In order to fuel the efforts to make Philippine products and services more competitive, particularly enterprises geared towards helping the poor, over P300 million was provided under the 2020 General Appropriations Act as seed money for the establishment of an innovation fund, Senator Sonny Angara said today.
As mandated by Republic Act 11293 or the Philippine Innovation Act, an innovation fund will be established “to strengthen entrepreneurship and enterprises engaged in developing innovative solutions benefitting the poorest of the poor.”
The National Innovation Council (NIC), chaired by the President, is tasked to administer the fund and for the 2020 national budget, the P323 million fund is lodged under the Office of the Socioeconomic Planning Secretary, who serves as its vice chairperson.
Under the law, the Innovation Fund will be used for grants to qualified proposals upon the determination of the NIC.
“We encourage micro, small and medium enterprises to explore ways to innovate their products and services. If you want to expand your market reach and make a niche in your respective industries, then innovation is the way to go,” Angara said.
“For many entrepreneurs, knowing where to begin when it comes to improving their products and services is definitely a challenge. This is among the objectives of the Philippine Innovation Act—to help find ways for MSMEs to improve competitiveness,” Angara added.
On top of the innovation fund, the law also requires all banking institutions to set aside at least four percent of their total loanable funds for innovation development credit.
RA 11293 was enacted into law on April 17, 2019 so this year would essentially be the first year of implementation.
The law encourages the creation of new ideas that have the potential to be developed into new and quality products, processes and services.
“If we are to provide a truly attractive value proposition to the world’s investors, we need to start investing more heavily in innovation. We need to build up our know-how, not only in research and development, but also in bringing new technological findings as quickly as we can to the market,” Angara said.
But more than building up the bottom lines of businesses, Angara said the Innovation Act seeks to improve the welfare of low-income and marginalized groups, primarily by creating opportunities for them.
RA 11293 puts particular emphasis on “inclusive innovation” wherein efforts to improve the quality of products, processes and services will ultimately result in the improvement of the quality of life of individuals and communities.
“As businesses grow so will its need for manpower and this means more jobs for the people. These MSMEs will become the drivers of growth, particularly for the local economies,” Angara said.