2M JOBS. The information technology and business process management sector is expected to breach the 2 million mark in terms of employment by 2025, the IT and Business Process Association of the Philippines says on Monday (Jan. 22, 2024). Promoting hybrid work arrangement will help the industry meet its target, the group said. (File photo)
MANILA – Employment created by the information technology and business process management (ITBPM) sector is expected to hit the 2-million mark in 2025, IT and Business Process Association of the Philippines (IBPAB) president and chief executive officer Jack Madrid said Monday.
Madrid told reporters that the industry ended last year with a 1.7-million headcount and total revenues of USD35 billion.
The IBPAP forecast that the industry will grow by 4 to 7 percent in terms of hiring and revenues, hitting 1.84 million jobs and USD39 billion in revenues.
“I’m really excited about 2025… This is when we will cross the 2 million jobs level. That’s why it’s significant. It took over almost 20 years to hit 1 million jobs and we’re attempting to do the second million in less than six (years),” Madrid said.
He said promoting hybrid work arrangement will help in attracting Filipinos to work in the ITBPM industry.
Providing incentives to ITBPM companies, including those in the economic and freeport zones, will also lure ITBPM companies to set up and expand their operations in the country.
DOJ opinion
Meanwhile, the Department of Justice (DOJ) released its legal opinion dated Jan. 3 upon the request of Presidential Management Staff (PMS) Undersecretary Rodolfo John Robert Palattao IV, clarifying that only business activities done within the economic and freeport zone boundaries can continue availing of tax incentives under the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) law.
“Likewise, these enterprises are not prohibited from adopting a WFH (work-from-home) arrangement but will no longer be eligible to continue enjoying the tax incentives,” the DOJ opinion signed by Secretary Jesus Crispin Remulla said.
This means ITBPM companies that will operate 100 percent onsite can register their preferred investment promotion agency (IPA) with the Philippine Economic Zone Authority (PEZA) through its one-stop-shop system and be granted fiscal incentives under the CREATE law.
This means that ITBPM companies can enjoy fiscal incentives under the CREATE law as long as they operate 100 percent onsite and register with the Philippine Economic Zone Authority (PEZA), which is the preferred investment promotion agency (IPA) of ITBPM players because of its one-stop-shop system.
Firms that would like to adopt WFH arrangement can still get tax perks by registering with the Board of Investments (BOI).
“Work-from-home (arrangement) has affected the future of work not just the ITBPM industry. But never before has it been important that we give our employees work flexibility,” Madrid said.
“What’s important is the flexibility that we give our employees, and the flexibility that we also give to our investors… because all other ITBPM destinations are offering work-from-home flexibility, including India,” he added.
Madrid said India extended granting incentives to ITBPM activities adopting hybrid work arrangement until this year.
DTI recommendation
In an interview with trade reporters, Department of Trade and Industry (DTI) Undersecretary Ceferino Rodolfo reiterated the agency’s position to allow 30-percent WFH arrangement for registered business enterprises (RBEs) operating within ecozones.
“As we have submitted to the House of Representatives, the DTI actually recommends 30-percent work-from-home threshold for RBEs in ecozones,” Rodolfo said.
The DTI and the IBPAP express hope that the CREATE Maximize Opportunities for Reinvigorating the Economy (MORE) bill will include this measure to address the concerns of the ITBPM industry.
“In addition, BOI also supports allowing those who have transferred to BOI to seamlessly to go back to their PEZA registration, if they prefer… Once ecozones or locators have given this flexibility, we also support allowing those who have transferred to BOI to take advantage of this legal solution to go back to PEZA,” Rodolfo added. (PNA)
