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Data Protection Laws in the Philippines: What Businesses Need to Know
In today’s technology-driven world, safeguarding personal and business data is crucial, particularly for companies with international operations. For businesses offshoring to the Philippines, understanding and adhering to local data protection regulations is vital for maintaining trust and ensuring compliance. Familiarity with these laws strengthens your cybersecurity measures and builds confidence, especially if your business handles critical data. Offshoring requires strict data security protocols, and partnering with ISO-certified offshoring providers like Shore360 ensures a secure approach to outsourcing.
The Philippines’ Data Privacy Act (DPA) of 2012 sets out strict guidelines for data management, focusing on the protection of sensitive information and the safeguarding of individual privacy rights. To stay compliant, it is crucial to understand the DPA’s requirements, establish strong data security protocols, and implement privacy-centric practices across your offshore operations. Reading this blog will provide an overview of the DPA’s key elements, core provisions, and strategies to maintain compliance while protecting your business and customer interests.
Navigating Data Protection Laws for Offshore Operations in the Philippines
The Philippines is a popular location for outsourcing because of its highly qualified labour and affordable prices. For Filipino businesses handling foreign clients’ data through offshoring, understanding the legal and ethical responsibilities surrounding data protection is essential. While the Philippine Data Privacy Act (DPA) of 2012 primarily safeguards the privacy rights of Filipino citizens and residents, it also sets stringent data protection standards for any data processing conducted within the country. As a result, Filipino companies managing foreign customer data must implement robust security measures to ensure compliance with both local and international data privacy regulations.
Compliance with the DPA is more than just a legal obligation—it signals a commitment to operational security and helps build trust with international clients. The law outlines clear protocols for secure data handling, transparency in data processing, and strict privacy safeguards. For Filipino offshoring providers, failing to meet these standards can result in reputational harm, loss of client trust, and financial penalties. By prioritising data protection and aligning with the DPA as well as the regulatory requirements of foreign clients, Filipino businesses can position themselves as reliable partners in the global outsourcing market.
As an ISO 27001:2022-certified company, Shore360 adheres to international standards and security protocols across its operations. This certification ensures a strong cybersecurity framework, with organization-wide security measures in place as a baseline. Additionally, some clients request customized security enhancements to meet their specific needs, such as aligning with the cybersecurity standards of their Australian, New Zealand, or other international counterparts. Shore360 accommodates these requests, offering flexibility for clients seeking more control over their security infrastructure while still delivering the expected results.
Filipino offshoring providers managing foreign client data must also prioritise advanced cybersecurity measures and secure IT infrastructure. Proven experience in handling international data, along with certifications such as ISO, reassures clients that their data is being managed with the utmost responsibility. These practices help position Filipino providers as trusted, capable partners prepared to meet the data protection needs of global businesses.
Overview of the Philippine Data Privacy Act
Transparency
Organisations must inform individuals how their data will be collected, processed, and stored, ensuring transparent communication regarding data practices. For example, a Filipino outsourcing provider managing customer support for a U.S.-based eCommerce company demonstrates this transparency by providing clients with a detailed privacy notice. This notice outlines how customer information, including purchase history and contact details, will be processed, stored, and, if necessary, shared with third parties, ensuring compliance with data protection regulations and fostering trust between the provider and its clients.
Legitimate Purpose
Data collection and processing should be conducted for lawful, justified, and specific business purposes, ensuring it supports legitimate operations. For example, a Philippine-based call centre managing insurance claims for a Canadian provider collects only essential information, such as policy numbers and claim details. This ensures that the data is used exclusively for verifying claims and processing payouts while preventing the collection of irrelevant information.
Proportionality
Data collection should be limited to what is strictly necessary and relevant for the intended purpose, avoiding storing excessive information. For example, an Australian healthcare provider outsourcing to a Philippine medical transcription company shares only the medical records required for transcription. The provider ensures that no additional, unrelated patient information is sent, maintaining data minimisation practices.
Security
Businesses must implement robust security measures to protect data from unauthorized access, leaks, or potential breaches. For example, a Filipino offshoring firm handling financial data for a European client employs multi-factor authentication, firewalls, and encrypted communications to safeguard sensitive information, such as credit card numbers and bank details, ensuring protection from cyber threats.
Accountability
Organisations are fully responsible for the handling of personal data, even when third-party providers are involved. For example, a U.K.-based software company outsourcing IT support to the Philippines conducts regular audits of its Philippine provider to ensure compliance with data protection protocols. Additionally, the provider enforces strict data privacy standards among its third-party vendors, such as cloud storage providers, to ensure ongoing accountability.
Rights of Data Subjects under the DPA
The Philippine Data Privacy Act (DPA) empowers individuals by granting them specific rights over their data, promoting transparency and control. These rights align with international data privacy frameworks, including the GDPR. Below is a breakdown of these rights and how individuals can exercise them:
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Right to Access
In order to promote transparency and guarantee that data subjects are aware of the reasons behind the processing of their data, people have the right to seek information about the personal data that is kept about them and how it is being used.
For example, a customer of a Philippine-based outsourcing provider can request a copy of their stored data, such as call logs or transaction records, and inquire about how these records have been utilized by the company.
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Right to Correction
Data subjects have the right to correct inaccurate or outdated information to ensure their data remains accurate and reliable.
For example, an employee of a foreign client supported by a Philippine HR outsourcing firm may notice an error in their record, such as an incorrect address, and can request the offshoring company to quickly update the data.
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Right to Erasure
Also known as the “right to be forgotten,” individuals can request the deletion of personal data that is no longer necessary for the purpose it was collected or has been unlawfully obtained.
For example, a customer of a subscription service managed by a Philippine call center may decide to cancel their subscription and request the deletion of their personal information from the provider’s database.
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Right to Data Portability
Data subjects are entitled to their personal information in a frequently used, structured format that makes it easy to transfer to another organisation.
For example, a client of a Philippine-based financial services outsourcing firm may request their transaction history to be transferred to another service provider, ensuring continuity without data loss.
These rights ensure individuals retain control over their personal data, requiring organizations in the Philippines to adopt practices that respect and uphold these standards. By implementing systems that support these rights, businesses demonstrate their commitment to ethical and transparent data management.
Compliance Requirements for Foreign Businesses
For foreign companies operating in the Philippines, compliance with the DPA requires implementing robust data protection protocols and adhering to specific regulations. Key compliance areas to focus on include the following below:
Consent Management
In order to treat data legally under the DPA, consent management is essential. Use these procedures to create consent protocols that work:
- Collect Explicit Consent: Ensure that consent forms are clear, accessible, and specific to the processing activities.
- Provide Withdrawal Options: Offer individuals the ability to easily withdraw consent, respecting their right to opt out.
Example: An offshore call centre operating in the Philippines handling customer support for their onshore clients should secure customer consent before any data processing occurs and provide a straightforward option for clients to revoke their consent at any moment.
Secure Data Storage and Processing
Data security is essential for DPA compliance, particularly for businesses managing sensitive information. To ensure protection, consider the following practices:
- Encryption: Encrypt data during both transfer and storage to prevent unauthorized access.
- Access Management: Limit access to data based on employee roles and conduct regular access reviews.
- Routine Security Audits: Schedule audits to identify vulnerabilities and enhance data protection.
Example: A healthcare provider outsourcing billing services should implement secure encryption and access controls to ensure patient data is properly safeguarded.
Breach Notification Protocols
In the event of a data breach, the DPA requires immediate action. Key steps include:
- Develop a Response Plan: Create a plan for identifying, containing, and addressing breaches effectively.
- Train Staff: Ensure employees understand the response plan and know how to report any breaches.
- Post-Incident Reviews: Conduct thorough reviews after incidents to identify weaknesses and prevent future breaches.
Example: If an eCommerce company detects a breach affecting its Philippine data centre, it must notify the NPC (National Privacy Commission) and any affected users within 72 hours to comply with local regulations.
Designate a Local Representative
If your company does not have a physical presence in the Philippines, it is required to appoint a local representative to liaise with the NPC (National Privacy Commission) on compliance matters.
- Select a Qualified Representative: Choose someone with a solid understanding of Philippine data laws and business practices.
- Empower the Representative: Ensure the representative has the authority to respond to inquiries and address compliance issues.
Example: A U.S.-based company processing data in the Philippines may appoint a local law firm or compliance consultant to act on its behalf, ensuring seamless communication with the NPC (National Privacy Commission).
All these key regulations must be followed when offshoring in the Philippines. However, when you partner with an offshoring provider, these requirements will be handled by them. To give you insight into what these providers do, Shore360, as an offshoring provider, does not store or back up client data. The company supports clients by isolating systems, scanning for malware, updating passwords, and reviewing logs if breaches occur. Clients are responsible for securely transferring and managing their data in the cloud.
Compliance Checklist
To simplify your compliance process, here’s a quick checklist of essential steps for DPA compliance:
- Designate a Local Representative: Appoint a qualified local representative if your business has no physical presence in the Philippines.
- Implement Secure Data Storage Protocols: Use encryption, limit access based on roles, and conduct regular security audits.
- Establish Consent Management: Secure explicit consent from data subjects, with clear opt-out options available.
- Develop a Breach Notification Plan: Ensure protocols are in place for handling breaches, and train your staff to manage incidents effectively.
- Conduct Regular Compliance Audits: Periodically review your data handling and storage practices to ensure continued compliance.
By following these steps, foreign companies can confidently operate within Philippine data protection regulations, safeguarding customer data and upholding privacy standards effectively.
Conclusion
Adhering to data protection laws is not just a regulatory requirement; it’s a strategic approach that reinforces customer trust and strengthens business integrity. For companies operating offshore in the Philippines, compliance with the Data Privacy Act (DPA) of 2012 ensures that data handling practices align with global standards, safeguarding both personal information and corporate reputation.
While implementing these compliance measures may seem challenging, they are crucial for businesses committed to responsible data practices. Regular audits, robust security protocols, and a proactive approach to consent management are essential steps in adhering to Philippine data protection laws. By investing in these practices, companies can effectively navigate the complex data protection landscape in the Philippines, fostering trust with both local clients and global stakeholders.
With an emphasis on security, transparency, and accountability, businesses can minimize risk and establish themselves as reliable partners in the global data economy. Adopting these standards not only ensures compliance but also positions companies to succeed in an increasingly data-driven world.
Learn how Shore360’s ISO-certified data protocol is implemented at https://www.shore360.com/technology-and-security/
