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PEZA is concerned about the rising ‘underground’ IT-BPO industry.

MANILA, Philippines — The Philippine Economic Zone Authority (PEZA) has received complaints that registered information technology and business process outsourcing (IT-BPO) firms are losing workers to “underground” IT-BPO firms that operate from home.

PEZA director general Charito Plaza noted in an interview that these underground operations of businesses serving the IT-BPO sector offer greater salaries and WFH arrangements, which are beneficial to the voice component of the industry in particular.

“After speaking with Cebu IT-BPOs, I discovered that there are now virtual or IT-related firms that we refer to as subterranean.” They’re working underground since they’re not registered with the government. They’re paying well, around PHP30,000 to PHP40,000 per month, but there’s no job security,” Plaza told reporters.

She also stated that many workers in the IT-BPO industry have quit as a result of the government’s instruction to return to their jobs.

“‘Yong mga workers din, matapang silang magsalita na we will quit from work kasi meron na itong underground eh, employing them for a high cost,” the PEZA chief explained.

The Fiscal Incentives Review Board (FIRB) denied the PEZA, registered IT-BPO firms, and workers’ request to extend the WFH arrangement until September 2022, when the proclamation of the state of calamity due to coronavirus disease 2019 (Covid-19) pandemic is slated to expire.

Since April 1, enterprises operating in economic zones have been required to abandon their WFH setup and return to their offices.

According to Plaza, as the underground IT-BPO sector grows, the government will lose more tax revenue since these unregistered enterprises do not pay their duties to the government and do not provide workers with the security of tenure.

PEZA reports that it has registered 1,608 IT locators and 297 IT parks.

At the end of 2021, these registered business companies had created over 1.01 million jobs and invested PHP330.4 billion.

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