Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Sixteenth Congress
Second Regular Session

072

HOUSE BILL NO.

Introduced by Honorable Sherwin T, Gatchalian

EXPLANATORY NO’

This bill seeks to amend certain provisions of Republic Act (RA) No. 7394,
otherwise known as the “Consumer Act of the Philippines, ” to provide broader protection
for consumers and to further strengthen their rights.

Section 13, Article XI of the 1987 Constitution provides:

“See. 13. The State shall pursue a trade policy that serves the
general welfare and uilizes all forms and arrangements of exchange on
the basis of equality and reciprocity.”

Pursuant to the above stated policy, Congress enacted RA 7394 in 1992 to ensure
the protection of the interests of the consumer, promote the general welfare and to
establish standards of conduct for business and industry. Since its enactment more than
20 years ago, many provisions of RA 7394 are no longer applicable and adequate to
address the prevailing situations at present. To ensure that the interests of the consumers
are promoted and protected, amendments to RA 7394 are imperative.

Accordingly, this measure also aims to increase the penalties of RA 7394 as the
existing penalties no longer ensure compliance ‘with the law and neither does it deter
violations to the provisions of the law.

In view of the foregoing, immediate passagy amestly sought.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Sixteenth Congress
Second Regular Session

HOUSE BILL NO. 5072

Introduced by Honorable Sherwin T. Gatchalian

AN ACT
GRANTING BROADER PROTECTION FOR CONSUMERS,
AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 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 1. Short Title. ~ This Act shall be known as the
“Consumer Act of 2014.”
SEC. 2. Article 2 of Republic Act (RA) No. 7394, otherwise known as

the “Consumer Act of the Philippines,” is hereby amended to read as
follows:
“ART. 2. Declaration of Policy. — It is the policy of the
State to protect the interests of the consumer, promote his
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) protection against hazards to health and safety;

b) protection against. deceptive, unfair and
unconscionable sales acts and practices;

c) provision of information and education to facilitate
sound choice and the proper exercise of rights by the consumer;

d) provision of adequate rights and means of redress; and

e) involvement of consumer representatives in the
formulation of social and economic policies.]

A) TO ACHIEVE AND MAINTAIN ADEQUATE
PROTECTION FOR THE CONSUMERS;

B) TO FACILITATE, PRODUCTION AND
DISTRIBUTION PATTERNS RESPONSIVE TO THE NEEDS

AND DESIRES OF CONSUMERS;


C) TO ENCOURAGE HIGH LEVELS OF ETHICAL,
CONDUCT FOR THOSE ENGAGED IN THE
PRODUCTION AND DISTRIBUTION OF GOODS AND
SERVICES TO CONSUMERS;

D) TO CURB ABUSIVE BUSINESS PRACTICES
BY ALL ENTERPRISES WHICH ADVERSELY AFFECT
CONSUMERS;

B) 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 GREATER CHOICE AT LOWER PRICES; AND

H) TO PROMOTE SUSTAINABLE,
CONSUMPTION.”

SEC. 3. The following articles are hereby inserted after Article 2 of
the same Act to read as follows:

“ART. 2-A. CONSUMER BILL OF RIGHTS — THE
GOVERNMENT, IN MAINTAINING AND

STRENGTHENING THE PROMOTION OF CONSUMER


INTEREST AND WELFARE IN HIS RELATION TO THE
BUSINESS AND INDUSTRY PRACTICE AS WELL AS
THE PRODUCTION AND DISTRIBUTION OF CONSUMER
PRODUCTS, SHALL ADOPT MEASURES OR
FORMULATE POLICES TAKING INTO ACCOUNT THE
FOLLOWING BASIC CONSUMER RIGHTS:

A) RIGHT TO BASIC NEEDS ~ THE CONSUMER
SHALL BE ENTITLED TO GUARANTEED SURVIVAL,
ADEQUATE FOOD, CLOTHING, SHELTER, HEALTH
CARE, EDUCATION AND SANITATION;

B) RIGHT TO CHOOSE — THE CONSUMER
SHALL BE ENTITLED TO CHOOSE PRODUCTS AT
COMPETITIVE PRICES WITH AN ASSURANCE OF
SATISFACTORY QUALITY;

C) RIGHT TO REPRESENTATION - THE
CONSUMER SHALL BE ENTITLED TO EXPRESS
CONSUMER INTERESTS AND BE INVOLVED IN THE
FORMULATION AND EXECUTION OF GOVERNMENT
POLICIES;

D) RIGHT TO REDRESS THE CONSUMER

SHALL BE ENTITLED TO COMPENSATION FOR


MISREPRESENTATION, SUBSTANDARD OR
DEFECTIVE GOODS OR UNSATISFACTORY SERVICES;

E) RIGHT TO CONSUMER EDUCATION — THE
CONSUMER SHALL BE ENTITLED TO ACQUIRE THE
KNOWLEDGE AND SKILLS NECESSARY TO MAKE AN
INFORMED CHOICE;

F). 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;

G) RIGHT TO A HEALTHY ENVIRONMENT

THE CONSUMER SHALL BE EN

ITLED TO LIVE AND
WORK IN AN ENVIRONMENT WHICH IS NEITHER
THREATENING NOR DANGEROUS AND WHICH
PERMITS A LIFE OF DIGNITY AND WELL-BEING; AND

H) RIGHT TO INFORMATION = THE

CONSUMER SHALL BE ENTITLED TO PROTECTION

AGAINST DISHONEST OR MISLEADING ADVERTISING
OR LABELING AND SHOULD BE PROVIDED WITH THE
FACTS AND INFORMATION NEEDED TO MAKE AN

INFORMED CHOICE.


ART. 2-B. CONSUMER RESPONSIBILITIES. IN
CONNECTION WITH THE BASIC RIGHTS STATED IN
THE PRECEDING SECTION, THE CONSUMER SHALL
EXERCISE THE FOLLOWING RESPONSIBILITIES:

A) CRITICAL AWARENESS — THE CONSUMER
SHALL BE MORE ALERT AND INQUIRING ABOUT THE
USE OF, THE PRICE AND QUALITY OF GOODS AND
SERVICES;

B) ACTION ~- THE CONSUMER SHALL ASSERT
AND ACT TO ENSURE THAT CONSUMERS WILL
ALWAYS GET A’ FAIR) DEAL TAKING INTO
CONSIDERATION THAT AS LONG AS A CONSUMER
REMAINS PASSIVE, CONSUMERS WILL CONTINUE TO
BE EXPLOITED;

C) SOCIAL CONCERN - THE CONSUMER
SHALL BE MORE AWARE OF THE IMPACT OF ONE’S
CONSUMPTION ON OTHER CITIZENS, ESPECIALLY
DISADVANTAGED OR POWERLESS, GROUPS,
WHETHER IN THE LOCAL, NATIONAL, OR
INTERNATIONAL COMMUNITY;

D) ENVIRONMENTAL AWARENESS — THE

CONSUMER SHALL UNDERSTAND THE


ENVIRONMENTAL CONSEQUENCES OF ~~ ONE’S
CONSUMPTION. THE CONSUMER SHOULD RECOGNIZE
INDIVIDUAL AND SOCIAL RESPONSIBILITY TO
CONSERVE NATURAL RESOURCES AND PROTECT THE
EARTH FOR FUTURE GENERATIONS; AND.

EB) SOLIDARITY — THE CONSUMER SHALL.
ORGANIZE CONSUMERS TOGETHER TO DEVELOP
THEIR STRENGTH AND INFLUENCE THE PROMOTION
AND PROTECTION OF THEIR INTERESTS.”

SEC. 4. Article 4 of the same Act is hereby amended to read as

follows:
“ART. 4. Definition of Terms. — For purposes of this Act, the
term:
@) Xxx;
XxX XxX XxX

n) "Consumer" means a natural person who is a
purchaser, lessee, recipient or prospective purchaser, lessor or
recipient of consumer products, services, [or] credit,
TECHNOLOGY, ADVERTISING OR PROMOTION, AND
OTHER ITEMS IN COMMERCE.

XxX XXX XxX


q) “Consumer products and services” means goods,
services and credits, debts or obligations, which are primarily
for personal, family, household or agricultural purposes, which
shall include but not limited to food, drugs, cosmetics, [and]
devices, PRODUCTS, MERCHANDISE, TECHNOLOGY
AND OTHER TRANSACTIONS OR MATTERS INTENDED
‘TO BE COVERED BY THIS ACT.

xxx pcg xxx

(u) “Cosmetics” means [(1) articles intended to be
rubbed, poured, sprinkled, or sprayed on, introduced into or
otherwise applied to the human body or any part thereof for

cleansing, beautifying, promoting attractiveness, or altering the

appearance, and (2) article intended for uses as a component of

any such article except that such term shall not include soap.]
ANY SUBSTANCE OR PREPARATION INTENDED TO BE
PLACED IN CONTACT WITH THE VARIOUS EXTERNAL,
PARTS OF THE HUMAN BODY OR WITH THE TEETH
AND THE MUCOUS MEMBRANES OF THE ORAL
CAVITY WITH A VIEW EXCLUSIVELY OR MAINLY FOR
CLEANSING, BEAUTIFYING, PROMOTING

ATTRACTIVENESS, ALTERING OR CHANGING THE


APPEARANCE, OR PROTECTING THE BODY OR
KEEPING IT IN GOOD CONDITION.

ar aor peed

w) "Credit card" means any card, plate, coupon book
or other credit SINGLE device existing for the purpose of
BEING USED FROM TIME TO TIME UPON
PRESENTATION TO obtain{ing] money, property, labor or
services OR ANYTHING OF VALUE on credit.

XXX XXX XXX

aj) "Guarantee" means an expressed or implied
assurance of the REAL quality, COST, PRICE, AND
PROMOTION of the consumer products and services offered
for sale or length of satisfactory use, COSTS OR OTHER
SIMILAR MATTERS to be expected from SUCH
CONSUMER PRODUCTS or SERVICES BASED ON

APPLICABLE = AND DOCUMENTS — IN

ACCORDANCE WITH THE LAW, MORALS, GOOD
FAITH AND PUBLIC POLICY.

Boog xxx xxx

at) “Mass media” refers to any means or methods used
to convey advertising messages to the public such as television,

radio, INTERNET, MOBILE PHONES AND SIMILAR


ELECTRONIC DEVICES, magazines, cinema, billboards,
posters, streamers, hand bills, leaflets, mails and the like.

xX XxX 20x

bm) "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 GIFT, OR
ANY SIMILAR SCHEME, as reward for TRANSACTING
FOR, RECEIVING, OR PURCHASING [the purchase of] a
product, security, service or winning in contest, game,
tournament and other similar competitions OR CHALLENGES
which involve determination of winner/s and which utilize mass
media or other widespread media of information such as
INFORMATION AND COMMUNICATIONS
TECHNOLOGY. It also means techniques purely intended to
increase the sales, patronage and/or goodwill of a product OR
SERVICE. ;

XxX AXX 2x

bn) "Seller" means a person engaged in the business of
selling consumer products AND SERVICES directly to
consumers. It shall include a supplier or distributor 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.

XXX XXX XXX

br) "Standard" means a set of conditions to be fulfilled
to ensure the quality and safety of a product AND SERVICE;

XXX XXX aoee
SEC. 5. Article 6 of the same Act is hereby amended to read as

follows:

“ART, 6, Implementing Agencies. — The provisions of

this Act and its implementing rules and regulations shall be

enforced by:

a) the Department of Health with respect to PROC!

food, drugs, cosmetics, de

es and HAZARDOUS substances;

b) the Department of Agriculture with respect to products

related to agriculture AND FISHERIES;
c) THE BANGKO SENTRAL NG PILIPINAS WITH
RESPECT TO CONSUMER CREDIT TRANSACTIONS; AND
D) the Department of Trade and Industry with respect to

other consumer products not specified above.”


SEC. 6. Article 8 of the same Act is hereby amended to read as
follows:
“ART. 8. 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 [two (2)] A newspaper{s] of general circulation [at
least once a week for a period of not less than one (1) month.]

IN THE OFFICIAL GAZET

3, OR IN THE OFFICIAL WEB
PORTAL OF THE DEPARTMENT OR AGENCY. 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. 7. Article 10 of the same Act is hereby amended to read as
follows:

“ART. 10. Injurious, Dangerous and Unsafe Products. -
Whenever the departments find, by their own initiative a 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 the
sound discretion of the department it may declare a consumer

product to be imminently injurious, unsafe or dangerous, and


order its immediate recall, ban or seizure from public salé 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. 8. Article 11 of the same Act is hereby amended to read as
follows:

“ART. 11. Amendment and Revocation of Declaration of
the Injurious, Unsafe or Dangerous Character of a Consumer
Product. — Any interested person may petition the 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 DO THE FOLLOWING WITHOUT
DELAY:

a) give notice to the public of the defect or failure to

comply with the product safety standards; [and]

b) give notice to each distributor or seller of such product[.];

AND

C) GIVE NOTICE, IN THE MOST PRACTICABLE
MEANS POSSIBLE, 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 A
REASONABLE TIME any or all of the following remedies to

the injured person:


a) to bring the product with a like or equivalent
product which complies with the applicable consumer product
standards which does not contain the defect;

b) to replace the product with a like or equivalent
product which complies with the applicable consumer piaet
standards which does not contain the defect;

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

d) 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. 9. A new Article denominated as Article 14-A is hereby inserted
after Article 14 of the same Act which shall read as follows:

“ART. 14-A. PHYSICAL SAFETY. ~ APPROPRIATE
POLICIES. SHOULD 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

16


GOVERNMENT SHOULD ALSO CONSIDER WAYS TO
ENSURE THAT CONSUMERS ARE PROPERLY
INFORMED OF SUCH HAZARDS.”
SEC. 10. Article 15 of the same Act is hereby amended to read as.
follows:

“ART. 15. Imported Products. — a) xxx

xxx XXX XXX

G) WHEN THE MANUFACTURE, SALE OR USE
OF A CONSUMER PRODUCT IS PROHIBITED IN THE
COUNTRY OF ORIGIN OF SUCH PRODUCT, THE
IMPORTATION, SALE OR USE OF SUCH PRODUCT IN
THE PHILIPPINES SHALL BE PROHIBITED.”
SEC. 11. Article 16 of the same Act is hereby amended to read as

follows:

“ART, 16. Consumer Products for Export. - The preceding
section on safety does not apply to any consumer product ift

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[.]; AND

C) CONSUMER PRODUCTS INTENDED FOR
EXPORT SHALL COMPLY WITH THE SAFETY
STANDARDS ENFORCED BY THE IMPORTING
COUNTRY, WHENEVER APPLICABLE.”

SEC. 12. Article 19 of the same Act is hereby amended to read as
follows:

“ART, 19. Penalties. - a) Any person who shall violate
any provision of Article 18 shall, upon conviction, be subject to
a fine of not less than One HUNDRED thousand pesos
[(P1,000.00)] (P100,000,00) but not more than [Ten] FIVE
HUNDRED thousand pesos [(P10,000.00)] (P500,000.00) or
imprisonment of not less than [two (2) months] THREE (3)
YEARS but not more than [one (1) year] 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.

XXX XXX a3"

SEC. 13. Article 41 of the same Act is hereby amended to read as

follows:


“ART. 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 [one (1) year] THREE
YEARS but not more than [five (5)] SEVEN (7) years [and]

OR fine of not less than [Five] ONE HUNDRED thousand

pesos [(5,000.00)] (P100,000.00) but not more than [Ten] FIVE

HUNDRED thousand pesos [(10,000.00)] (P500,000.00), or

both such imprisonment and fine, in the discretion of the Court.

XXX XXX wet

SEC. 14. Article 47 of the same Act is hereby amended to read as
follows:

“ART. 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 [One] FIFTY
thousand pesos [(P1,000.00)] (P50,000.00) or an imprisonment
of not less than [six (6) months] THREE (3) YEARS but not
more than [five (5)] SEVEN (7) years, or both, upon the
discretion of the court.

XXX XXX xxx.”

SEC. 15. Article 52 of the same Act is hereby amended to read as

follows:


“ART. 52. Unfair or Unconscionable Sales Act or
Practice. — An unfair or unconscionable sales act or practice by
a seller or supplier in connection with a consumer transaction
violates this Chapter whether it occurs before, during or after
the consumer transaction. 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 inimical to the interests of 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) Xxx

XXX XXX XxX

e) that the transaction that the seller or supplier
induced the consumer to enter into was excessively one-sided in
favor of the seller or supplier INCLUDING, BUT NOT

LIMITED TO, THE FOLLOWING CIRCUMSTANCES:


1) THE SELLER OR SUPPLIER IMPOSES UPON
THE CONSUMER TERMS AND CONDITIONS GROSSLY
DISADVANTAGEOUS TO THE LATTER WHO IS
REDUCED TO THE ALTERNATIVE OF ACCEPTING THE
CONTRACT OR LEAVING IT, COMPLETELY DEPRIVED
OF THE OPPORTUNITY TO BARGAIN ON EQUAL
FOOTING; AND.

2) THE SELLER OR SUPPLIER EMPLOYS AN

MARKETING PRACTICE THAT

SIGNIFICANTLY CONSTRAINS OR IMPAIRS OR IS
LIKELY TO SIGNIFICANTLY CONSTRAIN OR IMPAIR
THE CONSUMER’S FREEDOM OF CHOICE OR
CONDUCT WITH REGARD TO THE PURCHASE OF A
PRODUCT OR SERVICE THAT CAUSES THE
CONSUMER OR IS LIKELY TO CAUSE THE CONSUMER
TO ENTER INTO A CONSUMER TRANSACTION
DIFFERENT FROM THE ONE THE CONSUMER WOULD
HAVE INTENDED, OR WOULD NOT HAVE DONE
OTHERWISE.”

SEC. 16. Article 60 of the same Act is hereby amended to read as.

follows:


“ART. 60. Penalties. - a) Any person who shall violate
the provisions of Title III, Chapter 1, shall upon conviction, be
subject to a fine of not less than [Five Hundred Pesos
(P500.00)] TWENTY THOUSAND PESOS (P20,000.00) but
not more than [Ten] FIFTY Thousand Pesos [(P10,000.00))}
(P50,000.00) or imprisonment of not less than five (5) months
but not more than one (1) year or both, upon the discretion of
the court.

XXX XXX maxon?

SEC. 17. Article 62 of the same Act is hereby amended to read as
follows:

“ART, 62. Sealing and Testing of Instruments of Weights

and Measure. - All instruments for determining weights and

measures in all consumer and consumer related transactions

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 his 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 Chapter.
THE SAFEKEEPING AND MAINTENANCE OF

INSTRUMENTS FOR DETERMINING WEIGHTS AND


MEASURES SHALL BE UNDER THE CONTROL AND
SUPERVISION OF THE MARKET SUPERVISOR WHO
SHALL 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
SUPERVISION OR AN AUTHORIZED REPRESENTATIVE
REFLECTING THE CONTENTS OF SUCH RECORD
SHALL BE PRIMA FACIE EVIDENCE OF VIOLATION OF
THE PROHIBITED ACTS AS PROVIDED HEREIN.”

SEC. 18. Article 65 of the same Act is hereby amended to read as

follows:

“ART. 65. Penalties. - a) Any person who shall violate
the provisions of paragraphs (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)] FIVE THOUSAND PESOS (P5,000.00) but
not more than [One] TWENTY-FIVE thousand pesos
{(P1,000.00)] (P25,000.00) or by imprisonment of not more
than one (1) year, 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 hundred pesos (P500.00)] TEN
THOUSAND PESOS (P10,000.00) or by imprisonment of not
less than [one (1) month] SIX MONTHS but not more than
[five (5)] 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
[Three hundred pesos (P300.00)] TEN THOUSAND PESOS or
imprisonment not exceeding one (1) year, or both, upon the
discretion of the court.”

SEC. 19. Article 68 of the same Act is hereby amended to read as
follows:

“ART. 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

24


products with warranty:
a) xy
Bead 2x 2X

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] THE contract and recover from the seller so
much of the purchase price as has been paid, including
damages.

3) MANUFACTURERS 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. 20, Article 73 of the same Act is hereby amended to read as
follows:

“ART. 73. Penalties. - a) Any person who shall violate
the provisions of Article 67 shall be subject to fine of not less
than [Five hundred pesos (P500.00)] ten thousand pesos
(p10,000.00) but not more than [Five] FIFTY thousand pesos
[(PS,000.00)] (P50,000.00) or an imprisonment of not less than
[three (3)] SIX (6) months but not more than [two (2)] SIX (6)

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. 21. Article 79 of the same Act is hereby amended to read as
follows:

“ART. 79. 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 Article 77 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:

XXX XXX XXX, ;

For purposes of paragraph (c) of this Article, 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 (1)
protection of the contents of such package, (2) the requirements
of machines used for enclosing the contents in such package, or
(3) inherent characteristics of package materials or construction
being used.

THE CONCERNED DEPARTMENT MAY LIKEWISE
ISSUE SUCH OTHER REQUIREMENTS AS MAY BE
PRESCRIBED BY REGULATIONS TO ENSURE THE
SAFETY, EFFICACY AND QUALITY OF HEALTH

PRODUCTS.”

SEC.22. Article 81 of the same Act is hereby amended to read as
follows:

“ART.81. Price tag Requirement. — It shall be unlawful

to offer any consumer product OR SERVICE for retail sale to

oy)


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 the price of each article and 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 TO CHARGE THE
CUSTOMER MORE THAN THE ACTUAL CASH RETAIL
PRICE OF THE GOODS OR SERVICES PURCHASED
WHEN SUCH PURCHASE IS DONE WITH THE USE OF

CREDIT CARD AND 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, [further,] FINALLY, That if consumer niddusty 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. 23. The following new articles are hereby inserted after Article

94 of the same Act which shall read as follows:

28


“ART, 94-A. ENGLISH OR PILIPINO TRANSLATION
OF PRODUCT LABELS. — CONSUMER PRODUCTS WITH
PRODUCT LABELS, WRITTEN IN FOREIGN
CHARACTERS OR LANGUAGE SHALL BE ALLOWED
ENTRY INTO THE COUNTRY AND INTRODUCED INTO.
COMMERCE ONLY IF THE CONSUMER PRODUCTS
HAVE A CORRESPONDING ENGLISH OR FILIPINO
TRANSLATION TO ENABLE THE APPROPRIATE
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.”

ART. 94-B. OF FICIAL SOURCES OF INFORMATION
FOR IMPORTED CONSUMER PRODUCTS. — IMPORT
DATA FROM THE BUREAU OF CUSTOMS AND BUREAU
OF IMPORT SERVICES SHALL BE RECOGNIZED AS
OFFICIAL SOURCES OF INFORMATION TO VALIDATE
THE FOLLOWING INFORMATION RELATIVE TO A
PARTICULAR IMPORTED CONSUMER PRODUCT:

A) COUNTRY OF MANUFACTURE OR ORIGIN;

29


B) NAME AND ADDRESS OF MANUFACTURER
OR EXPORTER;

C) NAME AND ADDRESS OF IMPORTER AND
CONSIGNEE;

D) VALUE AND VOLUME OF SHIPMENT;

E) DATE OF ARRIVAL; AND

F) OTHER INFORMATION RELEVANT TO THE
SHIPMENT IN QUESTION.”

SEC. 24. Article 95 of the same Act is hereby amended to read as
follows:

“ART. 95. Penalties. - a) Any person who shall violate
the provisions of Title II, Chapter TV 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)| TEN THOUSAND PESOS
(P10,000.00) but not more than [Twenty] ONE HUNDRED
thousand pesos [(P20,000.00)] (P100,000.00) or imprisonment
of not less than [three (3)] SIX (6) months but not more than
[two (2)] SIX (6) 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 [Two hundred pesos

30


(P200.00)] FIVE THOUSAND PESOS (P5,000.00) but not
more than [Five] FIFTY thousand pesos  [(P5,000.00)]
(P50,000.00) or imprisonment of not less than [one (1) month]
SIX (6) MONTHS but not more than [one (1) year] THREE (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
[Two hundred pesos (P200.00)| FIVE THOUSAND PESOS
(P5,000.00) but not more than [Five] FIFTY thousand pesos
[(P5,000.00)] (P50,000.00) or by imprisonment of not less than
‘one (1) month but not more than six (6) months 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. 25. Article 103 of the same Act is hereby amended to read as
follows:

“ART. 103. 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, as regards

to the latter by the consumer.


IN PROVIDING SERVICE OR REPAIR AS
REQUIRED UNDER THIS ARTICLE, THE
MANUFACTURER MUST INFORM THE CONSUMER
WHICH PARTICULAR PARTS OF THE GOODS ARE
DAMAGED AND HAVE TO BE REPAIRED. THE
CONSUMER SHALL BE GIVEN THE OPTION .TO
REPLACE ONLY THE DAMAGED PARTS IF POSSIBLE.
THE CONSUMER SHOULD 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. 26. Article 107 of the same Act is hereby amended to read as
follows:

“ART. 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] FIFTY thousand
pesos [(P5,000.00)] (P50,000,00) and by imprisonment of not
LESS THAN SIX (6) MONTHS BUT NOT more that [one (1)
year] THREE (30 YEARS, OR both, upon the discretion of the

court.

32


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, 27. The following new articles are hereby inserted after Article
108 of the same Act which shall read as follows:

“ART. 108-A. ADVERTISEMENT, — GE

RAL
PRINCIPLES. -— AN ADVERTISEMENT FOR: A
CONSUMER PRODUCT OR A SERVICE MUST PROVIDE
THE GENERAL PUBLIC WITH RELEVANT AND
TRUTHFUL INFORMATION ON PRODUCTS AND
SERVICES, THEREBY HELPING CONSUMERS MAKE
INFORMED CHOICES.

THE ADVERTISING INDUSTRY SHOULD
CONTINUE TO IMPROVE THE LEVELS AND
STANDARDS OF ADVERTISING.”

ART. 108-B. COVERAGE; EXCEPTIONS. — THE
PROVISIONS OF THESE CHAPTER ON ADVERTISING
AND SALES PROMOTIONS SHALL APPLY TO THE
PHILIPPINE ADVERTISING COMMUNITY WHICH

INCLUDES ADVERTISERS, ADVERTISING AGENCIES,


MEDIA AND ADVERTISING SUPPORT GROUPS BUT

SHALL NOT APPLY TO THE FOLLOWING:

1) TO PUBLIC SERVICE AND EMERGENCY
ANNOUNCEMENTS OF UTILITY COMPANIES;

2) TO RELIGIOUS, POLITICAL AND PUBLIC
ISSUE ADVERTISEMENTS AND ANNOUNCEMENTS,
EXCEPT WHERE THESE INVOLVE OR SEEK TO
PROMOTE COMMERCIAL TRANSACTIONS; AND

3) TO STANDARD TRANSPORT
ANNOUNCEMENTS, CLASSIFIED ADVERTISEMENTS
AND OBITUARIES.”

ART. 108-C. PRESENTATION OF ADVERTISEMENTS.
— A) 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.

B) 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.

C) 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

SERVIC UCH CLAIMS MUST BE VERIFIABLE AND

SUBJECT TO SUBSTANTIATION IN. THE SAME

MANNER AS REGULAR PRODUCT OR SERVICE

ADVERTISEMENTS.”

SEC. 28. Article 110 of the same Act is hereby amended to read as
follows:

“ART. 110. False, Deceptive or — Misleading
Advertisement. ~ 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 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.

XXX XXX ee

SEC. 29. A new Article denominated as Article 115-A is inserted after
Article 115 of the same Act which shall read as follows:

“ART.  115-A. SPECIFIC CLAIMS. - ANY
ADVERTISEMENT WHICH MAKES A SPECIAL CLAIM
SHALL CONFORM TO THE FOLLOWING CONDITIONS:

A) AN ADVERTISEMENT CONCERNING AN
INGREDIENT OF A CONSUMER PRODUCT:

1) 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 1

CHNICALLY
SUBSTANTIATED; AND.

2) SHOULD NOT IMPLY THAT A CERTAIN
BENEFIT IS DUE TO A SPECIFIC INGREDIENT UNLESS
A VERIFIABLE CAUSE AND EFFECT RELATIONSHIP
EXISTS.

36


B) AN ADVERTISEMENT USING THE RESULTS OF
A BONA FIDE RESEARCH, SURVEY, OR TEST
RELATING TO A PRODUCT SHOULD NOT BE
PRESENTED INACCURATELY OR IN A MISLEADING
MANNER, NOR SHOULD IT CLAIM ANY IMPLICATIONS
BEYOND THAT CLEARLY ESTABLISHED BY
RESEARCH, SURVEY OR TEST.

C) AN ADVERTISEMENT WHICH INCLUDES ANY
SCIENTIFIC CLAIMS:

1) MAY EMPLOY VISUAL REPRESENTATIONS OF
LABORATORY SETTINGS = ONLY WHEN THE
RESEARCH WAS CONDUCTED IN THE LABORATORY;
AND

2) SHOULD BE SUPPORTED BY DOCUMENTED
AND AUTHORITATIVE EVIDENCE TO SUBSTANTIATE
REFERENCES TO TESTS BY PROFESSIONALS OR
INSTITUTIONS INCLUDING DOCTORS, ENGINEERS,
AND RESEARCH FOUNDATIONS FOR SUCH TESTS
AND THE CLAIMS BASED THEREON.

D) AN ADVERTISEMENT WHICH UTILIZES THE
NUMBER ONE OR LEADERSHIP CLAIM, NO “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

BE SUBSTANTIATED.

SHOULD, IN ANY CA‘

E) AN ADVERTISEMENT USING. TI
CLAIMS:
1) SHOULD ONLY INCLUDE GENUINE AND

TRUTHFUL 1

STIMONIAL CLAIMS RELATING TO THE

PRODUCT BEING ADVERTISED;

2) SHOULD ONLY PRE

iT AS EXPERT AN
INDIVIDUAL WHO HAS DEMONSTRABLE
CREDENTIALS TO SUBSTANTIATE THE CLAIMED
EXPERTISE. THE ENDORSEMENT MUST BE
SUPPORTED BY AN ACTUAL EXERCISE OF THE
INDIVIDUAL’S 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.

3) SHOULD ONLY PRESENT AN

ENDORSEMENT BY AN ORGANIZATION 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 JUDGMENT OF THE ORGANIZATION.
THE ORGANIZATION MAY BE CONSIDERED
LEGITIMATE IF IT CAN PRESENT PROOF OF HAVING
BEEN IN OPERATION FOR AT LEAST ONE YEAR.”

SEC. 30. Article 116 of the same Act is hereby amended to read as

follows:

“ART. 116. Permit to Conduct Promotion. — No
person shall conduct any sales campaigns, including beauty
contest, national in character, sponsored and promoted by
PRODUCERS, RETAILERS, SELLERS, DISTRIBUTORS,
SUPPLIERS, IMPORTERS, OR 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 5
(FIVE) DAYS [fifteen (15) days] from filing of the

COMPLE

2 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

be issued thereof.”

SEC. 31. The following new article:

116 of the same Act which shall read as follows:

“ART. 116-A. REGULATION OF ADVERTISING AND
SALES PROMOTION, — THE ADVERTISING AND SALES
PROMOTION OF CONSUMER PRODUCTS, SERVICES
AND CREDIT FACILITIES, © WHICH = INCLUDE
SPONSORSHIPS OF PROGRAMS, CONCERTS, GAMES,
SHOWS AND SIMILAR ACTIVITIES SHALL BE
REGULATED BY THE DEPARTMENT OF TRADE AND
INDUSTRY.

ADVERTISING AND SALES PROMOTION OF
FOOD, DRUGS, DEVICES, COSMETICS AND
HAZARDOUS SUBSTANCES SHALL BE UNDER THE
JURISDICTION OF THE DEPARTMENT OF HEALTH
WHILE THE ADVERTISING AND SALES PROMOTION
OF AGRICULTURAL PRODUCTS SHALL BE UNDER THE
JURISDICTION OF THE DEPARTMENT OF

AGRICULTURE.

e hereby inserted after Article

40


ART. 116-B. COVERAGE AND EXEMPTION OF THE
SALES PROMOTION OF CONSUMER PRODUCTS AND
SERVICES. - THE PROVISIONS ON SALES PROMOTIONS
OF CONSUMER PRODUCTS AND SERVICES SHALL
APPLY TO ALL PROMOTIONAL CAMPAIGNS AND
ANNOUNCEMENTS FOR CONSUMER PRODUCTS,
SERVICES, CREDIT FACILITIES, AS WELL AS BEAUTY
CONTESTS, NATIONWIDE IN CHARACTER.

THE PROVISIONS OF SALES PROMOTION OF
CONSUMER PRODUCTS AND SERVICES SHALL
LIKEWISE APPLY TO SIMILAR ACTIVITIES INCLUDING
IN-STORE PROMOTIONS, REDUCED PRICES, SPECIAL
OFFERS, PRODUCT DEMONSTRATION, PRODUCT
SAMPLES, REBATES, DISCOUNTS, PREMIUM-IN-PACK,
AND EXPERT ADVICE.

THE PROVISIONS OF SALES PROMOTION OF
CONSUMER PRODUCTS AND SERVICES SHALL NOT
APPLY TO THE FOLLOWING PROMOTIONAL
CAMPAIGNS OR ACTIVITIES:

A) GOVERNMENT OR ANY OF ITS AGENCIES

OR INSTRUMENTALITIES, WHEN THE SAME_ IS

41


CONDUCTED IN THE EXERCISE OF THEIR
GOVERNMENTAL FUNCTIONS;

B) PRIVATE ENTITIES IN JOINT PROJECT/S
WITH ANY GOVERNMENT AGENCY UNDER THE
PRECEDING PARAGRAPH; AND

C) SOCIAL, CIVIC, POLITICAL, RELIGIOUS,
EDUCATIONAL, PROFESSIONAL AND OTHER SIMILAR
ORGANIZATIONS WHICH EXTEND PROMOTIONAL.
ACTIVITY AMONG THEIR MEMBERS: PROVIDED,
THAT THE PROMOTIONAL ACTIVITY IS NOT
CONSIDERED AS A SALES PROMOTIONAL CAMPAIGN
AS DEFINED UNDER THIS ACT.

ART. 116-C. APPLICATION FOR PERMIT. — A) THE
APPLICATION FOR PERMIT SHALL BE IN THE FORM
PRESCRIBED BY THE DEPARTMENT CONCERNED.

ANY PERSON WHOSE CONSUMER PRODUCTS,
SERVICES, CREDIT FACILITIES, BEAUTY CONTESTS,
COMPETITION, GAMES SHOWS AND THE LIKE ARE
BEING PROMOTED MAY FILE AN APPLICATION FOR
THE ISSUANCE OF A PERMIT TO CONDUCT

PROMOTION.

42


THE ABOVE PERSON SHALL SIGN THE
APPLICATION INDIVIDUALLY OR JOINTLY WITH THE
OTHERS OR SUBMIT THEREWITH A TRUE COPY OF
ANY WRITTEN AGREEMENT BETWEEN OR AMONG
THEM, REFLECTING THE DEGREE OR EXTENT OF
THEIR PARTICIPATION AND RESPONSIBILITY IN THE
CONDUCT OF THE PROMOTIONAL — ACTIVITY
COVERED BY THIS ACT OR THE RULES. WHERE NO
LIMITATION AS TO THE EXTENT OF THE LIABILITY
OR RESPONSIBILITY IS INDICATED IN SUCH
AGREEMENT, ALL OF THEM SHALL BE JOINTLY AND

SEVERALLY LIABLE AND RESPONSIBLE THEREFOR,

B) APPLICATION THROUGH AND BY AN AGENT —
WHERE THE PROMOTIONAL CAMPAIGN OR ACTIVITY
IS APPLIED FOR AND IN BEHALF OF THE PERSONS
MENTIONED IN PARAGRAPH (A) HEREOF, THE AGENT
SHALL BE AUTHORIZED BY A SPECIAL POWER OF
ATTORNEY OR A BOARD RESOLUTION AS
EVIDENCED BY SECRETARY’S CERTIFICATE.

ART. 116-D. PROHIBITED ACTS IN THE CONDUCT

OF SALES PROMOTION, — THE FOLLOWING ACTS ARE

43


PROHIBITED IN THE CONDUCT OF SALES PROMOTION
CAMPAIGN:

A) GAMBLING AND WAGERING SCHEMES; ,

B) USE OF MEDICAL PRESCRIPTIONS;

D) TAMPERING WITH = THE ENTRIES,
PARAPHERNALIA OR ELECTRONIC DEVICE IN A
PROMOTIONAL CAMPAIGN OR ACTIVITY;

E) UNDULY INFLUENCING THE RESULTS OF
A PROMOTIONAL CAMPAIGN OR ACTIVITY; AND

F) PERFORMING ANY ACT TO THE PREJUDICE
OF THE LEGITIMATE PARTICIPANTS OR WINNERS IN
A PROMOTIONAL CAMPAIGN OR ACTIVITY.

ART. 116-E. VOLUNTARY CANCELLATION OF
PROMOTIONAL CAMPAIGN OR ACTIVITY. =
VOLUNTARY CANCELLATION OF APPROVED
PROMOTIONAL CAMPAIGN OR ACTIVITY SHALL BE
ALLOWED = SUBJECT TO THE = FOLLOWING
CONDITIONS:

A) VOLUNTARY CANCELLATION BEFORE
PUBLICATION — A PERSON MAY VOLUNTARILY
CANCEL OR DISCONTINUE THE APPROVED

PROMOTIONAL CAMPAIGN OR ACTIVITY PROVIDED

44


NO INFORMATION DISSEMINATION AND
ADVERTISING THEREON HAS BEEN MADE AND THAT
A WRITTEN NOTICE BE SUBMITTED TO THE
DEPARTMENT PRIOR) TO SUCH VOLUNTARY
CANCELLATION.

B) VOLUNTARY CANCELLATION AFTER
PUBLICATION - IF ANY ANNOUNCEMENT,
INFORMATION DISSEMINATION OR ADVERTISING OF
THE PROMOTIONAL CAMPAIGN OR ACTIVITY HAS
ALREADY BEEN MADE, BUT THE PROMOTION PERIOD
HAS NOT YET COMMENCED, THE DISCONTINUANCE
OR CANCELLATION OF THE PROMOTION MAY BE
MADE ONLY UPON PRIOR WRITTEN NOTICE TO THE
DEPARTMENT NOT LATER THAN FIVE (5) DAYS
BEFORE THE COMMENCEMENT OF THE ORIGINAL
INTENDED DATE OF PROMOTION.

THE SPONSOR SHALL HONOR ~~ THE
PROMOTIONAL COMMITMENTS SHOULD IT FAIL TO
COMPLY WITH THE REQUIRED PERIOD.

C) VOLUNTARY CANCELLATION OF ONGOING
PROMOTION VOLUNTARY CANCELLATION OR

DISCONTINUANCE OR SUSPENSION OF ANY ONGOING

45


PROMOTIONAL CAMPAIGNS OR ACTIVITIES SHALL

NOT BE ALLOWED EXCEPT UPON PRIOR WRITTEN
APPROVAL BY THE DEPARTMENT WHICH SHALL BE
BASED ON ANY OF THE FOLLOWING GROUNDS:

1) A FINAL JUDGMENT OF VOLUNTARY
INSOLVENCY OR BANKRUPTCY AGAINST THE
APPLICANT;

2) OCCURRENCE OF ANY FORTUITOUS EVENT
OR FORCE MAJEURE THAT WILL MAKE IT
IMPOSSIBLE TO CONTINUE THE PROMOTIONAL
CAMPAIGN OR ACTIVITY: PROVIDED, THAT THOSE
WHO HAD ALREADY WON IN THE PROMOTION
BEFORE THE APPROVAL OF THE CANCELLATION OR
DISCONTINUANCE OR SUSPENSION SHALL BE PAID
OR GIVEN THEIR PRIZES, :

ART. 116-F. RULES ON MECHANICS. — ALL
COVERED PROMOTIONAL CAMPAIGNS OR
ACTIVITIES SHALL ABIDE BY OR COMPLY WITH THE
RULES ON THE MECHANICS OF THE PROMOTION SET
FORTH IN THE IMPLEMENTING RULES AND

REGULATIONS OF THE AGENCY CONCERNED.

46


ART. 116-G. MODE OF SELECTION OF
PROSPECTIVE PARTICIPANTS/ENTIRES. ~ PROSPECTIVE
PARTICIPANTS OR ENTRIES SHALL BE SELECTED IN A
FAIR, HONEST AND TRANSPARENT MANNER. THERE
MUST BE PROOF OF NOTICE OF SELECTION AND
SUCH OTHER RELEVANT INFORMATION TO THE
SELECTED PARTICPANTS IN A MANNER EXPRESSLY
PROVIDED FOR IN THE MECHANICS.

DRAW DATE OR DATES FOR THE SELECTION OF
PARTICIPANTS OR WINNERS TO A PROMOTION
CAMPAIGN OR ACTIVITY SHALL NOT BE MORE THAN
FOURTEEN (14) DAYS AFTER THE DEADLINE OF THE
SUBMISSION OF ENTIRES.

DETERMINATION OF WINNERS MAY BE
THORUGH THE USE OF ANY TECHNIQUE NOT
CONTRARY TO LAW, MORALS AND PUBLIC POLICY
WHICH SHALL BE CONDUCTED IN A FAIR, HONEST
AND TRANSPARENT MANNER.”

SEC. 32, Article 123 of the same Act is hereby amended to read as
follows:

“ART. 123. Penalties. - a) Any person, association,

partnership or corporation who shall violate any of the

47


provisions of Articles 110 to 115 shall, upon conviction, be
subject to a fine of not less than [Five Hundred Pesos
(P500.00)] TEN THOUSAND PESOS (P10,000.00) but not
more than [Five] ONE HUNDRED thousand — pesos
[(P5,000.00)] (P100,000.00) or an imprisonment of not less
than [one (1) month] THREE MONTHS but not more than [six
(6) months] 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 [Two hundred pesos (P200.00)] FIVE THOUSAND
PESOS (P5,000.00) but not more than [Six hundred pesos
(P600.00)] FIFTY THOUSAND PESOS (P50,000.00) or [an]
imprisonment of not less than [one (1) month] THREE (3)
MONTHS but not more than [six (6) months] THREE (3)
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.”

48


SEC. 33, A new Article denominated as Article 131-A is hereby
inserted after Article 131 of the same Act which shall read as follows:

“ART. 131-A, LIMITATION IN THE AUTHORITY .OF
BANGKO SENTRAL NG PILIPINAS, — THE BANGKO
SENTRAL NG PILIPINAS SHALL STRICTLY ENFORCE
THE PROVISIONS OF THIS CHAPTER AND_ ITS
IMPLEMENTING RULES AND REGULATIONS EXCEPT
THOSE WHICH FALLS WITHIN THE JURISDICTION OF
THE SECURITIES AND EXCHANGE COMMISSION.”

SEC. 34. Article 147 of the same Act is hereby amended to read as
follows:

“ART. 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 [One] TWENTY thousand pesos
[(P1,000.00)] (P20,000.00) 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] ONE HUNDRED thousand pesos
[(P3,000.00)] (P100,000.00) 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 one (1) year from the date of the occurrence

of the violation in any court of competent jurisdiction.”

SEC. 35. Article 149 of the same Act is hereby amended to read as

follows:

“ART 149. Composition. The Council shall be composed of

representatives from the following government agencies and

non-government agencies:

a)
b)
°)
a)
e)
f)

G)

Department of Trade and Industry;

Department of Education[, Culture and Sports];
Department of Health;

Department of Agriculture;

DEPARTMENT OF ENERGY;

BANGKO SENTRAL NG PILIPINAS;

four (4) representatives from the consumer

organizations of nationwide base to be chosen by the President

among the nominees submitted by the various consumer groups

in the Philippines; AND

H)

two (2) representatives from the business

industry/sector to be chosen by the President from among the

nominees submitted by the various business organizations.”

50


SEC. 36. Article 151 of the same Act is hereby amended to read as

follows:

“ART, 151, Per Diems of Members. — The members of
the Council shall [be entitled to an allowance of five hundred
pesos (P500.00) per] RECEIVE PER DIEMS FOR EVERY
meeting actually attended [but not more two thousand pesos
(P2,000.00) a month] AT RATES ALLOWED UNDER

EXISTING RULES AND REGULATIONS.”

SEC. 37. Article 152 of the same Act is hereby amended to read as

follows:

“ART. 152. The EXECUTIVE DIRECTOR AND THE
Secretariat. — The Council shall appoint an Executive Director
who shall assist [the Chairman] and act as Secretary of the
Council. The COUNCIL [Department of Trade and Industry]
shall [provide] APPOINT the [Secretariat] STAFF which shall
assist. the [Council] EXECUTIVE DIRECTOR in the
[effective] performance of [its functions] DUTIES AND
RESPONSIBILITIES SUBJECT TO BUDGETARY,
COMPENSATION AND CIVIL SERVICE RULES AND

REGULATIONS.”

38. Article 156 of the same Act is hereby amended to read as


“ART 156, Consumer Participation. - The Department
shall 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.”

SEC. 39. Article 164 of the same Act is hereby amended to read as
follows:

“ART. 164. Sanctions. — After investigation, any of the
following administrative penalties may be imposed even if not
prayed for in the complaint:

a) XXX;

e) 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 (P500.00)] FIFTY

THOUSAND PESOS (P50,000.00) nor more than [Three


hundred thousand pesos (P300,000.00)] ONE MILLION

PESOS (P1,000,000,00) depending on the gravity of ‘the

offense, and an additional fine of [not more than One thousand

pesos (P1,000.00)} NOT LESS THAN ONE THOUSAND

PESOS (P1,000.00) [or] FOR each day of continuing violation

SEC. 40. A new article denominated as Article 164-A is hereby
inserted after Article 164 of the same Act which shall read as follows:

“ART. 164-A, USE OF ADMINISTRATIVE FINES
IMPOSED BY THE CONCERNED DEPARTMENT. — THE
SECRETARY OF THE DEPARTMENT CONCERNED
SHALL BE AUTHORIZED TO RETAIN, WITHOUT NEED
OF A SEPARATE APPROVAL FROM ANY
GOVERNMENT AGENCY, AND SUBJECT ONLY TO

EXISTING ACCOUNTING AND AUDITING RULES AND

REGULATIONS, THE FEES, FINES, AND OTHER
CHARGES COLLECTED BY THE DEPARTMENT UNDER
THIS ACT AND OTHER LAWS FOR THE EFFICIENT,
EFFECTIVE AND EXPEDITIOUS IMPLEMENTATION
AND ENFORCEMENT OF THIS ACT FOR USE IN ITS
OPERATION, INCLUDING, BUT NOT LIMITED TO, THE
UPGRADING OF ITS FACILITIES, EQUIPMENT OUTLAY,

HUMAN RESOURCE DEVELOPMENT AND EXPANSION,


ACQUISITION OF APPROPRIATE OFFICE SPACE, AND
OTHER PROJECTS, AIMS, OR ACTIVITIES OF THE
DEPARTMENT CONCERNED NECESSARY TO IMPROVE
AND STRENGTHEN THE DELIVERY OF ITS SERVICES
TO THE PUBLIC. THIS AMOUNT, WHICH SHALL BE IN
ADDITION TO THE DEPARTMENT’S ANNUAL BUDGET,
SHALL BE DEPOSITED AND MAINTAINED IN A
SEPARATE ACCOUNT OR FUND, WHICH MAY BE USED
OR DISBURSED DIRECTLY BY THE SECRETARY OF
THE CONCERNED DEPARTMENT.”

SEC. 41. Article 169 of the same Act is hereby amended to read as

follows:

“ART. 169 Prescription. — All actions or claims
accruing under the provisions of this Act and the rules and
regulations issued pursuant thereto shall prescribe within [two
(2)] THREE (3) years from the time the consumer transaction
was consummated or the deceptive or unfair and
unconscionable act or practice was committed and in case of
hidden defects, from discovery thereof.”

SEC. 42. Article 171 of the same Act is hereby amended to read as

follows:

34


“ART. 171. Appropriations. — For the initial operating
expenses of the National Consumer Affairs Council, the sum of

Two million pesos (P2,000,000.00) is hereby appropriated out

of funds of the National Treasury not otherwise appropriated.

Thereafter, such sums as may be necessary to carry out the [its]

purposes AND FUNCTIONS OF THE COUNCIL shall be

included in the General Appropriations Act.”

SEC. 43. Separability Clause. — If any part or provision of this
Act is declared unconstitutional or invalid, the remaining parts or
provisions not affected shall remain in full force and effect.

SEC. 44. Repealing Clause. — All laws, decrees, executive order, rules
and regulations and other issuances inconsistent with this Act is hereby
repealed, amended or modified accordingly.

SEC. 45. Effectivity. - This Act shall take effect fifteen (1 5) days after
its publication in the Official Gazette or in at least two (2) newspapers of
general circulation.

Approved,