• 3,000 firms
  • Independent
  • Trusted
Save up to 70% on staff

News » CREATE MORE bill to reshape Philippines’ BPO landscape

CREATE MORE bill to reshape Philippines’ BPO landscape

create-more-bill-to-reshape-ph-bpo

MANILA, PHILIPPINES — The recently approved Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) bill is poised to significantly impact the business process outsourcing (BPO) sector in the Philippines. 

The bill aims to make the Philippines a more attractive destination for business investments by lowering corporate income tax rates from 25% to 20% for both domestic and foreign companies.

Tax incentives and remote work flexibility

The CREATE MORE bill also institutionalizes work-from-home (WFH) arrangements, allowing registered business enterprises (RBEs) up to 50% remote work flexibility. This provision is expected to influence how BPO firms manage their workforce and office space requirements. 

Kevin Jara, director of office services at Colliers, added that “the clarity provided under CREATE MORE on key issues such as VAT exemption, zero-rating, and WFH arrangements offers investors greater regulatory stability and transparency.”

Shifts in office space utilization

The bill’s provisions could lead to shifts in office space utilization within the BPO sector. Companies that transferred from the Philippine Economic Zone Authority (PEZA) to the Board of Investments (BOI) in 2023 may face challenges in maintaining tax incentives if they do not adhere to onsite work requirements unless specific exemptions are granted. 

This could result in a renewed demand for office space as firms adjust to fulfill these requirements.

Conversely, firms registered under BOI, which does not manage economic zones or free ports, may continue to benefit from up to 100% WFH arrangements. This flexibility is crucial for BPO companies that have adapted remote work practices during the COVID-19 pandemic.

Economic growth and investment attraction

The CREATE MORE bill aligns with the government’s objectives of attracting investments and creating jobs. 

The bill is expected to stimulate economic growth and increase foreign direct investments by eliminating value-added tax (VAT) on essential services and offering VAT zero-rating and duty exemptions for large domestic enterprises.

Industry support and future prospects

The Philippine Senate approved the third and final reading of the bill last Monday, September 9. 

Senator Sherwin Gatchalian, who sponsored the bill, stated that “CREATE MORE offers [enhanced] and targeted incentives to further drive investment and economic recovery in the country.”

Meanwhile, House Ways and Means Committee Chairman Joey Salceda expressed hope that President Ferdinand R. Marcos Jr. will sign the measure soon, given his certification of urgency on the matter.

“It sustains the President’s very strong pro-investment record and could cement his legacy as the President who fixed manufacturing,” he added.

The Information Technology and Business Process Association of the Philippines (IBPAP) previously expressed support for these reforms, anticipating that they will help the BPO industry achieve its 2024 targets of $39 billion in revenue and 1.84 million full-time employees. The association believes that enhanced incentives and policy clarity on remote work arrangements will bolster the sector’s growth prospects.

As the CREATE MORE bill awaits presidential approval, its potential effects on the BPO sector remain a focal point for industry stakeholders. The law’s implementation could redefine how companies operate within the Philippines, balancing tax incentives with evolving workplace dynamics.

Start your
journey today

  • Independent
  • Free
  • Transparent

About OA

Outsource Accelerator is the trusted source of independent information, advisory and expert implementation of Business Process Outsourcing (BPO)

The #1 outsourcing authority

Outsource Accelerator offers the world’s leading aggregator marketplace for outsourcing. It specifically provides the conduit between Philippines outsourcing suppliers and the businesses – clients – across the globe.

The Outsource Accelerator website has over 5,000 articles, 450+ podcast episodes, and a comprehensive directory with 4000+ BPO companies… all designed to make it easier for clients to learn about – and engage with – outsourcing.

About Derek Gallimore

Derek Gallimore has been in business for 20 years, outsourcing for over eight years, and has been living in Manila (the heart of global outsourcing) since 2014. Derek is the founder and CEO of Outsource Accelerator, and is regarded as a leading expert on all things outsourcing.

“Excellent service for outsourcing advice and expertise for my business.”

Learn more
Banner Image
Get 3 Free Quotes Verified Outsourcing Suppliers
3,000 firms.Just 2 minutes to complete.
SAVE UP TO
70% ON STAFF COSTS
Learn more

Connect with over 3,000 outsourcing services providers.

Banner Image

Transform your business with skilled offshore talent.

  • 3,000 firms
  • Simple
  • Transparent
Banner Image