Pasay City, Philippines, Oct, 2022 -- The Philippine Economic Zone Authority (PEZA) Officer-in-Charge and Deputy Director General for Policy and Planning Mr. Tereso O. Panga has assured the IT-BPO sector of the agency’s full support and assistance in the transfer of registration to allow the implementation of 100% work-from-home (WFH) arrangements.
"With government's role as enablers of business and facilitators of value creation, PEZA will continue to enhance its ease and cost of doing business. We in PEZA always strive to provide the best business ecosystem in the ecozones so we can continue to attract more investments and sustain the growth of this winner sector," stated the PEZA interim chief.
The statement comes as the Department of Trade and Industry (DTI), as supported by the Fiscal Incentives Review Board (FIRB), released on 18 October 2022 DTI MC No. 22-19 which contains the guidelines on the transfer of registration of IT-BPO companies to the Board of Investments to allow 100% work-from-home (WFH).
The DTI MC covers all affected RBEs in the IT-BPM sector that have remaining incentives under Section 311 of the National Internal Revenue Code of 1997, as amended, or those with approved incentives on or before September 14, 2022 under the CREATE Act with the concerned IPA, particularly those currently registered with the PEZA, that intend to register with the BOI.
Guidelines on the transfer
To supplement DTI MC No. 22-19 which details the procedures on the registration of PEZA-registered IT-BPO companies with the Board of Investments (BOI) to allow the adoption of 100% work-from-home arrangements, PEZA has issued Memorandum Circular No. 2022-067 to guide its locator companies on the said transfer.
The guidelines provide, among others, that the eligible IT locators will have until 31 December 2022 to avail of the paper transfer of registration. Under this arrangement, BOI will issue a certificate of registration to the transferee RBEs for their conduct of 100% WFH and where PEZA will continue to administer to them the fiscal and non-fiscal incentives for the sunset period.
Moreover, PEZA will get to retain the monitoring and reporting of the subject locators' performance and for other compliance requirements. As these covered RBEs will not cancel their registration with PEZA, the agency will be kept whole with its investment facilitation and revenue generation functions.
However, PEZA has indicated additional reminders for its IT-BPO companies availing of the transfer to which includes maintaining an office inside PEZA-registered IT Centers/Buildings.
According to OIC Panga, "This is necessary in order for PEZA to retain its authority/jurisdiction over the transferee RBEs, which are required under the rules to operate inside the economic zone."
Failure to comply with this mandatory requirement will result in the cancellation of its registration with PEZA as an IT enterprise and subsequently, its registration with BOI.
Enhancing business models in support of the growth of the sector
OIC Panga said, "We consider the IT locators' paper transfer of registration from PEZA to BOI as an interim measure to preserve their export enterprise status as they avail of 100% WFH arrangement with full incentives."
"We hope that in the immediate term, a new law or policy will be put in place to institutionalize hybrid workplace for ecozone IT locators to avail of increased WFH threshold with incentives and for the transferee RBEs to retain their PEZA status so they can benefit from the agency's one-stop service and the IT centers' conducive business environment. In all these, we expect that PEZA will retain its mandate to promote and facilitate investments and keep the separate customs territory status vested in the ecozones to ensure the competitiveness of our IT sector," explained the PEZA interim chief.
With full assurance, Panga noted that "Through public and private sector innovation and cross-sector collaboration, PEZA and partner government agencies, academic institutions and ecozone industry associations can all contribute to accelerating growth of the IT sector as the IT & Business Process Association of the Philippines (IBPAP) and the Contact Center Association of the Philippines (CCAP) embarks on its ambitious goal of generating 1.1 million new jobs and $59 billion in export revenues in 6 years as part of the Philippine IT-BPM Industry Roadmap 2028."
Contact Islands 2022: Accelerating Growth for the IT-BPM sector
During the three-day Contact Islands 2022 conference of CCAP last October 19-21, CCAP members have expressed their gratitude to the government particularly PEZA for its constant support and assistance to ensure the seamless operations of IT-BPO companies in the country.
More importantly, the industry has called on the government to come up with an institutionalized policy on the hybrid/flexi-work arrangements that will ease the burden on the companies which play a crucial role in attracting the much-needed FDIs in the country.
Likewise, the sector hopes that the government will unite all agencies and put the IPAs like BOI and PEZA in equal footing in the facilitation of tax incentives and business models to further enhance the ease of doing business in the Philippines and achieve our goal of strong and inclusive economic development.
Posted by Veronica Silva Cusi, news correspondent
Published: Tuesday, November 1, 2022
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