Sen. Risa Hontiveros has called on the country’s incoming economic managers to remove the uncertainty and finally resolve the work-from-home (WFH) impasse in the information technology-business process management (IT-BPM) sector.
“Ideally, bago pa mailuklok ang bagong economic team ng bansa, they should already find common ground with the IT-BPM sector and remove the anxiety of their investors and international clients. Let’s not forget that the IT-BPM sector has been the only consistent generator of jobs in the past two and a half years of the pandemic. If we take care of the workers, the sector is set to continue attracting talent and growing. Working remotely also lessens the cost and cuts down on the stress of commuting, especially in Metro Manila,” the senator stated.
To date, there’s no final decision yet on whether to allow business process outsourcing (BPO) and registered business enterprises (RBEs) to continue their WFH setup indefinitely.
The initial “return to on-site work” announcement issued in March caused an uproar among BPO employees. The workers argued that they end up spending more when they are required to show up on-site.
“Sang-ayon ako sa gusto ng mga BPO workers. I think those are very reasonable demands. They’re already borne out by existing realities in the world of work. The workers have been productive in their WFH setup. They really optimized yung pagiging online ng malaking bahagi ng trabaho nila. Malaking tulong sa budget nila sa pang-araw-araw kung ipagpapatuloy itong work-from-home setup,” Hontiveros pointed out.
The government is currently allowing a hybrid 30% WFH setup until September 12, 2022, the so-called “end of the state of the Covid-19 calamity” declared by President Rodrigo Duterte.
“Nawa’y pakinggan ng ating economic team ang mga manggagawa. Our workers have said their piece. The ball is now in the next administration’s court. It’s high time we start working under a ‘better normal,’ and not just a ‘new normal.’ Huwag sana tayong paatras sa mga dating klase ng mga labor laws or even tax laws na pipilitin talagang bumalik sa pre-pandemic working conditions. Maging flexible naman tayo,” Hontiveros said.
Meanwhile, the government appears not to be interested in permanently establishing an incentive package for WFH setup with Department of Finance (DOF) assistant secretary Juvy Danofrata recently lauding the decision of BPO firm Concentrix to give up its tax perks in exchange for a continued hybrid work setup for its employees.
“We support the decision of Concentrix to carry on with its flexible work arrangements. We respect that they are supportive of their employees who want such a work setup in this post-pandemic situation,” said Danofrata.
“This goes to show,” she said, “that tax perks are not that important to investors doing business in the Philippines.”
“This validates the DOF’s policy thrust to avoid the grant of unnecessary tax incentives as this is apparently not the main consideration for them to do business in the country, especially for the business process outsourcing (BPO) firms that have been enjoying the exemptions and incentives for a long time,” she added.
Danofrata said, “By giving up their incentives, the opportunity cost to the government of these incentives will be minimized, which will make us more efficient in utilizing the government’s resources critical in our ongoing economic recovery efforts.”
Based on the DOF’s assessment, total dividends declared by BPOs exceeded their income tax incentives, signaling that tax incentives are being used to augment shareholder returns. This, she said, suggests that the tax benefits received by BPO firms are not that necessary as these only increase their profitability.
Although advantageous to registered business enterprises (RBEs), Danofrata said the grant of fiscal incentives from the government always comes with a responsibility.
Locators inside special economic zones (SEZs) are accorded tax incentives with the objectives of promoting the flow of investments into the areas where these SEZs are located, generating employment opportunities, and creating backward and forward linkages among industries in and around the economic zones.
“Thus, allowing RBEs in the ecozone or freeport to conduct its business outside the economic zones will effectively render the objectives of establishing economic zones useless as there will be no need for them to locate inside the zones,” Danofrata said.
Concentrix decided to maintain its hybrid work system after the expiration of the FIRB Resolution 19-21 allowing WFH arrangement of up to 90 percent of the total workforce of RBEs in the IT-BPM sector last March 31, 2022.