Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
‘Second Regular Session

HOUSE BILL NO. 629”

Introduced by HON. LUIS RAYMUND “LRAY” F. VILLAFUERTE, JR.

EXPLANATORY NOTE

In 1991, the Philippine Congress enacted into law Republic Act No. 6977, further
amended by Republic Act No 8289 in 1997’, what is more commonly known as the
“Magna Carta for Micro, Small and Medium Enterprises (MSMEs)". This landmark
legislation is geared towards the development of the Filipino entrepreneurial spirit.
With over 99% of establishments in the Philippines being MSMEs by 2015%, the
Magna Carta provided a business environment conducive for their growth in the

country.

It is clear that MSMEs play an important socioeconomic role in the country, and the
laws enacted in support of the role it plays have helped sustained the growth this
sector continuously seeks. If we play into the progress that this sector is
experiencing, and harness the efforts being done, this will help promote sustainable

economic and social development.

MSMEs have contributed over 60% of the total jobs generated by all types of
business establishments. These industries, albeit small in scale, have a large impact
on the nation's economy. Government has continually supported this sector of
society through enactment of laws, such as Republic Act No. 10644 also known as
the “Go Negosyo Act’ which sought to push the development of small businesses

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through the establishment of “Negosyo Centers’ in all provinces, cities and
municipalities to help facilities access services for MSMEs in the area.

The proposed bill intends to build on what the Government has done for the MSMEs
by improving innovation governance in the country and promote a culture of strategic
planning and innovation. The State recognizes research and development as
essential for national development and progress and that innovation is a key driver of
economic growth and competitiveness. The bill seeks to create a National Innovation
Council and develop a National Innovation Agenda and Strategy Document to
establish the country's vision and long-term goals for innovation and provide a road
map thereof. The bill also focuses on MSME Innovation with a provision to develop
strategies towards promoting MSME internationalization through a comprehensive
‘support program, from incorporation to internationalization.

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

Lui MUNI YY" F. VILLAFUERTE, JR.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Queson City

SEVENTEENTH CONGRESS
First Regular Session

HOUSE BILL NO.

Introduced by HON. LUIS RAYMUND “LRAY” F. VILLAFUERTE, JR.

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 the House of Representatives of the

Philippines in Congress Assembled.
Section 1. Short Title. - The Act shall be known as “The Philippine Innovation Act”

Section 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.

c) 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.

e) 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.

Section 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

2


b)

d)

f)

g)

h)

i)

service providers, academic or educational institutions, MSMEs, businesses,
among others;

“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 to
the welfare of lower-income and marginalized groups;

“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 come
together to support innovative efforts and enterprises;

“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;

“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;

“Innovation Networks” refer to the interconnected system of companies and
organizations in the knowledge infrastructure, strongly focused on innovation;
“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;
“Marketing Innovation” refers to significant changes in product design or

packaging, placement, promotion or pricing;


k) “Multistage Process” refers to the various stages of product or solution
development, from feasibility study, designing, prototyping, testing, and
commercialization or 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 development phase from the conduct of feasibility study,
designing, prototyping, testing, and commercialization of products or services;

©) “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 users;

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;

t) “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;


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

v) “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 ingenuous 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 of the community's cultural heritage or

spiritual identity.

Section 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 objective 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;

c) 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;

f) Encourage entrepreneurial attitude in order to stimulate growth ambitions in
businesses, specially 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.

Section 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 goas shall be directed at developing new technologies, it shall likewise
seek to hamess global knowledge and technology that will aid in 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.

Section 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 and provides a road map 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 concemed 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 Goverment Units (LGUs), and other
stakeholders and shall be completed within six months from the adoption of this Act.

Section 7. Considerations in Setting Priority Areas for Innovation. — \t 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.

Section 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.

Section 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 shalll be constituted by the following:
a
b}

President of the Philippines — Chairperson

Director General of the National Economic and Development Authority — Vice-

Chairperson

c) 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)
1) Chairperson of the Commission on Higher Education — Member

Secretary of Information and Communications Technology — 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
r) 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 on 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.

Section 10. Functions of the NIC. — 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 as a source of strategic intelligence for national research and
innovation policymaking;

e

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

Engage technological expertise in strategic and innovation policymaking;

coherence;
g) Monitor and assess the country's strategic and innovation programs;

hh

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
strategic 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;

1) 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 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

Section 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 creating 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;


c) Coordinate with various agencies of the government, the private sector,

academe, scientific community, and other sector towards achieving policy and
program coherence;

d) 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;

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.

Section 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 intemationalization, 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; patent; 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.

Section 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 combindations 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

Section 14. Strategic Research, Development and Extension Programs. - The
NIC, guided by the country’s innovation agenda and development goals, will develop
RD8A 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;
b) 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.
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.

Section 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 hamess 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,

Section 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 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

=

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 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.

Section 17. Diaspora for Innovation and Development. — A Diaspora for
Innovation and Development Program is hereby established to enable the country to

15


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, 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.

Section 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.


Section 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 iniatives. 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.

Section 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 (Php
1,000,000,000), 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
tives in the sphere of RD&E, education, product development and

innovation
testing, among others.


Section 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

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.

Section 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 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.

Section 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 the clear output 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.

Section 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.

Section 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.


Section 26. Separability Clause. - Should any provision herein be subsequently
declared invalid or unconstitutional, the same shall not affect the validity or the
legality of other provisions not so declared.

Section 27. Repealing Clause. — All laws, decrees, executive orders, rules and
regulations, or parts thereof which are inconsistent with this Act are hereby repealed,

amended or modified accordingly

Section 28. Effectivity. — This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation

Approved,

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