IBPAP seeks continued WFH arrangement

THE IT Business Process Association of the Philippines (IBPAP) urged anew the Fiscal Incentives Review Board (FIRB) to reconsider its decision mandating employees of the industry to return to office (RTO).

In a statement on Wednesday, Ibpap President and Chief Executive Officer Jack Madrid said the 100-percent RTO directive of the FIRB to employees of the industry "poses a threat to the industry's growth and remains a big challenge to industry players."

"Moreover, a critical risk that industry players face is increased employee attrition if the WFH/hybrid work setup is not available. Therefore, even at the risk of being met with penalties imposed by the FIRB on companies who are unable to comply with the RTO, some of these registered business enterprises (RBEs) will choose to allow employees to continue working from home," said Madrid.

FIRB temporarily allowed information technology-business process management (IT-BPM) enterprises to use WFH arrangements without losing incentives awarded to them as ecozone locators. The arrangements were allowed until last March 31.

RBEs in the IT-BPM industry were permitted to adopt WFH arrangements beyond the deadline, but must give up the tax incentives they currently enjoy.

"The decision of IT-BPM RBEs to forego their income tax perks is a difficult interim measure to address the needs of their employees and meet the demand of clients who prefer WFH/hybrid work arrangements. As such, the industry hopes that the FIRB will soon reconsider its decision and rule in favor of the IT-BPM industry by allowing its players the privilege of fully implementing the PEZA letters of authority (LoA) on WFH," said Madrid, referring to the Philippine Economic Zone Authority (PEZA).

The LoAs issued by PEZA allows IT-BPM firms to implement a 30-percent WFH arrangement until Sept. 12, 2022.

"This has enabled companies to accommodate the strong preferences of its employees and execute a smooth, phased return to on-site operations in the immediate term before a permanent WFH/hybrid work policy is established," said Madrid.

He noted that the IT-BPM industry continues to be a major economic pillar of the Philippines, employing a total of 1.44 million and delivering $29.49 billion in service export revenue as of end-2021.

Madrid noted that growth prospects for 2022 and the medium term are as bullish provided that favorable conditions are sustained.

"To retain and grow existing investments and encourage inflow of new investments, the country's regulatory and investment policies need to be clear and consistent. Consistency and clarity in the implementation of government regulations are critical in defending our country-level competitiveness," said Madrid.

He noted that terms and conditions of investment registrations must be honored and upheld, including the grant of fiscal and non-fiscal incentives.

Source: TheManila Times