The Department of Trade and Industry (DTI) and open innovation platform Plug and Play are gearing to bolster the Philippines' startup ecosystem through a national acceleration program.
Launched on April 17, the program aims to infuse technology and the latest innovation with Filipino ingenuity to solve problems rampant in various industries, and by extension the government sector.
"It [the program] brings together industries and asks them, 'what are your problems?,' 'what opportunities do you want to create. They know what they want, but they don't have the technical skills to identify the best solutions and build these," said Plug and Play Co-Founder Jojo Flores.
Flores told reporters that the company will "facilitate the accelerator program."
He explained that the company will market the feedback or problem statements of industry players in the Philippines in order to seek out startups that will be able to offer solutions. Through the acceleration program, the startups will work with the industry to build the products, attracting foreign direct investments (FDIs) from venture capitalists and other companies.
These include opportunities for mentorship, education, network connections with corporates, and linkages with venture capital funds.
In turn, startups will be able to secure the intellectual property (IP) for their products built in the Philippines, that will hopefully serve the interests of local stakeholders, and resell the products to the global market.
Flores said they are targeting to accommodate at least 40 startups per year for the program, majority being international startups and some local startups.
The program set up involves two batches of 20 startups per year on a six-month interval. In the sixth month of the program per batch, the startups will be showcased to the international investment community concurrently.
Plug and Play's sealed a contract agreement with DTI that involves running the program for two years, but Flores aims to continue the program for up to five years.
The funding for the program will come from sponsors that the DTI will refer, mostly from the private sector, said Flores.
DTI Secretary Alfredo Pascual said the partnership entails support and housing obligations on the part of the agency, through provision of offices and co-working spaces for startups that need them, as well as access to select startups that are already in the DTI's radar or have joined the agency's programs.
Aside from DTI, Plug and Play also signed a contract with information technology (IT) firm DFNN Group of Companies, who was their first corporate partner for the program in the Philippines.
Flores said DFNN will provide some funding and provide problem statements and help source the best startups that they can work with.
In terms of funding, Flores said that, based on their past corporate partnerships, the amount can range from "a low of $250,000 to a high of $1 million depending on their needs."
DFNN Group Executive Chairman Ramon Garcia Jr. noted that the program can yield around $150 million in FDIs, which he called "innovation by regulation."
"What we want to do is look at the regulatory framework in which DTI and the Board of Investments (BOI) can attract foreign capital. We found within their regulation that if you apply technology to it, there are creative ways to support the investment," said Garcia.
"I am conservatively targeting first about $150 million by using digital platforms within the DTI to bring in a new type of investor that hasn't been able to participate in the Philippine market," he added.