DoST calls for higher funding for startup law

A LAW designed to provide research support and incentives to Philippine startups remains underfunded, with officials citing the need for more resources to support startups’ research, design, and market expansion.

In a briefing on Tuesday, Department of Science and Technology (DoST) Undersecretary Leah J. Buendia said Republic Act No. 11337, or the Innovative Startup Act (ISA) of 2019, has not received sufficient funding six years after it was signed into law.

“We do not have the luxury of the funds, but all we can do is tap other resources that we have… it’s not a reason to not do anything,” she said during the opening of Philippine Startup Week.

The law creates the Philippine Startup Development Program, which consists of programs, benefits, and incentives to support local startups and startup enablers. Under the Act, the program aims to assist startups through research and development, capacity building, exchange programs, grants-in-aid, and participation in local and international events.

Section 11 of the law mandates that each of the lead agencies — DoST, Department of Information and Communications Technology (DICT), and Department of Trade and Industry (DTI) — “shall propose and include in its respective budget under the annual General Appropriations Act the initial and succeeding appropriations for the creation and replenishment of its Startup Grant Fund (SGF).”

In July 2024, DICT opened applications for the Startup Grant Fund Cohort 2, offering grants of P500,000 to P1 million, while DoST provided funding of up to P5 million per startup under its 2025 Startup Grant Fund program. The DTI, in partnership with the National Development Co., manages a P250-million Startup Venture Fund launched in November 2021 for seed-to-Series B startups, which included an P11-million investment in SolX Technologies, Inc. in June 2024.

The ISA Steering Committee, composed of DoST, DICT, and DTI, has mobilized P2.1 billion in state funding to support 212 startups, the Philippine Startup Week organizing committee said in a press release on Tuesday. It has also incubated 2,233 additional startups through a national network that has grown to 158 technology business incubators and innovation hubs.

The law authorizes full or partial subsidies for registration and business permit costs, as well as the use of government or private facilities, office space, equipment, and services. It also establishes Philippine Startup Ecozones.

On the sidelines of the briefing, Ms. Buendia told BusinessWorld that more funding is needed to support startups in research and design, infrastructure, and scaling their operations.

“In the case of DoST, we only fund startups that need to be polished through research and development,” she said, noting that funding for startup grants and aid comes from the department’s annual budget.

Ms. Buendia also highlighted a key challenge for the Philippine startup ecosystem: the “colonial mindset,” or the perception that foreign products are superior.

“We do not patronize our startups enough. Maybe because there’s still mentality that products abroad are better,” she said.

Philippine startups received $86.4 million in equity funding in the first half of 2025, 55% lower than in the same period in 2024, according to a report by Kickstart Ventures, Inc. and the Singapore-based business news platform DealStreetAsia. — B.M.D. Cruz