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Purpose The paper aims to explore the knowledge management and innovative outputs (IO) of university-based technology business incubators funded by the Department of Science and Technology in the Philippines. Design/methodology/approach The respondents, which include heads, managers, coordinators, and staff,were reached out via email using a database. The instrument was generally adopted from various related studies in the literature. Data were analyzed quantitively using partial least squares – structural equations modeling. Findings The main findings reveal that the mediated relationship between potential absorptive capacity (PACAP), realized absorptive capacity (RACAP) and IO explained 38.7% of the variance both predicted by PACAP and mainly explained by RACAP. Among new organizational antecedents measured, slack resources and willingness to cannibalize did not predict PACAP, while tolerance for failure and external openness predicted PACAP. Consequently, PACAP and RACAP positively mediated the relationship between significant organizational antecedents and IO. Originality/value The validation of the positive and significant link of absorptive capacity (ACAP) and innovation with an emphasis on the Philippine context. The study pointed out the unidimensionality of PACAP and RACAP as a single ACAP variable and not two separate constructs.