In an effort to boost the Philippines’ startup scene, the government has launched several programs and initiatives.
The Philippines is lagging behind in the startup innovation race. Despite the plethora of talent the local entrepreneurial pool offers, the Philippine startup ecosystem just isn’t enticing enough for those wishing to embark on a business venture.
Natasha Bautista, Head of QBO Innovation Hub, said in an interview with SCMP that promising Filipino entrepreneurs tend to venture abroad instead, since the local startup ecosystem simply doesn’t offer enough to tempt the talented.
According to PwC’s Philippine Startup Survey report, Philippine startups raised just US$304 million in 2018, making up only 0.3% of the total global deal volume that year.
To bump up the Philippines’ global startup ecosystem ranking higher, the government has since taken the initiative to roll out funded programs and policies to boost the ecosystem and support local entrepreneurs.
Government-funded Programs
- Startup Research Grant Program: Early-stage startup support for product R&D and market validation studies.
The Department of Science and Technology (DOST) and the Philippine Council for Industry, Energy and Emerging Technology Research and Development (PCIEERD) have created a partnership program to give startups funding access. The funding is intended to help them overcome R&D roadblocks and refine business models to transform their early-stage tech into market-ready products.
The Startup Research Grant Program features two fund tracks: the i2Tech and the iScale, which each cover salaries for extra members in the team excluding the founders, materials for prototypes, testing and professional fees, professional specialists, and travel and representation expenses.
After first launching in 2017, the Startup Research Grant Program has seen numerous successes from startups across sectors from AI and robotics to retail tech and healthtech.
Edusuite, one of the edtech startups in the program, received P4.9 million (over US$100,000) from the grant program. It currently serves its automated transactions and cloud-based computing solutions to more than 20,000 students, faculty and administrators across 10 learning institutions, which includes secondary schools and universities.
- Kapatid Mentor Me Program: A three-step initiative inclusive of mentoring, SSFs and IB schemes for MSEs.
The Kapatid Mentor Me Program was initiated by the Department of Trade and Industry (DTI) and the Philippine Center for Entrepreneurship (PCE) to assist MSEs in the country through three key areas: micro-entrepreneurship mentorship, facility-sharing, and inclusive business model schemes.
Translated as “sibling” in Tagalog, the Kapatid Mentor ME (micro-entrepreneurs) adopts a coaching and mentoring approach wherein experienced entrepreneurs and seasoned business lecturers from Go Negosyo, a non-profit derived from PCE, mentor founders of MSEs and teach them the fundamentals of business operations.
Some of the modules included in the mentoring sessions are entrepreneurial mind-setting and values formation, market growth expansion, operations management, and business law, DTI Provincial Director Ceferino Rubio said in an interview with The Philippines News Agency.
Since the COVID-19 pandemic, the Kapatid Mentor ME Program has shifted its efforts online, offering virtual 1-on-1 sessions with entrepreneur mentors and online classes with professionals.
Edith Christmae Tan, founder of agribusiness The Good Life Nature Farms, praised the program’s virtual shift.
Speaking with Manila Bulletin, she celebrated the Kapatid Mentor ME program’s resilience as it gave her the inspiration to continue during turbulent times, making The Good Life Nature Farms one of the 40 graduates of the first online program.
- Go Lokal Program: Market access platform for Philippine MSMEs to promote local products and accelerate mainstream market presence.
Another initiative by the DTI, the Go Lokal Program partners with private sector retailers and vendors and provides them with a free market access platform for market testing and brand incubation.
The program’s aim is to promote an appreciation of Philippine traditions and styles, both locally and globally, acting as a vehicle for larger conglomerates to discover emerging suppliers and new products with high market potential.
Duty Free Philippines, Robinsons and Ayala Malls are some of the leading retail companies that are supporting the program.
According to DTI, the Go Lokal program has since endorsed over 478 MSMEs to their retail partners, with almost 200 of them becoming mainstream and generating sales of over US$7 million.
Government Initiatives
- Innovative Startup Act: Government support for startups to access subsidies, grants and visas.
Signed in 2019, the Innovative Startup Act, also known as Republic Act No. 11337, provides government support for budding talent in the local startup community by giving entrepreneurs access to a Startup Venture Fund, travel grants, subsidies, and visas.
Aiming to strengthen the entrepreneurial ecosystem and culture in the Philippines, the program covers and supports startups in every field that propose to develop an “innovative product, process or business model.”
Government support includes assistance with business registration and related expenses, travel subsidies and startup visas, and an Asia Pacific Economic Cooperation (APEC) business travel card for Filipino startup executives to easily enter APEC-member countries on short business trips.
The Innovative Startup Act also includes a startup venture fund set up by host agencies to assist with grants-in-aid for R&D, training, and further expansion plans.
- The Philippine Roadmap for Digital Startups: A 3-step framework pushing for digital innovation in the country.
The Philippine Roadmap for Digital Startups was launched in 2015 by the Department of Science and Technology (DOST) and the Philippine startup community in an effort to boost the country’s digital presence.
According to the Information and Communications Technology Office at DOST, the Initiative’s goal is to develop startups to spur economic growth and push for Internet-related innovation.
In the Initiative’s three-part action plan, the roadmap outlines its goals for the digital startup ecosystem, patterns and trends in tech startups, and short-term and long-term action plans for stakeholders to follow through.
The action plans cover areas from IP rights, Internet infrastructure, and legislation, to R&D, education, and open-source information. Some of the activities suggested to boost innovation were government-backed internships, school competitions, investor conferences, and media campaigns.
The Philippine startup ecosystem is full of emerging entrepreneurial potential. With its talent pool overflowing with drive and skill, the local startup scene is likely to soon become a top performer in digitalization and entrepreneurial growth.
Photo by Anirudh Gaur on Unsplash
