Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

18TH CONGRESS
First Regular Session

HOUSE BILL No, 1185

Introduced by Representatives 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 unsafe products;

5) fail to comply with the rule prohibiting stockpiling


MIC]

This House Bill seeks to:

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

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

©) Undertake research on quality improvement of products and
investigation into causes and prevention of product related deaths, illness
and injurie

4) 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.

L L. ROMERO Ph.D. ENRICO A. PINEDA


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

18TH CONGRESS
First Regular Session

HOUSE BILL No, 1185

Introduced by Representatives 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 2019”.

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

ARTICLE 41. Penalties. —

a) —_ Any person who violates any of the provisions of Article 40
hereof shall, upon 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 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.

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
mislabeled 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 () 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 RA7394 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:

b)

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
rights 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

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.


c)

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 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 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 retailer:
covered by this Article shall keep a record of all purcha:
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

Designation of warranties. — A written warranty shall

clearly and conspicuously designate such warranty as:


1) “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.

) 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 warranty 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.

r) 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 III, 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 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 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
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 Fifty 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
carry 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. Article 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,
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.

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 required
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 refund

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;

4) 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 les



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 cach 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 Affai
Council, the sum of Twenty million pesos (P20,000,000.00)
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 circumstance: 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 laws, executive orders,
issuances, rules 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,