SIXTEENTH CONGRESS OF THE REPUBLIC 
) 
, 
OF THE PHILIFPINES 
) 
Second Regular Session 
) 
SEN,klF; 
S.No. 
;c~83 
Introduced by Senator Miriam Defensoi Santiago 
I 
AN ACT 
'14 
JUN 18, P 2 :36 
TO SUPPORT BUSINESS INCUBATION IN AcADEMIC SETTINGS 
EXPLANATORY NOTE 
Business incubators housed in academic settings provide umque educational 
opportunities for students, provide entreprenenrs with enhanced acc€ss to a skilled workforce, 
, 
, 
and bring a wealth of resources to business, academia, and communities. 
An "incubator" IS an entity affiliated with or housed i~ a degree-granting institution that 
provides space and coordinated and specialized services to bntrepl~enenrial businesses which 
i 
meet selected criteria during the businesses' statt-up phase, in~luding:providing services such as 
shared office space and services, access to equipment, access to telecommunications and 
, 
. 
technology services, flexible leases, specialized management assistan<ie, access to financing, and 
other coordinated business or technical support services. 
Studies in the United States show that incubator tertant companies have an average 
success rate of 87 percent, and 90 percent for technology-b~sed incubator tenant companies. 
These success rates are dramatically higher than the success rrtes for companies in the general 
economy. Incubator companies are also more likely to remain! in the :same communities as they 
, 
grow atld provide high paying jobs and benefits to their emploYjees. 
Business incubators help academic institutions contribute tq local goals of sustaining 
, 
, 
, 
economic development. in their snrrounding communities. E\lucation in entrepreneurship and 
other business formation skills is essential to business success illld sustainable economic 
development. 


The purpose of this Act is to encourage entrepreneurship in academic institutions by 
providing space and expertise in an academic setting to house and support new and emerging 
small businesses.' 
• This bill was originally filed during the Thirteenth Congress, First Regular Session. 
I 


SIXTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
Second Regular Session 
) 
'14 
JUN18 P2:36 
SEN~W 
S. No. 2;(83 
HECEIVEH ny: .f 
Introduced by Senator Miriam Defensor Santiago 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
AN ACT 
2 
TO SUPPORT BUSINESS INCUBATION IN ACADEMIC SETTINGS 
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SECTION 1. Short Title. - This Act shall be known as the "Linking Educators and 
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Developing Entrepreneurs for Reaching Success (LEADERS) Act." 
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SECTION 2. Definition of Terms. - For the purposes of this Act, the term: 
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(A) 
"Degree-granting institution" means all institutions for higher learning with 
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teaching and research facilities constituting a graduate school and professional schools that 
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award master's degrees and doctorates and an undergraduate division that awards bachelor's 
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degrees. 
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(B) 
"Incubator" means an entity affiliated with or housed in a degree-granting 
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institution that provides space and coordinated and specialized services to entrepreneurial 
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businesses which meet selected criteria during the businesses' start-up phase, including 
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providing services such as shared office space and services, access to equipment, access to 
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telecommunications and technology services, flexible leases, specialized management assistance, 
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access to financing, and other coordinated business or technical suppOli services. 
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(C) 
"CHED" means the Commission on Higher Education. 
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SECTION 3. Program Authorized.-
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(A) 
In General. -
The CHED IS authorized to support the establishment and 
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development of business incubators in institutions of higher education. 
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(B) 
Allocation of Funds. - From the amount appropriated under Section 8, the CHED 
(C) 
(1) 
(2) 
(3) 
Shall use eighty percent (80%) of the amount to -
(a) 
(b) 
Make awards, on a competitive basis, in amounts of Twenty 
Million Pesos (P20,000,000.00) to help acquire or renovate space 
for incubators; and 
Make awards, on a competitive basis, in amounts of Twenty 
Million 
Pesos 
(P20,000,000.00) 
to 
Fifty 
Million 
Pesos 
(P50,000,000.00), for developing curricula, providing services, 
including preparing corporate charters, partnership agreements, 
and basic contracts, assistance with patents, trademarks, and 
copyrights, and technology acquisition services, or providing 
programming for entrepreneurs housed in an incubator; 
Shall use ten percent (10%) of the amount to make awards, on a 
competitive basis, in amounts of Twenty Million Pesos (P20,000,000.00) 
to Fifty Million Pesos (P50,000,000.00), for feasibility studies for 
determining the need for or siting of incubators; and 
Shall use ten percent (10%) for research regarding best practices for 
incubator programs, including the development of a benchmarking system 
based on uniform measures, and for dissemination of information 
regarding such practices. 
Contracts. -
The CHED is authorized to contract with organizations with 
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expertise in business incubation practices for the purposes of carrying out subsection (B)(3). 
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(D) 
Recipients. - The CHED shall malce an award-
(1) 
Described in paragraph (B)(l) to a nonprofit entity that has a strong 
affiliation with a degree-granting institution and manages or provides 
technical assistance to the degree-granting institution's affiliated incubator, 
or if no non-profit entity manages or provides technical assistance to the 
incubator, to the degree-granting institution managing the incubator; and 
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(2)' 
Described in paragraph (B)(2) to a degree-granting institution, or a non-
profit municipality, 
city, 
township, 
or 
community 
development 
organization. 
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SECTION 4. Uses of Funds. - Funds awarded under section 3(B)(1) may be used for-
(A) 
Curriculum, training, or technical assistance developed by academic faculty with 
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participation from entrepreneurship experts and local government leaders; 
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(B) 
Programming that contributes to a coordinated set of business assistance tools, 
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such as developing management teams, providing workforce development, forming strategic 
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alliances, developing capital formation networks, and developing customized plans to help 
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entrepreneurs meet the challenges of doing business in their specific communities; and 
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(C) 
Hiring staff to coordinate the activities described in paragraph (A) or (B) or for 
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curriculum development. 
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SECTION 5. Applications. -
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(A) 
In General. _. Each entity desiring assistance under this Act shall submit an 
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application to the CHED at such time, in such manner, and accompanied by such information as 
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the CHED may require. 
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(B) 
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assisted -
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(C) 
Contents. - Each application shall contain an assurance that the activities to be 
(1) 
(2) 
Have the support of the municipality or city, in which the incubator is 
housed or proposed to be housed; and 
Are consistent with the local economic development plan or strategic 
master plan. 
Priority. - The CHED shall give priority to funding applications under this Act 
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that provide strong educational opportunities to students in entrepreneurship, and that require 
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significant collaboration between businesses, academia, and local government and economic 
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development leaders. 
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(D) 
Consideration. -
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(1) 
(2) 
In General. - In addition to applications from other appropriate sources, 
the CHED may give consideration to funding applications under this Act 
that support -
(a) 
(b) 
(c) 
(d) 
(e) 
(f) 
The building of new incubators; 
Incubators located in economically distressed areas; 
Incubators with successful graduation rates for tenant companies; 
Incubators that have shown demonstrable economic benefits in 
their surrounding communities; 
Incubators that work with faculty entrepreneurs or university-based 
research; or 
Incubators located m rural areas where the presence of an 
incubator may enhance and diversify the area's economy through 
expanded technology commercialization. 
Definition of Consideration. - In this subsection, the term "consideration" 
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does not mean priority. 
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SECTION 6. Matching Funds. - Each entity receiving government assistance under 
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Section 3(B)(I) shall contribute matching funds, in an amount equal to the amount of 
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government assistance received under this Act, toward the costs of the activities assisted under 
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this Act. The non-government share required under this section may be provided in the form of 
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in-kind contributions. 
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SECTION 7. Report. - The CHED, at the end of the third year for which assistance is 
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provided under this Act, shall prepare and submit to Congress a report that -
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(A) 
Describes the most effective or innovative additions to curricula developed under 
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this Act; 
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(B) 
Contains a comparison of small business survival rates for small businesses that 
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started up in incubators versus small businesses that did not so start; 
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(C) 
(D) 
(E) 
Describes factors leading to any success of incubator businesses; 
Describes the best role for degree-granting institutions in business incubation; and 
Contains a comparison of academic-affiliated incubators of specific missions and 
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ages supported under this Act with incubators with similar missions and ages that are not 
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supported under this Act. 
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SECTION 8. Authorization of Appropriations. - For the purpose of carrying out this Act, 
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such sums as are necessary are hereby authorized to be appropriated from the National Treasury. 
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SECTION 9. Separability Clause. - If any provision or part hereof is held invalid or 
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unconstitutional, the remainder of the Act or the provision not otherwise affected shall remain 
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valid and subsisting. 
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SECTION 10. 
Repealing Clause. 
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Any law, presidential decree or issuance, 
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executive order, letter of instruction, administrative order, rule, or regulation contrary to or 
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inconsistent with the provisions of this Act is hereby repealed, modified, or amended 
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accordingly. 
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SECTION II. Effectivity Clause. -
This Act shall take effect fifteen (15) days after its 
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publication in at least two (2) newspapers of general circulation. 
Approved, 
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