Remulla’s WFH verdict backed

FIRB said the transfer of registered ITBPM companies to the BoI was allowed to resolve the sector’s longstanding impasse on tax incentive claims while performing business activities outside the zone limits

Prime business process outsourcing organization, the IT (information technology) and Business Process Association of the Philippines, and the Board of Investments, expressed support to Justice Secretary Crispin Remulla’s view on the work-from-home, or WFH, setup friction.

Remulla’s statement indicated: “Section 309 of RA 11534 specifically requires registered projects or activities under an Investment Promotion Agency, or IPA, administering an economic zone or freeport to be exclusively conducted or operated within the geographical boundaries of the zone or freeport, and any project or activity conducted or performed outside the zone or free port shall not be entitled to the incentive under the CREATE Act.”

With this, BoI managing head Undersecretary Ceferino Rodolfo, said the DoJ opinion essentially confirms the existing mechanism that provides the flexibility that allows the BoI to continue attracting BPO investments into the Philippines.

“As we have submitted to the House of Representatives, the DTI recommends the 30 percent work-from-home threshold for RBEs (registered business enterprises) in ecozones,” Rodolfo told reporters.

Despite this, Rodolfo said he is in support of those RBEs wanting to go back to the Philippine Economic Zone Authority from BoI.

“In addition, BoI also supports allowing those who have transferred to BoI to seamlessly be able to go back to their PEZA registration, if they prefer,” Rodolfo told reporters on Monday.

The legal opinion of Secretary Remulla only pertains to BPO companies that are still operating within the country’s ecozones, and not those companies that have already transferred to BoI from PEZA.

FIRB said the transfer of registered ITBPM companies to the BoI was allowed to resolve the sector’s long-standing impasse on tax incentive claims while performing business activities outside the zone limits.

Most BPOs on-site

For his part, IBPAP president Jack Madrid expressed belief the Secretary’s pronouncement is moot as the majority of BPO companies are onsite, despite the ITBPM industry being a very diverse sector.

“The work-from-home, hybrid ratio is different for all companies, customers, and employees. There is no one-sizefits-all all. But in the past two years, there has been a gradual uptick going back to onsite. As to the aggregate number, we are probably 60 percent onsite,” Madrid pointed out.

However, Madrid said their position remains and that is work flexibility for their workforce, as that’s what their investors want.

“Our position has been the same from the very beginning. We think we believe in work flexibility, because that’s what investors want and it’s what our employees need, IBPAP’s position at the end of the day is to listen to the voice of the employee and also to protect what has been given to our investors when they decide to invest in the Philippines,” he said.

Also, Madrid noted that while they welcome the opinion, they are also happy to know that the DoJ secretary’s opinion will not affect the 100 percent work flexibility that some companies who transferred from PEZA to BoI are currently enjoying.

“We are 1.7 million strong and growing. What is holding us back is the availability of talent and we should take seriously the importance of upskilling and reskilling our existing workforce and the upcoming generation,” he said.

Aside from providing 1.7 million direct jobs in 2023, Madrid said they have generated $35 billion in revenues in 2023.

He said the IT-BPM is projected to grow from seven percent to eight percent or $39 billion in 2024 with 1.8 million jobs generated.