Seeking to bring color to entrepreneurship and the uniqueness of local industries, the “One Town, One Product” (OTOP) bill has been successfully passed by the Philippine Senate and the House of Representatives and now only awaits presidential approval.
Approved by Congress last May 31, 2023, the bill known as the OTOP Philippines Act of 2023 focuses on micro, small, and medium enterprises (MSMEs) and offers stimulus assistance to their product development, capacity building, market compliance, and product promotion. Their items and services should be representative of a locality’s areas of specialty, such as agricultural-based products, fashion, arts and crafts, and the like.
A flagship program of the Department of Trade and Industry (DTI), OTOP has been practiced throughout the country since 2002. It was first established as a response to the 1997 Asian financial crisis. Now, more than 20 years later, the OTOP Philippines is set to be institutionalized as a national program.
Many cities and provinces in the Philippines have famously rolled out local-specific products. For example, Davao’s cacao and handcrafted handbags have made waves in their local economy; the same can be said for Bukidnon’s coffee beans, bayong bags, and picnic mats.
In Quezon Province, OTOP has notably expanded the reach of the buri industry, providing additional income, employment, and training to weavers. Entrepreneurs in agribusiness-dominated Ilocos Sur also reported an increase in product quality following assistance from the program.
The OTOP Philippines Act seeks to elevate the project into an official law that would be a game-changer in opening up abundant opportunities for the MSME sector. “Habang itinataguyod natin ang mga ipinagmamalaking sariling produkto ng bawat bayan, siyudad, at rehiyon sa buong bansa, mabibigyan din natin ng pagkakataon ang bawat lokalidad na makabuo ng iba’t ibang inobasyon sa kanilang mga produkto at serbisyo,” noted one of the bill’s authors, Senator Win Gatchalian in his co-sponsorship speech for Senate Bill No. 1594.
(As we promote the proudly local products of every town, city, and region throughout the country, we also give each locality the opportunity to develop various innovations in their products and services.)
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To enhance the current practice, the bill presents specific criteria for such goods and services. They should feature cultural traditions, local resources, and creativity and innovation; moreover, they should foster an emotional connection with local residents as well as boost the area’s competitive advantage.
Under the bill, the DTI is set to create an OTOP Management Committee as well as a national OTOP Strategic Development Plan. The department will also be assisted by other agencies such as the Department of Science and Technology (DOST), the Department of Tourism (DOT), and the National Commission for Culture and the Arts (NCCA), among others. The plan will then trickle down to the local level, where every LGU will create an OTOP Program Office to execute the law.
“The impact of the OTOP Philippines Act extends far beyond the promotion of cultural products and indigenous materials. After all, it also seeks to draw attention to the untapped local potential that needs to be discovered and supported,” Gatchalian added.
FULL TEXT of the OTOP Philippines Bill here.
In 2021, MSMEs in Batangas were trained by DOST to improve product packaging and labeling. That same year, DOST pioneered the Philippines’ first multi-industry innovation hub for MSMEs.
In 2020, DOST gave lab and financing access to local entrepreneurs while providing a market boost for local products through the OneSTore PH platform.
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