Cebu’s IT-BPM group seeks DTI’s help to solve importation woes

MEMBER companies of Cebu IT-BPM Organization (CIB.O) have sought the help of the Department of Trade and Industry (DTI) to connect them to concerned government agencies to ensure a seamless transition of Cebu’s information technology and business process management (IT-BPM) firms from the Philippine Economic Zone Authority (Peza) to the Board of Investments (BOI).

In a letter addressed to DTI Secretary Alfredo Pascual, CIB.O requested the DTI to “organize an online forum with concerned agencies to discuss the fine details that will allow the seamless Peza-BOI transition process” after member companies of CIB.O face importation challenges, particularly on equipment importation.

“Recent pronouncements by government organizations on the IT-BPM industry’s transition from Peza to BOI is one major concern that everyone is dealing with. It seems that what is happening is totally opposite from pronouncements that the transition will be ”smooth and seamless,” the letter stated.

One major hurdle the group identified is in the area of “importations” where the new process will take more time and would be more costly for registered business enterprises (RBEs).

The group complained about the confusing guidelines implemented as a result of the transition.

CIB.O explained that to take advantage of similar tax incentives for shipments, RBEs will need to file a tax exempt indorsement (TEI) for every shipment at Department of Finance-Revenue in Manila but by the time the TEI is issued, the shipment/transfer of goods to Cebu are already tagged as “abandoned” by the Bureau of Customs (BOC).

“Hence, RBEs will have to pay additional fees again,” the group said, citing the lengthy process and unclear policies involved.

“Between Peza/BOI and BOC, they are confused on what process to follow. RBEs are crossing from one office to another, and ironically they have a different understanding and interpretation of the processes. Primarily, the left hand, disagrees with the right hand on how things should be done,” the group stressed.

CIB.O said they want “crystal clear guidelines and procedures” so as not to affect business operations and productivity. The group emphasized that any delays in the release of goods are additional costs to RBEs.

“While that confusion among concerned agencies are ongoing, and authorities are still in the dark as to how this should be dealt accordingly, the shipments of concerned RBE’s are on hold and incurring daily penalties,” the group said.

In September last year, Pascual vowed that the procedure for transfer of registration from Peza to BOI will be seamless.

The DTI chief chairs both Peza and BOI.

The Fiscal Incentives Review Board announced in the same month that registered IT-BPM firms in economic zones can implement full work-from-home arrangements and still enjoy fiscal incentives by transferring their registration to the BOI, in a bid to address the issue without violating existing laws.

Ending 2022 on strong note

The IT-BPM ended 2022 on a strong note with full-time employees (FTEs) growing 8.4 percent or by 121,000, bringing the industry’s total headcount to 1.57 million. The sector also recorded a growth of 10.3 percent in revenues to reach US$32.5 billion in 2022.

Based on IT and Business Process Association of the Philippines’ Roadmap 2028, the Philippine IT-BPM industry can reach 1.7 million FTEs and $35.9 billion in revenues in 2023.