REAL ESTATE brokerage and consultancy firm KMC Savills has cautioned against requiring business process outsourcing (BPO) firms in economic zones to conduct on-site work, stressing the importance of careful handling and maintaining a liberal environment conducive to private companies.

“We have to be careful in terms of issuing mandates to companies and businesses on how to run their business, in terms of what they should and should not be doing,” KMC Savills Chief Executive Officer Joe Curran said on the sidelines of a media briefing in Taguig City last week.

“It is important that Western corporates feel like they’re working with the government on a liberal environment where they’re not being dictated to as to what they do,” he added.

Mr. Curran also said that companies are faced with a challenge of making their offices more appealing to employees.

“I think the challenge for companies is really to make their offices as places where people will want to come and work… One of the good things about working in the Philippines is the office culture. It’s such a fun environment and it’s such a great environment to work in,” Mr. Curran said.

“We have to understand that the Philippines is also in competition with other markets when it comes to attracting BPO work. We’re in competition with Malaysia, India, and markets around Southeast Asia or Eastern Europe, also the emergence of Africa as well, for some of these roles,” he added.

On January 3, the Justice department issued a legal opinion on the eligibility of tax incentives for registered business enterprises (RBEs) regarding remote work, saying that BPO companies within economic zones must work onsite to maintain their tax benefits.

Justice Secretary Jesus Crispin C. Remulla said that Section 309 of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law “requires registered projects under an investment promotion agency (IPA) administering an ecozone or freeport to be exclusively conducted or operated within the geographical boundaries of the zone or freeport.

The country could expand hybrid work for the BPO sector via several pending legislative proposals.

Under the CREATE to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) bill, the BPO sector will be allowed to “conduct business under alternative work arrangements.”

The Fiscal Incentives Review Board previously allowed RBEs to move their registration to the Board of Investments from the Philippine Economic Zone Authority if they wanted to continue with their remote work arrangements and retain tax incentives.

For 2024, the local BPO industry is aiming a 7-8% growth in head count, with a revenue of $39 billion. It generated $35 billion in revenue and employed 1.7 million last year. — Revin Mikhael D. Ochave