NextGen Day

MANILA – Director General Charito Plaza of the Philippine Economic Zone Authority (PEZA) has announced that the agency is accepting applications for the hybrid work arrangement from PEZA-registered information technology-business process outsourcing (IT-BPOs) and registered business enterprises (RBEs).

PEZA-registered IT-BPOs and RBEs that are unable to return to work (RTO) by April 1 can request a Letter of Authority (LOA) from PEZA that includes the necessary conditions.

“Now that we’re back to normal, our government wants economic activity to return to normal as well, therefore this is PEZA’s response — the 70-30 hybrid work arrangement,” Plaza explained.

Prior to the coronavirus disease 2019 (Covid-19) pandemic, PEZA has been providing Letters of Authorities (LOAs) to its interested registered firms applying for a hybrid operation.

70-30 work ratio

Plaza stated that this hybrid work system will only be in place until September 12, 2022, when President Rodrigo Duterte declares the state of (Covid-19) catastrophe to be over.

Companies that provide IT-BPO services and RBEs who want to take advantage of this work arrangement must apply individually to PEZA.

PEZA’s work from home (WFH) arrangement for its registered IT-BPOs and RBEs, according to Plaza, was conceived even before the Dec. 20, 2018, passing of Republic Act No. 11165, better known as the Telecommuting Act.

“As a result, PEZA is simply returning to the standard ratio of not more than 30% domestic sales allowance and WFH work ratio. PEZA is entrusting the institutionalization of the hybrid work scheme to the next administration, including DOLE’s (Department of Labor and Employment) protection, safety, and security of tenure for workers involved in virtual or WFH schemes,” she stated.

According to Plaza, one of PEZA’s Bayanihan business support and reprieves, since the pandemic began in 2020, was the temporary rise of WFH arrangements, which were 90 percent WFH and 10% onsite.

“However, PEZA-registered IT-BPOs will return to our standard policy ratio of 70-30 on sales allowance and no more than 30% of WFH beginning April 1, 2022,” she noted.

According to Tereso Panga, Deputy Director General (DDG) for Policy and Planning, the Corporate Recovery and Tax Incentives for Enterprises (CREATE) statute does not prevent PEZA-registered RBEs and IT-BPOs from undertaking remote work or performing a portion of their operation outside the economic zones.

“Our ecozone locators undertaking hybrid work are (and should be) eligible to our tax benefits as long as they comply with the required 70 percent export sales and minimum 70 percent on-site report by their workers,” he said.

According to Panga, working 30 percent from home is legal under the PEZA, CREATE, and Telecommuting legislation.

Even before the pandemic, Plaza noted, the hybrid work model was being used around the world, particularly in India, the Philippines’ leading competitor in the IT-BPO business.

To sustain the country’s competitiveness and adaptability in the ‘new normal,’ she noted, it is necessary to recognize and react to this global trend.

PEZA has 1,274 IT locator firms operating in 297 IT centers/parks, providing 1,017,559 employment with exports of US$ 15.797 billion as of December 2021.

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