OTOP : One Town One Product
The Philippines is a country of many famous food products. Every province and town in the country has its own specialty products that we have all come to know and love. But did you know that the food products of the country are more diverse than we all really know? For example, Pangasinan produces the best milkfish but it is also famous for its duhat wine. Similarly, Benguet is famous for its strawberries are also famous for its coffee. These tiny bits of information are little by little getting known. Thanks to the government’s One Town One Product (OTOP) program a priority project of the Department of Trade and Industry (DTI) to promote entrepreneurship and job creation.
The OTOP program basically aims to spread development into the countryside by finding a specialty product in every municipality focusing on its further development. Under the program, LGU’s are tasked with identifying the local specialty products and encourage and provide assistance to entrepreneurs who are engaged in those ventures. OTOP makes sure that every municipality, no matter how small, has a specialty product that has a competitive advantage. OTOP Philippines supports micro, small, and medium enterprises (MSME’s) to manufacture, offer, and market distinctive products or services through the use of indigenous raw materials and local skills and talents.
Japan’s One Village One Product Program (OVOP) inspired the OTOP program. Other countries around the world have since adopted the model. Major export destinations for OTOP products include the United States, Japan, and Europe. Indeed, since its inception four years ago, OTOP Philippines has already produced a lot of tangible results. The DTI said that since 2007, the OTOP has generated $233.995 million in export sales while providing 208,622 jobs nationwide.
But just how does the DTI determine which products to consider in the OTOP program? It all starts when the DTI personnel visit towns across the country, coordinating with local officials, to identify and determine candidates for OTOP. Once a product or service has been identified as the town’s unique value proposition (UVP), the UVP is the towns’ primary specialty product. The DTI then enters into a memorandum of agreement with local officials for the further development of the product or service. For its part, the DTI gets the manufacturer in touch with government agencies that provide relevant services/assistance to help develop the identified product further. LGUs are also encouraged to create and provide a conducive business environment and prioritize OTOP Philippines programs and activities in their respective areas.
The DTI, through its Regional Operations Group and SME Development Group, assists the LGUs in identifying the specific product or service and coordinates all forms of assistance from various agencies including the Departments of Agriculture (DA), Environment and Natural Resources (DENR), Interior and Local Government (DILG), Science and Technology (DOST), Tourism (DOT) and the Technical Education Skills Development Authority (TESDA).
The OTOP therefore presents a very good opportunity for agri-entrepreneurs who lack resources to be able tap markets for their products to a wider audience. Due to the assistance of LGU’s required by the OTOP programs, agri-entrepreneurs can ask the government to help them with marketing their products. This means that the government will help OTOP enterprises by organizing trade fairs. Among other perks for OTOP food products is that the Bureau of Food and Drug (BFAD) is required to give priority in issuing safety certificates particularly for export products.
One of the areas that the DTI is exploring is extending the OTOP program to cover Halal products. This can be made possible by having an Islamic certifier in the country. Currently among the many certifiers considered is the Islamic Da’wah Council of the Philippines or IDCP-a nongovernmental organization-which is so far the only local agency that the Jakarta-based World Halal Council, Regional Islamic Da’wah Council of Southeast Asia and the Pacific, and similar bodies recognize as a halal certifier.
As a further incentive, the DTI’s Board of Investments (BOI) is planning to include centers of excellence institutions that will help equip Filipinos with the right skills for various serviceoriented industries. This in turn will further develop the industries covered in the OTOP program. OTOP, on the other hand, can also be considered to be a part of President Arroyo’s MediumTerm Philippine Development Plan (MTPDP) 2004-2010 outlines dual strategies: 1) product development through OTOP, and 2) credit provision through SULONG (SME Unified Lending Opportunities for National Growth) to support 3 million entrepreneurs and generate 6 to 10 million jobs.
One example of an OTOP success story is the story of the Tubigon loom weavers association. The group started out as a cooperative of fishermen wives in 1990. The women started the group because they were looking for alternate sources of income instead of just waiting for their husbands to come back from fishing. They got a Php5,000 grant from the municipal government. Using the funding provided by the municipal government, they established a weaving enterprise that has allowed members to earn at least Php5,000 monthly. This is just one of the examples of how OTOP is improving the livelihood of ordinary people.
However, experts say there are still some blind areas in the OTOP program that still need to be addressed. While relatively successful, the Philippine OTOP programs, still lag behind compared to its Thai counterparts. This is because the Thai OTOP is more effective in linking tourism, culture and other programs. As a solution, the national government has begun providing direct funding to OTOP projects taking over from the municipal governments. With this, the national government is hoping that by doing so, they would be able to better integrate the various parts of the program.
Aside from identifying OTOP projects, the-DTI is also providing counselling and financing to aspiring SME’s. The aid can be availed of via the OTOP Assistance Package Program. The program targets MSMEs with an asset size of not more than Php100 million, which accounts for about 99% of business establishments in the country. The package includes assistance in business counseling, skills and entrepreneurship training, product design and development, appropriate technologies and marketing.
So for those interested in joining the OTOP program, one need only approach the city or municipal governments or the DTI and inquire about the program. With the large export market that is slowly getting available to OTOP producers, it certainly makes sense for entrepreneurs to join the rising OTOP wave.