FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
Second Regular Session 
1 
SENATE 
B 
Introduced by SENATOR EDGARDO J. ANGARA 
EXPLANATORY 
NOTE 
The last decades of the 20" century saw rapid advances in our knowledge of life 
and its mechanisms that have given rise to a new set of practical tools and techniques 
collectively referred to as biotechnology. Biotechnology, in turn, developed for the world 
novel products such as safer, more effective pharmaceuticals, less capital-intensive crops 
and less polluting industrial and agricultural production systems. In this century, with 
concerns about climate change, non-renewable energy sowces, dwindling fresh water 
supply, increasing population and environmental protection on one hand, and new 
discoveries in biology on the other, these factors are expected to greatly increase the 
number of technologies developed based on biological systems. Thus, the 2 1 St century has 
been hailed the biotech century. 
The world biotechnology industry is a multibillion industry. 
Investment in 
medical biotechnology alone is estimated at US$200 billion whereas investment in 
agricultural biotechnology was worth US$67 billion in 2003. The start of the 21" century 
indicates the coming convergence of agriculture and medicine with pharmaceuticals 
being produced by genetically engineered plants and the greater acceptance of herbal 
medicine. The biotech century will further see the integration of agriculture and industry 
especially in energy production. Enzyme-based processing of agricultural produce and its 
by-products are being developed to produce biofuels, plastics and other products. It is 
predicted that this will eventually comprise the largest sector of the biotechnology 
industry. 
As early as 1979, the Philippine government has invested in biotechnology with 
the establishment of the National Institute of Biotechnology and Microbiology 
(BIOTECH), now known as the National Institute of Molecular Biology and 
Biotechnology at UP Los Bafios. This institute has been replicated in four other campuses 
of the University of the Philippines System. In mid-l980s, the Department of Science and 
Technology identified biotechnology as a priority investment area and developed the 
UPLB science park for business incubation. The Department of Agriculture two years 
ago organized its leading research centers - Philippine Rice Research Institute, Philippine 
Carabao Center, and National Fisheries Research Institute into a network of 
biotechnology research centers for crops, livestock and aquatic resources, respectively. 
Still these investments have not sufficiently fostered the growth of a biotechnology 
industry as what was previously envisioned in the establishment of the BIOTECH at UP 
Los Bafios. 


The US, Canada, Australia and several EU countries, as well as Singapore, 
Malaysia, China, India and Taiwan, have put in place a policy environment that 
encourages bioindustry development. These policies include support for high quality 
research, support to rapidly develop research results into marketable products/services, 
support for start-up companies, and other incentives for industry to develop/adopt new 
technologies. Large and competitive grants are provided for high quality research work in 
research institutions. Huge grants are also provided for industry-public collaborations to 
fast-track technology development. Guarantee funds for venture capital investing in 
biotechnology have been provided. Science parkshioincubators were established to 
provide infrastructure, technical, administrative, marketing and legal support for start-up 
companies. Technology transfer from public research institution is encouraged. For 
example, the US passed the Bayh-Doyle Act in 1980 which was credited with stimulating 
significant growth in university-industry technology transfer and research collaborations. 
France encourages scientists to become entrepreneurs by allowing them to leave their 
post for a maximum of 6 years and awards a maximum of 15% of capital in the creation 
of a start-up. Protection of intellectual property rights further encouraged technology 
development and biotechnology companies are graded according to their patent 
portfolios. In Malaysia and Singapore, foreign companies are encouraged to locate in 
their countries; whereas Canada requires foreign companies doing business within the 
country to establish R&D units. 
In the Philippines, we need to put in place the appropriate policy environment to 
promote bioindustry development. Biodiversity, our greatest resource, remains untapped. 
While we continue to train scientists, lack of local employment lead them either to other 
occupations or to foreign shores. The cumbersome government accounting and auditing 
procedures often results in poor fund utilization in public research institutions and stifles 
scientific creativity. Industry-academe collaborations in technology development are few. 
Many policies encourage individual rather than multidisciplinary achievements, yet 
biotechnology requires amultidisciplinary approach. Government funds for research 
cannot be committed for terms longer than one year yet technology and product 
development may take years. Venture capital for biotechnology is virtually non-existent. 
The present bioprospecting policy is biased against a Filipino start-up and favors well- 
capitalized foreign companies. Many scientists are not familiar with intellectual property 
rights protection. Although biotechnology investment is highly profitable, it is also very 
risky with a long gestation period, hence, private sector investments in biotechnology 
R&D is low. 
The proposed legislation intends to address the weaknesses of our system to 
enable the country to develop a biotechnology-based industry. The private sector is given 
incentives to invest in biotechnology R&D by allowing the total R&D cost and prices of 
shares of stocks in biotech companies as tax deductible. Majority of the government’s 
investments in biotechnology R&D is awarded through a government corporation so as to 
lessen the burden of an unwieldy accounting and auditing system. 


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FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
Second Regular Session 
1 
S. B. NO. 
I 
Introduced by SENATOR EDGARDO J. ANGARA 
AN ACT 
PROMOTING THE GROWTH OF A BIOTECHNOLOGY INDUSTRY IN THE 
PHILIPPINES AND THE CREATION OF WEALTH FROM BIODIVERSITY 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled 
CHAPTER I 
TITLE, DECLARATION OF POLICY AND OBJECTIVES 
SECTION. 1. Short Title. - This Act shall be known as the “Bioindustry Development 
Act of 2009”. 
SEC. 2. Declaration of Policy. - It is hereby declared the policy of the State to fuIly 
recognize that biotechnology is a powerful tool in the creation of wealth from human capital as 
well as from biodiversity. 
SEC. 3. Objective. - The Act aims to put in place a policy environment for the 
continuing generation and application of biological knowledge and promote the sustainable 
growth of a biotechnology-based industry. 
SEC, 4. Definition of Terms. - As used in this Act, the following terms shall be taken to 
mean as follows: 
(a) 
“Biodiversity” refers to the variability among living organisms from all sources, 
including, terrestrial, marine, and other aquatic ecosystems, and the ecological 
complexes of which they are part, such as diversity within species, between 
species and of ecosystems; 
(b) 
“Bioindustry” or “biotechnology-bused industry” consists of companies 
involved in research, development, manufacture and sale of materials such as cell 
cultures, catalysts, genetic materials, immune response materials, biochemicals, 
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enzymes, proteins, bioactive molecules, genetically engineered organisms, and 
equipment specifically used in biological and genetic research. It also includes 
service organizations performing consulting, testing, processing, and storage of 
such products; 
“Biotechnology” refers to a set of tools and procedures involving living 
organisms or parts thereof that produces a product or service; 
‘‘Start-up” refers to a newly established biotech company for profit. 
CHAPTER I1 
THE PHILIPPINE BIOINDUSTRY R&D CENTER 
SEC. 5. The Philippine Bioindwstry Research andllevelopment Center. - To ensure the 
continued availability of suitable yet innovative and competitive bio-based technologies, a 
Philippine Bioindustry Research and Development (R&D) Center (hereafter the “Center”) shall 
be established. 
SEC. 6. Functions ofthe Center. The Center shall perform the following functions: 
(a) 
(b) 
Develop and market competitive, biologically-based technologies and products; 
Harness Philippine biodiversity in developing competitive products for the world 
market; 
Conduct contract research and provide technical services to the public; 
Manage a Biotechnology Research Fund that will support off-Center research and 
development relevant to its corporate objectives as well as support a research 
fellowship and training program; 
Establish state of the art facilities for research and study. 
(c) 
(d) 
(e) 
SEC. 7. Powers ofthe Center. - To enable the Center to carry out its functions, it shall 
have the following powers: 
(a) 
To own, hold, plan and construct buildings and other facilities as may be 
necessary or proper to attain its purposes and objectives; 
To enter into, make and execute contracts and agreements of any kind or nature; 
To borrow money and obtain loans from all sowces, whether local or foreign and 
whether government or private, in order to finance its research programs and its 
capital and operating expenditures; 
To invest in, purchase or otherwise acquire, own, hold, use, lease, mortgage, 
pledge, encumber, sell, assign, convey, exchange, or otherwise deal in real and/or 
personal properties of whatever kind and nature, or any interest therein, including 
shares of stock, bonds, notes, securities and other evidences of indebtedness of 
(b) 
(c) 
(d) 


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natural or juridical persons, whether domestic or foreign and whether government 
or private; 
To conduct bioprospecting activities: Provided, That in conducting these 
activities, it shall be exempted from the fees and requirements of Republic Act 
No. 9147, otherwise known as The Wildlife Resources Conservation and 
Protection Act; 
To acquire or obtain from any governmental authority, whether national or local, 
foreign or domestic, or from any person, corporation, partnership, association or 
other entity, such charters, franchises, licenses, rights, privileges, assistance, 
financial or otherwise, and concessions as are conducive to and necessary or 
proper for the attainment of its purposes and objectives; 
To receive and acquire from any person, government and other private entity, 
whether foreign or domestic, grants, donations and contributions consisting of 
such properties, red or personal, including funds and valuable effects or things, as 
may be useful, necessary or proper to carry out its purposes and objectives and to 
administer the same in accordance with the terms of such grants, donations and 
contributions, consistent with its purposes and objectives; 
To establish new corporations solely, in partnership, or in consortium with other 
entities; 
To exercise all the powers of a corporation under the general corporation law, 
insofar as such powers are not inconsistent with the provisions of this Act; and 
(I)+ To exercise such other powers and functions and perform such other acts as may 
be necessary, proper or incidental to the attainment of its purpose and objectives. 
SEC. 8. Composition of the Board of Directors. - The Center shall have a corporate 
structure and be governed by a Board of Directors (hereafter the “Board”) composed of 
(a) 
The Secretary of the Department of Trade and Industry @TI) as the ex-oficio 
Chairperson; 
The President of the Center; 
(b) 
(c) 
Three (3) business leaders; 
(d) 
Two (2) respected scientists, in any one the relevant fields of molecular biology, 
biotechnology, genetics, biochemistry, chemistry or chemicalhioprocess 
engineering. 
Initially, the members of the Board shall be selected by the Chairperson based on a set of 
criteria to be determined and from nominations submitted by the Biotechnology Coalition of the 
Philippines (BCP), Chamber of Herbal Industries of the Philippines, Inc. (CHIPI), and Philippine 
Food Processors and Exporters Organization Inc. (PhilFoodex). 
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SEC. 9. Functions of the Board of Directors. - The Board shall exercise the following 
powers and functions: 
To define and approve the programs, plans, policies, procedures and guidelines 
for the Center in accordance with its purposes and objectives, and to control the 
management, operation and administration of the Center; 
To approve the Center’s organizational structure, staffing pattern, operating and 
capital expenditure, and financial budgets, prepared in accordance with the 
corporate plan of the Center; 
To approve salary ranges, benefits, privileges, bonuses, and other terms and 
conditions of service for all officers and employees of the Institute, upon 
recommendation of the President; 
To appoint, transfer, promote, suspend, remove or otherwise discipline any 
subordinate officer or employee of the Center, upon recommendation of the 
President; 
To create such committee or committees and appoint the members thereof, as may 
be necessary or proper for the management of the Center or for the attainment of 
its purposes and objectives; 
To determine the research priorities of the Center consistent with the framework 
of its purposes and objectives; and 
To exercise such other powers and functions and perform such other acts as may 
be necessary or proper for the attainment of the purposes and objectives of the 
Institute. 
SEC. 10. President and Other Officers. - The Center shall be headed by a President who 
shall be appointed by the Board. He/she shall serve at the pleasure of the Board of Directors. 
The President shall be assisted by a Vice-president and such other Program Managers as 
the Board may determine to carry out the purposes and objectives of the Center. 
SEC. 11. Powers, Functions and Duties of the President. - The President shall be 
directly responsible to the Board, and shall have the following powers, functions and duties: 
(a) 
To exercise over-all supervision and direction over the implementation of all 
research, development and marketing programs of the Center, and in general, to 
supervise and direct the management, operation and administration of the Center; 
To draft a program of operation for the implementation of all activities necessary 
to attain the objectives of the Center subject to the approval of the Board; 
To execute contracts, incur obligations, acquire and dispose of assets and deliver 
documents on behalf of the Center within the limits of the authority delegated to 
him by the Board; 
(b) 
(c) 
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(d) 
To implement and enforce policies, decisions, orders, rules and regulations 
adopted by the Board; and 
To exercise such other powers and functions and perform such other duties as 
may be authorized or assigned by the Board. 
(e) 
SEC. 12, Ownersltip ofthe Certter. - The Center shall exist as a government-owned and 
controlled corporation for a maximum period of ten (10) years from the effectivity of this Act, 
after which time it shall be sold off to the private sector: Provided, however, That in the event the 
Center becomes profitable earlier than the ten (10) year period provided, it shall be sold off to the 
private sector despite the period not having lapsed. 
SEC. 13. Scientific Manpower. - To enable the Center to retain its scientific staff, it 
shall offer salaries at rates competitive with other countries. Upon the privatization of the Center, 
fifteen percent (15%) of the shares shall be awarded to the scientific staff that has been with the 
Center for at least five (5) years and has produced at least one patented technology or eight (8) 
articles published in scientific journals cited in the Institute for Scientific Information (IS) 
Journal Citation Report. 
SEC. 14. Initial Operations. - The BCP is hereby designated to draft a Program of 
Operations for the Center. The Secretary of the DTI is hereby authorized to provide a grant of 
Three Million Pesos (P3,000,000.00) to enable the BCP to carry out this function. 
SEC. 15. Funding - The amount of Five Hundred Million Pesos (P500,000,000.00) shall 
be released to cover the operation of the Center for ten (10) years. 
CHAPTER 111 
THE BIOTECHNOLOGY GUARANTEE FUND 
SEC. 16. The Biotechnology Guarantee Fund. - A Biotechnology Guarantee Fund in 
the amount of Five Hundred Million Pesos (P500,000,000.00) is hereby established to provide 
guarantee for venture capital invested in biotechnology companies. 
CHAPTER IV 
INCENTIVES FOR BIOTECH COMPANIES AND COMPANY START-UPS 
SEC. 17. A biotech company shall, for a period of five (5) years from the time it is 
subject to corporate income tax, deduct the funds expended in R&D within the country from its 
taxable income. Biotech companies can also avail of the incentives granted to companies 
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registered as Barangay Micro Business Enterprises (BMBEs) in accordance with Republic Act 
No. 9178; or registered with the Philippine Economic Zone Authority (PEZA) in accordance 
with Republic Act No. 7916 or Board of Investments (BOI) in accordance with Executive Order 
No. 226, otherwise known as the Omnibus Investments Code of 1987, as amended. After the 
income tax holidays provided by such instruments have expired, the R&D expenditures of the 
biotech companies can then be used as tax deduction. 
SEC. 18. A biotech company shall be allowed to purchase equipment, materials and 
articles abroad, as may be necessary or proper to carry out its powers and functions and attain its 
purposes and objectives, and shall be exempt from the payment of any and all forms of taxes, 
duties, fees and charges imposed by any governmental authority, whether national or local, on 
any and all such importation of equipment, materials, articles and services: Provided however, 
that the same are not available locally on favorable terms. 
SEC. 19. Shareholders of new locally-based biotechnology companies shall be able to 
claim as tax credit the amount paid for the shares in the same taxable year. 
SEC. 20. Scientists in public institutions are hereby allowed up to five (5) years leave of 
absence to establish a biotech start-up based on technologies they themselves developed. 
SEC. 21. In order to encourage top executives and technology investors to participate in 
the operation of biotech companies and R&D activities and to share their achievements, new 
shares issued by a biotech company to top executives and technology investors (in return for 
their knowledge and technology) shall be excluded from the amount of their consolidated income 
or corporate income of the current year for taxation purposes: Provided, however, That if the title 
to the aforesaid shares is transferred with or without consideration, or distributed as estate, the 
total purchase price or the market value of the shares at the time of transfer as a gift or 
distribution as estate shall be deemed income generated in that taxable year and such income less 
the acquisition cost shall be reported in the relevant income tax return. 
SEC. 22. Subject to the approval of the Department of Agriculture, the Agricultural 
Competitiveness Enhancement Fund can be used as financial grants for technology start-ups with 
agriculture- and aquaculture-related products and services for seed capital and for subsequent 
expansion. 
CHAPTER V 
MISCELLANEOUS PROVISIONS 
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SEC. 23. Repealing Clause. - The pertinent provisions of Republic Act No. 9147, 
otherwise known as The Wildlife Resources Conservation and Protection Act; and all other laws, 
presidential decrees or issuances, executive orders, presidential proclamations, rules and 
regulations or parts thereof inconsistent with the provisions of this Act, are hereby repealed, 
modified or amended accordingly. 
SEC. 24. Separability Clause. - If'any provision of this Act is declared unconstitutional, 
the same shall not affect the validity and effectivity of the other provisions hereof. 
SEC. 25. Effectivity. - This Act shall take effect fifteen (15) days after its publication in 
at least two (2) newspapers of general circulation. 
Approved, 
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