Republic of the Philippines

NATIONAL INNOVATION COUNCIL

NEDA Building, Escriva Drive, Pasig City

Salient Features of the Republic Act No. 11293

Philippine Innovation Act

For questions regarding the Philippine Innovation Act, please email

the NIC Secretariat at [email protected]

Rationale and Objectives

The Republic Act No. 11293, otherwise known as the “Philippine Innovation
Act”, was enacted on 17 April 2019 in order to foster innovation in the country
as a vital component of national development and sustainable economic
growth. The specific objectives of the Act are as follows:

a. Promote a culture of strategic planning and innovation to encourage

creative thinking and knowledge creation and dissemination towards
expanding and maintaining economic competitiveness;
b. Improve innovation governance in the country and compel the adoption
of a long-term vision and focused priorities for innovation;
c. Ensure effective coordination and eliminate fragmentation of innovation
policies and programs at all levels;
d. Strengthen the position of MSMEs in the innovation system;
e. Remove obstacles to innovation by suppressing bureaucratic hurdles,
and adapting the regulatory framework to support the creation of and
diffusion of new knowledge, products, and processes;
f. Encourage entrepreneurial attitude in order to stimulate growth
ambitions in businesses, especially among MSMEs;
g. Explore, promote and protect the potentials for innovation of traditional
knowledge, traditional cultural expressions and genetic resources; and
h. Strengthen and deepen interactions and partnerships among different
actors from the public and private sector, academe, MSMEs, research
and development institutions and communities towards promoting
inclusive growth and improving the quality of life through innovation.

Establishment of the National Innovation Council

The National Innovation Council (NIC) shall be the policy advisory body in the
formulation, development, implementation and monitoring of the country’s
innovation goals, priorities, and long-term national strategy.
An inter-agency working group (composed of senior officials of the NIC
member agencies as formally designated by their respective
principals/Secretaries) shall draft the National Innovation Agenda and Strategy
Document (NIASD) with the assistance of the NIC Secretariat and submit it to
the NIC.

Further, the heads of each member agency of the NIC shall designate a focal
unit within their respective organizations to ensure effective coordination.

The NIC shall be composed of the following:

a. President of the Philippines – Chairperson;
b. Director General of the National Economic and Development Authority
(NEDA) – Vice Chairperson;
c. Secretary of Science and Technology – Member;
d. Secretary of Trade and Industry – Member;
e. Secretary of Agriculture – Member;
f. Secretary of Environment and Natural Resources – Member;
g. Secretary of Health – Member;
h. Secretary of Transportation – Member;
i. Secretary of Energy – Member;
j. Secretary of National Defense – Member:
k. Secretary of Information and Communications Technology – Member;
l. Chairperson of the Commission on Higher Education – Member;
m. Secretary of Budget and Management – Member;
n. Secretary of Education – Member;
o. Secretary of the Interior and Local Government – Member;
p. Secretary of Foreign Affairs – Member;
q. Secretary of Labor and Employment – Member;
r. Director General of the Intellectual Property Office of the Philippines –
Member; and
s. Seven (7) Executive Members to be appointed by the President

Functions of the National Innovation Council

The NIC shall have the following functions:

a. Develop the country’s strategic vision for innovation and long-term

innovation goals and priorities consistent and aligned with the country’s
long-term vision and global and regional commitments;
b. Develop the country’s innovation strategies to ensure coherent strategic
direction and programs;

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 c. Serve as a source of strategic intelligence for national research and
innovation policy-making;
d. Engage scientific and technological expertise, both domestic and foreign,
in strategic and innovation policy-making;
e. Coordinate with various sectors and agencies to promote policy and
program coherence;
f. Monitor and assess the country’s strategic and innovation programs;
g. Regularly review and update the country’s strategic and innovation
policies;
h. Guided by the legal mandates of the agencies and LGUs concerned,
identify government agencies and LGUs to implement specific strategies
under the National Innovation Agenda and Strategy Document (NIASD),
to be developed under Section 9 of the Act;
i. Communicate the country’s innovation policies, priorities, and agenda to
local and international publics;
j. Establish and administer the Innovation Fund established in Section 21 of
the Act. Further, a transparent and open support system in the
management of the Innovation Fund, conducive to innovation, shall be
developed in collaboration with the Department of Budget and
Management (DBM), Commission on Audit (COA), and Government
Procurement Policy Board (GPPB);
k. Identify and approve programs that may qualify for funding from the
Innovation Fund;
l. Create committees and/or invite resource persons or institutions, as
necessary, to ensure effectiveness or expedite policy decision-making
and implementation;
m. Develop metrics aligned with Global Innovation Index and other
international indices to monitor the progress of strategic innovation
programs, including publicly funded RD&E projects;
n. Implement an action agenda for the development of the country’s
capacity for, and success in innovation as measured by the Global
Innovation Index and other indices and measures that it may deem
appropriate in measuring the growth and development of innovation in
the country, or among countries;
o. Submit annual reports to the Congress of the Philippines on the progress
of implementation of the Act; and
p. Perform other functions as may be necessary for the implementation of
the Act

National Innovation Agenda and Strategy Document (NIASD)

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The NIASD shall establish the country’s vision and long-term goals for
innovation consistent with the country’s long-term vision, and with global and
regional commitments. Agenda and strategies shall have a minimum of ten
(10)-year horizon, subject to the periodic review by the NIC every five (5) years
after issuance.

The NIC shall issue guidelines on the implementation, monitoring and

evaluation of the NIASD. This document shall provide a road map consisting of
strategies and action plans for improving innovation governance through the
following:

a. Coordination of innovation policies, programs and projects across

agencies and LGUs;
b. Deepening and accelerating innovation efforts, including inclusive
innovation programs that target the poorest of the poor;
c. Integrating and fostering public-private partnerships, including those
with large businesses, MSMEs, academe, and RD&E institutions;
d. Recommend measures to enable and empower public and private higher
education institutions (HEIs) as knowledge producers and technology
generators; and
e. The creation, protection, and commercialization of intellectual
properties

All agencies and LGUs shall strictly comply with the NIASD and shall pursue this
as a collective, national effort. Other similar documents shall be aligned and
harmonized with the NIASD. The agencies and the LGUs innovation policies
shall be guided by the NIASD such that innovation programs and projects are
incorporated in their respective work programs and action plans.

Innovation Fund and Appropriations

An Innovation Fund to strengthen entrepreneurship and enterprises engaged in

developing innovative solutions benefiting directly or indirectly, the poorest of
the poor is hereby established. This Fund, from which grants shall be issued,
shall be administered by the NIC which shall screen and approve qualified
proposals.

The NIC shall formulate guidelines for programming, disbursing, and accessing
the Innovation Fund.

Subject to availability of funds, a revolving fund in the initial amount of One

Billion Pesos (₱1,000,000,000.00), is hereby allocated for the initial year’s

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implementation of the Act, and such funds necessary for its continuous and
effective implementation shall thereafter be included in the annual General
Appropriations Act.

Further, the NIC, in coordination with the agencies concerned, shall explore the
possibility of accessing a growing range of bilateral and multilateral funds in
order to be able to assist in the funding of RD&E and other innovation efforts.
Public-private partnerships shall also be encouraged in the development and
implementation of innovation initiatives in the sphere of RD&E, education,
product development and testing, among others.

Innovation Development Credit and Financing

An innovation development credit and financing program shall be developed to

generate and scale up innovation in accordance with the NIASD. Innovation
development credit, as used herein, shall consist of loans and other financing
activities for purposes of including the development of new technologies,
product innovation, process innovation, organizational innovation, and
marketing innovation.

The NIC, in coordination with the Bangko Sentral ng Pilipinas (BSP) and other
relevant agencies, shall involve the private sector in developing such credit and
financing program.

Credit Quota

All banking institutions, whether government or private, shall set aside at least
four percent (4%) of their total loanable funds for innovation development
credit: Provided, however, That the loanable funds as used in this section shall
refer to funds generated from the date of effectivity of the Act: Provided,
further, That innovation development loans benefitting agricultural sector
workers and businesses shall be considered as part of the compliance with the
credit quota requirement of Republic Act No. 10000, otherwise known as “The
Agri-Agra Reform Credit Act of 2009”; Provided, furthermore, that the four
percent (4%) credit quota is subject to a joint review by the NIC and the BSP
after three (3) years of implementation to determine whether the law has been
effective in accomplishing its goals. The findings shall be submitted to the
Congress of the Philippines.

The NIC shall conduct an annual assessment on the compliance of these

banking institutions with applicable regulations on credit quotas for innovation

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development and submit its recommendations to the BSP.

The BSP shall impose administrative sanctions and other penalties on the
lending institutions for noncompliance with the preceding paragraphs.Penalties
on noncompliance/under-compliance shall be computed at one-half of one
percent (0.5%) of the amount of noncompliance/under-compliance and shall
be directed towards innovation development. Ninety percent (90%) of the
penalties collected shall go to the Innovation Fund and the remaining ten
percent (10%) shall be given to the BSP to cover administrative expenses.

The BSP and the NIC, in consultation with the concerned agencies and sectors,
shall promulgate such rules and regulations as may be necessary to implement
Sections 22 and 23 of this Act within ninety (90) days after the effectivity of this
Act. Such rules and regulations shall, among others, provide for modes of
alternative compliance to the credit quota allocation and take into account the
varying scale and maturity of operation of the banks in the country. Such rules
and regulations shall take effect fifteen (15) days after its publication in a
newspaper of general circulation in the Philippines.

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