‘SIXTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
FIRST REGULAR SESSION )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

House Bill No_ 1634

EXPLANATORY NOTE

This bill was originally introduced as House Bill No. 3833 by the undersigned Rufus
B. Rodriguez during the 15" Congress where it was approved by the Committee on
Trade and Industry and substituted by House Bill No. 6930 together with other similar House
Bill including the undersigned’s House Bill No. 2726.

Republic Act 7394, otherwise known as the Consumer Act of the Philippines was
enacted almost 20 years ago, on April 13, 1992. As such, the penalties provided for in the
law are not in tune with the prevailing situation at present.

Due to the relatively low penalties provided, violators would rather pay the penalties
instead of complying with the law making the penal provisions of the law somewhat
ineffective

Is it therefore time to increase the penalties provided in the law to give it more teeth
and to ensure that future violators would think twice and would comply with the law.

Further, in line with the policy of the State to protect and promote the right to health of the
people and instill health consciousness among them and to adopt an integrated and
comprehensive approach to health development, it is imperative that all food, medicine and
food supplement products and goods being sold in the country be required to put the
English translation of the name, ingredients, place of manufacture and nutrient contents of
the products prior to putting them in the local market

In view of the foregoing, immediate approval of this bill is earnestly requested

RUFUS&. RO! EZ

MAXIMO B. RODRIGUEZ, JR


SIXTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
FIRST REGULAR SESSION )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

House Bill No_ 1634

AN ACT
GRANTING BROADER PROTECTION FOR CONSUMERS, REPEALING FOR THE
PURPOSE REPUBLIC ACT 7394, OTHERWISE KNOWN AS “THE CONSUMER ACT
OF THE PHILIPPINES

Be it enacted by the Senate and the House of Representatives of the Philippines in
Congress assembled.

SECTION 4. Short Title. - This Act shall be known as "The Revised Consumer Act of the
Philippines.”

Sec. 2. Declaration of Policy. - It is the policy of the State to protect the interests of the
consumer, promote the general welfare and to establish standards of conduct for business
and industry. The State recognizes that consumers often face imbalances in economic
status, educational levels and bargaining power. It further recognizes that consumers should
have the right of access to non-hazardous products, as well as the right to promote just,
equitable and sustainable economic and social development and environmental protection.
Towards this end, the State shall implement measures to attain the following objectives:

a) To achieve and maintain adequate protection for the population as consumers;

b) To enhance production and distribution patterns responsive to the needs and
desires of consumers;

¢) To encourage high levels of ethical conduct for those engaged in the production
and distribution of goods and services to consumers;

4) To curb abusive business practices by all enterprises which adversely affect
consumers:

e) To facilitate the development of independent consumer groups;

f)_ To foster international cooperation in the field of consumer protection;

g) To encourage the development of market conditions which provide consumers
with better quality goods and services, and greater choices at reasonable prices;
and

h) To promote sustainable consumption.

Sec. 3. Construction in Favor of the Best Interest of the Consumer. - All doubts in the
implementation and interpretation of the provisions of this Act, including its implementing
rules and regulations, shall be resolved in favor of the best interest of the consumer.

Sec. 4. Guiding Principles — To further enhance and strengthen consumer protection, the
State shall be guided by the following principles:

1. Consumer protection, specially of the poor should be provided by the State. The
State shall provide and maintain adequate infrastructure to develop, implement and
monitor consumer protection policies. Special care should be taken to ensure that



Measures for consumer protection are implemented for the benefit of all sectors of
the population, particularly the rural population and people living in poverty.

2. The State should be consulted in the development of consumer protection policies

3. The protection of consumer rights must be consistent with international trade
obligation and care must be taken that they do not become barriers to international
trade

4. As the arbiter of the public good, the State shall develop, strengthen or maintain, as
the case may be, measures which shall control restrictive and other abusive business
practices that may be harmful to consumers, and those that shall enhance its
capability to such measures.

5. Goods should meet reasonable standards of durability, utility and reliability, and
should be suited to the purpose for which they are intended. For this purpose, the
seller should see that these requirements are met. Similar policies should apply to
the provision of services.

6. The faimess of contracts shall be a basic tenet that shall be observed by all. The
State shall protect consumers from such contractual abuses as one-sided contracts,
exclusion of essential rights in contracts and unconscionable conditions of credit by
sellers,

7. Manufacturers, distributors or retailers shall ensure the availability of adequate and
reliable after-sales service and spare parts.

8. Promotional marketing and sales practices shall be guided by the principle of fair
treatment of consumers and shall meet legal requirements. Therefore, the necessary,
accurate information shall be made available to enable consumers to make
independent and informed decisions.

9. Protective truth in advertising shall be observed and enforced at all times. Pursuant
thereto, the State shall take measures regarding misleading claims or information in
advertising and other marketing activities. The development of appropriate
advertising codes and standards for the regulation and verification of environmental
claims should be encouraged.

10. The State shall encourage the formulation and implementation by business, in
cooperation with consumer organizations, of codes of marketing and other business
practices to ensure adequate consumer protection. Voluntary agreements may also
be established jointly by business, consumer organizations and other interested
parties. These codes shall receive adequate publicity

41. The State shall formulate and promote the elaboration and implementation of
voluntary or other standards for safety and quality of goods and services at the
national and intemational levels, and give them appropriate publicity. National
standards and regulations for product safety and quality shall be reviewed from time
to time in order to ensure that they conform, where possible, to generally accepted
international standards.

12. The State shall encourage and ensure the availability of facilities to test and certify
the safety, quality and performance of essential consumer goods and services.

13.The State shall promote and encourage development and implementation of


consumer protection, education and information programs such as, but not limited to,
redress mechanism, dispute resolution and inclusion of basic consumer information
‘on products and services, impact studies on environment, consumer choices and
behavior in the educational curricula, with support from consumer organizations,
business, and other interests groups.

14. The State shall endeavor to establish and publicly disseminate policies which may
seek to enable consumers to obtain optimum benefit from their economic resources.
Toward this end, the concemed government agencies shall be guided by the
following in their consumer protection and empowerment programs:

a) the goals of satisfactory production and performance standards;

b) adequate distribution methods;

¢) fair business practices;

d) informative marketing and effective protection against practices which could
adversely affect the economic interests of consumers and the exercise of
choice in the market place.

Sec. 5. Definition of Terms.- For purposes of this Act, the following terms are hereby
defined
a) Advertisement means a form of communication or any paid announcement or public
notice about consumer products or goods (including a property for sale), services or
credit, especially in print (such as newspapers, magazines and flyers) by broadcast
{radio or television), through out-of-home media (neon/iighted signs, billboards and
projection systems) and using any other media intended to persuade an audience or
the public at large to purchase or take some actions;

b) Advertising means the business of conceptualizing, presenting or making available to
the public, through any form of mass media or otherwise, fact, data or information
about the attributes, features, quality or availability of consumer products, services or
credit;

©) Advertising agency or Agent means a service organization or enterprise creating,
conducting, producing, implementing or giving counsel on promotional campaigns or
programs through any medium for and in behalf of any advertiser;

d) Advertiser means the client of the advertising agency or the sponsor of the
advertisement on whose account the advertising is conceptualized, prepared,
presented or disseminated;

e) Agricultural purpose means a purpose related to the production, harvest, processing,
manufacture, distribution, storage, transportation, marketing, exhibition or disposition
of agricultural, fishery or marine products;

f) Amount financed means the cash price plus non-finance charges in a consumer
credit sale less the amount of any down payment whether made in cash or in
property traded in, or in a consumer loan the amount paid to, receivable by or paid or
payable to the buyer or to another person in his behalf,

9) Banned hazardous substance means household/urban hazardous substance or other
hazardous substance which the implementing agency by regulation or advisory,
classifies as "banned hazardous substance” notwithstanding the existence of
cautionary labels, to safeguard public health and safety: Provided, That the
implementing agency may, by regulation, exempt from this Act articles which by
reason of their functional purpose require the inclusion of the hazardous substance
involved and which bear appropriate labels giving adequate directions and warnings

4


for their safe use.

h) Procedures for the issuance, amendment or repeal of regulations pursuant to this
Section shall be governed by the rules and regulations to be promulgated by the
Department of Health (DOH): Provided, That if the DOH finds that the distribution for
household use of the hazardous substance involved presents imminent hazard to
public health, it may publish in a newspaper of general circulation a notice of such
finding and such substance shall be deemed as "banned hazardous substance"
pending the issuance of regulation formally banning such substance.

i) Basie Necessities mean goods vital to the needs of consumers for their sustenance
and existence in times of any of the cases provided under Section 6 and 7 of
Republic Act 7581, otherwise known as “The Price Act’, such as but not limited to
rice, corn, root crops, bread; fresh, dried or canned fish and other marine products;
fresh pork, beef and poultry meat; fresh eggs; potable water in bottles and
containers; fresh and processed milk; fresh vegetable and fruits; noodles; coffee;
sugar; cooking oil, salt; laundry soap and detergents; firewood; charcoal; household
liquefied petroleum gas (LPG) and kerosene; candles; drugs classified as essential
by the Department of Health and such other goods as may be included under Section
4 of RA 7581;

j) Batch means a quantity of any product or goods produced during a given cycle of
manufacturing-or processin,

k) Business name, firm name, or style means any name or designation other than the
true name of a person, partnership, corporation or association which is used in
connection with ones’ business or in any written or printed receipt, including receipt
for tax or business; any written or printed contract not verified by a notary public; any
written or printed evidence of any agreement or business transaction; and in
announcing a firm name or business name or style;

|) Cash price or delivered price means, in the case of trade transaction, the amount of
money which would constitute full payment upon receipt, delivery of the property
(except money) or service purchased at the creditor's place of business. In the case
of financial transactions, cash price represents the amount received by the debtor
from the creditor upon consummation of the credit transaction, net of finance charges
collected at the time the credit is extended, if any;

m) Chain distribution plans or pyramid sales schemes mean sales mechanisms whereby
@ person, upon condition that he makes an investment, is granted by the
manufacturer or one’s representative a right to recruit for profit one or more additional
persons who will also be granted such right to recruit upon condition of making
similar investments: Provided, That the profits of the person employing such a plan
are derived directly from the recruitment of other persons into the plan rather than
from the sale of consumer products, services and credit: Provided further, That the
limitation on the number of participants does not change the nature of the plan;

n) Closing out sale means a sales activity which a seller announces the willingness to
give large discounts on merchandise in order to reduce, dispose or close out his
inventory and business;

0) Commerce means the sale, lease, exchange, traffic or distribution of goods,
commodities, productions, services or properties, tangible or intangible;

p) Consumer means a natural person who is a purchaser, lessee, recipient or
prospective purchaser, lessee or recipient of consumer products, services, credit,

5


technology, advertising or promotion, and other items in commerce:

@) Consumer credit means any credit extended by a creditor to a consumer for the sale
or lease of any consumer product or service under which part or all of the prices or
Payments therefore are payable at some future time, whether in full or in installments;

") Consumer loan means a sum of money tendered by the lender to a person which is
payable in installments for which a finance charge may or may not be imposed,
including credit transactions pursuant to an open-end-credit plan other than a seller
credit card:

s) Consumer products and services mean goods, services and credits, debts or
obligations, which are primarily for personal, family, household or agricultural
purposes:

t) Consumer product safety rule means a consumer product safety standard described
in Section 15 or a rule under this Act declaring a consumer product as banned
hazardous product;

u) Consumer transaction” means: (1) (i) a sale, lease, assignment, award by chance, or
other disposition of consumer products, including chattels that are intended to be
affixed to land, or of services, or of any right, title, or interest therein, except
securities as defined in the Securities Act and contracts of insurance under the
Insurance Code; or (ii) a grant of provision of credit to a consumer for purposes that
are primarily personal, family, household or agricultural; or (2) a solicitation or
promotion by a supplier with respect to a transaction referred to in clause (1) herein:

v) Cosmetics means any substance intended to be placed in contact with the various
external parts of the human body or of animals or with the teeth and the mucous
membranes of the oral cavity, with a view exclusively or mainly to clean them,
perfume them, enhance or change their appearance or correcting body odor, and/or
Protecting the body or keeping them in good condition;

w) Counterfeit product means any consumer product or preparation having a container,
label or any likeness thereof, without authorization from the lawful manufacturer,
processor, packer, distributor, and retailer:

x) Country of origin means either the country where the good has been wholly obtained
or, when more than one country is concerned in the production of the good, the
country where the last substantial transformation has been carried out;

y) Credit card means any card, plate, coupon book or other device bearing an account
number existing for the purpose of being used from time to time upon presentation to
obtain money, property, labor or services on credit;

2) Credit sale means the sale of a product, service or an interest in land on credit where
a debt is payable in installments or 2 finance charge is imposed with an agreement in
the form of a bailment of products or lease of products or real property if the bailee or
lessee pays or agrees to pay compensation in a sum substantially equivalent to or in
excess of the aggregate value of the products or real property involved and the
bailee or lessee for no other or a nominal consideration’ has the option to become
the owner of the products or real property upon full compliance with the terms of the
agreement;

‘aa) Credit transaction means a transaction between the natural person and a creditor in
which real or personal property, services or money acquired on credit and the

6


person's obligation is payable in installment;

bb) Creditor means any person, natural or juridical, engaged in the business of extending
credit and shall include any person, natural or juridical, who as a regular business
Practice makes loans or sells or rents property or services on a time, credit or
installment basis, either as principal or as agent who requires as an incident to the
extension of credit, the payment of a finance charge;

¢c) Default or delinquency charge means, with respect to a consumer credit transaction,
the penalty charge payable by the consumer-debtor for failure to pay an amount or
installment in full on the date the same becomes due and demandable, on or before
the period specified for the purpose in the consumer credit sale documents;

dd) Device means medical devices, radiation devices and health-related devices.

a. Medical device means any instrument, apparatus, implement, machine,
appliance, implant, in-vitro diagnostic reagent or calibrator, software, material,
or other similar or related article intended by the manufacturer to be used
alone, or in combination, for human beings for one or more of the specific
Purpose of: diagnosis, prevention, monitoring, treatment or alleviation of
disease; diagnosis, monitoring, treatment, alleviation of, or compensation for
an injury; investigation, replacement, modification, or support of the anatomy
or of a physiological process; supporting or sustaining life; preventing
infection; control of conception; disinfection of medical devices; and providing
information for medical or diagnostic purposes by means of in-vitro
examination of specimens derived from the human body. This device does not
achieve its primary intended action in or on the human body by
pharmacological, immunological, or metabolic means but which may be
assisted in its intended function by such means;

b. Radiation device means an electrical or electronic apparatus emitting any
ionizing or non-ionizing electromagnetic or particulate radiation; or any sonic;
infrasonic, or ultrasonic wave. It includes ionizing radiation emitting equipment
which is not intentionally designed to produce radioactive materials;

¢, Health-related device means any device not used in health care but has been
determined by the Food and Drug Administration (FDA) to affect the health of
the people;

ee) Distributor means any person or business entity who delivers, sells and distributes
the product or products of a manufacturer, importer, repacker to another person or
entity;

ff) Drugs mean: (1) articles recognized in official pharmacopeias and formularies,
including official homeopathic pharmacopeias, or any documentary supplement to
any of them, which are recognized and adopted by the FDA; (2) articles intended for
Use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man or
other animals; (3) articles (other than food) intended to affect the structure of any
function of the body of humans or animals; or (4)articles intended for use as a
component of any articles specified in clauses (1), (2), or (3) but do not include
devices or their components, parts or accessories;

gg) The term "drug" when used in this Act shalll include herbal or traditional drug. They
are articles from indigenous plant or animal origin used in folk medicine which are:
(1) recognized in the Philippine National Formulary; (2) intended for use in the
treatment or cure, mitigation, of disease symptoms, injury or bodily defect for use in
man; (3) other than food, intended to affect the structure of any function of the body

a


of man; (4) put into finishes, ready to use form by means of formulation, dosage or
dosage directions; and (5) intended for use as a component of any of the articles
specified in clauses (1), (2), (3) and (4) of this paragraph:

hh) Expiry or expiration date means the date stated on the label of food, drug, cosmetic,
device or hazardous substance after which they are not expected to retain their
claimed safety, efficacy and quality or potency and after which it is no longer
permissible to sell them;

ii) Extremely flammable means any substance which has a flash point at or below
Negative six and six-tenths degrees centigrade as determined by the Tagliabue Open
Cub Tester; and term “combustible” shall apply to any substance which has a flash
point of above twenty-six and six-tenths degrees to sixty-five and five-tenths degrees
centigrade as determined by the Tagliabue Open Cub Tester: Provided, That the
flammability or combustibility of solids and of the contents of self-pressurized
containers shall be determined through methods found by the implementing agency
to be generally applicable to such materials or containers, respectively, and
established by regulations issued by it;

ji) Fast-food restaurant or Quick service restaurant means any restaurant offering food
usually prepared and served quickly;

kk) Food means any substance, whether processed, semi-processed or raw, intended for
human consumption and includes chewing gum, drinks and beverages and any
substance which has been used as an ingredient or a component in the manufacture,
Preparation or treatment of food. The term also means any material, usually of plant
or animal origin, containing or consisting of essential nutrients that must be taken in
‘or assimilated by a person as nourishment to maintain life and growth.
It also includes those being processed, distributed and offered either in
disposable or non-disposable packages or containers:

|) Food additive means any substance, the intended use of which results or may
reasonably be expected to result, directly or indirectly, in its becoming a component
of or otherwise affecting the characteristics of any food (including any substance
intended for use in producing, manufacturing, packing, processing, preparing,
treating, packaging, transporting, storing or preserving food), if such substance is
generally recognized as safe among experts qualified as having been adequately
‘shown through scientific studies:

mm) __ Food establishment means a sole proprietorship, a partnership, a corporation,
an institution, an association, or an organization engaged in the manufacture,
importation, exportation, sale, offer for sale, distribution, donation transfer, use
testing, promotion, advertising, or sponsorship of food products, including the
facilities and installation needed for its activities. It includes, among others,
restaurants, food courts, food carts, food stalls, and other similar food services where
meals can be bought and consumed;

nn) Generic name means the identification of drugs and medicines by their scientifically
and internationally recognized active ingredients or by their official generic name as
determined by the FDA:

00) Government body means any executive agency, such as the Department of
Agriculture (DA), Department of Health (DOH), Bangko Sentral ng Pilipinas (BSP)
and Department of Trade and Industry (DTI); Congress, the Judiciary or the
constitutional bodies of the Government of the Republic of the Philippines, including

8


local government units, the Armed Forces of the Philippines (AFP) and the Philippine
National Police (PNP), government financial institutions and government-owned and
controlled corporations, whether created by its own charter or by registration with the
Securities and Exchange Commission (SEC), and all such other entities where the
government has substantial interest in;

pp) Goods means any manufactured or processed article of whatever nature or kind and
any base or raw materials in unprocessed form;

aq) Guarantee means an expressed or implied assurance of the real quality, cost, price,
promotion of the consumer products and services offered for sale or length of
satisfactory use, result, outcome, effects. promotional promise, detailed ingredients,
itemized costs or other similar matters to be expected from such consumer products
or services based on applicable and actual documents in accordance with law,
morals, good faith and public policy;

tt) Household hazardous substance or Urban hazardous substance means:

‘a. any substance or mixture of substances which is toxic, corrosive, irritant, a
strong sensitizer, flammable or combustible, or generates pressure through
decomposition, heat or other means; if such substance or mixture of
substances may cause strong allergic reactions, burning sensations,
substantial injury, illness during or as a proximate result of any customary or
reasonably foreseeable ingestion by children, but shall not include agricultural
fertiizers, agricultural pesticides, and agricultural insecticides and other
‘economic poisons, radioactive substances, or substances intended for use as
fuels, coolants, refrigerants and the like; (ii) any substance which the DOH
finds to be under the categories enumerated in clause (1) (i) of this
paragraph; (ii) any radioactive substance, if, with respect to such substance
as used in a particular class of article or as packaged, and which the DOH,
upon its approval, determines by regulation that the substance is sufficiently
hazardous to require labeling in accordance with this Section in order to
protect public health;

b. any toy or other articles intended for use by children which the FDA may, by
regulation, inspect to determine the presence of an electrical, mechanical or
thermal hazard. For this purpose “Toys and other articles intended for use by
children” shall refer to those toys and articles specified to be for children less
than fourteen (14) years of age; Provided, that the term ‘Household
hazardous substance or Urban hazardous substance’ shall not apply to food,
drugs, cosmetics, and devices nor to substances intended for use as fuels
when stored in containers and used in the heating, cooking or refrigeration
system of a house.

¢. any article which is not in itself an agricultural pesticide but which is a
hazardous substance, as construed in clause (1) of paragraph (i), by reason
of bearing or containing such harmful substances described therein;

ss) Health products means food, drugs, cosmetics, devices, biologicals, vaccines, in-vitro
diagnostic reagents and household-or urban hazardous substances or a combination
of and/or a derivative thereof. It also_ refers to products that may have an effect on
human health, which require regulations as determined by the FDA;

tt) Highly toxic means any substance which has any of the following effects: (1)
produces death within fourteen days to one-half or more than one-half of a group of
ten or more laboratory white rats each weighing between two hundred (200) and
three hundred (300) grams, at a single dose of fifty (50) milligrams or less per

9


kilogram of body weight, when orally administered: or (2) produces death within
fourteen (14) days to one-half or more of a group of ten (10) or more laboratory white
rats each weighing between two hundred (200) and three hundred (300) grams,
when inhaled continuously for a period of one hour (1) or less at an atmospheric
concentration of two hundred (200) parts per million by volume or less of gas or
vapor or two (2) milligrams per liter by volume or less of mist or dust, provided such
concentration is likely to be encountered by man when the substance is used in any
Teasonably foreseeable manner, or (3) produces death within fourteen days to one-
half or more of a group of ten (10) or more rabbits, when tested in a dosage of two
hundred (200) milligrams or less per kilogram of body weight, or when administered
through continuous contact with the bare skin for twenty-four (24) hours or less;

uu) Home solicitation sale means consumer sales or leases which are personally
solicited by any person or organization by telephone, person-to-person contact or by
written or printed communication other than general advertising or consummated at
the buyer's residence or a place of business, at the seller's transient quarters, or
away from a seller's regular place of business;

w) lonizing radiation means energy released by a radioactive substance or by a device
which is capable of removing an electron from an originally electrically neutral atom
or molecule;

ww) Immediate container or primary packaging means the container, wrapper or
package which immediately carries, covers, protects and comes in direct contact with
the product or substance, including the materials that come in direct contact with the
product;

xx) imminently hazardous product means a consumer product which presents an
unreasonable risk of death, serious illness or severe personal injury;

yy) In-vitro diagnostic reagent — means a reagent and system intended for use in the
diagnosis of disease or other conditions, including a determination of the state of
health in order to cure, mitigate, treat or prevent disease or its sequel;

zz) Irritant means any substance not corrosive within the meaning of paragraph (u) of
this Section which, on immediate, prolonged or repeated contact with normal living
tissue will induce a local inflammatory reaction;

aaa) —_Label or labeling means the display of written, printed or graphic matter on
any consumer product, its immediate container, tag, literature or other suitable
material affixed thereto for the purpose of giving information as to identify,
components, ingredients, attributes, directions for use, specifications and such other
information as may be required by law or regulations;

bbb) ‘Manufacture means any and all operations involved in the production,
including preparation, propagation, processing, formulating, filing, packing, repacking,
altering, ornamenting, finishing or otherwise changing the container, wrapper or
labeling of a consumer product in the furtherance of the distribution of the same from
the original place of manufacture to the person who makes the final delivery or sale
to the ultimate consumer,

ce) Manufacturer means any person who manufactures, assembles or processes
consumer products, except that if the goods are manufactured, assembled or
processed for another person who attaches his own brand name to the consumer
products, the latter shall be deemed the manufacturer. In case of imported products,

10


the manufacturer's representatives or, in his absence, the importer, shall be deemed
the manufacturer;

ddd) Mass media refers to any means or methods used to convey promotional and
advertising messages to the public, such as but not limited to print (e.g., newspapers,
tabloids, magazines, posters, hand bills, leaflets, mails, etc.), television (including
cinema), radio, outdoor media (e.g., billboards, digital media), and new media (e.g.,
internet, mobile phones, and similar electronic device

eee) __Materially defective product means a product which fails to offer the safety
rightfully expected of it, taking relevant circumstances into consideration, including
but not limited to: (a) presentation of product; (b) use and hazards reasonably
expected of it; and (c) the time it was put into circulation;

ff) Mislabeled household hazardous substance or mislabeled urban hazardous
substance or other mislabeled hazardous substances means any household
hazardous substance or urban hazardous substance the packaging or labeling of
which is in violation of the special packaging regulation issued by the concerned
department or government body under this Act or if such substance fails to bear a
label which: (1) states conspicuously: (i) the name and the exact address of the
manufacturer, packer, distributor, or seller; (ii) the common or usual name of the
hazardous substance or of each component which contributes substantially to the
harmfulness of the substance, unless the concerned department, by regulation
permits or requires the use of the recognized generic name; (iii) the signal word
"danger" on substances which are extremely flammable, corrosive, or highly toxic;
(iv) the signal word "warning" or “caution” on all other hazardous substances; (v) a
frank statement of the principal hazard or hazards involved, as ‘flammable’, "vapor
harmtul", "causes buns’, "absorbed through skin", or similar wording describing the
action to be followed or avoided, except when modified by regulation by the
Department pursuant to; (vi) instructions, when necessary or appropriate, for first aid
treatment; (vii) the word “poison” for any hazardous substance which is defined as
highly toxic; (viii) instructions for handling and storage of packages which require
special care in handling or storage; and (ix) the statement "keep out of the reach of
children’, or its practical equivalent, if the article is intended for use by children and is
not a banned hazardous substance, with adequate directions for the protection of
children from the hazard involved. The aforementioned signal words, affirmative
statements, description of precautionary measures, necessary instructions or other
words or statements may be in the English language or its equivalent in Filipino; and
(2) on which any statement required under clause (1) of this paragraph are located
prominently on the label and in contrast by typography layout, to other printed
matters thereon;

ggg) New Drugs mean (1) any drug the composition of which is such that said drug
is not generally recognized among experts qualified by scientific training and
experience to evaluate the safety, efficacy and quality of drugs as safe, efficacious
and of good quality for use under the conditions prescribed, recommended, or
‘suggested in the labeling thereof; or (2) any drug the composition of which is such
that said drug, as 2 result of its previous investigations to determine its safety,
efficacy and good quality for use under certain conditions, has become so recognized
but which has not, otherwise than in such investigations, been used to a material
extent or for a material time under new conditions;

i. "New Drugs" shall include drugs (a) containing a newly discovered
active ingredient; (b) containing a new fixed combination of drugs,
either by molecular or physical combination; (c) intended for new
indications; (d) an additional new mode of administration; or (e) in an

"


additional dosage or strength of the dosage form, which meets the
conditions as defined under the new drug.

li. The definition of "new drugs” covers to the extent applicable, new
devices.

hhh) _ New product means a newly-registered consumer product which incorporates
a design, material or form of energy exchange which has not previously been used
substantially in consumer products and where there exists a lack of adequate
information to determine the quality and safety of such product if used by the
consumers;

ili) Open-end credit plan means a consumer credit extended on an account pursuant to
a plan under the following circumstances:

a. the creditor may permit the person to make purchases or obtain loans, from
time to time, directly from the creditor or indirectly with the use of credit card,
check or other devices;

b. a person has the privilege of pre-paying or advancing the balance; or

¢. a finance charge may be computed by the creditor from time to time on an
outstanding unpaid balance;

iil) Package or packaging means any container or wrapping in which any consumer
product is enclosed for use in the delivery or display of that consumer product to
retail purchasers, but which does not include:

a. shipping containers or wrappings used solely for the transportation of any
‘consumer product in bulk or in big quantities by manufacturers, packers, or
processors to wholesale retail distributors thereof,

b. shipping containers or outer wrappings used by retailers to ship or deliver any
product to retail costumers if such containers and wrappings bear no printed
matter pertaining any particular product;

¢. the wrappers or containers of consumer products sold in small quantities by
small retail stores to the consumer which by tradition are wrapped with
ordinary paper,

kkk) Person means any individual, partnership, corporation or association, trust,
government or governmental subdivision or any other legal entity;

Ill) Pharmacovigilance means the science and activities relating to the detection,
assessment, understanding, and prevention of adverse effects or any other possible
drug-related problems;

mmm) Poisonous substance means any substance capable of destroying life or
seriously endangering health when applied externally or introduced internally even in
moderate doses;

nnn) Preservation means a method or process of prolonging the shelf life of
products using such means including, but not limited, to adding chemicals or
additives, exposing to ionizing radiation, and undergoing freezing, heating or
canning;

000) Price comparison means the direct comparison in any advertisement of a
seller's current price for consumer products or services with any other price or
statement of value for such property or services expressed in pesos, centavos,
fractions or percentages;

12


Ppp) Price tag means any device. written, printed, affixed or attached to a
consumer product or displayed in a consumer repair or service establishment for the
purpose of indicating the retail price per unit or service;

qaqa) Prime commodities mean commodities that ere goods not considered as
basic necessities but are essential to consumers in times of any of the cases
provided under Section 7 of RA 7581, such as, but not limited to, flour; dried,
processed or canned pork, beef and poultry meat; dairy products not falling under
basic necessities; onions, garlic, vinegar, patis, soy sauce; fertilizer, pesticides and
herbicides; poultry, livestock and fishery feeds and veterinary products; paper; school
supplies; nipa; shingles: sawali; cement: clinker: GI sheets: hollow blocks; plywood;
plyboard: construction nails; batteries; electrical supplies; light bulbs; steel wire; all
drugs not classified as essential drugs by the DOH and such other goods as may be
included under Section 4 of RA 7581;

rrr) Principal display panel means that part of the label that is most likely to be displayed,
presented, shown or examined under normal and customary conditions of display for
retail or sale;

sss) Private labeler means an owner of a brand or trademark on the label of
consumer product other than a manufacturer of the product ;

i. A consumer product bears a private label if: (1) the product or its
container is labeled with a brand or trademark of a person other than
its manufacturer; or (2) the brand or trademark of the manufacturer of
‘such product does not appear on such label

ttt) Radioactive substance means any solid, liquid, or gas with unstable nuclei which
during the process of decay emits ionizing radiation:

uuu) Referral selling means the sales device employed by the sellers wherein the
buyer is induced to acquire goods or services by presenting that after the acquisition
of the goods or services, where a rebate, commission or other benefits will be
received in return for the submission of names of potential customers or otherwise
helping the seller enter into other sales, if the receipt of such benefit is contingent on
‘an event occurring after the sale is made:

wv) __ Repair and service firm means any business establishment, engaged directly
‘or indirectly, in the repair, service or maintenance of any consumer product;

www) Requesting person means a natural person, whether on his own or as a
representative of another natural person or a juridical person, who makes a request
to obtain, have a copy of or have access to information from any government body as
defined in this Section;

Xxx) Retailer means a person engaged in the business of selling consumer
products directly to consumers;

yyy) Sale or distribution means an act made by a manufacturer or seller, or their
respective representative or aget, to make available consumer products, services or
credit to the end consumers under a consumer sale transaction. It shall not include
sampling or any distribution not for sale;

zzz) Sales promotion means techniques intended for broad consumer participation
which contain promises of gain such as prizes, in cash or in kind, or an opportunity to


win any prizes or free services, or aif, or any similar schemes, as reward for
transacting for, receiving, or purchasing of a product, security, service or winning in
contests, games, tournaments and other similar competitions or challenges which
involve determination of winner or winners and which utilize mass media or other
widespread media of information such as information and communications
technology. It also means techniques intended to increase the sales, patronage, or
goodwill of transaction for purchasing or receiving of consumer products and
services;

aaaa) —_Seller means a person engaged in the business of selling consumer products
and services directly to consumers such as, but not limited to, restaurants and
fastfood establishments. It shall include a supplier or distributor or any other similar
arrangements if: (1) the seller is a subsidiary or affiliate of the supplier or distributor,
(2) the seller interchanges personnel or maintains common or overlapping officers or
directors with the supplier or distributor; or (3) the supplier or distributor provides or
‘exercises supervision, direction or control over the selling practices of the seller,

bbbb) _ Service or Services mean services rendered, offered, promised, promoted,
advertised, transacted, received, or made a price or reward or any other similar
arrangements in connection with construction, maintenance, repair, processing,
treatment or cleaning of goods or of fixtures on land, distribution or transportation of
goods, or any other practices in commerce, trade, industry, business ventures, skills,
vocation or career;

cece) Safety packaging means packaging that is designed or constructed to be
significantly difficult for children five(S) years of age and below to open or to obtain a
toxic or harmful amount of the substance contained therein within a reasonable time
and not difficult for normal adults to use properly:

dddd) Standard means a set of conditions to be fulfilled to ensure the quality,
efficacy and/or safety of product and services;

eeee) Strong sensitizer means any substance which will cause on normal living
tissue, an allergy or photodynamic quality of hypersensitivity which becomes evident
on reapplication of the same substance, to be classified as such by the implementing
agency. Before classifying any substance as a strong sensitizer, the implementing
agency, upon consideration of the frequency of occurrence and severity of the
reaction, should find out whether the substance has a significant capacity to cause
hypersensitivity;

ffff) Substandard product means a product which fails to comply with the standards
prescribed under existing regulations or as set forth by the concerned industry;

ggg9) Supplier means a person, other than a consumer, who in the course of his
business, solicits, offers, advertises, or promotes the disposition or supply of a
consumer product or who other than the consumer, engages in, enforces, or
‘otherwise participates in a consumer transaction, whether or not a contract actually
exists between that person and the consumer, and includes the successor to, or
assignee of, any right or obligation of the supplier;

hhhh) Technical personnel of repair and service enterprise means a machinist,
technician, or any technically skilled or qualified person who works or renders
diagnosis or advice in connection with repair, service and maintenance of the
‘consumer products in a repair and service firm;

14


ill) Toxic substance means any substance other than a radioactive substance which can
cause injury, illness or death to human beings through ingestion, inhalation or
absorption through anybody surface or cavity;

ili) Trade name or trademark means a word or words, name, title, symbol, emblem, sign
‘or device or any combination thereof used as an advertisement, sign, label, poster or
‘otherwise for the purpose of enabling the public to distinguish the business of the
Person who owns and uses said trade name or trademark;

kkkk) Trade secret means any information, including a formula, pattern, compilation,
program, device, product, method, technique or process, that is used, or may be
used, in business or for any commercial advantage from where a business entity
derives independent economic value, actual or potential, from not being generally
known to the public or to persons who can obtain economic value from its disclosure
or use.

Sec. 6. The Basic Consumer Rights ~ The government, in maintaining and strengthening
the promotion of the interest and welfare of the consumers in their relation to businesses and
industry practice, as well as to the production and distribution of consumer products, shall
adopt measures and formulate polices taking into account the following basic consumer
rights:

1. Right to Basic Needs -The consumer shall be entitled to affordable and safe
food, clothing, shelter, health care, education and sanitation. In fulfilling this right,
the government shall ensure that basic and prime commodities shall be made
accessible, available, affordable and of safe quality, to the consumers.

2. Right to Choose - The consumer shall be entitled to choose products at
competitive prices with an assurance of safe and satisfactory quality.

3. Right to Representation ~The consumer shall be entitled to express consumer
interests in the formulation and execution of government policies.

4. Right to Redress —The consumer shall be entitled to compensation for
misrepresentation, substandard or defective goods or unsatisfactory services.

5. Right to Consumer Education ~The consumer shall be entitled to acquire the
knowledge and skills necessary to be an informed consumer. To fulfil this right,
the appropriate government agency shall ensure, among others, the availability of
nutrition information in the label or labeling of food, and, dissemination of the
information on maintaining healthy dietary practices.

6. Right to Safety —The consumer shall be entitled to protection against the
marketing of goods or provision of services that are hazardous to health and life
and damaging to property. The undertaking of comprehensive safety and
performance testing of products before being sold, and the placing of labels and
proper product information about the product's use and operation, and warnings
about precautions to be taken, if any, are enjoined on manufacturers and sellers.

7. Right to a Healthy Environment. — The consumer shall be entitled to live and
work in an environment which is neither threatening nor dangerous and which
permits a sustainable life of dignity and well-being.

8. Right to Information - The consumer shall be entitled to protection against
dishonest or misleading advertising or promotion and labeling and be given the

Is


facts and information needed to make an informed choice. In particular,
consumers of food and beverage products shall be guaranteed the right to be
assisted by government, working together with manufacturers and distributors, on
the significance of adequate labeling and in the interpretation of information and
data contained on such labels.

Sec. 7. The Basic Consumer Responsibilities — In connection with the entitlement of the
basic rights stated in the preceding Section, the consumer shall exercise the following
responsibilities:

1. Critical Awareness - The consumer shall make oneself knowledgeable on
usage of consumer products and services and be vigilant regarding prices and
quality of goods and services.

2. Take Action - The consumer shall refrain from being a passive consumer and
assert oneself and take action to ensure that one's rights as a consumer are
amply protected

3. Social Concern - The consumer shall be more aware of the negative impact of
‘one's consumption on other citizens especially the disadvantaged or powerless
groups, whether in the local, national, or international community.

4. Environmental Awareness — The consumer shall understand the environmental
consequences of one's consumption, recognize individual and social
responsibility to conserve natural resources, protect the earth for future
generations and adopt sustainable consumption patterns.

5. Solidarity - The consumer shall organize themselves to develop collective
strength and influence to promote and protect their interest.

Sec. 8. Implementing Agency. - The provisions of this Act and its implementing rules and
regulations shall be enforced by the:

a) Department of Health (DOH) with respect to processed food, drugs, cosmetics,
devices and hazardous substances;

b) Department of Agriculture (DA) with respect to products related to agriculture and
fisheries;

¢) Bangko Sentral ng Pilipinas (BSP) for credit transactions;

d) Department of Trade and Industry (DT!) with respect to other consumer products not
specified above.

Sec. 9. Price Monitoring. -All factors considered in determining the reasonable price of
consumer goods shall be in accordance with Republic Act 7581 otherwise known as “The
Price Act”

Sec.10. Establishment of Timbangan ng Bayan Centers. - The State shall regularly
review legislation pertaining to weights and measures and assess the adequacy of the
machinery for its enforcement. In this regard, all local government units, through their
provincial, city or municipal treasurers, shall establish a Timbangan ng Bayan center in all
public markets nationwide where instruments for determining weights and measures shall be
open for and accessible to anyone who wants to verify the accuracy of the quantity and
measurement of the products that they purchased.

Sec. 11. Sealing and Testing of Instruments of Weights and Measure. - All instruments
for determining weights and measures in all consumer and consumer related transactions

16


Shall be tested, calibrated and sealed every six (6) months by the official sealer who shall be
the Provincial or City or Municipal Treasurer or the authorized representative upon payment
of fees required under existing law: Provided, That all instruments of weights and measures
shall continuously be inspected for compliance with the provisions of this Section.

The safekeeping and maintenance of said instruments shall be under the control and
supervision of the market supervisor who shail likewise be in charge of keeping a record of
every product found to be wanting in quantity or substandard in dimension as well as the
circumstances surrounding the sale thereof, including but not limited to, the name of the
buyer, the price paid, and the name of the establishment where the same was bought
including the name of the proprietor or manager thereof. A certification duly issued by the
market supervisor or the authorized representative reflecting the contents of such record
shall be prima facie evidence of violation of the prohibited acts as provided herein.

Sec.12. Use of Metric System. - The system of weights and measures to be used for all
products, commodities, materials. utilities, services and commercial transactions, in all
contracts, deeds and other official and legal instruments and documents shall be the metric
system, in accordance with existing laws and their implementing rules and regulations.

The Department of Trade and Industry shall also adopt standard measurements for
garments, shoes and other similar consumer products.

Sec. 13. Physical Safety. - The State shall adopt or encourage the adoption of appropriate
measures, including legal systems, safety regulations, national or international standards,
voluntary standards and the maintenance of safety records to ensure that products are safe
for either intended or normally foreseeable use.

Appropriate policies shall ensure that if manufacturers or distributors become aware
of unforeseen hazards after products are placed on the market, they shall notify the relevant
authorities and, as appropriate. the public without delay. The State shall also consider ways
of ensuring that consumers are properiy informed of such hazards.

Sec. 14. Minimum Labeling Requirements for Consumer Products. - All consumer
products domestically sold, whether manufactured locally or imported, shall indicate the
following in their respective labels of packaging:

a) its correct and registered trade name or brand name;

b) its duly registered trademark:

©) its duly registered business name;

d) the address of the manufacturer, importer, repacker of the consumer product in the
Philippines;

@) its general make or active ingredients;

) the net quality of contents, in terms of weight, measure or numerical count rounded of
to at least the nearest tenths in the metric system;

9) country of manufacture. if imported; and

h) if a consumer product is manufactured, refilled or repacked under license from a
principal, the label shall so state the fact.

The following may be required by the concerned department in accordance with the
rules and regulations they will promulgate under authority of this Act:

a) whether it is flammable or inflammable;
b) directions for use, if necessary:

cc) warning of toxicity;

d) wattage, voltage or amperes: or

) process of manufacture used if necessary.

‘Any word, statement or other information required by or under authority of the

17


preceding paragraph shall appear on the label or labeling with such conspicuousness as
compared with other words, statements, designs or devices therein, and in such terms as to
render it likely to be read and understood by the ordinary individual under customary
conditions of purchase or use.

The above requirements shall form an integral part of the label without danger of
being erased or detached under ordinary handiing of the product.

Sec. 15. Legibility. - \t shall be ensured that labeling of food and beverage products are
legible and easily understood by consumers.

For the benefit of those who are unable to read for reasons of illiteracy or of
deficiency in reading due to eye-sight problem, labeling information shall be done through
the use of graphic symbols.

Sec. 16. Philippine Product Standard Mark. - The label shall contain the Philippine
Product Standard Mark if it is certified to have passed the consumer product standard
prescribed by the concemed department.

Sec. 17. Authority of the Concerned Department to Provide for Additional Labeling
and Packaging Requirements. - Whenever the concerned department determines that
regulations covering requirements other than those prescribed in Section 13 hereof are
necessary to prevent the deception of the consumer or to facilitate value comparisons as to
any consumer product, it may issue such rules and regulations to:

a) establish and define standards for characterization of the size of a package
enclosing any consumer product which may be used to supplement the label
statement of net quality, of contents of packages containing such products but this
clause shall not be construed as authorizing any limitation on the size, shape,
weight, dimensions, or number of packages which may be used to enclose any
product,

b) regulate the placement upon any package containing any product or upon any
label affixed to such product of any printed matter stating or representing by
implication that such product is offered for retail at a price lower than the ordinary
and customary retail price or that @ price advantage is accorded to purchases
thereof by reason of the size of the package or the quantity of its contents;

) prevent the nonfunctional slack-fill of packages containing consumer products.

For purposes of paragraph (c) of this Section, a package shall be deemed to be non-
functionally slack-filled if it is filled to substantially less than its capacity for reasons other
than:
i. protection of the contents of such package;
ii, the requirements of machines used for enclosing the contents in such
package: or
ili, inherent characteristics of package materials or construction being used.

The concemed department may likewise issue such other requirements as may be
prescribed by regulations to ensure the safety, efficacy and quality of health products.

Sec. 18. Special Packaging of Consumer Products for the Protection of Children. - The
concerned department may establish standards for the special packaging of any consumer
product if it finds that:

a) the degree or nature of the hazard to children in the availability of such product,
by reason of its packaging, is such that special packaging is required to protect

18


children from serious personal injury or serious illness resulting from handling
and use of such product; and

b) the special packaging to be required by such standard is technically feasible,
practicable and appropriate for such product.

In establishing a standard under this Section, the concerned department shall consider:

1. the reasonableness of such standard

2. available scientific, medical and engineering data concerning special packaging
and concerning accidental, ingestions, illnesses and injuries caused by consumer
product;

3. the manufacturing practices of industries affected by this Act; and

4. the nature and use of consumer products.

Sec. 19. English or Filipino Translation of Product Labels Written in Foreign
Characters or Languages. — Consumer products with product labels written in foreign
characters or language shall be allowed entry into the country and introduced into
commerce only if they bear a corresponding English or Filipino translation to enable the
authorities to determine whether the product has complied with all the other labeling
requirements as well as provide the consumers proper guidance on the contents and
source or origin of the product.

lll imported products brought into the country which shall be repacked, labeled or
relabeled shall bear the name of the product, ingredients, place of manufacture and nutrient
contents of the products before they can be sold domestically.

‘Sec. 20. Prohibited Acts on Labeling and Packaging. - |t shall be unlawful for any person
who is engaged in the labeling or packaging of any consumer product, either as principal or
agent, to display or distribute or to cause to be displayed or distributed for commercial
purpose any consumer product whose package or label does not conform to the provisions
of this Act.

The prohibition in this Act shall apply to persons engaged in the business of
wholesale or retail distributors of consumer products including, but not limited to, such
persons who:

‘a, are engaged in the packaging or labeling of such products,

b. prescribe or specify by any means the manner in which such products are
packaged or labeled;

c. having knowledge of mislabeling or mispackaging, refuse to disclose the source of
the mislabeled or mispackaged products

Sec. 21. Mislabeled Food. ~ The following circumstances shall be construed to be cases of
mislabeling of food products:

a) ifits labeling or advertising is false or misleading in any way;

') fits label contains claims which are not scientifically proven

©) ifitis offered for sale under the name of another food;

d) if itis an imitation of another food, unless its label bears in type of uniform size and
prominence, the word “imitation” and, immediately thereafter, the name of the food
imitated;

e) its containers is so made, formed, or filled as to be misleading;

f) if in package form unless it bears a label conforming to the requirements of this Act:
Provided, That reasonable variation on the requirements of labeling shall be
permitted and exemptions as to small packages shall be established by the
regulations prescribed by the concerned department;

19


Q) if any word, statement or other information required by or under authority of this Act
to appear on the principal display panel of the label or labeling is not prominently
placed thereon with such conspicuousness as compared with other words,
statements, designs or devices in the labeling and in such terms as to render it likely
to be read and understood by the ordinary individual under customary conditions of
purchase and use;

h) if it purports to be or is represented as a food for which a definition or standard of
identity has been prescribed unless.

i. ittconforms to such definition and standard; and

ji, its labels bear the name of the food specified in the definition or
standards, and insofar as may be required by such regulations, the
common names of optional ingredients other than spices, flavoring
and coloring, present in such food;

i) fit purports to be or represented as

(1) a food for which a standard of quality has been prescribed by regulations as
provided in this Act and its quality fall below such standard, unless its label
bears in such manner and form as such regulations specify, a statement that
it falls below such standard; or

(2) a food for which a standard or standards or fill of container have been
prescribed by regulations as provided by this Act and it falls below the
standard of fil of container applicable thereto, unless its label bears, in such
manner and form as such regulations specify, a statement that it falls below
such standard;

j) if it is not subject to the provisions of paragraph (g) of this Article unless its label
bears
(1) the common or usual name of the food, if there be any; and
(2) in case it is manufactured or processed from two or more ingredients, the
‘common or usual name of such ingredient; except the spices, flavorings and
colorings other than those sold as such, may be designated as spices,
flavorings and colorings without naming each: Provided, That to the extent
that compliance with the requirement of clause (2) of this paragraph is
impracticable or results in deception or unfair competition, exemptions shall
be established by regulations promulgated by the concerned Department of
Health;

k) if it purports to be or is represented for special dietary uses, unless its label bears
such information concerning its vitamin or mineral or other dietary properties as the
concerned department determines to be, or by regulations prescribed as necessary
in order fully to inform purchasers as its value for such uses

}) if it bears or contains any artificial flavoring, artificial coloring, or chemical
preservative, unless it bears labeling, stating that fact: Provided, That to the extent
that compliance with the requirements of this paragraph is impracticable, exemptions
shall be established by regulations promulgated by the concerned department. The
provisions of this paragraph or paragraphs (g) and (i) with respect to the artificial
coloring shall not apply in the case of butter, cheese or ice cream.

Foods or food products offered by restaurants and fast-foods chains shall likewise
conform with the foregoing regulations.

In cases of foods not contained in any disposable package or container, restaurant
operators must provide customers with a flyer or leaflet containing the prescribed nutritional
information when requested accordingly.

20


Sec. 22. Labeling of Drugs. - In addition to Section 14 hereof, the provisions of Republic
Act No. 6675 or the Generics Act and other applicable labeling requirements under Republic
Act No. 3720 as amended by Republic Act No. 9711, otherwise known as “The Food and
Drug Administration Act of 2009,” shall apply in the labeling of drugs.

Sec. 23. Mislabeled Hazardous Substances. - Hazardous substances shall be deemed

mislabeled when:

a) having been intended or packaged in a form suitable for use in households,
especially for children, the packaging or labeling thereof is in violation of the special
packaging regulations issued by the concemed department;

b) it fails to bear a label which states conspicuously the following important information:

vi

vil

vil.

the name and the place of business of the manufacturer, packer,
distributor seller;

‘the common or usual name or the chemical name, if there be no common
or usual name, of the hazardous substance or of each component which
contributes substantially to the harmfulness of the substance, unless the
concerned department by regulation permits or requires the use of the
recognized generic name:

the signal word "danger" on substances which are extremely flammable,
corrosive or highly toxic:

the signal word "warning" or “caution” with a bright red or orange color
with a black symbol on all other hazardous substances;

a clear statement as to the possible injury it may cause if used improperly;

precautionary measures describing the action to be followed or avoided;

instructions when necessary or appropriate for first-aid treatmer

the word "poisor
toxic;

" for any hazardous substance which is defined as highly

instructions for handling and storage of packages which require special
care in handling and storage: and

the statement "keep out of the reach of children”, or its practical
equivalent, if the article is not intended for use by children and is not a
banned hazardous substance, with adequate directions for the protection
of children from the hazard involved. The aforementioned signal words,
affirmative statements, description of precautionary measures, necessary
instructions or other words or statements may be in English language or
its equivalent in Filipino; and

¢) the statement required under clause (b) of this paragraph is not located prominently
in bright red and orange color with a black symbol in contrast typography, layout or
color with the other printed matters on the label

Sec. 24. Price Tag Requirement. — It shall be unlawful to offer any consumer product or
service for retail sale to the public without an appropriate price tag, label, or marking, or with
more than one price. or different price tags, labels, or markings publicly displayed to indicate

21


the price of each article. Said products shall not be sold at a price higher than that stated
therein and without discrimination to all buyers: Provided, That it shall be unlawful for any
retailer, including merchandising store or service establishment to charge the customers
more than the actual cash retail price of the goods or services purchased when such
purchase is done with the use of credit card or to limit bargain sale items and services to
cash purchases: Provided Further, That lumber sold, displayed or offered for sale to the
public shall be tagged or labeled by indicating thereon the price and the corresponding
official name of the wood: Provided finally. that if consumer products for sale are too small
or the nature of which makes it impractical to place a price tag thereon price list placed at the
nearest point where the products are displayed indicating the retail price of the same may
suffice.

Sec. 25. Manner of Placing Price Tags. - Price tags, labels or markings must be written
clearly, indicating the price of the consumer product per unit in pesos and centavos.

Sec. 26. Regulations for Price Tag Placement. - The concerned department shall
prescribe rules and regulations for the visible placement of price tags for specific consumer
products and services. There shall be no erasures or alterations of any sort of price tags,
labels or markings unless such products or services shall be the subject of a promotional
sale markdown

Sec. 27. Ensuring Safety of Goods - The State shall ensure that goods produced by
manufacturers are safe for either intended or normally foreseeable use. Those responsible
for bringing goods to the market, in particular suppliers, exporters, importers, retailers and
the like hereinafter referred to as distributors, should ensure that while in their care these
goods are not rendered unsafe through improper handling or storage and that while in their
care they do not become hazardous through improper handling or storage. Consumers
should be instructed in the proper use of goods and should be informed of the risks involved
in intended or normally foreseeable use. Vital safety information should be conveyed to
consumers by internationally understandable symbols wherever possible.

Sec. 28. Regulation on Imported Consumer Products. - (a) Any consumer product
offered for importation into Philippine territory shail be refused admission if such product

1. fails to comply with an applicable consumer product quality and safety standard
or rule;

2. is or has been determined to be injurious, unsafe and dangerous:

3. is substandard;

4. is defective: or

5. has been banned for distribution or declared unsafe by other countries.

(b) Samples of consumer products being imported into the Philippines in a quantity

necessary for purposes of determining the existence of any of the above causes for non-

admission may be obtained by the concerned department or agency without charge from the

‘owner or consignee thereof. The owner or consignee of the imported consumer product

under examination shall be afforded an opportunity to a hearing with respect to the

importation of such products into the Philippines. if it appears from examination of such

‘samples or otherwise that an imported consumer product does not conform to the consumer

product safety rule or is injurious, unsafe and dangerous, is substandard or has a material

defect, such product shall be refused admission unless the owner or the consignee thereof

manifests under bond that none of the above ground for non-admission exists or that

measures have been taken to cure them before they are sold, distributed or offered for sale

to the general public.

(c) If it appears that any consumer product which may not be admitted pursuant to

22


paragraph (a) of this Section can be so modified that it can already be acceptable for sale or
use, the concerned department may defer final examination as to the admission of such
product for a period not exceeding ten (10) days, and in accordance with such regulations as
the Department and the Commissioner of Customs shall jointly promulgate, such product
may be released from customs custody under bond for the purpose of permitting the owner
‘or consignee an opportunity to so modify such product.

(d) All modifications taken by an owner or consignee for the purpose of securing admission
of an imported consumer product under paragraph (c) shall be subject to the supervision of
the concerned department. If the product cannot be so modified, or if the owner or consignee
is not proceeding to satisfactorily modify such product, it shall be refused admission and the
department may direct redelivery of the product into customs custody, and seize the product
if not so redelivered.

(e) Imported consumer products not admitted must be exported, except that upon
application, the Commissioner of Customs may permit the destruction of the product if,
within @ reasonable time, the owner or consignee thereof fails to export the same,

(f) All expenses in connection with the destruction mandated in this Section, and all
‘expenses in connection with the storage, cartage or labor with respect to any consumer
product refused admission under this Article, shall be paid by the owner or consignee and, in
case of default of such payment, shall constitute a lien against any future importation made
by such owner or consignee

(g) It shall be prohibited for any person, corporation or entity, to import, sell or use goods, the
manufacture, sale or use of which is prohibited in the country of origin of such goods.

Sec. 29. Regulation on Consumer Products for Export. - The preceding Section on
safety standards imposed on imported products does not apply to any consumer product if:
(a) it can be shown that such product is manufactured, sold or held for sale for export from
the Philippines, or that such product was imported for export, unless such consumer product
is in fact distributed in commerce for use in the Philippines; and (b) such consumer product
or the packaging thereof bears a stamp or label stating that such consumer product is
intended for export and actually exported: Provided, however, that consumer products
intended for exports shall comply with the safety standards enforced by the importing
country, whenever applicable.

Sec. 30. Recall, Ban or Seizure of injurious, Dangerous and Unsafe Products. -
Whenever any department or government agency find by their own initiative or by petition of
a consumer, that a consumer product is found to be injurious, unsafe or dangerous, it shall,
after due notice and hearing, make the appropriate order for its recall, prohibition or seizure
from public sale or distribution: Provided, That in their sound discretion, such department or
agency, may declare a consumer product to be imminently injurious, unsafe or dangerous,
and order its immediate recall, ban or seizure from public sale or distribution, in which case,
the seller, distributor, manufacturer or producer thereof shall be afforded a hearing within
forty-eight (48) hours from such order: Provided further, That any establishment caught in
flagrante delicto selling, distributing, manufacturing, producing, or importing substandard and
hazardous products shall be automatically closed and shut down

The ban on the sale and distribution of a consumer product adjudged injurious,
unsafe or dangerous, or imminently injurious, unsafe or dangerous under the preceding
paragraph shall stay in force until such time that its safety can be assured or measures to
ensure its safety have been established

Sec. 31. Amendment and Revocation of Declaration of the Injurious, Unsafe or
Dangerous Character of a Consumer Product. - Any interested person may petition the

23


appropriate department to commence a proceeding for the issuance of an amendment or
revocation of a consumer product safety rule or an order declaring a consumer product
injurious, dangerous and unsafe
In case the department, upon petition by an interested party or its own initiative and
after due notice and hearing, determines a consumer product to be substandard or
materially defective, it shall so notify the manufacturer, distributor or seller thereof of such
finding and order such manufacturer, distributor or seller to, without delay
a) give notice to the public of the defect or failure to comply with the product safety
standards;
b) give notice to each distributor or retailer of such product; and
¢) give notice to every person to whom such consumer product was delivered or sold.

The department shall also direct the manufacturer, distributor or seller of such
product to extend within reasonable time any or all of the following remedies to the injured
person’

i. to bring such product into conformity with the requirements of the applicable
consumer product standards or to repair the defect in order to conform with the
same}

ji, to replace the product with a like or equivalent product which complies with the

applicable consumer product standards which does not contain the defect;

to refund the purchase price of the product less a reasonable allowance for use;

and

iv. to pay the consumer reasonable damages as may be determined by the
department

The manufacturer, distributor or seller shall not charge a consumer who avails
himself of the remedy as provided above of any expense and cost that may be incurred

Sec. 32. Effectivity of Amendments and Revocation of Consumer Product Safety
Rule, - Any amendment or revocation of a consumer product safety rule made by the
concerned department shall specify the date on which it shall take effect which shall not
exceed ninety days from the date of amendment or revocation is published unless the
concerned department finds, for a good cause shown, that a later effective date is in the
public interest and publishes its reasons for such finding. The department shall promulgate
the necessary rules for the issuance, amendment or revocation of any consumer product
safety rule.

Sec. 33. Official Sources of Information for Imported Consumer Products. ~ Import
data from the Bureau of Customs under the Department of Finance and the Bureau of Import
Services under the DTI shall be recognized as official sources of information to validate the
following information relative to a particular imported consumer product:

a) country of manufacturer;

b) name and address of manufacturer / exporter;

c) name and address of importer/consignee;

d) value and volume of shipment;

) date of arrival, and;

f)_ other information relevant to the shipment in question.

Sec. 34. Coverage and Exemptions of Sales Promotion of Consumer Products and
Services.

(a) Coverage- The provisions on sales promotions of the consumer products and services
shall apply to all promotional campaigns/announcements for consumer products, services,
credit facilities, as well as beauty contests, nationwide in character. It shall also include

24


promotional campaigns for television shows and other similar activities.

The provisions of sales promotion of consumer products and services shall likewise
apply to similar activities such as but not limited to in-store promotions offering reduced
prices, special offers, product demonstration, product samples, rebates, discounts, premium-
in-pack, and expert advice.

The coverage of sales promotions should also include promotional campaigns for
television shows and other similar activities,

(b) Exemption— The provisions of sales promotion of consumer products and services shall
not apply to the following promotional campaigns or activities:

i} those conducted by government or any of its agencies or instrumentalities, when the
same is conducted in the exercise of their governmental functions;

ji. those conducted by private entities in joint project/s with any government agency
under the preceding paragraph;

iii, those conducted by social, civic, political, religious, educational, professional and
other similar organizations which conduct promotional activities among their
members.: Provided, That the promotional activity is not considered sales
promotional campaign as defined under this Act.

Sec. 35. Permit to Conduct Promotion. - No person shall conduct any sales campaigns
including beauty contests, national in character, sponsored and promoted by manufacturing
enterprises without first securing a permit from the concerned department at least thirty (30)
calendar days prior to the commencement thereof. Unless an objection or denial is received
within fifteen (15) days from filing of the application, the same shall be deemed approved
and the promotion campaign or activity may be conducted: Provided, That any sales
promotion campaign using medical prescriptions or any part thereof or attachment thereto
for raffles or a promise of reward shall not be allowed, nor a permit issued thereof,

Sec. 36. Suspension of Publication or Dissemination of Information. - The concerned
department may, after due notice, suspend the publication and dissemination of any
information accompanying a sales promotion campaign, if it finds the campaign to be in
violation of the provisions of this Act or its implementing rules and regulations.

Sec. 37. Conduct of Sales Promotion. - A sales promotion which is intended for broad
‘consumer participation and utilizes mass media shall indicate the duration, commencement
and termination of the promotion, the deadline for submission of entries and the governing
criteria or procedure to be followed therein.

Sec. 38. Packaging of Products Under Promotion. - The packaging of the products
covered by the sales promotion shall not be changed or tampered with, unless so authorized
by the sponsoring agency or the owner or manufacturer of the product.

Sec. 39. Change in Starting and Termination Dates of Promotion. - The concerned
department shall be advised of any delay of starting dates or termination dates and details of
any change in the conduct of a sales promotion. Any change in the termination dates shall
be published in a newspaper of general circulation before the expiration of the original
schedule or the termination date, whichever comes first.

Sec. 40. Determination of Winners. - The winners in any sales promotion shall be
determined at a definite time and place and shall be verified by a representative of the
concerned department and the sponsor. Immediately after the winners are selected or
determined, a list with their addresses and corresponding prizes shall be submitted to the
concerned department. All winners shall be announced or published in the same manner
that the sales promotion was announced or published: Provided, That publication in a

5


newspaper of general circulation shall be done in a legible manner at least once, if the sales
promotion is national in scope: Provided further, That such announcement and publication
shall be done not later than two (2) weeks after the determination of winners. In all cases
where the amount of the price is Five Hundred Pesos (PhP500.00) or more, the winners
shall also be notified in writing by registered mail or any communication wherein proof of
notice or service can be verified

Sec. 41. Promulgation and Adoption of Consumer Product Standards. ~ Pursuant to
this objective, the State shall intensify efforts to prevent practices which are damaging to the
economic interests of consumers by ensuring that manufacturers, distributors and others
involved in the provision of goods and services adhere to established laws and mandatory
product standards. Consumer organizations shall be encouraged to monitor adverse
practices, such as the adulteration of foods, false or misleading claims in marketing and
service frauds. The concerned department shall establish consumer product quality and
safety standards which shall consist of one or more of the following
‘a) requirements to performance, composition, contents, design, construction, finish,
packaging of a consumer product;
b) requirements as to kind, class, grade, dimensions, weights, material;
¢) requirements as to the methods of sampling, tests and codes used to check the
quality of the products;
d) requirements as to precautions in handling, storage, packaging, and transporting;
) requirements that a consumer product be marked with or accompanied by clear and
adequate safety warnings or instructions, or requirements respecting the form of
warnings or instructions.

For this purpose, the concerned department shall adopt existing government
domestic product quality and safety standards: Provided, That in the absence of such
standards, the concerned department shall form specialized technical committees composed
of equal number of representatives from each of the government, business and consumer
sectors to formulate, develop and propose consumer product quality and safety standards.
The said technical committees shall consult with the private sector, which may, motu proprio,
develop its own quality and safety standards that shall be subjected to further review and
evaluation by the concerned agencies after public hearings have been conducted for that
purpose; and shall likewise consider existing international standards recognized by the
Philippine Government.

Sec. 42. Publication of Consumer Product Standards. - The concerned department shall,
upon promulgation of the above standards, publish or cause the publication of the same
either in a newspaper of general circulation, in the Official Gazette and in its online edition,
or in the department's or agency's official web portal. It may likewise conduct an information
campaign through other means deemed effective to ensure the proper guidance of
‘consumers, businesses, industries and other sectors concerned

Sec. 43. Certification of Conformity to Consumer Product Standards. - The concerned
department shall aim at having consumer product standards established for every consumer
product so that consumer products shall be distributed in commerce only after inspection
and certification of its quality and safety standards by the department. The manufacturer
shall avail of the Philippine Standard Certification Mark which the department shall grant
after determining the product's compliance with the relevant standard in accordance with the
implementing rules and regulations.

Sec, 44. Effectivity of Rules. - (a) Each consumer product standard or safety rule shall
specify the date such rule is to take effect, which shall not exceed ninety (90) days from the
date promulgated unless the concerned department finds, for good cause shown, that a later
effective date is in the public interest and publishes its reasons for such finding. Thereafter, it

26


shall no longer be legal to, or cause to, sell or distribute the consumer product not complying
with the standards or rules.

(b) The department may. by regulation, prohibit a manufacturer from stockpiling consumer
products so as to prevent such manufacturer from circumventing the purposes of this
Paragraph. The term “stockpiling” means manufacturing or importing a product between the
date of promulgation of its consumer product safety rule and its effective date, at a rate
which is significantly greater than the rate at which such product was produced or imported
during a base period as prescribed in the regulation under this paragraph, ending before the
date of promulgation of consumer product safety rule.

Sec. 45, Deceptive, Unfair and Unconscionable Sales Acts or Practices. - Thé State
shall encourage fair and effective competition in order to provide consumers with the
greatest range of choice among products and services at the lowest cost. Pursuant to this
objective, a deceptive act or practice by a seller or supplier in connection with a consumer
transaction violates this Act whether it occurs before, during or after the transaction. An act
or practice shall be deemed deceptive whenever the producer, manufacturer, supplier or
seller, through concealment or false representation of fraudulent manipulation, induces a
consumer to enter into a sales or lease transaction of any consumer product or service.

Without limiting the scope of the above paragraph, the act or practice of a seller or
supplier is deceptive when it represents that:

a. 2 consumer product or service has the sponsorship, approval, performance,
characteristics, ingredients, accessories, uses, or benefits it does not have;

b. a consumer product or service is of @ particular standard, quality, grade, style, or
model when in fact it is not;

© a consumer product is new, original or unused, when in fact,
deteriorated, altered, reconditioned, reclaimed or second-hand state;

4. 2 consumer product or service is available to the consumer for a reason that is
different from the fact

e. a consumer product or service has been supplied in accordance with the
previous representation when in fact it is not;

f. a consumer product or service can be supplied in a quantity greater than the
supplier intends;

g. aservice, or repair of a consumer product is needed when in fact it is not;

h. a specific price advantage of a consumer product exists when in fact it does not;

i. the sales act or practice involves or does not involve a warranty, a disclaimer of

warranties, particular warranty terms or other rights, remedies or obligations if the

indication is false;

ithhas a sponsorship, approval, or affliation it does not have;

it has adequate after sales parts and services it does not have.

it is in a

Sec. 46. Deceptive Sales Act or Practices by Regulation. - The concerned department
shall, after due notice and hearing, promulgate regulations declaring as deceptive any sales
act, practice or technique which is 2 misrepresentation of facts other than those enumerated
in Section 45 of this Act.

Sec. 47. Unfair or Unconscionable Business Practices. - An unfair or unconscionable
sales act or practice by a seller or supplier retailer in connection with a consumer transaction
may be committed whether it occurs before. during or after the consumer transactions. An
act or practice shall be deemed unfair or unconscionable whenever the producer,
manufacturer, distributor, supplier or seller. by taking advantage of the consumer's physical
or mental infirmity, ignorance, illiteracy. lack of time or the general conditions of the
environment or surroundings, induces the consumer to enter into a sales or lease
transaction grossly inimical to the interests of the consumer or grossly one-sided in favor of

27


the producer, manufacturer, distributor. supplier or seller.

In determining whether an act or practice is unfair and unconscionable, the following
circumstances shall be considered:

a. the producer, manufacturer, distributor, supplier retailer or seller took advantage
of the inability of the consumer to reasonably protect his interest because of his
inability to understand the language of an agreement, or similar factors;

b. when the consumer transaction was entered into, the price grossly exceeded the
price at which similar products or services were readily obtainable in similar
transactions by like consumers;

c. when the consumer transaction was entered into, the consumer was unable to
receive a substantial benefit from the subject of the transaction;

d. when the consumer was entered into, the seller or supplier was aware that there
was no reasonable probability or payment of the obligation in full by the
‘consumer; and

e. the transaction that the seller or supplier induced the consumer to enter into was
excessively one-sided in favor of the seller or supplier such as but not limited to:

i. when the consumer transaction was entered into, the seller or supplier
imposes upon the consumer terms and conditions grossly
disadvantageous to the latter who is reduced to the altemative of
accepting the contract or leaving it, completely deprived of the
‘opportunity to bargain on equal footing; and

ii. the seller or supplier employs an aggressive marketing practice that
significantly constrains or impairs or is likely to significantly constrain
‘or impair the average consumer's freedom of choice or conduct with
regard to the purchase of a product or service that causes himv/her or
is likely tocause him/her to enter into a consumer transaction or
into one that is different from the one he/she would have intended.

Sec. 48. Chain Distribution Plans or Pyramid Sales Schemes. - Chain distribution plans
or pyramid sales schemes as defined in this Act are prohibited.

Sec.49, Home Solicitation Sales. - No business entity shall conduct any home solicitation
sale of any consumer product or service without first obtaining a permit from the concerned
department. Such permit may be denied suspended or revoked upon cause as provided in
the rules and regulations promulgated by the department, after due notice and hearing
Home solicitation sales may be conducted only between the hours of nine o'clock in the
morning (9:00 A.M.) and seven o'clock in the evening (7:00 P.M.) of each working day:
Provided, That solicitation sales may be made at a time other than the prescribed hours
‘where the person solicited has previously agreed to the same. Home solicitation sales shall
only be conducted by a person who has the proper identification and authority from his
principal to make such solicitations. Sales generated from home solicitation sales shall be
properly receipted as per existing laws, rules and regulations on sale transactions.

‘Sec. 50. Prohibited Representations. - A home solicitation sale shall not represent that:
‘a. the buyer has been specially selected;
b. a survey, test or research is being conducted; or
c. the seller is making a special offer to a few persons only for a limited period of
time.

Sec. 51. Referral Sales. - Referral selling plans shall not be used in the sale of consumer
products unless the seller executes in favor of the buyer a written undertaking that will grant
@ specified compensation or other benefits to said buyer in return for each and every
transaction consummated by said seller with the persons referred by said buyer or for

28


‘subsequent sales that said buyers has helped the seller enter into.

Sec. 52. Measures Enabling Consumers to Obtain Redress - The State shall establish
and maintain legal or administrative measures to enable consumers or, as appropriate,
relevant organizations to obtain redress through formal or informal procedures that are
expeditious, fair, inexpensive and accessible. Such procedures should take particular
account of the needs of low-income consumers.

Sec. 53. Liability for the Defective Products. - Any manufacturer, producer, or importer,
shall be liable for redress, independently of fault, for damages caused to consumers by
defects resulting from design, manufacture, construction, assembly and erection, formulas
and handling and making up, presentation or packing of their products, as well as for the
insufficient or inadequate information on the use and hazards thereof.

A product shall be deemed defective when it does not offer the safety and utility
rightfully expected of it, taking relevant circumstances into consideration, including but not
limited to:

a) presentation of product:
b) use and hazards reasonably expected of it
¢) the time it was put into circulation.

A product cannot be considered defective when another better quality product has
been placed in the market

The manufacturer, builder, producer or importer shall not be held liable when it
evidences:

a) that it did not place the product on the market

b) that although it did place the product on the market such product has no defect;

¢) that the consumer or a third party is solely at fault.

Sec. 54. Liability of Tradesman or Seller. - The tradesman or seller is liable, pursuant to
the preceding article when:
) itis not possible to identify the manufacturer, builder, producer or importer;
b) the product is supplied, without clear identification of the manufacturer, producer,
builder or importer.
c)_helshe does not adequately preserve perishable goods.

The party making payment to the damaged party may exercise the right to recover a
part of the whole of the payment made against the other responsible parties, in accordance
with their part or responsibility in the cause of the damage effected

Sec. 55. Liability for Defective Services. - The service supplier is liable for redress,
independently of fault, for damages caused to consumers by defects relating to the rendition
of the services, as well as for insufficient or inadequate information on the fruition and
hazards thereof.

The service is defective when it does not provide the satisfactory repair and/or safety
the consumer may rightfully expect of it, taking the relevant circumstances into
consideration, including but not limited to:

a) the manner in which it is provided:

b) the result of hazards which may reasonably be expected of it;

) the time when it was provided

d) the time and inconvenience the service has caused the consumer

A service is not considered defective because of the use or introduction of new
techniques.
The supplier of the services shall not be held liable when it is proven that
a) there is no defect in the service rendered;

29


b) the consumer or third party is solely at fault.

Sec. 56. Liability for Product and Service Imperfection. - The suppliers of durable or
nondurable consumer products are jointly liable for imperfections in quality that render the
products unfit or inadequate for consumption or use for which they are designed, or those
that decreased their value, and for those resulting from inconsistency with the information
provided on the container, packaging, labels or publicity messages/advertisement, with due
regard to the variations resulting from their nature or possibility of the consumer being able
to demand replacement to the imperfect parts,
If the imperfection is not corrected within thirty (30) days, the consumer may
alternatively demand at his option for:
a) the replacement of the product by another of the same kind, in a perfect state of use;
b) the immediate reimbursement of the amount paid, with monetary updating, without
prejudice to any losses and damages;
¢) a proportionate price reduction

The parties may agree to reduce or increase the term specified in the immediately
preceding paragraph; but such shall not be less than seven (7) nor more than one hundred
and eighty (180) days.

The consumer may make immediate use of the alternatives under the second
paragraph of this Article when by virtue of the extent of the imperfection, the replacement of
the imperfect parts may jeopardize the product quality or characteristics, thus decreasing its
value.

If the consumer opts for the alternative under sub-paragraph (a) herein, and
replacement of the product is not possible, it may be replaced by another of a different kind,
mark or model: Provided, That any difference in price which may result thereof shall be
supplemented or reimbursed by the party which caused the damage, without prejudice to the
provisions of the second, third and fourth paragraphs herein.

Sec. 57. Liability for Product Quantity Imperfection. - Suppliers are jointly liable for
imperfections in the quantity of the product when, in due regard for variations inherent
thereto, their net content is less than that indicated on the container, packaging, labeling or
advertisement, the consumer having powers to demand, alternatively, at his own option:
‘a. the proportionate price;
b. the supplementing of weight or measure differential;
¢. the replacement of the product by another of the same kind, mark or model,
without said imperfections;
4. the immediate reimbursement of the amount paid, with monetary updating without
prejudice to losses and damages if any.

The provisions of the fifth paragraph of Section 56 hereof shall apply to this Section
The immediate supplier shall be liable if the instrument used for weighing or
measuring is not gauged in accordance with official standards,

Sec. 58. Liability for Service Quality Imperfection. - The service supplier is liable for any
quality imperfections that render the services improper for consumption or decrease their
value, and for those resulting from inconsistency with the information contained in the offer
or advertisement, the consumer being entitled to demand alternatively, at his option, the
following

a. the performance of the services, without any additional cost and when applicable;

b. the immediate reimbursement of the amount paid, with monetary updating without

Prejudice to losses and damages, if any;
©. a proportionate price reduction.

Reperformance of services may be entrusted to duly qualified third parties, at the

30


‘supplier's risk and cost.

Improper services are those which prove to be inadequate for purposes reasonably
expected of them and those that fail to meet the provisions of this Act that regulates the
supply or rendition of services.

Sec. 59. Repair Service Obligation. - When services are provided for the repair of any
product, the supplier shall be considered implicitly bound to use adequate, new, original
replacement parts, or those that maintain the manufacturer's technical specifications unless,
otherwise authorized by the consumer.

‘When giving service or repair, the consumer must be informed about which particular
parts of the goods are damaged and have to be repaired. The consumer shalll be given the
option to replace only the damaged parts if possible. The consumer shall not be forced to
replace other parts that are still in good condition on the grounds that all these parts come in
one set

Sec. 60. Ignorance of Quality Imperfection. - The supplier's ignorance of the quality
imperfections due to inadequacy of the products and services does not exempt one from any
liability.

Sec. 61. Legal Guarantee of Adequacy. - The legal guarantee of product or service
adequacy does not require an express instrument or contractual exoneration of the supplier
being forbidden

Sec. 62. Guaranty of Service Firms. - Service firms shall guarantee workmanship and
replacement of spare parts for a period not less than ninety (90) days which shall be so
indicated in the pertinent invoices.

Sec. 63. Prohibition in Contractual Stipulation. - The stipulation in a contract of a clause
preventing, exonerating or reducing the obligation to indemnify for damages effected, as
provided for in this Section and in the preceding Sections, is hereby prohibited, if there is
more than one person responsible for the cause of the damage, they shall be jointly liable for
the redress established in the pertinent provisions of this Act. However, if the damage is
caused by a component or part incorporated in the product or service, its manufacturer,
builder or importer and the person who incorporated the component or part are jointly liable.

Sec. 64. Regulation-Making Exemptions. - The FDA may promulgate regulations
‘exempting from any labeling requirements of this Act food, cosmetics, drugs or devices
which are, in accordance with the practice of trade, to be processed, labeled or repacked in
substantial quantities at establishments other than those where originally processed, labeled
or packed on condition that such food, cosmetics. drugs or devices are not adulterated or
mislabeled under the provisions of this Act and other applicable laws upon approval from
such processing, labeling and repacking establishments.

Sec. 65. Exemptions. - If the concemed department finds that for good or sufficient
Teasons, full compliance with the labeling requirements otherwise applicable under this Act is
impracticable or is not necessary for the adequate protection of public health and safety, it
shall promulgate regulations exempting such substances from these requirements to the
extent it deems consistent with the objective of adequately safeguarding public health and
safety, and any hazardous substance which does not bear a label in accordance with such
regulations shall be deemed as mislabeled hazardous substance.

Sec. 66. Consumer Education in Schools. - The Department of Education, with the
cooperation and advice of the National Consumer Affairs Council created under Section 96
of this Act, shall develop and adopt a consumer education program which shall be integrated
into existing curricula of all public and private schools from the primary to the secondary



level.
A continuing consumer education program for out-of-school youth and adults shall
likewise be developed and undertaken.
The consumer education program shall include information on the following
a) the consumer as 2 responsible member of society bears the responsibility
to develop the following traits and to act pursuant to such
responsibilities:

i. critical awareness or the responsibility to be alert and
questioning about the use of and price and quality of goods
one uses

ji, assertiveness which is the responsibility to assert one’s self
and act so one is assured of a fair deal, aware that for as
long as one remains to be a passive consumer one will
continue to be exploited;

iii. social concern which is the responsibility to be aware of the
impact of his consumption on other citizens, especially the
disadvantaged; and

iv. environmental awareness which is the responsibility to
understand the environmental consequences of the
consumption, recognizing one’s individual and social
esponsibility to conserve natural resources for future
generations

b) consumer rights;

c) the actions that may be undertaken and the agencies of the government
that one can approach to assert one’s consumer rights;

) practical problems the consumer faces in daily life.

Sec. 67. General Principles on Advertisement ~ Advertising must provide the general
public with relevant and truthful information on products and services, thereby helping
‘consumers make informed choices.

The advertising industry shall continuously improve the levels and standards of
advertising not only to satisfactorily inform and persuade the public about the advantage and
benefits that may be derived from products and services, but to protect as well, the rights of
consumers to be informed adequately and to healthful and safe living conditions and
environment.

Sec. 68. Presentation of Advertisements — (1) Claims of products and service properties
or their intended usage should be clearly presented and should not mislead or be likely to
mislead the persons to whom they are addressed by inaccuracy, ambiguity, exaggeration or
omission.

(2) Any test or demonstration may be used only if it directly proves the claimed product or
service property or characteristics and should be presented clearly and accurately.

(3) Corporate advertising must be fair, truthful and accurate; it should not contain any
exaggerations or sweeping generalizations that may mislead the public regarding the
advertiser or the attributes of its products or services. Where the advertisements contain
specific claims regarding the company or its products or services, such claims must be
verifiable and subject to substantiation in the same manner as regular product or service
advertisements.

Sec. 69. False, Deceptive or Misleading Advertisements. - It shall be unlawful for any
person to disseminate or to cause the dissemination of any false, deceptive or misleading
advertisement by Philippine mail or in commerce by print, radio, television, outdoor

32



advertisement, internet, mobile phone, or other medium for the purpose of inducing or which
is likely to induce directly or indirectly the purchase of consumer products or services.

‘An advertisement shall be false, deceptive or misleading if it is not in conformity with
the provisions of this Act or if it is misleading in respect to material content. In determining
whether any advertisement is false, deceptive or misleading, there shall be taken into
account, among other things, not only representations made or any combination thereof, but
also the extent to which the advertisement fails to reveal material facts in the light of such
representations, or materials with respect to consequences which may result from the use or
application of consumer products or services to which the advertisement relates under the
conditions prescribed in said advertisement, or under such conditions as are customary or
usual.

Sec.70. Price Comparisons. - Comparative price advertising by sellers of consumer
products or services shall conform to the following conditions:

(a) Where the comparison relates to a former price of the seller, the item compared shall
either have been sold at that price within the ninety (90) days immediately preceding the
date of the advertisement, or it shall have been offered for sale for at least four (4) weeks
during such ninety-day period. If the comparison does not relate to an item sold or offered for
sale during the ninety-day period, the date, time or seasonal period of such sale or offer shall
be disclosed in the advertisement

(b) Where the comparison relates to a seller's future price, the future price shall take effect
on the date disclosed in the advertisement or within ninety (90) days after the price
comparison is stated in the advertisement. The stated future price shall be maintained by the
seller for a period of at least four (4) weeks after its effective date: Provided, That
compliance thereof may be dispensed with in case of circumstances beyond the seller's
control

(c) Where the comparison relates to a competitors price, the competitor's price shall relate
to the consumer products or services advertised or sold in the ninety-day period and shall be
representative of the prices similar consumer produets or services are sold or advertised in
the locality where the price comparison was made.

Sec. 71. Credit Advertising. - No advertisement to aid, promote, or assist, directly or
indirectly, any extension of consumer credit may state that a specific periodic consumer
credit amount or installment amount can be arranged, unless the creditor usually and
customarily arranges credit payment or installments for that period and in that amount or
state that a specified down payment is required in any extension of consumer credit, unless
the creditor usually or customarily arranges downpayment in that amount.

Sec. 72. Advertising of Open-End Credit Plan. - In case of an open-end credit plan, the
rate of interest and other material features of the plan shall be disclosed in the
advertisement

Sec. 73. Coverage — (1) The provisions of this Act shall apply to the Philippine advertising
‘community which includes advertisers, advertising agencies, media and advertising support
groups.

(2) The provisions of this Act shall not apply to the following:

public service and emergency announcements of utility companies.

religious, political and public issue advertisements and announcements, except
where these involve or seek to promote commercial transactions.

ii, standard transport announcements, classified advertisements and obituaries.

Sec. 74. Specific Claims — (1) Ingredient Advertising —



a) Advertisements should not contain any reference which could lead the public to
assume that a product contains a specific ingredient unless the ingredient’s
quantities and properties as well as the material benefit that results from its inclusion
in the product formulation have been technically substantiated and approved by the
concerned department.

b) Advertisements should not imply that a certain benefit is due to a specific ingredient
unless a verifiable cause and effect relationship exists and approved by the
concemed department.

(2) Professional date references — The results of bona fide research, surveys, or tests
relating to a product should not be presented inaccurately or in a misleading manner in any
advertisement, nor should it claim any implication beyond those clearly established by
research, survey or test.

(3) Scientific claims — (a) Visual representations of laboratory settings and/or use of images
of professionals in authority such as doctors may only be employed provided the research
was conducted in the laboratory except when prohibited by existing provisions of law or
policies of the concerned department.

(b) In case of references to tests by professionals or institutions such as doctors,
engineers, research foundations, documented and authoritative evidence should be
submitted to substantiate such tests and the claims based thereon

(4) Number 1 or leadership claim — No number 1 or “no. 1" claim with respect to any product
or service shall be allowed unless it is clearly delineated and qualified as to render the claim
objectively verifiable. The claim should, in any case, be substantiated

(8) Testimonials — (a) Testimonial claims relating to the product being advertised should be
genuine and truthful and must have prior approval from the concerned department for use in
such advertisement
(b) Individual person or persons endorsing a product or service in communication
materials and who are presented as experts must have demonstrable credentials to
substantiate the claimed expertise. The endorsement must be supported by an actual
exercise of the expertise in evaluating the product or service features or characteristics.
Such evaluation must be relevant and available to an ordinary consumer's use of or
experience with the product.
(c) Endorsements by an organization are viewed as judgment or judgments by a group
whose collective experience outweighs that of an individual member. The advertiser must
provide evidence that the organization's endorsement was reached by a process
sufficient to ensure that it reflects the collective judament of the organization.
(d) Endorsers shall be actual users of products they endorse
(e) Non-doctors shall not be allowed to endorse medicines and medical devices.

An organization may be considered legitimate for purposes of lawfully and truthfully
endorsing a product if it is duly registered in the Securities and Exchange Commission and
can present proof of its existence for at least one year.

Sec. 75. New Products. - The concerned department shall regularly update the list of new
consumer products and to cause the publication by the respective manufacturers or
importers of such new products with the appropriate descriptions in a newspaper of general
circulation.

Sec. 76. Additional Powers, Functions and Duties of Concerned Departments. - In
addition to their powers, functions and duties under existing laws, the concerned department
shall perform the following powers, functions and duties:

a. to administer and supervise accordingly within their respective jurisdictions the

34


implementation of this Act and its implementing rules and regulations;

b. to undertake researches, develop and establish quality and safety standards for
consumer products in coordination with other government and private agencies
closely associated with these products;

¢. to inspect and analyze consumer products for purposes of determining conformity
to established quality and safety standards,

. to levy, assess, collect and retain fees as are necessary to cover the cost of
inspection, certification, analysis and tests of samples of consumer products and
materials submitted in compliance with the provisions of this section;

@. to investigate the causes of and maintain a record of product-related deaths,
illnesses and injuries for use in researches or studies on the prevention of such
product-related deaths, illnesses and injuries.

f. to accredit independent, competent non-government bodies, to assist in (1)
monitoring the market for the presence of hazardous or non-certified products
and other forms of violations under Section 84 of this Act and (2) other
appropriate means to expand the monitoring and enforcement outreach of the
department in relation to its manpower, testing and certification resources at a
given time.

g. to accredit independent competent testing laboratories

Sec. 77. Applicable Law on Warranties. - The provisions of the Civil Code on conditions
and warranties shall govern all contracts of sale with conditions and warranties.

Sec. 78. Additional Provisions on Warranties. - In addition to the Civil Code provisions on
sale with warranties, the following provisions shall govern the sale of consumer products
with warranty:

(a) Terms of express warranty. - Any seller or manufacturer who gives an express warranty
shall
i. set forth the terms of warranty in clear and readily understandable
language and clearly identify himself as the warrantor,
li, identify the party to whom the warranty is extended;
ili, state the products or parts covered;
iv. state what the warrantor will do in the event of a defect, malfunction of
failure to conform to the written warranty and at whose expense;
v. state what the consumer must do to avail of the rights which accrue to the
warranty; and
vi, stipulate the period within which, after notice of defect, malfunction or
failure to conform to the warranty, the warrantor will perform any obligation
under the warranty.
(b) Express warranty - All written warranties or guarantees issued by a manufacturer,
producer, or importer shall be operative from the moment of sale.
i, Sales Report. - All sales made by distributors of products covered by this
Section shall be reported to the manufacturer, producer, or importer of the
product sold within thirty (30) days from date of purchase, unless
otherwise agreed upon. The report shall contain, among others, the date
of purchase, model of the product bought, its serial number, name and
address of the buyer. The report made in accordance with this provision
shall be equivalent to a warranty registration with the manufacturer,
producer, or importer. Such registration is sufficient to hold the
manufacturer, producer, or importer liable, in appropriate cases, under its
warranty.
ii, Failure to make or send report. - Failure of the distributor to make the
report or send them the form required by the manufacturer, producer, or
importer shall relieve the latter of its liability under the warranty: Provided,

35


however, That the distributor who failed to comply with its obligation to
send the sales reports shall be personally liable under the warranty. For
this purpose, the manufacturer shall be obligated to make good the
warranty at the expense of the distributor.

iii, Retail. - The retailer shall be subsidiary liable under the warranty in case
Of failure of both the manufacturer and distributor to honor the warranty. In
such case, the retailer shall shoulder the expenses and costs necessary
to honor the warranty. Nothing therein shall prevent the retailer from
proceeding against the distributor or manufacturer.

iv. Enforcement of warranty or guarantee. - - The warranty rights can be
enforced by presentment of a claim. To this end, the purchaser needs only
to present to the immediate seller either the warranty card or the official
receipt along with the product to be serviced or returned to the immediate
seller. No other requirement documentary or otherwise shall be demanded
from the purchaser. If the immediate seller is the manufacturer's factory or
showroom, the warranty shall immediately be honored. If the product was
purchased from a distributor. the distributor shall likewise immediately
honor the warranty. In the case of a retailer other than the distributor, the
former shall take responsibility without cost to the buyer of presenting the
warranty claim to the distributor in the consumer's behalf.

v. Record of purchases. - Distributors and retailers covered by this Section
shall keep a record of all purchases covered by a warranty or guarantee
for such period of time corresponding to the lifetime of the product's
respective warranties or guarantees.

vi. Contrary stipulations - All covenants, stipulations or agreements contrary
to the provisions of this Section shall be without legal effect.

(©) Designation of warranties. - A written warranty shall clearly and conspicuously designate
such warranty as:

i. “Full warranty" if the written warranty meets the minimum requirements
set forth in paragraph(d); or
“Limited warranty” if the written warranty does not meet such minimum
requirements.

(d) Minimum standards for warranties. - For the warrantor of a consumer product to meet the
minimum standards for warranty, he shal!

i. remedy such consumer product within 2 reasonable time and without
charge in case of a defect, malfunction or failure to conform to such
written warranty:

ii. permit the consumer to elect whether to ask for a refund or replacement
without charge of such product or part, as the case may be, where after
reasonable number of attempts to remedy the defect or malfunction, the
product continues to have the defect or to malfunction.

The warrantor will not be required to perform the above duties if he
can show that the defect, malfunction or failure to conform to a written
warranty was caused by damage due to unreasonable use thereof.

(e) Duration of warranty. - The seller and the consumer may stipulate the period within which
the express warranty shall be enforceable. If the implied warranty on merchantability
accompanies an express warranty, both will be of equal duration.
Any other implied warranty shall endure not less than sixty (60) days nor more than one (1)
year following the sale of new consumer products.

(f) Breach of warranties. - (1) In case of breach of express warranty, the consumer may elect
to have the goods repaired or its purchase price refunded by the warrantor. In case the
repair of the product in whole or in part is elected, the warranty work must be made to
conform to the express warranty within thirty (30) days by either the warrantor or his

36


Tepresentative. The thirty-day period, however, may be extended by conditions which are
beyond the control of the warrantor or his representative. In case the refund of the purchase
price is elected, the amount directly attributable to the use of the consumer prior to the
discovery of the non-conformity shall be deducted.

(2) In case of breach of implied warranty, the consumer may retain the goods and

recover damages, or reject the goods, cancel the contract and recover from the seller so
much of the purchase price as has been paid, including damages.

(3) Manufacturer's or distributors must maintain a service center that consumers can

easily reach for complaints and inquiries by phone, email, or other effective means.
Consumers must not be made to suffer great inconveniences in contacting manufacturers to
claim warranties and other needed services.

Sec. 79. Warranties in Supply of Services. ~

a)

b)

In every contract for the supply of services to a consumer made by a seller in the course
of a business, there is an implied warranty that the service will be rendered with due care
and skill and that any material supplied in connection with such services will be
reasonably fit for the purpose for which it is supplied

Where a seller supplies consumer services in the course of a business and the
consumer, expressly or by implication, makes known to the seller the particular purpose
for which the services are required, there is an implied warranty that the services
supplied under the contract and any material supplied in connection therewith will be
reasonably fit for that purpose or are of such a nature or quality that they might
reasonably be expected to achieve that result, unless the circumstances show that the
consumer does not rely or that it is unreasonable for him to rely, on the seller's skill or
judgment

Sec. 80. Professional Services. - The provision of this Act on warranty shall not apply to
professional services of certified public accountants, architects, engineers, lawyers,
veterinarians, optometrists, pharmacists, nurses, nutritionists, dietitians, physical therapists,
brokers, medical and dental practitioners and other professionals engaged in their respective
professional endeavors.

Sec, 81. Prohibited Acts. it shall be unlawful for any person to:

a) manufacture for sale, offer for sale, distribute in commerce, or import into the
Philippines any consumer product which is not in conformity with an applicable
consumer product quality or safety standard promulgated in this Act;

b) manufacture for sale, offer for sale, distribute in commerce, or import into the
Philippines any consumer product which has been declared as banned consumer
product by a rule in this Act;

¢) refuse access to or copying of pertinent records or fail or refuse to permit entry of or
inspection by authorized officers or employees of the department;

4) fail to comply with an order issued under the provisions relating to notifications of
substantial product hazards and to recall, repair, replacement or refund of unsafe
products;

e) fail to comply with the rule prohibiting stockpiling

f) forge, counterfeit, simulate, or falsely represent or without proper authority use any
mark, stamp, tag, label, or other identification device authorized or required by
regulations promulgated under the provisions of this Act,

g) use to one’s own advantage, or revealing, other than to the Department or to the
courts when relevant in any judicial proceeding under this Act, any information
concerning any method or process which as a trade secret is entitled to protection;

h) alter, mutilate, destroy, obliterate, or remove the whole or any part of the labeling of,
or the doing of any other act with respect to a food, drug, device, or cosmetic, if such
act is done while such product is held for sale (whether or not the first sale) and
results in such product being adulterated or mistabeled;

37


i) use, in labeling, advertising or other sales promotion, of any reference to any report
or analysis furnished in compliance with Section 19 of Executive Order 175, series of
1987 as amended by Republic Act 9711;

j) manufacture, import, export, sell, offer for sale, distribute, or transfer any health
product which is not registered with the Department pursuant to RA 3720 as
amended by Republic Act 9711;

k) introduce or deliver for introduction into commerce of any mislabeled, adulterated or
banned consumer or health product;

1) alter, mutilate, destroy, obliterate or remove the whole or any part of the label of a
mislabeled, or banned consumer or health product if such act is done while the
substance is in commerce or while the substance is held for sale, whether or not itis
the first sale;

m) receive in commerce any mislabeled, adulterated or banned consumer or health
product and the delivery or preferred delivery thereof at cost or otherwise;

n) refuse without any valid legal cause by the local manufacturer or any person
obligated under the warranty or guarantee to honor a warranty or guarantee issued;

©) unreasonably delay by the local manufacturer or any person obligated under the
warranty or guarantee in honoring the warranty;

p) remove a product's warranty card for the purpose of evading said warranty obligation;

q) falsely represent in an advertisement as to the existence of a warranty or guarantee.

1) Itshall be unlawful for airline companies operating in the Philippines to:

i. charge a rebooking fee of more than Two hundred pesos (PhP200).

ii charge an amount of more than Three hundred pesos (PhP300.00) for
cancellation fees, no show fees or any other penalties related to
cancellation and rebooking of flights.

ili, enforce a forfeiture policy whereby a passenger who has bought a ticket
but misses his flight is not allowed or cannot rebook his ticket nor be
refunded the fare amount.

iv. Forego in their advertisements the exact number of seat per flight that
they have allocated for their promo fares.

Sec. 82. Fraudulent Practices Relative to Weights and Measures. — The following acts

relating to weights and measures are prohibited
a) for any person other than the official sealer or one’s duly authorized representative to

place or attach an official tag, seal, sticker, mark, stamp, brand or other characteristic

In used to indicate that such instrument of weight and measure has officially been
tested, calibrated, sealed or inspected;

b) for any person to imitate any seal, sticker, mark, stamp, brand, tag or other
characteristic sign used to indicate that such instrument of weight or measures has
been offically tested, calibrated, sealed or inspected;

c) for any person other than the official sealer or one's duly authorized representative to
alter in any way the certificate or receipt given by the official sealer or the duly
authorized representative as an acknowledgment that the instrument for determining
weight or measure has been fully tested, calibrated, sealed or inspected;

d) for any person to make or knowingly sell or use any false or counterfeit seal, sticker,
brand, stamp, tag, certificate or license or any dye for printing or making the same or
any characteristic sign used to indicate that such instrument of weight or measure
has been officially tested, calibrated, sealed or inspected;

) for any person other than the official sealer or the duly authorized representative to
alter the written or printed figures, letters or symbols on any official seal, sticker,
receipt, stamp, tag, certificate or license used or issued

f) for any person to use or reuse any restored, altered, expired, damaged stamp, tag
certificate or license for the purpose of making it appear that the instrument of weight
of measure has been tested, calibrated, sealed or inspected;

g) for any person engaged in the buying and selling of consumer products or of

38


furnishing services the value of which is estimated by weight or measure to possess,
use or maintain with intention to use any scale, balance, weight or measure that has
not been sealed or if previously sealed, the license therefor has expired and has not
been renewed in due time:

h) for any person to fraudulently alter any scale, balance, weight, or measure after it is
officially sealed:

i) for any person to knowingly use any false scale, balance, weight or measure,
whether sealed or not

j)_ for any person to fraudulently give short weight or measure in the making of a scale;

k) for any person, assuming to determine truly the weight or measure of any article
bought or sold by weight or measure, to fraudulently misrepresent the weight or
measure thereof: or

}) for any person to procure the commission of any such offense abovementioned by
another.

Instruments officially sealed at some previous time which have remained unaltered
and accurate and the seal or tag officially affixed thereto remains intact and in the same
position and condition in which it was placed by the official sealer or the duly authorized
representative shall, if presented for sealing, be sealed promptly on demand by the official
sealer or the authorized representative without penalty except a surcharge fixed by law or
regulation.

Sec. 83. Minimum Requirements for Accreditation. - The following shall be the minimum
requirements for accreditation or repair and service firms:
a. the duly registered business name, firm name or style of the firm;
b. date of issue and effectivity of the certificate of accreditation;
. number and skills of technical personnel; and
d. required license for the repair or servicing of any consumer product as required
by special laws.

Sec. 84, Accreditation of Repair and Service Firm. - No person shall operate a repair and
service firm or act as technical personnel therein without first being accredited by the
concerned department

Sec. 85. Certification of Accreditation. - Upon compliance with the requirements for
accreditation, the concemed department shall issue the corresponding certificate of
accreditation. A separate certificate shall be required for each branch of an enterprise
located in areas outside of the main office. However. with respect to repair and service
centers of factory authorized representatives of franchised dealers, such centers may
display a certified true copy of the certificate of accreditation of the parent company.

Sec. 86. Suspension, Revocation or Cancellation of Certification of Accreditation. -
Any certificate of accreditation may be suspended, revoked or cancelled by the concerned
department, for cause, after due notice and hearing.

Sec. 87. Distribution Facilities for Essential Consumer Goods and Services. — (a) The

State shall, where appropriate, consider:
() Adopting or maintaining policies to ensure the efficient distribution of goods and
services to consumers; where appropriate, specific policies should be considered to
ensure the distribution of essential goods and services where this distribution is
endangered, as could be the case particularly in rural areas. Such policies could
include assistance for the creation of adequate storage and retail facilities in rural
centers, incentives for consumer self-help and better control of the conditions under
which essential goods and services are provided in rural areas,

39


(ii) Encouraging the establishment of consumer cooperatives and related trading
activities, as well as information about them, especially in rural areas.

(b) Manufacturers and distributors of food and beverage products are required to assist the
government in raising public awareness on the significance of adequate labeling and in the
interpretation of information and data contained on such labels. They shall endeavor to
assist in educating consumers insofar as quality products are concerned.

Sec. 88. Consumer Complaints. - The concemed Department as specified in Section 8 of
this Act may commence an investigation upon petition or upon letter-complaint from any
consumer: Provided, That, upon a finding by the department of prima facie violation of any
provisions of this Act or any rule or regulation promulgated under its authority, it may motu
proprio or upon verified complaint commence formal administrative action against any
Person who appears responsible therefor. The Department shall establish procedures for
systematically logging in, investigating and responding to consumer complaints into the
development of consumer policies, rules and regulations, assuring as far as practicable
simple and easy access on the part of the consumer to seek redress for his grievances

The State shall encourage all enterprises to resolve consumer disputes in a fair,
expeditious and informal manner, and to establish voluntary mechanisms, including advisory
services and informal complaints procedures, which can provide assistance to consumers.

Sec. 89. Consumer Arbitration Officers. - The concerned Department Secretaries shall
appoint as many qualified consumer arbitration officers as may be necessary for the
effective and efficient protection of consumer rights: Provided, However, That there shall be
not more than ten (10) consumer arbitration officers per province, including the National
Capital Region

Sec. 90. Consumer Arbitration Officers; Qualifications. - The consumer arbitration officer
must be a college graduate with at least three (3) years experience in the field of consumer
protection and shall be of good moral character.

Sec. 91. Arbitration Officers; Jurisdiction. - The consumer arbitration officers shall have
original and exclusive jurisdiction to mediate, conciliate, hear and adjudicate all consumer
complaints: Provided, however, That this does not preclude the parties from pursuing the

Sec. 92. Investigation Procedure. —

a. The consumer arbitration officer shall conduct hearings on any complaint
received by him or referred by the National Consumer Affairs Council created
under Section 96 of this Act.

b. Parties to the case shall be entitled to notice of the hearing, and shall be
informed of the date, time and place of the same. A copy of the complaint
shall be attached to the notice.

c. The Department shall afford all interested parties the opportunity to submit a
statement of facts, arguments, offers of settlements or proposals of
adjustments.

d. The consumer arbitration officer shall first and foremost ensure that the
contending parties come to a settlement of the case.

e. In the event that a settlement has not been effected, the arbitration officer
may now proceed to formally investigate, hear and decide the case.

f, The consumer arbitration officer may summon witnesses, administer oaths
and affirmations, issue subpoena and subpoena duces fecum, rule upon
offers of proof and receive relevant evidence, take or cause deposition to be

40


taken whenever the ends of justice would be served thereby, regulate the
course of the hearing, rule on any procedural request or similar matter and
decide the complaint.

In hearing the complaint, the mediation officer shall use every and all
reasonable means to ascertain the facts in each complaint speedily and
objectively without regard to strict rules of evidence prevailing in suits before
courts. The complaints shall be decided within fifteen (15) days from the time
the investigation was terminated.

Sec. 93. Administrative Sanctions. - After investigation, any of the following administrative
Penalties may be imposed even if not prayed for in the complaint:

a

rie ae

the issuance of a cease and desist order, Provided, however, That such order
shall specify the acts that respondent shall cease and desist from and shall
require him to submit a report of compliance therewith within a reasonable
time:
the acceptance of a voluntary assurance of compliance or discontinuance
from the respondent which may include any or all of the following terms and
conditions:

i. an assurance to comply with the provisions of this Act and its

implementing rules and regulations;

ji. an assurance to refrain from engaging in unlawful acts and practices
or unfair or unethical trade practices subject of the formal
investigation:

ili, an assurance to comply with the terms and conditions specified in the
consumer transaction subject of the complaint,

iv. an assurance to recall, replace. repair, or refund the money value of
defective products distributed in commerce;

v. an assurance to reimburse the complaint out of any money or property
jn connection with the complaint, including expenses in making or
Pursuing the complaint, if any, and to file a bond to guarantee
compliance therewith.

restitution or rescission of the contract without damages;

condemnation and seizure of the consumer product found to be hazardous to
health and safety unless the respondent files a bond to answer for any
damage or injury that may arise from the continued use of the product;
automatic cancellation of a business name;

if the penalty under a separate law is higher, the higher penalty shall apply.

the imposition of any of the penalties herein provided is without prejudice to
any liability incurred under the warranty or guarantee.

the imposition of administrative fines in such amount as deemed reasonable
by the Department Secretary, which shall in no case be less than Fifty
Thousand Pesos (PhP50,000.00) nor more than One Million Pesos
(PhP1,000,000.00) depending on the gravity of the offense, and an additional
fine of not less than One Thousand Pesos (PhP1,000.00) of each day of
continuing violation.

if the administrative sanction under a separate law is higher, the higher
penalty shall apply.

Sec. 94. Appeal from Orders. - Any order, not interlocutory of the consumer arbitration
officer, becomes final and executory unless appealed to the Department Secretary
concemed within fifteen (15) days from receipt of such order. An appeal may be entertained
only on any of the following grounds:

a) grave abuse of discretion;

41


b) the order is in excess of the jurisdiction or authority of the consumer arbitration
officer,

¢) the order is not supported by the evidence or there is serious error in the findings
of facts.

Sec. 95. Decision on Appeal. - The Department Secretary concerned shall decide the
appeal within thirty (30) days from receipt thereof. The decision becomes final after fifteen
(15) days from receipt thereof unless a petition for certiorari is filed with the proper court.

Sec. 96. The National Consumer Affairs Council— To improve the management,
coordination and effectiveness of consumer programs, a National Consumer Affairs Council
is hereby created, hereinafter referred to as the “Council” which shall be attached under the
Department of Trade & Industry.

Sec. 97. Composition. The Council shall be composed of representatives from the
following government agencies and non-government organizations:
a) Department of Trade and Industry
b) Department of Health
¢) Department of Agriculture
d) Department of Education
e) Bangko Sentral ng Pilipinas
f) Department of Eneray
g) Four (4) representatives from the registered consumer organizations to be
appointed by the President from among its nominees submitted by the
various consumer groups in the Philippines; and
h) Two (2) representatives from the business/industry sector to be appointed
by the President from among the nominees submitted by the various
business organizations.
Government agency members of the Council shall be represented by no less than an
Assistant Secretary or its equivalent rank.

Sec. 98. Chairman; Functions. - The Council shall be headed and presided by the
Secretary of the Department of Trade and Industry. The Secretary shall establish, with the
concurrence of the Council, the policies, procedures and standards to govern the
implementation and interpretation of the functions and duties of the Council

Sec. 99. Per Diems of Members. - The members of the Council shall receive per diems for
‘every meeting actually attended at rates allowed under existing rules and regulations

Sec. 100. The Council Secretariat. — The Council shall appoint an Executive Director who
shall assist the Chairman and act as Secretary of the Council. The Council shall be assisted
by such number of personnel as it may deem necessary for the effective performance of its
functions.

Sec. 101. Powers and Functions of the Council. - The Council shall have the following
powers and functions:

a) to rationalize and coordinate the functions of the agencies charged with consumer
programs and enforcement of consumer related laws to the end that an effective,
coordinated and integrated system of consumer protection, research and
implementation and enforcement of such laws shall be achieved;

b) to recommend new policies and legislation or amendments to existing ones;

¢) to monitor and evaluate implementation of consumer programs and projects and to
take appropriate steps to ensure that concerned agencies take appropriate steps to
comply with the established priorities, standards and guidelines;

42


) to seek the assistance of government instrumentalities in the form of augmenting the
need for personnel, facilities and other resources;

@) to undertake @ continuing education and information campaign to provide the
‘consumer with, among others:

i. facts about consumer products and services;

ii, consumer rights and the mechanism for redress available to him;

ili, information on new concepts and developments on consumer
protection; and

iv. general knowledge and awareness necessary for a critical and better
judgment on consumption;

v. such other matters of importance to the consumer's general well-
being.

f)_ to prepare the annual work and financial plan of the Council for consolidation with the
budget of the Office of the President and for submission to the Department of Budget
and Management:

9) _in general, to promulgate such rules and regulations and to undertake such other
functions and duties as maybe essential and necessary to carry out the powers and
functions of the Council

Sec. 102, Consumer and Consumer Organizations’ Participation. — The concerned
departments shall extend support and establish procedures for recognition of the meaningful
participation by consumers or consumer organizations in the development and review of
department rules, policies, and programs. Such procedures shall include provisions for a
forum, where consumers can express their concerns and recommendations to decision-
makers. The departments shall exert efforts to inform consumers of pending proceedings
where their participation is important. Consumer representatives to the implementing
agencies and other public bodies shall be given full support and regular briefings by the
concerned agencies, as well as by the organizations that nominated them.

Sec. 103. Transitory Provision. - Until such time that the National Consumer Affairs
Council established under Section 96 of this Act is organized, the appointed members of the
Council pursuant to Republic Act 7394, shall serve in a hold-over capacity.

Sec. 104. Creation of the ConsumerNet, Rationale. - To meet the objectives to protect the
interest of the consumer, promote his general welfare and establish standards of business
and industry, a ConsumerNet, an inter-government agency cooperation for consumer
welfare and protection, is hereby established to address consumer-related complaints or
inquiries,

The ConsumerNet will strengthen the networking among member government
agencies and local government units (LGUs) identified under the ConsumerNet, particularly
tasked to provide and deliver consumer welfare and protection services and support
activities to all consumers,

‘network among government consumer-oriented agencies proves to be an essential
vehicle in establishing redress mechanism and effective action for the speedy resolution of
consumer issues and complaints, facilitate the flow of information and provide an avenue in
establishing linkage

It is under this context that a swift redress mechanism through the use of a dynamic
and integrated web-based information technology shall be established and implemented
among government consumer-oriented agencies in order to extend full support in resolving
issues/concerns/complaints.

Sec. 105. Objectives. — The ConsumerNet shall have the following objectives:
a) to strengthen networking among government agencies and local government units
with consumer protection functions in order to facilitate the timely flow of accurate
and relevant information to consumers and member agencies and/or offices;

43


b) to establish frontline facilities for consumer queries and concerns: to establish a
systematic and effective action on consumer issues and complaints; and

€) to provide an avenue for greater collaboration and complementation among
themselves

Sec. 106. Composition. — The ConsumerNet shall consist of an Executive Committee and
a Technical Working Committee, with the following composition

1. The Executive Committee shall be composed of the following government agencies’

a) Department of Trade And Industry;

b) Department of Agriculture

c) Department of Health

d) Department of Education

€) Department of Energy

f) Department of Transportation and Communications

2. The Technical Working Committee shall be composed of the following government
agencies and/or other concerned agencies and units:

a) Department of Trade And Industry - Bureau of Trade Regulation and Consumer
Protection (DTI-BTRCP)

b) Department of Agriculture

©) Department of Health

d) Department Of Education-Special Events Unit

e) Department of Energy - Consumer Welfare And Promotion Office

f) Department Of Environment and Natural Resources - Environmental Management
Bureau

9) Department of the Interior and Local Government

h) Department of Transportation and Communication - National Telecommunication
Commission and the Civil Aviation Board (CAB)

i) Land Transportation Franchising Regulatory Board

j) Metropolitan Waterworks And Sewerage System

k) Bangko Sentral Ng Pilipinas- Consumer Welfare Unit, Corporate Affairs Office,
‘Supervision and Examination Department

|) Securities And Exchange Commission- Compliance and Enforcement Department

Government agency members of the Executive Committee shall be represented by
no less than an Assistant Secretary or its equivalent rank, while those in the Technical
Working Committee shall be represented by a Bureau Director or its equivalent rank

Sec. 107. Functions and Powers. The ConsumerNet shall be mandated:

a) to monitor, facilitate and take appropriate actions on the speedy resolution of
consumer issues/concems, inquiries and complaints endorsed to concerned
member agencies,

b) to prepare a ConsumerNet action or commitment and financial plan on the basis of
submitted agencyloffice work pian

Sec. 108. Organization. The DTI Undersecretary for Consumer Welfare and Trade
Regulation Group shall be the Chairperson of the ConsumerNet. The Chairperson shall
convene and preside the quarterly meeting of the member agency of the ConsumerNet and
other participating government agencies. The Regional Director of the DTI shall be the
Chairperson of the ConsumerNet in the region, and he shall assist, support, recommend,
facilitate, coordinate and collaborate in the effective and efficient performance of the

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functions and responsibilities of the ConsumerNet

Sec. 109. Participation of Other Government Agencies. The ConsumerNet shall seek the
assistance of other government agencies who are not members of the technical working
committee, but, which are by their charter performing frontline activities that are related to
‘consumer welfare and protection, whenever deemed necessary in the effective and efficient
discharge of its functions and responsibilities under this Act

Sec. 110. The ConsumerNet Secretariat The DTI-Bureau of Trade Regulation and
Consumer Protection and the Regional Office of the DT! and/or their successor agencies
and units shall respectively act as the Secretariat to the ConsumerNet.

Sec. 111. Prescription. ~ All actions or claims accruing under the provisions of this Act and
the rules and regulations issued pursuant thereto shall prescribe within three (3) years from
the time the consumer transaction was consummated or the deceptive or unfair and
unconscionable sales act or practice was committed and in case of hidden defects, from
discovery thereof,

Sec. 112. Penalties. - (a) Any person, association, partnership or corporation who shall
violate any of the provisions of Sections 69 to 72 hereof shall, upon conviction, be
subject to a fine of not less than Fifty Thousand Pesos (PhPS0,000,00) but not more
than One Million Pesos (PhP1,000,000.00) or an imprisonment of not less than three
(3) years but not more than seven (7) years or both upon the discretion of the court

(b) Any violation of the provisions of Sections 35 to 40 hereof shall, upon conviction,
Subject the offenders to a fine of not less than Fifty Thousand Pesos (PhP50,000.00)
but not more than One Million Pesos (PhP1,000,000.00) or an imprisonment of not less
than three (3) years but not more than seven (7) years or both upon the discretion of
the court. If the violation was committed by a juridical person, the manager,
representative, director, agent or employee of said juridical person responsible for the
act shall be deported after service of sentence and payment of the fine without need for
further deportation proceedings.

(c)Any person who violates the provisions of Sections 24 to 26 hereof for the first time
shall be subject to a fine of not less than Fifty Thousand Pesos (PhPS0,000.00) but not
more than One Million Pesos (PhP1,000,000.00) or an imprisonment of not less than
three (3) years but not more than seven (7) years or both upon the discretion of the
court. A second conviction under this paragraph shall also carry with it the penalty of
revocation of business permit and license.

(d) Any person who shall violate the provisions of Section 77 hereof shall be subject to a fine
of not less than Fifty Thousand Pesos (PhP50,000.00) but not more than One Million Pesos
(PhP1,000,000.00) or an imprisonment of not less than three (3) years but not more than
seven (7) years or both upon the discretion of the court. A second conviction under this
paragraph shall also carry with it the penalty or revocation of the business permit and
license.

(e) Any person, natural or juridical, committing any of the illegal acts provided for in Sections
78 to 81 hereof, shall be liable for a fine of not less than Fifty thousand pesos
(PhP50,000.00) but not more than One million pesos (PhP1,000,000.00) or an imprisonment
of not less than three (3) years but not more than seven (7) years or both upon the discretion
of the court. The imposition of any of the penalties herein provided is without prejudice to
any liability incurred under the warranty or guarantee.

‘Sec. 113. Exemption from Penalties. - No publisher, radio broadcast, television licensee or
medium for the dissemination of advertising shall be liable, under this Act, by reason of their

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dissemination of any false advertisement unless they refuse, on the request of appropriate
authorities, to furnish the name and post office address of the manufacturer, packer,
distributor seller or advertising agency. This exemption shall not apply however, to the
manufacturer, packer, distributor or seller of the consumer product or service and the
advertising agency responsible for the false and misleading advertising,

Sec. 114. Implementing Rules and Regulations. — Within one hundred twenty (120) days
from the effectivity of this Act, the DTI shall in consultation with all the stakeholders
concerned, promulgate the Implementing Rules and Regulations (IRR) of this Act.

Sec. 115. Appropriations. - The amount necessary to implement the provisions of this Act
shall be included in the annual General Appropriations Act.

Sec. 116. Separability Clause. — If any of the provision of this Act is held unconstitutional or
invalid, the remainder of the Act or the provision not otherwise affected shall remain valid
and subsisting

Sec. 117. Repealing Clause. — Any law, presidential decree or issuance, executive order,
administrative rule or regulation contrary to or inconsistent with the provisions of this Act is
hereby repealed, modified or amended accordingly.

Sec. 118. Effectivity Clause. This Act shall take effect fifteen (15) days from the date of
Publication in at least two (2) newspapers of general circulation.

Approved,

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