Institutionalizing the One Town, One Product Program

Policy, intent, and objectives

The State policy is to develop a self-reliant and independent national economy effectively controlled by Filipinos through policies and programs that drive inclusive local economic activity and boost national economic growth (Section 2).
The State recognizes the indispensable role of the private sector and private enterprises and the necessity to provide incentives to foster advancement among local micro, small and medium enterprises (MSMEs) (Section 2).
The State shall equip MSMEs to progressively improve product and service quality and to utilize new technologies to pursue innovation and diversification (Section 2).
The State shall promote the preferential use of Filipino labor, domestic materials, and locally produced goods, and adopt measures to make them competitive (Section 2).
Section 2 directs the State to provide adequate and effective support services for MSMEs so communities can determine, develop, and promote products and services rooted in their culture, community resources, creativity, connection, and competitive advantage.
The Act’s objectives include providing a package of assistance for MSMEs with viable products to develop more complex and innovative products with significant improvement in quality, design, packaging, standards compliance, marketability, production capability, and brand development (Section 3).
The Act also aims to assist rural communities to grow the local economy and become more market-oriented and innovation-driven (Section 3).
The Act seeks convergence of initiatives from LGUs, national government agencies, and the private sector in developing and promoting Philippine products for export or the domestic market (Section 3).
The Act requires formulation of a national OTOP Strategic Development Plan (Section 3).

Institutionalizing OTOP Program

Section 4 institutionalizes the OTOP Philippines Program as one of the government’s stimulus programs to encourage MSME growth in the countryside through development of indigenous raw materials, use of local skills and talents, and featuring local traditions and cultures across the country.
Section 4 requires adoption of simplified requirements and procedures for beneficiaries to easily access components of the Program in accordance with Republic Act No. 11032.

OTOP Trustmark authorization

Section 5 authorizes the Department of Trade and Industry (DTI) to establish the OTOP Philippines Trustmark as an assurance that products under the Program represent the country’s best.
The OTOP Philippines Trustmark signifies that business and products have been marked as excellent in terms of quality, design, value, and marketability (Section 5).

Covered products and services

Section 6 provides that the Program covers products and skills-based services known to an area or locality, including the following categories:
Processed foods including fruits and nuts, local delicacies, juices, wines, tea and other beverages, pastries and baked goods, preserved food sauces, cakes and dessert products, food supplements, and culinary-based specialty products (Section 6(a)).
Agricultural-based products including coffee, cacao, and other agricultural produce, and agri-processed products such as processed meats, coconut oil, and preserved and processed seafood products (Section 6(b)).
Home and fashion and creative artisanal products including gifts, souvenir items, furniture, ornaments, houseware, garments, fabrics, and textiles (Section 6(c)).
Arts and crafts including coco coir, weaves, bamboo products, paper artistry, and wood (Section 6(d)).
Skills-based services and other products including hilot (traditional Filipino massage), sculpting, essential oils and other wellness products, industrial goods, soaps and other personal care goods, and cosmetics (Section 6(e)).
The Program covers other goods and services eligible under Section 7 and approved by the DTI (Section 6(f)).

Qualifications and selection criteria

Section 7 requires OTOP products included in the Program to meet a set of criteria established by the DTI.
The criteria in Section 7 must be consistent with Culture, Community Resource, Connection, Creativity, and Competitive Advantage:
Culture refers to cultural values rooted in heritage, living traditions, customs and rituals, recipes passed on from generation, narrative, history, and beliefs (Section 7(a)).
Community Resource requires that selected products be based on availability of local resources, raw materials, skills, and network resources within a community (Section 7(b)).
Connection requires that the selected product evoke a sense of price or emotional connection among locals (Section 7(c)).
Creativity requires selected products to exemplify Filipino people’s creativity and innovation (Section 7(d)).
Competitive Advantage requires that product or service selection be anchored on locality’s innate or endemic strengths using variables such as topography, climate, geographical location, and proximity to resources, among others (Section 7(e)).
Section 7 grants preference to goods or services that form part of the supply chain of OTOP products.

Beneficiaries and eligibility limits

Section 8 directs the DTI regional and provincial offices, in cooperation with concerned LGUs, to determine the beneficiaries of the OTOP Program.
Beneficiaries are limited to MSMEs as defined under Republic Act No. 6977, as amended by Republic Act No. 9501 (Section 8).
The guidelines and mechanism for selection of beneficiaries are to be formulated by the implementing agencies identified by the Act (Section 8).

Program components and assistance package

Section 9 mandates a comprehensive package of assistance to OTOP Philippines Program beneficiaries, including the following:
Product Development, consisting of:
- Product Design support for design assistance to new products, product adaptation, product diversification, and expansion of existing product lines (Section 9(a)(1)).
- Packaging and Labeling assistance for new packaging, improvement of package design, or labeling (Section 9(a)(2)).
- Technology Updating through workshops on new technology procedures, materials, and processing to increase production quality and quantity (Section 9(a)(3)).
- Product Enhancement through seminars to increase design awareness and appreciation of product or merchandise development and the industrial design profession (Section 9(a)(4)).
The DTI and the Department of Science and Technology (DOST), in coordination with the concerned LGU, must facilitate knowledge sharing and technology transfer related to product development (Section 9(a)).
Capacity Building through training opportunities focused on the human aspect of OTOP Philippines, including business skills training and business counseling in coordination with DTI, Cooperative Development Authority (CDA), and TESDA (Section 9(b)).
Standards and Market Compliance by training and capacitating beneficiaries to observe standards and comply with requirements of DTI-Bureau of Philippine Standards (DTI-BPS), Food and Drug Administration (FDA), Department of Agriculture (DA), and Intellectual Property Office of the Philippines (IPOPHL), and other concerned government agencies (Section 9(c)).
Section 9(c) requires monitoring and evaluation schemes to be developed and maintained in consultation with these agencies to ensure products conform to standards.
Market Access and Product Promotion through support across different platforms including multimedia advocacy campaigns, trade fairs, and ad OTOP Philippines Hubs (Section 9(d)).
Section 9(d) requires DTI, PIA, DOT, and PITC to implement a promotional campaign in local and international markets for OTOP Philippines products.
Eligibility for government assistance through a minimal set of rules and simplification of procedures and requirements for government agencies dealing with OTOP beneficiaries, consistent with Section 4 of Republic Act No. 9501 (Section 9(e)).
Section 9 directs the DTI, in coordination with other government agencies, to formulate a program to provide easier access to credit or capital infusion for OTOP beneficiaries for establishment, development, or growth if necessary.

Lead agency, management committee, and partners

Section 10 designates the DTI as the lead agency for implementation of the Act.
Section 10 requires the DTI Secretary to create an OTOP Management Committee with the main responsibility of directing implementation.
The OTOP Management Committee is composed of offices and attached agencies under DTI, including DTI-BPS and IPOPHL (Section 10).
The DTI Secretary must create the OTOP Management Committee within 15 working days from the effectivity of the Act (Section 10).
Section 10 lists assisting and coordinating agencies to achieve convergence and efficient resource use:
- CDA, DA, DICT, DILG, DOH, DOST, DOT, DOTr, NEDA, NCCA, PIA, PITC, and TESDA.

OTOP national and local offices

Section 11 authorizes DTI to create the OTOP Program Management Office (OTOP-PMO) to oversee and direct the OTOP Program at the national level.
Section 11 requires the OTOP-PMO to be headed by a Director.
Section 11 directs that the organizational structure and staffing complement of the OTOP-PMO be determined by the DTI Secretary in consultation with the Department of Budget and Management and in accordance with civil service rules and regulations.
Section 11 creates an OTOP Local Program Office (OTOP-LPO) in each LGU to direct, supervise, and implement the OTOP Program locally.
Section 11 requires DTI, through the OTOP-PMO, to develop a six (6)-year National OTOP Strategic Plan within 1 year, in consultation with concerned stakeholders, and to validate and update it annually.
The Plan must be approved by the President of the Philippines and must define annual and medium-term targets, develop and implement programs and strategies, and identify priority OTOP products and services characterized by high value-added and high potential to meet the Act’s objectives (Section 11).

OTOP Hubs and establishment locations

Section 12 requires DOT, Civil Aviation Authority of the Philippines (CAAP), Philippine Ports Authority (PPA), Land Transportation Franchising and Regulatory Board (LTFRB), and other similar agencies to support construction and allocation of spaces for OTOP Philippines Hubs.
Section 12 requires DTI to ensure OTOP Philippines Hubs are established in strategic ports of entry such as airports, seaports, bus terminals, high-traffic retail outlets like malls, tourist destinations, and other consumer-frequented locations.
Section 12 requires all LGUs to establish their own LGU OTOP Hub in any location with high foot traffic, preferably in the city or municipal hall or other LGU facility or location frequented by locals.
Section 12 requires DTI, in coordination with the agencies, to formulate a comprehensive marketing and operations plan for the establishment of the OTOP Philippines Hubs.

Funding, implementing rules, and governance timelines

Section 13 charges the amount necessary for initial implementation of the Act against the current year’s appropriation of the DTI.
Section 13 provides that amounts necessary for continued implementation must be included in the annual General Appropriations Act.
Section 13 requires concerned LGUs to set aside amounts needed for operation of the OTOP-LPO and OTOP Hubs under Sections 11 and 12.
Section 14 requires DTI, within 60 working days from effectivity, in coordination with other implementing agencies under Section 10, to formulate and promulgate necessary implementing rules and regulations.

Separability and repeal

Section 15 provides separability: if any portion or provision is declared unconstitutional, the remainder remains in force.
Section 16 provides that any law, decree, proclamation, issuance, or ordinance contrary to or inconsistent with the Act is amended, repealed, or modified accordingly.

Statutory cross-references and named legal bases

Republic Act No. 11032 is incorporated in Section 4 for simplified requirements and procedures for Program beneficiaries.
Republic Act No. 6977, as amended by Republic Act No. 9501, governs the definition and limitation of beneficiaries under Section 8.
Section 4 of Republic Act No. 9501 is used in Section 9(e) to guide the minimal rules and simplification of procedures and requirements for government assistance to OTOP beneficiaries.