NEDA maintains BPO workers must work on-site after March

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Metro Manila (CNN Philippines, March 15) — The National Economic and Development Authority (NEDA) on Tuesday backed the government's decision to affirm the end-March work-from-home deadline for information technology-business process outsourcing (IT-BPO) firms.

"In the case of BPOs, while I understand their concern, the rest of the economy has already shifted to working back in the office," NEDA Secretary Karl Chua said in a virtual briefing.

"I also understand that the legal basis for providing incentives to BPOs is that they should be situated in an economic zone. I am not certain if homes of workers are economic zones. I think we will have to look at this from this perspective," he added.

However, the Philippine Economic Zone Authority has expressed support for a hybrid WFH setup — which the IT & Business Process Association of the Philippines (IBPAP) is pushing for.

PEZA earlier recommended to the Fiscal Incentives Review Board (FIRB) the approval of a policy allowing enterprises to operate under a WFH arrangement without the 10% onsite requirement and diminution of perks until Sept. 12, 2022.

However, the inter-agency body affirmed its decision instead — part of its oversight functions under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.

"PEZA will still file its appeal for reconsideration on the denial by the FIRB. We hear the concerns of our investors and their workers and we will continue to lobby on it. For the meantime, I call onto our enterprises to follow the decision of the FIRB to avoid any penalties," said PEZA Director-General Charito Plaza, who also cited concerns from registered firms on costs, health, and safety with the return to offices.

Still, Chua acknowledged the contribution of BPOs to the economy.

"The BPO sector performed very well and was very productive before the pandemic, during the pandemic, and I'm sure there is a big scope for them to also perform and contribute much to this new normal where we're all back in the office," the economic official said.

The government expects the economy to grow within 7-9% this year.

Growth of BPO industry at risk

Miguel Bengzon, Assistant Manager of Office Services - Tenant Representation of Colliers International Philippines, said the competitiveness of the local IT-BPM sector is at risk as it competes with other markets, like India, where increased WFH allowance may provide the advantage of stronger employee retention, engagement, and performance.

He also told CNN Philippines that BPO firms they spoke to want an operating environment that remains future thinking to accommodate the growth of the industry. This arrangement has also unlocked a number of benefits, especially on the part of employees, he noted.

Some companies have warned that a number of their workers might leave their jobs to go for companies that allow the work-from-home arrangement if this will be removed, Bengzon said.

He added that "flexibility is key to allow the industry to grow into the future," which includes adapting to the changing employee behavior, technologies, and the like.