As far as I know, all aftermarket head units nowadays comes with mp3/iPod functionality. If we are to use industry-leader Pioneer as reference, even their most affordable head unit (the DEH-X1 series) at Php5,000 has the said functionality. Personally, I'd pick any head unit brand that's fairly well known: Sony, Kenwood, Alpine, Pioneer, etc. for the purchase.
For reputable shops, to be honest, any in Banawe would do. The installation process is quite easy so even those barkers on the street actually knows how to install one. However, I would recommend you stick to a shop for peace of mind

For the shop recommendations, just pick any. They don't really differ that far in price and this is a given seeing how the shops in Banawe are lined up one after the other (making comparisons quite easy so the area is price-sensitive).
If you'll be around "old Banawe", you're looking at the likes of Maspro, Perfect Circle, and Ryan Audio. In "new" Banawe, you're looking at C3, TeamCars, JetCar, etc. Of course, famous budget-friendly Araneta Car Accessories also deserves a mention although they're at Araneta Avenue going to Sta. Mesa.
Yup. Don't buy into these "pairing" stuff t8hat shops sell to you. Anything lower than Php10,000 usually sound the same because they're limited by their budget. You can't just try to throw in diamond tweeters and price them at Php5k now can we?
