The Philippines has allowed outsourcing companies to fully implement remote work while keeping tax perks, resolving a months-long issue in favor of the economically important industry.
Information technology and business process outsourcing firms, which include call centers, may enjoy incentives under a work-from-home setup by shifting their registration from the Philippine Economic Zone Authority to the Board of Investments or BOI, according to separate statements from the Finance and Trade Departments.
"From the beginning, our priority has been to secure a solution for the sector's WFH setup, which has become the new normal post-pandemic," Trade Secretary Alfredo Pascual said in a statement sent to media Monday. The previous administration's economic officials wanted outsourcing companies to return to the office to help boost economic activity, or risk losing their tax perks.
Outsourcing industry players however earlier warned that the return-to-office push could threaten their growth, as more employees opt to work from home due to the pandemic.
Outsourcing revenues reached $29.5 billion in 2021, near the $31 billion cash remitted by overseas Filipinos for that year. The industry that's been a key economic pillar can create 1.1 million new direct jobs by 2028, according to the IT & Business Process Association of the Philippines.
Finance Secretary Benjamin Diokno said in a separate statement that the revised rule "establishes a more permanent solution to the issue." Outsourcing firms may continue their economic zone registration and remote work for up to 30 per cent of workers until the end of the year during the transition. The BOI is the only investment promotion agency that's not covered by a legal requirement for projects to be in an ecozone or freeport to qualify for tax perks.