| | NOVEMBER 2021 19By Atty. Karen Jimeno, Director & Chief Legal Counsel, SofCap Partners Ltd THE REGULATORY AND MARKET ENVIRONMENT FOR STARTUPS IN THE PHILIPPINESThe Philippines is the most oligopolistic country in the region and the willingness to invest of monopolies and oligopolies "is inhibited by their concentrated ownership structure", laments a lawmaker pushing for investment reforms in the country (Department of Interior & Local Government, 2021). Micro, Small, and Medium Enterprises (MSMEs) account for about 99 percent of total business establishments and employ at least 63 percent of the Philippines' workforce (P&A Grant Thornton citing the Philippine Statistics Authority, 2020). Yet monopolies and oligopolies still dominate most sectors in the Philippines (agriculture, manufacturing, and major services such as electricity, water, wholesale & retail, drug stores, telecommunications, ports, transport) (Aldaba, 2008) and--compared to MSMEs--collectively generate higher revenues and gain more access to financing. Changing the Landscape: Policy & Regulatory Environment for Startups The government has embarked on several efforts to change the business landscape of the Philippines which includes, among others, enhancing the country's competitive environment, supporting MSMEs, and encouraging the growth of start-ups. In the recently enacted "Innovative Start-up Act of 2019" (Start-up Act), it is a declared State policy "to foster inclusive growth through an innovative economy... and an innovative entrepreneurial culture in the Philippines." The Start-up Act provides incentives for, and removes constraints to the establishment of startups and startup enablers. Incentives for start-ups include subsidies for costs of permits and other business registration requirements; expedited processing of government requirements; subsidies for the use of facilities, office space, equipment, or services provided by government, private enterprises, or institutions; use of repurposed government spaces and facilities as the start-up's registered business address; and Grants-in-Aid (GIA) for research, development, training, and expansion projects. Host agencies (Department of Science and Technology, Department of Information and Communications Technology, and Department of Trade and Industry (DTI)) each have a Start-up Grant STARTUP INSIDERVC TALK
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