DTI supports BPO sector’s call to extend WFH scheme

The Department of Trade and Industry said over the weekend it supports the extension of the work-from-home set-up of business process outsourcing companies while they continue to receive incentives as Philippine Economic Zone Authority-registered enterprises.

“During the next board meeting of the Fiscal and Incentives Review Board, we will be proposing a resolution for the FIRB to approve the WFH arrangement even beyond Sept. 12, 2021,” said Trade Undersecretary and Board of Investments managing head Ceferino Rodolfo.

Most BPO companies and call centers receive fiscal incentives from the government because they are located in economic zones administered by PEZA.

PEZA, at the height of the COVID-19 pandemic and lockdown, asked the national government to allow the resumption of BPO operations through the WFH arrangement of companies and employees. The arrangement is supposed to end in September.

Ceferino while PEZA-registered companies were allowed to have as many as 90 percent of their employees work from home last year, the BOI was unsure if it could allow the same percentage this year.

He said there is a specific section on the implementing rules and regulation of the Corporate Recovery and Tax Incentives for Enterprises Act that may allow for an extension of the WFH set-up.

“I’m just not sure if we can get the ceiling level of 90 percent work-from-home, or it will be reduced. We cannot promise that at the moment, but we’re in close discussions for the impact analysis with the group of [Information Technology and Business Process Association of the Philippines president and chief executive] Rey Untal,” he said over the weekend.

Rodolfo said the BOI was also working on the removal of geographical restrictions for new PEZA-accredited building, the home of information technology and BPOs in Metro Manila.

He said the BOI was in close coordination with the Department of Finance and other government agencies through the National Employment Recovery Strategy.

“Currently, because of the Investments Priorities Plan and the CREATE law, we cannot register new BPOs in the NCR. In our discussions with the DOF, they said we can add new IT zones in areas vacated by previous occupants. As long as there is leasable space abandoned by other companies or locators, we can take advantage of those spaces,” Rodolfo said.

Industry data showed that available PEZA-accredited IT space declined, resulting in insufficient supply to meet industry demand. It is estimated that there are only 126,940 square meters of PEZA-accredited office space, compared to the forecasted annual demand of 450,000 square meters by IT-BPO companies.

The industry was also facing a challenge in talent availability in the countryside. Most IT-BPM companies that were successful in expanding to provinces were mostly engaged in voice services.

Industry players said that as the industry pivots to digital, talent availability for mid to high complexity work was limited to metro cities such as Manila and Cebu.