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THIRTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
S.B. NO.1 
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Introduced by Senator JlNGGOY EJERCITO ESTRADA 
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EXPLANATORY NOTE 
In recognition of the importance of science and technology as tools towards 
economic development and national progress, the Constitution has amply provided that 
the State shall give priority to science and technology, research and development, 
inventions, innovations, and their utilization, provide incentives, scholarship, and 
encourage private participation in programs of basic and applied scientific research. 
In line with such goals and objectives, this bill provides for the creation and 
establishment of the Philippine Science and Technology Development Corporation, 
which shall be responsible, among others, in providing funds for private venture capital 
corporations, and provide financial and other forms of assistance in developing, 
adapting, and commercializing indigenous and imported technologies. 
It is hoped that this bill will contribute and promote the development ,and 
advancement of science and technology in our country, and the utilization thereof as an 
instrument to our economic progress. 
The approval of this bill is recommended. 
J 
Senator 


THIRTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
) 
:I “ . “ 
I 1  
SENATE 
S.B. NO.1 
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Introduced by Senator JINGGOY EJERCITO ESTRAOA 
AN ACT 
CREATING THE PHILIPPINE SCIENCE AND TECHNOLOGY DEVELOPMENT 
CORPORATION AND APPROPRIATING FUNDS THEREFOR 
Be it enacted by the Senate and the House of Representatives of the Philippines in the 
Congress assembled: 
SECTION f. Tit/e. - This Act shall be known as “The Philippine Science and 
Technology Development Corporation Act.” 
SECTION 2. Declaration of Policy. - It shall be the policy of the State to 
promote the rapid development of science and technology to hasten the attainment of 
NIC (Newly Industrialized Country) status for the Philippines by the year 2000. For this 
purpose, the State shall establish an institution that shall adopt policies, which shall fast 
track technology adaptation and commercialization. Source the latest technology and 
innovation that will modernize the production sector and raise productivity and enhance 
global technology competitiveness in the world export market by encouraging the 
private sector to undertake scientific and technological R & D (Research and 
Development) and technology transfer. The Corporation shall provide venture capital 
fund for accredited venture capital firms. 
SECTION 3. Creation of Philippine Science and Technology Development 
Corporation. - To implement the policy enunciated in this Act. There is hereby created 
a body corporation to be known as the Philippine Science and Technology Development 
Corporation hereinafter referred to as the “Corporation”. It shall have its principal office 
in Metro Manila but may have such branches or offices or subsidiaries in other areas as 
it may deem necessary for the proper conduct of its business. It shall exist fur a term of 
fifty (50) years from the effectivity hereof renewable for the same period unless 
otherwise provided by law. 
SECTION 4. Powers and Functions. - The Corporation shall assume primarily 
responsibility in providing funds for private venture capital corporations (VCCs) duly 
accredited by the Corporation which shall provide financial and other forms of 
assistance in developing, adapting and commercializing indigenous or imported 
technologies. Specifically, it shall: 
(a) Provide support for all aspects of the introduction, improvement and adaptation 
of advanced technology abroad through equity investment or loans; 


Own, lease, operate or otherwise hold hands, buildings, equipment and such 
other immovable properties as may be necessary to carry out its functions and 
to sell the same; 
Enter into, make, perform and carry out contracts of every class and description 
necessary or accidental to the realization of its functions with any person’, firm 
or corporation, private or public; 
Promulgate such rules and regulations as may be necessary to carry out the 
provisions of this Act. Such rules and regulations shall take effect fifteen (15) 
days following the publication twice in at least two (2) national newspapers of 
general circulation; 
Adopt, alter and use a corporate seal which shall be juridically noticed; 
Sue and be sued; 
Receive donations, grants, bequest and utilize the same for the attainment of 
its objectives. Such donations, grants and bequest shall be exempt from the 
payment of transfer taxes and be fully deductible from the gross income tax 
purposes; and 
Perform any and all acts, and exercise any and all powers as may necessary to 
carry into effect the provisions of this Act or as are essential to the proper 
conduct of its operations. 
SECTION 5. Board of Directors. - The governance and policy direction 
of the Corporation shall be vested in the Board of Directors, hereinafter referred to as 
the Board, which shall have overall responsibility for the formulation and coordination of 
a comprehensive program geared towards the realization of rapid technology 
development in the Philippines. The Board shall be composed of the following who, 
except for the representatives from the private sector, shall serve in an ex- officio 
capacity: 
1. 
2. 
3. 
4. 
5. 
6. 
7. 
8. 
9. 
Chairman, to be appointed by the president of the Philippines; 
Secretary of the Department of Science and Technology, Member; 
Secretary of the Department of Trade and Industry, Member; 
Secretary of the Department of Energy, Member; 
Managing Director of the Board of investments, Member; 
President of the Philippine Chamber of Commerce and Industry, Member; 
Director - General of the National Economic development Authority, 
Member; 
Two representatives from the Academe; one (I) 
from Science and one (I) 
from Technology, Members; 
Two (2) representatives from the Private Sector, one (I) 
from Small and 
Medium Enterprises and one (1) from High- Tech Industries. 
Members of the Board shall meet regularly at least quarterly on any date 
to be determined by its members: Provided, however, That the Chairman may convene 
special meetings to discuss urgent matters need immediate resolution. The Board 
Members, except for he ex- officio members, shall be entitled to per diem for each 
meeting actually attended at such amount to be determined by the Board but no to 
exceed One thousand pesos (PI, 000.00) per month. If for any reason, an ex- officio 
member of the Board is unable to attend a meeting, he shall be represented therein by 
his duly authorized representative. 


The Board of Members, except for the ex- officio members shall hold office for a 
term of two (2) years, without prejudice to re- appointment. 
Whenever a vacancy shall occur in the Board, the person appointed to fill the 
vacancy shall hold office for the unexpired term of the position was declared vacant. 
Any Director may be removed by the president of he Philippines for just and legal 
cause. Six members of the Board shall constitute a quorum for the transaction of 
business. 
SECTION 6. Powers and Dufies of fhe Board. - The Board shall have the 
following powers and duties: 
(a) 
Prescribed, amend, modify or repeal by- laws, rules and regulations, 
consistent with the provisions of this Act, governing the manner in which 
the general business of he Corporation shall be exercised; 
(b) 
Appoint and fix the compensation of the President of the Corporation, 
subject to the approval of the President of the Philippines; 
(c) 
Approve the annual budget of the Corporation or such supplement 
budgets thereof as may be submitted to the Board by the President of 
the Corporation from time to time: Provided, That the total budget for any 
year shall not exceed one- half (1/2) of one percent (1%) of the total 
fund, as one of the close of the immediately proceeding year. 
(d) 
Call any government agency or institution to carry into effect the 
provisions of this Act. 
SECTION 7. Managemenf. - The management of the Corporation shall 
vested in the President of the Corporation who shall be appointed by the President of 
the Philippines. He shall direct and manage the affairs of the Corporation. 
The president of the Corporation shall appoint, remove, suspend or otherwise 
discipline officers and employees of the Corporation subject to the rules and regulations 
of the Civil Service Commission. 
The President of the Corporation shall be a natural born citizen of the Philippines, 
not less than thirty- five (35) years of age, of proven honesty and integrity, extensive 
experience in business and finance management and with a technical training 
background either in the science engineering. 
SECTION 8. Exempfions. - The Corporation shall be exempted from from 
payment of the following taxes, fees, or charges: 
(a) 
(b) 
All taxes, fees and other charges levied by the National Government, its 
instrumentalities and political subdivisions; 
All duties, fees and other charges imposed under the Tariff and Customs 
Code of the Philippines, including such filling, docket and service fees, 
bonds and other charges or cost in any court or administrative proceedings 
in which the Corporation may be a party; 
All income taxes, franchise taxes and realty taxes levied by the National 
Government and its political subdivisions; and 
All duties and arrastre fees in so far as share of the government is 
concerned, including all charges and fees imposed under Presidential 
Decree No. 857, compensating taxes and advance sales taxes, wharfage 
(c) 
(d) 


fees, and tonnage dues on the importlexport of goods required for its 
operation and projects. 
All documents or contracts executed by or in favor of the Corporation shall 
be exempt from the payment of documentary and science stamp taxes and registration 
fees: Provided, however, That this exemption shall not apply to taxes and assessment 
payable by persons or entities transacting business with the Corporation. 
SECTION 9. Creation of a Venfure Capifal Fund. - There shall be created a 
Technology Venture Capital Fund for the commercialization, utilization and development 
of local and foreign technology. The Fund shall be administered in trust by the 
corporatjon and appropriated from the national budget in the amount of Five billion 
pesos (P5, 000,000,000.00). 
Any proceeds or increments arising from the use of the Fund shall form part 
thereof. 
SECTION I O .  Programs. - The Fund shall cater to technologies that can be 
developed and commercialized, which shall include but not limited to: 
I. 
2. 
3. 
4. 
5. 
technology and inventions using indigenous materials which could have 
potential in the development of import- substitute products and export - 
variable products; 
that which will foster competitiveness in the area of science and 
technology production; 
that which will increase net value- added, generate employment, increase 
utilization of abundant local materials and market potentials; 
commercially- viable technologies developed by the DOST and other 
research institution that produce new agri- based products, non- traditional 
export or import substitutes; and 
subject to existing laws, local and bankable imported technologies such as 
those available via franchise, licensing and dealership agreements, joint 
ventures and other arrangements which minimize start-up risks and will 
generate significant local value0 added improve the competitiveness of 
local industries. 
SECTION 11. Capitalization. - The Corporation shall have an authorize 
capital stock of Fifty million pesos (P50, 000,000.00). This capital shall be wholly 
subscribed to and paid by the National Government. The National Government shall 
make additional equity investment into the Corporation out of requirements of the 
Corporation. 
SECTION 12. Fund Invesfors. - The Corporation is hereby authorized to 
accept investors whether public or private who shall be issued certificates of 
participation stating the number of units they own with the value per unit based on the 
net asset value at a time of the entry or exit. The amount of appropriation necessary for 
the maintenance of fund shall be on diminished scale and in proportion to the amount of 
capital corning from the public and private sector. Five years from the effectivity of this 
Act, the Corporation shall start to privatize its ownership until full privatization is realized 
within the period prescribed, by the Board of Directors. 
SECTION 13. Appropriations. - The amount necessary for the effective 
implementation of this Act shall be appropriated from the funds in the National Treasury 


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not otherwise appropriated. Thereafter such sum as may be necessary for the continuos 
implementation of this Act shall be included in the Annual General Appropriations Act. 
SECTION 14. Repealing Clause . - All laws, executive orders, rules and 
regulations or parts thereof, inconsistent with the provisions of this Act are hereby 
repealed, amended or modified accordingly. 
SECTION 15. Separabilify Clause. - Should any part, section or provision of 
this Act be held invalid or unconstitutional, no other part, section or provision hereof 
shall be affected thereby. 
SECTION 16. Effefivify. - This Act shall take effect upon its approval. 
Approved,