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NATIONAL SCIENCE AND TECHNOLOGY PLAN 2002-2020

I. INTRODUCTION The National Science and Technology Plan for 2002-2020 (NSTP 2020) is a longterm indicative plan which defines, in broad strokes, the direction of science and technology (S&T) development in the Philippines for the next 18 years. It is the S&T communitys response to the national leaderships call for S&T to be the foundation of future economic development in the country. The Plan is supportive of the visions and goals stated in the Medium-Term Philippine Development Plan (MTPDP) which are: macroeconomic stability with equitable growth based on free enterprise, agriculture and fisheries modernization with social equity, comprehensive human development, and good governance. Although NSTP 2020 is a long-term plan, it includes a short-term component (2002-2004) which outlines the specific programs that will be given emphasis, namely, research and development (R&D), technology transfer, human resource development, S&T promotion, information dissemination and advocacy, and linkaging or networking. The success of NSTP in the short and medium term depends upon the implementation of these programs. The development of the NSTP has been a highly participatory process which took a year to finish since it was started in 2001. In coming up with the NSTPs visions, goals, strategies and area thrusts, consultations involving S&T experts and opinion leaders and stakeholders from the private sector, government, academe, and nongovernment organizations were held.

II. THE PLANNING ENVIRONMENT Global Scenario: General The current global scene has been described as one of increasing globalization. It is marked by increasingly borderless exchanges of goods, capital and labor, which are both a result and part of the commitment of member-countries to the free flow of goods and services under the World Trade Organization (WTO). Alongside globalization has been rapid technological change, increased competition among nations, the expansion of the services sector, and increasing mobility of skilled labor which has led to rising wages. Although increased competition is the norm, greater cooperation between and among countries, particularly as members of regional blocs, has also been a notable development. This and related developments have led to predictions of the eventual demise of the nation-state in the form that it has existed since at least the 19th century. 1

Global Scenario: Science and Technology The technological advances which marked the closing decades of the 20th century have profoundly altered, and continue to revolutionize, every aspect of human existence (economic, political, socio-cultural). Technology forecasts made in developed countries during the 1990s point to the continuation, even acceleration, of these changes into at least the first two to three decades of the 21st century. One such forecast, by Japan, identified the following scientific and technological areas in which rapid and intensive development is expected to take place: environment; electronics; life sciences; marine and earth science; production and machinery; communication; information; health, medical and welfare; agriculture, forestry and fisheries; and transportation. Another forecast, prepared by Korea, identified the following areas: materials; information, electronics and communication; medical care and health; production; life science; energy; environment and safety; transportation; agriculture, forestry and fisheries; and minerals, water resources, urbanization, construction and civil engineering. As can be noted, there are striking similarities between the two independent forecasts. Of the many technological advances, two -- biotechnology and information and communications technology (ICT) -- stand out as having great potential especially for less developed countries. Alongside rapid technological change has been a growing concern for intellectual property rights (IPR) protection and enforcement especially by governmental institutions and firms in developed countries which are heavily involved in the development of new products and services. There are two implications of this development. On the one hand, stricter enforcement of IPR, by providing the needed incentive for technological innovation, has undoubtedly contributed to the emergence and rapid development of new technologies as well as new and improved products and services. In theory at least, the greater variety and improved quality of technologies as well as of new products and services should redound to the benefit of all, including, and especially, those from the poor or underdeveloped countries. On the other hand, a stricter IPR regime has raised or erected new barriers to poor countries access to technologies developed by firms from the rich countries, resulting to the widening of the gap between the rich and the poor countries. But the growing number and intensity of collaboration in S&T and R&D among countries, particularly within regional blocs, has a positive aspect. To the extent that poor countries are given the opportunity to participate in -- and to share the benefits of -- these collaborative efforts, there is a tremendous potential for optimizing the use of resources, which are especially scarce in the poor countries. Technological innovation efforts provide an important impetus for the emergence and growth of technology-based spin-off enterprises. With the growth of such 2

enterprises, venture capital will play, as it has already played in more developed countries, an increasing role in technology development and commercialization, especially among small and medium enterprises (SMEs). Local Scenario: General The Philippines is characterized by a sluggish or slow-growing economy, rapid population growth and uncontrolled urbanization, depletion of natural resources and degradation of the environment, inadequate infrastructure, a very narrow range of export products and poor export performance in general, and a relatively stagnant manufacturing sector existing side by side with a fast growing services sector. Slow growth has led to low levels of investment in general and investment in S&T in particular, as well as to inadequate job opportunities, the latter leading to strong pressures for overseas employment and resulting to brain drain. Local Scenario: Science and Technology The local situation in S&T can be described as relatively underdeveloped, as shown in a number of indicators. Ratio of R&D Expenditures to GDP Up to about a decade ago (1992) the Philippines devoted 0.22 percent of its GDP to R&D. In the most recent survey (1996), this ratio is shown to have gone down to only 0.15 percent. (Table 1) By contrast, South Korea devoted 2.82 percent of its GDP to R&D in 1996, making it the highest among the countries included in the survey. Japan came second with 2.80 percent, while the US with a ratio of 2.61percent, is next. Other more developed countries had R&D-to-GDP ratios ranging from 1.0 to almost 2.0 percent. With the exception of Singapore, the rest of the ASEAN countries had R&D-to-GDP ratios of less than 1.0 percent, although most had ratios higher than that of the Philippines. In contrast to the more developed countries where the private sector undertakes most of the R&D and provides most of the funds for that purpose, typically between 60-80 percent of the total, in the Philippines the government sector, which accounts for almost 80 percent of the total, is still the major R&D player (Table 2). It has long been a goal of Philippine S&T policy to raise the private sector share in R&D , but there is no evidence that this has been, or is about to be, achieved. S&T Manpower The Philippines has 157 scientists and engineers (S & E) per million population engaged in R&D (Table 3). For the period 1987 to 1997, Japan had the highest number, with 4,909 S&Es per million population engaged in R&D. Russia had 3,801 S & Es while the US had 3,676 S&Es per million population. Other countries in which data are available had numbers ranging from 1,700 to 3,400. Again, the 3

ASEAN countries with the notable exception of Singapore, fared poorly, with numbers ranging from less than a hundred to less than 500 per million population. Patents Patent applications provide a good indicator of a countrys technological innovation capacity and performance. In terms of patent applications filed, the Philippines has performed poorly, with 125 and 3,440 resident and non-resident applications, respectively. As expected, Singapore, with 8,188 patent applications by residents and 29,467 by nonresidents, respectively, leads the pack in ASEAN. Thailand and Malaysia, with 238 and 179 resident patent applications, respectively, are far behind, although both have done better than the Philippines. Non-resident patent applications in these two countries have also been higher at 5,205 and 6,272, respectively. In ASEAN, only Vietnam and Indonesia had lower patent applications than the Philippines (Table 4). In Asia, South Korea, with 92,798 patents by its nationals and 37,184 by nonresidents, has the highest number of patent applications. China comes a very far second, but with high number of 12,768 patents and 48,596 patents applied, respectively, by its residents and non-residents. High Technology Exports as a Percentage of Manufacturing Exports This indicator measures the technology-intensity of a countrys exports. Of all the measures, it is here that the Philippines scored higher than China, ASEAN countries, and even South Korea. The percentage share of high technology exports to total manufacturing exports of the Philippines is 71 percent compared to Singapores 59 percent and Malaysias 54 percent. Other countries in the list have figures of 31percent and below. The high technology-intensity of Philippine exports is, however, accounted for mostly by electronics products exports. (Table 5) This makes the countrys exports hostage to the changing fortunes of the electronics industry, as the recent downturn in the electronics industry in the US demonstrated. Capital and Labor Productivity Capital productivity is usually measured by the incremental capital-output ratio (ICOR), or its inverse, with a rising output-to-capital ratio indicating increasing capital productivity. From 1990 to 2000 the inverse ICOR fluctuated, rising to a peak in 1996 and becoming negative in 1998, before rising again in 1999 and 2000. GDP per capital stock, another measure of capital productivity, remained almost constant from 1990 to 2000 indicating very little productivity gains. (Figure 1) 4

Labor productivity, as measured by the GDP per employee, first decreased from 1990 to 1992 and then gradually increased in the following years up to 2000. A related measure, gross output per employee, showed a constantly increasing trend over the same period. (Figure 2) Technology Achievement Index The UNDP Human Development Report, whose theme for 2001 is Making Technologies Work for Human Development, has come up with a Technology Achievement Index, which is a composite of different measures of a countrys technological innovation capability and performance. The index measures how well a country is creating and diffusing technology and building its human skill base. It includes R&D expenditures as percent of GNP, number of scientists and engineers per million population, number of patent applications, and percent of exports with high technology content to total manufacturing exports. Based on 2000 data, Finland ranked first on the index followed by the United States, Sweden, Japan and other countries. The Philippines was 44th out of a total of 72 countries rated, behind Malaysia and Thailand, which ranked 30th and 40th,, respectively, although it was ahead of China, Indonesia and India which ranked 45th, 60th and 63rd , respectively. (Table 6) The only ASEAN country that made it to the top ten is, again, Singapore.

III. ASSESSMENT OF PAST S&T PLANS Since 1986 the Philippines has prepared three comprehensive S&T plans: the Science and Technology Master Plan (STMP), the Science and Technology Agenda for National Development (STAND) and the DOST Medium-Term Plan (DMTP). The STMP, a 10-year (1991-2000) plan formulated during the administration of President Aquino, represented the first attempt by the government of the Philippines -- in particular, the DOST-- at comprehensive and long-term planning in S&T. The Plan correctly diagnosed the problems plaguing Philippine S&T, like low investment in R&D, poor S&T education, lack of private sector participation in R&D, inadequate attention to market demand as a basis for R&D and innovation, and lack of technology transfer and commercialization. To address these problems, the STMP proposed bold measures which included global search of technology, programs to attract expatriate scientists, greater private sector involvement in R&D, and closer collaboration among the private sector, academe and government. The programs proposed under the STMP were basically sound. However, the resources to carry out the proposed reforms were lacking. For instance, STMP proposed to increase the ratio of R&D to GNP from 0.2 percent to 1.0 percent in 2000. Such an increase would, however, have required substantial additional 5

resources, which were neither present nor forthcoming during the Plan period. Moreover, the target appears, from hindsight, to have been overly optimistic. STAND, which was the medium-term S&T plan (1993-1998) under President Ramos, employed the strategy of targeting specific industries as export winners. Around 13 such winners were identified for government support or special treatment; these were: computer software; fashion accessories; marine products; fruits (fresh and processed); gifts, toys and housewares; furniture; metals fabrication; marble; electronic products; garments and textiles; construction services; professional services; and ornamental and horticulture products. Targeting or picking winners as a strategy is per se not bad, although some economists would argue otherwise. STAND may have targeted too many industries, spreading scarce private and public-sector resources very thinly. Moreover, the identification of industries was not the result of a scientific, objective method but of rounds of consultation with industry and sectoral representatives whose predictable result was to keep adding to the list of targeted industries. The DMTP for 1999-2004 was basically an agency or departmental plan of DOST, and thus, was more limited in scope than the previous plans. Unlike the previous plans, the DMTP tried to avoid the temptation to target specific industries or pick winners. Instead, it focused on a few flagship programs, while at the same time making sure not to neglect the regular or recurring programs of DOST. The DMTP was, however, torn between, on one hand, the need to build the countrys long-term capability in S&T and, on the other hand, the need to address the short-term problem of poverty alleviation. The former strategy suggests a focus on building human resource capability, and in particular the capacity to do R&D, while the latter strategy makes do with, or even puts a premium on low-technology, labor-intensive and livelihood-type programs and projects.

IV. VISIONS FOR PHILIPPINE S&T At the end of each plan period, i.e. short, medium and long-term, the following S&T states of the world are envisioned for the Philippines: By 2004, S&T shall have contributed significantly to the enhancement of national productivity and competitiveness, and to the solution of pressing national problems. By 2010, the Philippines shall have carved some niches and become a world-class knowledge provider and user in selected S&T areas; it shall also have developed a vibrant Filipino S&T culture. By 2020, the Philippines shall have developed a wide range of globally competitive products and services which have high technology content. 6

V. GOALS FOR PHILIPPINE S&T To realize the foregoing visions, the following goals shall be pursued in the short, medium and long-term: By 2004: improved access to quality S&T services; higher productivity and competitiveness for selected Philippine products and industries; technology-based enterprises shall have emerged in the regions; availability, if not widespread use, of S&T-based solutions to pressing national problems; and enhanced S&T awareness and support among leaders and policy makers.

By 2010: world-class capabilities in ICT; technological leadership in ASEAN in the fields of biotechnology, materials science, and microelectronics; adequate number of quality scientists and engineers in the country; robust technology- and knowledge-based industry sectors and globally competitive products; quality S&T-oriented higher education sector; top performance in science and math; highly-developed culture of innovation and S&T consciousness; enhanced private sector participation in S&T and R&D activities; and national R&D expenditure level at 1 percent of GDP.

By 2020: VI. world-class universities in S&T; a well-developed S&T-based SME sector; internationally recognized Filipino scientists and engineers; and the Philippines as a model in S&T management and governance.

STRATEGIES FOR S&T To achieve the foregoing goals under the Plan, the following S&T strategies shall be pursued:

1. Niching and Clustering If there is any lesson to be learned from the experience of technologically advanced countries, it is that the development of industries or technologies does not happen simultaneously (on all fronts or areas) and independently of, or in isolation from, other industries or technologies. Rather, technological development occurs on a relatively narrow front and often in clusters of related interacting or supporting industries. Considering very limited resources, the forward and backward linkages of industries will be an important criterion in prioritizing industries to be provided with technological assistance and other available incentives. Along this line, the industry clusters which have been identified by the Department of Trade and Industry provide a good starting point. 2. Addressing Pressing National Problems S&T should address not only long-term or continuing concerns (e.g. human resource development, national security, digital divide) but also short-term and medium-term problems. The most pressing problems of the country which needs to be addressed include poverty, poor health, rapid population growth, shortage of food, water, energy, housing and jobs, low levels of income, low productivity, deterioration of the environment, cyber-terrorism and poor governance. 3. Development of Human Resources A nations success in S&T is ultimately dependent upon the quantity and quality of its human resources. S&T human resource development shall aim to strengthen science and mathematics education, build future S&T capabilities through focused programs in basic and higher education, align vocational, technical and skills development programs to the requirements of global competitiveness of Philippine industries, promote partnerships with the private sector, harness the potentials of locally available S&T expertise in the different sectors, and maximize the contributions of Filipino S&T professionals abroad to the national S&T development efforts. 4. Provision of Support to Industry Particularly SMEs Because of their broad base and relatively labor-intensive nature, SMEs provide a reliable and equitable basis for economic development. It has been so in some of the most successful economies like Taiwan and the newly-industrialized economies. This being the case, S&T support to SMEs shall be extended through, among others, improvement of their access to available technologies and services; making available technology verification services; implementing integrated S&T 8

programs for specific sectors; partnership and collaboration with the private sector in the upgrading of technological capabilities; harnessing of the capabilities of the academe in meeting the technology requirements of industries, particularly in their weak areas; provision of incentives for firms to invest in technology upgrading; assistance in securing international accreditation of quality assurance and standards laboratories; and assistance and encouragement in the establishment of privately owned laboratories to service the needs of industries. 5. Accelerating Technology Transfer and Utilization Studies have shown that technology transfer, utilization and commercialization is the weak link in the technology development chain. Their accelerated development is therefore an important priority under the Plan. Technology transfer and utilization shall be accelerated through the maintenance of an inventory of available technologies and their sources; the establishment of a pool of technology experts by sector; the global search for technologies; maintenance of data bases on technologies, expertise and resources; training and information dissemination of available technologies; provision of incentives for industries to invest in HRD for technology upgrading; promotion of networking among government, industry associations and NGOs to facilitate technology acquisition and transfer; and mobilization of the financial sector in support of technology transfer and commercialisation. 6. Building/Upgrading of S&T Infrastructure The Philippines lags very far behind the newly-industrialized countries in S&T infrastructure and facilities. The buildup and maintenance of a good S&T infrastructure is therefore an important long term as well as short-term strategy. In building the countrys S&T infrastructure, emphasis shall be given to strengthening the capabilities of the existing centers of excellence in S&T priority areas, the upgrading of regional and local capabilities, and the provision of support to encourage and enable the private sector to carry out technological innovation and related activities/services. 7. Strengthening of Government-Industry-Academe-Civil Society and International Linkages Collaborative programs among government, industry and academe, participatory planning, sharing of best practices and other information, and S&T policy advocacy shall be encouraged. The principle of cost-sharing -- of each partner or participant having a stake in the financial success or viability of the project or activity --shall guide the conduct of such activities.

8. Improvement of S&T Governance The improvement of governance (i.e. of accountability, transparency and performance) is an important strategy for enhancing the performance of the S&T sector. To improve S&T governance, there shall be a continuing assessment, classification and upgrading of S&T institutions, regular performance audit of S&T agencies and institutes, mechanisms to ensure continuity of plans and programs, unification and coordination of national S&T efforts, strengthening of the monitoring and evaluation component of S&T governance, institutionalization of incentives for excellent performance, and harnessing of the full potentials of ICT in governance. Alternative modalities for undertaking R&D more efficiently and effectively, like corporatization and privatization, shall be studied. 9. Promotion/Popularization of S&T To many Filipinos, S&T is an esoteric or remote subject rather than an important part of their daily activities or existence. It is therefore of utmost importance that the relevance, if not necessity, of S&T be brought to or impressed upon the people through programs or projects designed to promote or popularize S&T. To promote/popularize S&T, the following activities will be undertaken: dissemination of S&T information through the use of laymans language; study of the social science aspects of S&T; promotion of the culture of innovation; creation of awareness among, and education of, policy makers and decision makers on the importance of S&T; promotion of constructive competition on S&T achievements; and proper recognition and, if possible, financial reward for S&T achievers and achievements.

VII.

LONG-TERM AREA THRUSTS Based on the forecasts discussed earlier and consultations with S&T experts and various stakeholders, the following priority areas for S&T development have been identified (the sectors are listed in no particular order): 1) agriculture, forestry and natural resources; 2) health/medical sciences; 3) biotechnology; 4) information and communications technology; 5) microelectronics; 6) materials science and engineering; 7) earth and marine sciences; 8) fisheries and aquaculture; 9) environment; 10) natural disaster mitigation; 11) energy; and 12) manufacturing and process engineering. These area thrusts shall serve as guide in the allocation of S&T resources and the provision of S & T assistance, whenever available. 10

1. Agriculture, Forestry and Natural Resources S&T interventions in agriculture and fisheries shall be undertaken in support of the countrys Agricultural Modernization Program. The aim of S&T shall be to increase agricultural productivity through the use of modern production technology. By sector, the following are the priorities and directions for development: a. Agriculture: a.1 Crops - Hybridization, production management systems, integrated pest management, post production and primary processing systems, storage, and quality improvement and standardization for priority horticultural crops such as fruits, ornamental and medicinal plants, industrial crops (coconut and fiber crops), and vegetables. Crop varietal improvement, cultural management systems, IPM, post harvest handling, primary processing, storage and product development for priority agronomic crops (rice, corn, sugarcane, rootcrops and field legumes). a.2 Livestock Genetic and feed improvement for ruminants; product standards for poultry; and production systems and animal health programs, vaccine/diagnostics development for ruminants, poultry, and swine.

a.3 Resource Management Sustainable agricultural production system (hydrophonics, precision agriculture (computer-based models and related tools), peri-urban agriculture, organic agriculture); soil fertility management through the development, management and utilization of organic/inorganic fertilizers and soil conditioners; agricultural machinery and structures (benchmark survey and information system, Philippine standards for agricultural machinery and structures, irrigation and agricultural drainage system, production, postharvest/agricultural processing); and soil and water resources management and conservation (management of marginal areas for sustainable food production, integrated water resources management and utilization). b. Forestry and Natural Resources: b.1 Wood Production Forests Forest biotechnology; natural resource development and management system technologies; plantation forest development and management. b.2 Protected Areas and Wildlife Agro-forestry and natural resources management; biodiversity conservation and utilization; survey, inventory and population census of species; and biopiracy. 11

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Non-Wood or Non-Timber Plants/Products Development of regeneration methods and production aspects including plantation development technology for vines, orchids, resin and other forest plants; development of designs and products using other materials and species; and natural dyes R&D. Bamboo and Rattan Survey and inventory, design and product development, and computerized database on production, harvesting, processing, utilization and marketing, and policy development. Resources Valuation - Quantification and appropriate pricing of various natural resources.

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2. Health/Medical Sciences The health/medical sciences is an important component of total human development and shall therefore be given priority attention under the Plan. Fortunately, this is an area in which the Philippines has already made some headway. Within the health/medical sciences sector, the priorities and directions for S&T development are: control of communicable diseases; early detection and prevention of non-communicable diseases; accurate diagnosis of common tropical diseases; immuno-diagnostics and bio-sensors for priority diseases; telemedicine and bioinformatics; development of biopharmaceutical products; production of drugs and recombinant vaccines using known and patent-lapsed technologies; development of natural health/medicinal products; functional foods/nutraceuticals development and standardization; and vaccine and antibiotics development for local needs. 3. Biotechnology Among the new and emerging technologies/sectors, biotechnology holds perhaps the greatest potential for the Philippines. The country already has the domestic expertise and capability in the form of a corps of highly-trained and experienced researchers in biotechnology (particularly agricultural biotechnology), biology and chemistry. Moreover, unlike some of the other sectors or technologies, biotechnology is skill or knowledge- rather than capital-intensive and is therefore relatively more affordable to a country like the Philippines. The priorities for S&T development in this area are the applications of biotechnology in agriculture, forestry and natural resources, marine sciences, fisheries and aquaculture, health/medical sciences, environment, energy and manufacturing and process engineering. Biotechnology applications in the mentioned sectors are: For agriculture and fisheries varietal improvement and sustainable production for food security; for forestry maintenance and 12

maximization of forestry resources; for health/medical sciences prevention, diagnosis and treatment of diseases; for marine sciences, fisheries and aquaculture development of resources for food security; for energy development of renewable energy sources; for manufacturing and process engineering development of novel processes of manufacture using life forms as miniature factories to produce the desired products; and for environment bioremediation. The priority for biotechnology processes/technologies are: plant tissue culture; immuno-based diagnostics; protein and DNA markers; microbial transformations; plant transformations; genome mapping; cloning single genes; and mammalian tissue culture. 4. Information and Communications Technology (ICT) ICT is an area in which the Philippines already has built some competitive advantage or edge; its further development is one of the top priorities under the MTPDP and the administration of President Macapagal-Arroyo. The aim of S&T intervention is to further build the countrys capabilities in ICT and make the country a world-class provider of ICT services and products. The specific directions of ICT development under the Plan shall be in the following areas: a. E-governance: through access to facilities and on-line information, frontline services, information sharing/networking, and data banking. Teleservices: through databases and decision support for urban/rural development. Applications in health : tele-medicine, tele-radiology, virtual patient records, medical expert systems, ICT applications for the disabled and the elderly. Applications in education : intelligent tutoring systems, on-line training, digital satellite radio services, digital terrestial television.

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e. Applications on the environment: geographic information systems, global positioning systems, remote sensing and telemetry. f. Applications in agriculture: expert systems for specific crops, land information systems, and marketing information systems.

g. Applications in industry: e-commerce applications in sales and marketing, procurement, order management, and customer service and support. h. Embedded systems design

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5. Microelectronics The electronics and microelectronics sector has been, and remains, the top export earner of the country, accounting for almost 70 percent of total Philippine exports in 2000. It is expected to continue to be a major export product and earner in the future because of the rapid pace of technological development in the sector which continually brings out new products, the continued and increasing future demand for electronics products, and the presence of some domestic capability in this sector. The specific thrusts in microelectronics are: development of technology-based support industries; development of Application Specific Integrated Circuits (ASICs); development of locally-designed electronic equipment or tools for designing ASICs; development of Radio Frequency Integrated Circuits (RFIC) as well as digital and mixed signals as design niches; development of a strong core of R&D engineers with strong capabilities in design and prototyping; development of core technologies in microelectronics; and development of highly skilled human resources for the sector. 6. Materials Science and Engineering Materials science and engineering is predicted to play a very important role in the countrys industrial development. The increasing usage of materials like metals, ceramics, and polymers and the development of advanced materials with tailored specific properties (electromagnetic, optical, thermal, chemical, biological and mechanical) are predicted, the latter to be realized by 2010. Various design, synthesis and processing technologies in connection with the production of these new materials are also predicted to be onstream by 2010. Other related developments in the future are micromachines and nanotechnology. For the plan period, the thrusts are: conducting polymers, plasma, crystal growth technologies, nanotechnology, superconducting ceramics, industrial ceramics from local sources, novel construction materials, minerals engineering, materials processing from marine sources, and materials for energy conservation. 7. Earth and Marine Sciences Earth and marine sciences hold considerable potential for increasing the countrys food supply, the development of alternative energy and materials, the enhancement of marine biodiversity and the marine ecosystem in general, and for ecologically-sustainable development. The specific thrusts are: for marine science: sustainable mariculture, marine ecosystem enhancement, marine bioindustries, oceanography, marine/freshwater biodiversity, continental shelf studies (delineation and inventory of resources) and sea bed resources studies (fuels, metals and minerals). For earth science, the 14

thrusts are: mineral resources processing, groundwater studies, geophysical exploration, studies of geophysical sites for local tourism development, and studies of coastal environments, geologic hazards and climate change. 8. Fisheries and Aquaculture With vast areas of Philippine territorial waters consisting of offshore or oceanic waters, coastal waters and inland waters, capture fisheries present a significant contribution to domestic food supply and exports as well as other potentials for development. The countrys fisheries industry is vital for food security economic growth and global competitiveness. The priority for fisheries is improved resource conservation and management for sustainability and socio-economic development. Aquaculture, on the other hand, has emerged as the fastest growing food producing sector in the world in the last three decades. In the Philippines, aquaculture supplies more than one-third (35 percent) of the total fisheries production and is the only fisheries sub sector projected to post positive growth in the next five years. It is expected to provide 42 percent of the total fish production in the Philippines by 2004. The identified R&D thrusts for this sub sector are: genetic improvement of cultured stocks, biotechnology applications, sustainable production, fish health management, and development of low fish meal- based feeds. 9. Environment Environmental concerns such as soil degradation, depletion of resources, proper disposal and management of wastes, particularly hazardous wastes, and air and water pollution need to be properly and promptly addressed. Some of these problems are nearing, if they have not already reached, critical proportions. The S&T priorities in this area are: recycling technologies; clean production technologies; integrated solid wastes disposal technologies; handling of hazardous wastes; remediation and rehabilitation technologies for contaminated sites; water and waste water treatment technologies; wastes to energy conversion technologies; monitoring and assessment technologies; spatial data acquisition and management technologies; approaches to the restoration of environmental ecosystems; agricultural pollution mitigation; and agricultural waste management and utilization. 10. Natural Disaster Mitigation The Philippines is prone to typhoons, storm surges, monsoon rains, floods, flash floods, droughts, earthquakes, liquefactions, lahars, soil erosions, and possible dam failures. What makes the situation worse is that natural disasters are compounded by man-made disasters caused by the neglect of the environment as well as ignorance of physical laws. 15

S&T offers options and opportunities to mitigate, if not prevent, natural and manmade disasters. Possible S&T interventions include R&D in early warning systems, hazards assessment and mapping; risk and vulnerability assessment and mapping; promotion of hazard and mitigation awareness through information/databanking, information packaging, and information dissemination; promulgation of policies and measures for disaster mitigation such as land-use planning and zoning; and R&D on pilot testing of non-structural and structural mitigation measures. 11. Energy There is a need to develop new and renewable energy resources to lessen the countrys dependence on imported fossil fuel, which is the source of the countrys huge foreign debt and one of the causes of high and rising commodity prices. New and renewable energy resources, of course, also contribute to solving global environmental problems such as global warming or climate change and the domestic problems of pollution and environmental degradation. The S&T priorities are geothermal energy, indigenous/alternative energy sources (solar, wind, geothermal, biomass, and coco-based fuel, micro-hydro and ocean), natural gas liquefaction technologies, production and utilization of alternative clean fuels/energy, energy conservation and promotion of energy efficient technologies in the production sector, and the solution of environmental problems resulting from energy production. 12. Manufacturing and Process Engineering The aim of S&T intervention in this area shall be to raise the level of productivity in the manufacturing and process engineering sector through automation technologies and other modern techniques. If fully and widely utilized by industry, these technologies should make them more globally competitive. The thrusts for this sector are metalworking and metals processing and treatment, industrial electronics, microprocessor-based technologies, mechatronics, sensors and transducers, automated production machines and computer-integrated manufacturing.

VIII.

PROGRAMS FOR 2002-2004 This component of the NSTP spells out the strategic programs to be pursued during the short and the medium term (2002-2004). It includes a 3-year program on R&D, three (3) major technology transfer programs, human resource development programs, and S&T promotion, information dissemination, advocacy and linkages.

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1. R&D Programs The R&D programs aim to stimulate and support technological innovations which have applications in agriculture, industry, health and medicine, and other priority areas. Resources and activities shall be directed to maximizing S&Ts contribution to the creation of wealth, the solution of domestic needs and pressing problems, and the support of creative R&D at the local level. Private-sector investment and participation in R&D activities shall likewise be encouraged. Specifically, R&D programs shall include the following: a. R&D to Address Pressing National Problems a.1 Energy, Water and Environment R&D efforts shall be directed towards the development of new energy sources. Specifically, R&D activities shall include studies on the utilization of low enthalpy natural gas for power and non-power applications; biomass energy from agricultural wastes from which fuels may be produced; development of high-efficiency turbines for use in the development of micro-hydro projects in the country; and production and utilization of alternative clean fuels/energy. R&D efforts on water shall be directed towards water treatment technologies and groundwater studies. R&D activities on the environment shall focus on finding solutions to the problems of solid wastes generated by the industrial and domestic sectors, and shall include the implementation of cleaner production strategies. The objective is to develop processes and technologies to reduce cleanup costs and risks to people, other living things, and the environment. a.2 Shelter, Livelihood and Health and Nutrition R&D programs for housing and shelter shall aim to contribute to the provision of housing needs and to augment the efforts of the government to cope with the growing housing backlog. R&D shall include the development and utilization of cost-efficient housing materials and components. For health and nutrition, R&D projects shall aim to address the basic health needs of the population. Activities shall include the development of health products such as pharmaceutical drugs, vaccines, biologicals, nutraceuticals and functional foods, natural health products; diagnosis, prevention and control of priority diseases; and generation of knowledge on priority diseases/health concerns such as communicable diseases, 17

non-communicable and lifestyle-related diseases or disorders, environmental and occupational health and nutritional disorders, maternal and child health, and biomedical devices. b. R&D to Improve Productivity in the Production Sector b.1 R&D to Support AFMA R&D activities in this area shall support the Agricultural and Fisheries Modernization Act or AFMA. Emphasis shall be given to the development of modern technologies and their application to the improvement of productivity, development of post-harvest technologies to minimize postharvest losses, and development and improvement of research laboratories and facilities in the agriculture sector. These include R&D to develop high-value fruit crops, root crops, coconut, rice, corn, soybean, industrial crops and medicinal crops. Other R&D priority areas shall be livestock, and forestry and natural resources; land rehabilitation and farming systems development in lahar areas; irrigation R&D; and water resources management. For capture fisheries, priority shall be given to integrated R&D for coastal fisheries and coastal resources management, and integrated R&D for offshore fisheries development. Linkages with international research institutions will be strengthened. b.2 R&D to Address Industry Requirements R&D requirements in industry shall focus on the identification and development of new products and processes that will find commercial application and improve productivity. For the medium term in particular, R&D on industrial technology development shall include ethnic food products, application of biotechnology in the production of food and food grade chemicals, coconut food diversification program, natural dyes and fabrics, metals and engineering to fabricate local equipment for food processing, post harvest and packaging; furniture and ceramic products. c. R&D for New Technologies and Products Towards Global Competitiveness

c.1 Biotechnology Biotechnology R&D shall be directed to enhancing biotechnology applications in food production, biotechnology applications in the production of diagnostics, and biotechnology applications in industry and environmental management. Specific targets for this sector are the production of high volume and high value products using lapsed or soonto-lapse patents, and the conversion of biomass and wastes into energy.

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c.2 Information and Communications Technology R&D activities shall be focused on internet technologies and software engineering. More specifically, R&D activities on internet technologies shall include security and authentication, e-commerce applications, on-line learning, web interfaces, convergence technologies and e-publishing. R&D for software engineering shall include data warehousing, geographic information systems (GIS), multimedia applications, decision support systems, digital libraries and high performance computing. The Virtual Center for Technology Innovation, one of the flagship programs under the DMTP, shall continue to be supported under the ICT program. d. R&D to Develop Competence in Pioneering or New Areas d.1 Materials Science R&D shall focus on engineering materials such as metals, polymers, composites and ceramics. The targets for this sector are the development of advanced materials with tailored specific properties (electromagnetic, optical, thermal, chemical, biological and mechanical) and the development of various designs, synthesis and processing technologies for the production of these new materials. d.2 Microelectronics The target is the development of semiconductor devices to upgrade the local electronics industry from an assembly-type industry to that of an original design manufacturing (ODM) industry. R&D shall include the development of ASICs and of radio frequency microelectronics for wireless technologies, digital and mixed signals as design niches, and the development of consumer products in niche markets. 2. Technology Transfer Program Three major technology transfer programs are to be implemented in the shortterm: a) Small Enterprises Technology Upgrading Program or SET-UP; b) Technological Innovation Commercialization Program or TECHNICOM; and c) Technology Support Program for E-Governance or SUPRE-GOV. a. Small Enterprises Technology Upgrading Program (SET-UP) SET-UP is a nationwide program designed to upgrade productivity of SMEs through technology application/upgrading. Under this program, technology upgrading assistance and services will be provided to agricultural, manufacturing and services enterprises in the regions/provinces in an integrated manner. 19

SET-UP is an application of the niching and clustering strategies in the identification and selection of program beneficiaries. Sectors or clusters already identified by government agencies such as DTI, DA or LGUs and that have significant potentials to benefit from technology will be given priority. New areas with big potential to be developed as enterprise sectors, e.g., biotechnology, will be pioneered by DOST. In this activity, key institutional partners in the regions will be identified; they will work closely with technology sector managers. Existing tie-ups for enterprise financing will be strengthened or reactivated and new tie-ups will be initiated. Under SET-UP, various types of S&T services/interventions such as technology selection, technology acquisition, technology training, process and equipment design, packaging, productivity improvement, quality assurance, standardization, materials identification/selection, waste management, product improvement, and IPR protection, will be made available to identified clusters or sectors. b. Technological Innovation Commercialization Program (TECHNICOM) TECHNICOM is designed to facilitate technological innovation enterprise spinoffs. Under this program, innovations or R&D results with high potential for enterprise or product spin-offs shall be identified and selected. High technology applications with commercial potential shall be given priority. Under TECHNICOM, tie-ups with universities for the incubation and commercialization of creative works or R&D outputs shall be established and strengthened. This can include outputs of faculty/student projects in areas such as robotics, mechatronics, materials science, communications, software development, GIS, biotechnology, and industrial design. Marketing links or strategic partnerships with the industry sector, with international entities and with other government agencies will also be initiated. In all these, venture capital will play an important role. Complementing the program will be capability building support in high technology areas. c. Technology Support Program for E-Governance (SUPRE-GOV) SUPRE-GOV is designed to provide technology support to jumpstart Egovernance. Its specific features are the involvement of concerned government agencies led by the National Computer Center in national efforts to speed up the application of ICT in government processes and services; support for the development of electronic products, which incorporate accompanying software; and the establishment and enhancement of the government portal. Special attention shall be given to systems development and their utilization for priority local government applications and development, organization and standardization of data bases. The 20

establishment of linkages between the academe, the private sector, and government units for collaborative undertaking towards the widespread use of ICT in governance shall also be given priority attention. 3. Human Resources Development Program In the medium term, human resource development is aimed at building future S&T capabilities through focused programs in basic and higher education. Human resource development for S&T will give priority to the following: a. Demand Oriented S&T Undergraduate Scholarships Undergraduate scholarships shall be directed to fields where demand has been established or where capabilities for emerging S&T fields or areas need to be built. b. Excellence in S&T Higher Education to Stimulate High Technology Industries Scholarships and research fellowships at the graduate level shall aim at the continuing build up of faculty capabilities in the higher education sector. Support shall be provided for the development of new graduate programs for strategic areas such as Microelectronics and Mechatronics. c. Science and Mathematics Competitions Nationwide at the Basic Education Level Countrywide competitions in science and mathematics will be undertaken to motivate students, teachers and schools and to promote a culture of achievement. Prizes to schools shall be in the form of developmental grants intended to further enhance their capability levels. 4. S&T Promotion, Information Dissemination, Advocacy and Linkages For 2002-2004 a vigorous S&T promotion and information dissemination campaign aimed at reaching the general public, policy-makers and decision makers in government, the business/entrepreneurial sector, the S&T community (researchers, inventors, educators, extension workers and their support personnel), and the youth, will be undertaken. Policy advocacy will also be an important thrust, with the National Academt of Science and Technology (NAST), National Research Council of the Philippines (NRCP), the R&D Councils and the R&D Institutes playing a more active role. 21

Linkages with other institutions and individuals will be actively sought and pursued, particularly with those that will enhance the accomplishment of the targets in the various S&T programs, the development of capabilities to effectively carry out S&T activities, and the interaction between science and society.

IX.

PLAN IMPLEMENTATION The NSTP is intended to serve as the blueprint for the countrys S&T development in the coming years. As with any plan, the attainment of its objectives and targets will depend upon its implementation. The following implementation arrangements and mechanisms have been devised for that purpose. 1. Institutional Arrangements

The principal coordinating mechanism for the implementation of NSTP is the Science and Technology Coordinating Council (STCC) which has the mandate to establish mechanisms to facilitate and enhance the implementation of NSTP. Its multi-sectoral membership, which includes representatives from other line departments, business and industry, and the academe, makes it an ideal mechanism for coordinating the implementation of the Plan. STCC can forge partnerships and networking among different players through the creation of technical working groups to steer and oversee particular NSTP programs and projects. It can also spearhead the establishment of systems and processes like, for instance, the preparation of a public R&D investment plan that would provide the framework for the efficient allocation of public funds. 2. Operational Plans

Operational Plans shall be prepared every three (3) years to define the detailed activities and courses of action to be taken for each identified strategy and area thrust. As in the formulation of NSTP, these plans will be prepared in close consultation and collaboration with other government agencies, the academe and the private sector. 3. Monitoring Plan Implementation To ensure its continuing relevance and successful implementation, mechanisms shall be adopted to regularly monitor, assess and, if necessary, update the NSTP. Refinements in existing measurements and indicators of implementation and performance under the Plan shall also be made. The following activities shall be undertaken:

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a. Improving Measurement of Success Improvements in measuring the success and performance of NSTP implementation shall be pursued at two levels. The first level is the enhancement of the countrys national S&T statistical indicators. The collection and dissemination of S&T statistics shall be made more regular, systematic and efficient. National S&T statistics should be prepared and presented in such a form as to enable the monitoring of recent trends as well as structural shifts in S&T and a comparison of the Philippines with other countries. The second level is the improvement in the evaluation of S&T programs to ensure that the allocation and expenditure of scarce public funds redound to the maximum benefit of the people. The initial set of S&T indicators showing current and target figures are shown in Table A. The other set to be monitored henceforth are shown in Table B. b. Annual S&T Report to the President An annual S&T Report will be submitted to the President to provide him/her as well as other policy makers and decision makers with a regular assessment of the status of NSTPs implementation and other pertinent policy directions and issues on the S&T development of the Philippines.

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Table A. S&T Indicators

Indicators
1. Philippine Ranking in S&T Competitiveness In the World Competitiveness Report 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.
*1996

2000-01 2004
41st 40th

2010 2020
35th 25th

Philippine Ranking in Technology Achievement Index No. of Patents Granted to Residents % of Private Sector R&D Expenditures to Total National R&D Expenditures % of Total R&D Expenditures to GDP No. of R&D Personnel Per Million Population No. of World-class S&T Universities Value Added in Leading High Technology Exports Philippine Ranking in Global Technology Index Philippine Ranking in Knowledge Jobs Philippine Ranking in the Transformation to a Digital Economy

44th 20 22%* 0.15%* 153

43rd 30 25% 0.30% 200 3

40th 50 30%

35th 200 40%

1.00% 2.00% 250 9 50% 20th 2nd 30th 350 15 70% 15th 1st 20th

30% 30th 3rd 39th

40% 27th 3rd 34th

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Table B. Other S&T Indicators to be Monitored Indicators


1. No. of Publications of Filipino Scientists and Engineers included in the International Science Citation Index 2. No. of registered Scientists and Engineers 3. No. of Filipino PhDs in Science and Engineering 4. No. of Internationally AccrediTed Laboratories 5. Technology Balance of Payments 6. Investments in High Technology Areas 2000-01 2004 2010 2020

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Table 1.

COMPARATIVE FIGURES ON RATIO OF NATIONAL R&D EXPENDITURES TO GDP

Country

South Korea (1996) Japan (1996) USA (1997) Australia (1996) Canada (1997) Singapore (1995) New Zealand (1995) Russia (1997) Hong Kong (1996) Malaysia (1996) Philippines (1992) (1996) * Indonesia (1994)

2.82 2.80 2.61 1.80 1.68 1.13 1.04 0.88 0.61 0.24 0.22 0.15 0.07

*Estimates Source: UNESCO Statistical Yearbook, 1999 Survey on National R&D Expenditures (Philippines), 1992 Survey on National R&D Expenditures (Philippines), 1996

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Table 2.

PERCENTAGE DISTRIBUTION OF R&D EXPENDITURES BY SECTOR OF PERFORMANCE IN SELECTED COUNTRIES, 19911997 Sectors of Performance (Source) Private Higher Govt. Funds Not Sector Educ. & other from distriservice abroad buted sectors 59.4 50.7 34.0 15.5 45.7 62.5 8.3 2.8 8.7 76.4 21.8 81.7 84 5.1 8.4 8.9 0.1 4.2 2.4 5.7 6.8 0.5 14.7 35.5 30.1 54.7 59.6 48.1 31.4 13.5 91.0 61.1 15.8 58.8 18.2 16

Country

Year

All Sectors

U.S. Canada New Zealand Russia Australia Singapore Malaysia Hong Kong Thailand Indonesia Philippines Japan South Korea

1995 1996 1993 1997 1994 1995 1996 1995 1996 1994 1992 1991 1994

100 100 100 100 100 100 100 100 100 100 100 100 100

10.8 2.4 7.4 2.0 3.7 1.6 0.5 5.0 7.3 0.1 -

17.4

76.6 18.4 4.7*

* Non-Government Organization

Source: UNESCO Statistical Yearbook, 1999 Survey on R&D Expenditures, 1993-1996

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Table 3.

S&T MANPOWER OF SELECTED COUNTRIES, 1987-1997 (per million population) Scientists and Engineers in R&D per million population 1987 - 1997 4,909 3,676 3,801 3,357 2,719 2,318 2,193 1,663 454 182 157 103 93

Country

Japan (1996) USA (1993) Russia (1996) Australia (1996) Canada (1995) Singapore (1995) South Korea (1996) New Zealand (1995) Hong Kong (1996) Indonesia (1988) Philippines (1992) Thailand (1996) Malaysia (1996)

Source: UNESCO Statistical Yearbook, 1999 Survey on National R&D Expenditures and Manpower,

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Table 4.

PATENT APPLICATIONS FILED IN SELECTED COUNTRIES BY RESIDENTS AND NON-RESIDENTS 2000

Country

By Residents

By NonResidents

South Korea China Singapore Thailand Malaysia Philippines Vietnam Indonesia

92,798 12,768 8,188 238 179 125 30 -

37,184 48,596 29,467 5,205 6,272 3,440 27,410 4,512

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Table 5.

HIGH TECHNOLOGY EXPORTS AS PERCENTAGE OF MANUFACTURING EXPORTS IN SELECTED COUNTRIES, 2000

Country

% Share

Philippines Singapore Malaysia Thailand South Korea China Indonesia

71 59 54 31 27 15 10

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Table 6.

TECHNOLOGY ACHIEVEMENT INDEX OF SELECTED COUNTRIES, 2000

Country

TAI Value

TAI Rank

Finland United States Sweden Japan Korea Netherlands United Kingdom Canada Australia Singapore Malaysia Thailand Philippines China Indonesia India

0.744 0.733 0.703 0.698 0.666 0.630 0.606 0.589 0.587 0.585 0.396 0.337 0.300 0.299 0.211 0.201

1 2 3 4 5 6 7 8 9 10 30 40 44 45 60 63

Source: Human Development Report 2001, "Making New Technologies Work for Human Development". Published for UNDP.

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FIGURE 1:

CAPITAL PRODUCTIVITY - PHILIPPINES

0.50

0.40

0.30

0.20

0.10

0.00

-0.10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Inverse Incremental Capital Output Ratio GDP per Capital Stock

32

FIGURE 2:

LABOR PRODUCTIVITY - PHILIPPINES

35,000

250,000

33,000

200,000

31,000

150,000

29,000

100,000

27,000

50,000

25,000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

GDP per Employee

Gross Output per Employee

33

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