NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES
First Regular Session
SENATE
S.B. No. 1337
01 tlif S? ' rtar.i>
*22 SEP 21 A 8:47
RliCElVLD BV:
Introduced by SEN. WIN GATCHALIAN
AN ACT AMENDING SECTION 309 OF THE NATIONAL INTERNAL REVENUE 
CODE, AS AMENDED, AND FOR OTHER PURPOSES
EXPLANATORY NOTE
If there is any good that the COVID-19 pandemic has taught the world, it is the 
viability of flexible working arrangements. In 2018, Republic Act No. 11165 or the 
Telecommuting Act was passed which aimed to protect the rights of workers and 
promote their welfare in light of technological developments that has allowed new and 
alternative avenues for employees to carry out their work even outside the confines 
of their offices.
During the height of the pandemic, companies were compelled to institute 
telecommuting arrangements. Now that community quarantine restrictions have 
eased and we are slowly putting the pandemic behind us, telecommuting arrangement 
remains and is the way of the future. In fact, in a recent global survey by a top online 
employment company, 80% of Filipinos prefer jobs that allow a remote or hybrid work 
setup.1
1 Most Filipinos prefer remote or hybrid work setup, Manila Standard, September 10, 2022, available
af https://manilastandard.net/business/biz-plus/314259065/most-filipinos-prefer-remote-or-hybrid- 
work-setup.html [date last accessed: September 20, 2022]


However, the current wording of the 1997 National Internal Revenue Code or 
the Tax Code, as amended, does not permit the institution of a telecommuting 
program by business enterprises registered under an Investment Promotion Agency 
without running the risk of losing its tax incentives. Section 309 of the Tax Code 
requires that a qualified registered project or activity shall be exclusively conducted or 
operated within the geographical boundaries of the zone or freeport being 
administered by the Investment Promotion Agency in which the project or activity is 
registered.
Thus, this measure seeks to allow the institution of telecommuting programs 
by registered business enterprises while keeping their tax incentives. Moreover, this 
measure aims to improve the quality of life, well-being, and productivity of 
employees,2 not to mention alleviate the burden of rising costs of living, especially 
transportation and fuel costs. In addition, this also ensures that the information 
technology and business process management (IT-BPM) sector remains globally 
competitive.3
In view of the foregoing, the immediate passage of this bill is hereby earnestly
sought.
N GATCHALIaN
2 WFH improved well-being, productivity of workers: survey, Malaya, May 10, 2022, available at 
https://malaya.com.ph/news_business/wfh-improved-well-being-productivity-of-workers-survey/ 
[date last accessed: September 20, 2022].
3 'WFH scheme will make BPO sector more competitive', BusinessMirror, August 22, 2022, available 
af https://businessmirror.com.ph/2022/08/22/wfh-scheme-will-make-bpo-sector-more-competitive/ 
[date last accessed: September 20, 2022].


NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
SENATE
S. B. No. 1337
of II).* .€'1 ’ : rt:rp
•22 SEP 21 A8:47
RliCtiV. D
Introduced by SEN. WIN GATCHALIAN
AN ACT AMENDING SECTION 309 OF THE NATIONAL INTERNAL 
REVENUE CODE, AS AMENDED, AND FOR OTHER PURPOSES
Be it enacted by the Senate and the House of Representatives of the Philippines 
in Congress assembled:
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SECTION 1. Section 309 in Chapter VI entitled "Transitory and
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Miscellaneous Provisions" of the National Internal Revenue Code of 1997", is
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hereby amended to read as follows:
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"SEC. 309. Prohibition on Registered Activities. — A qualified
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registered project or activity under an Investment Promotion Agency
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administering an economic zone or freeport shall be exclusively
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conducted or operated within the geographical boundaries of the zone
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or freeport being administered by the Investment Promotion Agency in
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which the project or activity is registered: Provided, That a registered
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business enterprise may conduct or operate more than one qualified
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registered project or activity within the same zone or freeport under the
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same Investment Promotion Agency: Provided, further. That any project
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or activity conducted or performed outside the geographical boundaries
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of the zone or freeport shall not be entitled to the incentives provided in
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this Act, unless such project or activity is conducted or operated under
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another Investment Promotion Agency: PROVIDED, HOWEVER,
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THAT INSTITUTING A "TELECOMMUTING" PROGRAM AS


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DEFINED UNDER REPUBLIC ACT NO. 11165, OTHERWISE 
KNOWN AS "THE TELECOMMUTING ACT/' INCLUDING WORK- 
FROM-HOME ARRANGEMENTS, SHALL NOT BE CONSIDERED A 
VIOLATION OF THE REQUIREMENT TO CONDUCT OR OPERATE 
EXCLUSIVELY WITHIN THE GEOGRAPHICAL BOUNDARIES OF 
THE ECONOMIC ZONE OR FREEPORT, PROVIDED, FINALLY, 
THAT THE TELECOMMUTING EMPLOYEES ARE RESIDENTS OF 
THE PROVINCE WHERE THE SAID ZONE OR FREEPORT IS 
LOCATED.
SEC. 2. Implementing Rules and Regulations. - Within thirty (30) 
calendar days from the effectivity of this Act, the Secretary of Finance, after 
due consultation with the Fiscal Incentives Review Board, investment promotion 
agencies, and the private sector, shall promulgate the necessary rules and 
regulations for its effective implementation.
SEC. 3. Separability Clause. - If any provision of this Act is declared 
invalid or unconstitutional, the provisions not affected thereby shall remain in 
full force and effect.
SEC. 4. Repealing Clause. - All laws, presidential decrees, executive 
orders, presidential proclamations, rules and regulations or parts thereof 
contrary to or inconsistent with this Act are hereby repealed or modified 
accordingly.
SEC. 5. Effectivity Clause. -This Act shall take effect fifteen (15) days 
after its publication in the Official Gazette or in a newspaper of general 
circulation.
Approved,