Government ramps up support for startups in the region

CEBU, Philippines — While businessmen and entrepreneurs admitted the lack of funding in startups which are predominantly concentrated in Metro Manila, government agencies are now trying to expand opportunities in the regional landscape.

During the seventh year of the Geek on a Beach (GOAB) event, Department of Information and Communications Technology (DICT) Undersecretary Jocelle Batapa Sigue        shared that unlike Manila, where startups thrive due to accessible resources, different regions lack adequate support systems, which the government hopes to rectify by implementing policy changes.

Sigue explained that under the Innovative Startup Act (ISA), three government agencies – the Department of Information and Communications Technology (DICT), the Department of Trade and Industry (DTI), and the Department of Science and Technology (DOST)--are working to support the startup innovation community.

However, due to limited funding specifically for startups and innovation, these agencies have to rely on their own departmental budgets, which only provide a small allocation for such initiatives.

According to Startup Blink, Philippines’ global standing in the startup ecosystem has declined for three consecutive years now.

The country dropped one notch to 60th worldwide in the 2024 rankings. The Philippines, however, has retained its position at rank 6 within Southeast Asian region.

Moreover, the country has five ranked cities in the startup ecosystem, led by Manila which saw its own dip that dropped in the global top 100 cities, slipping to 101st while Cebu City is at 459th spot.

Cebu City, however, is now on the 10th spot in the regional level having surpassed Yangon City in Myanmar. This is why ISA is committed to reaching beyond Manila in the coming years with the three leading agencies onboard, outlined five critical areas in which policy changes and resources will help foster a more inclusive startup ecosystem.

Sigue emphasized the need to inculcate an entrepreneurial mindset within the Philippine educational system, with plans to collaborate with the Department of Education (DepEd), Commission on Higher Education (CHED), and Technical Education and Skills Development Authority (TESDA) to develop startup innovation modules.

“That's what our education system is training us to do, ‘go to college and get a job’ but we need to start the mindset that ‘go to college and start a business’,” said the DICT undersecretary.

To further decentralize startup support, the ISA will be initiating plans to establish regional hubs in the next three years.

Cebu is already identified as a key location for a startup innovation hub, which will also be available across other regions by 2028.

These regional centers, according to Sigue, will provide a focal point for startups and offer much-needed access to mentors, accelerators, and other vital resources.

“Let’s also help at least a hundred fetuses because in every university you have ideas that are fetuses but can grow to become a unicorn,” said Sigue.

In terms of funding, the National Development Company (NDC) is now making strides in creating an environment for Philippine startups, offering consistent support.

NDC General Manager Antonilo Mauricio emphasized that they are coordinating with stakeholders in streamlining funding support and processes.

“For the sourcing of funds, we are hopeful that we will be finally getting the allocation for the national budget for the startup venture fund,” said Mauricio.

Mauricio explained that the startup venture fund, with an intended annual allocation of P250 million and a cumulative budget of P1.5 billion from 2019 to 2024, has yet to be disbursed.

This as the COVID-19 pandemic and complex approval processes prevented the Department of Budget and Management (DBM) from releasing the funds, leaving startups without the promised allocation.

“We want us to be proactive so that the image of the Philippine government is to be really supporting the ecosystem and not become a burden or a hurdle in investments into startups,” he added. (CEBU NEWS)