Republic of the Philippines
HOUSE OF REPRESENTATIVES

Quezon City

SEVENTEENTH CONGRESS
Second Regular Session

House Bill No.6476

INTRODUCED BY REPRESENTATIVE ARTHUR C. YAP

EXPLANATORY NOTE

In the 2017 Global Innovation Index (Gil) published by Cornell University, INSEAD, and the
World Intellectual Property Organization (WIPO), it was reported that the Philippines ranks 73°
out of 127 economies in terms of innovation capabilities and results. With a score of 32.5,
alongside Morocco and Tunisia’, it is deemed one of the countries lagging behind in terms of
innovation. The same study also suggested that high-income countries outpace developing
countries by a wide margin across the board in terms of scores, and that a persistent innovation
divide exists.

In 2009, Philippine Institute for Development Studies (PIDS), National Statistics Office (NSO) and
Department of Science and Technology (DoST) conducted a survey citing the 2009 Survey on
Innovation Activities (SIA) of the Philippine Statistics Authority showing that the average annual
expenditure for innovation activities was about P:12.4 million. The average annual spending for
large firms was P30.2 million, for medium sized companies P3.2 million, for small firms P2.96
million, and for microestablishments P51,200. Overall, 37.6 percent said they were product
innovators, mostly to introduce new products to their respective markets. The study also
pointed out that only 3.4 percent of the total sample said they had public financial support for
innovation. Medium sized companies had the most access with 7.5 percent, followed by large
firms with 4.4 percent and small companies with 1.9 percent. While 21.5 percent of the total
sample said they had government assistance to innovate, none of the microestablishments had
public financial support for innovation. Companies apparently had better access to non-
financial government support.”

This discrepancy in innovation funding is primarily due to the lack of development policies that
drive inclusive development, promote the growth and national competitiveness of Micro, Small
and Medium Enterprises (MSMEs) such as the lack of a lead government agency responsible for
improving innovation governance in the country, that shall foster a long-term vision and
focused priorities for innovation as driver for inclusive and sustainable economic growth of the
country, while strengthening the interactions among different actors from the public and
private sector, academe, MSMEs, research and development institutions.

With the adoption of innovation as a vital component of the country’s development policies to
drive inclusive development and growth for the competitiveness of micro, small and medium
enterprises, there will be better 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 through the creation of a National Innovation Council (NIC) and
establishment of a long term National Innovation Agenda and Strategy Document (NIASD), the
country will finally be able 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, that shall foster the country’s
innovation capabilities through a more inclusive economy, for the benefit of the Filipino people.

In view of the foregoing, immediate passage of this bill is earnestly sought.


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Republic of the Philippines
HOUSE OF REPRESENTATIVES
‘Quezon City

SEVENTEENTH CONGRESS

Second Regular Sessign

House Bill No.

INTRODUCED BY REPRESENTATIVE ARTHUR C. 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 harness 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.

ic)

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.

d) 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.


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¢) 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;

Dd)

“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;

¢) “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
ports collaborative research, development and extension (RD&E)
tives and innovation-related activities between and among academic or
educational institutions, RD&E centers, and business;

“Innovation Governance” refers to the institutional set up 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;

8)


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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;

1) “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;

q) “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;

t

“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;


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

“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

vj

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 and 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;

¢)

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;

{) Encourage entrepreneurial attitude in order to stimulate growth ambitions in
businesses, especially 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



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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 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.

‘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

q) 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.

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 National Innovation Council. - 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 asa source of strategic intelligence for national research and innovation
policymaking;

e) Engage technological expertise in strategic and innovation policymaking;

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

g) 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;

) 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 project

n) 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
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.

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:

a) Provide secretariat support to the NIC, including the preparation of draft
strategies, priorities, and other outputs to be adopted by the NIC;

b) 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;

e) Build strategic intelligence on human capital development;

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

¢)



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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.

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 harness 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
educational 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
concerned 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:

a)

Establish centers of research excellence, to bring together multi-
sector/ stakeholder teams to address multi-disciplinary research agenda;
Establish centers of collaborative research activity between academic and
business; and

c) Mandate pertinent agencies to work with academic or educational and
research institutions to provide research infrastructure to support key
research areas.

Dd)

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

c) Innovation networks

d) 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 sectors
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 concerned, 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:

a) National Economic and Development Authority

b) Department of Science and Technology

c) Department of Trade and Industry

d) Department of Agriculture

e) 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 requirements
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 without prejudice to other
agencies that the NIC may mandate.

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


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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 streamline 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 MSMEs 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, MSMEs,
incubation centers and networks, Negosyo Centers, and academic or educational
institutions.

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
(PhP1,000,000,000), to be sourced by the DBM from government savings, is
hereby allocated for the initial year’s implementation of this Act, and such funds


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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 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

c) 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 Code), and all other
applicable general and special laws.

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,