Philippine labor

As the world returns to offices, Philippines backs work-from-home setup

Ralf Rivas
As the world returns to offices, Philippines backs work-from-home setup

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BPOs get to keep their tax perks. The labor department also makes it clear that remote work is no different from work done in offices.

MANILA, Philippines – As some of the world’s largest companies encourage workers to return to offices, countries like the Philippines are giving firms more flexibility, at least for now.

For instance, the Philippine government has resolved a bitter standoff between information technology and business process management (IT-BPM) companies and ecozone managers, where companies feared they would lose tax perks if they continued a remote setup. 

The Fiscal Incentives Review Board (FIRB) ironed out the matter by transferring the registration of IT-BPM companies to the Board of Investments (BOI) from economic zones.

Currently, laws specify that companies in ecozones must conduct activities within geographical boundaries of the ecozone or freeport. But with the transfer to the BOI, boundary constraints or zone limits are lifted.

The FIRB also extended the 70% on-site, 30% work-from-home arrangement for IT-BPM companies until December 31.

“We recognize that the work-from-home arrangement is the new business model of most of the registered business enterprises. Hence, it is high time to resolve this issue faced by IT-BPM enterprises,” said Finance Secretary and FIRB Chairperson Benjamin Diokno.

The IT-BPM sector currently employs around 1.44 million Filipinos.

The IT and Business Process Association of the Philippines (IBPAP) said it has advocated for the hybrid work setup for two years. (READ: [OPINION] Working from home: A sort-of open letter to HR)

“IBPAP has been voicing the industry’s support for work-from-home/hybrid work since 2020. While it started out as an expedient measure in response to nationwide lockdowns, it very quickly ushered in a new era of work for the sector – reinforcing our agility and resilience and proving that the IT-BPM industry is an important pillar of the country’s economy,” IBPAP said in a statement.

Protecting employees working from home

Meanwhile, the Department of Labor and Employment (DOLE) has issued an order which protects employees working from home.

Department Order 237, signed by Labor Secretary Bienvenido Laguesma, emphasized that employees working from home should not be treated as second-class employees, adding that work done remotely must be viewed the same as work done in offices.

The order was a product of almost two months of consultations, according to DOLE. The department added that the order optimizes the “benefits of technology.”

“Under the revised rules, telecommuting employees are not considered field personnel except when their actual hours of work cannot be determined with reasonable certainty,” the department order read.

“All time that an employee is required to be on duty, and all time that an employee is permitted or suffered to work in the alternative workplace shall be counted as hours worked.”

What companies are saying

According to a survey by Sprout, a human resource analytics platform, 70.7% of remote employees in the Philippines love their current setup.

However, the survey also found that only 43.5% feel engaged. Sprout noted that while this may look counterintuitive at first, it’s possible that this sentiment “could be stemming from a love of work and the flexibility to work on one’s own terms – but the lack of support to make it sustainable in the long term.”

Simply put, workers want a hybrid setup, but also don’t want to lose out on opportunities to collaborate.

The survey found that 64.2% of human resource officers see a future of hybrid work, even after the pandemic is deemed under control. As for workers in offices, 42.9% feel “enthusiastic” about adopting a hybrid model.

These sentiments mirror what the rest of the world sees in remote work.

Figures from Colliers showed that 77% of companies will shift to hybrid, in stark contrast to the 20% posted pre-pandemic.

Meanwhile, 43% of surveyed companies said they have not set a return-to-office date. – Rappler.com

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Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.