MANILA, PHILIPPINES – The Philippine Economic Zone Authority’s petition to extend the work-from-home arrangement for the information technology and business process management sectors was denied by the Fiscal Incentives Review Board.
Finance Secretary Carlos Dominguez III, who chairs the Fiscal Incentives Review Board (FIRB), said in a statement on Wednesday (March 9) that the work-from-home arrangement—allowed at the height of COVID-19 infection surges—had been “only a time-bound temporary measure.”
“Considering all surrounding circumstances as well as relevant issues and points raised during the recently concluded FIRB meeting held on Feb. 21, 2022, the FIRB members were unanimous that the approval of PEZA’s request with great regard to WFH arrangement is not considered consistent with the economic strategy of the government of reopening the economy gradually and safely.”
PEZA was instructed to advise and remind all ITBPM enterprises to follow the provisions of FIRB Resolution No. 19-21, which effectively extended WFH from September 20, 2021 to March 31, 2022. Violators would face penalties if they did not comply with the resolution.
PEZA previously proposed a policy that would allow registered ITBPM enterprises to operate under WFH arrangements until September 12, 2022, without losing the fiscal benefits they receive as economic zone locators.
According to the FIRB, even government agencies were required to have the majority of their employees physically report for work to their respective offices under the President’s Memorandum Circular No. 93, by 40%, 60%, and 80%, respectively, under Alert Levels 4, 3, and 2.
The board stated that all policies and programs, such as allowing the pilot opening of face-to-face classes, implementing granular lockdown measures, and expanding vaccination to include children aged 5 to 17, were aimed at improving mobility and increasing economic activity.
“Moreover, the FIRB’s thrust towards reopening the economy promoted higher utilization rates in infrastructure, specifically in office spaces, among concerned registered business enterprises. An increase in infrastructure utilization within ecozones or Freeports will encourage further expansion and diversification in the area and support the government’s initiative of making the country a safe investment and work destination,” Dominguez said.
The FIRB also denied PEZA’s request to lift the moratorium on ecozone expansion within Metro Manila, which board members agreed to in a meeting in February 2022.
“The members of the FIRB were all in unison for the continuation of the moratorium hence, (your) request is hereby denied,” the letter said.
According to the FIRB, locator companies in economic zones may continue to register and operate in existing ecozones in Metro Manila. Outside of Metro Manila, new ecozones may still be established.
Plaza stated that the work-from-home arrangement is in accordance with the implementing rules and regulations of Republic Act 11534, also known as the Corporate Recovery and Tax Incentives for Enterprises Act.
PEZA also requested that the penalties imposed under FIRB Resolution No. 19-21 be avoided due to the potential consequences.
“PEZA-registered companies are coping with or recovering from the impacts of the pandemic. If it’s supposed to be a relief measure, we should not penalize the companies; rather, we must continue to assist our registered companies as much as possible given that protecting livelihoods of millions of Filipinos is an important national interest,” Plaza said.