Republic of the Philippines
HOUSE OF REPRESENTATIVES.
Constitution fills, Quezon City

FIFTEENTH CONGRESS
Second Regular Session

50539

Introduced by Honorable Tomas V. Apacible

EXP. ANATORY NOTE

Republic Act 7394, otherwise known as the “Consumer Act of the Philippines” was enacted into
law in Aprit 13, 1992, Since then, it has served as the legal crutch of our consumers in pursuing
various actions against erting individuals and enterprises.

‘Almost twenty years after the law’s enactment, gaps have surfaced which must be addressed at
the soonest time possible to ensure that consumers in the Philippines will be able to cope with
developments in consumer products brought about by scientific breakthroughs, technology and
other innovations.

Article XVI on General Provisions of the 1987 Constitution provides the constitutional
framework for the protection of consumers. These are found in Sections 9 and 11, subsection 2
Section 9 states that, “The State shall protect consumers from trade malpractices and from
substandard or hazardous products,” While Section 11, subsection 2, paragraph 1 states that:
“The advertising industry is impressed with public interest, and shal? be regulated by faw for the
protection of consumers and the promotion of the general welfare.”

In 1999, the United Nations agreed on an expanded “Guidelines for Consumer Protection.” ‘The
major objectives of the guidelines include the need to assist countries in achieving or maintaining
adequate protection for their population as consumers; to facilitate production and distribution
patterns responsive to the needs and desires of consumers; to encourage high levels of ethical
conduct for those engaged in the production and distribution of goods and services to consumers;
to assist countries in curbing abusive business practices by all enterprises at the national and
international levels which adversely affect consumers; to facilitate the development of
independent consumer groups; to further imtemational cooperation in the field of consumer
protection; fo encourage the development of market conditions which provide consumers with
greater choice at lower prices and to promote sustainable consumption

‘The Guidelines also called on governments to develop or maintain a strong consumer protection
policy to ensure that consumers are protected from hazards to their health and safety, the
promotion and protection of the cconomic interests of consumers, access of consumers to adequate
information to eaable them to make informed choices according to individual wishes and needs;
consumer education, including education on the esvironmental, social and cconomic impacts of
consumer choice; availability of effective consumer redress; freedom to form consumer and other
Televant groups or organizations and the opportunity of such organizations to present their views in
decision-making processes affecting them; and, the promotion of sustainable consumption patterns.


This proposed bill will not only highlight consumer rights but will also legislate consumer
responsibilities and amends relevant provisions of the law.

It is hoped that through this proposed law, the consumers in the Philippines will be on equal

footing with consumers of our nations who have put in place similar legislation. International
concer and collective actions are best served by domestic legislation.


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Republic of the Philippines
TIOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

FIFTEENTH CONGRESS
Second Regular Session

HOUSE BILL NO, 5059

INTRODUCED BY HON. TOMAS V. APACTBLE

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:

CHAPTER 1
AMENDMENTS TO TITLE I (GENERAL PROVISIONS)
CHAPTER T
GENERAL PROVISIONS
SECTION 1. Short Title, - This Act shall be known as “The Consumer Act of 201°”.

SECTION 2. A new Article is hereby inserted to the Consumer Act of the Phitippines to read as follows:

‘HE KIGHT (8) CONSUMER BILL OF RIGHTS - THE GOVERNMENT, IN MAINTAINING AND.
STRENGTHENING THE PROMOTION OF THE INTEREST AND WELFARE OF THE
CONSUMERS IN THEIR RELATION TO THE BUSINESS AND INDUSTRY PRACTICE AS WELL
AS TO THE PRODUCTION AND DISTRIBUTION OF CONSUMER PRODUCTS, SHALL ADOPT
MEASURES OR FORMULATE POLICES TAKING INTO ACCOUNT THE FOLLOWING FIGHT
(8) BASIC CONSUMER RIGHTS:

a.) RIGHT TO BASIC NEEDS — THE CONSUMER SHALL BE ENITTLED TO GUARANTEED
SURVIVAL, ADEQUATE FOOD, CLOTHING, SHELTER, HEALTH CARE, EDUCATION AND.
SANITATION.


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b.) RIGHT 1O CHOOSE — THE CONSUMER SHALL BE ENTITLED) TO CHOOSE PRODUCTS
AT COMPETITIVE PRICES WITH AN ASSURANCE OF SATISFACTORY QUALITY,

¢.) RIGHT TO REPRESENTATION — THE CONSUMER SHALL BE ENTIILED TO EXPRESS
CONSUMER INTERESTS IN THE MAKING AND EXECUTION OF GOVERNMENT POLICIES,

d) RIGHT TO REDRESS - THE CONSUMER SHALL BE. ENTITLED TO COMPENSATION
FOR MISREPRESENTATION, SUBSTANDARD OR DEFECIIVE GOUDS OR UNSATISFACTORY
SERVICES,

¢.) RIGHT TO CONSUMER EDUCATION - THE CONSUMER SHALL BE £NTITLED TO
ACQUIRE THE KNOWLEDGE AND SKILLS NECESSARY TO BE AN INFORMED CHOICE,

£) 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.

8) RIGHT TO A HEALTHY ENVIRONMENT, - THE CONSUMER SHALL BE ENTITLED TO
LIVE AND WORK IN AN ENVIRONMENT WHICH IS NEITHER THREATENING NOR
DANGEROUS AND WIIICH PERMITS A LIFE OF DIGNITY AND WELL-BEING.”

h) RIGHT TO INFORMATION - THE CONSUMER SHALL. BE ENTITLED TO PROTECTION
AGAINST DISHONEST OR MISLEADING ADVERTISING OR LABELING AND BE GIVEN THE
FAGTS AND INFORMATION NEEDED tO MAKE AN INFORMED CHOICE.

SECTION 3. A new Article is hereby inserted to the Consumer Act of the Philippines to read as follows:

“THE FIVE (5) CONSUMER RESPONSIBILITIES — IN CONNECTION WITH HIS ENTITLEMENT
OF THE BASIC RIGHTS STATED IN THE PRECEDING SECTION, THE CONSUMER SHALL
EXERCISE THE FOLLOWING RESPONSIBILITIES:

a) CRITICAT. AWARENESS - THE CONSUMER SHALL BE MORE ALERT AND
QUESTIONING ABOUT THE USE OF, THE PRICE AND QUALITY OF GOODS AND SERVICES
USE.


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b) ACTION - THE CONSUMER SHALL ASSERT HIMSELF/HERSELF AND ACT TO
ENSURE THAT HE/SHE GETS A FAIR DEAL. AS LONG AS HE/SHE REMAINS A PASSIVE
CONSUMER, HE/SHE WILL CONTINUE TO BE EXPLOITED.

c) SOCIAL CONCERN ~ ‘THE CONSUMER SHALL BE MORE AWARE OF THE IMPACT OF
HIS/HER 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 HIS/IER CONSUMPTION. HE/SHE SHOULD
RECOGNIZE INDIVIDUAL AND SOCIAL RESPONSIBILITY TO CONSERVE NATURAL
RESOURCES AND PROTECT THR EARTH FOR FUTURE GENERATIONS TOWARDS
SUSTAINABLE CONSUMPTION PATTERNS.

¢) SOLIDARITY - THE CONSUMER SHOULD BE ABLE TO ORGANIZE CONSUMERS
TOGETHER TO DEVELOP THE STRENGTH AND INFLUENCE TO PROMOTE AND PROTECT
‘THEIR INTEREST.”

SECTION 4. Article 4 of the Consumer Act of the Philippines is hereby amended to read as follows:

“ART. 4. Definition of Terms. — For purposes of this Act, the term:

8) “Consumer” means a natural person who is a purchaser, lessee, recipient or prospective purchaser,
lessor or secipient of consumer products, services, credit, TECHNOLOGY, ADVERTISING OR
PROMOTION, AND OTTER ITEMS {N COMMERCE.

(@ “Consumer products and services” means goods, services and oredits, debts or obligations,
SERVICES which are primarily for personal, family, household or agricultural parposes, which shall

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include but not limited to food, drugs, cosmetics, and devices, PRODUCT, MERCHANDISE, GOODS,
CREDIT, TECHNOLOGY AND OTHER TRANSACTIONS OR MATTERS INTENDED TO BF.
COVERED BY THIS ACT.

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{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
amticle 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 TO CLEANING THEM, PERFUMING
THEM, CHARGING THEIR APPEARANCE AND/OR CORRECTING BODY ODORS AND/OR
PROTECTING THEM IN GOOD CONDITION.”

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W) "Credit card” means any card, plate, coupon book or other oredit SINGLE. device existing for the
purpose of BEING USED FROM TIME TO TIMF UPON PRESENTATION TO obtain[ing] moncy,
property, labor of services on credit,

aj) "Guarantee" means an expressed or implied assurance of the REAL quality, COS', PRICE,
PROMOTION of the consumer products and services affered for sale or lenyth of satisfactory use,
COSTS OR OTHER SIMILAR MATTERS to be expocted from SUCH CONSUMER products or
SERVICES BASED ON APPLICABLE AND ACTUAL DOCUMENTS IN ACCORDANCE WITH
THE LAW, MORALS, GOOD FAITH AND PUBLIC POLICY,”

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af) “Mass media” refers to any means of methods used 10 convey advertising messages to the public
such as television, radio, THE INTERNET, MOBILE PHONES AND SIMILAR ELECTRONIC
DEVICES, magazines, cinema, billboards, posters, streamers, hand bills, leaflets, mails and the like,

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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 ‘10 WIN ANY PRIZES OR
FREE SERVICES, OR GIFT, OR ANY SIMILAR SCHEME, as reward for TRANSAGTING FOR,
RECEIVING, OR purchas[e]ING the purchase of a product, security, service or winning in contest, gaune,
tournament and other similar competitions OR CLALLENGES which invalve determination of winnes/s
and which utilize mass media or other widespread media of information such as INFORMATION AND
COMMUNICATION TECHNOLOGY. It also means techniques purely intended to increase the sales,
patronage and/or goodwill of [a product], TRANSACTION FOR, PURCHASING, OR RECEIVING OF,
CONSUMER PRODUCTS AND SERVICES.

bn) “Seller” means a person engaged in the business of selling consumer products AND SERVICES
directly 10 consumers, It shull inchide 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 ovedtapping
officers of directors with the supplier or distributor, or (3) the supplier or distributor provides or exercises
supervision, direction of control over the selling practices of the seller,

be) “Standard” means a sot of conditions to be fulfilled to ensure the quality and safety of a product
AND SERVICE;

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CHAPTER 2

AMENDMENTS TO TITLE Tl (CONSUMER PRODUCT QUALITY AND SAFETY)

CHAPTER I

CONSUMER PRODUCT QUALITY AND SAFETY

SECTION S. Article 6 of the Consumer Act is hereby amended to read as follows:

“ART. 6 Jmplemensing Agencies. — The provisions of this Act and its implementing rules and regulations
shall be enforced by:

a) the Department of Health with respect to PROCESSED food, drugs, cosmetics, devices and
HAZARDOUS substances;

b) the Department of Agriculture with respect to products related to agriculture AND FISHERIES

¢) the Department of Trade and Industry with respect to other consumer products not specified
above;

SECTION 6. Article 8 of the Consumer Act is hereby amended (o 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 a
newspaper of general circulation, in the OFFICIAL GAZETTE, OR IN THE
DEPARTMENT'S/AGENCY’S OFFICIAL WEB PORTAL. It may likewise conduct an information
campaign through other means deemed effective to ensure the proper guidance of consumers, businesses,

industries and other sectors concerned.”

SECTION 7. Article 10 of the Consumer Act of the Phitippines is hereby amended to read as fotlows:


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“Ast, 10, injurious, Dangeraus and Unsafe Products. - Whenever the departments find, by their own initiative or by
Pafition of 2 consumer, that a consumer product is found (o be injurious, unsafe or dangerous, it shall, after due
notice and hearing, make the appropriate order for its recall, prohibition or selzuce 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 is immediate recall, ban or seizmre from public sale or distribution, in
which case, the seller, distributor, mamafacturer or producer thereof shall be afforded a hearing within forty-eight
{48) hours from such order: PROVIDED, FURTHER, ANY ESTABLISHMENT CAUGHT IN #LAGRANTE
DELICIO 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 imuninently
injurious, unsafe or dangerous under the preceding paragraph shall stay in force until euch time that its safety can be
assured or measures to ensure its safety have been established,”

SECTION 8. Article 11 of the Consumer Act is hereby amended to read as follows:

“ART. 11. Amendment ani! 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 am interested party or its own initiative and after due notice and
hearing, determines a consumer product to he substandard or materially defective, it shall yo natify the
manufacturer, distributor or seller thereof of such finding and order such manufacturer, distributor or
seller to WITHOUT DELAY:

a) give notice to the public of the defect or failure to comply with the product safety standards;

b) give nofice fo each distributor or seller of such product; and

6) GIVE NOTICE TO EVERY PERSON TO WHOM SUCH CONSUMER PRODUCT WAS

DELIVERED OR SOLD.


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‘The department shall also direct the manufacturer, distributor or seller of such product to extend WITHIN
REASONABLE TIME any or all of the following remedies to the injures! person:

a) to bring the product with a like or equivalent product which complics 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 product standards which does not comtain the defect;

c) to refund the purchuse price of the product Jess 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.”

SECTION 9. A new Article is hereby inserted to the Consumer Act of the Philippines to read as follows:

“PHYSICAL SAFETY APPROPRIATE POLICIES SHOULD ENSURE THAT IF
MANUFACTURERS OR DISTRIBUTORS BECOME AWARE OF UNFORESEEN HAZARDS
AFTER PRODUCTS ARE PLACED ON THE MARKET, THEY SHOULD NOTIFY THE RELEVANT
AUTHORITIES AND, AS APPROPRIATE, THE PUBLIC WITHOUT DELAY. GOVERNMENTS
SHOULD ASSO CONSIDER WAYS ENSURING THAT CONSUMERS ARE PROPERLY
INFORMED OF SUCH HAZARDS.”

CHAPTER 3

AMENDMENTS TO TITLE II (PROTECTION AGAINST DECEPTIVE, UNFAIR AND
UNCONSCIONABLE SALES ACTS OR PRACTICES)

CHAPTER I
DECEPTIVE, UNFAIR ANP UNCONSCIONABLE SALES ACTS OR PRACTICES
REGULATION OF SALES ACTS AND PRACTICES

SECTION 11, Article 52 of the Consumer Act of the Philippines is hereby amended to read as follows:
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“ART, 52. Unfair or Unconscionable Sales Act or Practice, — An unfair or unconscionable sales act or
peactice by a seller ot supplier in connection with a consumer transaction violates this Chapter whether it
‘occurs before, during or after the consumer tramsaction. An act or practice shall be deemed unfair or
imconscionable 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 tease transaction

inimical to the interests of the producer, manufacturer, distribulor, supplier or seller.

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

a) that the producer, manufacturer, distributor, supplicr or sctler took advantage of the inahility of
the consumer to reauonably protect his interest because of inability to understand the language of an
agreement, or similar factors;

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

¢) that when the consumer transaction was entered into the consumer was unable to reccive

substantial benefit from the subject of transaction;

d) that when the consumer transaction was entered into, the seller of supplier was aware that there

was no reasonabte probability or payment of the obligation in full by the consumer;

€) 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 SUCH AS BUT NOT LIMITED TO:

1) THAT WHEN THE CONSUMER TRANSACTION WAS ENTERED INTO, THR.
SELLER OR SUPPLIER IMPOSES UPON THE CONSUMER TERMS AND CONDITIONS:
GROSSLY DISADVANTAGEOUS TO THE LATTER WHO IS REDUCED 10 THE
ALTERNATIVE OF ACCEPTING THE CONTRACT OR LEAVING IT, COMPLETELY
DEPRIVED OF THE OPPORTUNITY TO BARGAIN ON EQUAL FOOTING; AND


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2) THE SELLER OR SUPPLIER EMPLOYS AN AGGRESSIVE MARKETING
PRACTICE THAT SIGNIFICANTLY CONSTRAINS OR IMPAIRS OR IS LIKELY TO
SIGNIFICANTLY CONSTRAIN OR IMPAIR THE AVERAGE CONSUMER'S FREEDOM OF
CHOICE OR CONDUCT WITH REGARD TO THE PURCHASE OF A PRODUCT OR SERVICE
THAT CAUSES HIM/HER OR IS LIKELY TO CAUSE HIM/HER TO ENTER INTO A
CONSUMER TRANSACTION DIFFERENT FROM THE ONE HE/SHE WOULD HAVE
INTENDED, OR HE/SHE WOULD NOT HAVE DONE OTHERWISE,

CHAPTER I

CONSUMER PRODUCT AND SERVICE WARRANTIES.

CHAPTER IV

LABELING AND FAIR PACKAGING

SECTION 12, Anicle 81 of the Consumer Act is hereby amended to read as follows:

“ARTB1. Price tag Requirement, - It shall be unlawful to offer any consumer product OR SERVICE for
retail sale to the public without an appropriate peice tag, label, ar marking, OR WITH MORE THAN
ONE PRICE, OR DIFFERENT PRICE TAGS, LABELS, OR MARKINGS publicly displayed to indicate
of each articte and said products shall not be sold at a price higher than that stated thercin and without
discrimination to all buyers, PROVIDED, THAT TT SISALL BE UNLAWFUL FOR ANY RETAILER
TO CHARGE THE CUSTOMERS MORE THAN THE ACTUAL CASH RETAIL PRICE OF THE
GOODS OR SERVICES PURCHASED WHEN SUCH PURCHASE I$ DONE WITH THE USE OF
CREDIT CARD AND/OR TO LIMIT BARGAIN SALE ITEMS AND SERVICES TO CASH
PURCHASES: Provided, further, Tat Inmber sold, displayed or offered for sale to the public shall be
tagged or labeled by indicating thereon the price and the corresponding official name of the wood
PROVIDED , FINALLY, That if consumer products for sale are tov 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.”

SECTION 13. A new Article, is hereby inserted to the Consumer Act of the Philippines to read ax
follows:

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“ENGLISH OR PILIPINO TRANSLATION QF PRODUCT LARELS WRITTEN IN FOREIGN
CHARACTERS/LANGUAGES. - CONSUMER PRODUCTS WITH PRODUCT LABELS WRITTEN IN
FOREIGN CHARACTERS/LANGUAGE SHALL BE ALLOWED ENTRY INTO THE COUNTRY
AND INTRODUCED INTO COMMERCE ONLY IF THEY HAVE A CORRESPONDING ENGLISH
‘OR PILIPINO TRANSLATION TO ENABLE THE AUTHORITIES TO DRTERMINE WHETHER,
THE PRODUCT HAS COMPLIED WITH ALL THE OTHER LABELING REQUIREMENTS AS
WELL AS PROVIDE THE CONSUMERS PROPER GUIDANCE ON THE CONTENTS AND
SOURCE / ORIGIN OF THE PRODUCT.”

SECTION 14. A new article is hereby inserted to the Consumer Act of the Philippines to read as follows:

“OFFICIAL 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 10 VALIDATE THE FOLLOWING
INFORMATION RELATIVE TO A PARTICULAR IMPORTED CONSUMER PRODUCT:

COUNTRY OF MANUFACTURE;

NAME AND ADDRESS OF MANUFACTURER / EXPORTER;

NAME AND ADDRESS OF IMPORTER/CONSIGNEE;

VALUE AND VOLUME OF SHIPMENT;

DATE OF ARRIVAL, AND;

OTHER INFORMATION RELEVANT TO THE SHIPMENT IN QUESTION.”

Avene

CHAPTER VI

FALSE, DECEPTIVE AND MISLEADING ADVERTISEMENT

SECTION 15 Article 110 of the Consumer Act of the Philippines is hereby amended to read as follows:

“ART. 110. False, Deceptive or Misleading Advertisement. — It shall be wnlawfal for any person to
disscminate 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 indireculy
the purchase of consumer products or services.

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

SECTION 16. A new Article is hereby inserted to the Consumer Act of the Philippines to read as

follows:

“ADVERTISEMENT ;GENERAI. PRINCIPLES - (1) ADVERTISING MUST PROVIDE THE
GENERAL PUBLIC WITH RELEVANT AND TRUTHFUL INFORMATION ON PRODUCTS AND.
SERVICES, THEREBY HELPING CONSUMERS MAKE INFORMED CHOICES,

(2) THE ADVERTISING INDUSTRY SHOULD CONTINUE TO IMPROVE THE LEVELS
AND STANDARDS OF ADVERTISING.

SECTION 17, A new Article is herchy inserted to the Consumer Act of the Philippines to read as
follows:

COVERAGE — (1) THESE PROVISIONS SHALL APPLY TO THE PHILIPPINE ADVERTISING
COMMUNITY WHICH INCLUDES ADVERTISERS, ADVERTISING AGENCIES, MEDIA AND
ADVERTISING SUPPORT GROUPS.

(2) THESE PROVISIONS SHALL NOT APPLY TO THE FOLLOWING:

2.4) PUBLIC SERVICE AND EMERGENCY ANNOUNCEMENTS OF UTILITY COMPANIES.

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

2.3) STANDARD TRANSPORT ANNOUNCEMENTS, CLASSIFIED ADVERTISEMENTS AND
OBITUARIES

SECTION 18, A new Article is hereby inserted to the Consumer Act of the Philippines to read as
follows;

PRESENTATION OF ADVERTISEMENTS - (1) CLAIMS OP PRODUCTS AND SERVICE
PROPERTIES OR THEIR (NYENDED USAGE SHOULD BE CLEARLY PRESENTED AND
SHOULD NOT MISLEAD OR BE LIKELY TO MISLEAD THE PERSONS TO WHOM THEY ARE
ADDRESSED BY INACCURACY, AMBIGUITY, EXAGGERATION OR OMISSION,

(2) ANY TEST OR DEMONSTRATION MAY BE USED ONLY IF IT DIRECTLY PROVES
‘THE CLAIMED PRODUCT OR SERVICE PROPERTY OR CHARACTERISTICS AND SHOULD BE
PRESENTED CLEARLY AND ACCURATELY.

(3) CORPORATE ADVERTISING MUST BE FAIR, TRUTHFUL AND ACCURAT!
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 SPECIPIC CLAIMS.
REGARDING THE COMPANY OR ITS PRODUCTS OR SERVICES, SUCH CLAIMS MUST BE
VERIFIABLE AND SUBJECT TO SUBSTANTIATION IN THE SAME MANNER AS REGULAR
PRODUCT OR SERVICE. ADVERTISEMENTS.

SECTION 19, A new Article is hereby inscsted to the Consumer Act of the Philippines to read as
follows:

“SPECIFIC CLAIMS - (1) INGREDIENT ADVERTISING - (A) ADVERTISEMENTS SHOULD NOT
CONTAIN ANY REFERENCE WHICH COULD LEAD THE PUBLIC TO ASSUME THAT A
PRODUCT CONTAINS A SPECIFIC INGREDIENT UNLESS THE INGREDIENT’S QUANTITIES

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AND PROPERTIES AS WELL AS THE MATERIAL BENEFIT THAT RESULTS PROM ITS
INCLUSION IN THE PRODUCT FORMULATION HAVE BEEN TECHNICALLY

(B) ADVERTISEMENTS SHOULD NOT IMPLY THAT A CERTAIN RENEFIT IS DUE TO A
SPECIFIC INGREDIENT UNLESS A VERIFIABLE CAUSE AND EFFECT RELATIONSHIP EXISTS,

Q) PROFESSIONAI. DATE REFERENCES ~ ADVERTISEMENTS USING THE RESULTS OF A
BONA FIDE RESEARCH, SURVEYS, OR TEST RELATING TO 4 PRODUCT SHOULD NOT BE,
PRESENTED INACCURATFLY OR TN A MISLEADING MANNER, NOR SHOULD IT CLAIM
ANY IMPLICATIONS BEYOND THAT CLEARLY ESTABLISHED BY RESEARCH, SURVEY OR
‘TEST.

(3) SCIENTIFIC CLAIMS —(A) VISUAL REPRESENTATIONS OF LABORATORY SETTINGS MAY
ONLY BE EMPLOYED PROVIDED THE RESEARCH WAS CONDUCTED IN THE
LABORATORY.

(B) IN CASE OF REFFRENCES TO TESTS BY PROFESSIONALS OR INSTITUTIONS (E.G.
DOCTORS, ENGINEERS, RESEARCH FOUNDATIONS) DOCUMENTED AND AUTHORITATIVE,
EVIDENCE SHOULD BE SUBMITTED TO SUBSTANTIATE SUCH TESTS AND THE CLAIMS
BASED THEREON.

(4) NUMBER 1 OR LEADERSHIP CLAIM - (A) NO “NO. I" CLAIM WITH RESPECT TO ANY
PRODUCT OR SERVICE SHALL BE ALJ-OWED UNLESS IT IS CLEARLY DELINEATED AND.
QUALIFIED AS TO RENDER THE CLAIM OBJECTIVELY VERIFIABLE, THE CLAIM SHOULD,
IN ANY CASE, BE SUBSTANTIATED.

(5) TESTIMONIALS - (A) “TESTIMONIAL CLAIMS RELATING TO THE PRODUCT BEING
ADVERTISED SHOULD BE GENUINE AND TRUTHFUL.

®) INDIVIDUAL PERSON(S) ENDORSING A PRODUCT OR SERVICE IN COMMUNICATION
MATERIALS AND WHO IS PRESENTED AS AN EXPERT MUST HAVE DEMONSTRABLE
CREDENTIALS TO SUBSTANTIATE THE CLAIMED EXPERTISE. HIS OR HER ENDORSEMENT

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MUST BE SUPPORTED BY AN ACTUAL EXPRCISE OF HIS/HER 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.

(©) ENDORSEMENTS BY AN ORGANIZATION ARF VIEWED AS JUDGMENT(S) BY A GROUP
WHOSE COLLECTIVE EXPERIENCE OUTWEIGHS THAT OF AN INDIVIDUAL MEMBER.
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 [T CAN PRESENT BY
PROOF OF AT LEAST ONE YEAR”

PROMOTION OF SALES OF CONSUMER PRODUCTS AND SERVICES

SECTION 20. A now Article id hereby inserted to the Consumer Act of the Philippines to read as
follows:

“COVERAGE OF ADVERTISING AND SALES PROMOTION. - TH PROVISIONS ON
ADVERTISING AND SALES PROMOTION SHALL APPIY TQ ADVERTISING AND
PROMOTION OF CONSUMER PRODUCTS, SERVICES AND CREDIT FACILITIES, WHICH
INCLUDE SPONSORSHIPS OF PROGRAMS, CONCERTS, GAMES, SHOWS ANI) SIMILAR
ACTIVITIES. PROVIDED, THAT WITH RESPECT TO FOOD, DRUGS, DEVICES, COSMETICS
AND HAZARDOUS SUBSTANCES AND AGRICULTURAL PRODUCTS, THE SAME SHALL BE
UNDER THE JURISDICTION OF THE CONCERNED DEPARTMENTS.”

SECTION 21. A new Article is inserted to the Consumer Act of the Philippines to read as follows:

“COVERAGE AND EXEMPTION OF THE SALES PROMOTION OF CONSUMER PRODUCTS AND

SERVICES, (A) COVERAGE OF THE SALES PROMOTION OF CONSUMER PRODUCTS AND

SERVICES — THE PROVISIONS ON SALES PROMOTIONS OF THE CONSUMER PRODUCTS,
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AND SERVICES SHALL APPLY TO ALL PROMOTIONAI. CAMPAIGNS/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 SUCH AS BUT NOT LIMITED
TO IN-STORE PROMOTIONS OFFERING REDUCED PRICES, SPECIAL OFFERS, PRODUCT
DEMONSTRATION, PRODUCTS SAMPLES, REBATES, DISCOUNTS, PREMIQM-IN-PACK,
AND EXPERT ADVICE

(B) EXEMPTION OF THE SALES PROMOTION OF CONSUMER PRODUCTS AND
SERVICES ~ ‘THE PROVISIONS OF SALES PROMOTION OF CONSUMER PRODUCTS AND.
SERVICES SHALL NOT APPLY TO THE FOLLOWING PROMOTIONAL CAMPAIGNS OR
ACTIVITIES:

(1) GOVERNMENT OR ANY OF ITS AGENCIES OR INSTRUMENTALITIES, WHEN ‘THE SAME
IS CONDUCTED IN THE EXERCISE OF THEIR GOVERNMENTAL FUNCTIONS.

@Q) PRIVATE ENTITIES IN JOINT PROJECTS WITH ANY GOVERNMENT AGENCY UNDER
‘THE PRECEDING PARAGRAPH,

@) 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 SALES.
PROMOTIONAL. CAMPAIGN AS DEFINED UNDER THESE ACT.

SECTION 22, Article 116 of the Consumer Act of the Philippines is hereby amended to read as follows:

“ART. 116. Permit to Conduct Promotion. — No person shall conduct any sales campaigns, inchading
beauty contest, national in character, sponsored and promoted by PRODUCERS, RETAILERS,
SELLERS, DISTRIBUTORS, SUPPLIERS, IMPORTERS, OR manufacturing enterprises without first
securing a permit fiom 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] fiom filing of the COMPLETE application, the same shall be deemed approved and the promotion
campaign ot activity may be conducted: povided, that any sales promotion campaign using medical
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Prescriptions or any part thereof of attachment thereto for raffles or a promise of reward shall not be
allowed, nor a permit be issued thereof.”

SECTION 23. A new Article is hereby inserted to the Consumer Act of the Philippines « read as follows:

“APPLICATION FOR PERMIT - (A) THE APPLICATION FOR PERMIT SHALL BE IN THE
FORM PRESCRIBED BY THE DEPARTMENT CONCERNED.

(B) WHO MAY FILE THE APPLICATION FOR PERMIT - THE PERSON WIIOSE
CONSUMER PRODUCTS, SERVICES, CREDIT FACILITIES, BEAUTY CONTESTS,
COMPETITION, GAMES SHOWS AND THE LIKE ARE BEING PROMOTED,

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 THEMSELVES, REFLECTING THE DEGREE OR EXTENT OF THEIR
PARTICIPATION AND RESPONSIBILITY IN THE CONDUCT OF THE PROMOTIONAL,
ACTIVITY COVERED BY TINS ACT OR THE RULES. WHERE NO LIMITATION AS TO THE.
EXTENT OF THE LIABILITY OR RESPONSIBILITY 1S INDICATED [8 SUCH AGREEMENT, ALL
OF THEM SIIALL BE JOINTLY AND SEVERALLY LIABLE AND RESPONSIBLE THEREFOR.

(C) APPLICATION THROUGH AND BY AN AGENT - WHERE THE PROMOTIONAL
CAMPAIGN/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
AS THE CASE MAY BE,

SECTION 24. A new Article is hereby inserted to the Consumer Act of the Philippimes to read as

follows:

“PROHIBITED ACTS IN THE CONDUCT OF SALES PROMOTION — “THE FOLLOWING ACTS ARE
PROHIBITED IN THE CONDUCT OF SALES PROMOTION CAMPAIGN: (A) GAMBLING AND.
WAGERING SCHEMES;

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(B) USE OF MEDICAL PRESCRIPTIONS; AND

(©) NO PERSON SHALL DIRECTLY OR {NDIRECTLY TAMPER WITH THE ENTRIES,
PARAPHERNALIA ANLVOR ELECTRONIC DEVICE IN A PROMOTIONAL CAMPAIGN/ACTIVITY
COVERED BY FHIS ACT OR THE RULES NOR UNDULY INFIUENCE THE RESULTS THEREOF,
NOR PERFORM ANY ACT TO THE PREJUDICE OF LEGITIMATE PARTICIPANTS AND/OR
WINNERS.

SECTION 25. A new Article is hereby inserted to the Consumer Act of the Philippines to read as
follows:

“VOLUNTARY CANCELLATION OF APPROVED PROMOTIONAL CAMPAIGN/ACTIVITY — ~(A)
VOLUNTARY CANCELLATION BEFORE PUBLICATION — A PERSON MAY VOLUNTARILY
CANCEL OR DISCONTINUE THE APPROVED PROMOTIONAL CAMPAIGN/ACTIVITY.
PROVIDED NO INFORMATION DISSEMINATION AND ADVERTISING THEREON HAS BEEN
MADE AND THAT A WRITTEN NOTICE BE SUBMITTED TO TIE DEPARTMENT PRIOR TO.
SUCH VOLUNYARY CANCELLATION.

(B) VOLUNTARY CANCELLATION AFTER PUBLICATION IF ANY ANNOUNCEMENT,
INFORMATION DISSEMINATION OR ADVERTISING OF THE PROMOTIONAL
CAMPAIGN/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 WITHIN A
PERIOD OF NOT LESS THAN FIVE (5) DAYS BEFORE THE COMMENCEMENT OF THE
ORIGINAL INTENDED DATE OF PROMOTION.

THE SPONSOR SIIALL HONOR THE PROMOTIONAL COMMITMENTS SHOULD If
FAIL TO COMPLY WITII THE REQUIRED PERIOD.

(©) VOLUNTARY CANCELLATION OF ONGOING PROMOTION - VOLUNTARY
CANCELLATION OR DISCONTINUANCE OR SUSPENSION OF ANY ONGOING
PROMOTIONAL CAMPAIGNS/ACTIVITIES SHALL NOT BE ALLOWED EXCEPT UPON PRIOR
WRITTEN APPROVAL BY ‘THE DEPARTMENT WHICH SHALL BE BASED ON ANY OF TIE
FOLLOWING GROUNDS:

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() A FINAL JUDGMENT OF VOLUNTARY INSOLVENCY/BANKRUPTCY AGAINST
THE PERSON WHO APPLIED,

{IM} OCCURRENCE OF ANY FORTUITOUS EVENT OR FORCE MAJEURE THAT WLI.
MAKE 1T IMPOSSIBLE TO CONTINUE THE PROMOTIONAL CAMPAIGN/ACTIVITY.
PROVIDED, HOWEVER, THAT THOSE WHO HAD ALREADY WON IN THE PROMOTION
BEFORE THE APPROVAL OF THE CANCELLATION OR DISCONTINUANCE OR SUSPENSION
SHALL BE PAID OR GIVEN THER PRIZES.

SECTION 26. A new Anticle is hereby inserted to the Consumer Act of the Philippines to read as
follows:

“RULES ON MECHANICS ~ ALL COVERED PROMOTIONAL CAMPAIGNS/ACTIVITIES SILALL
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.”

SECTION 27. A new Article is hereby inserted to the Consumer Act of the Philippines to read as

follows:

(A) MODE OF SELECTION OF PROSPECTIVE PARTICIPANTS/ENTIRES — PROSPECTIVE
PARTICIPANTS/ENTRIES ARE SELECTED IN A FAIR, HONEST AND TRANSPARENT
MANNER. THERE MUST HE PROOF OF NOTICE OF SELECTION AND SUCH OTHER
RELEVANT INFORMATION TO THE SELECTED PARTICPANTS IN A MANNER EXPRESSLY
PROVIDED FOR IN THE MECHANICS.

(B) DETERMINATION OF WINNERS - 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.

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DETERMINATION OF WINNERS MAYBE THORUGH THE USE OF ANY TECHNIQUE NOT
CONTRARY TO LAW, MORALS AND PUBLIC POLICY PROVIDED THE SAME SHALI BE
CONDUCTED IN A FAIR, HONEST AND TRANSPARENT MANNER.

(CHAPTER 4

AMENDMENTS TO TITLE IV (CONSUMER CREDIT TRANSACTION)

SECTION 28, A new Article is hereby inserted to the Consumer Act of the Philippines to read as
follows:

“ART. 131-A. IMPLEMENTING AGENCY, - THE BANGKO SENTRAL NG PILIPINAS SHALL
STRICTLY ENFORCE THE PROVISION OF THIS CHAPTER AND ITS IMPLEMENTING RULES
AND REGULATIONS EXCEPT THOSE WHICH FALLS WITHIN TIE JURISDICTION OF THE
SECURITIES AND EXCHNAGE COMMISSION.”

CHAPTER 5.

AMENDMENTS TO TITLE V (THE NATIONAL CONSUMER AFFAIRS COUNCIL (NCAC))

CHAPTERS

ESTABLISHMENT AND COMPOSITION

SECTION 29. Article 148 of the Consumer Act of the Philippines is hereby arnended to read as follows:

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“ART 148. The National Consumer Affairs Council. To apprave the management, coordination and
cflectiveness of consumer programs, a National Consumer Affairs Council is hereby created, hereinafter
referred to as “Council” WHICII SHALL BE ATTACHED DIRECTLY UNDER THE OFFICE OF THE.
PRESIDENT.”

SECTION 30. Article 149 of the Consumer Act of the Philippines is hereby umended to read as follows:

“ART 149, Composition, The Council shall be composed of representatives from the following

government agencies and non-government agencies:

#) Departnent of Trade And Industry;
b) DEPARTMENT OF EDUCATION;
©) Department of Health;

d) Departnent of Agriculture;

E) DEPARTMENT OF RNERGY;

©) BANGKO SENTRAL NG PILIPINAS;

F) [e] four (4) representatives from the consumer organizations of nationwide base to be chosen by
the president among [the] ITS nominees [submitted by the various groups in the Philippines};
AND

G) [€] two (2) representatives from the business industry/sector (0 be chosen by the president from

the from among the nominees submitted by the various business orgunizations,”

SECTION 31. Atticle 151 of the Consumer 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
TEN THOUSAND PESOS (P10,000.00) [five hundred pesos (P500.00)] per meeting actually altended
‘but nat more than SEVEN THOUSAND PESOS (P7,(100,00) {two thousand pesos (P2,000.00)] a month.”

SECTION 32, Article 152 of the Consumer Act is hereby amended to read as follows:

“ART. 152, The Secretariat, — The Council shall appoint an Executive Director who shall assist the
Chairman and act as Secretary of the Council, The OFFICE OF THE PRESIDENT [Department of Trade

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and Industry} shall provide the Secretariat which shall assist ce Council in the effective performance of
its functions.”

CHAPTER IT

POWERS AND FUNCTIONS OF NCAC

SECTION 33. . Article 156 of the Consumer Act of the Philippines is hereby amended to read as follows:

“ART 136. Consumer Participation. — Department shalt 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 inchide provisions for a forum, where
consumers can express their concems and recommendations to decision-makers, The departments shall
exert efforts to inform consumers of pending proceedings where their participation is important,

NOTE BENE: The inclusion of the word “recognition” would do away with the strict requirements of
accreditation of consurmer organization under the LOL 1337, In effect, mote recognition of consumer
organization would suffice.

CHAPTER IL

CONSUMER COMPLAINTS:

SECTION 34. Article 164 paragraph e) of the Consumet Act is hereby amended to read as follows:

“ART, 164, Sanctions. — After investigation, any of the following administrative penalties may be
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a) the issuance of a cease and deist order, Provided, however; That such order shall specify the acts
that respondent shall ccase and desist from and shall him to submit a report of compliance therewith
within a reasonable time;

b) the acceptance of a voluntary assurance of compliance ar discontinuance from respondent which
‘may include any or all of the following terms and conditions:

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

2) an assurance to reffain from engaging in unlawful nts and. practices or unfair or unfair or
‘unethical trade practices subject of the formal investigation;

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

4) ao assurance fo rocall, replace, repair, or refund the moncy value of defective products distributed

5) um aseurance 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;

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 CANCE).LATION OF A BUSINESS NAME,

) the imposition of administrative fines in such amount as decmed reasonable by the Secretary,
which shall in ao casc be Jess than FIFTY THOUSAND PESOS (P50,000.00) (Five hundred
pesos (P500.00)] nor more than ONE MILLION PESOS (P1,000,000.00) [Three ttundred
thonsand pesos (P300,000.00)] depending on the gravity of the offense, and an additional fine of

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NOT LESS THAN ONE THOUSAND PESOS (P1,000.00) [nat more than One thousand pesos
(P1,000,00) OF for] each day of continuing violation.

SECTION 35. A new provision is hereby inserted to the Consumer Act of the Philippines to read as
follows:

* “CRIMINAL PENALTIES - ANY PERSON WHO VIOLATES ANY PROVISION OF THIS ACT
SHALL, UPON CONVICTION, BE SUBJECT TO A FINE OF NOT LESS ‘THAN FIFTY THOUSAND
PESOS (P50,000,00) BUT NOT MOT 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.

*NOTA BENE; The proposed provision will increase the present penalties of Republic Act No. 7394 or.
Consumer Act and set a uniform penalty to be imposed for violation of any of the provisions of the
Consumer Act The Consumer Act presently imposes different ininimum and maximum penalties and
different terms of imprisonment depending on the provisions thereof being violated.

SECTION 36, A new article is hereby inserted to the Consumer Act which shall read as follows:

“USE OF ADMINISTRATIVE FINES IMPOSED BY THE CONCERNED DEPARTMENT. TUE
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 CO1].ECTED BY THE DEPARTMENT UNDER THIS
ACT AND OTHER LAWS FOR THE £¥FICIENT, 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, SHALI. BE DEPOSITED AND MAINTAINED IN A
SEPARATE ACCOUNT OR FUND, WHICH MAY BE USED OR DISBURSED DIRECTLY BY THE
SECRETARY OF THE CONCERNED DEPARTMENT.”

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CHAPTER 6

AMENDMENTS TO TITLE Vi (TRANSITORY AND FINAL PROVISIONS)

SECTION 37. Article 169 of the Consumer Act of the Philippines is hereby amended to read as follows:

“ART. (69 Prescription. — All actions or claims accruing under the provisions of this Act and the rules
and regulations issued pursuant thereto shall prescribe within THREE (3} years ftwo (2)] 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.”

SECTION 38, Separabitity Clause. If any part or parts of this Act should, for any reason, be declared
invalid of unconstitutional, the part ot parts thereof unaffected shall thereby continue to remain in full

force and effect.

SECTION 39. Hepecling Clause. All laws, decrees, executive order, rules and regulations and other
issuances consistent with this Act is herchy repealed o¢ amended accordingly.

SECTION 40. Effectivity. ‘This Act shal! take effect fifteen (15) days from the date of publication in at
east twa (2) newspapers af general circulation.

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