Building a Durable Ecosystem for Filipino Innovators
The Philippines has laid the legal and policy foundation to transform its startup landscape through the Innovative Startup Act (Republic Act No. 11337), the country’s first comprehensive legal framework designed to foster an innovative economy. Signed into law in 2019, the Act provides benefits, programs, and incentives to startups and startup enablers, removing constraints that traditionally slow new businesses such as high registration costs, slow government processing, and limited access to R&D funding.
The Act’s Core Promise
The declaration of policy frames startups as a key driver of inclusive growth, job creation, and enhanced production and innovation. The law seeks to foster an innovative economy that supports inclusive growth across regions and sectors, streamline government and non-government initiatives, encourage the establishment of innovative new businesses, and strengthen the startup ecosystem by coordinating government agencies, NGOs, investors, and educational institutions.
Government Coordination and Program Implementation
Three Lead Agencies
The Innovative Startup Act designates three lead agencies: the Department of Science and Technology (DOST), the Department of Trade and Industry (DTI), and the Department of Information and Communications Technology (DICT). These agencies implement the Philippine Startup Development Program, the overarching framework for all benefits and incentives. The program’s key objectives include supporting R&D for startups, promoting access to development programs and international exchange, facilitating collaboration between government, private sector, academia, and investors, and developing policies to remove restrictions and improve the ease of doing business.
Philippine Startup Ecozones
The Act authorizes the Philippine Economic Zone Authority (PEZA) to pursue and create Philippine Startup Ecozones—special economic zones focused on the startup ecosystem. This initiative provides dedicated spaces where startups can access infrastructure, mentorship, and funding, creating a concentrated environment for innovation and growth.
Incentives and Benefits for Startups
Tax Perks and Fiscal Incentives
Under the 2026 Strategic Investment Priority Plan (SIPP), qualified enterprises in priority sectors may access fiscal incentives and tax perks under the CREATE MORE Act, with additional incentives for businesses operating outside Metro Manila. These incentives are designed to attract both domestic and foreign investment, with the SIPP organizing incentive targets into a three-tier framework: Preferred (Tier 1), Supply Chain Gap (Tier 2), and Innovation/High-Value (Tier 3).
Startup Visas for Foreign Innovators
The Innovative Startup Act mandates the Department of Foreign Affairs to create Startup Visas for prospective or current foreign owners, employees, and investors of a startup or startup enabler registered in the Philippines. This provision aims to attract global talent and capital, positioning the Philippines as a competitive destination for international entrepreneurs.
Ambitious Targets: Four Unicorns by 2030
The 2030 Vision
The Innovative Startup Act’s 2030 Vision sets ambitious targets: more incubators, stronger sustainability for programs, double the number of funded startups, USD10 billion in investments, and the possibility of four unicorns—startups valued at over USD1 billion. These bold goals reflect the government’s recognition that startups are essential to economic transformation and job creation.
Mobilizing Capital
The Philippine government has mobilized over 2.1 billion pesos to support the startup scene, with the goal of producing four unicorns and attracting USD10 billion in investments by 2030. This funding is channeled through various programs, including DOST-TAPI’s Grants and Assistance to Leverage Innovations for National Growth (GALING) and the Expanded Venture Financing Program (eVFP), which supports startups, spin-offs, and graduates of the TECHNICOM Program and Startup Grant Fund.
Regional Development and Inclusive Growth
Beyond Metro Manila
A key feature of the 2026 SIPP is its emphasis on directing investments toward industries that create quality jobs, strengthen domestic industries, encourage innovation, and generate long-term economic value—with additional incentives for businesses operating outside Metro Manila. This regional focus ensures that the benefits of startup ecosystem development extend to provinces and underserved areas, fostering inclusive growth across the archipelago.
The Path Forward
The Innovative Startup Act represents a fundamental shift in the Philippines’ approach to economic development—from simply registering companies to strategically positioning businesses within a national development program that includes subsidies, expedited permits, IP assistance, and access to special zones and visas. By building a durable ecosystem where startups can scale, access capital, and integrate with global markets, the Philippines is positioning itself as a rising star in the Southeast Asian innovation landscape.
