DoF’s Diokno concedes ‘new workforce models’ needed for BPO industry

THE GOVERNMENT will support new modes of deploying workers as the business process outsourcing (BPO) industry transitions to a new regulator which will be more permissive of work-from-home (WFH) arrangements, Finance Secretary Benjamin E. Diokno said.

“The Philippine government stands ready to support the continued growth of IT-BPM companies by building an enabling business environment in order to boost the country’s competitiveness in the field of business processes and services,” Mr. Diokno was quoted as saying by the Department of Finance (DoF) in a conference last week.

The BPO industry, also known as the information technology and business process management (IT-BPM) industry, is seeking to maintain its ability to offer WFH arrangements to its employees, embroiling it in a dispute with the government.

The law requires BPOs registered with the Philippine Economic Zone Authority to perform most of their work within economic zones in order to continue enjoying their tax breaks. As a solution, the government has proposed a transfer of registration to the Board of Investments, which does not enforce the economic zone requirement.

The Fiscal Incentives Review Board has said the transfer of registration will “resolve the sector’s long-standing issue on tax incentive claims while performing business activities beyond their zone limits.”

“Given the global contact center and business processing services markets’ exponential growth in the past 15 years, the DoF strongly recognizes the need to integrate new, adaptive, and sustainable workforce models to boost the Philippines’ competitiveness in the field of business processes and services,” Mr. Diokno said.

The industry is expected to generate up to 1.1 million direct jobs by 2028.

“In the Asia-Pacific region, the Philippines remains one of the most preferred locations for delivering business processing and contact center services,” according to the DoF.

“Moreover, with various firms employing new techniques and work models, the IT-BPM sector has effectively set the stage for digitalization to flourish in the Philippines,” it added.

Mr. Diokno also noted that the COVID-19 pandemic was a catalyst for the industry to evolve even faster, resulting in a “dynamic, reliable, and significantly more agile IT-BPM industry that is aligned with the DoF’s push for a sustainable and digitally-powered economy.” — Luisa Maria Jacinta C. Jocson