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NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
*22 JUL-7 P3X)5
RECEIVED GY:
SENATE 
S. B. NO. 135
Introduced by Senator JOEL VILLANUEVA
AN ACT
ALLOWING THE ADOPTION OF ALTERNATIVE WORK 
ARRANGEMENTS IN ENTERPRISES REGISTERED WITH 
INVESTMENT PROMOTION AGENCIES, AMENDING FOR THE 
PURPOSE SECTION 309 OF THE NATIONAL INTERNAL 
REVENUE CODE, AS AMENDED AND FOR OTHER PURPOSES
EXPLANATORY NOTE
Republic Act No. 11165 or the Telecommuting or Work From Home 
(WFH) Law was signed into law on December 20, 2018. The law recognized the 
need to promote the welfare of employees in light of technological developments 
that opened up alternative avenues for employees to carry out their work. The 
WFH Law provides that an employer and employee in the private sector may 
enter into a telecommuting program upon such terms and conditions based on 
their agreement.1 At the time of its passage, the Act was principally meant to 
address the worsening traffic situation in Metro Manila and to promote work-life 
balance. Two years after its passage, the WFH Law became pivotal as the 
Filipino labor force shifted to alternative modes of work, especially online, 
because of the nationwide lockdown brought about by the COVID-19 pandemic.
According to the 2021 Work Reimagined Employee Survey conducted by 
Ernst & Young, 9 in 10 employees located in Southeast Asia prefer flexible work 
than the traditional office setup.2 Meanwhile, in a survey conducted by Robert 
Walters, 8 out of 9 professionals in the Philippines are satisfied with remote 
working arrangements, with 9 out of 10 noting a similar or increased level of
1 Section 4, Republic Act No. 11165
2 https://philstarlife.com/self/425740-ey-survey-employees-in-ph-sea-countries-want-flexible-work-to-stay-post-covid-19


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productivity while at home.3 In addition, more than 9 in 10 professionals want 
more work from home arrangements in the future, with an offer of such 
arrangement a significant factor in determining employee job satisfaction in job 
selection.4
In the Philippines, the WFH arrangement was instrumental for the IT-BPO 
sector in ensuring business continuity despite nationwide lockdowns. In fact, the 
arrangement facilitated the creation of 23,000 new jobs in 2020, and another 
100,000 new jobs in 2021.5 Meanwhile, revenues also increased by around 12% 
in 2021, reaching a total of $28.8 billion.6 According to the Department of Trade 
and Industry, the IT-BPO was the only sector that did not lay off workers and 
even continued to hire during the pandemic, which in turn, helped the economy in 
it’s recover, especially in generating jobs and contributing to dollar revenue 
generation.7
However, the WFH Law’s merits have not been fully realized for the IT- 
BPO sector. Earlier this year, the Fiscal Incentive Review Board (FIRB) required 
employees of the IT-BPO sector to return to their offices located in economic 
zones by April 1, 2022; otherwise, the employers will lose their tax incentives. 
This order was made despite the clamor of IT-BPO employees to continue with 
WFH arrangements, in light of the ongoing COVID-19 pandemic, rising fuel 
prices and unprecedented inflation.
This bill seeks to allow entities registered with Investment Promotion 
Agencies, such the Philippine Economic Zone Authority (PEZA) to enter into 
voluntary work-from-home arrangements with their employees, without losing 
their tax incentives. Indeed, adaptability has helped our country survive this 
pandemic, and we must ensure that flexibility emanates from our laws in light of 
the rapid technological developments and global best practices.
The immediate passage of this measure is earnestly sought.
SENATOR JOEL VILLANUEVAJU.
3 https://www.robertwalters.com.ph/content/dam/robert-walters/countrv/the-philippines/files/survGvs/the-truth-aboLit-
working-from-home.pdf
4 Id.
5 https://business.inquirer.net/342640/april-1-return-to-office-deadline-bucked-by-bpos#ixzz7Mqfxquak
6 Id.
7 Id.


NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES )
First Regular Session 
)
..■*T
l&Wl Semite
of t!)e
•22 JUL-7 P3:05
RHCEIVrDBV;
SENATE 
S. B. NO. 135
Introduced by SENATOR JOEL VILLANUEVA
AN ACT
ALLOWING THE ADOPTION OF ALTERNATIVE WORK 
ARRANGEMENTS IN ENTERPRISES REGISTERED WITH 
INVESTMENT PROMOTION AGENCIES, AMENDING FOR THE 
PURPOSE SECTION 309 OF THE NATIONAL INTERNAL REVENUE 
CODE, AS AMENDED AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
1 
SECTION 1. Chapter VI, Section 309 of the National Internal Revenue Code, as
2 
amended by Republic Act No. 11534, otherwise known as the “Corporate Recovery
3 
and Tax Incentives for Enterprises Act” (CREATE) is hereby amended to read as
4 
follows:
5
6 
SEC. 309. Prohibition on Registered Activities. - A qualified
7 
registered project or activity under an Investment Promotion
8 
Agency administering an economic zone or freeport shall, AS
9 
FAR AS PRACTICABLE, be exclusively conducted or operated
10 
within the geographical boundaries of the zone or freeport being
11 
administered by the IPA in which the project or activity is
12 
registered: PROVIDED, THAT NOTWITHSTANDING ANYTHING
13 
TO THE CONTRARY, SUCH REGISTERED BUSINESS
14 
ENTERPRISES SHALL HAVE THE OPTION TO OFFER A
15 
TELECOMMUTING PROGRAM TO ITS EMPLOYEES ON A
16 
VOLUNTARY BASIS, PURSUANT TO REPUBLIC ACT NO.
17 
11165, OTHERWISE KNOWN AS THE “TELECOMMUTING
18 
ACT,” UPON SUCH TERMS AND CONDITIONS AS THEY MAY
19 
MUTUALLY AGREE, AND IN COMPLIANCE WITH THE RULES
20 
AND REGULATIONS AS THE INVESTMENT PROMOTION
21 
AGENCY MAY PRESCRIBE: Provided, That a registered
22 
business enterprise may conduct or operate more than one
23 
qualified registered project or activity within the same zone or
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freeport under the same Investment Promotion Agency: Provided, 
further, That any project or activity conducted or performed 
outside the geographical boundaries of the zone or freeport shall 
not be entitled to the incentives provided in this Act, unless such 
project or activity is conducted or operated under another 
Investment Promotion Agency, OR SUCH PROJECT OR 
ACTIVITY IS CARRIED OUT IN ACCORDANCE WITH THE 
TELECOMMUTING ACT AND THE RELEVANT RULES AND 
REGULATIONS OF THE CONCERNED INVESTMENT 
PROMOTION AGENCY ON THE CONDUCT OF PROJECTS OR 
ACTIVITIES OUTSIDE OF THE ZONE OR FREEPORT.
SEC. 2. Implementing Rules and Regulations. - Within sixty (60) days from the 
effectivity of this Act, the Secretary of Finance, in consultation with the Department of 
Trade and Industry, the Commissioner of Internal Revenue, the Board of 
Investments, the Philippine Economic Zone Authority and other Investment 
Promotion Agencies, shall promulgate the necessary rules and regulations to 
implement the provisions of this Act. Failure to promulgate the rules and regulations 
shall not prevent the implementation of this Act upon its effectivity.
SEC. 3. Separability Ciause. - Any portion or provision of this Act that is declared 
unconstitutional or invalid shall not have the effect of nullifying other portions or 
provisions hereof as long as such remaining portions can still subsist and be given 
effect in their entirety.
SEC. 4. Repealing Clause. - The relevant provisions of Republic Act No. 7916 or 
“The Special Economic Zone Act of 1995,” Republic Act No. 7227, as amended or 
“The Bases Conversion And Development Act of 1992,” Republic Act No. 7922 or 
“The Cagayan Special Economic Zone Act of 1995,” Republic Act No. 7903 or “The 
Zamboanga City Special Economic Zone Act of 1995,” Presidential Decree No. 538 
or the Act “Creating And Establishing The Phividec Industrial Authority And Making It 
A Subsidiary Agency Of The Philippine Veterans Investment Development 
Corporation Defining Its Powers, Functions And Responsibilities, And For Other 
Purposes,” Republic Act No. 9490 or “The Aurora Special Economic Zone Act of 
2007,” Republic Act No. 9728 or the “Freeport Area of Bataan (FAB) Act of 2009,” 
Republic Act 9593 or “The Tourism Act of 2009,” and all other similar laws and 
provisions of laws for all other Investment Promotion Agencies as defined under 
Section 293(H) of the National Internal Revenue Code, as amended.
SEC. 5. Effectivity. - This Act shall take effect fifteen (15) days after its publication 
in the Official Gazette or in a newspaper of general circulation.
Approved,