QuestionsQuestions (Republic Act No. 11960)
RA No. 11960 is the “OTOP Philippines Act.” It institutionalizes the One Town, One Product (OTOP) Philippines Program as a government stimulus program to encourage growth of MSMEs in the countryside through indigenous raw materials, local skills, and local traditions/cultures.
The State shall develop a self-reliant and independent national economy effectively controlled by Filipinos by driving inclusive local economic activity and boosting national growth. It recognizes the role of the private sector and the need for incentives, aims to equip MSMEs to improve quality and innovate using new technologies, promotes preferential use of Filipino labor and domestic materials/locally produced goods, and provides adequate support services to help communities develop and promote culturally rooted and competitively advantageous products and services.
RA 11960 seeks: (a) a package of assistance for MSMEs with viable products to develop more complex, innovative products and improve quality/design/packaging/standards compliance/marketability/production capability/branding; (b) to help rural communities grow the local economy to be more market-oriented and innovation-driven; (c) to promote convergence among LGUs, national government agencies, and the private sector in developing and promoting Philippine products (for export or domestic markets); and (d) to formulate a national OTOP Strategic Development Plan.
It is treated as one of the government’s stimulus programs to encourage MSME growth in the countryside via product development rooted in local resources and culture. It also provides that beneficiaries should be able to easily access components of the Program through simplified requirements and procedures consistent with RA 11032 (Ease of Doing Business and Efficient Government Service Delivery Act of 2018).
The OTOP Philippines Trustmark is an assurance that products under the Program represent the country’s best. It signifies products have been marked as excellent in quality, design, value, and marketability. The Department of Trade and Industry (DTI) is authorized to establish it.
The Program covers products and skills-based services known to an area or locality, including processed foods; agricultural-based and agri-processed products; home and fashion and creative artisanal products; arts and crafts; skills-based services and other products (e.g., hilot, sculpting, essential oils, wellness products, industrial goods, soaps, personal care and cosmetics); and other eligible goods/services approved by the DTI as allowed under Section 7.
The five elements are: (a) Culture; (b) Community Resource; (c) Connection; (d) Creativity; and (e) Competitive Advantage (anchored on factors such as topography, climate, geographic location, proximity to resources, etc.).
Yes. Section 7 provides that preference shall be given to goods or services that form part of the supply chain of OTOP products.
DTI’s regional and provincial offices, in cooperation with concerned LGUs, determine the beneficiaries. Beneficiaries are limited to MSMEs as defined under RA 6977, as amended by RA 9501. The selection guidelines and mechanism are to be formulated by the implementing agencies identified in the Act.
Examples include: (1) Product Development (product design, packaging/labeling, technology updating, product enhancement); (2) Capacity building/training (business skills training, counseling); (3) Standards and Market Compliance training (DTI-BPS, FDA, DA, IPOPHL and other agencies); (4) Market Access and Product Promotion (trade fairs, ad campaigns, OTOP hubs; implementation by DTI/PIA/DOT/PITC); (5) Eligibility for government assistance with simplified procedures; and credit/capital access formulation by DTI if necessary.
DTI, Philippine Information Agency (PIA), Department of Tourism (DOT), and Philippine International Trading Corporation (PITC) are tasked to implement a promotional campaign in local and international markets for OTOP Philippines products.
The DTI is the lead implementing agency. It must create an OTOP Management Committee directed by the DTI Secretary (to be created within fifteen (15) working days from effectivity), and it is authorized to create an OTOP Program Management Office (OTOP-PMO) and OTOP Local Program Offices (OTOP-LPO) in each LGU.
The Act lists CDA, DA, DICT, DILG, DOH, DOST, DOT, DOTr, NEDA, NCCA, PIA, PITC, and TESDA. Their participation is meant to achieve convergence and ensure efficient use of resources in implementing the Act.
Within one (1) year, the DTI through the OTOP-PMO must develop a six-year National OTOP Strategic Plan in consultation with stakeholders. The plan is validated and updated annually. It is approved by the President of the Philippines.
It requires OTOP Philippines Hubs to be established by DTI support and in strategic ports of entry such as airports, seaports, bus terminals, high-traffic retail outlets (e.g., malls), tourist destinations, and other consumer-frequented locations. It also requires LGUs to establish their own LGU OTOP Hub preferably in locations with high foot traffic such as city/municipal hall or other LGU facilities. DOT, CAAP, PPA, LTFRB, and similar agencies support construction/allocation of spaces for the hubs.
For initial implementation, the amount is charged against the current year’s appropriation of DTI. For continued implementation, the amount necessary is included in the annual General Appropriations Act.
LGUs concerned must set aside the amount needed for the operation of the OTOP-LPO and OTOP Hubs under Sections 11 and 12.
The Act takes effect fifteen (15) days after its publication in the Official Gazette or in a newspaper of general circulation. The DTI, within sixty (60) working days from effectivity, must formulate and promulgate the necessary IRR in coordination with the other implementing agencies.
Under Section 15 (Separability), if any portion is declared unconstitutional, the remainder remains in force. Under Section 16 (Repealing Clause), any law/decree/proclamation/issuance/or ordinance contrary to or inconsistent with RA 11960 is amended, repealed, or modified accordingly.