WHEREAS, the University of the Philippines through its Board of Regents has established a unit known as the Institute for Small-Scale Industries pursuant to the bilateral agreement between the Republic of the Philippines and the Government of Netherlands, concluded on March 1, 1966;

WHEREAS, the major purposes of the University of the Philippines in the establishment of this Institute are to train competent people up to a level where they will be able to assist existing small-scale industries to increase productivity and to promote and develop new ones; provide consultancy and extension services to existing small-scale and medium-sized industries; conduct research on plant operations and make the result of such research available to interested parties, and the assumption of leadership in overcoming the various problems of small-scale and medium-sized industries needing the advice, simulation and assistance of consultants;

WHEREAS, the said Institute is at present engaged in activities to effectuate the above purposes, namely:

1. The conduct of a regular Consultancy Training Course geared towards the harmonious blending of three major components, namely: scientific management, development of technology and modern economic planning, and designed to meet specific interest of officers in: (a) central, regional or local government, (b) government or semi-governmental agencies, (c) development of rural commercial banks, (d) groups or association of private industry and (e) consulting organizations or educational institutions.
2. The conduct of short periodic seminars on specific problems on productivity.
3. Extension service in small-scale and medium-sized industry.
WHEREAS, small-scale and medium-sized industries in the Philippines by their very nature are beset with complex problems such as insufficient applications of modern production techniques, lack of experience in financing, inadequate control of cost, lack of specialized management and inadequate control of facilities;

WHEREAS, small-scale and medium-sized industries play an important role in the process of industrialization especially in the field of regional development, where special attention must be paid to programming as well as stimulating the dispersal of small industries outside metropolitan Manila;

WHEREAS, the bilateral agreement between the Republic of the Philippines and the government of the Kingdom of the Netherlands concluded on March 2, 1966, provided for the permanent character of the Institute;

WHEREAS, under the same agreement, the assistance of the Netherlands government shall be available only for a period of three and a half years;

WHEREAS, the continuous operation and in fact the very life of the Institute shall depend entirely upon the support of our own government after the withdrawal of the Netherlands Government from the project: Now, therefore

Section 1. The Institute for Small-Scale Industries of the University of the Philippines, shall perform the following functions:

1. To undertake continuous conduct of consultancy training courses, periodic seminars, technical studies in the field of medium and small-scale industries with emphasis on Philippine industries;
2. To undertake technical studies and researches on request of the various governmental agencies concerned with industrial development, interested private industries, and committees of the House of Representatives and the Senate concerned with industry;
3. To undertake study programs and research for the promotion of medium and small-scale industries;
4. To undertake the publication of studies, monographs, research papers, articles, and other written works on small and medium-scale industry with emphasis on those related to the Institute’s objectives and distribute them at cost to government agencies, private industry, and other interested parties;
5. To perform all other acts as may be necessary for the achievement of its objectives and functions, in accordance with the rules and regulations of the University including the granting of research awards, prizes, scholarships and fellowships.
Section 2. Any provision of law to the contrary notwithstanding, appointments to the administration, teaching staff of the UP Institute for Small-Scale Industries shall be exempt from the requirements and restrictions of the Civil Service Law, and Section two hundred fifty-nine of the Revised Administrative Code.

Section 3. The Institute is authorized to procure the temporary or intermittent services of experts or consultants or organizations thereof, by contract or appointments and in such cases such services shall be without regard to the Civil Service Law and regulations and Section two hundred fifty-nine of the Revised Administrative Code. Any individual so employed may be compensated at a rate to be fixed by the Director of the Institute and approved by the Board of Regents of the University of the Philippines and while such individual is away from his home or regular place of business, he may be allowed transportation and per diem allowances as authorized by rules and regulations of the University.

Section 4. The Institute for Small-Scale Industries shall contribute and remit to the Government Service Insurance System its share as an employer to the retirement and insurance premium of its employees.

Section 5. The Institute shall be authorized to consult and cooperate with all Government agencies and to make studies and recommendations to such agencies and such agencies are authorized and directed to cooperate with the Institute in order to carry out and accomplish the purposes of this Act.

Section 6. The Institute is authorized to consult with representatives of small-business concerns with the view to assisting and encouraging such firms to undertake joint programs for research and development carried out through such corporate and other mechanisms as may be most appropriate for the purpose. Such joint programs may among other things include the following purposes:

1. To construct, acquire, or establish buildings, laboratories and other facilities for the conduct of research;
2. To undertake and utilize applied research;
3. To collect research information related to a particular industry and disseminate it to participating members;
4. To conduct applied research on a protected, propriety and contractual basis with member or non-member firms, government agencies and other interested parties.
Section 7. The Board of Regents of the University of the Philippines shall make the necessary provisions and rules and regulations to effectively carry out the objectives of this Act.

Section 8. In order to provide for the support of the UP Institute for Small-Scale Industries, the sum of six hundred and fifty thousand pesos is hereby authorized to be appropriated, out of the funds of the National Treasury not otherwise appropriated, for the operation and maintenance of the Institute for Small-Scale Industries for the fiscal year nineteen hundred seventy. Thereafter, such sums as may be necessary to carry out the purposes of this Act, shall be included in the annual General Appropriations Act.

Section 9. All Acts and parts of Acts, executive orders, proclamations and rules or regulations inconsistent with the provisions of this Act are hereby repealed.

Section 10. This Act shall take effect upon its approval.

Approved, August 4, 1969.