The country’s group of semiconductors and electronics manufacturers, on Tuesday, warned of losing $3.6 billion following a set of concerns on the surprise audit system introduced by the Bureau of the Internal Revenue (BIR) to monitor compliance with the 70/30 work set-up.
The Semiconductors and Electronics Industry of the Philippines, Inc. (SEIPI) said five companies have pulled out from commitments to locate in the Philippines, and another two firms, with combined investments of $400 million, threatening to do the same.
“There are lots o concerns and what happened is capital flight. We have about 5 companies that moved to Vietnam, Thailand, and China instead of investing in the Philippines,” said SEIPI president Dan Lachica at an open forum during the signing of a memorandum of understanding Tuesday between the Philippine Economic Zone Authority (PEZA) and the Department of Environment and Natural Resources (DENR).
The MOU will seal the two agencies’ cooperation to identify idle lands for the development of new economic zones.
With the fresh set of capital flight, the country’s bid to provide jobs to 25,000 Filipinos was put in jeopardy.
On top of BIR inconsistencies, Lachica underscored the effects of incentives rationalization, seen to have detrimental to companies as well as the lack of support to the work-from-home work set-up which has “undermined the effectiveness of PEZA.”
Jack Madrid of the IT Business Process Association of the Philippines (IBPAP) said investors are looking at a “black and white clarity” on the WFH issue.
The support from Senator Imee Marcos to secure a resolution from the Fiscal Incentives Review Board (FIRB) for the institutionalization of the 70/30 work ratio.
“We’ve been working hard for the 70/30 set-up,” said Madrid stressing that the sector has been observing the practice way before the push for WFH during the pandemic.
Marcos, a staunch advocate for the continuation if not institution of the WFH arrangement, asked for ITBAP’s cooperation not to antagonize agencies of interest.
“The reality is that it needs to be addressed in a more nuanced way. We can’t just say 70/30 absolutely to everything under the sun,” she said.
She asked the group to identify the niches that urgently need as high as 90 percent on-site and the other areas where WFH is needed, asap, “so we don’t scare real estate developments, hotels and restaurants, shopping and malls.”
“While we want it to be black and white, we also want it to be more precise and detailed, allowing for greater flexibility as well, because this is all an experiment not only in the Philippines. I’m sure as well, the foreign chambers and our foreign locators, everyone in the world is struggling with the right way to do work from home and work from anywhere,” Marcos added.
Earlier, incoming Trade secretary Alfredo Pascual said the Department of Trade and Industry (DTI) will support the right balance to promote remote work.