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Policy Lessonsfor the Philippines Macapanpan (1998), Halos (1998) and Nolasco (1998) also note that fiscal incentives are important in attracting the private sector to go into R&D activities. Cororaton (1999) lists down some of the major fiscal incentives in the Philippines, and finds that these were generally similar to the ones offered in other countries. However, fiscal incentives have to be handled properly, as these would have significant budgetary implications. Furthermore, although fiscal incentives are important, results would indicate that there are major inefficiencies in the granting of incentives by the BOI. For example, Nolasco (1998) notes that from 1991 to 1997, only 11 companies or a total of 13 projects, received incentives. Patalinghug (1998) therefore suggests the need to "design an incentive package, with strict qualifying requirements on what constitutes R&D activities, to encourage private sector R&D. An external peer review committee is recommendedto act as the screening mechanism." The granting of fiscal incentives may be conducted on a competitive basis through a set of performance criteria that may be defined by the government.

Israel (1999) discusses other important incentive issues that need attention. In particular, it was noted that in most cases, researchers conducting research using the funds from their own agencies are accorded minimal financial incentives. Remunerations from projects funded by other government sources have been low. As a result, many researchers tend to do odd jobs not related to research, or consulting work for private and international organizations. The results of the PillS survey on R&D manpower, particularly those involving R&D personnel with Ph.D. degrees, point to this trend (Cororaton et al. 2000).

The Magna Carta for the Government Science and Technology Personnel (Republic Act 8439) was recently passed to address the problem of low incentives, but it remains to be seen whether this will solve the problem. In particular, the law allows for the provision of honoraria, share of royalties, hazard allowance and other benefits to science and technology workers.

Patalinghug (1998) offers additional recommendations that can improve the S&T incentives. These include (1) allocation of an annual funding for the implementation of the Scientific Career System (SCS). However, entry into SCS should be limited by giving top priority to the target groups, natural scientists and engineers; and (2) the implementation of a competitive bidding, strictly based on merit, in the awarding of research projects by pooling a major portion of the country's R&D resourcesto be administered by an agency similar to the National Science Foundation (NSF).

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