Republic of the Philippines
HOUSE OF REPRESENTATIVES.
Quezon City
SIXTEENTH CONGRESS
Second Regular Session

HOUSE BILL NO. 9472

Introduced by REP, ANTHONY G. DEL ROSARIO

EXPLANATORY NOTE

Article 2 of Republic Act 7394, otherwise known as the Consumer Act of the
Philippines, declares that it is the policy of the State to protect the interest of the
consumer, promote his general welfare and establish standards of conduct for business
and industry. The State is tasked through the Department of Trade and Industry (DTI) to
implement measures that will provide protection against deceptive, unfair and
unconscionable sales acts and practices. Penalties were provided when the law was
passed almost 22 years ago in the hope that the same will deter those who are more
inclined to violate its provisions.

However, there have been regular and numerous complaints against
unscrupulous traders and business establishments which render the penalties provided
for in the present law somewhat ineffective. It seems those who violate the law don't
care about the penalty and are even willing to take those penalties. Everyday new
violations are being committed to the detriment of the consumers who are robbed in
broad daylight of their hard-earned money. When such penalty is being used on a
regular basis against recidivists who violate the law then perhaps such penalty is not
working.

It is therefore imperative that stiffer penalties be imposed in order to establish an
environment that will provide better and greater protection for the consumer.
Substantially increasing the penalties will encourage conduct and behaviour geared
towards the observance of our consumer laws for the benefit of the consumers and for
businesses to compete efficiently and fairly. This is a timely reform that will give more
teeth to our current statute in order to put heavier burden to those who violate it, provide
redress to those whose rights are injured and enable those who implement it.

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

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*t77-—
ANTHONY )G. DEL ROSARIO


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
SIXTEENTH CONGRESS
Second Regular Session

HOUSE BILL No. 5472

Introduced by REP. ANTHONY G. DEL ROSARIO

AN ACT
AMENDING THE PENAL PROVISIONS OF REPUBLIC ACT 7394, OTHERWISE
KNOWN AS THE CONSUMER ACT OF THE PHILIPPINES

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

SECTION 1. Article 19 of Republic Act 7394, otherwise known as the Consumer Act of
the Philippines is hereby amended to read as follows:

Article 19. Penalties. - Any person who shall violate any provision of
Article 18 shall upon conviction, be subject to a fine of not less than [ One
thousand pesos ( P 1,000.00 ) but not more than Ten Thousand pesos (
P10,000.00 ) or imprisonment of not less than two (2) months but not more than
one (1) year, ] FIFTY THOUSAND PESOS ( P 50,000.00) BUT NOT MORE
THAN ONE MILLION PESOS ( P 1,000 000.00) OR 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 offender is an alien, he shall be
deported after service of sentence and payment of fine without further
deportation proceedings.

In case the offender is a naturalized citizen, he shall, in addition to the
penalty prescribed herein, suffer the penalty of cancellation of his naturalization
certificate and its registration in the civil register and immediate deportation after
service of sentence and payment of fine

Any director, officer or agent of a corporation who shall authorize, order or
perform any of the acts or practices any of the acts or practices constituting in
whole or in part a violation of Article by the corporation from the concerned
department, shall be subject to penalties to which that corporation may be
subject.

In case the violation is committed by, or in the interest of a foreign juridical
person duly licensed to engage in business in the Philippines, such license to
engage in business in the Philippines shall immediately be revoked.

SEC.2. Article 41 of Republic Act 7394, otherwise known as the Consumer Act of the
Philippines is hereby amended to read as follows:

Article 41. Penalties. — Any person who violates any of the provisions of
Article 40 hereof shall, upon conviction, be subject to imprisonment of not less
than [ one (1) year but not more than five (5) years, or a fine of not less than
Five thousand pesos (P 5,000.00) but not more than Ten Thousand pesos(
P10,000.00 )] , FIFTY THOUSAND PESOS ( P50,000.00) BUT NOT MORE


THAN ONE MILLION PESOS ( P1,000 000.00) OR IMPRISONMENT OF NOT
LESS THAN THREE (3) YEARS BUT NOT MORE THAN SEVEN (7) YEARS or
both such imprisonment and fine, in the discretion of the court.

Should the offense be committed by a juridical by a 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.

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
to 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.

SEC. 3. Article 47 of Republic Act 7394, Otherwise Known as the Consumer Act of the
Philippines is hereby amended to read as follows:

Article 47. Penalties, exception.- Any person who violates any of the provision
of Article 46 shall, upon conviction, be subject to a fine of not less than [ One
thousand pesos ( P1,000.00) or an imprisonment of not less than six (6) months
but not more than five (5) years] FIFTY THOUSAND PESOS ( P50,000.00) BUT
NOT MORE THAN ONE MILLION PESOS ( P 1,000 000.00) OR
IMPRISONMENT OF NOT LESS THAN THREE (3) YEARS BUT NOT MORE
THAN SEVEN (7) YEARS or both upon 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 therefor shall be penalized.

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 requested 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
substances is not a mislabelled Hazardous substance or banned hazardous
within the meaning of that term in this Act.

SEC. 4. Article 60 Of Republic Act 7394, otherwise known as the Consumer Act of the
Philippines is hereby amended to read as follows:

Article 60. Penalties.- Any person who shall violate the provisions of Title Ill,
Chapter |, shall upon conviction, be subject to a fine of not less than [ Five
Hundred Pesos (P 500.00) but not more than Ten Thousand Pesos (


P10,000.00) or imprisonment of not less than five (5) months but the not more
than one (1) year] FIFTY THOUSAND PESOS ( P50,000.00) BUT NOT MORE
THAN ONE MILLION PESOS ( P1,000 000.00 ) OR IMPRISONMENT OF NOT
LESS THAN THREE (3) YEARS BUT NOT MORE THAN SEVEN (7) YEARS or
both , upon the discretion of the court

In addition to the penalty provided for in paragraph (1), the court may
grant an injunction restraining the conduct constituting the contravention of the
provisions of Articles 50 and 51 and/or actual damages and such other orders
as it thinks fit to redress injury to the person caused by such conduct.

SEC. 5. Article 65 of Republic Act 7394, otherwise known as the Consumer Act of the
Philippines is hereby amended to read as follows

Article 65. Penalties. — Any person who shall violate the provisions of paragraph
(a) to (f) and paragraph (1) of article 64 or its implementing rules and regulations
shall, upon conviction, be subject to a fine of not less than [ Two hundred pesos
(P200.00) but not more than One Thousand pesos (P1000.00) or by
imprisonment of not more than one (1) year] FIFTY THOUSAND PESOS
(P50,000.00) BUT NOT MORE THAN ONE MILLION PESOS (P1,000 000.00 )
OR IMPRISONMENT OF NOT LESS THAN THREE (3) YEARS BUT NOT
MORE THAN SEVEN (7) YEARS or both upon the discretion of the court.

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 hundred pesos
(P500.00) or by imprisonment of not less than one (1) month but not more than
five (5) years] FIFTY THOUSAND PESOS (P50,000.00) BUT NOT MORE THAN
ONE MILLION PESOS (P 1,000,000.00) OR IMPRISONMENT OF NOT LESS.
THAN THREE (3) YEARS BUT NOT MORE THAN SEVEN (7) YEARS or both ,
upon the discretion of the court.

The owner — possessor of uses 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 [ Three hundred pesos (P300.00) or
imprisonment not exceeding one (1)year] FIFTY THOUSAND PESOS
(P50,000.00) BUT NOT MORE THAN ONE MILLION PESOS (P 1,000,000.00)
OR IMPRISONMENT OF NOT LESS THAN THREE (3) YEARS BUT NOT
MORE THAN SEVEN (7) YEARS or both , upon the discretion of the court,

SEC. 6. Article 73 of Republic Act. 7394, otherwise known as the Consumer Act of the
Philippines is hereby amended to read as follows:

Article 73. Penalties. — Any person who shall violate the provisions of
Article 67 shall be subject to a fine of not more than [Five thousand pesos
(P5,000.00) or an imprisonment of not less than three (3) months but not more
than two (2) years ] FIFTY THOUSAND PESOS (P50,000.00) BUT NOT MORE
THAN ONE MILLION PESOS (P 1,000,000.00) OR 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 his business permit and
license.

Any person, natural or juridical, committing any of the illegal acts provided
for in Chapter Ill, except with respect to Article 67, shall be liable for a fine of not


less than [ One thousand pesos ( P1,000.00) or imprisonment for a period at
least one (P50,000.00) or five (5) years] FIFTY THOUSAND PESOS
(P50,000.00) BUT NOT MORE THAN ONE MILLION PESOS (P 1,000,000.00)
OR 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. 7. Article 95 of Republic Act 7394, otherwise known as the Consumer Act of the
Philippines is hereby amended to read as follows:

Article 95. Penalties. - Any person who shall violate the provisions of
Title III, Chapter IV of this Act, or its implementing rules and regulations, except
Articles 81 to 83 of the same Chapter, shall be subject to a fine of not less than [
Five hundred pesos (P500.00) but not more than Twenty thousand pesos
(P20,000.00) or imprisonment of not less than three (3) months but not more
than two (2) years] FIFTY THOUSAND PESOS (P50,000.00) BUT NOT MORE.
THAN ONE MILLION PESOS (P 1,000,000.00) OR IMPRISONMENT OF NOT
LESS THAN THREE (3) YEARS BUT NOT MORE THAN SEVEN (7) YEARS or
both , upon 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 [ Two hundred pesos (P200.00) but not.
more than Five thousand pesos (P5,000.00) or Imprisonment of not less than
‘one (1) month but not more than one (1) year] FIFTY THOUSAND PESOS
(P50,000.00) BUT NOT MORE THAN ONE MILLION PESOS (P 1,000,000.00)
OR IMPRISONMENT OF NOT LESS THAN THREE (3) YEARS BUT NOT
MORE THAN SEVEN (7) YEARS or both , upon the discretion of the court.

Any person who violates the provision of Article 81 to 83 for the first time
shall be subject to a fine of not less than [ Two hundred pesos ( P200.00) but not
more than Five Thousand pesos (P5,000.00) or by imprisonment of not less than
‘one (1) month but not more than six (6) months ] FIFTY THOUSAND PESOS.
(P50,000.00) BUT NOT MORE THAN ONE MILLION PESOS (P 1,000,000.00)
OR IMPRISONMENT OF NOT LESS THAN THREE (3) YEARS BUT NOT
MORE THAN SEVEN (7) YEARS or both , at 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.

SEC. 8, Article 107 of Republic Act 7394, otherwise known as the Consumer Act of the
Philippines 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 [ Five thousand pesos (
P5,000.00) and by imprisonment of not more than one (1) year] FIFTY
THOUSAND PESOS (P50,000.00) BUT NOT MORE THAN ONE MILLION
PESOS (P 1,000,000.00) OR IMPRISONMENT OF NOT LESS THAN THREE
(3) YEARS BUT NOT MORE THAN SEVEN (7) 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

SEC.9. Article 123 of Republic Act 7394, otherwise known as the Consumer Act of the
Philippines is hereby amended to read as follows:

Article123. Penalties. - 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 Hundred pesos ( P500.00)
but not more than Five thousand Pesos (P 5,000.00) or an imprisonment of not
less than one (1) month but not more than (6) Months] FIFTY THOUSAND
PESOS (P50,000.00) BUT NOT MORE THAN ONE MILLION PESOS (P
1,000,000.00) OR IMPRISONMENT OF NOT LESS THAN THREE (3) YEARS
BUT NOT MORE THAN SEVEN (7) YEARS or both , upon the discretion of the
court.

Any violation of the provisions of Articles 116 to 121 shall, upon
conviction, subject the offenders to a fine of not less than [ Two hundred pesos
(P200.00) or an imprisonment of not less than one (1) month but not more than
six (6) months] FIFTY THOUSAND PESOS (P50,000.00) BUT NOT MORE
THAN ONE MILLION PESOS (P 1,000,000.00) OR 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.

SEC. 10. Article 164, paragraph (e) of Republic Act 7394, otherwise known as the
Consumer Act of the Philippines is hereby amended to read as follows:

Article164. 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:
the acceptance of a voluntary assurance of compliance or discontinuance
from 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 regulation;
an assurance to refrain from engaging in unlawful acts and practices or
unfair or unethical trade practices subject of the formal investigation;
an assurance to comply with the terms and conditions specified in the
consumer transaction subject of the complaint;
an assurance to recall , replace , repair, or refund the money value of
defective products distributed in commerce;
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
) restitution or rescission of the contract without damage;

b}

2

3)

4

§)


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;
AUTOMATIC CANCELLATION OF A BUSINESS NAME;

f) The imposition of administrative fines in such amount as deemed
reasonable by the Secretary , which shall in no case be less than [ Five
hundred pesos (P 500.00) ] FIFTY THOUSAND PESOS (P50,000.00) nor
more than [Three hundred thousand pesos (P300,000.00)] ONE MILLION
PESOS (P 1,000,000.00) depending on the gravity of the offense, and an
additional fine of [ not more than One thousand pesos ( P 1,000.00) ] NOT
LESS THAN ONE THOUSAND PESOS ( P1,000.00) [or] OF each day of
continuing violation

2

SEC.11. Separability Clause — If for any reason, any part of or provision of this Act is
declared unconstitutional or invalid, such parts not affected thereby shall remain in full
force and effect.

SEC.12 Repealing Clause — If for any reason, any part of or any part thereof
inconsistent with any of the provisions of this Act is hereby repealed , modified or
amended accordingly.

SEC.13. Effectively — This Act Shall Take Effect take effect fifteen (15) days after its
Publication in at least two (2) newspapers of general circulation.

Approved,