FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
) 
S E N A T E  
, r, .,r; 
S. B. No. 
602 
Introduced by Senator JINGGOY EJERCITO ESTRADA 
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 t he State shall give priority to science and technology, 
research and development, inventions, innovations, and their utilization, provide 
incentives, scholarship, and encourage private participation in programs of basic 
and applied scientific research. 
In line with such goals and objectives, this bill provides for the creation 
and establishment of the Philippine Science and Technology Development 
Corporation, which shall be responsible, among others, in providing funds for 
private venture capital corporations, and provide financial and other forms of 
assistance in developing, adapting, and commercializing indigenous and 
imported technologies. 
It is hoped that this bill will contribute and promote the development and 
advancement of science and technology in our country, and the utilization thereof 
as an instrument to our economic progress. In view of the foregoing, the 
immediate enactment of the bill is earnestly urged. 
JERCITO ESTRADA 
Senator 


FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
1 
S E N A T E  
S. B. No. 
602 
~- ~- 
Introduced by Senator JINGGOY EJERCITO ESTRADA 
AN ACT 
CREATING THE PHILIPPINE SCIENCE AND TECHNOLOGY DEVELOPMENT 
CORPORATION AND APPROPRIATING FUNDS THEREFOR 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTlON 1. Title. - This Act shall be known as "The Philippine Science 
and Technology Development Corporation Act." 
SEC. 2. Declaration of Policy. - It shall be the policy of the State to 
promote the rapid development of science and technology to hasten the 
attainment of economic progress for the Philippines by the year 2010. For this 
purpose, the State shall establish an institution that shall adopt policies, which 
shall fast track technology adaptation and commercialization, source 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. 
SEC. 3. Creation of Philippine Science and Technology Development 
Corporation. - To implement the policy enunciated in this Act, there is hereby 
created a body corporation to be known as the Philippine Science and 
Technology Development Corporation 
hereinafter referred to 
as 
the 
"Corporation". It shall have its principal office in Metro Manila but may have such 
branches or offices or subsidiaries in other areas as it may deem necessary for 
the proper conduct of its business. It shall exist for a term of fifty (50) years from 
the effectivity hereof renewable for the same period unless otherwise provided by 
law. 
SEC. 4. Powers and Functions. - The Corporation shall assume primary 
responsibility in providing funds for private venture capital corporations (VCCs) 
duly accredited by the Corporation which shall provide financial and other forms 
of assistance in developing, adaptipg 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 loat's; 
b) Own, lease, operate or otherwise hold lands, buildings, equipment and 
such other immovable properties as may be necessary to carry out its functions 
and to sell the same: 
c) Enter into, make, perform and carry out contracts of every class and 
description necessary or accidental to the realization of its functions with any 
person, firm or corporation, private or public; 
d) Promulgate such rules and regulations as may be 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; 
e) Adopt, alter and use a corporate seal which shall be juridically noticed; 
9 Sue and be sued; 
g) Receive donations, grants, bequest and utilize the same for the 
attainment of its objectives. Such donations, grants and bequest shall be exempt 
from the payment of transfer taxes and be fully deductible for the gross income 
tax purposes; and 
h) Perform any and all acts, and exercise any and all powers as may 
necessary to carry into effect the provisions of this Act or as are essential to the 
proper conduct of its operations. 
SEC. 5. Board of Directors. - The governance and policy direction of the 
Corporation shall be vested in the Board of Directors, hereinafter referred to as 
the Board, which shall have overall responsibility for the formulation and 
coordination of a comprehensive program geared towards the realization of rapid 
technology development in the Philippines. The Board shall be composed of the 
following who, except for the representatives from the private sector, shall serve 
in an ex- officio capacity: 
1) Chairman, to be appointed by the President of the Philippines; 
2) Secretary of the Department of Science and Technology, Member; 
3) Secretary of the Department of Trade and Industry, Member; 
4) Secretary of the Department of Energy, Member; 
5) Managing Director of the Board of Investments, Member; 
6) President of the Philippine Chamber of Commerce and Industry, 
Member; 
7) Director - General of the National Economic development Authority, 
Member; 
8) Two representatives from the Academe; one (1) from Science and one 
(1) from Technology, Members; 
9) Two (2) representatives from the Private Sector, one (1) from 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 that need immediate 
resolution. The Board Members, except for the ex-officio members, shall be 
entitled to per diem for each meeting actually attended at such amount to be 
determined by the Board but not to exceed Five thousand pesos (P5,OOO.OO) per 


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


d) All duties and arrastre fees in so far as share of the government is 
concerned, including all charges and fees imposed under Presidential Decree 
No. 857, compensating taxes and advance sales taxes, wharfage, fees, and 
tonnage dues on the import/export of goods required for its operation and 
projects. 
All documents or contracts executed by or in favor of the Corporation shall 
be exempt from the payment of documentary and science stamp taxes and 
registration fees: Provided, however, That this exemption shall not apply to taxes 
and assessment payable by persons or entities transacting business with the 
Corporation. 
SEC. 9. Creation of a Venture Capital Fund. - There shall be created a 
Technology Venture Capital Fund for the commercialization, utilization and 
development of local and foreign technology. The Fund shall be administered in 
trust by the corporation and appropriated from the national budget in the amount 
of Five billion pesos (P5, 000,000,000.00). 
Any proceeds or increments arising from the use of the Fund shall form 
part thereof. 
SEC. IO. Programs, - The Fund shall cater to technologies that can be 
developed and commercialized, which shall include but not limited to: 
1) technology and inventions using indigenous materials which could have 
potential in the development of import- substitute products and export - variable 
products; 
technology production; 
2) that which will foster competitiveness in the area of science and 
3) that which will increase net value- added, generate employment, 
increase utilization of abundant local materials and market potentials; 
commercially- viable technologies developed by the DOST and other research 
institution that produce new agri-based products, non- traditional export or import 
substitutes: and 
4) subject to existing laws, local and bankable imported 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 value added and improve the competitiveness of local industries. 
SEC.11. Capitalization. - The Corporation shall have an authorize capital 
stock of Fifty million pesos (P50,000,000.00). 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. 
SEC. 12. Fund Investors. - The Corporation is hereby authorized to 
accept investors whether public or private who shall be issued certificates of 
participation stating the number of units they own with the value per unit based 
on the net asset value at a time of the entry or exit. The amount of appropriation 
necessary for the maintenance of fund shall be on diminished scale and in 
proportion to the amount of capital coming from the public and private sector. 
Five years from the effectivity of this Act, the Corporation shall start to privatize 
its ownership until full privatization is realized within the period prescribed, by the 
Board of Directors. 


SEC. 13. Appropriations. - The amount necessary for the effective 
implementation of this Act shall be appropriated from the funds in the National 
Treasury not otherwise appropriated. Thereafter such sum as may be necessary 
for the continuous implementation of this Act shall be included in the annual 
General Appropriations Act. 
SEC. 14. Repealing Clause. - All laws, executive orders, rules and 
regulations or parts thereof, inconsistent with the provisions of this Act are 
hereby repealed, amended or modified accordingly. 
SEC. 15. Separability Clause. - Should any part, section or provision of 
this Act be held invalid or unconstitutional, no other part, section or provision 
hereof shall be affected thereby. 
SEC. 16. Effectivity-. This Act shall take effect upon its approval 
Approved,