According to Department of Trade and Industry (DTI) Undersecretary for Trade and Investments Promotion Group Nora Terrado, there are about 500 to 750 startups in the Philippines today, approximately 300 of which were founded between 2012 and 2017.
The Philippines is being touted as an emerging startup scene in Southeast Asia, with English fluency, low barriers to entry, and market availability making it increasingly possible for entrepreneurs to launch their businesses.
However, these entrepreneurs face many challenges, with 88% saying capital requirement was the main roadblock to starting a business, followed by regulatory requirements and general business conditions in the Philippines.
The good news is that aspiring entrepreneurs will soon receive assistance from the government in the form of the Philippines Startup Development Program under the Innovative Startup Act.
The Innovative Startup Act
The Innovative Startup Act was authored by Camarines Sur Rep. Luis Raymund Villafuerte and Tarlac Rep. Victor Yap. The act is expect to give the Philippine startup ecosystem a boost by offering incentives and relaxing constraints to encourage the establishment and operation of more startup companies in the country.
To make this happen, various government agencies, such as DTI, Department of Science and Technology (DOST), and Department of Information and Communications Technology (DICT), will be tapped to for the Philippine Start-up Development Program (PSDP).
PSDP is aimed at developing and unifying programs, incentives, and benefits not just for startups, but also for startup enablers.
The aforementioned agencies will be in charge of assessing, developing, expanding, and monitoring the aforementioned program in support of Philippine President Rodrigo Roa Duterte’s vision of financial inclusion and sustained growth for the country.
To track the development and impact of PSDP, these agencies will set key metrics, with the DTI establishing rules to guide the registration and overall assessment of startup enablers to be accredited with the program.
According to Rep. Villafuerte, government agencies and non-profit organizations (NGOs) will also be tasked with putting together an incentives package to help entrepreneurs launch innovative start-up businesses in the Philippines.
DOST, DTI, and DICT will be given individual start-up grant funds to be awarded as initial and supplemental aid to eligible startups and startup enablers.
The act defines a startup as a registered business that has been in operation for 60 months or less in the Philippines, and with core functions that involve innovative processes, products, or business model.
What it means for Filipino entrepreneurs
The act will cater to Filipinos with a knack for shaping and executing innovative ideas. By promoting a culture of entrepreneurship in the Philippines, it will encourage not just the creation of new businesses, but also the creation of new jobs.
The government and non-government sector will help bring novel and groundbreaking business ideas come to life. Filipinos with feasible business ideas will be given the support they need when it comes to funding, subsidies, incentives, technical assistance, accreditation, mentorship, and assessment.
Startup business owners will also learn how to tap a vast pool of skilled and university-educated workers that will help them get established.
Moreover, the act will help them streamline business procedures for startups in addition to providing tax perks and relaxing immigration procedures to helpFilipino entrepreneurs get support from international investors.