The Philippines comprises of a number of special economic zones or SEZ. These zones are highly developed or areas with the potential to turn into “highly developed agro-industrial, commercial, tourist, banking investment, and financial [centers],” according to the Republic Act No. (RA) 7916. These zones welcome foreign and local investors in order to open more job opportunities.

However, the Philippine Economic Zone Authority (PEZA), the government agency in charge of giving accreditation to companies for incentives and eligibility to operate in special zones, finally gave in, providing support to the tax reform. The decision due to the tax reform, the tax reform itself, and the recent moratorium on new economic zones will heavily affect the Business Process Outsourcing (BPO) Office demand, as confirmed by Janlo de los Reyes, Head of Research and Consulting of Jones Lang LaSalle (Philippines), Inc. (JLL).

“Definitely I think (office space demand is) going to take a hit. What is important now for the stakeholders is clarity about what is going to happen now because up until now, wala pa naman (there is still no) major decision in terms of what are the final regulations, what are the final incentives,” he said.

As for the outsourcing firms, there are challenges waiting their way. They will need to make changes based on the Comprehensive Income Tax and Incentive Rationalization Act (CITIRA) bill, which is set to be filed in the Senate. These businesses are worried about the fiscal incentives as there is a transition timeline of changes. The BPO companies who want to expand outside in the capital, on the other hand, will find it hard to look for office spaces that are recognised by PEZA.

The tax reform may bring about setbacks for the industry. But, there’s still progress, and there are outsourcing firms eager to help businesses that want to start in Metro Manila or different parts of the country.

If you want to start a new office in the country, Ezy Outsourcing Hub is your gateway to outsourcing and offshoring. We offer outsourcing solutions Philippines perfect for any business need.

Reach us to us to know more about our services. Contact us through the following:

Phone: (PH) +63961 237 9718 or +63 917 568 0402 / (AU) +61 419 200 663