Call Centers in Philippines to Allow Permanent Remote Work

Call center remote work
Photo by Mimi Thian on Unsplash

The Philippines’ finance secretary has clarified a dispute that had been looming over the economically significant sector, stating that call centres and other businesses engaged in business process outsourcing may preserve their tax benefits and permit their staff to work from home.

The approximately $30 billion sector has lobbied for a permanent work-at-home arrangement, which was introduced during COVID-19 lockdowns and is now supported by the majority of the sector’s 1.4 million employees. However, many BPO firms must keep employees on-site in order to take advantage of financial benefits due to an investment regime under which they operate.

“The tax incentives will continue, [and] they [BPOs] can opt to do it from home.”

Benjamin Diokno, Finance Secretary

Diokno, who chairs the Fiscal Incentives Review Board, met on Wednesday and made the decision that BPO firms registered with the Philippine Economic Zone Authority can transfer their investment registration to the Board of Investments, which does not require on-site employees for companies to keep their incentives.

The work-from-home arrangement will become permanent once the policy is established. However, the country’s real estate sector, whose office sector has profited from the outsourcing growth, is also perceived as being threatened.

In accordance with the pandemic-related “state of calamity” that was recently extended until December, BPO businesses with PEZA registration are currently permitted to have 30% of their workforce working remotely.

The Philippines’ IT and Business Process Association have been advocating for a long-term hybrid work environment. Without it, the Philippines’ BPO rival, India, may win market share, the group’s leader has previously said.

Last month, the sector—which also includes IT specialists, animators, and other non-voice service providers—unvealed a plan to add 1.1 million jobs between 2023 and 2028, under the incoming presidency of Ferdinand Marcos Jr., but highlighted that hybrid employment is essential to reaching such an ambitious goal.

The industry, which is widely regarded as a pillar of the Southeast Asian country’s economy, saw a 10.6% increase in revenue last year, to $29.5 billion, thanks to pent-up demand from the fintech and e-commerce segments, which expanded rapidly during the pandemic, as well as aggressive cost-cutting initiatives during the health crisis.

The IBPAP anticipates revenue to increase by 8% to 10% this year and a 7%–8% increase in employee headcount from 1.44 million last year.

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