Facts on Science, Technology and Innovation

Content

• Overview
• Research and education policy
• Structure of research system
• Research performing organisations
• R&D statistics

Overview

The Philippines is a developing country, characterised by steady population growth combined with robust economic growth. The gross domestic product (GDP) of the Philippines grew at an average annual rate of 5.4% during the decade 2006-2015, with the latest five years registering higher growth of 5.8%. Its GDP growth is stronger than Thailand’s and Malaysia’s, but lower than Indonesia’s and Vietnam’s (World Bank 2016). Together with Thailand, the Philippines are among the ASEAN countries suffering most from the crisis moments in 2009 and 2011 where growth plummeted.

The Philippines has typically been the laggard in foreign direct investments (FDI), but saw a sharp increase in 2012 and again in 2014. It is still only sixth among the ASEAN countries by means of annual FDI inflows and stock, but the growth was impressive: FDI inward stock almost quintupled between 2000 and 2015. Annual inflows in 2015 were four times higher than in 2010 (UNCTAD 2016). 

The Philippines has several long term socio-economic challenges and allocates significant resources to alleviate problems like poverty and exclusion. On the other hand, the investments in R&D have remained very low. While the absolute values of R&D expenditures (Gross domestic expenditure on research and development - GERD) grew over the years due to the strong economic growth, their equivalent ratios to GDP remained almost constant at 0.12% and were even decreasing slightly from 2002 to 2009. Public investments in R&D are growing faster than business expenditures, leaving the government with an increasing share of the overall R&D expenditures. However, the private sector investments still account for a total of 65% of the total investments in R&D (see: Estella, T. “Results of the 2011 Survey of R& Expenditures and Human Resources and Updates on R& Indicators in the Philippines.”, 2013).

Although a large part of the R&D expenditure is channelled to the higher education sector, the higher education system is an inhibiting factor in not being able to produce a sufficient amount of high-skilled workers that the advanced sections of the economy need. The Philippines is also affected by a brain drain of skilled labour and researchers, most notably directed towards the US. Indeed, the human capital and labour productivity are critical issues for the Philippines (see: Ahmed, E. M. / Krishnasamy, G.(2013): Human Capital Investment to Achieve Knowledge-Based Economy in ASEAN5: DEA Applications, Journal of the Knowledge Economy) as other challenges to the innovation system remain, for example infrastructure, low income levels as well as health and primary education. Nevertheless, thanks to institutional improvements, financial market development and innovation, the Philippines have moved from rank 75 (2011-2012) to rank 47 in the Global Competitiveness Index for 2015-2016 (see the Global Competitiveness Report from the World Economic Forum 2015-2016). The Global Entrepreneurship Monitor report lists the Philippines as one of the countries with the highest number of early-stage entrepreneurs per total population. Both reports indicate that there is innovative potential in the Philippines’ private sector.

Pillars of competitiveness according to the Global Competitiveness Index	2011-2012 (out of 142)	2012-2013 (out of 144)	2013-2014 (out of 148)	2014-2015 (out of 144)	2015-2016 (out of 140)
Global Competiviness Index (GCI) Ranking	75	65	59	52	47
Basic requirements	100	80	78	66	66
1 Institutions	117	94	79	67	77
2 Infrastructure	105	98	96	91	90
3 Macroeconomic Environment	54	36	40	26	24
4 Health and primary education	92	98	96	92	86
Efficiency enhancers	70	61	58	58	51
5 Higher education and training	71	64	67	64	63
6 Goods market efficiency	88	86	82	70	80
7 Labor market efficiency	113	103	100	91	82
8 Financial market development	71	58	48	49	48
9 Technological readiness	83	79	77	69	68
10 Market size	36	35	33	35	30
Innovation and sophistication factors	74	64	58	48	47
11 Business sophistication	57	49	49	46	42
12 Innovation	108	94	69	52	48

Pillars of Innovation according to the Global Innovation Index	2011 (out of 142)	2012 (out of 144)	2013 (out of 148)	2014 (out of 144)	2015 (out of 141)
Global Innovation Index (GII) Ranking	91	95	90	100	83
Innovation input sub-index ranking	93	106	108	110	101
Innovation output sub-index ranking	84	83	77	84	77
Innovation efficiency ratio	62	32	24	35	44
1 Institutions	101	132	128	108	102
2 Human capital & research	116	121	116	121	123
3 Infrastructure	68	69	78	94	83
4 Market sophistication	98	106	95	93	101
5 Business sophistication	61	72	96	113	81
6 Knowledge & technology outputs	76	59	61	68	53
7 Creative outputs	90	108	91	98	101

Research and Education Policy

 The Philippine Development Plan defines the overarching development strategy for the Philippines and is re-formulated in each Government period. The most recent plan (2011-2016) provides an inclusive growth framework, placing the main focus on employment generation and poverty alleviation. These goals are pursued at local level through a broad policy framework for local economic development (LED), in which several cross-sectoral policies and initiatives are subsumed (see Canadian International Development Agency 2010).

The Philippine Development plan also acknowledges several fundamental weaknesses in terms of competitiveness. The plan emphasizes that strategies shall therefore be pursued to help raise the competitiveness of industries by improving the business environment, raising productivity and efficiency, and inculcating quality consciousness among manufacturers and producers to offer quality goods and services comparable to global brands. Furthermore, the plan identifies a number of economic sectors to be prioritized.

The Philippine STI policy gained a new momentum during the government of President Gloria Macapagal Arroyo (2004-2010), whose ten-point agenda stated “technology is the foundation of future economic development” and the current Philippine STI policies build on its legacy.

The Philippine STI policy is guided by the National Science and Technology Plan (NSTP) 2002-2020. The NSTP identifies 12 priority areas for S&T development (the sectors are listed in no particular order): (a) agriculture, forestry and natural resources; (b) health/medical sciences; (c) biotechnology; (d) information and communications technology; (e) microelectronics; (f) materials science and engineering; (g) earth and marine sciences; (h) fisheries and aquaculture; (i) environment; (j) natural disaster mitigation; (k) energy; and (l) manufacturing and process engineering. These area thrusts were identified to serve as a resource allocation guide for scarce S&T resources.

Alongside the National Science and Technology Plan, the Philippine Innovation Strategy “Filipinnovation” (2007) provides a broad framework for innovation policy and is the main national initiative to boost innovation in the country. As the National Science and Technology Plan, it had specific support from President Arroyo and was built upon a public-private partnership. Filipinnovation calls for action in four strategic areas: 1) Strengthening human capital; 2) supporting business incubation and acceleration; 3) regenerating the innovation environment; and 4) upgrading the Philippine mind-set.

The strategy development was headed by the Philippine’s Department for Science and Technology (DOST) and the committee developing the strategy was later re-organised into a Filipinnovation Network. In the process, 10 sectors were defined as of priority and the subsequent process came up with more than 100 priority initiatives, later reduced to 87 and then to 28. However, these initiatives were never officially adopted and the necessary supportive budget was cut, leaving the strategy and its network to play a smaller role than initially envisaged. The strategy is relevant in the Philippine’s policy system, but needs commitment and better integration into national policies.

To better focus STI programmes and other initiatives, DOST has launched an 8-point action agenda (initially in 2006), much in line with Filipinnovation and LED

This includes:

1) Science-based know-how and tools that enable the agriculture sector to raise productivity to world-class standards

2) Innovative, cost-effective and appropriate technologies that enable MSMEs to develop and produce competitive products that meet world-class standards

3) State-of-the-art facilities and capabilities that enable local industries to move up the value chain and attain global competitiveness

4) Idea of the Philippines as a global leader in Information Technology - Business Process Management Services generating direct employment of 1.3mio (520,000 of which in the countryside)

5) ICT-based transformation of governance broadening access to government services (i.e. health and education) for those in the countryside (to bring the Philippines in the top 50 global ranking of e-government by 2016)

6) Improved quality healthcare and quality of life thru science, technology and innovation

7) Highly skilled and globally competitive S&T human resources in support of the national S&T programs (Philippine Science High School/PSHS to be the leading science high school in ASEAN by 2015 and every town to have at least one DOST scholar by 2016)

8) Science-based weather information and climate change scenarios with associated impact assessments that enable concerned agencies to develop appropriate mitigation strategies for a disaster and climate change resilient Philippines (please see more here).

Education is seen to be in a central role in reducing poverty and building national competitiveness. In this regard, the government has for example expanded its core social development strategy, the Pantawid Pamilyang Pilipino Program (4Ps), which was linked to the Aquino Administration’s Conditional Cash Transfer (CCT) program, by including in its coverage children aged 14-18 years of its 3.9 million family-beneficiaries to help them finish high school. About 2.2 million children are expected to benefit from the age expansion.

The higher education sector is guided by the Commission on Higher Education Strategic Plan for 2011-2016. The Plan aims at improving the relevance and upgrading the quality of higher education institutions programmes and systems, at broadening access to high-quality education and at efficiently managing the system. The Commission on Higher Education has also defined a National Higher Education Research Agenda (2009-2018), whereas the National Research Council of the Philippines has developed a National Integrated Basic Research Agenda, both of which aim at improving the quality of research in the country.

There is also a specific plan to boost human capital in the engineering and technology sector, (Engineering Research and Development for Technology plan), implemented by the consortium of the top eight Philippine Universities (Ateneo de Manila University (ADMU), Central Luzon State University (CLSU), De La Salle University (DLSU), Mapua Institute of Technology (MIT), Mindanao State University – Iligan Institute of Technology (MSU-IIT), University of the Philippines (U.P.) Diliman, U.P. Los Baños and University of San Carlos (USC)). In the course of the plans, the universities aim at delivering high-impact research, attaining a critical mass of Master and Doctoral graduates and upgrading the qualifications of engineers.

Structure of Research System

Initiatives to develop, implement and coordinate Science and Technology (S&T) policies started in 1958 with the creation of the National Science and Development Board.

After a number of restructurings, the actual entity in charge of national S&T policies, the Department of Science and Technology (DOST), was created in 1987 and has played an important role in policy formulation, coordination and implementation of national S&T policies ever since. The DOST institutional structure is comprehensive, including the following departments:

• 3 sectoral councils helping to shape priorities in the respective sectors (Council for Agricultural, Aquatic and Natural Resources, Council for Health and Council for Industry, Energy and Emerging Technology Research and Development)
• 2 collegial bodies (National Academy of Science and Technology/NAST and National Research Council of the Philippines/NRCP)
• 7 R&D institutes
• 8 S&T service institutions
• 16 regional offices
• 79 provincial S&T centres

Therefore, DOST is not only a policy ministry as such, but also a funding agency and directly responsible for R&D activities and implementing agencies. (please see more on the structure of DOST here).

Figure 1: Department of Science and Technology - Organisational Chart

(source: http://www.dost.gov.ph/index.php/transparency/about-dost/organizational-structure)

An integral part in policy formulation in S&T is played by the National Academy of Science and Technology (NAST), a collegial body operating under DOST. NAST is advising the whole policy landscape, not only DOST. NAST consists of scientists, issues policy statements on STI and engages in round table discussions with the private sector to better include industry views in promoting programmes and initiatives.

Another key policy advisory body is the Congressional Commission on Science, Technology and Engineering. It was created jointly by the Senate and the House of Representatives of the Parliament to generate high level recommendations and advice. It undertakes national reviews and assessments of the science, technology and engineering system of the country with a view to enhancing the system’s internal capability to implement policies, providing the necessary funding resources and other infrastructural support, strengthening the linkages with all sectors concerning STI, and assisting the S&T sector in achieving objectives in line with the overall policies.

Alongside DOST, some other ministries also have their own research budgets, such as the Department of Trade and Industry, which is responsible for much of the industry-focussed policies and jointly with DOST co-funds programmes (with DOST as the coordinating agent).

To balance this system of widespread responsibilities, the National Economic and Development Authority (NEDA) was set up. NEDA is the coordinating agency and national planning body and is headed by the President. NEDA aims at promoting rapid and industrial growth and attempts to coordinate the S&T expenditures to support this.  NEDA, for example, attempts to identify projects implementing the objectives of Filipinnovation and line ministries are then mandated to implement these projects or programs, such as DOST in the case of S&T programmes.

The Commission on Higher Education (CHED) is responsible for formulation of policies, plans and programmes for the development of the higher education system in the country. The Technical Education and Skills Development Authority aims at mobilising the full participation of industry, technical and vocational institutions, local government and civil society in formulating skilled manpower development programmes. These programmes are put in place to maximize the contribution to be made by the country’s human resources. 

Research performing organisations

As regards public research, most of it is carried out by public and private research performing universities, as well as by public research organisations operating under DOST and other ministries in key industrial sectors. The main public research performing organisations are the seven R&D institutes: the Advanced Science and Technology Institute, the Food and Nutrition Research Institute, the Forest Products Research and Development Institute, the Industrial Technology Development Institute, the Metals Industry Research and Development Center, the Philippine Nuclear Research Institute and the Philippine Textile Research Institute. The Philippine Institute for Development Studies and the International Rice Research Institute are other important research institutes. Beyond supporting these institutes, the three sectoral planning councils also engage in allocating funds (although small, e.g. PCHRD had in 2013 a budget of 25mio USD) to discrete projects.

There are more than 1400 universities and colleges in the Philippines, many of which are not performing research. The larger research performing universities are the University of the Philippines (UP, with a nation-wide system of campuses), De La Salle University, Ateneo de Manila University, University of Santo Tomas and the Mapua Institute of Technology. An interesting aspect of the Filipino university system lies in the fact that all, excepting UP, are private. The Philippine’s top-5 universities also produce most of the graduates.

The Commission on Higher Education has been accrediting universities as centres of excellence (COE) and centres of development (COD) (which may qualify for centre of excellence). The awards have been heavily concentrated to the top-five universities, which also illustrates that the wider system of universities and colleges cannot compete with the few high-class universities. A key requirement for being granted has been that a COE program should have at least seven regular faculty staff members with a Ph.D.

While research and innovation in the business sector is still small, it is still significantly higher than public spending and some innovation is taking place. A survey conducted in 2009 showed that in particular the ICT firms were innovating, with larger firms more likely to innovate than smaller. As stated above, the Global Entrepreneurship Monitor report lists the Philippines as one of the countries with the highest number of early-stage entrepreneurs per total population

R&D statistics

The investments on R&D have remained very low, at around 0.12% of GDP between 2002 and 2011. Both, the public and the private expenditures were slowly decreasing from 2002 to 2009 and then increased slightly in 2011, with the national R&D expenditures standing at 12,046 million in the year 2011. The private sector investments total 66% of the total investments in R&D, whereas the public investments only account for 34%. Of this latter number, the higher education sector (public and private) contributed 22%, government institutions 17 %, and the non-profit sector 0.40%.  The sector with the highest public R&D spending was agricultural production and technology, whereas the private industries’ spending on R&D was mostly directed to the manufacturing industry.

In 2011, the Philippines had a number of R&D personnel totalling 19,151. This represented an increase of 15% from the level in the previous 2009 survey. Indeed, there has been a significant growth of the R&D personnel in the economy, although it has not improved the ration of researchers per capita. By looking at sector of performance, the private industry sector had almost half or 46% of this total, the higher education sector (including both public and private higher education institutions) had 34%, the government had 19% and the lowest share with only 1% came from private non-profit institutions. Within the higher education sector alone, almost three fourths or 74% were employed in public HEIs or state universities and colleges (SUCs). Table 3 shows key indicators for the Philippine’s economy and R&D sector. Obviously some of the data is missing, as it is neither provided by national Philippine authorities, nor by international organisations, such as the World Bank or UNESCO (status August 2016).

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