THIRTEENTH CONGRESS OF THE REPUBLIC ) 
OF THE PHILIPPINES 
1 
'04 
DEC 16 ?li 35 
First Regular Session 
1 
Introduced by Senator Miriam Defensor Santiago 
EXPLANATORY NOTE 
Business incubators housed in academic settings provide unique educational 
opportunities for students, provide entrepreneurs with enhanced access to a skilled workforce, 
and bring a wealth of resources to business, academia, and communities. 
Academic affiliated incubators bridge the missions of academic institutions by bringing 
together education, economic development, and technology commercialization efforts. 
Studies in the United States have shown that incubator tenant companies have an average 
success rate of 87 percent, and 90 percent for technology-based incubator tenant companies. 
These success rates are dramatically higher than the success rates for companies in the general 
economy. Incubator companies are also more likely to remain in the same communities as they 
grow and provide high paying jobs and benefits to their employees. 
Business incubators help academic institutions contribute to local goals of sustaining 
economic development in their surrounding communities. Education in entrepreneurship and 
other business formation slcills is essential to business success and sustainable economic 
development. 
The purpose of this Act is to encourage entrepreneurship by increasing the role for 
academia in entrepreneurship by providing space and expertise in an academic setting to house 
and support new and emerging small businesses. 


THIRTEENTH CONGRESS OF THE REPUBLIC ) 
OF THE PHILIPPINES 
1 
YM 
UEC 16 P3 :yj 
First Regular Session 
1 
Introduced by Senator Miriam Defensor Santiago 
AN ACT 
TO SUPPORT BUSINESS INCUBATION IN ACADEMIC SETTINGS 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assem bled: 
SECTION 1. Short Title. - This Act shall be known as the “Linking Educators and 
Developing Entrepreneurs for Reaching Success (LEADERS) Act of 2004.” 
SECTION 2. Definitions. -As used in this Act, the following terms shall mean: 
(1) “Degree-Granting Institution” - all institutions for higher learning with teaching and 
research facilities constituting a graduate school and professional schools that award master’s 
degrees and doctorates and an undergraduate division that awards bachelor’s degrees. 
(2) “Incubator” - an entity affiliated with or housed in a degree-granting institution that 
provides space and coordinated and specialized services to entrepreneurial businesses which 
meet selected criteria during the businesses’ start-up phase, including providing services such as 
shared office space and services, access to equipment, access to telecommunications and 
technology services, flexible leases, specialized management assistance, access to financing, and 
other coordinated business or technical support services. 
(3) “CHED” - Commission on Higher Education. 
SECTION 3. Program Authorized. - 
(1) 
IN GENERAL. - The CHED is authorized to support the establishment and 
development of incubators. 
(2) 
the CHED 
ALLOCATION OF FUNDS. - From the amount appropriated under Section 8, 


(a) shall use 80 percent (80%) of the amount to - 
(i) make awards, on a competitive basis, in amounts of P20,000,000.00 to help 
acquire or renovate space for incubators; and 
(ii) make awards, on a competitive basis, in amounts of P20,000,000.00 to 
P50,000,000.00, for developing curricula, providing seiliices (including 
preparing corporate charters, partnership agreements, and basic contracts, 
assistance with patents, trademarks, and copyrights, and technology 
acquisition services), or providing programming for entrepreneurs housed in 
an incubator; 
(b) shall use 10 percent (10%) of the amount to make awards, on a competitive 
basis, in amounts of P20,000,000.00 to P50,000,000.00, for feasibility studies for 
determining the need for or siting of incubators; and 
(c) shall use 10 percent (10%) for research regarding best practices for incubator 
programs, including the development of a benchmarking system based on uniform 
measures, and for dissemination of information regarding such practices. 
(3) CONTRACTS. - The CHED is authorized to contract with organizations with 
expertise in business incubation practices for the purposes of carrying out subsection (2)(c). 
(4) RECIPIENTS. - The CHED shall make an award - 
(a) described in subsection (2)(a) to a nonprofit entity that has a strong affiliation with 
a degree-granting institution and manages or provides technical assistance to the degree- 
granting institution's affiliated incubator, or if no non-profit entity manages or provides 
technical assistance to the incubator, to the degree-granting institution managing the 
incubator; and 
(b) described in subsection (2)(b) to a degree-granting institution, or a non-profit 
municipality, city, township, or community development organization. 
SECTION 4. Uses Of Funds. - Funds awarded under section 3(2)(aj(iij may be used for - 
(1 j curriculum, training, or technical assistance developed by academic faculty with 
participation from entrepreneurship experts and local government leaders; 


(2) programming that contributes to a coordinated set of business assistance tools, such as 
developing management teams, providing workforce development, forming strategic alliances, 
developing capital formation networks, and developing customized plans to help entrepreneurs 
meet the challenges of doing business in their specific communities; and 
(3) hiring staff to coordinate the activities described in paragraph (1) or (2) or for 
curriculum development. 
SECTION 5. Applications. - 
(1) IN GENERAL. - Each entity desiring assistance under this Act shall submit an 
application to the CHED at such time, in such manner, and accompanied by such information as 
the CHED may require. 
(2) CONTENTS. - Each application shall contain an assurance that the activities to be 
assisted - 
(a) have the support of the municipality or city, in which the incubator is housed 
or proposed to be housed; and 
(b) are consistent with the local economic development plan or strategic master 
plan. 
(3) PRIORITY. - The CHED shall give priority to funding applications under this Act 
that provide strong educational opportunities to students in entrepreneurship, and that require 
significant collaboration between businesses, academia, and local government and economic 
development leaders. 
(4) CONSIDERATION. - 
(a) IN GENERAL. - In addition to applications from other appropriate sources, 
the CHED may give consideration to funding applications under this Act that support - 
(i) the building of new incubators; 
(ii) incubators located in economically distressed areas; 
(iii) incubators with successful graduation rates for tenant companies; 
(iv) incubators that have shown demonstrable economic benefits in their 
surrounding communities; 


(v) incubators that work with faculty entrepreneurs or university-based 
research; or 
(vi) incubators located in rural areas where the presence of an incubator 
may enhance and diversify the area’s economy through expanded 
technology commercialization. 
(b) DEFINITION OF CONSIDERATION. - In this subsection, the term 
“consideration” does not mean priority. 
SECTION 6. Matching Funds. - 
Each entity receiving government assistance under section 3(2)(i) shall contribute 
matching funds, in an amount equal to the amount of government assistance received under this 
Act, toward the costs of the activities assisted under this Act. The non-government share required 
under this section may be provided in the form of in-kind contributions. 
SECTION 7. Report. - 
The CHED, at the end of the third year for which assistance is provided under this Act, 
shall prepare and submit to Congress a report that - 
(1) describes the most effective or innovative additions to curricula developed under this 
Act; 
(2) contains a comparison of small business survival rates for small businesses that 
started up in incubators versus small businesses that did not so start; 
( 3 )  describes factors leading to any success of incubator businesses; 
(4) describes the best role for degree-granting institutions in business incubation; and 
(5) contains a comparison of academic-affiliated incubators of specific missions and ages 
supported under this Act with incubators with similar missions and ages that are not supported 
under this Act. 


SECTION 8. Authorization ofAppropriations. - For the purpose of carrying out this Act, 
such sums, as may be deemed appropriate by the CHED, are hereby authorized to be 
appropriated from the National Treasury. 
SECTION 9. Separability Clause. - If any provision or part hereof, is held invalid or 
unconstitutional, the remainder of the Act or the provision not otherwise affected shall remain 
valid and subsisting. 
SECTION 10. Repealing Clause. - Any law, presidential decree or issuance, executive 
order, letter of instruction, administrative order, rule or regulation contrary to, or inconsistent 
with the provisions of this Act is hereby repealed, modified or amended accordingly. 
SECTION 11. ESfectivity Clause. - This Act shall take effect fifteen (15) days after its 
publication in at least two (2) newspapers of general circulation. 
Approved, 
/alp