press conference on Monday, Treñas said that he understood the rationale of the national government’s economic team, led by the National Economic and Development Authority (NEDA) and the Department of Finance (DOF), in ordering BPO workers to return to office-based work starting April 1.
The economic team has mulled stripping BPOs and their location sites of tax exemptions if they continue to implement remote work arrangements.
But the mayor cautioned that the NEDA and the DOF have to converse with the sector and its workers amid the growth in employment especially in Iloilo City.
He cited the experience of India, the other world powerhouse aside from the Philippines on the BPO sector, saying that there are benefits in allowing a WFH scheme for workers.
“I can understand NEDA’s and DOF’s [reason] for letting [BPO workers] return to [on-site work], but you have to look on the experience of India. They [India] have a huge BPO sector, and they have seen that it is really possible to work from home,” the mayor said.
“Iloilo City’s BPO sector has [nevertheless] increased amid the pandemic, so my thinking is, NEDA and DOF should continue the dialogue with the BPO sector because we are seeing that the sector will continue to increase in numbers like what is happening in Iloilo City even if they continue to work from home,” he added.
For the mayor, it is important for the NEDA and the DOF to study the proposal to allow the BPO sector’s request for a WFH setup at least until September.
“For me, let’s listen to the BPO sector. That is the feeling [of the BPO sector], and we have to listen. We will be helping them,” he said.
The BPO sector started to implement the WFH sector in March 2020 during the dawn of the coronavirus disease 2019 (COVID-19) pandemic worldwide.
The Iloilo Federation of IT last June 2021 estimated that Iloilo City has had 69 BPO companies with 26,820 employees, and this excludes companies and workers who are not their members.
Early this month, the Fiscal Incentives Review Board (FIRB) rejected the appeal of BPO firms for a longer window to transition from work-from-home operations to traditional office-based work.
In a statement, the Department of Finance (DOF) said the FIRB has upheld its Resolution No, 19-21, which allows IT-BPM firms in economic zones to implement work-from-home (WFH) arrangements for 90% of their workforce only until March 31, 2022.
The Philippine Economic Zone Authority (PEZA), an investment promotion agency that affords several information technology-business process management (IT-BPM) fiscal incentives, has been pushing to extend the WFH arrangements for companies located in economic zones until Sept 12, 2022.
The FIRB’s decision to deny requests for extension and uphold its earlier resolution means that IT-BPM firms’ workers should return for on-site duty beginning April 1, 2022.
“The WFH arrangement is only a time-bound temporary measure adopted during the surge of the Covid-19 pandemic. Given the increasing vaccination rate of Filipinos nationwide, we can now undertake safe measures for physical reporting of employees, including those working in the IT-BPM firms operating within ecozones and freeports,” said Finance Secretary and FIRB chairman Carlos Dominguez III.
“The employees’ return to the office would provide more opportunities and pave the way for the recovery of local micro, small, and medium enterprises (MSMEs) that depend on IT-BPM employees for their livelihood,” Dominguez added.
Firms located in economic zones that fail to comply with the FIRB’s rules cannot enjoy fiscal incentives such as income tax holidays and 5% tax on gross income earned.