Cinemalaya competition chairperson Laurice Guillen told PEP (Philippine Entertainment Portal) the rationale behind this new award. "We thought about it last year but there was not enough time to do the mechanics. We tried it this year and it gives the audience some satisfaction that they get the chance to choose their favorites."

SHORT FEATURE CATEGORY. Alvin Yapan's Rolyo won Best Film in the short-feature category. The fiction writer and Ateneo de Manila professor received a Gawad Balanghai trophy, a P100,000 grant from the FDCP, and a one-term training of the filmmaker's choice, and P25,000 from the International Academy of Film and Television.

The Special Jury Prize went to Nineball by Enrico Aragon. It was cited for "its hilarious and satiric take on the national pastime, billiards, and its engaging characterization." Enrico received P25,000 from the FDCP and a Gawad Balanghai trophy.

Other award-winners in the short feature category were: Emmanuel dela Cruz for Gabon (Best Direction), and Vic Acedillo for To Ni (Best Screenplay).  

The Cinemalaya 2007 jurors were: National Artist for Theater Salvador Bernal, journalists Marianne "Maan" Hontiveros and Joselito "Lito" Zulueta, and film critics Jeremy Segay and Max Tessier.

Eight films competed in the full-length feature category during the third edition of Cinemalaya. These were: Endo by Jade Castro, Kadin (The Goat) by Adolfo B. Alix Jr., Gulong by Romualdo "Bona" Fajardo and Anna Liza "Lyn" Fajardo, Ligaw Liham by Emilio "Jay" Abello VI, Pisay by Auraeus Solito, Still Life by Katrina Flores, Tribu by Jim Libiran and Tukso by Dennis Marasigan.

Eduardo Lejano Jr.'s entry Sinungaling Na Buwan (Liar Moon) was pulled out from the competition because it was not finished on time for its gala screening.

Ten films competed in the short-feature category. These were: Doble Vista by Nisha Alicer, Nix Lañas, and Caren Crisologo; Durog by Tara Illenberger; Gabon by Emmanuel dela Cruz, Liwanag sa Dilim by Lawrence Fajardo; Maikling Kwento by Hubert Tibi; Misteryo ng Hapis by Mark dela Cruz; Nineball by Enrico Aragon; Rolyo by Alvin Yapan; Tagapagligtas by Solita Garcia; and To Ni by Vic Acedillo.