Gov’t inks IRR for startup law

The Department of Trade and Industry (DTI) is investing an initial P125 million under a startup venture fund (SVF) for the commercialization of viable startup companies as it puts into motion the law backing the growth of the Philippine startup ecosystem.

The funding is part of the package of programs, benefits and incentives for startups and startup enablers under the Philippine Development Program (PDSP), to be formed via Republic Act No. 1137, or the Innovative Startup Act.

On Friday, 22 November, the implementing rules and regulations of the startup law was signed by the heads of the departments of Trade and Industry, Science and Technology (DoST) and Information and Communications Technology (DICT) after it was signed into law by President Duterte 26 April this year. The agencies make up the steering committee for the PDSP.

On the part of the DTI, Trade Secretary Ramon Lopez said the P125 million fund, which will be allocated to around 50 startups, is part of the initial P250 million projected SVF for the first year of the startup law, to be administered by the DTI with its investments arm, the National Development Company (NDC).

The SVF will be used to match investments made by venture capitalists. In total, the DTI is targeting 100 startups, or an SVF amounting to P500 million.

“We can start with the P125 million, as one half of the P250 million projected. That will be the fund to be used if ever there are deserving startups that need to be taken to the next level…commercialization investment fund to scale them up,” Lopez told reporters.

He added the agency will also be working on the guidelines that will set the parameters of the startups which will be viable for funding.

Under the law, the DTI is also tasked to coordinate with the Philippine Economic Zone Authority for the construction of startup economic zones; create a Startup Investment Development Plan with the Board of Investments; and ensure efficient regulatory process for startups to be part of the program.

Meanwhile, the DoST said it will be allotting P2.5 billion for infrastructure construction of infrastructure for the incubation of startups. DoST secretary Fortunato dela Peña said this includes an electronics products development center, advanced manufacturing center, advanced testing material center and automation robotics lab.

On the other hand, part of the DICT’s responsibilities is the creation of a website to serve as a primary online source of information for startup events, programs and benefits, among others.

The steering committee will also be in charge of a startup grant fund for initial and supplemental grants-in-aid for startups that will pass the selection and application process.