TO support the local startup ecosystem, the Department of Trade and Industry (DTI) is pushing for the creation of innovation economic zones in the country during the Duterte administration.

Should this materialize, DTI Export Marketing Bureau (EMB) Director Senen Perlada said, “innovative” startup companies inside the innovation zones may avail themselves of fiscal and non-fiscal incentives, primarily income tax holiday breaks.

“For innovation zone, that is still in the works. (Since) for BPOs (business process outsourcing firms), we have Peza (Philippine Economic Zone Authority) zones, the innovation zone is something like that,” said Perlada on the sidelines of SlingShot Cebu 2017 at the Marco Polo Plaza Hotel yesterday.

The goal, he said, is to make the Philippines a “magnet” for innovation and for the government to help shape a “more robust” ecosystem.

As for its implementation, Perlada said the DTI still has to determine if the identification of innovation zones will be under Peza.

Senate bills

In addition, the DTI wishes to have these innovation zones implemented together with the passing of the Philippine Innovation Act (Senate Bill 1355) which seeks the creation of the National Innovation Council (NIC) tasked to administer an approximately P1-billion Innovation Fund; and the Startup Business Bill (Senate Bill 2217), so there would be no contradictions in the future.

“We’re (DTI) pushing for it (innovation zone). It has to be taken into context, but there are a lot of bills at kailangan magkakasama yan. It has to connect with that kasi mahirap if it’s only administrative because there might be duplications or contradictions (when the bills are passed),” said the export trade official.

EMB, the DTI’s export marketing arm, has involved itself in the digital thrust, since it is part of the government’s agenda under the Philippine Export Development Plan 2015 to 2017 to incorporate innovation in the country’s export sector.

“As far as DTI is concerned, we have to come up with an ecosystem so that startups would become scaleups... For us in the export sector, we need to learn how to use these platforms so we can compete,” he said, adding that the Philippine Development Plan 2017-2022 also identified innovation and the digital economy as vital in the country’s development.

Action agenda

The trade agency has identified a five-point action agenda to cultivate the country’s startup ecosystem.

These include fostering a culture of entrepreneurship and collaboration; addressing legal and regulatory barriers; government support including access to capital; establishing the Philippine Innovation Economic Zone; and the creation of a Philippine Startup Ecosystem.

“We are not yet there,” said both Perlada and Jojo Flores, a Silicon Valley-based co-founder and vice president of Plug and Play Tech Center.

They said the country has to do more work to expanding the startup community and be considered an innovative economy.

Plug and Play invests in over 100 companies every year, including the most popular PayPal and Dropbox.