Work from home extension approved in principle — PEZA

The Philippine Economic Zone Authority has confirmed it would seek a new round of Fiscal incentives Review Board requests to extend the work-from-home arrangement until March 2023.

In an interview, PEZA OIC-director general Tereso Panga disclosed that, in principle, the resolution to extend the said scheme was already approved by the PEZA Board.

“That will cover the sunset period, which is until December, under the CREATE regime invoking the business continuity plan provision of CREATE with the extension of the national state of calamity,” Panga told reporters in a Viber message. However, he said the matter would be discussed in the upcoming Board meeting on 26 August.

President Ferdinand Marcos Jr. said he is poised to extend the national state of calamity due to COVID-19 until December this year.

“However, PEZA management is prepared to extend the letter of authorities allowing for a 30-percent work from home limit until March 2023 to IT locators who were registered with PEZA before CREATE. These locators were initially issued WFH LOAs in March 2022 with a validity period up to 12 September 2022, which the FIRB sustained.

Panga said that with PBBM’s pronouncement to extend the national state of calamity until the end of the year, they expect FIRB to issue a supporting resolution to allow the extension of the 30-percent WFH limit for the same period, which will benefit as well the registered business enterprises covered by the CREATE regime.

“The extension of the 30-percent WFH limit until March 2023 is in keeping with the one-year validity period of LOAs issued by PEZA and in support of the IBPAP’s request for a more extended WFH authority so that the locators can plan better for the work schedule of their employees vis-a-vis increasing market demands.

“PEZA has been implementing its policy on the 30-percent WFH limit before the enactment of the Telecommuting and CREATE laws; thus, it is covered by the sunset provision of the CREATE,” Panga maintained.

He said PEZA is working closely with the Board of Investments and FIRB on institutionalizing the hybrid workplace, particularly for ecozone export-oriented locators that are required to operate in their designated IT centers.

“Moreover, since the Philippines is still in a national state of calamity, PEZA will request FIRB for the waiver of penalties (i.e., withdrawal of fiscal and non-fiscal incentives) for any breach of the 30-percent WFH limit–other than those penalties prescribed in the PEZA LOAs issued to its locators,” he added.

PEZA met recently with FIRB TWG to iron out the stringent penalties and conditions as imposed additionally by the BIR and BOC that are inconsistent with the CREATE and FIRB resolutions and which were issued without prior consultation with the investment promotion agencies.

“This regulatory incoherence will surely impact the viability of existing and prospective IT investors of PEZA. We are banking on the support of DTI Secretary Pascual and the FIRB to sustain the industry’s appeal–given the mounting call of some senators to liberalize the WFH policy for the locators to keep their incentives while availing of flexiwork, and as a measure to attract more investments into the country,” Panga said.

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