Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

528

5
HOUSE BILLNO. _

Introduced by REP. Michael L. Romero and Enrico A. Pineda

EXPLANATORY NOTE

In pursuant to RA No.7394, otherwise known as the “Consumer Act of the
Philippines”

It shall be unlawful for any person to:

1) 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;

2) 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:

3) 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 Article 11 relating to
notifications of substantial product hazards and to recall, repair,
replacement or refund of unsate products;

5) fail to comply with the rule prohibiting stockpiling.


This House Bill seeks to:

a) Assist the consumer in evaluating the quality, including safety,
performance and comparative utility of consumer products;

b) Protect the public against unreasonable risks of injury
associated with consumer products;

c) Undertake research on quality improvement of products and
investigation into causes and prevention of product related deaths, illness
and injuries:

d) Assure the public of the consistency of standardized products:
and

e) Develop and provide safety and quality standards for consumer

products, including performance or use-oriented standards, codes of
practice and methods of tests.

Thus, the early passage of this bill is earnestly requested.

L. ROMERO Ph.D am A. PINEDA



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon Cily

SEVENTEENTH CONGRESS
First Regular Session

5528

HOUSE BILL NO: —"

Introduced by REP. Michael L. Romero and Enrico A. Pineda

AN ACT
AMENDING REPUBLIC ACT NO.7394, OTHERWISE KNOWN AS THE
“CONSUMER ACT OF THE PHILIPPINES”, INCREASING ITS PENALTIES
AND SANCTIONS, RATIONALIZING ITS POLICIES AND GUIDELINES, AND
FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representative of the
Philippines in congress assembled:

SECTION 1. Title - this act shall be known as the “COMSUMER ACT OF THE
PHILIPPINES 2017".

SECTION 2. Article 41 of RA7394 is hereby amended to read as follows:

ARTICLE 41. Penalties. —

@) Any person who violates any of the provisions of Article 40
hereof shall, pon conviction, be subject to imprisonment of not less
than two (2) years but not more than six (6) years, or a fine of not
less than Twenty Five thousand pesos (P25,000.00) but not more


than Fifty thousand pesos (P50,000.00), or both such imprisonment
and fine, in the discretion of the Court.

Should the offense be committed by a juridical person, the
Chairman of the Board of Directors, the President. General
Manager, or the partners and/or the persons directly responsible
therefore shall be penalized.

b) No person shall be subject to the penalties of sub-article
{a) of this Article for (1) having sold, offered for sale or transferred
any product and delivered it, if such delivery was made in good
faith, unless he refuses to furnish on request of the Department, the
name and address of the person from whom he purchased or
received such product and copies of all documents, if any there
be, pertaining fo the delivery of the product to him; (2) having
violated Article 40(a) if he established a guaranty or undertaking
signed by, and containing the name and address of, the person
residing in the Philippines from whom he received in good faith the
Product, or (3) having violated Article 40(a), where the violation
exists because the product is adulterated by reason of containing a
color other than the permissible one under regulations promulgated
by the Department in this Act, if such person establishes a guaranty
or undertaking signed by, and containing the name and address, of
the manufacturer of the color, to the effect that such color is
permissible, under applicable regulations promulgated by the
Department in this Act.

SECTION 3. Article 47 of RA7394 is hereby amended to read as follows:

ARTICLE 47. Penalties, Exception —

a) Any person who violates any of the provisions of Article 46
shall, upon conviction, be subject to a fine of not less than Thirty
thousand pesos (P30,000.00) or an imprisonment of not less than one
(1) year but not more than six (6) years or both upon the discretion
of the court.


b) No person shall be subject to the penalties of paragraph
(a) of this Article for (1) having violated paragraph (c) of Article 46
unless he refuses to furnish, Upon request by the Department or his
representative, the name and address of the person from who he
purchased such hazardous substances and (2) having violated
paragraph (a) of Article 46, if he establishes a guaranty or
undertaking signed by, and containing the name and address of,
the person from whom he received in good faith, the hazardous
substance to the effect that the hazardous substance is not a
misiabeled hazardous substance or banned hazardous within the
meaning of that term in this Act.

SECTION 4. Article 65 of RA7394 is hereby amended to read as follows:

ARTICLE 65, Penalties —

a) Any person who shall violate the provisions of paragraphs
{a) to (f) and paragraph (I) of Article 64 or its implementing rules
and regulations shall, upon conviction, be subject to a fine of not
less than Five thousand pesos (P5,000.00) but not more than Twenty
Five thousand pesos (P25,000.00) or by imprisonment of not more
than two (2) years or both upon the discretion of the court.

b) Any person who shall violate the provisions of paragraph
(g) of Article 64 for the first time shall be subject to a fine of not less
than Five thousand pesos (P5,000.00) or by imprisonment of not less
than six (6) months but not more than six (6) years or both, upon the
discretion of the court.

c) The owner-possessor or user of instrument of weights and
measure enumerated in paragraphs (h) to (k) of Article 64 shall,
upon conviction, be subject to a fine of not less than Five thousand
pesos (P5,000.00) or imprisonment not exceeding two (2) years, or
both, upon the discretion of the court.


SECTION 5. Article 68 of RA73?4 is hereby amended to read as follows:

ARTICLE 68. 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:

1) set forth the terms of warranty in clear and readily
understandable language and clearly identify himself as the
warrantor;

2) identify the party to whom the warranty is
extended;

3) state the products or parts covered:

4) 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;

5) state what the consumer must do to avail of the
fights which accrue to the warranty; and

6) 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 — operative from moment of sale. — All
written warranties or guarantees issued by a manufacturer,
producer, or importer shall be operative from the moment of sale.

1) Sales Report. — All sales made by distributors of
products covered by this Article 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.

2) 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, however,
That the distributor who failed to comply with its obligation to
send the sales report 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.

3) Retail. — The retailer shall be subsidiarily 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.

4) Enforcement of waranty 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 documentary requirement
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.

5) Record of purchases. — Distributors and retailers
covered by this Article 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,

6) Contrary stipulations — null and void. — All
covenants, stipulations or agreements contrary to the
provisions of this Article shall be without legal effect.

c) Designation of warranties. — A written warranty shall
clearly and conspicuously designate such warranty as:

) “Full warranty" if the written warranty meets the
minimum requirements set forth in paragraph (d); or

2) “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 shall:

1) remedy such consumer product within a reasonable
time and without charge in case of a defect, malfunction or
failure to conform to such written warranty;

2) 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 waranty on merchantability
accompanies an express warranty, both will be of equal duration.

Any other implied warranty shall endure not less than ninety (90)
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 representative. 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 in the goods and recover damages, or
reject the goods, cancel and contract and recover from the
seller so much of the purchase price as has been paid,
including damages.

SECTION 6. Article 73 of RA7394 is hereby amended to read as follows:

ARTICLE 73. Penalties —

a) Any person who shall violate the provisions of Article 67
shall be subject to fine of not less than Ten thousand pesos


(P10,000.00) but not more than Fifty thousand pesos (P50,000.00) or
an imprisonment of not less than six (6) months but not more than.
three (3) 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 his business permit and license.

b) Any person, natural or juridical, committing any of the
illegal acts provided for in Chapter Il, except with respect to Article
67. shall be liable for a fine of not less than Ten thousand pesos
(P10,000.00) but not more than One hundred thousand pesos
(P100,000.00) or imprisonment for a period of at least two (2) years
but not more than six (6) years, or both, at 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.

SECTION 7. Article 95 of RA7394 is hereby amended to read as follows:

ARTICLE 95. Penalties —

a) Any person who shall violate the provisions of Title Ill,
Chapter IV of this Act. or its implementing rules and regulations.
except Articles 81 fo 83 of the same Chapter. shall be subject to a
fine of not less than Five thousand pesos (P5,000.00) but not more
than Fifty thousand pesos (P50,000.00) or imprisonment of not less
than six (6) months but not more than three (3) years or both, at the
discretion of the court:

Provided, That. if the consumer product is one which is not a food,
cosmetic. drug. device or hazardous substance, the penalty shall
be a fine of not less than Five thousand pesos (P5,000.00) but not
more than Fifty thousand pesos (P50,000.00) or imprisonment of not
less than six (6) months but not more than one (3) years or both, at
the discretion of the court.


b) Any person who violates the provisions of Article 81 to 83
for the first time shall be subject to a fine of not less than Five
thousand pesos (P5,000.00) but not more than Fifly thousand pesos
(P50,000.00) or by imprisonment of not less than six (6) months but
not more than three (3) years or both, at the discretion of the court.
A second conviction under this paragraph shall also cary with it the
penalty of revocation of business permit and license.

SECTION 8. Article 107 of RA7394 is hereby amended to read as follows:

ARTICLE 107. Penalties —

Any person who shall violate any provision of this Chapter or its
implementing rules and regulations with respect to any consumer
product which is not food, cosmetic. or hazardous substance shall
upon conviction, be subject to a fine of not less than Twenty Five
thousand pesos (P25,000.00) and by imprisonment of not more than
two (2) years or both upon the discretion of the court.

In case of juridical persons, the penalty shall be imposed upon its
president, manager or head. If the offender is an alien, he shall,
after payment of fine and service of sentence, be deported without
further deportation proceedings.

SECTION 9. Arlicle 123 of RA7394 is hereby amended to read as follows:

ARTICLE 123. Penalties —

a) Any person, association, partnership or corporation who
shall violate any of the provisions of Articles 110 to 115 shall, upon
conviction, be subject to a fine of not less than Five thousand Pesos
(P5,000.00) but not more than Fifty thousand pesos (P50,000.00) or
an imprisonment of not less than six (6) months but not more than
three (3) years or both upon the discretion of the court.


b) Any violation of the provisions of Articles 116 to 121 shall,
upon conviction, subject the offenders to a fine of not less than Five
thousand pesos (P5,000.00) but not more than Twenty Five thousand
pesos (P25,000.00) or an imprisonment of not less than six (6) months
but not more than two (2) years or both upon the discretion of the
court,

If the violation was committed by a juridical person, the manager,
fepresentative, director, agent or employee of said juridical person
fesponsible for the act shall be deported after service of sentence
and payment of the fine without need for further deportation
proceedings.

SECTION 10. Article 147 of RA7394 is hereby amended to read as follows:

ARTICLE 147. Penalties —

Any creditor who in connection with any credit transaction fails to
disclose to any person any information in violation of this Chapter or
the Implementing rules and regulations issued thereunder shall be
liable to such person in the amount of Five thousand pesos
(P5,000.00) or in amount equal to twice the finance charge
fequired by such creditor in connection with such transaction,
whichever is greater, except that such liability shall not exceed
Three thousand pesos (P15,000.00) for any credit transaction and
actual damages with the non-disclosure of the required
information.

Action to recover such penalty may be brought by such person
within six (6) months from the date of the occurrence of the
violation in any court of competent jurisdiction.

SECTION 11. Article 164 of RA7394 is hereby amended to read as follows:

ARTICLE 164. Sanctions. —


After investigation, any of the following administrative penalties
may be imposed even if not prayed for in the complaint:

a) 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:

b) 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:

1) an assurance to comply with the provisions of this
Act and its implementing rules and regulations;

2) an assurance to refrain from engaging in unlawful
acts and practices or unfair or unethical trade practices
subject of the formal investigation;

3) an assurance to comply with the terms and
conditions specified in the consumer transaction subject of
the complaint;

4) an assurance to recall, replace, repair, or retund
the money value of defective products distributed in
commerce:

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

c) restitution or rescission of the contract without damages;

d) 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:


e) the imposition of administrative fines in such amount as
deemed reasonable by the Secretary. which shall in no case be less
than Fifty thousand pesos (P50,000.00) nor more than Five hundred
thousand pesos (P500,000.00) depending on the gravity of the
offense, and an additional fine of not more than Five thousand
pesos (P5,000.00) or each day of continuing violation,

SECTION 12. Article 171 of RA7394 is hereby amended to read as follows:

ARTICLE 171. Appropriations —

For the initial operating expenses of the National Consumer Affairs
Council, the sum of Twenty million pesos (P20,000,000.00) is hereby
appropriated out of funds of the National Treasury not otherwise
appropriated.

Thereafter, such sums as may be necessary to carry out its purpose
shall be included in the General Appropriations Act (GAA).

SECTION 13. SEPARABILITY CLAUSE - If any provision or section of this
Act or the application thereof to any person or circumstances is held invalid, the
other provisions or sections of this Act shall remain valid, and the application of
such remaining provisions or sections to the other persons or circumstances, shall
not be affected thereby.

SECTION 14. Repealing Clause. All Jaws, executive orders, issuances,
tules and regulations inconsistent with this Act are hereby amended, repealed
or modified accordingly.

SECTION 15. EFFECTIVITY CLAUSE - This Act shall take effect fifteen
(15) days from the date of its publication in the Official Gazette or in at least two.
(2) newspapers of general circulation.

Approved.