A bill has been filed in the Senate seeking to allow investment promotion agency-registered enterprises to adopt work-from-home, hybrid, and other flexible work arrangements without losing their fiscal incentives.
Senate Bill No. 2148 seeks to amend the tax code to remove the uncertainty faced by IPA-registered firms when implementing alternative work arrangements outside economic zones and freeports.
Under existing rules, IPA-registered enterprises are generally required to conduct their registered activities exclusively within zone boundaries. This has raised concerns that companies allowing remote or hybrid work could risk losing their tax privileges.
The proposed measure seeks to allow telecommuting, work-from-home arrangements, hybrid setups, compressed workweeks, and other flexible work modes while preserving the incentive entitlements of registered enterprises.
“We must understand that in the context of how our work is done today, the stakes go beyond balance sheets,” Senator Joel Villanueva, who filed the bill, said.
“Flexible work arrangements offer meaningful relief to workers facing rising transportation costs, long commuting hours, and increasing economic pressures. Flexible work arrangements even benefit locators as they allow businesses to stay resilient and investment-friendly,” he added.
The bill builds on Republic Act No. 11165, or the Telecommuting Act, which Villanueva authored in 2018 to establish the legal framework for telecommuting in the private sector.
Senate Bill No. 2148 seeks to extend that framework to the fiscal incentives regime covering IPA-registered enterprises, an area that has remained unclear even as remote work became common across industries.
“The fuel crisis triggered by the recent Middle East conflict further demonstrated the critical role of these work arrangements in sustaining employment, preserving investments, and maintaining economic activity during periods of disruption,” Villanueva said.
“Some enterprises have demonstrated the successful implementation of alternative work arrangements by continuing to deliver services efficiently and competitively on a global scale,” he added.
Under the bill, all alternative work arrangements must be voluntary and mutually agreed upon by employers and employees, in line with the Telecommuting Act.
The measure also prohibits any reduction in labor standards, security of tenure, compensation and benefits, occupational safety and health standards, data privacy and cybersecurity protections, and other rights under the Constitution and the Labor Code.
Concerned IPAs may issue guidelines for implementation, monitoring, reporting, and compliance, but these must be consistent with the law and must not impair the incentive entitlements of registered firms.