DTI agrees with PEZA interpretation on allowing 70-30% hybrid work

According to Department of Trade and Industry (DTI) Secretary Ramon Lopez, the interpretation of the Philippine Economic Zone Authority (PEZA) in permitting up to 30 percent work-from-home (WFH) or work-from-anywhere (WFX) setup for information technology-business process outsourcing (IT-BPO) firms and registered business enterprises (RBEs) is possible in accordance to the existing legal framework.

Earlier, PEZA Director General Charito Plaza announced that the agency is accepting applications for letter of authority from PEZA-registered BPOs and RBEs seeking to implement an extended hybrid work arrangement of 70 percent onsite and 30 percent WFH until September 12, 2022, the stipulated end date of the state of calamity in the Philippines by virtue of President Rodrigo Duterte’s Proclamation No. 1218.

“The 70-30 export to domestic revenues as definition of export enterprises can also be applied on (onsite-WFH) arrangement,” Lopez said in a Viber message to media reporters.

“Registered enterprises who keep to this will continue to enjoy incentives,” the DTI secretary added, “However, what can be questioned later by the Bureau of Internal Revenue (BIR) is whether the incentives should apply to all of the project’s revenues, or only to the revenues associated with the 70 percent done onsite.”

Lopez, who also serves as co-chair of the Fiscal Incentives Review Board (FIRB), earlier pointed out that allowing 30 percent WFH scheme for PEZA-administered locators after the mandated deadline of hybrid work on March 31, 2022 might be permitted, but only if there would be amendments to governing laws.

“In the meantime, PEZA-registered companies will have to abide by the applicable regulations in the definition of export enterprise under the PEZA Law and the CREATE Act. On the 50-50 WFH arrangement under the SIPP (Strategic Investment Priority Plan), there is no such arrangement in the CREATE Act,” according to the DTI secretary last March, “Thus, the SIPP cannot allow what is not allowed under the Law.”

PEZA has 1,274 IT locator companies operating in 297 IT centers/parks as of December 2021. Overall, they reportedly provided 1,017,559 jobs nationwide with exports amounting to USD 15.797PHP 927INR 1,339EUR 15CNY 115 billion.

“PEZA therefore is just restoring back to the regular ratio of not more than 30 percent domestic sales allowance and WFH work ratio. PEZA is giving the institutionalization of the hybrid work scheme to include DOLE’s (Department of Labor and Employment) protection, safety, and security of tenure of workers engaged in the virtual or WFH schemes to the next administration,” the PEZA Director General stated following the agency announcement that they are accepting applications from firms which aim to extend hybrid work.

On the part of BPO workers, Alliance of Call Center Workers (ACW) Co-Convenor Emman D. David believed that the best solution is to have a permanent hybrid work arrangement that allows employees to choose their preferred setup.

“We have received reports from some of our group members that their employers are interested in requesting a Letter of Authority (LOA) from the PEZA for the 30 percent work-from-home setup but are unsure how to proceed given the situation,” David said in response to the recent developments.

“While we welcome the move of PEZA to allow a 30 percent work-from-home setup for registered BPO companies, we are concerned about the confusion that it brings considering the previous statements that were made by the agency,” the ACW co-convenor added.