HXPLANATORY NOTH
There are a total of 957,620 business enterprises operating in the Philippines. Of these,
952,969 (99.51 %) are MSMEs and 4,651 (0.49%) are large enterprises, while micro enterprises
constitute 88.77% (850,127),  followed by small enterprises at  10.25% (98,126) and medium
enterprises at 0.49% (4,716).I
The  MSMEs  generated  a  total  of 5,380,815 jobs  or  62.66%  of the  country's  total
employment  in  2020.2  The  "One  Town,  One  Product  (OTOP)  Philippines"  is  a  stimulus
program of the Department of Trade and Industry for MSMEs as an approach which could
contribute to inclusive local economic growth.3
The program has been in existence in the country since 2002, which originated from
Japan's "One Village, One Product" program. In the 3rd District of Bondoc Peninsula, six (6)
municipalities  have  benefited  from  this  program,  namely  Padre  Burgos,  Mulanay,  General
Luna, Unisan, Agdangan and San Andres, and have since enrolled nine (9) food and non-food
products from 2017 to 2022.
This  bill  aims  to  institutionalize  the  OTOP  Philippines  by  providing  support  and
stimulating  advancement  opportunities  among  MSMEs  and  enable  more  communities  to
determine, develop and promote local and culturally rooted products and services and promote
it as a priority product or sector in different areas of the country. This measure had its success
in the 18th Congress and it is hoped that in the  19th Congress, it will finally become a law.
DTI  (2020)  MS ME Statlstics   Retneved from : https.//w`"/, dti,gov. ph/resources/msme-stalislJcst
lbld
DTI Website -One Town. One Product Phil I ppines.  Rctneved from.  https.//www. dti.gov. ph/negosyo/otop-ph/


NINETEENTH CONGRESS OF THE
REPUBLIC OF THE PHILIPPINES
First Regular Session
HOUSE OF REPRESENTATIVES
H. B. No. ___5 6 6 9_
Introduced by Rep. Reynante U. Arrogancia
AN ACT
PROMOTING INCLuslvn AND susTAINABLE HcONOMlc DHVELOpMENT
TlmouGH THE INSTITUTIONALlzATION OF "Or\un TOwN, Or`rm pRODucT»
PHILlpplNES PROGRAM ANI> AppRopRIATING FUNDs THnREFOR
Be  it  enacted  by  the  Senate  and  House  Of Representatives  Of the  Philippines  in  Congress
assembled:
1       SECTION 1. Jsrfeorf rj.£/a -This Act shall be known as the "OTOp philippines Act".
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3       SEC. 2. Doc/¢roJi.o„ a/Po/I.c}?. -It is hereby declared the policy of the state to develop a self-
4       reliant and independent national economy effectively controlled by Filipinos through policies
5       and programs that drive inclusive local economic activity and boost national economic growth.
6       The state also recognizes the indispensable role of the private sector and private enterprises
7       and the necessity to provide  incentives to  foster advancement among businesses especially
8       local micro, small and medium-scale enterprises (MSMEs).
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10                    Towards this end, the state shall equip MSMEs to progressively improve product and
11        service quality, and to utilize new technologies to pursue innovation and diversification. The
12       State  shall  likewise  promote the preferential  use of Filipino  labor,  domestic  materials,  and
13       locally produced goods, and adopt measures to make them competitive. The state shall further
14       provide  adequate  and  effective  support  services  for  MSMEs  to  enable  communities  to
15       determine,  develop,  and  promote  products  and  services  that  are  rooted  in  their  culture,
16       community resources, creativity, connection, and competitive advantage.
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18       SEC. 3. a+y.ccfi.tlcs. -This Actaims to:
19              (a)  Provide a package of assistance for MSMEs with minimum viable products to develop
20                    new, innovative, and more complex products with significant improvement in the areas
21                     of   quality,    product    development,    design,    packaging,    standards    compliance,
22                    marketabil ity, production capability, and brand development, among others;
23              (b) Assist   rural   communities   in   achieving   competitive   and   innovation-driven   local
24                     economies;


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(c)  Promote  convergence  of  initiative  from  local  government  units  (LGUs),  national
government agencies (NGAs), and the private sector in the development and promotion
of Philippine products, whether for export or domestic market; and
(d) Establish the "One Town, One Product" (OTOP) Philippines Trustmark as a guarantee
of excellence in OTOP Philippines products and services.
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31      SEic. 4. Institutionalization of one Town, One product philippines progral'rL -The one
32       Town,  One Product Philippines Program, herein referred to as OTOP Philippines,  is hereby
33       institutionalized  to  serve  as  the  govemment's  stimulus  program  for  the  promotion  and
34       development ofMSMEs in the countryside through the use of indigenous raw materials and
35       the utilization of local skills and talents.
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37      SHC. 5. Program coxpo#e"ts. -The Department of Trade and Industry (DTI), in partnership
38       with the  LGUs,  shall  provide a comprehensive package of assistance to OTOP Philippines
39       Program beneficiaries, such as the following:
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(a,)  Product Development, inc;1nding..
(i)      Prod#c/ Desi.gr -design assistance to new products, product adaptation, product
diversiflcation, and expansion of existing product lines;
(ii)       Pachagz.#g  a#c7  £abe/j.#g  -  assistance  to  new  packaging,  improvement  of
package design, or labeling;
(iii)       Technology  Updating  -  conduct  workshops  on  new  technology  procedures,
materials and processing to increase production quality and quantity; and
(iv)       Product  Enhancement  -  provide  seminars  to  increase  design  awareness  and
appreciation of product of merchandise development and the industrial design
profession.
(b)  Capacity  Bwj./di.77g  shall  be  provided  through  training  opportunities  focusing  on
improving the human aspect of OTOP Philippines,  including business skills training
and business counseling;
(c) SJandcrrds cz#d A4lczrfe/ Coxp/j.cz#ce where beneficiaries shall be trained and capacitated
to observe standards and comply with the requirements of DTI-Bureau of Philippine
Standards, Food and Drug Administration, and the Intellectual Property Offlce of the
Philippines,  and  other  concerned  government  agencies.  Monitoring  and  evaluation
schemes shall be developed and maintained to ensure that products under the OTOP
Philippine conform to these standards; and
(d) A4la7.fe/ .4ccess and Prod#c/ P7iormo/i.o7.  where  beneficiaries  shall  receive  support  in
market access and promotion of products across different platforins. These platforms
may include multimedia advocacy campaigns, trade fairs, and OTOP Philippines Hubs.
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64       SEC. 6. Coverogc. -The oTOp philippines program shall cover material products and skills-
65       based  services  known  to  an  area or locality.  This  shall  include the  following products  and
66        services:


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(a) j4grJ.c#//"ra/-basec7 Proc7#cts  such  as  coffee,  cacao,  other agricultural produce,  agri-
processed products like processed meats, coconut oil, preserved and processed seafood
products;
(b) 4rfs ¢#d Cr#//s such as coco coir, weaves, bamboo, paper artistry, and wood;
(c) f7ome & FosAi.o7/ Crecr/z.ve .4rfJ.sa#cr/ Prod#c/a such as gifts, souvenir items, furniture,
ornaments, houseware, garments, and textiles;
(d) Proccssec7Food such as fruits and nuts, local delicacies and frcrkcz#j.# (sticky rice cakes),
juices, wines, tea, and other beverage, pastries and baked goods, preserved food sauces,
cakes,   other   desserts   products,   food   supplements,   and   culinary-based   specialty
products; and
(e)  StJ.//a-based Servz.ces cI#c7 0rfoer Proc7ac/s such as fo7./a/ or traditional Filipino massage,
sculpting, essential oils and other wellness products, industrial goods, soaps and other
personal care goods, and cosmetics.
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81       SEC.  7.  Orop Pbi./I.ppi.#cs  rrusJmar*.  -  The  DTI  shall  establish  the  OTOP  Philippines
82       Trustmark that shall signify that the services and products have been marked excellent in terms
83       of quality, design, value, and marketability. It shall be a symbol representing the country's best
84       products.
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86      SEC. 8. Establislunent of oTOp philippines Hubs. -The Depirrtmen o£ Ton.ism (Don),
87       Civil Aviation Authority of the philippines (CAAP), Philippine ports Authority (PPA), Land
88       Transportation and Franchising Board (LTFRB), and other relevant agencies shall  construct
89       and allocate spaces for the establishment ofoTOp philippines Hubs.
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91       SEC. 9. Bc#efci.¢rfes. -The regional and provincial offices of the DTI, shall, in cooperation
92       with the concerned LGUs, determine the beneficiaries of the oTOp program. The guidelines
93       and mechanism  for the  selection  of beneficiaries  shall  be  formulated  by  the  implementing
94       agencies identified bythis Act.
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96      SI]C.10. Cre¢Jr.on a/ffec oropprogrom a;orce. -Every LGU shall create an oTOp program
97       Office (OTOP PO) managed by an officer who shall administer, supervise, and implement the
98      0TOpprogram.
100       SEC.11. Jmip/c"c#/I.#g4ge#ci.cs.  -The DTI  shall  implement the provisions of this Act, in
101        coordination with the following agencies:
102              (a)  Cooperative Development Authority (CDA);
103             (b) Deparfuent of Interior and Local Government (DILG);
104              (c)  Technical Education and skills Development Authority (TESDA);
105             (d) Department of science and Technology (DOST);
106              (e)  Department of Agriculture (DA); and
107             (I)  Department of Tourism (DOT)
109       SEC.12..4pprap".¢l;.o#§. -The amount necessary to carry out the initial implementation of
110       this Act shall be charged against the current year's appropriations of the DTI. Thereafter, such


11       amount as may be necessary for the continued implementation of this Act shall be included in
12       the annual General Appropriations Act.
14                    The LGUs concerned shall set aside the amount needed for the operation of the OTOP
15       Po under section 10 hereof.
17       SEC.13. Jingp/cme#fi.#g jRw/c§ a#djRcgwJali.o#s. -Within sixty (60) days from the effectivity
18       of this Act, the DTl shall, in coordination with the other implementing agencies, formulate and
19       promulgate the necessary rules and regulations to effectively implement the provisions of this
20       Act.
22       SEC.14. Separabi./i.ty CJawsc.  -If any provision of this Act is declared unconstitutional  or
23       invalid, the provisions hereof which are not affected shall continue to be in force and effect.
25       SHC.15. jRcpca/I.#g cJausc. -All laws, decrees, proclamations, issuances, or ordinances that
26       are contrary to or inconsistent with the provisions of this Act are hereby amended, repealed or
27       modified accordingly.
29       SEC.16. E/Tec/i.tJfty. -This Act shall take effect fifteen (15) days after its publication in the
30       Official Gazette or in a newspaper of general circulation.
32       Approved,