fiin>

Republic of the Philippines Ce “qn
HOUSE OF REPRESENTATIVES f! ? RECEIVED Z
Quezon City > my?37i ©
DATE: AEA
17" CONGRESS
First Regular Session ames 7 rs
House Bill no, 0704

Introduced by Representative WES GATCHALIAN

EXPLANATORY NOTE

This bill seeks to establish the National Innovation Council (NIC) that will be tasked to facilitate the
adoption of clear and long-term view of the country’s innovation vision in terms of new ideas,
development of new or improved policies, products, processes or services.

The innovation council will be an inter-agency body that will be chaired by no less than the President of
the Republic of the Philippines and will be composed 16 cabinet secretaries from key line
department/agencies as well as representative from the business, academe and scientific community.

With the socio economic plan of our government that includes innovation policy frame work to achieve
sustained and inclusive growth, this bill makes innovation as a major driver of economic development in
order to build a foundation for a more inclusive economy that promotes the growth of micro, small and
medium enterprises.

The bill also focuses on strengthening scientific, technological and institutional capabilities and
promoting scientific and technological advancement and likewise mandates the National Innovation
Council to establish a long term National Innovation Agenda and Strategy Document (NIASD) towards
innovation governance among government agencies accelerate innovation efforts and integrating public
and private partnerships.

Finally the bill aims to generate and scale up actions in all level areas of education, training, research and
development through innovation.

The approval of this is earnestly sought



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

17th CONGRESS
First Regular Session

5701

House Bill No,

Introduced by Representative WES GATCHALIAN

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:

SEC. 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
Fecognizes 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
bya clear and long-term set of goals that will take into consideration the key advantages
oftthe 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.

©) __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
coherence, alignment of priorities, and effective coordination in program delivery. This
ecosystem should facilitate and ‘support innovation efforts,

e) rhe 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,

) 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,

8) __ The State recognizes the value of sources of innovation that are unique to the
Country such as traditional knowledge, traditional cultural expressions, ard genetic
Treources 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:

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;

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
naw or improved policies, products, processes, or services which are thes 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 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;

8) __ “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;

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

1) ___ “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;

i) “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

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

P) “Product Innovation” refers to the introduction of good or service that is new or
Significantly improved with respect to its features applications, characteristics or
intended uses;

9) __ “Project-based Competition” refers to a Process whereby contractors bid for

")___ “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;


8) __ “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 Sreatest advantage to users;

9) __ “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;

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

vy) “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
ofthe 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;

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

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

A Encourage entrepreneurial attitude in order to stimulate growth ambitions in
businesses, especially among MSMEs;

8) 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,

innovation; among others. While the ikem, 5,innovation goals shall be directed st

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
Bovernance 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,

The NIASD will also include the innovation priority areas for which Tesources 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 programe in their
FesPective work programs and action plans, 8uided 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 monthe from the adoption of this Act.

SEC. 7. Considerations in Setting Priority Areas for Innovation. ~ tt 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
4) Secretary of Trade and Industry - Member
e) Secretary of Agriculture - Member

f) Secretary of Environment and Natural Resources - Member


8) Secretary of Health - Member
h) Secretary of Transportation - Member
i) Secretary of Energy - Member rae

i) 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

©) _ Secretary of Interior and Local Government - Member

P) Secretary of Foreign Affairs - Member

@ _ 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
bya 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;
©) Setthe country’s innovation priorities;

d) Serve as a source of strategic intelligence for national research and innovation
policymaking;
©) __ Engage technological expertise in strategic and innovation policymaking;


1} 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;

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

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

k) Establish and administer the Innovation Fund;

}/ Mdentify 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;

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
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;

©) 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;

8) 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;

'} 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 DT! 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, Itshall
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;

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

©) Mandate pertinent agencies to work with 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

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
©) Department of Trade and Industry
4) Department of Agriculture
¢) Department of Environment and Natural Resources
f) Department of Health
Department of Energy
h) Department of Transportation
i) Department of National Defense
i) Department of Information and Communications Technology

k) Department of Budget and Management


D} Department of Interior and Local Government
m) Department of Foreign Affairs

n) Department of Education

o) 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 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
ino 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 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


©) _ 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,