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SIXTEENTH CONGRESS OF THE REPUBLIC 
) 
.If,~" .f l~. j>.",.t.r~ 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
Senate Bill No. 5 5 9 
"13 
JUL -8 
1\ 9 :04 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA" 
EXPLANATORY NOTE 
I 
In recognition of the importance of science and technology as tools towards 
economic development and national progress, the Constitution has amply 
provided that t he State shall give priority to science and technology, research and 
development, inventions, innovations, and their utilization, provide incentives, 
scholarship, and encourage private participation in programs of basic and applied 
scientific research. 
In line with such goals and objectives, this bill provides for the creation and 
establishment of the 
Philippine 
Science 
and 
Technology 
Development 
Corporation, which shall be responsible, among others, in providing funds for 
private venture capital corporations, and provide financial and other forms of 
assistance in developing, adapting, and commercializing indigenous and imported 
technologies. 
It is hoped that this bill will contribute and promote the development and 
advancement of science and technology in our country, and the utilization thereof 
as an )nstrument to our economic progress. In view of the foregoing, the 
immediate enactment of the bill is earnestly urged. 
GOY EJERCITO ESTRADA 
Senator 
"------------------------


SIXTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
Senate Bill No. 559 
) 
) 
) 
fil'fU!h? 
. ~H.;. "f H!. S-"tfl •• ~ 
'13 
JUL -8 A 9 :04 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRAoA 
" " 
AN ACT 
CREATING THE PHILIPPINE SCIENCE AND TECHNOLOGY DEVELOPMENT 
CORPORATION AND APPROPRIATING FUNDS THEREFOR 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Title. - This Act shall be known as "The Philippine Science 
and Technology Development Corporation Act". 
SEC. 2. Declaration of Policy. - It shall be the policy of the State to 
promote the rapid development of science and technology to hasten the 
attainment of economic progress for the Philippines by the year 2010. For this 
purpose, the State shall establish an institution that shall adopt policies, which 
shall fast track technology adaptation and commercialization, source tre latest 
technology and innovation' that will modernize the production sector and raise 
productivity and enhance global technology competitiveness in the world export 
market by encouraging the private sector to undertake scientific and technological 
R&D (Research and Development) and technology transfer. The Corporation 
shall provide venture capital fund for accredited venture capital firms. 
SEC. 3. Creation of Philippine Science and Technology Development 
Corporation. - To implement the policy enunciated in this Act, there is hereby 
created a body corporation to be known as the Philippine Science and Technology 
Development Corporation hereinafter referred to as the "Corporation". It shall have 
its principal office in Metro Manila but may have such branches or offices or 
subsidiaries in other areas as it may deem necessary for the proper conduct of its 
business. It shall exist for a term of fifty (50) years from the effectivity hereof 
renewable for the same period unless otherwise provided by law. 
SEC. 4. Powers and Functions. - The Corporation shall assume primary 
responsibility in providing funds for private venture capital corporations (VCCs) 
duly accredited by the Corporation which shall provide financial and other forms of 
assistance in developing, adapting and commercializing indigenous or imported 
technologies. Specifically, it shall: 
a) 
Provide support for all aspects of the introduction, improvement and 
adaptation of advanced technology abroad through equity investment 
or loans; 


b) 
Own, lease, operate or otherwise hold lands, buildings, equipment and 
such other immovable properties as may be necessary to carry out its 
functions and to sell the same; 
c) 
Enter into, make, perform and carry out contracts of every class and 
description necessary or accidental to the realization of its functions 
with any person, firm or corporation, private or public; 
d) 
Promulgate such rules and regulations as may be necessaryl to carry 
out. the provisions of this Act. Such rules and regulations shall take 
effect fifteen (15) days following the publication twice in at least two (2) 
national newspapers of general circulation; 
e) 
Adopt, alter and use a corporate seal which shall be juridically noticed; 
f) 
Sue and be sued; 
g) 
Receive donations, grants, bequest and utilize the same for the 
attainment of its objectives. Such donations, grants and bequest shall 
be exempt from the payment of transfer taxes and be fully deductible 
for the gross income tax purposes; and, 
h) 
Perform any and all acts, and exercise any and all powers as may 
necessary to carry into effect the provisions of this Act or as are 
essential to the proper conduct of its operations. 
SEC. 5. Board of Directors. - The governance and policy direction of the 
Corporation shall be vested in the Board of Directors, hereinafter referred to as the 
Board, which shall have overall responsibility for the formulation and coordination 
of a comprehensive program geared towards the realization of rapid technology 
development in the Philippines. The Board shall be composed of the following 
who, except for the representatives from the private sector, shall serve in an ex-
officio capacity: 
1) Chairman, to be appointed by the President of the Philippines; 
2) Secretary of the Department of Science and Technology, Member; 
3) Secretary of the Department of Trade and Industry, Member; 
4) Secretary of the Department of Energy, Member; 
5) Managing Director of the Board of Investments, Member; 
6) President of the Philippine Chamber of Commerce_ and Industry, 
Member; 
7) Director - General of the National Economic development Authority, 
Member; 
8) Two representatives from the Academe; one (1) from Science and one 
(1) from Technology, Members; 
9) Two (2) representatives from the Private Sector, one (1) from ~mall and 
Medium Enterprises and one (1) from High- Tech Industries. 
. 
I 
Members of the Board shall meet regularly at least quarterly on any date to 
be determined by its members: Provided, however, that the Chairman may 
convene special meetings to discuss urgent matters that need immediate 
resolution. The Board Members, except for the ex-officio members, shall be 
entitled to per diem for each meeting actually attended at suCh amount to be 
determined by the Board but not to exceed Five Thousand Pesos (P5,OOO.OO) per 


month. If for any reason, an ex- officio member of the Board is unable to attend a 
meeting, he shall be represented therein by his duly authorized representative. 
The Board Members except for the ex- officio members, shall hold office for 
a term of two (2) years, without prejudice to re- appointment. 
Whenever a vacancy shall occur in the Board, the person appointed to fill 
the vacancy shall hold office for the unexpired term of the position declared 
vacant. Any director may be removed by the president of the Philippines for just 
and legal cause. Six members of the Board shall constitute a quorum for the 
transaction of business. 
SEC. 6. Powers and Duties of the Board. - The Board shall have the 
following powers and duties: 
a) 
b) 
c) 
d) 
Prescribed, amend, modify or repeal by- laws, rules and regulations, 
consistent with the provisions of this Act, governing the manner in 
which the general business of the Corporation shall be exercised; 
Appoint and fix the compensation of the President of the Corporation, 
subject to the approval of the President of the Philippines; 
Approve the annual budget of the Corporation or such supplementary 
budgets thereof as may be submitted to the Board by the President of 
the Co~poration from time to time; 
I 
I 
Call upon and deputize any government agency or institution to carry 
into effect the provisions of this Act. 
SEC. 7. Management - The management of the Corporation shall be 
vested in the President of the Corporation who shall be appointed by the President 
of the Philippines. He shall direct and manage the affairs of the Corporation. 
The president of the Corporation shall appoint, remove, suspend or 
otherwise discipline officers and employees of the Corporation subject to the rules 
and regulations of the Civil Service Commission. 
The President of the Corporation shall be a natural born citizen of the 
Philippines, not less than thirty- five (35) years of age, of proven honesty and 
integrity, extensive experience in business and finance management and with a 
technical training background either in the science or engineering. 
SEC. 8. Exemptions. - The Corporation shall pe exempted from payment 
of the following taxes, fees, or charges: 
a) 
All taxes, fees and other charges levied by the National Government, 
its instrumentalities and political subdivisions; 
b) 
All duties, fees and other charges imposed under the Tariff and 
Customs Code of the Philippines, including such filing, docket and 
service fees, bonds and other charges or cost in any court or 
administrative proceedings in which the Corporation may be a party; 


c) 
All income taxes, franchise taxes and realty taxes levied by the 
National Government and its pOlitical subdivisions; and, 
d) 
All duties and arrastre fees in so far as share of the gover~ment is 
concerned, including all charges and fees imposed under Pre,sidential 
Decree No. 857, compensating taxes and advance sales taxes, 
wharfage, fees, and tonnage dues on the import/export of goods 
required for its operation and projects. 
All documents or contracts executed by or in favor of the Corporation shall 
be exempt from the payment of documentary and science stamp taxes and 
registration fees: Provided, however, That this exemption shall not apply to taxes 
and assessment payable by persons or entities transacting business with the 
Corporation. 
SEC. 9. Creation of a Venture Capital Fund. - There shall be created a 
Technology Venture Capital Fund for the commercialization, utilization and 
development of local and foreign technology. The Fund shall be administered in 
trust by the corporation and appropriated from the national budget in the amount of 
Five Billion Pesos (P5,OOO,OOO,OOO.OO). 
Any proceeds or increments arising from the use of the Fund shall form part 
thereof. 
SEC. 10. Programs, - The Fund shall cater to technologies that can be 
developed and commercialized, which shall include but not limited to: 
1) 
technology and inventions using indigenous materials which could 
have potential in the development of import- substitute products and 
export - variable products; 
2) 
that which will foster competitiveness in the area of science and 
teohnology production; 
3) 
that which will increase net value- added, generate employment, 
increase utilization of abundant local materials and market potentials; 
commercially- viable technologies developed by the DOST and other 
research institution that produce new agri-based products, non-
traditional export or import substitutes; and, 
4) 
subject' to existing laws, local and bankable imported tec~nOIOgieS 
such as those available via franchise, licensing and dealership 
agreements, joint ventures and other arrangements which minimize 
start-up risks and will generate significant local value added and 
improve the competitiveness of local industries. 
SEC. 11. Capitalization. - The Corporation shall have an authorize capital 
stock of Fifty million pesos (P50,OOO,OOO.OO). This capital shall be wholly 
subscribed to and paid by the National Government. The National Government 
shall make additional equity investment into the Corporation out of requirements of 
the Corporation. 


, ,. 
SEC. 12. Fund Investors. - The Corporation is hereby authorized to accept 
investors whether public or private who shall be issued certificates of participation 
stating the number of units they own with the value per unit based on the net asset 
value at a time of the entry or exit. The amount of appropriation necessary for the 
maintenance of fund shall be on diminished scale and in proportion to the amount 
of capital coming from the public and private sector. Five years from the effectivity 
of this Act, the Corporation shall start to privatize its ownership until full 
privatization is realized within the period prescribed, by the Board of Directors. 
SEC. 13. Appropriations. - The amount necessary for the effective 
implementation of this Act shall be appropriated from the funds in the National 
Treasury not otherwise appropriated. Thereafter such sum as may be necessary 
for the continuous implementation of this Act shall be included in the annual 
General Appropriations Act. 
~ 
SEC. 14. Repealing Clause. - All laws, executive orders, rules and 
regulations or parts thereof, inconsistent with the provisions of this Act are hereby 
repealed, amended, or modified accordingly. 
I 
SEC. 15 • . Separability Clause. - Should any part, section or provision of 
this Act be held invalid or unconstitutional, no other part, section or provision 
hereof shall be affected thereby. 
SEC. 16. Effectivity·. This Act shall take effect upon its approval. 
Approved,