In 2019, the Philippine government took a bold step to elevate its tech ecosystem with the passage of Republic Act No. 11337, better known as the Innovative Startup Act. The bill promised to foster innovation, attract investors, and create an enabling environment for startups. Five years later, the question remains: has the Act delivered on its promise?
A New Era for Startups
When the Innovative Startup Act was signed into law, it marked a turning point for entrepreneurs in the country. The law was designed to streamline government initiatives, making it easier for startups to access critical resources such as funding, facilities, and permits. With promises of subsidies, grants, and the establishment of startup ecozones, the goal was to transform the Philippines into a hub for innovation.
Success Stories: A Boost for Innovation
One of the Act’s significant wins is the creation of the Philippine Startup Development Program, which has supported numerous startups in the form of research and development grants and subsidies for local and international events. Startups have taken advantage of these incentives to scale up quickly.
Moreover, the Startup Visa has attracted foreign founders and investors, bringing in fresh talent and global expertise. According to the Department of Trade and Industry (DTI), foreign direct investment in tech startups has increased since the law’s enactment.
Gaps and Challenges: Has the Act Lived Up to Its Promise?
However, not all startups have found the path as smooth. While many benefits were laid out in the law, bureaucratic bottlenecks have limited access for some businesses. Many startups struggle to secure the grants and subsidies promised in the Act, with some founders citing slow processing times and unclear guidelines from government agencies.
Despite the introduction of the Startup Ecozones, their impact has been relatively limited. As of 2024, only a handful of ecozones have been created, and their role in boosting startup development remains under scrutiny. Local governments and private sectors have been slow to implement the provisions needed to fully activate these zones.
A Regional Comparison: How Does the Philippines Stack Up?
Compared to its regional neighbors, the Philippines still lags in terms of ecosystem maturity. Singapore and Indonesia have long established themselves as Southeast Asia’s innovation hubs, offering more streamlined incentives and easier access to venture capital. While the Innovative Startup Act was a promising start, it has struggled to fully compete with the level of support that these countries offer.
Startups in the Philippines still face challenges in securing large-scale investments and accessing broader markets.
What’s Next for the Philippine Startup Ecosystem?
The Innovative Startup Act was a critical first step in recognizing the potential of the country’s startup scene, but it is clear that challenges remain. Looking ahead, there are discussions around possible amendments to the Act that could further simplify processes and bring more funding to startups.
There’s also hope that the creation of more Startup Ecozones will accelerate growth. Industry experts are optimistic that with the right adjustments, the Philippines can become a startup powerhouse in the next decade.
As the country continues to navigate these challenges, one thing is certain: innovation will remain a key driver of economic growth. The tech ecosystem is still evolving, and with the right support, the Philippines could soon realize its vision of becoming a leader in Southeast Asia’s innovation landscape.
