Both houses of the Philippine Congress have approved two bills that seek to promote innovation and provide benefits to start-ups and micro, small and medium enterprises (MSMEs).
According to a recent press release, the bicameral conference committees of the Senate and House of Representatives have reconciled the versions of the proposed landmark Philippine Innovation Act and Innovative Startup Act and are now a step closer to becoming laws.
Once ratified by both Houses, the twin bills will be sent to Malacañang for the signature of President Duterte.
These bills do not only intend to promote a culture of innovation in the Philippines, they also aim to improve ease of doing business and to provide MSMEs and start-ups with a platform to flourish and create more jobs.
Innovation is the key to sustainable and inclusive growth in the country.
The Philippine Innovation Act seeks to provide MSMEs greater access to finance, market and technology.
Under the bill, a National Innovation Council, to be chaired by the President, will be created to develop the country’s innovation goals, priorities, and long-term national strategy.
Moreover, the proposed measure provides for a comprehensive support program for MSMEs, from incorporation to internationalisation.
The program shall include coaching and mentoring in the areas of design; technology extension services; standard business practices in contracting, accounting and project management.
Other areas also include quality control; standard-setting; business services such as commercialisation and management; and patents; among others.
Through a start-up MSME innovation development program, the government shall mobilise its various agencies to work hand in hand with private organisations to provide technical and financial support for the development training of entrepreneurs.
Regional innovation that will harness the competitive advantages, as well as existing and potential strengths of regions and provinces shall also be promoted.
A US$ 19.12 million (PHP 1 billion) Innovation Fund will be established to strengthen entrepreneurship and enterprises engaged in developing innovative solutions benefitting the poorest of the poor.
An Innovation Development Credit and Financing Program shall be developed for MSMEs to avail of loans and other financing activities.
All banking institutions shall set aside at least 4% of their total liable funds for innovation development credit.
The Innovative Startup Act, meanwhile, aims to provide start-ups with benefits and incentives which include the following:
- Subsidy for the application and processing of permits and certificates required for business registration.
- Expedited or prioritised processing of applications.
- Subsidy for the use of facilities, office space, equipment, and services provided by government or private institutions.
- Grants-in-aid for research, development, training and expansion projects.
Furthermore, a Startup Grant Fund and Startup Venture Fund shall be created to provide grants-in aid and to match investments by selected investors in start-ups based in the country.
Under the bill, the Department of Education (DepEd), the Commission on Higher Education (CHED), and the Technical Education and Skills Development Authority (TESDA) are directed to develop and integrate, in their respective curricula, entrepreneurial program that shall foster an environment conducive to innovation.
