PEZA says one-year WFH to help protect jobs, growth

Allowing economic zone locators to adopt work-from-home (WFH) arrangements for one year will help sustain business growth and preserve jobs amid external headwinds, the Philippine Economic Zone Authority (PEZA) said.

The Fiscal Incentives Review Board (FIRB) on April 10 approved a resolution that temporarily allows registered business enterprises (RBEs) to implement WFH arrangements without affecting their fiscal and non-fiscal incentives amid the national energy emergency.

“I am sure the economic zone locators will be happy with FIRB’s prompt approval of their request for increased WFH allowance — albeit up to 90% WFH limit only,” PEZA Director-General Tereso O. Panga told BusinessWorld.

“This will be a big relief already, in light of the anticipated shortage in fuel and electricity supply in the country given the worsening war conflict in the Middle East,” he added.

The FIRB said the resolution will be in effect one year from March 24, unless the state of national energy emergency is extended or lifted by President Ferdinand R. Marcos, Jr.

Mr. Marcos on March 23 declared a one-year state of national energy emergency, giving the government expanded powers to shield the economy from surging oil prices triggered by the war involving Iran, Israel and the US.

Under the FIRB measure, RBEs can adopt WFH arrangements for up to 90% of their total workforce or the employees engaged in the registered project or activity.

Prior to this measure, implementing rules and regulations of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy Act provide that RBEs may implement up to a 50% WFH arrangement but subject to the rules of the concerned investment promotion agencies (IPAs).

Mr. Panga said that the FIRB’s move allows RBEs to help mitigate the impact of the rising cost of transport, logistics, electricity, and basic goods.

He said that the remaining 10% of the workforce that needs to work on-site ensures that on-premises servers, critical equipment, tech support, and even payroll processing are managed properly.

“It is a fair policy as it promotes business continuity for both the economic zone developers and locator companies,” Mr. Panga said.

“In all these, the government wants economic zone developers and locators to continue to operate to be able to sustain the jobs and growth amid headwinds.”

The FIRB resolution also allows concerned IPAs to set a lower on-site work threshold, based on operational needs and specific circumstances, provided it is not less than 50% of the total workforce.

However, Mr. Panga said that the agency will “leave it up to the RBEs and their workers to fix their firm-level flexi-work arrangements without having to compromise the business objectives.”

Trade Secretary and PEZA Chair Ma. Cristina A. Roque said that the measure will benefit business process outsourcing (BPO) companies and even some manufacturing companies.

“This will allow RBEs located in economic zones full-flexibility to adopt WFH as a measure to maintain their cost-competitiveness and equally important, ease the burden of higher fuel prices, on their workforce — particularly, for example, those in the BPOs and the administrative workers of electronics companies,” she said in a Viber message.

The IT & Business Process Association of the Philippines (IBPAP) said that it proposed the measure to PEZA “as a practical business continuity measure for information technology and business process management companies and their workforce.”

“This recommendation was put forward to help manage potential disruptions linked to rising transportation costs, while supporting the well-being and productivity of employees who rely on daily commuting,” IBPAP said.

“It allows the industry to remain agile, sustain service delivery, and continue meeting the demands of global clients amid a shifting operating environment.” — Justine Irish D. Tabile, Senior Reporter