Senator Joel Villanueva is pushing to close a gap in the tax code that has forced investment promotion agencies (IPA) and their registered enterprises to choose between staying competitive globally and keeping their workers out of punishing commutes.
Villanueva filed Senate Bill No. 2148, which seeks to allow IPA-registered enterprises to adopt alternative work arrangements—such as telecommuting, work-from-home, hybrid setups, compressed workweeks, and other flexible modes—without forfeiting their entitlement to fiscal incentives.
Existing provisions of the tax code “continue to create uncertainty regarding the continued entitlement of IPA-registered enterprises to fiscal incentives when implementing alternative work arrangements outside economic zones and freeports,” Villanueva explained in a statement.
That uncertainty has real consequences, the lawmaker continued, as existing laws mandate that IPA-registered enterprises must conduct their activities exclusively within zone boundaries. This requirement constrained firms deploying remote or hybrid work arrangements under the constant threat of losing their tax privileges, according to the lawmaker.
“We must understand that in the context of how our work is done today, the stakes go beyond balance sheets,” Villanueva 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.”
The bill draws directly from the foundation Villanueva built before the pandemic when he authored Republic Act No. 11165, the Telecommuting Act, which established the legal framework for that flexible work mode in the private sector in 2018.
SBN 2148 extends that framework into territory the original law did not reach—the fiscal incentives regime governing IPA-registered firms, which has remained a legal grey area even as remote work became standard practice 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.”
Under the bill, all alternative work arrangements must be voluntary and mutually agreed upon by employer and employee pursuant to the Telecommuting Act. The bill explicitly prohibits any diminishment of 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 prescribe guidelines for implementation, monitoring, reporting, and compliance, but only in a manner consistent with the law and without impairing the incentive entitlements of registered firms, according to the bill.
