by Adriel Nisperos
“A real emerging startup destination”
This is how Undersecretary Rafaelita Aldaba of the Department of Trade and Industry (DTI) described the actively growing startup ecosystem in the Philippines in the 2022 Global Startup Ecosystem Report (GSER). DTI boasts the notable increase in value of the Manila ecosystem from USD 584 million last year to USD 2.1 billion. A key contributor to this remarkable growth is the expanding programs of the government for startups thanks to the Innovative Startup Act.
In this article, we share with you 11 government funding opportunities for startups that you can explore, so you can keep your business running.
Government Funding Opportunities for Product Development
Technology Innovation for Commercialization (TECHNiCOM)
- Stage Focus: Pre-commercialization (with rough prototype or MVP)
- Lead agency: Department of Science and Technology – Technology Application and Promotion Institute (TAPI)
Have you seen a “Tatak PINOYpreneur” branded startup program before? If yes, then you know it’s a technopreneurship program of the Technology Application and Promotion Institute (TAPI), the tech commercialization and marketing arm of DOST. In 2021, DOST-TAPI launched a campaign to encourage Filipino innovators and entrepreneurs to participate in their programs. They offer a wide range of support for startups, but the best part is that all provide funding assistance.
DOST-TAPI has two programs for startups in the pre-commercialization stage: the Technology Innovation for Commercialization (TECHNiCOM) and the Youth Empowerment through Technopreneurship (YET) programs. Pre-commercialization is a stage where a startup is yet to launch their product in the market and enter full-scale production. It includes activities such as prototyping, pilot-scale testing, tech validation, market research and testing, business model validation, and pre-investment activities.
TECHNiCOM is a multi-million grant program that helps startups and small businesses fast-track the commercialization of their research and development outputs. Currently, the program prioritizes projects aligned with the country’s national R&D agenda.
Youth Empowerment through Technopreneurship (YET)
- Stage Focus: Pre-commercialization
- Lead agency: Department of Science and Technology – Technology Application and Promotion Institute (TAPI)
The Youth Empowerment through Technopreneurship (YET) is the other grant-giving program of DOST-TAPI. It supports youth-led income-generating projects by providing them opportunities to develop their entrepreneurial knowledge and skills, and access financial assistance for their projects. YET funds projects up to PHP 250,000 for college students (per academic institution) and PHP 350,000 for young professionals (per project).
Some of the resources that YET covers are raw materials, production tools and equipment, packaging and labeling, computer hardware and programming language.
Startup Grant Fund (SGF) Program
- Stage Focus: Early-stage (with working prototype/proof of concept)
- Lead agency: Department of Science and Technology – Philippine Council for Industry, Energy, and Emerging Technology Research and Development (PCIEERD)
The Department of Science and Technology (DOST) has also started launching various programs to support startups, and small and medium enterprises (SMEs). One of which is the Startup Grant Fund Program they launched in 2020 to assist startups and SMEs in their research and development activities. Since then, they have funded 27 projects, amounting to a total of PHP 89 million.
Two of DOST’s pioneer startup grantees were Nanotronics, Inc., a tech company that produces nanomaterials derived from indigenous plants to support key industries in the Philippines, and the Futuristic Aviation and Maritime Enterprises (FAME), a tech startup providing solutions for real-time intelligent monitoring and management of resources for maritime, aviation, and land transportation applications.
With the theme “Powering Startups to Thrive in the Next Normal,” this year’s SGF program prioritizes startups that are focused in the following areas:
- Sustainable Industries
- Education/Learning
- Remote Work Productivity
- Content and Talent Development
- Industry Data-Driven Solutions
Women-Helping-Women: Innovating Social Enterprises (WHWise)
- Stage Focus: Early-stage (with working prototype/proof of concept)
- Lead agency: Department of Science and Technology – Philippine Council for Industry, Energy, and Emerging Technology Research and Development (PCIEERD)
Aside from the Startup Grant Fund Program, DOST-PCIEERD has also paved the way for women-led businesses to thrive through their Women-Helping-Women: Innovating Social Enterprises (WHWise) program. The program aims to help 10 women entrepreneurs annually by providing them with customized incubation support and financial assistance. Since its launch last year, they have supported 9 women-led social enterprises, releasing a total of PHP 30 million in grant funding.
Empath, a social enterprise on a mission to make mental health care accessible to Filipinos, is one of the program’s grantees. Receiving the funding has enabled Empath to expand and streamline their operations, improve their services and booking processes.
Venture Financing Programs (VFP)
- Stage Focus: Commercialization
- Lead agency: Department of Science and Technology – Technology Application and Promotion Institute (TAPI)
DOST-TAPI also offers funding opportunities to startups and SMEs that are already commercializing by providing them soft loans. This means that startups and SMEs accessing financial support through this mechanism should repay the agency with the amount they loaned but with 0% interest and 0 collateral. DOST TAPI’s venture financing programs , purchase order financing, and LIGTAS-COVID-19 follow this funding mechanism.
Here are TAPI’s venture financing programs:
Startup and Tech-based Projects
Target:
- Startups existing for less than 5 years
- Intellectual Property (IP)-based company with valid IP OR tech-based company with potential for IP application
This VFP was created to help startups accelerate the commercialization of their innovations or inventions. It can lend startups of up to PHP 2 million to cover equipment purchases or fabrication. As it is a loan, borrowers are expected to repay DOST-TAPI within 3 years (with 6 months grace period).
The agency prioritizes projects that are under the following areas:
- Food Processing
- Furniture
- Gifts, Decors, and Handicrafts
- Agriculture or Marine or Aquaculture
- Metals and Engineering
- Information and Communication Technology (ICT)
- Pharmaceuticals, Health, and Wellness products
- Manufacturing and Industrial processing
Environmentally-Sound Technologies (VFEST)
Target: Filipino-owned Startups and SMEs
Promoting local green technologies or technologies that protect the environment is also a key aspect of DOST-TAPI’s technopreneurship programs. This is why they have also implemented a venture financing program for Environmentally-Sound Technologies or VFEST. Through this program, startups and SMEs looking to purchase equipment for sustainable energy conservation (or abatement) and waste and pollution reduction can access funding of up to PHP 2.5 million. These businesses should be able to repay the agency within 3 years (with 6 months grace period).
Commercialization of DOST-Generated Technologies
Target: Filipino-owned Startups and SMEs that have adopted a DOST-generated technology (by virtue of a Technology Licensing Agreement)
DOST undertakes various research and development projects. Many of those projects result in technologies that can be mass-produced to benefit communities and other businesses. However, it doesn’t always end up that way. This is why DOST-TAPI incentivizes startups and SMEs that are interested to license or adopt DOST-generated technologies through a venture financing program.
This VFP can fund startups and SMEs commercializing DOST-generated technologies of up to PHP 5 million to cover their expenses for equipment and applications to local and international standard certifications. Examples of these are FDA approvals and ISO certifications.
Similar to other venture financing programs, businesses accessing this support are expected to repay DOST-TAPI within 3 years (with 6 months grace period).
Purchase Order Financing Program
- Stage Focus: Startups and SMEs that are previous DOST program beneficiary or adopter of DOST-generated technologies
- Lead agency: Department of Science and Technology – Technology Application and Promotion Institute (TAPI)
Unlike the venture financing programs that are more focused in assisting startups and SMEs purchase equipment or fabrication, the next two financial assistance programs of DOST-TAPI focus on providing financial assistance to startups and SMEs for their purchase of raw materials.
The Purchase Order Financing Program was developed to aid startups and SMEs that are unable to meet their customer’s purchase orders due to financial constraints. Businesses can borrow up to PHP 2.5 million and should repay DOST-TAPI within 3 months (with 3 months grace period).
Level-up Innovation Government Support for Technologies Against the Spread of COVID-19 (LIGTAS-COVID-19)
- Stage Focus:
- Startups and SMEs providing support for the fight against the COVID-19 pandemic
- Previous DOST beneficiary or adopter of DOST-generated technologies
- Lead agency: Department of Science and Technology – Technology Application and Promotion Institute (TAPI)
COVID-19 has proven to be a major business disruptor for startups and SMEs. To help them survive and continue to provide essential goods and services to their customers, DOST-TAPI has initiated the Level-up Innovation Government Support for Technologies Against the Spread of COVID-19 (LIGTAS-COVID-19). Through the program, DOST-TAPI can lend startups and SMEs of up to PHP 1 million to help them continue developing products and services that respond to the impacts of the pandemic.
Similar to the Purchase Order Financing Program, the LIGTAS-COVID-19 aids startups and SMEs in purchasing raw materials but with focus on businesses responding to the COVID-19 pandemic. Borrowers are expected to repay DOST-TAPI within 12 months (with 6 months grace period).
Government Funding Opportunities for Business Development and Growth
Startup Venture Fund
- Stage Focus: Seed to Series B
- Lead agency: Department of Trade and Industry – National Development Company (NDC)
At last year’s Philippine Startup Week, DTI-NDC launched the Startup Venture Fund (SVF), a venture capital fund developed to support the startup ecosystem in the Philippines. Through the program, NDC has allocated PHP 250 million to fund Seed to Series B startups. Aside from financial assistance, the SVF opens the opportunity for startups to access mentorship and training from DTI and other startup enablers.
One of the first startups that received funding through the program was Agro-Digital PH, a startup “building the digital enterprise for small farmers”. Their business won PHP 100,000 in the Venture Pilipinas pitching competition held also at the PHSW in 2021. Previously, they were also part of the third batch of social enterprises in the Social Impact Accelerator, a program we’ve co-implemented with the United Nations Development Programme in the Philippines and the Australian Embassy in the Philippines.
Upcoming Startup Programs
Startup Grant Fund
- Stage Focus: Early-stage (with at least a proof of concept)
- Lead agency: Department of Information and Communications Technology – ICT Industry Development Bureau
The DICT-IIDB is the latest government agency that has expressed their support for startups. In March, they conducted a public consultation to introduce their agency’s Startup Grant Fund to startup founders and enablers. The program was designed to help new and early-stage startups access starter funds, so they can become investable and ready for venture capitalists.
DICT hopes to launch soon not just their Startup Grant Fund, but also the rest of their programs under their Digital Startup Development and Acceleration Program. This includes a Startup Portal consolidating various information about startups and ecosystem enablers in the Philippines.
The Philippines’ startup ecosystem continues to grow fast, and it’s because of the momentum we have gained in the past few years. What we need to do now is to stay consistent (or leap further), so startups can also continue solving problems and creating lasting impact for the well-being of Filipinos.
Government support may be becoming more robust to back startups, but it takes the whole village to catapult the ecosystem and truly become a “startup destination”.
