Regulating the rapid switch to online working during a pandemic: an overview for the Philippines

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Divina P V Ilas-Panganiban
Intellectual Property, Data and Technology Practice Group, Quisumbing Torres, Manila
divina.ilas-panganiban@quisumbingtorres.com

Neonette E Pascual
Intellectual Property, Data and Technology Practice Group, Quisumbing Torres, Manila
neonette.pascual@quisumbingtorres.com
 

As a result of the continuing rise of Covid-19 cases in the Philippines, from the beginning of March 2020, the national government placed different parts of the country under different levels of community quarantine.^[1] In areas under the strictest community quarantine, government offices and business establishments have been required to adopt a skeleton workforce and/or alternative work arrangements, including telecommuting for employees so that the strict social distancing measures can be enforced. For a number of private businesses which opted, either voluntarily or due to financial or technological constraints, to retain in-person operations in full, physical offices have been temporarily closed to comply with measures imposed to curb the spread of Covid-19.

To ensure the continuity of government services and operations, most government agencies and private enterprises have adopted online means of engaging with the public. Fortunately, the government has been relatively quick in responding to such necessary rapid changes, by enacting various relevant policies and guidelines regulating different aspects of online or electronic methods of conducting business.

Guidelines on working from home (WFH) arrangements

On 15 May 2020, the National Privacy Commission (NPC) issued PHE Bulletin No 12, entitled ‘Protecting Personal Data in a Working from Home Arrangement’, to address issues arising from telecommuting during the pandemic. PHE Bulletin No 12 sets guidelines for public and private organisations operating under a WFH arrangement to ensure that the privacy of employees and their company’s data subjects are protected.^[2]

Among PHE Bulletin No 12’s salient points, is the need for organisations to provide their employees the proper Information Communication Technology (ICT) assets, which are both secure and comply with the organisation’s ICT guidelines and policies. Companies must also ensure that they have Acceptable Use Policies which define the permissible personal use of ICT assets, such as access to personal emails, browsing online articles, using social media and streaming videos. Each organisation must also define unacceptable and unauthorised uses of their ICT assets.

Personal access to the organisation’s data must be on a need-to-know basis. At the same time, the company must ensure that physical network security is in place, and users are properly authenticated, such as through the use of strong passwords. When transferring personal and sensitive data through email, files and attachments should be encrypted. In case of a data breach, the organisation’s data protection officer or data breach response team should be informed immediately.

The NPC later supplemented PHE Bulletin No 12 with PHE Bulletin No 14, covering privacy regulations and best practices on privacy matters involved in return to work and working from home arrangements.^[3] The NPC reiterated that Philippine data privacy regulations do not hinder public health measures in combating the pandemic. Instead, the effective use of personal data, while adhering to the general principles of legitimacy of purpose, proportionality and transparency, help in the nation’s fight against and recovery from the invisible viral enemy.

Online court processes and proceedings

On 13 March 2020, the conduct of hearings at all court levels and administrative bodies was suspended as a result of the pandemic. The Supreme Court subsequently issued various circulars which allowed the functioning of court processes online, via such methods as electronic filing of a complaint or information, electronic posting of bail, the e-raffle of cases, and conducting hearings via videoconferencing.^[4]

The Supreme Court issued Administrative Circular No 45-2020^[5] on 18 August 2020, which requires the physical reopening of all courts and the resumption of in-court hearings. However, all courts are still mandated to continue allowing the electronic filing of all pleadings in civil and criminal cases in the courts’ respective email addresses, available on the Supreme Court’s official website.^[6] Videoconferencing for hearings involving detainees and other exceptional circumstances is still permitted, subject to certain conditions.

The majority of government agencies have also allowed hearings and filings to be carried out online. On 3 July 2020, the Intellectual Property Office (IPO) issued Memorandum Circular No 2020-21 entitled ‘Advisory on IPOPHL Services re Conduct of Hearings/Conferences in Inter Partes Cases (IPC) and IP Rights Violations Cases (IPV).’^[7] This Advisory allows the conduct of preliminary conference, hearing, pre-trial and trial hearings through online videoconferencing in cases before the IPO’s Bureau of Legal Affairs, on joint request of the parties. All submissions and payments to the IPO are also required to be made online from 1 September 2020, except for payments of PHP100,000 (approx. US$2,060) or more, which should be made in person at the IPO’s main office.

On 3 August 2020, the National Privacy Commission (NPC) issued Advisory 2020-02 or the ‘Guidelines on the Use of Videoconferencing Technology for the Remote Appearance and Testimony of Parties before the National Privacy Commission’.^[8] Under this Advisory, parties in administrative cases before the NPC have the option to attend proceedings before the commission remotely via videoconferencing.

Notarisation via videoconferencing

On 14 July 2020, the Supreme Court issued A M No 20-07-04-SC or the ‘2020 Interim Rules on Remote Notarisation of Paper Documents’ ('Rules on Remote Notarisation'). The Rules allow the notarisation of documents with handwritten signatures through videoconferencing facilities in localities where the notary public or one of the parties resides or holds office in an area under community quarantine.

Under the Rules, where the document requires an acknowledgment, affirmation, oath or jurat, the party to the document shall deliver the instrument or document to be notarised to the notary public in a sealed envelope via personal or courier service. The document shall be delivered together with said person’s recognised evidence of identity, as well as a CD or USB containing a video clip showing that he or she actually signed the instrument or document to be notarised, unless the party sends the video clip via email. On receipt of the documents and proof of its signing, the notary public shall then schedule a videoconference to confirm the person’s identity, their location, the fact that the signature on the document is that of said person and, finally, the fact that the instrument was executed in accordance with the rules on notarisation.

Regulation of online sellers, proposal on digital transactions tax

On 10 June 2020, the Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) No 60-2020, which required businesses engaged in digital transactions through the use of electronic platforms to register their businesses with the BIR by 31 July 2020.^[9] Online businesses, which cover sellers/merchants, payment gateways, delivery channels, internet service providers and other facilitators, must also comply with the Philippine Tax Code which requires the issuance of sales invoices or official receipts, keeping of registered books of accounts, filing of tax returns, withholding of taxes and timely payment of applicable taxes.

As a requirement for registration with the BIR, a sole proprietorship needs to be registered with the Department of Trade and Industry (DTI), while a partnership or a corporation is required to register with the Securities and Exchange Commission (SEC). In a statement, DTI Secretary Ramon Lopez encouraged the registration of online businesses to ensure consumer protection and increase public trust in online transactions.^[10]

Several bills have also been filed with the Philippine Congress seeking to tax digital services. In July 2020, the Congress’s Committee on Ways and Means approved a bill which imposes 12 per cent VAT on electronic goods and services, including online the licensing of software, mobile applications, provision of digital content such as music and information, online advertisements, e-learning and online courses, and subscription and payment processing services.^[11]

Under the proposed legislation, a non-resident digital service provider is liable for assessing, collecting and remitting VAT on the sale of goods or services through its online platform to a Philippine-based buyer who acquires taxable services in the Philippines. A non-resident digital service provider is also required to register for VAT where its gross sales or receipts in the past 12 months exceeds PHP3m (approximately US$62,000), or there are reasonable grounds to believe that its gross sales or receipts in the next 12 months will exceed PHP3m.

The bill on digital transactions has yet to be approved by Congress. A similar bill is also pending before the Philippine Senate.

The need for flexibility and adaptability

In these uncertain times of the pandemic, the rapid movement of business operations and government processes from in-person transactions to remote and electronic means of working definitely come with their own advantages. In addition to ensuring the safety of the people, they also accelerate the Philippine’s transition into the digital age. However, they also result in new risks and challenges which arguably necessitate government regulation. The end result of this rapid and yet developing switch to online methods of doing business has yet to be seen as we continue to wage war against Covid-19. However, our present crisis definitely calls for greater flexibility and creativity at both individual and enterprise levels for us to adjust effectively and eventually thrive in these unprecedented times.