PRepublic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

EIGHTEENTH CONGRESS
1st Regular Session

651

House Bill No.

Introduced by Hon. Francis Gerald Aguinaldo Abaya

EXPLANATORY NOTE

The growth of a country’s economy is aided by a number of important
factors: a huge reservoir of inexpensive but skilled workers, a vibrant business
sector, sound government policies and growing confidence among investors.
However, even leapfrogging attempts, e.g. importation of turnkey technology or
adoption of so-called “leading-edge” or non-traditional technologies (e.g.
nanotechnology, new materials, biotechnology, etc.) will fall short of their target
in the absence of a sound technological springboard. More important than the
sophistication of the transplanted technology is the ability of the recipient nation
to absorb, hone and bring it to bear on its needs. Thus, every country needs a
technological base on which to nurture, grow and bring to fruition its commerce
and industry.

The country's scorecard of its technological base is relatively poor.
Because newly industrialized country (NIC) status is synonymous with global
competitiveness, Philippine science and technology (S&T) must be measured
against international standards. Here, some of the parameters compared are: (1)
the number of research scientists and engineers (RSEs) per million of the
population, and (2) the proportion of national research and development (R&D)
expenditures in relation to the size of their economies.

The so-called economic superpowers (Japan, Singapore, and South
Korea) have the highest number of RSEs, followed by the Asian dragons (China,
Thailand and Malaysia). Sadly, the Philippines trails behind by a formidable
margin. The number of true RSEs in the country is very low, at only 108 per
million of the Filipino population in 2002. In stark contrast is the number in other
developing countries such as Thailand, Malaysia and Indonesia who have 340
per million of their population. This shortage threatens to prevent further
acceleration of economic growth. As the economy becomes vibrant, businesses
will tend to diversify, expand and encounter competition. Hence, technological
flexibility will be greatly required.

Based on another parameter, a study by the American Association for the
Advancement of Science (AAAS) showed that there is a direct proportion of the
national R&D expenditures of various countries in relation to the size of their


economies. In 2004, U.S. R&D represented 2.6% of its GDP while Japan spent
3.3%. The World Bank data analyzed by nationmaster.com shows that the
Philippines spends only a very small 0.2% of GDP on R&D.

There have been numerous initiatives, both from the government and the
private sector, and in some cases, a collaboration of both, to address the dire
‘state of the country’s S&T situation.

The National Science Complex (NSC), created by Executive Order No.,
583 (Dec. 8, 2006) and operated by UP Diliman’s College of Science, now serves
as the national hub for the generation and application of new scientific knowledge
in the natural and applied sciences and mathematics. The Government has
invested Php1.7B between 2006 and 2009 to complete the infrastructure
requirements of the NSC and to establish technology incubation centers to
benefit scientists, researchers and entrepreneurs.

A Php 3.5B investment for three (3) years starting 2008 until 2010 by the
Government in Engineering Research and Development for Technology (ERDT)
was also made, Php 1.7B of which is for the completion of the infrastructure
development of the UP College of Engineering's Engineering Complex. ERDT is.
a program of the ERDT Consortium Universities all of which offer masters and
doctoral degrees in various engineering fields. The Consortium is led by the
University of the Philippines-Diliman and includes: University of the Philippines
— Los Banos, Ateneo de Manila University, Central Luzon State University, De
La Salle University, Mapua Institute of Technology, Mindanao State University-
lligan Institute of Technology, and University of San Carlos. The ERDT
Consortium Universities share a common vision of a globally competitive
Philippines, with engineers equipped with advanced degrees to make science
and technology work for Filipinos from disaster mitigation to poverty alleviation,
from agriculture to semiconductor industries; with emphasis on ensuring a
sustainable environment and affordable energy for the future and producing
indigenous technologies to improve the lives of Filipinos.

A steady and productive support and funding for the Engineering
Research and Development for Technology (ERDT) and the National Science
Complex (NSC) objectives, which are vital to the satisfactory implementation of
the Constitution's statements of policy on education, science and technology,
and the need to further develop, beyond 2010, emerging technologies (e.g.
Nanotechnology, bioengineering, and renewable energy) that will make the
country more competitive, is therefore imperative

The proposed bill seeks to address this pressing concern by creating the
ASSET Scholarship Center to sustain and institutionalize these initiatives in the
ERDT and NSC, as well as to ensure continuous progress in science and
technology.

The proposed bill also seeks to institutionalize reforms in the procurement
and fund disbursement systems in science, engineering and technology
programs in line with the Government's program of good governance where
there is a need to streamline procedures for science and technology contracts


for the expeditious implementation of research projects and the speedy response
to the fast changing demands of science and technology while promoting
transparency, impartiality and accountability in government transactions.

Finally the proposed bill also seeks to provide for the establishment of the
ASSET Fund, a funding mechanism to augment the massive budgetary
requirements needed to sustain and maintain the various programs of the
ASSET Scholarship Center.

For the foregoing reasons, the approval of this bill is earnestly sought.

4 Loe
pRANCIS GERALD AGUINA\ 60 Ap

Representative, First Dist



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

House Bill No. 651

Introduced by Hon. Francis Gerald Aguinaldo Abaya

AN ACT ADVANCING AND SUSTAINING SCIENCE, ENGINEERING AND
TECHNOLOGY RESEARCH AND EDUCATION, CREATING THE ASSET
SCHOLARSHIP CENTER, PROVIDING FOR ITS FINANCING, AND MANDATING
IT TO INSTITUTIONALIZE REFORMS IN THE PROCUREMENT AND FUND
DISBURSEMENT SYSTEMS IN SCIENCE, ENGINEERING AND TECHNOLOGY
SCHOLARSHIP PROGRAMS, AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Short Title. — This Act shall be known as the “The Asset Act of

2019"

SECTION 2. Declaration of Policies. —

a

In furtherance of the explicit provisions of the 1987 Philippine
Constitution, especially in Article XIV, recognizing that science and
technology are essential for national development and progress and
mandating that the State shall give priority to education, science and
technology, sustained efforts to promote the advancement of
science, engineering and technology research and education is
hereby declared as a national priority concern in view of their
indispensability in achieving national development and growth and
international competitiveness of the Philippines in the fields of
science, engineering, and technology.

Recognizing the need to bolster interest and appeal of science,
engineering and technology among the citizens, the State shall
promote and provide incentives, including tax exemptions,
scholarships, grants-in-aid, or other forms of incentives to deserving


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science students, researchers, scientists, inventors, technologists,
and specially gifted citizens to encourage continuous and higher
learning and education, research and activities in science,
engineering and technology.

SECTION 3. Definition of Terms. — For purposes of this Act:

b.

©.

ASSET is an acronym that refers to Advancing and Sustaining Science,
Engineering and Technology;

ASSET FUND refers to the Fund created under Section 8 of this Act;
ASSET Scholarship Center refers to the scholarship center created
under Section 4 of this Act;

. ERDT refers to Engineering Research and Development for Technology. It

is a consortium of eight member universities comprising, at present, of
University of the Philippines-Diliman, University of the Philippines — Los
Banos, Ateneo de Manila University, Central Luzon State University, De
La Salle University, Mapua Institute of Technology, Mindanao State
university — lligan Institute of Technology, and University of San Carlos.

NSC refers to the National Science Complex and Technology Incubation
Park created by virtue of Executive Order (EO) 583 dated Dec. 8, 2006.

SECTION 4. Creation and Establishment of the ASSET Scholarship

Center. —

The ASSET Scholarship Center is hereby established as an institute in an

area within the University of the Philippines, Diliman.
SECTION 5. Functions of the ASSET Scholarship Center. —

a

Undertake or sponsor technical studies and researches in the fields
of Science, Engineering, and Technology;

Implement graduate degree programs, certification programs and
scholarship programs in all fields of engineering and science, in
collaboration with the Department of Science & Technology (DOST),
Commission on Higher Education (CHED) and the University of the
Philippines (UP);

Undertake the buildup of infrastructure and other physical facilities
and software for instructional and R&D work;

Undertake the training of faculty members, support staff and
research staff in order to make them more suited to the goals of the
ERDT and NSC;


ew aneon

Undertake scientific, engineering and technological studies and
researches on request from the various agencies of the government
concerned with the applied sciences, where expertise is available in
ERDT and NSC;

Undertake the publication of studies, monographs, research papers,
articles, and other works or writings on science, engineering and
technology, with special emphasis on those related to its general
objectives, subject to rigorous and scientific scrutiny under pertinent
laws on national security and intellectual property;

Adopt a procurement ad fund disbursement system for the ASSET
Scholarship Center that will ensure timely delivery of scientific tools
and equipment and other logistical requirements with the
appropriate quality and quantity;

Adopt measures that will ensure that the Filipino people shall benefit
from the activities of the ASSET Scholarship Center. To this end,
the ERDT and NSC may: (1) Delegate authority to government-
owned, government-operated institutes — to enter into cooperative
research and development agreements with laboratories, foreign
governments, local government units (LGUs), universities, and the
private sector, and to license, assign, or waive rights to intellectual
property developed by the ERDT and NSC either under such
cooperative research or development agreement and from within
individual laboratories; (2) Identify and encourage persons to act as.
conduits between and among the NSC, ERDT universities, and the
private sector for the transfer of technology developed from NSC or
ERDT-funded research and development efforts; (3) Ensure that the
national government, local government units, universities, and the
private sector are provided with information on the technology,
expertise, and facilities available in the ERDT and NSC, as well as
adequate access thereto as may be deemed reasonable and
appropriate; (4) Promote the commercialization, in accordance with
pertinent laws, of patentable results of ERDT- and NSC-funded
research by granting to all contractors, regardless of size, the title to
patents, made in whole or in part, with ERDT and NSC funds, in

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exchange for royalty-free us by or on behalf of the government; (5)
Administer all patents and licenses to inventions made with ERDT
and NSC, which are owned by the non-profit contractor or grantee,
in accordance with an Institutional Patent Agreement that shall be
drafted with the help of the University of the Philippines Law
Complex; and (6) Implement, as expeditiously as practicable,
royalty-sharing programs with inventors who were employees of the
agency at the same time their inventions were made, and cash
award programs.

4 Perform all other acts as may be necessary for the achievement of
its objectives and functions, including the adoption of implementing
rules and regulations in accordance with the pertinent rules and
regulations; and

j. Organize such other additional institutes, centers, departments and
laboratories in the future, which it may deem proper to create,
utilizing the staff, physical facilities and programs of the consortium
universities and their constituent units as appropriate. The ASSET
Scholarship Center shall issue such rules, regulations, and other
issuances as may be necessary to ensure the effective
implementation of this law.

SECTION 6. Appointments to the Administrative and Research Staff. —

Any provision of law to the contrary notwithstanding, appointments to the

administrative or research staff of the ASSET Scholarship Center may be on a part-

time basis and shall be exempt from the requirements and restrictions of the Civil

Service Law, the Retirement Law, and Section 259 of the Revised Administrative

Code; Provided, that any retiree employed in the ASSET Scholarship Center shall

not be required to reimburse or refund any gratuity received from the Government.

nor shall any pension or annuity to which he/she is entitled be suspended or reduced
on account of his employment in the Center.

SECTION 7. Provisions on Copyright. — In order to enhance the facilities of
the ASSET Scholarship Center, no book, treatise, or other literary work on science,
mathematics, and engineering, which shall have been directly produced using the
time, facilities and materials of the ASSET Scholarship Center and/or under its
auspices, shall be deemed entitled to copyright protection as provided in the laws on

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copyright, unless, in addition to the requirements therein prescribed, two copies
thereof shall have been previously filed with the Center, as shown by an official
receipt thereof. The materials thus gathered shall be open to all researchers,
whether in the government service or otherwise.

SECTION 8. Establishment and Sources of ASSET Fund. — In order to
provide for the support of the ASSET Scholarship Center, a Science, Engineering, &
Technology Research & Education Fund (ASSET Fund) is hereby established.

The Government's share in the ASSET Fund shall be composed of:

a. One percent (1%) of the total filing fees collected by their respective
administrators, or equivalent functionary, for each application or pleading
filed with the Department of Health’, the Department of Environment and
Natural Resources?, the Department of Public Works and Highways, the
Department of Science and Technology, the Department of Trade and
Industry, the Department of Energy, National Mapping and Resource
Information Administration, Commission on Information and
Communications Technology, the Department of Transportation and
Communications, Professional Regulatory Commission, local government
units handling building occupancy, fire, zonal clearances, and real
Property taxes, and the attached agencies of all the foregoing, if
applicable. Such additional amounts shall be receipted for separately as
part of the ASSET Fund;

b. One percent (1%) of the gross sales of the lotto operation of the Philippine
Charity Sweepstakes Office (PCSO);

c. One percent (1%) of the road users tax;

d. Government financing institutions identified and requested by the ERDT
and the NSC must contribute to the ASSET Fund an amount equivalent to
not less than one percent (1%) but not more than three percent (3%) of
their unimpaired surplus realized during the immediately preceding year;
and

e. The ERDT and NSC share in projects, research and any other income-
generating venture.

' Includes the BFAD
? Includes the PENRO, CENRO, Mines and Geosciences Bureau ete.

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The ASSET Fund shall also have a private portion to be raised from donations, gifts,
and other conveyances including materials, equipment, properties and services by
gratuitous title.

SECTION 9. Disposition of Funds. — Fifty percent (50%) of the ASSET Fund
shall, upon collection, be immediately remitted to the NSC and deposited in a
separate account in any authorized government depository bank in the name of the
NSC. The remaining 50% of the ASSET Fund shall, upon collection, be immediately
remitted to the ERDT and deposited in a separate account in any authorized
government depository bank in the name of the ERDT. No more than twenty percent
(20%) of the said allocated ASSET Fund may be used for general administration
purposes. The Office of the Solicitor General is directed to aid the NSC and ERDT to
ensure the prompt collection of the ASSET Fund.

SECTION 10. Creation and Mandate of the Office on Internal Control. —
The Office on Internal Control is hereby created to serve the ASSET Scholarship
Center.

SECTION 11. Duties and Functions Regarding Institutional Reforms in
the Procurement and Fund Disbursement System in the ASSET Scholarship
Center. — The Office on Internal Control shall perform the following functions:

a. Recommend and implement improvements in the Procurement and Fund
Disbursement Systems of the ASSET Scholarship Center, and ensure
timely delivery of scientific equipment and tools and other logistical
requirements with the right quality and quantity;

b. Ensure the efficiency of the ASSET Fund vis-a-vis the delivery of the
respective mandate and functions of these institutions;

c. Ensure that adequate internal controls are in place at the ASSET
Scholarship Center in the areas of procurement and fund disbursement
systems, determine adherence to existing rules and regulations and their
responsiveness to operational requirements. The Office shall therefore
facilitate the establishment of Internal Audit Service Units at the ASSET
Scholarship Center to fulfill this objective in accordance with R.A. No. 3456
as amended by R.A. No. 4177, and Administrative Order (A.O.) No. 278 as
amended by A.O. No. 70.

d. Coordinate with concerned government and non-government institutions
regarding the conduct of capacity-building activities and skills-

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enhancement trainings in the areas of procurement and fund
disbursement, to equip the latter with appropriate tools and techniques on
the same;

. Facilitate the establishment of a single Bids and Awards Committee (BAC)

in the ASSET Scholarship Center for procurement contracts over Php 50
million, such as centrally managed and peculiar items;

Procure by negotiated purchase highly specialized items for research,
locally or by importation subject to approval by the BAC. For this purpose,
“highly specialized items for research” shall be understood to be
analogous to “other causes where immediate actions is necessary’, as
used in Section 53 (b) of the Implementing Rules and Regulations of RA
9184.

SECTION 12. Tax Provisions. —
. All donations to the ASSET Fund are tax-exempt;

As a non-profit educational institution, the ASSET Scholarship Center shall
also be exempt from income tax as well as real property tax;

. All purchases made by the ASSET Scholarship Center shall also be

exempt from Value Added Tax (VAT) as well as customs duties.

SECTION 13. Effectivity. — This Act shall take effect fifteen (15) days
following its publication in the Official Gazette or in a newspaper of general
circulation.

Approved,