PIDS is a nonstock, nonprofit, government research institution engaged in long-term, policy-oriented research. It was established on September 26, 1977 by virtue of Presidential Decree (PD) No. 1201 as an agency attached to the National Economic and Development Authority (NEDA), the Philippine government's socioeconomic planning arm, for policy and program coordination.
It was created to serve as an effective means of bridging the gap between public policy formulation and research. Given the orientation and character of pure academic research, it was the government's goal to establish a national research institution that will perform policy-oriented research on all aspects of the Philippine economy and assist the government in formulating plans and policies that are evidence based and fully responsive to the requirements of national planning and policymaking for national development.