Pres. Rodrigo Duterte has signed into law the Philippine Innovation Act that aims to promote innovation in the country and provide benefits to micro, small and medium enterprises (MSMEs).
“It is high time that we recognize innovation and small businesses as key drivers of sustainable and inclusive growth in the country. This law will provide MSMEs with a platform to flourish and create more jobs,” said Tarlac representative Victor A. Yap, principal author of the Philippine Innovation Act.
The lawmaker noted that while MSMEs comprise 99% of the total business establishments in the Philippines, the sector only contributes around 35% to the national economy due to red tape and high cost of doing business which hinder MSMEs to attain their full potential.
The Philippine Innovation Act or Republic Act 11293 seeks to provide MSMEs greater access to finance, market and technology, as well as comprehensive support program from incorporation to internationalization.
Under the law, a National Innovation Council, to be chaired by the President, will be created to develop the country’s innovation goals, priorities, and long-term national strategy.
Through a startup MSME innovation development program, the government shall mobilize its various agencies to work hand-in-hand with private organizations to provide technical and financial support for the development training of entrepreneurs.
“The law shall also promote regional innovation that will harness the strengths and potential of regions and provinces,” he added.
A P1-billion Innovation Fund will be established to strengthen entrepreneurship and enterprises engaged in developing innovative solutions benefitting the poorest of the poor.
An Innovation Development Credit and Financing Program shall be developed for MSMEs to avail of loans and other financing activities. All banking institutions shall set aside at least four percent of their total liable funds for innovation development credit.