Backward move to mandate working from offices

The paper says the government really needs to change its old mindset that being physically present in the workplace means higher productivity.


March 21, 2022

MANILA – While the rest of the world saw the many benefits of work-from-home (WFH) and other hybrid arrangements during the COVID-19 pandemic, here is the government forcing workers in the information technology-business process management (IT-BPM) sector to physically report to their offices if only to prop up the economy by making them spend on dining and shopping. And in a contrasting move, Socioeconomic Planning Secretary Karl Chua is pushing for a four-day workweek for government agencies to help state workers save on transport expenses.

IT-BPM companies would have to require their entire workforce to return to their offices by April 1 after the inter-agency Fiscal Incentives Review Board (FIRB) rejected during its meeting last Feb. 21 requests to extend remote-work arrangements. The Department of Finance (DOF) said the FIRB upheld its Resolution No. 19-21, which allowed IT-BPM firms in economic zones to implement WFH arrangements only up to the end of this month. The Philippine Economic Zone Authority (Peza), an investment promotion agency overseeing the fiscal incentives of several IT-BPM firms, has been pushing to extend this to at least until Sept. 12, 2022.

“The WFH arrangement is only a time-bound temporary measure adopted during the surge of the COVID-19 pandemic. Given the increasing vaccination rate of Filipinos nationwide, we can now undertake safe measures for physical reporting of employees, including those working in the IT-BPM firms,” explained Finance Secretary and FIRB chair Carlos Dominguez III. “The employees’ return to the office would provide more opportunities and pave the way for the recovery of local micro, small and medium enterprises that depend on IT-BPM employees for their livelihood,” he added. Firms located in economic zones that fail to comply with the FIRB rules will lose their fiscal perks such as income tax holidays and the low 5-percent tax on gross income earned. Peza has advised IT-BPM companies to comply with the decision of the FIRB while it asks the review board to reconsider its decision, or at least allow a hybrid working scheme wherein 40 to 60 percent of the industry’s employees would work from home.

The IT-BPM sector’s concerns are very valid. The pandemic has changed the way the industry viewed remote work, which used to be unthinkable. Jack Madrid, president of the IT and Business Process Association of the Philippines (IBPAP), said in an interview with the Inquirer that the industry realized it could still grow even with its employees working remotely. This setup helped the industry thrive despite the lockdowns during the pandemic, creating 23,000 new jobs in 2020 and another 100,000 last year, while revenues rose by 12 percent to $28.8 billion, according to IBPAP data. By the end of last year, IBPAP said about 60 percent of the industry still worked remotely. “We have discovered that our work, the work being done by 1.4 million Filipinos (in the industry), can be done at home,” Madrid pointed out. “We were able to achieve that without sacrificing productivity and customer satisfaction ratings … I think we did not lose any business. In fact we grew.”

The workers’ concerns about the government’s lack of long-term plans for testing and vaccination in the workplace, health insurance, and other measures to protect on-site workers and commuters, and the poor public transport system in the metropolis also support the suspension of the return-to-work order. Its bad timing is further buttressed by the fact that fuel prices have soared to unprecedented levels and ordinary consumers have started complaining about the rising cost of living. Peza Director General Charito Plaza agreed that remote-work arrangements should continue as costly fuel has made transportation more expensive for workers.

The government really needs to change its old mindset that being physically present in the workplace means higher productivity. The pandemic and the IT-BPM sector’s performance in the past two years showed that employees can just be as productive working from home. Hybrid work arrangements should be made part of the “new normal” and take into account that WFH actually opened new opportunities for people who cannot physically report for work, among them parents who have to stay at home to take care of household chores, senior citizens, and persons with mobility problems. The most practical option is a hybrid setup wherein an employee physically reports to the office a few days a week and works at home on other days, as health experts have determined that people also need to socialize—meet friends, attend work meetings, etc.—to stay mentally and emotionally fit. Forcing IT-BPM employees now to physically report for work will do more harm than good in terms of productivity. The government must reconsider its decision on the IT-BPM sector especially since its counterparts abroad are expected to continue WFH arrangements even after the pandemic. India, the Philippines’ biggest competitor, is already adjusting its policies and tax breaks to support a remote-work setup and the Philippines should do the same, or risk getting left behind.

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