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SEVENTEENTH CONGRESS ) 5 @
OF THE REPUBLIC OF THE PHILIPPINES) / 2 RECEIVED
First Regular Section ) DATE: 1207

Time: ‘Oh

HOUSE OF REPRESENTATIVES

House Bill No.9 618

Introduced by Representative Victor A. Yap

EXPLANATORY NOTE

“Governments will always play a huge part in solving big problems.
They set public policy and are uniquely able to provide the resources to
make sure solutions reach everyone who needs them. They also fund
basic research, which is crucial component of the innovation that
improves life for everyone.”

-Bill Gates

According to NEDA, Micro, Small, and Medium Enterprises (MSMEs) comprise around
99.6% of the total establishments in the Philippines. However, this sector only contributes

around 35% to the national economy and employs only about 65% of the labor force.

Lack of access to finance, technology and market, and cost of doing business are just
among the hurdles that hinder MSMEs to achieve the sector’s potential and growth-promoting
role. Coupled with a bureaucracy that requires tax imposition in almost every transaction and we

are left with a stale, if not lost, economic boon.

This bill intends to remove this obstacle by suppressing bureaucratic blocks to MSMEs.
Further, this bill intends to promote a culture of innovation and ensure that knowledge is created,
acquired, disseminated, and used more effectively by individuals, enterprises, organizations, and

communities to promote sustainable economic and social development.

Apart from improving the ease of doing business, a more important role of the
government is to provide MSMEs with a platform to flourish. Strategic planning and the
adoption of a long-term vision for innovation is the key to sustainable and inclusive growth.
Government funding in establishing research centers for MSMEs is vital in ensuring that
innovation shall be a continuous path for progress for this country. By establishing the National


Innovation Council, it is our hope that our people will be encouraged to develop entrepreneurial

attitude in order to stimulate growth ambitions in business, especially among MSMEs.

In the interest of economic progress and social development, support for the passage and
approval of this legislation is earnestly sought.

Representative, Second District, Tarlac


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SEVENTEENTH CONGRESS )
OF THE REPUBLIC OF THE PHILIPPINES)
First Regular Section )

HOUSE OF REPRESENTATIVES

inno, 5618

House Bil

Introduced by Representative Victor A. Yap

AN ACT
ADOPTING INNOVATION AS VITAL COMPONENT OF THE COUNTRY’S
DEVELOPMENT POLICIES TO DRIVE INCLUSIVE DEVELOPMENT, PROMOTE
THE GROWTH AND NATIONAL COMPETITIVENESS OF MICRO, SMALL AND
MEDIUM ENTERPRISES, APPROPRIATING FUNDS THEREFOR, AND FOR OTHER
PURPOSES:

Be it enacted by the Senate and House of Representatives of the Philippines in Congress

assembled:

SECTION 1. Short Title. - The Act shall be known as “The Philippine Innovation
Act.”

SEC.2. Declaration of Policies. - In conformity with the provision of the Constitution
that recognizes science and technology as “essential for national development and progress” and
gives priority to “research & development, invention, innovation and their utilization,” the State
hereby adopts the following policies:

a) The State shall place innovation at the center of its development policies, guided by a
clear and long-term set of goals that will take into consideration the key advantages of
the country and the opportunities in the regional and global economic arena. As such,
it shall hamess innovation efforts to help the poor and the marginalized and to enable
Micro, Small, and Medium Enterprises (MSMEs) to be a part of the domestic and
global supply chain.

b) The State shall promote a culture of strategic planning and innovation and ensure that
knowledge is created, acquired, disseminated, and used more effectively by
individuals, enterprises, organizations, and communities to promote sustainable

economic and social development.


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c) Investments in education, science, technology and innovation will be guided by a
strategic direction towards strengthening the country’s knowledge-based economic
development that benefits all.

4) The State recognizes the importance of an effective and efficient innovation ecosystem
that addresses and delivers action in various policy areas, including MSME
development, education, trade, investment, finance, and agriculture, sustainable
energy, climate change, among others. This requires the various departments and
agencies of government to implement a “whole of government” approach that will
ensure policy coherence, alignment of priorities, and effective coordination in
program delivery. This ecosystem should facilitate and support innovation efforts.

¢) The State recognizes the indispensable role of governance in maximizing the benefits
from the country’s innovation policy. As such, it shall put efficient institutions in
place, with the necessary authority to remove regulatory, informal, and other
obstacles to the innovative undertaking.

f) The business sector, academe, scientific community and research institutions play a
crucial role in driving economic growth through innovation. As such, the Government
will work and cooperate with these sectors and encourage the innovative efforts of
businesses, MSMEs, academe, and the scientific community.

g) The State recognizes the value of sources of innovation that are unique to the country
such as traditional knowledge, traditional cultural expressions, and genetic resources
and shall strive to promote their potentials for innovation while protecting them from

misappropriation.

SEC. 3. Definition of Terms. - The following terms shall have their respective

meanings:

a) “Cluster Policies” refer to policies which aim to support geographic concentrations of
interconnected firms and related actors such as specialized service providers,
academic or educational institutions, MSMEs, businesses, among others;

b) “Genetic Resources” refer to genetic material, which are any material of plant, animal,
microbial or other origin containing functional units of heredity, of actual or potential
value;

©) “Inclusive Innovation” refers to the creation of new ideas that results to the
development of new products, processes and services that help improve the welfare of
lower-income and marginalized groups;

d) "Innovation” means the creation of new ideas that results in the development of new or
improved policies, products, processes, or services which are then spread or

transferred across the market;


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¢) “Innovation Alliance” refers to a coalition of research and development-based
technology companies, academic or educational institutions, and/or research
institutions, MSMEs and other relevant organizations, that have come together to
support innovative efforts and enterprises;

f) “Innovation Centers” refer to centers of competence and innovation activities, either
housed in academic, educational, or non-academic facility that supports collaborative
research, development and extension (RD&E) initiatives and innovation-related
activities between and among academic or educational institutions, RD&E centers,
and business;

g) “Innovation Governance” refers to the institutional setup of the various elements of the
national innovation ecosystem, including the institutional structures and the processes
governing policy making and implementation, including program delivery and
monitoring, as well as the process of coordination and collaboration across public
institutions and with relevant stakeholders;

h) “Innovation Networks” refer to the interconnected system of companies and
organizations in the knowledge infrastructure, strongly focused on innovation;

i) “Innovative Goods and Services” refer to new or significantly improved products,
services, processes, technical specifications or components, methods, and tools that
enhance government's ability to deliver services;

j) “Marketing Innovation” refers to significant changes in product design or packaging,
placement, promotion or pricing;

k) “Multi-stage Process” refers to the various stages of product or solution development,
from feasibility study, designing, prototyping, testing, and commercialization of
products or services;

}) “Organizational Innovation” refers to business practices, workplace organization or
external relations;

m) “Policy Innovation” refers to the introduction of new or significantly different
solutions to policy problems;

n) “Pre-commercial Procurement” refers to the procurement of RD&E services for
services, solutions, or products that do not yet exist, which may involve contracting
by development phase from the conduct of feasibility study, designing, prototyping,
testing, and commercialization of products or services;

0) “Process Innovation” refers to the implementation of a new or significantly improved
production or delivery method;

p) “Product Innovation” refers to the introduction of a good or service that is new or
significantly improved with respect to its features, applications, characteristics or

intended uses;


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4g) “Project-based Competition” refers to a process whereby contractors bid for contracts
for a specific project with the proponent being given the flexibility to submit
particulars detailing the unique scope and features of its proposal. The contracting
agency shall award the contract to the proponent deemed to have submitted the best
innovation solution or product;

1) “Social Innovation” refers to the process of identifying and delivering new services
that improve the quality of life of individuals and communities, including through
employment, consumption and/or participation;

s) “Technology Diffusion Procurement” refers to public procurement that is undertaken
on behalf of end-users with the view to accelerating the diffusion of innovative
solutions or technologies that offer the greatest advantage to users;

1) “Technology Platforms” are self-organized programs or arrangements that allow a wide
range of stakeholders to collaborate in identifying common needs and to assemble a
portfolio of funding sourced from government or industrial sources or a mix thereof
to address those needs;

u) “Technology Programs” refer to programs that link industrial, academic or educational
RD&E efforts towards building national capacities in developing industrially
important technologies;

v) “Traditional Cultural Expressions” refer to forms in which traditional culture is
expressed; passed down from generation to generation, they form part of the identity
and heritage of a traditional or indigenous community; and

w) “Traditional Knowledge” refers to a living body of knowledge, innovations, systems,
and practices of indigenous peoples and local communities developed, sustained and
passed on from generation to generation within a community, and often forming part

of the community’s cultural heritage or spiritual identity.

SEC. 4. Objectives. - The overarching objective of this Act is to generate and scale up

action in all levels and areas of education, training, research and development towards promoting
innovation and internationalization activities of MSMEs as driver of sustainable and inclusive

growth. The specific objectives of this Act are as follows:

a) Promote a culture of strategic planning an d innovation to encourage creative thinking
and knowledge creation and dissemination towards expanding and maintaining
economic competitiveness;

b) Improve innovation governance in the country and compel the adoption of a long-term
vision and focused priorities for innovation as driver for sustainable and inclusive
growth;


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c) Ensure effective coordination and eliminate fragmentation of innovation policies and
programs at all levels;

d) Strengthen the position of MSMEs in the innovation system;

e) Remove obstacles to innovation by suppressing bureaucratic hurdles, and adapting the
regulatory framework to support the creation of and diffusion of new knowledge,
products, and processes;

f) Encourage entrepreneurial attitude in order to stimulate growth ambitions in
businesses, specially among MSMEs;

g) Explore, promote and protect the potentials for innovation of traditional knowledge,
traditional cultural expressions and genetic resources; and

h) Strengthen and deepen interactions and partnerships among different actors from the
public and private sector, academe, MSMEs, research & development institutions and
communities towards promoting inclusive growth and improving the quality of life
through innovation.

SEC.5. Innovation Scope. - The government shall adopt a broader view in developing its

innovation goals and strategies covering all potential types and sources of innovation, including
product innovation; process innovation; organizational innovation; social innovation; marketing
innovation; academic or educational innovation; or policy innovation; among others. While the
country’s innovation goals shall be directed at developing new technologies, it shall likewise
seek to harness global knowledge and technology that will aid in developing new processes or
services for increasing productivity in the agricultural sector and of the MSMEs, and for
promoting over-all public welfare. As such, the National Innovation Council (NIC), as created in
Sec. 9, shall set the country’s innovation goals and priorities, as well as assess the innovation

programs of various agencies, guided by this provision.

SEC. 6. National Innovation Agenda and Strategy Document.- The National
Innovation Council (NIC), created under this Act, shall develop a National Innovation Agenda
and Strategy Document (NIASD) that establishes the country’s vision and long-term goals for
innovation and provides a road map and the strategies for improving innovation governance
through clear-cut delineation and complementation of innovation efforts across agencies;
deepening and accelerating innovation efforts, including inclusive innovation programs that are
targeting the poorest of the poor; and integrating and fostering public-private partnerships,
including those with large businesses, MSMEs, academe, and RD&E institutions. In developing
the NIASD, the NIC will identify strategies to stimulate regional capacity for development that
can contribute to differentiated innovation strategy across regions in the medium term. Such


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differentiated strategies shall take into consideration the competitive advantages and strengths of
each province, region, and community.

The NIASD will also include the innovation priority areas for which resources and
budget will be provided. The agenda and strategies shall have a minimum of ten-year horizon,
subject to periodic review by the NIC. All agencies shall strictly comply with the NIASD and
will pursue this as a collective, national effort. The agencies concerned will incorporate pertinent
programs in their respective work programs and action plans, guided by the NIASD.

The NIASD will be developed in consultation with government agencies, Regional
Development Councils (RDCs), Local Government Units (LGUs), and other stakeholders and
shall be completed within six months from the adoption of this Act.

SEC. 7. Considerations in Setting Priority Areas for Innovation. - It is vital that the
challenges in the following areas be considered in developing the country’s priorities for
innovation;

+ Food security and sustainable agriculture;

+ The blue economy;

+ Education and the academe;

+ Health;

+ Secure, clean and reliable energy;

* Climate change and disaster resilience;

+ Resource efficiencies;

+ National and community-based comparative advantages in the context of Global Value

Chains;

+ Comparative strengths and advantages of sectors and communities;

+ Potentials for innovation of traditional knowledge, traditional cultural expressions and

genetic resources;

* Infrastructure needs;

+ Governance; among others.

The NIC, in consultation with various sectors, will identify the priority areas as provided
for in Sec. 5 of this Act.

SEC.8. Inclusive Innovation . - The NIC shall develop strategies to promote creation of
new ideas that will be developed into new, quality products, processes, and services that are
aimed at improving the welfare of low-income and marginalized groups, as well as create

livelihood opportunities for these sectors.


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The NIC will likewise develop strategies for promoting social innovation as a tool for
delivering new services that will improve the quality of life of individuals and communities, as
well as enable the participation of communities in meeting their needs. Such strategies will be

incorporated in the NIASD.

SEC. 9. The National Innovation Council. - A National Innovation Council (NIC) is
hereby established to develop the country’s innovation goals, priorities, and long-term national
strategy. The NIC shall be constituted by the following:

a) President of the Philippines - Chairperson

b) Director General of the National Economic and Development Authority - Vice-

Chairperson

©) Secretary of Science and Technology - Member

d) Secretary of Trade and Industry - Member

e) Secretary of Agriculture - Member

f) Secretary of Environment and Natural Resources - Member

g) Secretary of Health - Member

h) Secretary of Transportation - Member

i) Secretary of Energy - Member

j) Secretary of National Defense - Member

k) Secretary of Information and Communications Technology - Member

1) Chairperson of the Commission on Higher Education - Member

m) Secretary of Budget and Management - Member

n) Secretary of Education - Member

0) Secretary of Interior and Local Government - Member

p) Secretary of Foreign Affairs - Member

4q) Director-General of the Intellectual Property Office - Member

1) Seven Executive Members to be appointed by the President

The Executive Members shall be appointed from the ranks of business, academe, and the
scientific community, at least one of whom shall be a woman.

There shall be at least one representative from the MSME sector, and at least one from
the business sector. The representative of business and the MSME shall be recommended by a
legally established and reputable business organization. Those to be appointed from the academe
and the scientific community should have at least 7 years of experience in the field of science

and technology, research and development, or innovation.


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The President may designate the Executive Secretary to preside over the meetings of the
NIC in his absence. The Department Secretaries and other members may not designate alternate
representatives other than their respective undersecretaries to the meetings of the NIC.

SEC. 10. Functions of the NIC. - The NIC shall have the following functions:

a) Develop the country’s strategic vision for innovation and long-term innovation goal;

b) Develop the country’s innovation strategies to ensure coherent strategic direction and
programs by government agencies;

c) Set the country’s innovation priorities;

d) Serve as a source of strategic intelligence for national research and innovation
policymaking;

e) Engage technological expertise in strategic and innovation policymaking;

£) Coordinate with various sectors and agencies to promote policy and program
coherence;

8) Monitor and assess the country’s strategic and innovation programs;

h) Regularly review and update the country’s strategic and innovation policies;

i) Guided by the legal mandates of the agencies/LGUs concerned, identify and task
government agencies and LGUs that will be tasked to implement specific strategies
under the NIASD;

j) Communicate the country’s innovation policies, priorities, and agenda to local and
international publics;

k) Establish and administer the Innovation Fund;

1) Identify and/or approve programs that may qualify for funding from the Innovation
Fund;

m) Develop metrics and monitor the progress of strategic innovation programs, including
publicly-funded RD&E projects;

1n) Submit annual reports to the Philippine Congress on the progress of implementation of
this Act; and

0) Undertake other functions as mandated under this Act.

SEC. 11. Secretariat to the Council. - A Secretariat to the NIC shall be established
within NEDA, to be headed by an Executive Director who will be 36 appointed by the President
and will have the rank of Undersecretary. The Executive Director shall have at least seven (7)
years of experience and practice in the fields of Science and Technology, Research &
Development, MSME, Innovation, Finance, or Business Management to qualify for appointment.
The Executive Director will be nominated by the NIC.


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An NIC Secretariat is hereby established whose staffing structure and complement will
be submitted by the NIC to the Department of Budget and Management for funding. Pending
creation of these positions, the NIC shall constitute an interim Secretariat within one month
from the adoption of this Act, through the temporary detail of personnel from its member
agencies.

The Secretariat shall have the following functions:

) Provide secretariat support to the NIC, including the preparation of draft strategies,

priorities, and other outputs to be adopted by the NIC;

) Consult with experts who can offer insights in innovation policymaking and priority
setting;

©) Coordinate with various agencies of the government, the private sector, academe,
scientific community, and other sector towards achieving policy and program
coherence;

4) Gather strategic intelligence and information to support the NIC in its policy making,
as well as goal and strategy setting;

©) Build strategic intelligence on human capital development;

f) Assess the effectiveness of existing S&T and Innovation grant programs and
scholarships and subm it recommendations to the NIC on these programs, guided by
the NIASD;

g) Draft a set of “relevance criteria” which will be used by the NIC to evaluate RD&E
proposals for public funding through the Innovation Fund;

h) Develop and administer metrics for monitoring and evaluation of the country’s
innovation programs;

i) Develop recommendations for consideration by the NIC; and

j) Perform other functions as may be directed by the NIC.

SEC. 12. MSME Innovation . - The NIC will develop strategies towards promoting
MSME internationalization and participation in the local and global value chains. A
comprehensive support program, from incorporation to internationalization, will be developed by
the NIC and implemented by the agencies concerned. These programs will include coaching and
mentoring in the areas of design; technology extension services; standard business practices in
contracting, accounting and project management; quality control; standard-setting; business
services such as commercialization and management; patents; among others.

The government, through the DTI, shall encourage and support the establishment of
business incubators, in partnership with the private sector, towards fostering collaboration
between small and big businesses in promoting skills and technology transfer, supplier
development, access to finance, and creating marketing opportunities for MSMEs.


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The DTI will scope high productivity innovative businesses to help them identify and
exploit opportunities in overseas markets. The NIC shall develop metrics for purposes of
assessing the progress of work in these areas.

SEC. 13. Regional Innovation and Cluster Policy. - The NIC will integrate in the
NIASD strategies to promote regional innovation that will hamess the competitive advantages,
as well as existing and potential strengths of regions and provinces. Such strategies shall promote
regional development through sound science, technology and innovation programs. For this
purpose, the RDCs will help coordinate and monitor the implementation of the NIASDs in their
respective regions.

Cluster policies or strategies shall be adopted by the NIC as a significant component of
the country’s innovation policy mix. In determining the feasibility and effectiveness of cluster
Policies in pursuit of innovation goals, other policy streams, such as regional economic
development policy, industrial/enterprise policy, higher education policy, among others, will be
considered.

The cluster policies shall be adopted to focus on regional hubs or provinces or sectors
such as MSMEs, large firms, spinoffs and start-ups, academic or ducational institutions and
research centers, or combinations of these. For this purpose, the NIC shall establish a Cluster
Development Program . Funding for this purpose will be incorporated in the annual General
Appropriations Act. Cluster strategies and programs will be implemented through the agencies
concemed through a well-coordinated system facilitated by the NIC.

SEC. 14. Strategic Research, Development and Extension Programs. - The NIC,
guided by the country’s innovation agenda and development goals, will develop RD&E themes.
These themes will be adopted in the RD&E programs of concerned agencies which will ensure
that a higher level of mission orientation in publicly funded research is observed. For this
Purpose, the NIC will develop a “relevance criteria” that will be administered by the agencies
concerned in the selection of RD&E projects or programs for funding. It shall likewise prepare
an inventory of academic or educational and RD&E institutions, together with their resources
and capacities to undertake RD&E. This will provide the strategic intelligence for RD&E public
funding and grants,

The NIC will also monitor the implementation of these RD&E projects and ensure that
these comply with the criteria established for the purpose and meets the objectives for which
these were funded. A system for “peer review” may be established for this Purpose.

As part of strategies to address the multi-dimensional nature of certain research
requirements, the NIC shall:

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) Establish centers of research excellence, to bring together multi-sector/stakeholder
teams to address multi-disciplinary research agenda;

b) Establish centers of collaborative research activity between academic and business;
and

©) Mandate pertinent agencies to work w ith academic or educational and research
institutions to provide research infrastructure to support key research areas.

The NIC will recommend to Congress the annual proposed level of Gross Expenditure on
R&D (GERD) based on the National Innovation Agenda and Strategy Document. This
recommendation will be submitted by the beginning of each annual budget cycle.

SEC. 15. Innovation Instruments - The government shall employ a range of
instruments to achieve the objectives of this Act. These instruments include:

a) Technology programs,

b) Innovation centers

©) Innovation networks

4) Technology platforms

e) Cluster policies

f) Human capacity building programs

For this purpose, the NIC shall develop strategies by which government agencies
concerned may harness these instruments to more efficiently deliver programs and promote
greater collaboration among stakeholders. These agencies, enumerated in Sec. 16, shall submit
their respective action plans, guided by the strategies that will be imposed by the NIC.

The establishment of innovation centers shall be undertaken in coordination with the
private sector, academic or educational institutions, and other seetors to maximize opportunities

for collaboration and joint initiatives.

SEC. 16. Whole of Government Approach. - In order to effectively drive innovation
across all areas of government policy - spanning education, training, health, energy,
communication, industry, science & technology, defense, among others - a “whole of
government approach” shall be adopted. This approach shall facilitate engagement with business,
the RD&E sector, MSMEs, and the broader community towards ensuring the full and effective
implementation of the country’s innovation agenda.

All government agencies concemed, including the following, shall be responsible for
implementing the country’s innovation strategies, and as such, will observe the “whole of

government approach” provided herein:

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a) National Economic and Development Authority

b) Department of Science and Technology

c) Department of Trade and Industry

d) Department of Agriculture

) Department of Environment and Natural Resources
f) Department of Health

g) Department of Energy

h) Department of Transportation

i) Department of National Defense

J) Department of Information and Communications Technology
k) Department of Budget and Management

1) Department of Interior and Local Government

m) Department of Foreign Affairs

n) Department of Education

0) Commission on Higher Education

p) Intellectual Property Office

Government agencies shall make available for public access, a joint web portal, that will
bear information pertinent to innovation policies, strategies, programs, including services, grants,
and financial assistance for related trainings. The agencies shall likewise ensure that
beneficiaries are guided on services that are available. The web portal shall also include a
database of all ongoing and completed innovation projects implemented under the NIASD. It
shall have interactive features that will allow the public to access services or file applications for
scholarships or other services and programs online. Inquiries shall be addressed within three (3)
days from receipt thereof. Processing of applications for scholarships and other services shall be
streamlined in accordance with the guidelines to be established by the NIC. Reforms to this
effect shall be reported to the NIC within six (6) months from the adoption of this Act.

The online facility shall provide an acknowledgement receipt and reference number for
each transaction for monitoring purposes. Government agencies concerned shall submit periodic
progress reports to the NIC on the status of innovation strategies and projects. Reportorial
Tequirements prescribed under this Act shall take into consideration reports required under other
laws related to innovation, with the view to harmonizing and achieving efficiencies in the
preparation of these reports. Reporting guidelines will be prepared by the NIC for this purpose.

The enumeration of agencies provided herein is w thout prejudice to other agencies tha
tthe NIC may mandate.

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SEC. 17. Diaspora for Innovation and Development. - A Diaspora for Innovation and
Development Program is hereby established to enable the country to mobilize and tap the high
level expertise of the Filipino Diaspora in pursuit of innovation and development efforts.

The NIC, in coordination with the Department of Labor and Employment, the Bureau of
Immigration, the Bureau of Customs, the Department of Foreign Affairs, among other agencies,
will establish the necessary mechanisms to facilitate the participation of qualified members of
the Filipino Diaspora in the country’s innovation drive.

The NIC will develop an inventory of skills and talent requirements and the institutions
or programs needing them as basis for inviting Filipinos in the Diaspora to participate in the
program . The NIC will develop the guidelines for this purpose, in coordination with the DOST
and other agencies that have existing programs and funding for purposes of mobilizing overseas
Filipino talents for innovation and S&T efforts.

SEC. 18, Intellectual Property System and Management. - Republic Act No. 8293, as
amended, or the Intellectual Property Code of the Philippines, will be enforced to protect and
secure the exclusive rights of scientists, inventors and innovators to their intellectual Property
and creations. The pertinent agencies of the government shall promote the diffusion of
knowledge and information for the promotion of national development.

The Intellectual Property Office shall promote the registration of patents, trademarks,
copyrights, industrial designs and geographical indications among scientists, inventors and
innovators to ensure protection of innovation against misappropriation. Towards this end, it shall
stream line administrative procedures of registering patents, trademarks, copyrights, industrial
designs and geographical indications to liberalize the registration on the transfer of technology,
and to enhance the enforcement of intellectual property rights in the Philippines. Reforms to this
effect shall be reported to the NIC within six (6) months from the adoption of this Act.

It shall undertake programs to assist MSMESs in the registration of patents, trademarks,
copyrights, industrial designs and geographical indications.

SEC. 19. Advocacy and Community Education. - The NIC, in cooperation with the
various agencies concerned, will undertake an information and community education program to
rally everyone around the country’s innovation agenda and priorities, and to generate public
support to these initiatives. Such program shall aim to inform the public on available programs,
services, grants, and financial assistance for related trainings, among others, to widen the base of
participation in the conduct of the country’s innovation agenda.

The government will undertake its advocacy and community education program, in
partnership with the business sector and business associations, MSMESs, incubation centers and

networks, Negosyo Centers, and academic or educational institutions.

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The NIC will develop a communication plan for this purpose.

SEC. 20. Innovation Fund. - An Innovation Fund to strengthen entrepreneurship and
enterprises engaged in developing innovative solutions benefiting the poorest of the poor is
hereby established. This. Fund, from which grants will be issued, shall be administered by the
NIC Secretariat which shall screen and approve qualified proposals.

Subject to availability of funds, an initial amount of One Billion Pesos
(PhPI,000,000,000), to be sourced by the DBM from government savings, is hereby allocated for
the initial year’s implementation of this Act, and such funds necessary for its continuous and
effective implementation shall thereafter be included in the annual General Appropriations Act.

Further, the NIC, in coordination with the agencies concerned, shall explore the

possibility of accessing a growing range of bilateral and multilateral funds in order to be able to

assist in the funding of RD&E and other innovation efforts. Public-private partnerships shall also
be encouraged in the development and implementation of innovation initiatives in the sphere of

RD&E, education, product development and testing, among others.

SEC. 21. Removing Barriers to Innovation. - The NIC and its member government
agencies shall eliminate regulatory barriers and cut red tape to boost innovation efforts. Towards
this end, the NIC shall facilitate consultations with stakeholders to identify and remove barriers
to accelerating innovation efforts, including but not limited to procurement rules and regulations,
and to align efforts and enhance collaboration.

Government agencies and all LGUs shall hereby improve efficiencies in addressing
public transactions that impact on innovation, including reducing the number of days and costs
of starting or expanding a business.

Government agencies and LGUs will undertake reforms in their systems and processes to
ensure that applications for starting a business and renewal of business licenses are processed
within three (3) working days from the time the application is received. The processing of other
government permits and clearances, as well as application for patents, shall likewise be
streamlined towards ensuring a business environment that fosters innovation.

For this purpose, the NIC shall develop and prescribe guidelines towards streamlining
and improving the country’s performance in key indicators that will facilitate and promote
innovation. The NIC will identify these indicators for purposes of issuing the guidelines and

monitoring its strict implementation.

SEC. 22. Innovation Alliances. - The NIC shall establish the necessary conditions and
framework that will promote the establishment of Innovation Alliances. Such framework should
encourage companies to engage in collaborative research consortia among private sector entities

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and with academic or educational institutions. This framework shall also facilitate regional
networking and alliances to promote knowledge and technology sharing as well as collaboration

in innovation projects.

SEC. 23. Government Procurement. - Public procurement shall be conducted in
accordance with Republic Act No. 9184 or the Government Procurement Reform Act and its
Implementing Rules and Regulations.

To help stimulate innovation in the country, the NIC, in coordination with the
Government Procurement Policy Board, shall develop public Procurement guidelines, as
authorized under RA 9184, covering the following:

a) Innovative Goods and Services - Requirements for innovative goods and services shall
be identified, together with their clear output specifications, as well as functional or
performance criteria, The guidelines shall also allow project-based competition to
encourage participants to develop innovative solutions;

b) Pre-Commercial Procurement-Government agencies are mandated to determine their
long term needs towards encouraging the development of innovative solutions in
areas for which solutions are not currently available. Procurement contracts of this
nature will involve a multi-stage process; and

°)

Technology Diffusion Procurement - The government may aggregate demand and
initiate a technology procurement process to promote technology diffusion and
market transformation.

The guidelines to be issued by the NIC for this purpose shall ensure efficiency,
transparency, timeliness and relevance in the procurement process.

SEC. 24. Rules and Regulations. - The NIC shall promulgate the implementing rules
and regulations (IRR) and other issuances as may be necessary to ensure the effective
implementation of this Act within sixty (60) days from its adoption.

SEC. 25. Penalty Provisions. - Failure to carry out any of the provisions of this Act will
be ground for the filing of criminal or administrative cases, as may be warranted, under the
Administrative Code of 1987, Republic Act No. 6770 (The Ombudsman Act of 1989); Republic
Act No. 6713 (Code of Conduct and Ethical Standards for Public Officials and Employees);
Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act); Republic Act No. 7160 (Local
Government Code of 1991), and Act No. 3815, as amended (Revised Penal 22 Code), and all
other applicable general and special laws.

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SEC. 26 . Separability Clause. - Should any provision herein be subsequently declared
invalid or unconstitutional, the same shall not affect the validity or the legality of the other

provisions not so declared.
SEC. 27 . Repealing Clause. - All laws, presidential decrees, executive orders, rules and
regulations, other issuances, and parts thereof, which are inconsistent with the provisions of this

Act, are hereby repealed and modified accordingly.

SEC. 28. Effectivity. - This Act shall take effect fifteen (15) days after publication in at

least (2) newspapers of general circulation.

Approved,

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