Sept 16

4. Activities in connection with, or with a view to, consumer transactions

a. Licensing

Art. 10 (y), (ii), RA 3720 as amended by RA 9711

“(y) ‘Authorization’ means a permission embodied in a document granted by the FDA to a natural or
juridical person who has submitted an application to implement the manufacture, importation, exportation,
sale, offer for sale, distribution, transfer, and/or, where appropriate, the use, testing, promotion,
advertising, or sponsorship of health products. The authorization can take the form of a permit, a license,
a certificate of registration, of accreditation, of compliance, or of exemption, or any similar document.

“(ii) ‘Licensing’ means the process of approval of an application to operate or establish an establishment
prior to engaging in the manufacture, importation, exportation, sale, offer for sale, distribution, transfer,
and where applicable the use, testing, promotion, advertisement, and/or sponsorship of health products.

Art. 31, RA 7394

ARTICLE 31. Licensing and Registration. — a) No person shall manufacture, sell, offer for sale,
import, export, distribute or transfer any drug or device, unless an application filed pursuant to sub-article
(b) hereof is effective with respect to such drug or device.

b) Any person may file with the Department, through the Department, an application under oath
with respect to any drug or device subject to the provisions of sub-article (a) hereof. Such persons shall
submit to the Department: (1) full reports of investigations which have been made to show whether or not
such drug or device is safe, efficacious and of good quality for use based on clinical studies conducted in
the Philippines; (2) a full list of the articles used as components of such drug or device; (3) a full
statement of the composition of such drug or device; (4) a full description of the methods used in and the
facilities and controls used for the manufacture of such drug or device; (5) such samples of such drug or
device and of the articles used as components thereof as the Department may require; (6) specimens of
the labeling proposed to be used for such drug or device; and (7) such other requirements as may be
prescribed by regulations to ensure safety, efficacy and good quality of such drug or device.

c) Within one hundred eighty (180) days after the filing of an application under this sub-article, or
such additional period as may be agreed upon by the Department and the applicant, the Department shall
either (1) approve the application if he then finds that none of the grounds for denying approval specified
in sub-article (d) applies, or (2) give the applicant notice of an opportunity for a hearing before the
Department under sub-article (d) on the question whether such application is approvable.

d) If the Department finds, after due notice to the applicant and giving him an opportunity for a
hearing, that (1) the reports of the investigations which are required to be submitted to the Department
pursuant to sub-article (b) hereof, do not include adequate tests by all methods reasonably applicable to
show whether or not such drug or device is safe, efficacious and of good quality for use under the
conditions prescribed, recommended or suggested in the proposed labeling thereof; (2) the results of
such test show that such drug or device is unsafe, inefficacious or of doubtful therapeutic value for use
under such conditions or do not show that such drug or device is safe, efficacious or of good quality for
use under such conditions; (3) the methods used in, and the facilities and controls used for the
manufacture of such drug or device are inadequate to preserve its identity, strength, quality and purity; or
(4) upon the basis of the information submitted to him as part of the application, or upon the basis of any
other information before him with respect to such drug or device, he has insufficient information to
determine whether such drug or device is safe, efficacious or of good equality for use under such
conditions; or (5) evaluated on the basis of the information submitted to him as part of the application, and
any other information before him with respect to such drug or device, there is a lack of substantial
evidence that the drug or device will have the effect it purports or is represented to have under the
conditions of use prescribed, recommended or suggested in the proposed labeling thereof; or (6) based
on a fair evaluation of all material facts, such labeling is false or misleading in any way; he shall issue an
order disapproving the application.

e) The effectiveness of an application with respect to any drug or device shall, after due notice
and opportunity for hearing to the applicant, by order of the Department be suspended if it finds (1) that
clinical experience, tests by new methods, or tests by methods not deemed reasonably applicable when
such application became effective show that such drug or device is unsafe or ineffective for use under the
conditions of use upon the basis of which the application became effective, or (2) that the application
contains any untrue statement of a material fact. The order shall state the findings upon which it is based.

f) The Department shall promulgate regulations for exempting from the operation of this Article
drugs and devices intended solely for investigational used by experts qualified by scientific training and
experience to investigate the safety and effectiveness of drugs and devices.

g) No person shall manufacture, sell, offer for sale, import, export, distribute or transfer any drug
or device without first securing a license to operate from the Department after due compliance with
technical requirements in accordance with the rules and regulations promulgated by the Department
pursuant to this Act.

h) No drug or device shall be manufactured, sold, offered for sale, imported, exported, distributed
or transferred, unless registered by the manufacturer, importer or distributor thereof in accordance with
rules and regulations promulgated by the Department pursuant to this Act. The provisions of Article 31
(b), (d) and (e), to the extent applicable, shall govern the registration of such drugs and devices.

i) The Department shall promulgate a schedule of fees for the issuance of the certificate of
product registration and license to operate provided for under this Article.

b. Registration

Art. 10 (kk), RA 3720 as amended by RA 9711

“(kk) ‘Registration’ means the process of approval of an application to register health products prior to
engaging in the manufacture, importation, exportation, sale, offer for sale, distribution, transfer, and where
applicable, the use, testing, promotion, advertisement, and/or sponsorship of health products

Art. 31, RA 7394

c. Standardization Art. 5, 7, 14, RA 7394 RA 4109

RTICLE 5. Declaration of Policy. — It shall be the duty of the State:

a) to develop and provide safety and quality standards for consumer products, including
performance or use-oriented standards, codes of practice and methods of tests;

b) to assist the consumer in evaluating the quality, including safety, performance and comparative
utility of consumer products;
c) to protect the public against unreasonable risks of injury associated with consumer products;

d) to undertake research on quality improvement of products and investigation into causes and
prevention of product related deaths, illness and injuries;

e) to assure the public of the consistency of standardized products.

ARTICLE 7. Promulgation and Adoption of Consumer Product Standards. — The concerned

department shall establish consumer product quality and safety standards which shall consist of one or
more of the following:

a) requirements as to performance, composition, contents, design, construction, finish, packaging

of a consumer product;

b) requirements as to kind, class, grade, dimensions, weights, material;

c) requirements as to the methods of sampling, tests and codes used to check the quality of the
product;

d) requirements as to precautions in storage, transporting and packaging;

e) requirements that a consumer product be marked with or accompanied by clear and adequate
safety warnings or instructions, or requirements respecting the form of warnings or instructions.

For this purpose, the concerned department shall adopt existing government domestic product quality and
safety standards: Provided, That in the absence of such standards, the concerned department shall form
specialized technical committees composed of equal number of representatives from each of the
Government, business and consumer sectors to formulate, develop and purpose consumer product
quality and safety standards. The said technical committees shall consult with the private sector, which
may, motu proprio, develop its own quality and safety standards that shall be subject to review and
approval of the concerned government agency or agencies after public hearings have been conducted for
that purpose; and shall likewise consider existing international standards recognized by the Philippine
Government.

ARTICLE 14. Certification of Conformity to Consumer Product Standards. — The concerned

department shall aim at having consumer product standards established for every consumer product so
that consumer products shall be distributed in commerce only after inspection and certification of its
quality and safety standards by the department. The manufacturer shall avail of the Philippine Standard
Certification Mark which the department shall grant after determining the product’s compliance with the
relevant standard in accordance with the implementing rules and regulations.

REPUBLIC ACT No. 4109

An Act to Convert the Division of Standards Under the Bureau of Commerce into a Bureau of Standards,
to Provide for the Standardization and/or Inspection of Products and Imports of the Philippines and for
Other Purposes

Be it enacted by the Senate and House of Representatives of the Philippine Congress Assembled:

Section 1. The Division of Standards under the Bureau of Commerce is hereby converted into a Bureau of
Standards under the Department of Commerce and Industry.

Section 2. The Bureau shall have as its head a Director of Standards and two Assistant Directors, one for
technical matters and the other for administrative matters, who shall be appointed by the President of the
Philippines with the consent of the Commission on Appointments.1âшphi1 There shall be in the Bureau
such officials and employees to be appointed by the Secretary of Commerce and Industry as may be
necessary to carry out the purpose of this Act: Provided, That personnel of the Bureau whose duties and
functions are technical in nature shall be exempt from the operation of the Wage and Position
Classification Office.

Section 3. The Bureau shall have charge of the establishment of standards for, and inspection of, all
agricultural, forest, mineral, fish, industrial and all other products of the Philippines for which no standards
have as yet been fixed by law, executive order, rules and regulations; and the inspection and certification
of the quality of commodities imported into the Philippines, to determine the country of origin of the
articles which are the growth, raw materials, manufacture, process, or produce, and to determine if they
satisfy the buyer’s or importer’s requirements or specifications for domestic consumption; and to prohibit
the discharge and/or release of any article which are the growth, raw materials, manufacture, process, or
produce of countries without trade relations with the Philippine government. Physical, biological and/or
chemical tests or analyses necessary for the examination of products under the provisions of this Act may
be undertaken in any branch of the Government having facilities for the purpose until such time as the
Bureau may have its own facilities.

Section 4. Subject to the general supervision and control of the Secretary of Commerce and Industry, the
Director of Standards shall possess the general powers conferred by law upon Bureau Chiefs, and the
following specific powers and duties which he may perform personally or through his duly authorized
representatives:

(a) Under such rules and regulations as the Director of Standards may promulgate which the Secretary of
Commerce and Industry must approve within one year, to establish standards for the products within the
purview of Section three of this Act; to inspect in order to sample and determine the standards of said
products, and to certify the inspection and standard thereof:

(b) Before the government, including government owned or controlled corporation, make any purchase of
any of the products within the purview of Section three of this Acts, and/or the producer, manufacturer
and/or dealer offers for sale any commodity which affects the life, health and property of the people, to
inspect and sample in order to determine if, and to certify that the products satisfy the requirements as to
kind, class, grade, quality or standard in accordance with the provisions of sub-section (a) above;

(c) Before the exportation or shipment abroad of any of the products within the purview of Section three of
this Act for which no standard has or shall have, as yet, been established in accordance with the
provisions of sub-section (a) above, to inspect and sample in order to determine if, and to certify that, the
whole shipment satisfies the buyer’s or importer’s requirements as to kind, class, grade, quality or
standard: Provided, However, That shipments which are not standardized but conforms to buyer’s or
importer’s requirements, shall have their corresponding customs or shipping papers or documents
stamped conspicuously with caption "not under government commodity standardization" and may be
released by the Collector of Customs in accordance with the existing Tariff and Customs Laws.

(d) Before any commodity imported into the Philippines is discharged and/or released by the Bureau of
Customs, to inspect such commodity in order to sample and determine the country of origin where the
articles are the growth, raw materials, manufacture, process or produce, and to certify that, the whole
shipment satisfies local buyer’s importer’s requirements as to kind, class, grade, quality or standard which
may be indicated on the corresponding customs or shipping papers or commercial documents: Provided,
However, That imports which are not shown to be covered by, or do not conform to, buyer’s or importer’s
requirements, shall be labelled or stamped conspicuously with the caption "do not conform to buyer’s or
importer’s specifications": Provided, further, That imports of any article which are the growth, raw
materials, manufacture, process or produce of countries wherein the Philippines has no trade agreement
shall be confiscated and/or seized at the disposal of the government.

(e) To fix and collect fees for the services of inspection and certification of inspection and standard, and/or
testing or analyzing samples and certification of tests or analyses, and other services, the nature of which
require scientific and/or technological knowledge and skill.

(f) To take testimony or evidence on matters of official business relating to the exercise of his powers, the
performance of his duties, and the accomplishment of the purpose of this Act or any of the rules and
regulations promulgated in accordance therewith.

(g) To initiate and undertake official investigation to determine the nature of organization and business
methods of any entrepreneur, person, corporation, association, partnership or firm engaged in the
manufacture, marketing and distribution of the products within the purview of Section three of this Act:
Provided, However, That this power shall be exercised only in connection with any known or reported
violation of any provision of this Act, or non-compliance with any rule or regulation promulgated in
accordance therewith.

Section 5. Any person who fails or refuses to comply with a legal summon, or subpoena, or subpoena
duces tecum, of the Director of Standards or his duly authorized agent or representative, or refuses to be
sworn to, prior to giving testimony of refuses to answer pertinent questions, or gives false or misleading
data or information or willful concealment of a material fact, in any investigation made pursuant to
subsection (c), (d), (e), (f), and (g) of Section four of this Act, shall be punished by imprisonment of not
less than two or more than six months, and by a fine of not less than five hundred nor more than one
thousand pesos and deportation if he is an alien, after serving the entire period of his imprisonment:
Provided, However, That, if the false or misleading data or information shall have been given under oath,
the maximum penalty for giving false testimony shall be imposed.

Section 6. No customs export entry, import entry, declaration, release certificate, manifest, clearance,
import permit, or permit to ship abroad and/or discharge shall be issued for any of the products within the
purview of Section three of this Act and/or imported commodity, unless it is first inspected in accordance
with provisions of sub-sections (b), (c), (d), and/or (e) of Section four of this Act: Provided, However, That
no product of the Philippines for which a standard has been established and promulgated by virtue of this
Act shall be sold and/or disposed of in any manner and/or exported unless and until its standard shall
have been certified by the Director of Standards or his duly authorized representatives as conforming to
the standard set for, either for local distribution and/or for export: Provided, further, That no such
certification shall be required upon application under oath by the manufacturer and/or exporter to the
Director of Standards that the shipment is in small quantity and the product is not for sale but for private
use or consumption only. It shall be the duty and the responsibility of all collectors of customs to enforce
the prohibition on the exportation and/or importation of any product hereinabove referred to.

Section 7. Any public official, employee, individual, corporation, association, partnership, or firm effecting
or abetting the shipment abroad and/or facilitate the discharge of distribution and/or sale for domestic
consumption of any product in violation of any of the provisions of Section six of this Act or any rules and
regulations issued therewith, shall be punished by imprisonment of not less than six months nor more
than two years and by a fine of not less than one thousand nor more than five thousand pesos, and
deportation if he is an alien after serving the entire period of his imprisonment.

Whenever the violation is committed by a corporation, association, partnership, or firm, the President and
each one of the directors or managers of said corporation, association, partnership or firm who shall have
knowingly permitted or failed to prevent the commission of said violation shall be held liable as principals
thereof.

In case the offender is a naturalized citizen he shall, in addition to the penalty prescribed herein, suffer the
penalty of cancellation of his naturalization certificate and such registration in the civil registry and
immediate deportation.

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

If the offender is a public officer or employee, he shall, in addition to the penalty of imprisonment and fine
prescribed herein, be dismissed from office and perpetually disqualified from holding public office.

Section 8. The Division of Standards under the Bureau of Commerce is hereby converted and its
personnel, appropriation, and share in the appropriations of the Bureau of Commerce, funds, furniture,
equipment, properties, supplies, records, assets and liabilities are hereby constituted to the Bureau: and
all powers conferred upon, and all duties, functions, and activities assigned to the said division and to the
Director of Commerce by virtue of the provisions of Sections one hundred fifty-five, one hundred fifty-six
and one hundred fifty-seven of Executive Order Numbered ninety-four, series of nineteen hundred and
forty-seven, together with the execution and enforcement of Commerce Administrative Orders on
Standardization and inspection of Philippine products already promulgated in accordance with the
provisions of the said sections of the executive order, are hereby transferred to the Director of Standards.

Section 9. In addition to such funds and appropriation as may be transferred to the Bureau as provided in
Section eight of this Act, there is hereby appropriated, out of any funds in the National Treasury not
otherwise appropriated, the amount of one million pesos for the salaries, wages, sundry and other
expenses, furniture, and equipment of such personnel of the Bureau as will be needed and required to
carry out the purpose of this Act.

Section 10. Twenty-five per centum of all receipts and collections accruing from the enforcement of this
Act and the rules and regulations on inspection and certificate of inspection and standard shall be set
aside and be available for disbursement for salaries, wages, sundry and other expenses, furniture, and
equipment of such additional personnel as may be needed and required to intensify or extend the
activities and services of the Bureau. Any amount thus set aside, or so much thereof as may be needed
for the intensification or extension of activities and services, shall be itemized in special budget to be
approved by the President upon recommendation of the Secretary of Commerce and Industry; and any
such special budget thus approved for the ensuing fiscal year for the consideration of the Congress in its
regular or special session. Unitemized and unexpended balances of amounts thus set aside shall be
cumulative from year to year, and shall constitute, a special fund to be called "Philippine Standardization
and Inspection Funds" to be used for the purposes herein stated, and for such other aims and projects as
may render the services of the Bureau efficient and effective.

Section 11. All Acts, executive orders, administrative orders and proclamations or parts thereof
inconsistent with any of the provisions of this Act are hereby repealed or modified accordingly. If any part
of this Act shall, for any person, be adjudged by any court of competent jurisdiction to be invalid, such
judgment shall not affect the remainder thereof, but shall be confined in its operation to the part directly
involved in the controversy in which such judgment shall have been rendered.

Section 12. Effectivity. -This Act shall take effect upon its approval.

Approved: June 20, 1964.

d. Manufacture; Labeling; Packaging Sec. 4, pars. ar), aq), az), RA 7394

ar) “Manufacture” means any and all operations involved in the production, including preparation,
propagation, processing, formulating, filling, packing, repacking, altering, ornamenting, finishing or
otherwise changing the container, wrapper or labeling of a consumer product in the furtherance of the
distribution of the same from the original place of manufacture to the person who makes the final delivery
or sale to the ultimate consumer.

aq) “Label, labeling” means the display of written, printed or graphic matter on any consumer
product, its immediate container, tag, literature or other suitable material affixed thereto for the purpose of
giving information as to the identity, components, ingredients, attributes, directions for use, specifications
and such other information as may be required by law or regulations.

az) “Package” or “packaging” means any container or wrapping in which any consumer product is
enclosed for use in the delivery or display of that consumer product to retail purchasers, but does not
include:

1) shipping containers or wrappings used solely for the transportation of any consumer product in
bulk or in big quantities by manufacturers, packers, or processors to wholesale retail distributors thereof;

2) shipping containers or outer wrappings used by retailers to ship or deliver any product to retail
costumers if such containers and wrappings bear no printed matter pertaining any particular product;

3) The wrappers or containers of consumer products sold in small quantities by small retail stores
to the consumer which by tradition are wrapped with ordinary paper.

Title III, Chapter IV, RA 7394

CHAPTER IV

Labeling and Fair Packaging

ARTICLE 74. Declaration of Policy. — The State shall enforce compulsory labeling, and fair
packaging to enable the consumer to obtain accurate information as to the nature, quality and quantity of
the contents of consumer products and to facilitate his comparison of the value of such products.

ARTICLE 75. Implementing Agency. — The Department of Trade and Industry shall enforce the
provisions of this Chapter and its implementing rules and regulations: Provided, That with respect to food,
drugs, cosmetics, devices, and hazardous substances, it shall be enforced by the concerned department.

ARTICLE 76. Prohibited Acts on Labeling and Packaging. — It shall be unlawful for any person,
either as principal or agent, engaged in the labeling or packaging of any consumer product, to display or
distribute or to cause to be displayed or distributed in commerce any consumer product whose package
or label does not conform to the provisions of this Chapter.

The prohibition in this Chapter shall not apply to persons engaged in the business of wholesale or retail
distributors of consumer products except to the extent that such persons:

a) are engaged in the packaging or labeling of such products;

b) prescribe or specify by any means the manner in which such products are packaged or
labeled; or

c) having knowledge, refuse to disclose the source of the mislabeled or mispackaged products.

ARTICLE 77. Minimum Labeling Requirements for Consumer Products. — All consumer products
domestically sold whether manufactured locally or imported shall indicate the following in their respective
labels of packaging:

a) its correct and registered trade name or brand name;

b) its duly registered trademark;

c) its duly registered business name;

d) the address of the manufacturer, importer, repacker of the consumer product in the Philippines;

e) its general make or active ingredients;

f) the net quality of contents, in terms of weight, measure or numerical count rounded of to at
least the nearest tenths in the metric system;

g) country of manufacture, if imported; and

h) if a consumer product is manufactured, refilled or repacked under license from a principal, the
label shall so state the fact.

The following may be required by the concerned department in accordance with the rules and regulations
they will promulgate under authority of this Act:

a) whether it is flammable or inflammable;

b) directions for use, if necessary;

c) warning of toxicity;

d) wattage, voltage or amperes; or

e) process of manufacture used if necessary.

Any word, statement or other information required by or under authority of the preceding paragraph shall
appear on the label or labeling with such conspicuousness as compared with other words, statements,
designs or devices therein, and in such terms as to render it likely to be read and understood by the
ordinary individual under customary conditions of purchase or use.

The above requirements shall form an integral part of the label without danger of being erased or
detached under ordinary handling of the product.

ARTICLE 78. Philippine Product Standard Mark. — The label may contain the Philippine Product
Standard Mark if it is certified to have passed the consumer product standard prescribed by the
concerned department.

ARTICLE 79. Authority of the Concerned Department to Provide for Additional Labeling and
Packaging Requirements. — Whenever the concerned department determines that regulations containing
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:

a) establish and define standards for characterization of the size of a package enclosing any
consumer product which may be used to supplement the label statement of net quality, of contents of
packages containing such products but this clause shall not be construed as authorizing any limitation on
the size, shape, weight, dimensions, or number of packages which may be used to enclose any product;

b) regulate the placement upon any package containing any product or upon any label affixed to
such product of any printed matter stating or representing by implication that such product is offered for
retail at a price lower than the ordinary and customary retail price or that a price advantage is accorded to
purchases thereof by reason of the size of the package or the quantity of its contents;

c) prevent the nonfunctional slack-fill of packages containing consumer products.

For purposes of paragraph (c) of this Article, a package shall be deemed to be nonfunctionally 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.

ARTICLE 80. Special Packaging of Consumer Products for the Protection of Children. — The
concerned department may establish standards for the special packaging of any consumer product if it
finds that:

a) the degree or nature of the hazard to children in the availability of such product, by reason of
its packaging, is such that special packaging is required to protect children from serious personal injury or
serious illness resulting from handling and use of such product; and

b) the special packaging to be required by such standard is technically feasible, practicable and
appropriate for such product. In establishing a standard under this Article, the concerned department shall
consider:

1) the reasonableness of such a standard;

2) available scientific, medical and engineering data concerning special packaging and
concerning accidental, ingestions, illnesses and injuries caused by consumer product;

3) the manufacturing practices of industries affected by this Article; and

4) the nature and use of consumer products.

ARTICLE 81. Price Tag Requirement. — It shall be unlawful to offer any consumer product for retail
sale to the public without an appropriate price tag, label or marking 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 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, That if consumer products 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.

ARTICLE 82. Manner of Placing Price Tags. — Price tags, labels or markings must be written
clearly, indicating the price of the consumer product per unit in pesos and centavos.

ARTICLE 83. Regulations for Price Tag Placement. — The concerned department shall prescribe
rules and regulations for the visible placement of price tags for specific consumer products and services.
There shall be no erasures or alterations of any sort of price tags, labels or markings.

ARTICLE 84. Additional Labeling Requirements for Food. — The following additional labeling
requirements shall be imposed by the concerned department for food:

a) expiry or expiration date, where applicable;

b) whether the consumer product is semi-processed, fully processed, ready-to-cook, ready-to-eat,

prepared food or just plain mixture;

c) nutritive value, if any;

d) whether the ingredients use are natural or synthetic, as the case may be;

e) such other labeling requirements as the concerned department may deem necessary and
reasonable.

ARTICLE 85. Mislabeled Food. — A food shall also be deemed mislabeled:

a) if its labeling or advertising is false or misleading in any way;

b) if it is offered for sale under the name of another food;

c) if it is an imitation of another food, unless its label bears in type of uniform size and
prominence, the word “imitation” and, immediately thereafter, the name of the food imitated;

d) its containers is so made, formed, or filled as to be misleading;

e) if in package form unless it bears a label conforming to the requirements of this Act: Provided,
That reasonable variation on the requirements of labeling shall be permitted and exemptions as to small
packages shall be established by the regulations prescribed by the concerned department of health;

f) if any word, statement or other information required by or under authority of this Act to appear
on the principal display panel of the label or labeling is not prominently placed thereon with such
conspicuousness as compared with other words, statements, designs or devices in the labeling and in
such terms as to render it likely to be read and understood by the ordinary individual under customary
conditions of purchase and use;

g) if it purports to be or is represented as a food for which a definition or standard of identity has

been prescribed unless:

1) it conforms to such definition and standard; and

2) its labels bears the name of the food specified in the definition or standards, and insofar as
may be required by such regulations, the common names of optional ingredients other than spices,
flavoring and coloring, present in such food;

h) if it purports to be or is represented as:

1) a food for which a standard of quality has been prescribed by regulations as provided in this
Act and its quality fall below such standard, unless its label bears in such manner and form as such
regulations specify, a statement that it falls below such standard; or

2) a food for which a standard or standards or fill of container have been prescribed by
regulations as provided by this Act and it falls below the standard of fill of container applicable thereto,
unless its label bears, in such manner and form as such regulations specify, a statement that it falls below
such standard;
i) if it is not subject to the provisions of paragraph (g) of this Article unless its label bears:

1) the common or usual name of the food, if there be any; and

2) in case it is manufactured or processed from two or more ingredients, the common or usual
name of such ingredient; except the spices, flavorings and colorings other than those sold as such, may
be designated as spices, flavorings and colorings without naming each: Provided, That to the extent that
compliance with the requirement of clause (2) of this paragraph is impracticable or results in deception or
unfair competition, exemptions shall be established by regulations promulgated by the concerned
department of health;

j) if it purports to be or is represented for special dietary uses, unless its label bears such
information concerning its vitamin or mineral or other dietary properties as the concerned department
determines to be, or by regulations prescribed as necessary in order fully to inform purchasers as its
value for such uses;

k) if it bears or contains any artificial flavoring, artificial coloring, or chemical preservative, unless
it bears labeling, stating that fact: Provided, That to the extent that compliance with the requirements of
this paragraph is impracticable, exemptions shall be established by regulations promulgated by the
concerned department. The provisions of this paragraph or paragraphs (g) and (i) with respect to the
artificial coloring shall not apply in the case of butter, cheese or ice cream.

ARTICLE 86. Labeling of Drugs. — The Generics Act shall apply in the labeling of drugs.

ARTICLE 87. Additional Labeling Requirements for Cosmetics. — The following additional
requirements may be required for cosmetics:

a) expiry or expiration date;

b) whether or not it may be an irritant;

c) precautions or contra-indications; and

d) such other labeling requirements as the concerned department may deem necessary and
reasonable.

ARTICLE 88. Special Labeling Requirements for Cosmetics. — A cosmetic shall be deemed
mislabeled:
a) if its labeling or advertising is false or misleading in any way;

b) if in package form unless it bears a label conforming to the requirements of labeling provided
for in this Act or under existing regulations: Provided, That reasonable variations shall be permitted, and
exemptions as to small packages shall be established by regulations prescribed by the concerned
department;

c) if any word, statement or other information required by or under authority of this Act to appear
on the label or labeling is not prominently placed thereon with such conspicuousness, as compared with
other words, statements, designs or devices in the labeling, and in such terms as to render it likely to be
read and understood by the ordinary individual under customary conditions of purchase and use;

d) if its container is so made, formed or filled as to be misleading; or

e) if its label does not state the common or usual name of its ingredients.

ARTICLE 89. Mislabeled Drugs and Devices. — A drug or device shall be deemed to be mislabeled:

a) if its labeling is false or misleading in any way;

b) if it is in package form unless it bears a label conforming to the requirements of this Act or the
regulations promulgated therefor: Provided, that reasonable variations shall be permitted and exemptions
as to small packages shall be established by regulations prescribed by the concerned department.

c) if any word, statement or other information required by or under authority of this Act to appear
on the principal display panel of the label or labeling is not prominently placed thereon with such
conspicuousness as compared with other words, statements, designs or devices in the labeling and in
such terms as to render it likely to be read and understood by the ordinary individual under customary
conditions of purchase and use;

d) if it is for use by man and contains any quantity of the narcotic or hypnotic substance alpha-
eucaine, barbituric acid, beta-eucaine, bromal, cannabis, carbromal, chloral, coca, cocaine, codeine,
heroin, marijuana, morphine, opium, paraldehyde, peyote or sulfonmethane, or any chemical derivative of
such substance, which derivative has been designated by the concerned department after investigation,
and by regulations, as habit forming; unless its label bears the name and quantity or proportion of such
substance or derivative and in juxtaposition therewith the statement “Warning — May be habit forming”;
e) its labeling does not bear:

1) adequate directions for use; and

2) such adequate warning against use in those pathological conditions or by children where its
use may be dangerous to health, or against unsafe dosage or methods or duration of administration or
application, in such manner and form, as are necessary for the protection of users: Provided, That where
any requirement of clause (1) of this paragraph, as applied to any drug or device, is not necessary for the
protection of the public health, the concerned department may promulgate regulations exempting such
drug or device from such requirement;

f) if it purports to be a drug the name of which is recognized in an official compendium, unless it

is packaged and labeled as prescribed therein: Provided, That the method of packing may be modified
with the consent of the concerned department;

g) if it has been found by the concerned department to be a drug liable to deterioration, unless it
is packaged in such form and manner, and its label bears a statement of such precautions, as the
concerned department, shall by regulations, require as necessary for the protection of the public health;

h)1) if it is a drug and its container is so made, formed or filled as to be misleading; or

2) if it is an imitation of another drug; or

3) if it is offered for sale under the name of another drug;

i) if it is dangerous to health when used in the dosage, or with the frequency of duration
prescribed, recommended or suggested in the labeling thereof;

j) if it is, purports to be or is represented as a drug composed wholly or partly of insulin or of any

kind of penicillin, streptomycin, chlortetracycline, chloramphenicol, bacitracin, or any other antibiotic drug,
or any derivative thereof, unless:

1) it is from a batch with respect to which a certificate of release has been issued pursuant to
regulations of the concerned department; and

2) such certificate of release is in effect with respect to such drug: Provided, That this paragraph
shall not apply to any drug or class of drugs exempted by regulations promulgated under Authority of this
Act.
ARTICLE 90. Regulation-making Exemptions. — The concerned department may promulgate
regulations exempting from any labeling requirements of this Act food, cosmetics, drugs or devices which
are, in accordance with the practice of trade, to be processed, labeled or repacked in substantial
quantities at establishments other than those where originally processed, labeled or packed on condition
that such food, cosmetics, drugs or devices are not adulterated or mislabeled under the provisions of this
Act and other applicable laws upon approval from such processing, labeling and repacking
establishments.

ARTICLE 91. Mislabeled Hazardous Substances. — Hazardous substances shall be deemed

mislabeled when:

a) having been intended or packaged in a form suitable for use in households, especially for
children, the packaging or labeling of which is in violation of the special packaging regulations issued by
the concerned department;

b) such substance fails to bear a label:

1) which states conspicuously:

(i) the name and the place of business of the manufacturer, packer, distributor or seller;

(ii) the common or usual name or the chemical name, if there be no common or usual name, of the
hazardous substance or of each component which contributes substantially to the harmfulness of the
substance, unless the concerned department by regulation permits or requires the use of the recognized
generic name;

(iii) the signal word “danger” on substances which are extremely flammable, corrosive or highly
toxic;

(iv) the signal word “warning” or “caution” with a bright red or orange color with a black symbol on
all other hazardous substances;

(v) a clear statement as to the possible injury it may cause if used improperly;

(vi) precautionary measures describing the action to be followed or avoided;

(vii) instructions when necessary or appropriate for first-aid treatment;

(viii) the word “poison” for any hazardous substance which is defined as highly toxic;

(ix) instructions for handling and storage of packages which require special care in handling and
storage; and

(x) the statement “keep out of the reach of children”, or its practical equivalent, if the article is not
intended for use by children and is not a banned hazardous substance, with adequate directions for the
protection of children from the hazard involved. The aforementioned signal words, affirmative statements,
description of precautionary measures, necessary instructions or other words or statements may be in the
English language or its equivalent in Filipino; and

2) on which any statement required under clause 1) of this paragraph is located prominently in
bright red and orange color with a black symbol in contrast typography, layout or color with the other
printed matters on the label.

ARTICLE 92. Exemptions. — If the concerned department finds that for good or sufficient reasons,
full compliance with the labeling requirements otherwise applicable under this Act is impracticable or is
not necessary for the adequate protection of public health and safety, it shall promulgate regulations
exempting such substances from these requirements to the extent it deems consistent with the objective
of adequately safeguarding public health and safety, and any hazardous substance which does not bear a
label in accordance with such regulations shall be deemed mislabeled hazardous substance.

ARTICLE 93. Grounds for Seizure and Condemnation of Mislabeled Hazardous Substances. — a)
Any mislabeled hazardous substance when introduced into commerce or while held for sale shall be liable
to be proceeded against and condemned upon order of the concerned department in accordance with
existing procedure for seizure and condemnation of articles in commerce: Provided, That this Article shall
not apply to a hazardous substance intended for export to any foreign country if:

1) it is in a package labeled in accordance with the specifications of the foreign purchaser;

2) it is labeled in accordance with the laws of the foreign country;

3) it is labeled on the outside of the shipping package to show that it is intended for export; and

4) it is so exported,
b) any hazardous substance condemned under this Article shall after entry of order of
condemnation be disposed of by destruction or sale as the concerned department may direct, and the
proceeds thereof, if sold, less the legal cost and charges, shall be paid into the treasury of the Philippines;
but such hazardous substance shall not be sold under any order which is contrary to the provisions of this
Act: Provided, That, after entry of the order and upon the payment of the costs of such proceedings and
the execution of a good and sufficient bond conditioned that such hazardous substance shall not be sold
or disposed of contrary to the provisions of this Act, the concerned department may direct that such
hazardous substance be delivered to or retained by the owner thereof for destruction or for alteration to
comply with the provisions of this Act under the supervision of an officer or employee duly designated by
the concerned department. The expenses for such supervision shall be paid by the person obtaining
release of the hazardous substance under bond.

c) all expenses in connection with the destruction provided for in paragraphs (a) and (b) of this
Article and all expenses in connection with the storage and labor with respect to such hazardous
substance shall be paid by the owner or consignee, and default in such payment shall constitute a lien
against any importation by such owner or consignee.

ARTICLE 94. Labeling Requirements of Cigarettes. — All cigarettes for sale or distribution within the
country shall be contained in a package which shall bear the following statement or its equivalent in
Filipino: “Warning” Cigarette Smoking is Dangerous to Your Health”. Such statement shall be located in
conspicuous place on every cigarette package and shall appear in conspicuous and legible type in
contrast by typography, layout or color with other printed matter on the package. Any advertisement of
cigarette shall contain the name warning as indicated in the label.

ARTICLE 95. Penalties. — a) Any person who shall violate the provisions of Title III, Chapter IV of
this Act, or its implementing rules and regulations, except Articles 81 to 83 of the same Chapter, shall be
subject to a fine of not less than Five hundred pesos (P500.00) but not more than Twenty thousand pesos
(P20,000.00) or imprisonment of not less than three (3) months but not more than two (2) years 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
(P200.00) but not more than Five thousand pesos (P5,000.00) or imprisonment of not less than one (1)
month but not more than one (1) year 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) but not more than Five thousand pesos (P5,000.00) or
by imprisonment of not less than one (1) month but not more than six (6) months 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. 10, pars. (i), (jj), RA 3720 as amended by RA 9711

(i) "Label" means a display of written, printed, or graphic matter upon the immediate container of any
article and a requirement made by or under authority of this Act that any word, statement, or other
information appearing on the label shall not be considered to be complied with unless such word,
statement, or other information also appears on the outside container or wrapper, if any there be, of the
retail package of such article, or is easily legible through the outside container or wrapper.
“(jj) ‘Misbranding’ means, in addition to definitions in existing laws, misinformation or misleading
information on the label or other information materials authorized by the FDA. It shall not refer to
copyright, trademark, or other intellectual property-like instruments.

e. Data Collection and Processing RA 10173 (Data Privacy Act)

Republic of the Philippines

Congress of the Philippines

Metro Manila

Fifteenth Congress

Second Regular Session

Begun and held in Metro Manila, on Monday, the twenty-fifth day of July, two thousand eleven.

[REPUBLIC ACT NO. 10173]

AN ACT PROTECTING INDIVIDUAL PERSONAL INFORMATION IN INFORMATION AND

COMMUNICATIONS SYSTEMS IN THE GOVERNMENT AND THE PRIVATE SECTOR, CREATING
FOR THIS PURPOSE A NATIONAL PRIVACY COMMISSION, AND FOR OTHER PURPOSES

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

CHAPTER I

GENERAL PROVISIONS

SECTION 1. Short Title. – This Act shall be known as the “Data Privacy Act of 2012”.

SEC. 2. Declaration of Policy. – It is the policy of the State to protect the fundamental human right of
privacy, of communication while ensuring free flow of information to promote innovation and growth. The
State recognizes the vital role of information and communications technology in nation-building and its
inherent obligation to ensure that personal information in information and communications systems in the
government and in the private sector are secured and protected.

SEC. 3. Definition of Terms. – Whenever used in this Act, the following terms shall have the respective
meanings hereafter set forth:
(a) Commission shall refer to the National Privacy Commission created by virtue of this Act.

(b) Consent of the data subject refers to any freely given, specific, informed indication of will, whereby the
data subject agrees to the collection and processing of personal information about and/or relating to him
or her. Consent shall be evidenced by written, electronic or recorded means. It may also be given on
behalf of the data subject by an agent specifically authorized by the data subject to do so.

(c) Data subject refers to an individual whose personal information is processed.

(d) Direct marketing refers to communication by whatever means of any advertising or marketing material
which is directed to particular individuals.

(e) Filing system refers to any act of information relating to natural or juridical persons to the extent that,
although the information is not processed by equipment operating automatically in response to
instructions given for that purpose, the set is structured, either by reference to individuals or by reference
to criteria relating to individuals, in such a way that specific information relating to a particular person is
readily accessible.

(f) Information and Communications System refers to a system for generating, sending, receiving, storing
or otherwise processing electronic data messages or electronic documents and includes the computer
system or other similar device by or which data is recorded, transmitted or stored and any procedure
related to the recording, transmission or storage of electronic data, electronic message, or electronic
document.

(g) Personal information refers to any information whether recorded in a material form or not, from which
the identity of an individual is apparent or can be reasonably and directly ascertained by the entity holding
the information, or when put together with other information would directly and certainly identify an
individual.

(h) Personal information controller refers to a person or organization who controls the collection, holding,
processing or use of personal information, including a person or organization who instructs another
person or organization to collect, hold, process, use, transfer or disclose personal information on his or
her behalf. The term excludes:

(1) A person or organization who performs such functions as instructed by another person or
organization; and

(2) An individual who collects, holds, processes or uses personal information in connection with the
individual’s personal, family or household affairs.
(i) Personal information processor refers to any natural or juridical person qualified to act as such under
this Act to whom a personal information controller may outsource the processing of personal data
pertaining to a data subject.

(j) Processing refers to any operation or any set of operations performed upon personal information
including, but not limited to, the collection, recording, organization, storage, updating or modification,
retrieval, consultation, use, consolidation, blocking, erasure or destruction of data.

(k) Privileged information refers to any and all forms of data which under the Rules of Court and other
pertinent laws constitute privileged communication.

(l) Sensitive personal information refers to personal information:

(1) About an individual’s race, ethnic origin, marital status, age, color, and religious, philosophical or
political affiliations;

(2) About an individual’s health, education, genetic or sexual life of a person, or to any proceeding for any
offense committed or alleged to have been committed by such person, the disposal of such proceedings,
or the sentence of any court in such proceedings;

(3) Issued by government agencies peculiar to an individual which includes, but not limited to, social
security numbers, previous or current health records, licenses or its denials, suspension or revocation,
and tax returns; and

(4) Specifically established by an executive order or an act of Congress to be kept classified.

SEC. 4. Scope. – This Act applies to the processing of all types of personal information and to any natural
and juridical person involved in personal information processing including those personal information
controllers and processors who, although not found or established in the Philippines, use equipment that
are located in the Philippines, or those who maintain an office, branch or agency in the Philippines subject
to the immediately succeeding paragraph: Provided, That the requirements of Section 5 are complied
with.

This Act does not apply to the following:

(a) Information about any individual who is or was an officer or employee of a government institution that
relates to the position or functions of the individual, including:
(1) The fact that the individual is or was an officer or employee of the government institution;

(2) The title, business address and office telephone number of the individual;

(3) The classification, salary range and responsibilities of the position held by the individual; and

(4) The name of the individual on a document prepared by the individual in the course of employment with
the government;

(b) Information about an individual who is or was performing service under contract for a government
institution that relates to the services performed, including the terms of the contract, and the name of the
individual given in the course of the performance of those services;

(c) Information relating to any discretionary benefit of a financial nature such as the granting of a license
or permit given by the government to an individual, including the name of the individual and the exact
nature of the benefit;

(d) Personal information processed for journalistic, artistic, literary or research purposes;

(e) Information necessary in order to carry out the functions of public authority which includes the
processing of personal data for the performance by the independent, central monetary authority and law
enforcement and regulatory agencies of their constitutionally and statutorily mandated functions. Nothing
in this Act shall be construed as to have amended or repealed Republic Act No. 1405, otherwise known
as the Secrecy of Bank Deposits Act; Republic Act No. 6426, otherwise known as the Foreign Currency
Deposit Act; and Republic Act No. 9510, otherwise known as the Credit Information System Act (CISA);

(f) Information necessary for banks and other financial institutions under the jurisdiction of the
independent, central monetary authority or Bangko Sentral ng Pilipinas to comply with Republic Act No.
9510, and Republic Act No. 9160, as amended, otherwise known as the Anti-Money Laundering Act and
other applicable laws; and

(g) Personal information originally collected from residents of foreign jurisdictions in accordance with the
laws of those foreign jurisdictions, including any applicable data privacy laws, which is being processed in
the Philippines.

SEC. 5. Protection Afforded to Journalists and Their Sources. – Nothing in this Act shall be construed as
to have amended or repealed the provisions of Republic Act No. 53, which affords the publishers, editors
or duly accredited reporters of any newspaper, magazine or periodical of general circulation protection
from being compelled to reveal the source of any news report or information appearing in said publication
which was related in any confidence to such publisher, editor, or reporter.

SEC. 6. Extraterritorial Application. – This Act applies to an act done or practice engaged in and outside
of the Philippines by an entity if:

(a) The act, practice or processing relates to personal information about a Philippine citizen or a resident;

(b) The entity has a link with the Philippines, and the entity is processing personal information in the
Philippines or even if the processing is outside the Philippines as long as it is about Philippine citizens or
residents such as, but not limited to, the following:

(1) A contract is entered in the Philippines;

(2) A juridical entity unincorporated in the Philippines but has central management and control in the
country; and

(3) An entity that has a branch, agency, office or subsidiary in the Philippines and the parent or affiliate of
the Philippine entity has access to personal information; and

(c) The entity has other links in the Philippines such as, but not limited to:

(1) The entity carries on business in the Philippines; and

(2) The personal information was collected or held by an entity in the Philippines.

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CHAPTER II

THE NATIONAL PRIVACY COMMISSION

SEC. 7. Functions of the National Privacy Commission. – To administer and implement the provisions of
this Act, and to monitor and ensure compliance of the country with international standards set for data
protection, there is hereby created an independent body to be known as the National Privacy
Commission, winch shall have the following functions:
(a) Ensure compliance of personal information controllers with the provisions of this Act;

(b) Receive complaints, institute investigations, facilitate or enable settlement of complaints through the
use of alternative dispute resolution processes, adjudicate, award indemnity on matters affecting any
personal information, prepare reports on disposition of complaints and resolution of any investigation it
initiates, and, in cases it deems appropriate, publicize any such report: Provided, That in resolving any
complaint or investigation (except where amicable settlement is reached by the parties), the Commission
shall act as a collegial body. For this purpose, the Commission may be given access to personal
information that is subject of any complaint and to collect the information necessary to perform its
functions under this Act;

(c) Issue cease and desist orders, impose a temporary or permanent ban on the processing of personal
information, upon finding that the processing will be detrimental to national security and public interest;

(d) Compel or petition any entity, government agency or instrumentality to abide by its orders or take
action on a matter affecting data privacy;

(e) Monitor the compliance of other government agencies or instrumentalities on their security and
technical measures and recommend the necessary action in order to meet minimum standards for
protection of personal information pursuant to this Act;

(f) Coordinate with other government agencies and the private sector on efforts to formulate and
implement plans and policies to strengthen the protection of personal information in the country;

(g) Publish on a regular basis a guide to all laws relating to data protection;

(h) Publish a compilation of agency system of records and notices, including index and other finding aids;

(i) Recommend to the Department of Justice (DOJ) the prosecution and imposition of penalties specified
in Sections 25 to 29 of this Act;

(j) Review, approve, reject or require modification of privacy codes voluntarily adhered to by personal
information controllers:Provided, That the privacy codes shall adhere to the underlying data privacy
principles embodied in this Act: Provided, further,That such privacy codes may include private dispute
resolution mechanisms for complaints against any participating personal information controller. For this
purpose, the Commission shall consult with relevant regulatory agencies in the formulation and
administration of privacy codes applying the standards set out in this Act, with respect to the persons,
entities, business activities and business sectors that said regulatory bodies are authorized to principally
regulate pursuant to the law: Provided, finally. That the Commission may review such privacy codes and
require changes thereto for purposes of complying with this Act;
(k) Provide assistance on matters relating to privacy or data protection at the request of a national or local
agency, a private entity or any person;

(l) Comment on the implication on data privacy of proposed national or local statutes, regulations or
procedures, issue advisory opinions and interpret the provisions of this Act and other data privacy laws;

(m) Propose legislation, amendments or modifications to Philippine laws on privacy or data protection as
may be necessary;

(n) Ensure proper and effective coordination with data privacy regulators in other countries and private
accountability agents, participate in international and regional initiatives for data privacy protection;

(o) Negotiate and contract with other data privacy authorities of other countries for cross-border
application and implementation of respective privacy laws;

(p) Assist Philippine companies doing business abroad to respond to foreign privacy or data protection
laws and regulations; and

(q) Generally perform such acts as may be necessary to facilitate cross-border enforcement of data
privacy protection.

SEC. 8. Confidentiality. – The Commission shall ensure at all times the confidentiality of any personal
information that comes to its knowledge and possession.

SEC. 9. Organizational Structure of the Commission. – The Commission shall be attached to the
Department of Information and Communications Technology (DICT) and shall be headed by a Privacy
Commissioner, who shall also act as Chairman of the Commission. The Privacy Commissioner shall be
assisted by two (2) Deputy Privacy Commissioners, one to be responsible for Data Processing Systems
and one to be responsible for Policies and Planning. The Privacy Commissioner and the two (2) Deputy
Privacy Commissioners shall be appointed by the President of the Philippines for a term of three (3)
years, and may be reappointed for another term of three (3) years. Vacancies in the Commission shall be
filled in the same manner in which the original appointment was made.

The Privacy Commissioner must be at least thirty-five (35) years of age and of good moral character,
unquestionable integrity and known probity, and a recognized expert in the field of information technology
and data privacy. The Privacy Commissioner shall enjoy the benefits, privileges and emoluments
equivalent to the rank of Secretary.
The Deputy Privacy Commissioners must be recognized experts in the field of information and
communications technology and data privacy. They shall enjoy the benefits, privileges and emoluments
equivalent to the rank of Undersecretary.

The Privacy Commissioner, the Deputy Commissioners, or any person acting on their behalf or under
their direction, shall not be civilly liable for acts done in good faith in the performance of their duties.
However, he or she shall be liable for willful or negligent acts done by him or her which are contrary to
law, morals, public policy and good customs even if he or she acted under orders or instructions of
superiors: Provided, That in case a lawsuit is filed against such official on the subject of the performance
of his or her duties, where such performance is lawful, he or she shall be reimbursed by the Commission
for reasonable costs of litigation.

SEC. 10. The Secretariat. – The Commission is hereby authorized to establish a Secretariat. Majority of
the members of the Secretariat must have served for at least five (5) years in any agency of the
government that is involved in the processing of personal information including, but not limited to, the
following offices: Social Security System (SSS), Government Service Insurance System (GSIS), Land
Transportation Office (LTO), Bureau of Internal Revenue (BIR), Philippine Health Insurance Corporation
(PhilHealth), Commission on Elections (COMELEC), Department of Foreign Affairs (DFA), Department of
Justice (DOJ), and Philippine Postal Corporation (Philpost).

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CHAPTER III

PROCESSING OF PERSONAL INFORMATION

SEC. 11. General Data Privacy Principles. – The processing of personal information shall be allowed,
subject to compliance with the requirements of this Act and other laws allowing disclosure of information
to the public and adherence to the principles of transparency, legitimate purpose and proportionality.

Personal information must, be:,

(a) Collected for specified and legitimate purposes determined and declared before, or as soon as
reasonably practicable after collection, and later processed in a way compatible with such declared,
specified and legitimate purposes only;

(b) Processed fairly and lawfully;

(c) Accurate, relevant and, where necessary for purposes for which it is to be used the processing of
personal information, kept up to date; inaccurate or incomplete data must be rectified, supplemented,
destroyed or their further processing restricted;
(d) Adequate and not excessive in relation to the purposes for which they are collected and processed;

(e) Retained only for as long as necessary for the fulfillment of the purposes for which the data was
obtained or for the establishment, exercise or defense of legal claims, or for legitimate business purposes,
or as provided by law; and

(f) Kept in a form which permits identification of data subjects for no longer than is necessary for the
purposes for which the data were collected and processed: Provided, That personal information collected
for other purposes may lie processed for historical, statistical or scientific purposes, and in cases laid
down in law may be stored for longer periods: Provided, further,That adequate safeguards are
guaranteed by said laws authorizing their processing.

The personal information controller must ensure implementation of personal information processing
principles set out herein.

SEC. 12. Criteria for Lawful Processing of Personal Information. – The processing of personal information
shall be permitted only if not otherwise prohibited by law, and when at least one of the following
conditions exists:

(a) The data subject has given his or her consent;

(b) The processing of personal information is necessary and is related to the fulfillment of a contract with
the data subject or in order to take steps at the request of the data subject prior to entering into a contract;

(c) The processing is necessary for compliance with a legal obligation to which the personal information
controller is subject;

(d) The processing is necessary to protect vitally important interests of the data subject, including life and
health;

(e) The processing is necessary in order to respond to national emergency, to comply with the
requirements of public order and safety, or to fulfill functions of public authority which necessarily includes
the processing of personal data for the fulfillment of its mandate; or

(f) The processing is necessary for the purposes of the legitimate interests pursued by the personal
information controller or by a third party or parties to whom the data is disclosed, except where such
interests are overridden by fundamental rights and freedoms of the data subject which require protection
under the Philippine Constitution.
SEC. 13. Sensitive Personal Information and Privileged Information. – The processing of sensitive
personal information and privileged information shall be prohibited, except in the following cases:

(a) The data subject has given his or her consent, specific to the purpose prior to the processing, or in the
case of privileged information, all parties to the exchange have given their consent prior to processing;

(b) The processing of the same is provided for by existing laws and regulations: Provided, That such
regulatory enactments guarantee the protection of the sensitive personal information and the privileged
information: Provided, further, That the consent of the data subjects are not required by law or regulation
permitting the processing of the sensitive personal information or the privileged information;

(c) The processing is necessary to protect the life and health of the data subject or another person, and
the data subject is not legally or physically able to express his or her consent prior to the processing;

(d) The processing is necessary to achieve the lawful and noncommercial objectives of public
organizations and their associations: Provided, That such processing is only confined and related to the
bona fide members of these organizations or their associations: Provided, further, That the sensitive
personal information are not transferred to third parties: Provided, finally, That consent of the data subject
was obtained prior to processing;

(e) The processing is necessary for purposes of medical treatment, is carried out by a medical practitioner
or a medical treatment institution, and an adequate level of protection of personal information is ensured;
or

(f) The processing concerns such personal information as is necessary for the protection of lawful rights
and interests of natural or legal persons in court proceedings, or the establishment, exercise or defense of
legal claims, or when provided to government or public authority.

SEC. 14. Subcontract of Personal Information. – A personal information controller may subcontract the
processing of personal information: Provided, That the personal information controller shall be
responsible for ensuring that proper safeguards are in place to ensure the confidentiality of the personal
information processed, prevent its use for unauthorized purposes, and generally, comply with the
requirements of this Act and other laws for processing of personal information. The personal information
processor shall comply with all the requirements of this Act and other applicable laws.

SEC. 15. Extension of Privileged Communication. – Personal information controllers may invoke the
principle of privileged communication over privileged information that they lawfully control or process.
Subject to existing laws and regulations, any evidence gathered on privileged information is inadmissible.
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CHAPTER IV

RIGHTS OF THE DATA SUBJECT

SEC. 16. Rights of the Data Subject. – The data subject is entitled to:

(a) Be informed whether personal information pertaining to him or her shall be, are being or have been
processed;

(b) Be furnished the information indicated hereunder before the entry of his or her personal information
into the processing system of the personal information controller, or at the next practical opportunity:

(1) Description of the personal information to be entered into the system;

(2) Purposes for which they are being or are to be processed;

(3) Scope and method of the personal information processing;

(4) The recipients or classes of recipients to whom they are or may be disclosed;

(5) Methods utilized for automated access, if the same is allowed by the data subject, and the extent to
which such access is authorized;

(6) The identity and contact details of the personal information controller or its representative;

(7) The period for which the information will be stored; and

(8) The existence of their rights, i.e., to access, correction, as well as the right to lodge a complaint before
the Commission.

Any information supplied or declaration made to the data subject on these matters shall not be amended
without prior notification of data subject: Provided, That the notification under subsection (b) shall not
apply should the personal information be needed pursuant to a subpoena or when the collection and
processing are for obvious purposes, including when it is necessary for the performance of or in relation
to a contract or service or when necessary or desirable in the context of an employer-employee
relationship, between the collector and the data subject, or when the information is being collected and
processed as a result of legal obligation;

(c) Reasonable access to, upon demand, the following:

(1) Contents of his or her personal information that were processed;

(2) Sources from which personal information were obtained;

(3) Names and addresses of recipients of the personal information;

(4) Manner by which such data were processed;

(5) Reasons for the disclosure of the personal information to recipients;

(6) Information on automated processes where the data will or likely to be made as the sole basis for any
decision significantly affecting or will affect the data subject;

(7) Date when his or her personal information concerning the data subject were last accessed and
modified; and

(8) The designation, or name or identity and address of the personal information controller;

(d) Dispute the inaccuracy or error in the personal information and have the personal information
controller correct it immediately and accordingly, unless the request is vexatious or otherwise
unreasonable. If the personal information have been corrected, the personal information controller shall
ensure the accessibility of both the new and the retracted information and the simultaneous receipt of the
new and the retracted information by recipients thereof: Provided, That the third parties who have
previously received such processed personal information shall he informed of its inaccuracy and its
rectification upon reasonable request of the data subject;

(e) Suspend, withdraw or order the blocking, removal or destruction of his or her personal information
from the personal information controller’s filing system upon discovery and substantial proof that the
personal information are incomplete, outdated, false, unlawfully obtained, used for unauthorized purposes
or are no longer necessary for the purposes for which they were collected. In this case, the personal
information controller may notify third parties who have previously received such processed personal
information; and
(f) Be indemnified for any damages sustained due to such inaccurate, incomplete, outdated, false,
unlawfully obtained or unauthorized use of personal information.

SEC. 17. Transmissibility of Rights of the Data Subject. – The lawful heirs and assigns of the data subject
may invoke the rights of the data subject for, which he or she is an heir or assignee at any time after the
death of the data subject or when the data subject is incapacitated or incapable of exercising the rights as
enumerated in the immediately preceding section.

SEC. 18. Right to Data Portability. – The data subject shall have the right, where personal information is
processed by electronic means and in a structured and commonly used format, to obtain from the
personal information controller a copy of data undergoing processing in an electronic or structured format,
which is commonly used and allows for further use by the data subject. The Commission may specify the
electronic format referred to above, as well as the technical standards, modalities and procedures for their
transfer.

SEC. 19. Non-Applicability. – The immediately preceding sections are not applicable if the processed
personal information are used only for the needs of scientific and statistical research and, on the basis of
such, no activities are carried out and no decisions are taken regarding the data subject: Provided, That
the personal information shall be held under strict confidentiality and shall be used only for the declared
purpose. Likewise, the immediately preceding sections are not applicable to processing of personal
information gathered for the purpose of investigations in relation to any criminal, administrative or tax
liabilities of a data subject.

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CHAPTER V

SECURITY OF PERSONAL INFORMATION

SEC. 20. Security of Personal Information. – (a) The personal information controller must implement
reasonable and appropriate organizational, physical and technical measures intended for the protection of
personal information against any accidental or unlawful destruction, alteration and disclosure, as well as
against any other unlawful processing.

(b) The personal information controller shall implement reasonable and appropriate measures to protect
personal information against natural dangers such as accidental loss or destruction, and human dangers
such as unlawful access, fraudulent misuse, unlawful destruction, alteration and contamination.

(c) The determination of the appropriate level of security under this section must take into account the
nature of the personal information to be protected, the risks represented by the processing, the size of the
organization and complexity of its operations, current data privacy best practices and the cost of security
implementation. Subject to guidelines as the Commission may issue from time to time, the measures
implemented must include:

(1) Safeguards to protect its computer network against accidental, unlawful or unauthorized usage or
interference with or hindering of their functioning or availability;

(2) A security policy with respect to the processing of personal information;

(3) A process for identifying and accessing reasonably foreseeable vulnerabilities in its computer
networks, and for taking preventive, corrective and mitigating action against security incidents that can
lead to a security breach; and

(4) Regular monitoring for security breaches and a process for taking preventive, corrective and mitigating
action against security incidents that can lead to a security breach.

(d) The personal information controller must further ensure that third parties processing personal
information on its behalf shall implement the security measures required by this provision.

(e) The employees, agents or representatives of a personal information controller who are involved in the
processing of personal information shall operate and hold personal information under strict confidentiality
if the personal information are not intended for public disclosure. This obligation shall continue even after
leaving the public service, transfer to another position or upon termination of employment or contractual
relations.

(f) The personal information controller shall promptly notify the Commission and affected data subjects
when sensitive personal information or other information that may, under the circumstances, be used to
enable identity fraud are reasonably believed to have been acquired by an unauthorized person, and the
personal information controller or the Commission believes (bat such unauthorized acquisition is likely to
give rise to a real risk of serious harm to any affected data subject. The notification shall at least describe
the nature of the breach, the sensitive personal information possibly involved, and the measures taken by
the entity to address the breach. Notification may be delayed only to the extent necessary to determine
the scope of the breach, to prevent further disclosures, or to restore reasonable integrity to the
information and communications system.

(1) In evaluating if notification is unwarranted, the Commission may take into account compliance by the
personal information controller with this section and existence of good faith in the acquisition of personal
information.
(2) The Commission may exempt a personal information controller from notification where, in its
reasonable judgment, such notification would not be in the public interest or in the interests of the affected
data subjects.

(3) The Commission may authorize postponement of notification where it may hinder the progress of a
criminal investigation related to a serious breach.

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CHAPTER VI

ACCOUNTABILITY FOR TRANSFER OF PERSONAL INFORMATION

SEC. 21. Principle of Accountability. – Each personal information controller is responsible for personal
information under its control or custody, including information that have been transferred to a third party
for processing, whether domestically or internationally, subject to cross-border arrangement and
cooperation.

(a) The personal information controller is accountable for complying with the requirements of this Act and
shall use contractual or other reasonable means to provide a comparable level of protection while the
information are being processed by a third party.

(b) The personal information controller shall designate an individual or individuals who are accountable for
the organization’s compliance with this Act. The identity of the individual(s) so designated shall be made
known to any data subject upon request.

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CHAPTER VII

SECURITY OF SENSITIVE PERSONAL

INFORMATION IN GOVERNMENT

SEC. 22. Responsibility of Heads of Agencies. – All sensitive personal information maintained by the
government, its agencies and instrumentalities shall be secured, as far as practicable, with the use of the
most appropriate standard recognized by the information and communications technology industry, and
as recommended by the Commission. The head of each government agency or instrumentality shall be
responsible for complying with the security requirements mentioned herein while the Commission shall
monitor the compliance and may recommend the necessary action in order to satisfy the minimum
standards.
SEC. 23. Requirements Relating to Access by Agency Personnel to Sensitive Personal Information. – (a)
On-site and Online Access – Except as may be allowed through guidelines to be issued by the
Commission, no employee of the government shall have access to sensitive personal information on
government property or through online facilities unless the employee has received a security clearance
from the head of the source agency.

(b) Off-site Access – Unless otherwise provided in guidelines to be issued by the Commission, sensitive
personal information maintained by an agency may not be transported or accessed from a location off
government property unless a request for such transportation or access is submitted and approved by the
head of the agency in accordance with the following guidelines:

(1) Deadline for Approval or Disapproval – In the case of any request submitted to the head of an agency,
such head of the agency shall approve or disapprove the request within two (2) business days after the
date of submission of the request. In case there is no action by the head of the agency, then such request
is considered disapproved;

(2) Limitation to One thousand (1,000) Records – If a request is approved, the head of the agency shall
limit the access to not more than one thousand (1,000) records at a time; and

(3) Encryption – Any technology used to store, transport or access sensitive personal information for
purposes of off-site access approved under this subsection shall be secured by the use of the most
secure encryption standard recognized by the Commission.

The requirements of this subsection shall be implemented not later than six (6) months after the date of
the enactment of this Act.

SEC. 24. Applicability to Government Contractors. – In entering into any contract that may involve
accessing or requiring sensitive personal information from one thousand (1,000) or more individuals, an
agency shall require a contractor and its employees to register their personal information processing
system with the Commission in accordance with this Act and to comply with the other provisions of this
Act including the immediately preceding section, in the same manner as agencies and government
employees comply with such requirements.

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CHAPTER VIII

PENALTIES

SEC. 25. Unauthorized Processing of Personal Information and Sensitive Personal Information. – (a) The
unauthorized processing of personal information shall be penalized by imprisonment ranging from one (1)
year to three (3) years and a fine of not less than Five hundred thousand pesos (Php500,000.00) but not
more than Two million pesos (Php2,000,000.00) shall be imposed on persons who process personal
information without the consent of the data subject, or without being authorized under this Act or any
existing law.

(b) The unauthorized processing of personal sensitive information shall be penalized by imprisonment
ranging from three (3) years to six (6) years and a fine of not less than Five hundred thousand pesos
(Php500,000.00) but not more than Four million pesos (Php4,000,000.00) shall be imposed on persons
who process personal information without the consent of the data subject, or without being authorized
under this Act or any existing law.

SEC. 26. Accessing Personal Information and Sensitive Personal Information Due to Negligence. – (a)
Accessing personal information due to negligence shall be penalized by imprisonment ranging from one
(1) year to three (3) years and a fine of not less than Five hundred thousand pesos (Php500,000.00) but
not more than Two million pesos (Php2,000,000.00) shall be imposed on persons who, due to negligence,
provided access to personal information without being authorized under this Act or any existing law.

(b) Accessing sensitive personal information due to negligence shall be penalized by imprisonment
ranging from three (3) years to six (6) years and a fine of not less than Five hundred thousand pesos
(Php500,000.00) but not more than Four million pesos (Php4,000,000.00) shall be imposed on persons
who, due to negligence, provided access to personal information without being authorized under this Act
or any existing law.

SEC. 27. Improper Disposal of Personal Information and Sensitive Personal Information. – (a) The
improper disposal of personal information shall be penalized by imprisonment ranging from six (6) months
to two (2) years and a fine of not less than One hundred thousand pesos (Php100,000.00) but not more
than Five hundred thousand pesos (Php500,000.00) shall be imposed on persons who knowingly or
negligently dispose, discard or abandon the personal information of an individual in an area accessible to
the public or has otherwise placed the personal information of an individual in its container for trash
collection.

(b) The improper disposal of sensitive personal information shall be penalized by imprisonment ranging
from one (1) year to three (3) years and a fine of not less than One hundred thousand pesos
(Php100,000.00) but not more than One million pesos (Php1,000,000.00) shall be imposed on persons
who knowingly or negligently dispose, discard or abandon the personal information of an individual in an
area accessible to the public or has otherwise placed the personal information of an individual in its
container for trash collection.

SEC. 28. Processing of Personal Information and Sensitive Personal Information for Unauthorized
Purposes. – The processing of personal information for unauthorized purposes shall be penalized by
imprisonment ranging from one (1) year and six (6) months to five (5) years and a fine of not less than
Five hundred thousand pesos (Php500,000.00) but not more than One million pesos (Php1,000,000.00)
shall be imposed on persons processing personal information for purposes not authorized by the data
subject, or otherwise authorized under this Act or under existing laws.
The processing of sensitive personal information for unauthorized purposes shall be penalized by
imprisonment ranging from two (2) years to seven (7) years and a fine of not less than Five hundred
thousand pesos (Php500,000.00) but not more than Two million pesos (Php2,000,000.00) shall be
imposed on persons processing sensitive personal information for purposes not authorized by the data
subject, or otherwise authorized under this Act or under existing laws.

SEC. 29. Unauthorized Access or Intentional Breach. – The penalty of imprisonment ranging from one (1)
year to three (3) years and a fine of not less than Five hundred thousand pesos (Php500,000.00) but not
more than Two million pesos (Php2,000,000.00) shall be imposed on persons who knowingly and
unlawfully, or violating data confidentiality and security data systems, breaks in any way into any system
where personal and sensitive personal information is stored.

SEC. 30. Concealment of Security Breaches Involving Sensitive Personal Information. – The penalty of
imprisonment of one (1) year and six (6) months to five (5) years and a fine of not less than Five hundred
thousand pesos (Php500,000.00) but not more than One million pesos (Php1,000,000.00) shall be
imposed on persons who, after having knowledge of a security breach and of the obligation to notify the
Commission pursuant to Section 20(f), intentionally or by omission conceals the fact of such security
breach.

SEC. 31. Malicious Disclosure. – Any personal information controller or personal information processor or
any of its officials, employees or agents, who, with malice or in bad faith, discloses unwarranted or false
information relative to any personal information or personal sensitive information obtained by him or her,
shall be subject to imprisonment ranging from one (1) year and six (6) months to five (5) years and a fine
of not less than Five hundred thousand pesos (Php500,000.00) but not more than One million pesos
(Php1,000,000.00).

SEC. 32. Unauthorized Disclosure. – (a) Any personal information controller or personal information
processor or any of its officials, employees or agents, who discloses to a third party personal information
not covered by the immediately preceding section without the consent of the data subject, shall he subject
to imprisonment ranging from one (1) year to three (3) years and a fine of not less than Five hundred
thousand pesos (Php500,000.00) but not more than One million pesos (Php1,000,000.00).

(b) Any personal information controller or personal information processor or any of its officials, employees
or agents, who discloses to a third party sensitive personal information not covered by the immediately
preceding section without the consent of the data subject, shall be subject to imprisonment ranging from
three (3) years to five (5) years and a fine of not less than Five hundred thousand pesos (Php500,000.00)
but not more than Two million pesos (Php2,000,000.00).

SEC. 33. Combination or Series of Acts. – Any combination or series of acts as defined in Sections 25 to
32 shall make the person subject to imprisonment ranging from three (3) years to six (6) years and a fine
of not less than One million pesos (Php1,000,000.00) but not more than Five million pesos
(Php5,000,000.00).
SEC. 34. Extent of Liability. – If the offender is a corporation, partnership or any juridical person, the
penalty shall be imposed upon the responsible officers, as the case may be, who participated in, or by
their gross negligence, allowed the commission of the crime. If the offender is a juridical person, the court
may suspend or revoke any of its rights under this Act. If the offender is an alien, he or she shall, in
addition to the penalties herein prescribed, be deported without further proceedings after serving the
penalties prescribed. If the offender is a public official or employee and lie or she is found guilty of acts
penalized under Sections 27 and 28 of this Act, he or she shall, in addition to the penalties prescribed
herein, suffer perpetual or temporary absolute disqualification from office, as the case may be.

SEC. 35. Large-Scale. – The maximum penalty in the scale of penalties respectively provided for the
preceding offenses shall be imposed when the personal information of at least one hundred (100)
persons is harmed, affected or involved as the result of the above mentioned actions.

SEC. 36. Offense Committed by Public Officer. – When the offender or the person responsible for the
offense is a public officer as defined in the Administrative Code of the Philippines in the exercise of his or
her duties, an accessory penalty consisting in the disqualification to occupy public office for a term double
the term of criminal penalty imposed shall he applied.

SEC. 37. Restitution. – Restitution for any aggrieved party shall be governed by the provisions of the New
Civil Code.

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CHAPTER IX

MISCELLANEOUS PROVISIONS

SEC. 38. Interpretation. – Any doubt in the interpretation of any provision of this Act shall be liberally
interpreted in a manner mindful of the rights and interests of the individual about whom personal
information is processed.

SEC. 39. Implementing Rules and Regulations (IRR). – Within ninety (90) days from the effectivity of this
Act, the Commission shall promulgate the rules and regulations to effectively implement the provisions of
this Act.

SEC. 40. Reports and Information. – The Commission shall annually report to the President and
Congress on its activities in carrying out the provisions of this Act. The Commission shall undertake
whatever efforts it may determine to be necessary or appropriate to inform and educate the public of data
privacy, data protection and fair information rights and responsibilities.
SEC. 41. Appropriations Clause. – The Commission shall be provided with an initial appropriation of
Twenty million pesos (Php20,000,000.00) to be drawn from the national government. Appropriations for
the succeeding years shall be included in the General Appropriations Act. It shall likewise receive Ten
million pesos (Php10,000,000.00) per year for five (5) years upon implementation of this Act drawn from
the national government.

SEC. 42. Transitory Provision. – Existing industries, businesses and offices affected by the
implementation of this Act shall be given one (1) year transitory period from the effectivity of the IRR or
such other period as may be determined by the Commission, to comply with the requirements of this Act.

In case that the DICT has not yet been created by the time the law takes full force and effect, the National
Privacy Commission shall be attached to the Office of the President.

SEC. 43. Separability Clause. – If any provision or part hereof is held invalid or unconstitutional, the
remainder of the law or the provision not otherwise affected shall remain valid and subsisting.

SEC. 44. Repealing Clause. – The provision of Section 7 of Republic Act No. 9372, otherwise known as
the “Human Security Act of 2007”, is hereby amended. Except as otherwise expressly provided in this
Act, all other laws, decrees, executive orders, proclamations and administrative regulations or parts
thereof inconsistent herewith are hereby repealed or modified accordingly.

SEC. 45. Effectivity Clause. – This Act shall take effect fifteen (15) days after its publication in at least two
(2) national newspapers of general circulation.

f. Advertising

Art. 4, pars. a), b), RA 7394 Sec. 4 (a), RA 10611

a) “Advertisement” means the prepared and through any form of mass medium, subsequently
applied, disseminated or circulated advertising matter.

b) “Advertising” means the business of conceptualizing, presenting or making available to the

public, through any form of mass media, fact, data or information about the attributes, features, quality or
availability of consumer products, services or credit.

Art. 110, RA 7394

(a) Advertising refers to the business of conceptualizing, presenting or making available to the public,
through any form of mass media, fact, data or information about the attributes, features, quality or
availability of food and its related products for the purpose of promoting its sale or distribution and
enhancing economic activity.
Advertising Standards Council (ASC) Code of Ethics

g. Sales promotion

Art. 4, par. bm), RA 7394 Art. 109, 116-121, RA 7394

bm) “Sales Promotion” means techniques intended for broad consumer participation which contain
promises of gain such as prizes, in cash or in kind, as reward for the purchase of a product, security,
service or winning in contest, game, tournament and other similar competitions which involve
determination of winner/s and which utilize mass media or other widespread media of information. It also
means techniques purely intended to increase the sales, patronage and/or goodwill of a product.

ARTICLE 109. Implementing Agency. — The Department of Trade and Industry shall enforce the
provisions of this Chapter and its implementing rules and regulations: Provided, That with respect to food,
drugs, cosmetics, devices and hazardous substances, it shall be enforced by the Department of Health.

ARTICLE 116. Permit to Conduct Promotion. — No person shall conduct any sales campaigns,
including beauty contest, national in character, sponsored and promoted by 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 fifteen (15) days from filing of the
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.

ARTICLE 117. Suspension of Publication or Dissemination of Information. — The concerned

department may, after due notice and hearing, suspend the publication and dissemination of any
information accompanying a sales promotion campaign, if it finds the campaign to be in violation of the
provisions of this Chapter or its implementing rules and regulations.

ARTICLE 118. Conduct of Sales Promotion. — A sales promotion which is intended for broad
consumer participation and utilizes mass media shall indicate the duration, commencement and
termination of the promotion, the deadline for submission of entries and the governing criteria or
procedure to be followed therein.

ARTICLE 119. Packaging of Products Under Promotion. — The packaging of the products covered by
the sales promotion shall not be tampered, neither shall any change in the product’s package be affected
without the authority of the sponsoring agency or the owner or manufacturer of the product.

ARTICLE 120. Change in Starting and Termination Dates of Promotion. — The concerned
department shall be advised of any delay of starting dates or termination dates and details of any change
in the conduct of a sales promotion. Any change in the termination dates shall be published in a
newspaper of general circulation before the expiration of the original schedule or the termination date,
whichever comes first.

ARTICLE 121. Determination of Winners. — The winners in any sales promotion shall be determined
at a definite time and place and shall be verified by a representative of the concerned department and the
sponsor. Immediately after the winners are selected or determined, a list with their addresses and
corresponding prizes shall be submitted to the concerned department. All winners shall be announced or
published in the same manner that the sales promotion was announced or published: Provided, That
publication in a newspaper of general circulation shall be done in a legible manner at least once, if the
sales promotion is national in scope: Provided, further, That such announcement and publication shall be
done not later than two (2) weeks after the determination of winners. In all cases where the amount of the
price is Five hundred pesos (P500.00) or more, the winners shall also be notified in writing by registered
mail or any communication wherein proof of notice or service can be verified.
SEC-OGC Opinion No. 18-21 (28 November 2018)

Re: Mass Media; Digital Platform

DOJ Opinion No. 40, S. 1998 (March 19, 1998)

OPINION NO. 040, Series of 1998

March 19, 1998

Mr. Perfecto R. Yasay, Jr.

Chairman

Securities and Exchange Commission

SEC Building, EDSA, Greenhills

Mandaluyong City

S i r :chanroblesvirtuallawlibrary

This has reference to your request for a “definite ruling” on whether the Internet business constitutes
mass media which should not be given to foreign investors pursuant to Section II (1), Article XVI of the
1987 Constitution.

The aforesaid constitutional mandate pertinently provides, to wit:chanroblesvirtuallawlibrary

“SEC.II. (1) The ownership and management of mass media shall be limited to citizens of the Philippines,
or to corporations, cooperatives or associations, wholly-owned and manages by such citizens.

…” (Art. XVI, 1987 Constitution) (Emphasis supplied)

The request, it appears, is raised in connection with the implementation of the Second Regular Foreign
Investment Negative List (E.O. No. 362, s. 1996).

In Opinion No. 24 s. 1986, this Department, construing and identical provision in the 1973 Constitution
said

“The term ‘mass media’ in the Constitution refers to any medium of communication, a newspaper, radio,
motion pictures, television, designed to reach the masses and that tends to set standards, ideals and
aims of the masses (Op. No. 163, s. 1973) . The distinctive features of any mass media undertaking is the
dissemination of information and ideas to the public, or a portion thereof (Op. No. 120, s. 1982) …”
(reiterated in Op. No. 10, s. 1996)

An almost identical definition of “mass media” is found in the Rules and Regulations for Mass Media in the
Philippines adopted by the Media Advisory Council and approved by the President of the Philippines (See
De Leon, Textbook on the Philippine Constitution, 1994 ed., p. 579) . According to said RR, the term
“mass media” embraces means of communication that reach and influence large numbers of people
including print media (especially newspapers, periodicals and popular magazines) radio, television, and
movies, and involved the gathering, transmission and distribution of news, information, messages, signals
and all forms of written, oral and visual communications (see also, DOJ Opinion No. 163, s. 1973)

Upon the other hand, the “Internet” is a “giant network which interconnects innumerable smaller groups of
linked computer networks" (American Civil Liberties Union vs. Reno, 929 F. Supp. 824,830, cited in
“Purging Pornography in the Internet”, which virtually covers the entire globe, can either be through the
use of a computer or computer terminal that is directly (and usually permanently) connected to a
computer network that is itself directly or indirectly connected to the Internet, or through the use of a
“personal computer” with “modem” to connect over a telephone line to a larger computer network that is
itself directly of indirectly connected to the Internet (id., at p 97).

Considering the nature and function of an Internet and the fact that it offers three broad types of services,
i.e., (1) electronic mail (e-mail) which is the computer version of the post office as it can transmit both text
and still or moving visual messages to an addressee or multiple addresses in a mailing list; (2) Bulletin
Board System (BBS) which emulates an ordinary bulletin board and; (3) World Wide Web (WWW) which
consists of documents (with their respective addresses) stored in the Internet containing varied
information in text, still images or graphics (see, ACLU case, supra, at pp. 836-838) , it may be safely said
that an Internet access provided is one engaged in offering to the owner of a computer the services of
inter-connecting the latter’s computer to a network of computers thereby giving him access to said
services offered by Internet.

Construed in light of the earlier definition of “mass media” which involves not only the transmittal but also
the creation/publication, gathering and distribution of the news, information, messages and other forms of
communications to the general public, it appears indubitable that the Internet business does not constitute
mass media. Accordingly, it cannot fall within the coverage of the constitutional mandate limiting
ownership and management of mass media to citizens of the Philippines or wholly-owned and managed
Philippine corporations.

The rationale is because in Internet business, the Internet access provided merely serves a carrier for
transmitting messages. It does not create the messages/information nor transmit the
messages/information to the general public, as mass media do, and the publication of the messages
/information or stories carried by the Internet and transmitted to the computer owner, thru the access
provider, is decided by the sender or the inter-linked networks.

The foregoing considered, your query is answered in the negative.

(Whether the internet constitutes mass media)

Cases:
Pepsi-Cola Products Phils. v. Pagdanganan

G. R. No. 167866, October 12, 2006

G.R. No. 167866             October 12, 2006

PEPSI-COLA PRODUCTS PHILIPPINES, INCORPORATED, and PEPSICO,

INCORPORATED, petitioners,
vs.
PEPE B. PAGDANGANAN, and PEPITO A. LUMAJAN, respondents.

DECISION

CHICO-NAZARIO, J.:

The Case

For review under Rule 45 of the Rules of Court, as amended, is the 13 February 2004 Decision1 and 26
June 2005 Resolution2 of the Court of Appeals in CA-G.R. CV No. 68290, reversing and setting aside the
3 August 20003 Decision and 23 August 20004 Order of the Regional Trial Court of Pasig City, Branch
163,5 in Civil Case No. 62726.

The Facts

This case stemmed from a Complaint6 filed by herein respondents Pepe B. Pagdanganan (Pagdanganan)
and Pepito A. Lumahan (Lumahan) against herein petitioners Pepsi-Cola Products Philippines,
Incorporated (PCPPI) and PEPSICO, Incorporated (PEPSICO) on 22 December 1992, before the
Regional Trial Court (RTC) of Pasig City, Branch 163, for Sum of Money and Damages.

The facts are beyond dispute. As culled from the records of the case, they are as follows:

Petitioners PCPPI and PEPSICO launched a Department of Trade and Industry (DTI) approved and
supervised under-the-crown promotional campaign entitled "Number Fever" sometime in 1992. With said
marketing strategy, it undertook to give away cash prizes to holders of specially marked crowns and
resealable caps of PEPSI-COLA softdrink products, i.e., Pepsi, 7-Up, Mirinda and Mountain Dew.
Specially marked crowns and resealable caps were said to contain a) a three-digit number, b) a seven-
digit alpha-numeric security code, and c) the amount of the cash prize in any of the following
denominations – P1,000.00; P10,000.00; P50,000.00; P100,000.00; and P1,000,000.00.

Petitioners PCPPI and PEPSICO engaged the services of D.G. Consultores, a Mexican consultancy firm
with experience in handling similar promotion in other countries, to randomly pre-select 60 winning three-
digit numbers with their matching security codes out of 1000 three-digit numbers seeded in the market, as
well as the corresponding artworks appearing on a winning crown and/or resealable cap.
The mechanics of the "Number Fever" promo was simple – From Monday to Friday, starting 17 February
1992 to 8 May 1992, petitioners PCPPI and PEPSICO will announce, on national and local broadcast and
print media, a randomly pre-selected7 winning three-digit number. All holders of specially marked crowns
bearing the winning three-digit number will win the corresponding amount printed on said crowns and/or
resealable caps.

On account of the success of the promotional campaign, petitioners PCPPI and PEPSICO extended or
stretched out the duration of the "Number Fever" for another five weeks or until 12 June 1992.

For the extended period, petitioners PCPPI and PEPSICO again sought the services of D.G. Consultores
to pre-select 25 winning three-digit numbers with their matching security codes as well as the
corresponding artworks to appear on a winning crown and/or resealable cap.

On 25 May 1992, petitioners PCPPI and PEPSICO announced the notorious three-digit combination
"349" as the winning number for the next day, 26 May 1992. On the same night of the announcement,
however, petitioners PCPPI and PEPSICO learned of reports that numerous people were trying to
redeem "349" bearing crowns and/or resealable caps with incorrect security codes "L-2560-FQ" and "L-
3560-FQ." Upon verification from the list of the 25 pre-selected 8 winning three-digit numbers, petitioners
PCPPI and PEPSICO and the DTI learned that the three-digit combination "349" was indeed the winning
combination for 26 May 1992 but the security codes "L-2560-FQ" and "L-3560-FQ" do not correspond to
that assigned to the winning number "349".

Subsequently, petitioners PCPPI and PEPSICO issued a statement stating in part that:

DEAR VALUED CUSTOMERS

xxxx

Some 349 crowns have winning security codes as per the list held in a bank vault by the Department of
Trade and Industry and will be redeemed at full value like all other authenticated winning crowns.

Some other 349 crowns which have security codes L-2560-FQ and L-3560-FQ are not winning crowns.

However, as an act of goodwill to our customers, we will redeem the non-winning 349 crowns for P500.00
each until June 12, 1992 at all Pepsi plants & warehouses.

xxxx

Sincerely,

ROD SALAZAR
President
PEPSI-COLA PRODUCTS PHILS., INC.

Despite the foregoing announcement, on 9 July 1992, respondent Pagdanganan demanded from
petitioners PCPPI and PEPSICO and the DTI the payment of the corresponding cash prize of each of his
"349" bearing crown, specifically, four 7-Up9 crowns and two Mirinda10 crowns, each displaying the cash
prize of P1,000,000.00 in addition to one 7-Up11 crown showing the cash prize of P100,000.00. Notably,
all seven crowns bore the security code L-2560-FQ.
For his part, respondent Lumahan similarly insisted that petitioners PCPPI and PEPSICO pay him the
cash value of his two "winning" crowns, that is, two 7-Up crowns with one exhibiting the cash value
of P1,000,000.00 and the other the amount of P100,000.00.

Petitioners PCPPI and PEPSICO refused to take heed of the aforementioned demands.

Affronted by the seeming injustice, respondents Pagdanganan and Lumahan filed a collective
complaint12 for Sum of Money and Damages before the RTC of Pasig City, Branch 163, against
petitioners PCPPI and PEPSICO.

After trial on the merits, the RTC rendered its decision on 3 August 2000, the dispositive part of which
states that:

WHEREFORE, for failure of the plaintiffs to establish a cause of action against defendants, the
instant case is hereby DISMISSED.

The defendants are hereby ordered to pay plaintiffs Pagdanganan and Lumahan the amounts of
P3,500.00 and P1,000.00, respectively.

Without costs.

SO ORDERED.

In dismissing the complaint, the RTC ratiocinated that:

The preponderance of evidence now on record does not appear to support the assertion of the
plaintiffs that number 349 with security code number L-2560-FQ won the Pepsico’s sales
promotion game for May 26, 1992. While it is true that number 349 was used both as a winning
and non-winning number, still the winning 349 must tally with the corresponding security code
contained in the master list of winning crowns.

xxxx

x x x [a]mong the 349s enumerated in the list of winning crowns (citation omitted) as winning
numbers were 349 V-2421-JC; 349 A-7963-IS; 349 B-4860-IG; 349 C-3984-RP; 349 D-5863-CO;
349 E-3800-EL; 349 U-3501-MN (sic) and 349 U-3246-NP. Nowhere to be found were nos. 349
L-2560-FQ and L-3560-FQ. This means that it was not possible for both defendants to have won
during the entire extended period of the sales promotion of Pepsi Cola because the number did
not appear in the master list. It was made clear in the advertisements and posters put up by
defendants that to win, the 3-digit number must be matched with the proper security code. The
Department of Trade and Industry had been duly informed of the mechanics of the Pepsi Cola
sales promotion for the protection of the interest of the public.

Anent the award of P3,500.00 and P1,000.00 to respondents Pagdanganan and Lumahan, respectively,
the RTC justified such grant, by stating to wit:

x x x since the defendants have voluntarily announced their desire to pay holders of caps or
crowns of their products bearing non-winning number 349 as a sign of goodwill, the Court feels
that this privilege should also be extended to the plaintiffs despite the institution of the instant
case.

Their Partial Motion for Reconsideration13 having been denied in an Order14 dated 23 August 2000,

respondents Pagdanganan and Lumahan appealed their case to the Court of Appeals.
In a Decision15 promulgated on 13 February 2004, the Court of Appeals reversed and set aside the
decision of the RTC, the fallo of which reads:

WHEREFORE, the appeal is hereby GRANTED. The decision of the Regional Trial Court of
Pasig, Branch 163, in Civil Case No. 62726 is REVERSED. Defendants-appellants are hereby
ORDERED to pay plaintiffs-appellants Pepe Pagdanganan the sum of P5 million and Pepito
Lumahan the sum of P1.2 million.

In a Resolution dated 26 April 2005, the Court of Appeals denied petitioners PCPPI and
PEPSICO’s Motion for Reconsideration.

The Issues

Hence, this petition for review on certiorari under Rule 45 of the Rules of Court, as amended, predicated
on the following issues:16

I.

WHETHER OR NOT PETITIONERS ARE ESTOPPED FROM RAISING STARE DECISIS;

II.

WHETHER OR NOT RODRIGO, MENDOZA, PATAN AND DE MESA ARE BINDING

ALTHOUGH RESPONDENTS WERE NOT PARTIES THEREIN;

III.

WHETHER OR NOT THE RESPONDENTS RAISE ANY ISSUE THAT HAS NOT BEEN
PREVIOUSLY RESOLVED IN RODRIGO, MENDOZA, PATAN OR DE MESA;

IV.

WHETHER OR NOT THE SENATE AND DTI TASK FORCE REPORTS ARE EVEN RELEVANT,
OR CONTROLLING; and

V.

WHETHER OR NOT RESPONDENTS MAY SEEK AFFIRMATIVE RELIEF WITHOUT HAVING

APPEALED.

In essence, the present petition raises as fundamental issue for resolution by the Court the question of
whether or not the instant case is already barred by our rulings in the cases
of Rodrigo,17  Mendoza,18 Patan19 and, the most recent, De Mesa. 20

The Court’s Ruling

In ordering petitioners PCPPI and PEPSICO to pay respondents Pagdanganan and Lumahan the
amounts of P5,000,000.00 and P1,200,000.00, the appellate court articulated that:

x x x [w]e fully agree with the contention of plaintiffs-appellants that such deviation or additional
requirement, that is the winning crown must have a corresponding winning security code,
imposed by PEPSI was a deviation from the rules approved by DTI.
 xxxx

x x x [i]t appeared that the matching winning security with code is not an express requirement in
order to win. Taken together with printed promo mechanics, this means that one is a winner as
long as he has in his possession the crown with the winning number. The matching winning
security code is not required.

With the promo mechanics as the guide, it is undisputable that plaintiffs-appellants are very well
entitled to the cash prizes indicated on their crowns. To deny their claim despite their compliance
with the unequivocal requirements of the promotion is contrary to the principle of good faith.

xxxx

It is highly inequitable for PEPSI to impose an additional requirement in order to win as a way to
evade the unusually large number of 349 winner-claimants. x x x.

Petitioners PCPPI and PEPSICO fault the appellate court for disregarding this Court’s pronouncements in
four other Pepsi/"349" cases i.e., Mendoza, Rodrigo, Patan and De Mesa – that the "349" bearing crowns
and/or resealable caps with security codes L-2560-FQ and L-3560-FQ, like those held by respondents
Pagdanganan and Lumahan, are non-winning crowns under the terms of the "Number Fever" promo.
They reckon that, by virtue of the principle of stare decisis, the aforementioned cases have already settled
the issue of whether or not petitioners PCPPI and PEPSICO are liable to holders of non-winning "349"
bearing crowns and/or resealable caps. Simply put, the principle of stare decisis should have been
determinative of the outcome of the case at bar. "Rodrigo, Mendoza, Patan and De Mesa cases having
ruled on the very same issues raised in the case at bar, they constitute binding judicial precedents on how
Pepsi/"349" litigations must be disposed of.

On the other hand, respondents Pagdanganan and Lumahan justify the non-application of the principle
of stare decisis by stating that "it is required that the legal rights and relations of the parties, and the facts,
and the applicable laws, the issue and evidence are exactly the same, (sic) as those decided in the cases
of Rodrigo, Mendoza and later the de Mesa x x x".21 They contend, however, that "a comparison of the
subject cases show that they are not the same nor identical x x x as evident in the different questions of
law, the findings of facts and evidence and issues involved in said cases x x x." 22 In fact, respondents
Pagdanganan and Lumahan particularly argue that the basis of their action is Breach of Contract while
that of the Rodrigo and Mendoza cases involved complaints for Specific Performance.

The petition is meritorious.

There is no question that the cases of Mendoza, Rodrigo, Patan and De Mesa, including the case at bar,
arose from the same set of facts concerning the "Number Fever" promo debacle of petitioners PCPPI and
PEPSICO. Mendoza, Rodrigo, Patan, De Mesa, Pagdanganan and Lumahan are among those holding
supposedly winning "349" Pepsi/7-Up/Mirinda/Mountain Dew soft drink crowns and/or resealable caps.
Said crowns and/or resealable caps were not honored or allowed to be cashed in by petitioners PCPPI
and PEPSICO for failing to contain the correct security code assigned to such winning combination. As a
result, the rejected crown and/or resealable cap holders filed separate complaints for specific
performance/ sum of money/ breach of contract, with damages, all against petitioners PCPPI and
PEPSICO.

A survey of said cases is imperative in order to determine whether or not the principle of stare decisis will,
indeed, bar the relitigation of the instant case.

In 2001, in the case of Mendoza v. Pepsi-Cola Products Phils., Inc. and Pepsico, Inc .,23 the RTC
dismissed the complaint for specific performance and damages against herein petitioners PCPPI and
PEPSICO. On appeal24 with the Court of Appeals, the latter dismissed the appeal for lack of merit and
affirmed the dismissal of the complaint. It rationalized that:

The mechanics for the "Number Fever" promo, both in the original period and for the extension
period, was duly approved by the DTI. Television, radio and print advertisements for the promo
passed through and were by the DTI. Posters explaining the promo mechanics were posted all
over the country and warning ads in newspapers highlighted the importance of the security code.
Plaintiff-appellant admitted to have read and understood the mechanics of the promo. His
different interpretation of the security code’s function should not mean that PEPSI was grossly
negligent. The mechanics were clear. A winning number had its own unique, matching security
code which must be authenticated by PEPSI against its official list. The importance of a matching
security code had been adequately emphasized in the Warning Ads (citation omitted) and in the
new campaign posters (citation omitted) during the extension period both of which were duly
approved by DTI.

xxxx

The function of the security code is not limited to the determination of whether or not a crown is
tampered with or fake. It also serves to authenticate the winning number combination whether it
had the correct alpha-numeric security code uniquely assigned to each crown as appearing in
PEPSI’s official list. The campaign posters for the promo period February 17, 1992 to May 10,
1992 as well as for the extension period from May 11, 1992 to June 12, 1992 uniformly
enumerated three (3) essential elements of a participating winning crown, to wit: (1) 3-digit
winning number; (2) prize denomination; and (3) 7-digit alpha-numeric security code. x x x The
promo mechanics stressed that the 3-digit winning number combination must have an
authenticated security code, which security code was unique to every crown. Thus, plaintiff-
appellant’s ‘349’ crown must also be measured against the essential elements of a winning
participating crown pursuant to the promo’s mechanics.

xxxx

Thus, PEPSI’s obligation to redeem plaintiff-appellant’s ‘349’ crown did not arise as his crown did
not bear the correct security code, a condition precedent to winning the proffered prize.

A Petition for Review on Certiorari was then filed with this Court. In a Resolution dated 24 July 2002, we
denied Mendoza’s petition for review for failing to show that the Court of Appeals committed reversible
error.25

Similarly, in 2002, in Rodrigo v. Pepsi Cola Products (Phils.), Inc. and Pepsico, Inc., the RTC therein
dismissed the complaint for Specific Performance and Damages filed against herein petitioners PCPPI
and PEPSICO. The Court of Appeals then affirmed the dismissal of the complaint, stating that:

To resolve the pivotal issue of whether the appellants are the real winners of the promo, the
various advertisements must be read together to give effect to all. From the start of the
promotion, Pepsi had highlighted the security code as a major component of each and every
crown. In subsequent posters, the companies clarified its role as a measure against tampering or
faking crowns. (sic), and emphasized the important role of the security code in identifying and
verifying the real winning crown. In its ‘Warning Cheaters’ posters, the third paragraph succinctly
provides that:

‘Thus if a supposed winning crown is presented to us where the security code does not
match the real security code of the winning number as verified with our master list (known
only to authorized personnel of Pepsi and DTI), then we know that the Crown is either
fake or tampered with.’ (Citation omitted.)
 Also (sic) the companies published that:

‘Every crown/cap with a winning number and Authenticated security wins the amount
printed on the crown/cap.’ (Citation omitted.)

Given said advertisements, the impression an ordinary consumer gets is that the security code
distinguishes the ‘real’ or genuine from the fake winning crown, especially considering the
conditions surrounding their issuance i.e., that as early as March 1992, various complaints of
tampered crowns had reached the DTI. This construction is bolstered by the subsequent release
of the ‘NUMBER FEVER MORE CHANCES TO WIN’ posters during the extension period wherein
the security code is defined as a ‘measure against tampering or faking of crowns’ (citation
omitted) and in the subsequent advertisements which warned the consuming public that the
appellee companies would not honor under any circumstances any fake or tampered crown.
(Citation omitted.)

The inescapable conclusion is that the crowns held by the appellants are not winning crowns. x x
x.

Undaunted, Rodrigo went to this Court via a Petition for Review on Certiorari but we subsequently denied
his petition, in a Resolution dated 1 October 2001, for failure to show that a reversible error was
committed by the Court of Appeals, hence the aforequoted disquisition was affirmed.

Promulgated in 2003, in Pepsi Cola Products (Phils.) vs. Patan, Jr., the RTC therein dismissed two
consolidated complaints for specific performance and damages against herein petitioners PCPPI and
PEPSICO for lack of cause of action. The Court of Appeals substantially affirmed the findings of the trial
court that therein respondents did not win in the petitioners’ "Number Fever" promotional campaign as
their crowns were not the winning crowns. The appellate court, however, awarded therein respondents
P500 each in the interest of justice. When the case came to the Court by means of a Petition for Review
on Certiorari, the finding that the correct security code is an indispensable requirement to be entitled to
the cash prize is concerned, was affirmed. The award of P500 though was deleted as it was our stance
that the offer of P500 for every non-winning "349" crown had long expired on 12 June 1992.

And, in the 2005 case of De Mesa v. Pepsi Cola Products Phils., Inc., the RTC dismissed the case under
the principle of stare decisis. It elucidated that the instant case, as well as the 2001 Mendoza case, not
only are the legal rights and relations of the parties substantially the same as those passed upon in the
2002 Rodrigo case, but the facts, the applicable laws, the causes of action, the issues, and the
testimonial and documentary evidence are identical such that a ruling in one case, under the principle
of stare decisis, is a bar to any attempt to relitigate the same issue. Subsequently, De Mesa et al., filed
a Petition for Review on Certiorari before us challenging the application of the principle of stare decisis to
said case. In a Decision promulgated 19 August 2005, we denied their recourse to this court and affirmed
the dismissal of the complaint. We held that:

In the instant case, the legal rights and relations of the parties, the facts, the applicable laws, the
causes of action, the issues, and the evidence are exactly the same as those in the decided
cases of Mendoza and Rodrigo, supra. Hence, nothing is left to be argued. The issue has been
settled and this Court’s final decision in the said cases must be respected. This Court’s hands are
now tied by the finality of the said judgments. We have no recourse but to deny the instant
petition.

The principle of stare decisis et non quieta movere (to adhere to precedents and not to unsettle things
which are established) is well entrenched in Article 8 of the Civil Code, to wit: 26

ART. 8. Judicial decisions applying or interpreting the laws or the Constitution shall form a part of
the legal system of the Philippines.
With the above provision of law, in tandem with the foregoing judicial pronouncements, it is quite evident
that the appellate court committed reversible error in failing to take heed of our final, and executory
decisions – those decisions considered to have attained the status of judicial precedents in so far as the
Pepsi/"349" cases are concerned. For it is the better practice that when a court has laid down a principle
of law as applicable to a certain state of facts, it will adhere to that principle and apply it to all future cases
where the facts are substantially the same.27 In the case at bar, therefore, we have no alternative but to
uphold the ruling that the correct security code is an essential, nay, critical, requirement in order to
become entitled to the amount printed on a "349" bearing crown and/or resealable cap.

Likewise, the same principle of judicial precedent will prevent respondents Pagdanganan and Lumahan
from receiving the amounts of P3,500.00 and P1,000.00, respectively, as goodwill compensation. As we
have stated on the case of Patan:

Neither is the award of P500 to respondent Patan, Jr. "in the interest of justice and equity"
warranted. Respondent Patan, jr. had consistently refused the petitioner’s offer of P500 for his
non-winning "349" crown. Unlike the other holders of the non-winning "349" crowns, x x x who
availed themselves of the goodwill money offered by the petitioner, respondent Patan, Jr. rejected
the same.

xxxx

In this case, the petitioner’s offer of P500 for every non-winning "349" crown had long expired on
June 12, 1992. The petitioner cannot now be compelled to pay respondent Patan, Jr. P500 as a
"goodwill gesture," since he had already rejected the same.

The doctrine of stare decisis embodies the legal maxim that a principle or rule of law which has been
established by the decision of a court of controlling jurisdiction will be followed in other cases involving a
similar situation. It is founded on the necessity for securing certainty and stability in the law and does not
require identity of or privity of parties.28 This is unmistakable from the wordings of Article 8 of the Civil
Code. It is even said that such decisions "assume the same authority as the statute itself and, until
authoritatively abandoned, necessarily become, to the extent that they are applicable, the criteria which
must control the actuations not only of those called upon to decide thereby but also of those in duty bound
to enforce obedience thereto."29 Abandonment thereof must be based only on strong and compelling
reasons, otherwise, the becoming virtue of predictability which is expected from this Court would be
immeasurably affected and the public’s confidence in the stability of the solemn pronouncements
diminished.

To reiterate, there is naught that is left to be brought to court. Those things which have been so often
adjudged ought to rest in peace.30

WHEREFORE, premises considered, the instant petition is GRANTED. The assailed 13 February 2004
Decision and 26 April 2005 Resolution both of the Court of Appeals in CA-G.R. CV No. 68290, are hereby
REVERSED and SET ASIDE. The Decision of the Regional Trial Court of Pasig City, Branch 163, in Civil
Case No. 62726 dismissing the complaint for Sum of Money and Damages is REINSTATED. Further,
respondents Pepe B. Pagdanganan and Pepito A. Lumahan, are not entitled to the award of P3,500.00
and P1,000.00, respectively, as goodwill compensation.

SO ORDERED.

Department of Health v. Philip Morris Philippines Manufacturing, Inc.

G.R. No. 202943, March 25, 2015

G.R. No. 167866             October 12, 2006

PEPSI-COLA PRODUCTS PHILIPPINES, INCORPORATED, and PEPSICO,

INCORPORATED, petitioners,
vs.
PEPE B. PAGDANGANAN, and PEPITO A. LUMAJAN, respondents.

DECISION

CHICO-NAZARIO, J.:

The Case

For review under Rule 45 of the Rules of Court, as amended, is the 13 February 2004 Decision1 and 26
June 2005 Resolution2 of the Court of Appeals in CA-G.R. CV No. 68290, reversing and setting aside the
3 August 20003 Decision and 23 August 20004 Order of the Regional Trial Court of Pasig City, Branch
163,5 in Civil Case No. 62726.

The Facts

This case stemmed from a Complaint6 filed by herein respondents Pepe B. Pagdanganan (Pagdanganan)
and Pepito A. Lumahan (Lumahan) against herein petitioners Pepsi-Cola Products Philippines,
Incorporated (PCPPI) and PEPSICO, Incorporated (PEPSICO) on 22 December 1992, before the
Regional Trial Court (RTC) of Pasig City, Branch 163, for Sum of Money and Damages.

The facts are beyond dispute. As culled from the records of the case, they are as follows:

Petitioners PCPPI and PEPSICO launched a Department of Trade and Industry (DTI) approved and
supervised under-the-crown promotional campaign entitled "Number Fever" sometime in 1992. With said
marketing strategy, it undertook to give away cash prizes to holders of specially marked crowns and
resealable caps of PEPSI-COLA softdrink products, i.e., Pepsi, 7-Up, Mirinda and Mountain Dew.
Specially marked crowns and resealable caps were said to contain a) a three-digit number, b) a seven-
digit alpha-numeric security code, and c) the amount of the cash prize in any of the following
denominations – P1,000.00; P10,000.00; P50,000.00; P100,000.00; and P1,000,000.00.

Petitioners PCPPI and PEPSICO engaged the services of D.G. Consultores, a Mexican consultancy firm
with experience in handling similar promotion in other countries, to randomly pre-select 60 winning three-
digit numbers with their matching security codes out of 1000 three-digit numbers seeded in the market, as
well as the corresponding artworks appearing on a winning crown and/or resealable cap.

The mechanics of the "Number Fever" promo was simple – From Monday to Friday, starting 17 February
1992 to 8 May 1992, petitioners PCPPI and PEPSICO will announce, on national and local broadcast and
print media, a randomly pre-selected7 winning three-digit number. All holders of specially marked crowns
bearing the winning three-digit number will win the corresponding amount printed on said crowns and/or
resealable caps.

On account of the success of the promotional campaign, petitioners PCPPI and PEPSICO extended or
stretched out the duration of the "Number Fever" for another five weeks or until 12 June 1992.

For the extended period, petitioners PCPPI and PEPSICO again sought the services of D.G. Consultores
to pre-select 25 winning three-digit numbers with their matching security codes as well as the
corresponding artworks to appear on a winning crown and/or resealable cap.

On 25 May 1992, petitioners PCPPI and PEPSICO announced the notorious three-digit combination
"349" as the winning number for the next day, 26 May 1992. On the same night of the announcement,
however, petitioners PCPPI and PEPSICO learned of reports that numerous people were trying to
redeem "349" bearing crowns and/or resealable caps with incorrect security codes "L-2560-FQ" and "L-
3560-FQ." Upon verification from the list of the 25 pre-selected 8 winning three-digit numbers, petitioners
PCPPI and PEPSICO and the DTI learned that the three-digit combination "349" was indeed the winning
combination for 26 May 1992 but the security codes "L-2560-FQ" and "L-3560-FQ" do not correspond to
that assigned to the winning number "349".

Subsequently, petitioners PCPPI and PEPSICO issued a statement stating in part that:

DEAR VALUED CUSTOMERS

xxxx

Some 349 crowns have winning security codes as per the list held in a bank vault by the Department of
Trade and Industry and will be redeemed at full value like all other authenticated winning crowns.

Some other 349 crowns which have security codes L-2560-FQ and L-3560-FQ are not winning crowns.

However, as an act of goodwill to our customers, we will redeem the non-winning 349 crowns for P500.00
each until June 12, 1992 at all Pepsi plants & warehouses.

xxxx

Sincerely,

ROD SALAZAR
President
PEPSI-COLA PRODUCTS PHILS., INC.

Despite the foregoing announcement, on 9 July 1992, respondent Pagdanganan demanded from
petitioners PCPPI and PEPSICO and the DTI the payment of the corresponding cash prize of each of his
"349" bearing crown, specifically, four 7-Up9 crowns and two Mirinda10 crowns, each displaying the cash
prize of P1,000,000.00 in addition to one 7-Up11 crown showing the cash prize of P100,000.00. Notably,
all seven crowns bore the security code L-2560-FQ.

For his part, respondent Lumahan similarly insisted that petitioners PCPPI and PEPSICO pay him the
cash value of his two "winning" crowns, that is, two 7-Up crowns with one exhibiting the cash value
of P1,000,000.00 and the other the amount of P100,000.00.

Petitioners PCPPI and PEPSICO refused to take heed of the aforementioned demands.
Affronted by the seeming injustice, respondents Pagdanganan and Lumahan filed a collective
complaint12 for Sum of Money and Damages before the RTC of Pasig City, Branch 163, against
petitioners PCPPI and PEPSICO.

After trial on the merits, the RTC rendered its decision on 3 August 2000, the dispositive part of which
states that:

WHEREFORE, for failure of the plaintiffs to establish a cause of action against defendants, the
instant case is hereby DISMISSED.

The defendants are hereby ordered to pay plaintiffs Pagdanganan and Lumahan the amounts of
P3,500.00 and P1,000.00, respectively.

Without costs.

SO ORDERED.

In dismissing the complaint, the RTC ratiocinated that:

The preponderance of evidence now on record does not appear to support the assertion of the
plaintiffs that number 349 with security code number L-2560-FQ won the Pepsico’s sales
promotion game for May 26, 1992. While it is true that number 349 was used both as a winning
and non-winning number, still the winning 349 must tally with the corresponding security code
contained in the master list of winning crowns.

xxxx

x x x [a]mong the 349s enumerated in the list of winning crowns (citation omitted) as winning
numbers were 349 V-2421-JC; 349 A-7963-IS; 349 B-4860-IG; 349 C-3984-RP; 349 D-5863-CO;
349 E-3800-EL; 349 U-3501-MN (sic) and 349 U-3246-NP. Nowhere to be found were nos. 349
L-2560-FQ and L-3560-FQ. This means that it was not possible for both defendants to have won
during the entire extended period of the sales promotion of Pepsi Cola because the number did
not appear in the master list. It was made clear in the advertisements and posters put up by
defendants that to win, the 3-digit number must be matched with the proper security code. The
Department of Trade and Industry had been duly informed of the mechanics of the Pepsi Cola
sales promotion for the protection of the interest of the public.

Anent the award of P3,500.00 and P1,000.00 to respondents Pagdanganan and Lumahan, respectively,
the RTC justified such grant, by stating to wit:

x x x since the defendants have voluntarily announced their desire to pay holders of caps or
crowns of their products bearing non-winning number 349 as a sign of goodwill, the Court feels
that this privilege should also be extended to the plaintiffs despite the institution of the instant
case.

Their Partial Motion for Reconsideration13 having been denied in an Order14 dated 23 August 2000,

respondents Pagdanganan and Lumahan appealed their case to the Court of Appeals.

In a Decision15 promulgated on 13 February 2004, the Court of Appeals reversed and set aside the
decision of the RTC, the fallo of which reads:

WHEREFORE, the appeal is hereby GRANTED. The decision of the Regional Trial Court of
Pasig, Branch 163, in Civil Case No. 62726 is REVERSED. Defendants-appellants are hereby
 ORDERED to pay plaintiffs-appellants Pepe Pagdanganan the sum of P5 million and Pepito
Lumahan the sum of P1.2 million.

In a Resolution dated 26 April 2005, the Court of Appeals denied petitioners PCPPI and
PEPSICO’s Motion for Reconsideration.

The Issues

Hence, this petition for review on certiorari under Rule 45 of the Rules of Court, as amended, predicated
on the following issues:16

I.

WHETHER OR NOT PETITIONERS ARE ESTOPPED FROM RAISING STARE DECISIS;

II.

WHETHER OR NOT RODRIGO, MENDOZA, PATAN AND DE MESA ARE BINDING

ALTHOUGH RESPONDENTS WERE NOT PARTIES THEREIN;

III.

WHETHER OR NOT THE RESPONDENTS RAISE ANY ISSUE THAT HAS NOT BEEN
PREVIOUSLY RESOLVED IN RODRIGO, MENDOZA, PATAN OR DE MESA;

IV.

WHETHER OR NOT THE SENATE AND DTI TASK FORCE REPORTS ARE EVEN RELEVANT,
OR CONTROLLING; and

V.

WHETHER OR NOT RESPONDENTS MAY SEEK AFFIRMATIVE RELIEF WITHOUT HAVING

APPEALED.

In essence, the present petition raises as fundamental issue for resolution by the Court the question of
whether or not the instant case is already barred by our rulings in the cases
of Rodrigo,17  Mendoza,18 Patan19 and, the most recent, De Mesa. 20

The Court’s Ruling

In ordering petitioners PCPPI and PEPSICO to pay respondents Pagdanganan and Lumahan the
amounts of P5,000,000.00 and P1,200,000.00, the appellate court articulated that:

x x x [w]e fully agree with the contention of plaintiffs-appellants that such deviation or additional
requirement, that is the winning crown must have a corresponding winning security code,
imposed by PEPSI was a deviation from the rules approved by DTI.

xxxx

x x x [i]t appeared that the matching winning security with code is not an express requirement in
order to win. Taken together with printed promo mechanics, this means that one is a winner as
 long as he has in his possession the crown with the winning number. The matching winning
security code is not required.

With the promo mechanics as the guide, it is undisputable that plaintiffs-appellants are very well
entitled to the cash prizes indicated on their crowns. To deny their claim despite their compliance
with the unequivocal requirements of the promotion is contrary to the principle of good faith.

xxxx

It is highly inequitable for PEPSI to impose an additional requirement in order to win as a way to
evade the unusually large number of 349 winner-claimants. x x x.

Petitioners PCPPI and PEPSICO fault the appellate court for disregarding this Court’s pronouncements in
four other Pepsi/"349" cases i.e., Mendoza, Rodrigo, Patan and De Mesa – that the "349" bearing crowns
and/or resealable caps with security codes L-2560-FQ and L-3560-FQ, like those held by respondents
Pagdanganan and Lumahan, are non-winning crowns under the terms of the "Number Fever" promo.
They reckon that, by virtue of the principle of stare decisis, the aforementioned cases have already settled
the issue of whether or not petitioners PCPPI and PEPSICO are liable to holders of non-winning "349"
bearing crowns and/or resealable caps. Simply put, the principle of stare decisis should have been
determinative of the outcome of the case at bar. "Rodrigo, Mendoza, Patan and De Mesa cases having
ruled on the very same issues raised in the case at bar, they constitute binding judicial precedents on how
Pepsi/"349" litigations must be disposed of.

On the other hand, respondents Pagdanganan and Lumahan justify the non-application of the principle
of stare decisis by stating that "it is required that the legal rights and relations of the parties, and the facts,
and the applicable laws, the issue and evidence are exactly the same, (sic) as those decided in the cases
of Rodrigo, Mendoza and later the de Mesa x x x".21 They contend, however, that "a comparison of the
subject cases show that they are not the same nor identical x x x as evident in the different questions of
law, the findings of facts and evidence and issues involved in said cases x x x." 22 In fact, respondents
Pagdanganan and Lumahan particularly argue that the basis of their action is Breach of Contract while
that of the Rodrigo and Mendoza cases involved complaints for Specific Performance.

The petition is meritorious.

There is no question that the cases of Mendoza, Rodrigo, Patan and De Mesa, including the case at bar,
arose from the same set of facts concerning the "Number Fever" promo debacle of petitioners PCPPI and
PEPSICO. Mendoza, Rodrigo, Patan, De Mesa, Pagdanganan and Lumahan are among those holding
supposedly winning "349" Pepsi/7-Up/Mirinda/Mountain Dew soft drink crowns and/or resealable caps.
Said crowns and/or resealable caps were not honored or allowed to be cashed in by petitioners PCPPI
and PEPSICO for failing to contain the correct security code assigned to such winning combination. As a
result, the rejected crown and/or resealable cap holders filed separate complaints for specific
performance/ sum of money/ breach of contract, with damages, all against petitioners PCPPI and
PEPSICO.

A survey of said cases is imperative in order to determine whether or not the principle of stare decisis will,
indeed, bar the relitigation of the instant case.

In 2001, in the case of Mendoza v. Pepsi-Cola Products Phils., Inc. and Pepsico, Inc .,23 the RTC
dismissed the complaint for specific performance and damages against herein petitioners PCPPI and
PEPSICO. On appeal24 with the Court of Appeals, the latter dismissed the appeal for lack of merit and
affirmed the dismissal of the complaint. It rationalized that:

The mechanics for the "Number Fever" promo, both in the original period and for the extension
period, was duly approved by the DTI. Television, radio and print advertisements for the promo
 passed through and were by the DTI. Posters explaining the promo mechanics were posted all
over the country and warning ads in newspapers highlighted the importance of the security code.
Plaintiff-appellant admitted to have read and understood the mechanics of the promo. His
different interpretation of the security code’s function should not mean that PEPSI was grossly
negligent. The mechanics were clear. A winning number had its own unique, matching security
code which must be authenticated by PEPSI against its official list. The importance of a matching
security code had been adequately emphasized in the Warning Ads (citation omitted) and in the
new campaign posters (citation omitted) during the extension period both of which were duly
approved by DTI.

xxxx

The function of the security code is not limited to the determination of whether or not a crown is
tampered with or fake. It also serves to authenticate the winning number combination whether it
had the correct alpha-numeric security code uniquely assigned to each crown as appearing in
PEPSI’s official list. The campaign posters for the promo period February 17, 1992 to May 10,
1992 as well as for the extension period from May 11, 1992 to June 12, 1992 uniformly
enumerated three (3) essential elements of a participating winning crown, to wit: (1) 3-digit
winning number; (2) prize denomination; and (3) 7-digit alpha-numeric security code. x x x The
promo mechanics stressed that the 3-digit winning number combination must have an
authenticated security code, which security code was unique to every crown. Thus, plaintiff-
appellant’s ‘349’ crown must also be measured against the essential elements of a winning
participating crown pursuant to the promo’s mechanics.

xxxx

Thus, PEPSI’s obligation to redeem plaintiff-appellant’s ‘349’ crown did not arise as his crown did
not bear the correct security code, a condition precedent to winning the proffered prize.

A Petition for Review on Certiorari was then filed with this Court. In a Resolution dated 24 July 2002, we
denied Mendoza’s petition for review for failing to show that the Court of Appeals committed reversible
error.25

Similarly, in 2002, in Rodrigo v. Pepsi Cola Products (Phils.), Inc. and Pepsico, Inc., the RTC therein
dismissed the complaint for Specific Performance and Damages filed against herein petitioners PCPPI
and PEPSICO. The Court of Appeals then affirmed the dismissal of the complaint, stating that:

To resolve the pivotal issue of whether the appellants are the real winners of the promo, the
various advertisements must be read together to give effect to all. From the start of the
promotion, Pepsi had highlighted the security code as a major component of each and every
crown. In subsequent posters, the companies clarified its role as a measure against tampering or
faking crowns. (sic), and emphasized the important role of the security code in identifying and
verifying the real winning crown. In its ‘Warning Cheaters’ posters, the third paragraph succinctly
provides that:

‘Thus if a supposed winning crown is presented to us where the security code does not
match the real security code of the winning number as verified with our master list (known
only to authorized personnel of Pepsi and DTI), then we know that the Crown is either
fake or tampered with.’ (Citation omitted.)

Also (sic) the companies published that:

‘Every crown/cap with a winning number and Authenticated security wins the amount
printed on the crown/cap.’ (Citation omitted.)
 Given said advertisements, the impression an ordinary consumer gets is that the security code
distinguishes the ‘real’ or genuine from the fake winning crown, especially considering the
conditions surrounding their issuance i.e., that as early as March 1992, various complaints of
tampered crowns had reached the DTI. This construction is bolstered by the subsequent release
of the ‘NUMBER FEVER MORE CHANCES TO WIN’ posters during the extension period wherein
the security code is defined as a ‘measure against tampering or faking of crowns’ (citation
omitted) and in the subsequent advertisements which warned the consuming public that the
appellee companies would not honor under any circumstances any fake or tampered crown.
(Citation omitted.)

The inescapable conclusion is that the crowns held by the appellants are not winning crowns. x x
x.

Undaunted, Rodrigo went to this Court via a Petition for Review on Certiorari but we subsequently denied
his petition, in a Resolution dated 1 October 2001, for failure to show that a reversible error was
committed by the Court of Appeals, hence the aforequoted disquisition was affirmed.

Promulgated in 2003, in Pepsi Cola Products (Phils.) vs. Patan, Jr., the RTC therein dismissed two
consolidated complaints for specific performance and damages against herein petitioners PCPPI and
PEPSICO for lack of cause of action. The Court of Appeals substantially affirmed the findings of the trial
court that therein respondents did not win in the petitioners’ "Number Fever" promotional campaign as
their crowns were not the winning crowns. The appellate court, however, awarded therein respondents
P500 each in the interest of justice. When the case came to the Court by means of a Petition for Review
on Certiorari, the finding that the correct security code is an indispensable requirement to be entitled to
the cash prize is concerned, was affirmed. The award of P500 though was deleted as it was our stance
that the offer of P500 for every non-winning "349" crown had long expired on 12 June 1992.

And, in the 2005 case of De Mesa v. Pepsi Cola Products Phils., Inc., the RTC dismissed the case under
the principle of stare decisis. It elucidated that the instant case, as well as the 2001 Mendoza case, not
only are the legal rights and relations of the parties substantially the same as those passed upon in the
2002 Rodrigo case, but the facts, the applicable laws, the causes of action, the issues, and the
testimonial and documentary evidence are identical such that a ruling in one case, under the principle
of stare decisis, is a bar to any attempt to relitigate the same issue. Subsequently, De Mesa et al., filed
a Petition for Review on Certiorari before us challenging the application of the principle of stare decisis to
said case. In a Decision promulgated 19 August 2005, we denied their recourse to this court and affirmed
the dismissal of the complaint. We held that:

In the instant case, the legal rights and relations of the parties, the facts, the applicable laws, the
causes of action, the issues, and the evidence are exactly the same as those in the decided
cases of Mendoza and Rodrigo, supra. Hence, nothing is left to be argued. The issue has been
settled and this Court’s final decision in the said cases must be respected. This Court’s hands are
now tied by the finality of the said judgments. We have no recourse but to deny the instant
petition.

The principle of stare decisis et non quieta movere (to adhere to precedents and not to unsettle things
which are established) is well entrenched in Article 8 of the Civil Code, to wit: 26

ART. 8. Judicial decisions applying or interpreting the laws or the Constitution shall form a part of
the legal system of the Philippines.

With the above provision of law, in tandem with the foregoing judicial pronouncements, it is quite evident
that the appellate court committed reversible error in failing to take heed of our final, and executory
decisions – those decisions considered to have attained the status of judicial precedents in so far as the
Pepsi/"349" cases are concerned. For it is the better practice that when a court has laid down a principle
of law as applicable to a certain state of facts, it will adhere to that principle and apply it to all future cases
where the facts are substantially the same.27 In the case at bar, therefore, we have no alternative but to
uphold the ruling that the correct security code is an essential, nay, critical, requirement in order to
become entitled to the amount printed on a "349" bearing crown and/or resealable cap.

Likewise, the same principle of judicial precedent will prevent respondents Pagdanganan and Lumahan
from receiving the amounts of P3,500.00 and P1,000.00, respectively, as goodwill compensation. As we
have stated on the case of Patan:

Neither is the award of P500 to respondent Patan, Jr. "in the interest of justice and equity"
warranted. Respondent Patan, jr. had consistently refused the petitioner’s offer of P500 for his
non-winning "349" crown. Unlike the other holders of the non-winning "349" crowns, x x x who
availed themselves of the goodwill money offered by the petitioner, respondent Patan, Jr. rejected
the same.

xxxx

In this case, the petitioner’s offer of P500 for every non-winning "349" crown had long expired on
June 12, 1992. The petitioner cannot now be compelled to pay respondent Patan, Jr. P500 as a
"goodwill gesture," since he had already rejected the same.

The doctrine of stare decisis embodies the legal maxim that a principle or rule of law which has been
established by the decision of a court of controlling jurisdiction will be followed in other cases involving a
similar situation. It is founded on the necessity for securing certainty and stability in the law and does not
require identity of or privity of parties.28 This is unmistakable from the wordings of Article 8 of the Civil
Code. It is even said that such decisions "assume the same authority as the statute itself and, until
authoritatively abandoned, necessarily become, to the extent that they are applicable, the criteria which
must control the actuations not only of those called upon to decide thereby but also of those in duty bound
to enforce obedience thereto."29 Abandonment thereof must be based only on strong and compelling
reasons, otherwise, the becoming virtue of predictability which is expected from this Court would be
immeasurably affected and the public’s confidence in the stability of the solemn pronouncements
diminished.

To reiterate, there is naught that is left to be brought to court. Those things which have been so often
adjudged ought to rest in peace.30

WHEREFORE, premises considered, the instant petition is GRANTED. The assailed 13 February 2004
Decision and 26 April 2005 Resolution both of the Court of Appeals in CA-G.R. CV No. 68290, are hereby
REVERSED and SET ASIDE. The Decision of the Regional Trial Court of Pasig City, Branch 163, in Civil
Case No. 62726 dismissing the complaint for Sum of Money and Damages is REINSTATED. Further,
respondents Pepe B. Pagdanganan and Pepito A. Lumahan, are not entitled to the award of P3,500.00
and P1,000.00, respectively, as goodwill compensation.

SO ORDERED.

Pharmaceutical and Healthcare Assoc. of the Philippines v. Duque III G.R. NO. 173034, October 9, 2007

G.R. No. 173034             October 9, 2007

PHARMACEUTICAL AND HEALTH CARE ASSOCIATION OF THE PHILIPPINES, petitioner,
vs.
HEALTH SECRETARY FRANCISCO T. DUQUE III; HEALTH UNDER SECRETARIES DR. ETHELYN
P. NIETO, DR. MARGARITA M. GALON, ATTY. ALEXANDER A. PADILLA, & DR. JADE F. DEL
MUNDO; and ASSISTANT SECRETARIES DR. MARIO C. VILLAVERDE, DR. DAVID J. LOZADA,
AND DR. NEMESIO T. GAKO, respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

The Court and all parties involved are in agreement that the best nourishment for an infant is mother's
milk. There is nothing greater than for a mother to nurture her beloved child straight from her bosom. The
ideal is, of course, for each and every Filipino child to enjoy the unequaled benefits of breastmilk. But how
should this end be attained?

Before the Court is a petition for certiorari under Rule 65 of the Rules of Court, seeking to nullify
Administrative Order (A.O.) No. 2006-0012 entitled, Revised Implementing Rules and Regulations of
Executive Order No. 51, Otherwise Known as The "Milk Code," Relevant International Agreements,
Penalizing Violations Thereof, and for Other Purposes (RIRR). Petitioner posits that the RIRR is not
valid as it contains provisions that are not constitutional and go beyond the law it is supposed to
implement.

Named as respondents are the Health Secretary, Undersecretaries, and Assistant Secretaries of the
Department of Health (DOH). For purposes of herein petition, the DOH is deemed impleaded as a co-
respondent since respondents issued the questioned RIRR in their capacity as officials of said executive
agency.1

Executive Order No. 51 (Milk Code) was issued by President Corazon Aquino on October 28, 1986 by
virtue of the legislative powers granted to the president under the Freedom Constitution. One of the
preambular clauses of the Milk Code states that the law seeks to give effect to Article 11 2 of the
International Code of Marketing of Breastmilk Substitutes (ICMBS), a code adopted by the World Health
Assembly (WHA) in 1981. From 1982 to 2006, the WHA adopted several Resolutions to the effect that
breastfeeding should be supported, promoted and protected, hence, it should be ensured that nutrition
and health claims are not permitted for breastmilk substitutes.

In 1990, the Philippines ratified the International Convention on the Rights of the Child. Article 24 of said
instrument provides that State Parties should take appropriate measures to diminish infant and child
mortality, and ensure that all segments of society, specially parents and children, are informed of the
advantages of breastfeeding.

On May 15, 2006, the DOH issued herein assailed RIRR which was to take effect on July 7, 2006.

However, on June 28, 2006, petitioner, representing its members that are manufacturers of breastmilk
substitutes, filed the present Petition for Certiorari and Prohibition with Prayer for the Issuance of a
Temporary Restraining Order (TRO) or Writ of Preliminary Injunction.

The main issue raised in the petition is whether respondents officers of the DOH acted without or in
excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and in
violation of the provisions of the Constitution in promulgating the RIRR. 3

On August 15, 2006, the Court issued a Resolution granting a TRO enjoining respondents from
implementing the questioned RIRR.
After the Comment and Reply had been filed, the Court set the case for oral arguments on June 19, 2007.
The Court issued an Advisory (Guidance for Oral Arguments) dated June 5, 2007, to wit:

The Court hereby sets the following issues:

1. Whether or not petitioner is a real party-in-interest;

2. Whether Administrative Order No. 2006-0012 or the Revised Implementing Rules and
Regulations (RIRR) issued by the Department of Health (DOH) is not constitutional;

2.1 Whether the RIRR is in accord with the provisions of Executive Order No. 51 (Milk Code);

2.2 Whether pertinent international agreements1 entered into by the Philippines are part of the law
of the land and may be implemented by the DOH through the RIRR; If in the affirmative, whether
the RIRR is in accord with the international agreements;

2.3 Whether Sections 4, 5(w), 22, 32, 47, and 52 of the RIRR violate the due process clause and
are in restraint of trade; and

2.4 Whether Section 13 of the RIRR on Total Effect provides sufficient standards.

_____________

1 (1) United Nations Convention on the Rights of the Child; (2) the WHO and Unicef "2002 Global
Strategy on Infant and Young Child Feeding;" and (3) various World Health Assembly (WHA)
Resolutions.

The parties filed their respective memoranda.

The petition is partly imbued with merit.

On the issue of petitioner's standing

With regard to the issue of whether petitioner may prosecute this case as the real party-in-interest, the
Court adopts the view enunciated in Executive Secretary v. Court of Appeals, 4 to wit:

The modern view is that an association has standing to complain of injuries to its members. This
view fuses the legal identity of an association with that of its members. An association has
standing to file suit for its workers despite its lack of direct interest if its members are
affected by the action. An organization has standing to assert the concerns of its
constituents.

xxxx

x x x We note that, under its Articles of Incorporation, the respondent was organized x x x to act
as the representative of any individual, company, entity or association on matters related to the
manpower recruitment industry, and to perform other acts and activities necessary to accomplish
the purposes embodied therein. The respondent is, thus, the appropriate party to assert the
rights of its members, because it and its members are in every practical sense identical. x
x x The respondent [association] is but the medium through which its individual members
seek to make more effective the expression of their voices and the redress of their
grievances. 5 (Emphasis supplied)
which was reasserted in Purok Bagong Silang Association, Inc. v. Yuipco,6 where the Court ruled that an
association has the legal personality to represent its members because the results of the case will affect
their vital interests.7

Herein petitioner's Amended Articles of Incorporation contains a similar provision just like in Executive
Secretary, that the association is formed "to represent directly or through approved representatives the
pharmaceutical and health care industry before the Philippine Government and any of its agencies, the
medical professions and the general public."8 Thus, as an organization, petitioner definitely has an
interest in fulfilling its avowed purpose of representing members who are part of the pharmaceutical and
health care industry. Petitioner is duly authorized9 to take the appropriate course of action to bring to the
attention of government agencies and the courts any grievance suffered by its members which are
directly affected by the RIRR. Petitioner, which is mandated by its Amended Articles of Incorporation to
represent the entire industry, would be remiss in its duties if it fails to act on governmental action that
would affect any of its industry members, no matter how few or numerous they are. Hence, petitioner,
whose legal identity is deemed fused with its members, should be considered as a real party-in-interest
which stands to be benefited or injured by any judgment in the present action.

On the constitutionality of the provisions of the RIRR

First, the Court will determine if pertinent international instruments adverted to by respondents are part of
the law of the land.

Petitioner assails the RIRR for allegedly going beyond the provisions of the Milk Code, thereby amending
and expanding the coverage of said law. The defense of the DOH is that the RIRR implements not only
the Milk Code but also various international instruments 10 regarding infant and young child nutrition. It is
respondents' position that said international instruments are deemed part of the law of the land and
therefore the DOH may implement them through the RIRR.

The Court notes that the following international instruments invoked by respondents, namely: (1) The
United Nations Convention on the Rights of the Child; (2) The International Covenant on Economic,
Social and Cultural Rights; and (3) the Convention on the Elimination of All Forms of Discrimination
Against Women, only provide in general terms that steps must be taken by State Parties to diminish infant
and child mortality and inform society of the advantages of breastfeeding, ensure the health and well-
being of families, and ensure that women are provided with services and nutrition in connection with
pregnancy and lactation. Said instruments do not contain specific provisions regarding the use or
marketing of breastmilk substitutes.

The international instruments that do have specific provisions regarding breastmilk substitutes are the
ICMBS and various WHA Resolutions.

Under the 1987 Constitution, international law can become part of the sphere of domestic law either
by transformation or incorporation.11 The transformation method requires that an international law be
transformed into a domestic law through a constitutional mechanism such as local legislation. The
incorporation method applies when, by mere constitutional declaration, international law is deemed to
have the force of domestic law.12

Treaties become part of the law of the land through transformation pursuant to Article VII, Section 21 of
the Constitution which provides that "[n]o treaty or international agreement shall be valid and effective
unless concurred in by at least two-thirds of all the members of the Senate." Thus, treaties or
conventional international law must go through a process prescribed by the Constitution for it to be
transformed into municipal law that can be applied to domestic conflicts. 13

The ICMBS and WHA Resolutions are not treaties as they have not been concurred in by at least two-
thirds of all members of the Senate as required under Section 21, Article VII of the 1987 Constitution.
However, the ICMBS which was adopted by the WHA in 1981 had been transformed into domestic law
through local legislation, the Milk Code. Consequently, it is the Milk Code that has the force and effect of
law in this jurisdiction and not the ICMBS per se.

The Milk Code is almost a verbatim reproduction of the ICMBS, but it is well to emphasize at this point
that the Code did not adopt the provision in the ICMBS absolutely prohibiting advertising or other
forms of promotion to the general public of products within the scope of the ICMBS. Instead, the Milk
Code expressly provides that advertising, promotion, or other marketing materials may be allowed
if such materials are duly authorized and approved by the Inter-Agency Committee (IAC).

On the other hand, Section 2, Article II of the 1987 Constitution, to wit:

SECTION 2. The Philippines renounces war as an instrument of national policy, adopts the

generally accepted principles of international law as part of the law of the land and adheres
to the policy of peace, equality, justice, freedom, cooperation and amity with all nations.
(Emphasis supplied)

embodies the incorporation method.14

In Mijares v. Ranada,15 the Court held thus:

[G]enerally accepted principles of international law, by virtue of the incorporation clause of the
Constitution, form part of the laws of the land even if they do not derive from treaty obligations.
The classical formulation in international law sees those customary rules accepted as
binding result from the combination [of] two elements: the established, widespread, and
consistent practice on the part of States; and a psychological element known as the opinion
juris sive necessitates (opinion as to law or necessity). Implicit in the latter element is a belief
that the practice in question is rendered obligatory by the existence of a rule of law requiring
it.16 (Emphasis supplied)

"Generally accepted principles of international law" refers to norms of general or customary international
law which are binding on all states,17 i.e., renunciation of war as an instrument of national policy, the
principle of sovereign immunity,18 a person's right to life, liberty and due process,19 and pacta sunt
servanda,20 among others. The concept of "generally accepted principles of law" has also been depicted
in this wise:

Some legal scholars and judges look upon certain "general principles of law" as a primary source of
international law because they have the "character of jus rationale" and are "valid through all kinds
of human societies." (Judge Tanaka in his dissenting opinion in the 1966 South West Africa Case, 1966
I.C.J. 296). O'Connell holds that certain priniciples are part of international law because they are "basic
to legal systems generally" and hence part of the jus gentium. These principles, he believes, are
established by a process of reasoning based on the common identity of all legal systems. If there should
be doubt or disagreement, one must look to state practice and determine whether the municipal law
principle provides a just and acceptable solution. x x x 21 (Emphasis supplied)

Fr. Joaquin G. Bernas defines customary international law as follows:

Custom or customary international law means "a general and consistent practice of states
followed by them from a sense of legal obligation [opinio juris]." (Restatement) This statement
contains the two basic elements of custom: the material factor, that is, how states behave,
and the psychological or subjective factor, that is, why they behave the way they do.

xxxx
 The initial factor for determining the existence of custom is the actual behavior of states. This
includes several elements: duration, consistency, and generality of the practice of states.

The required duration can be either short or long. x x x

xxxx

Duration therefore is not the most important element. More important is the consistency and the
generality of the practice. x x x

xxxx

Once the existence of state practice has been established, it becomes necessary to determine
why states behave the way they do. Do states behave the way they do because they consider it
obligatory to behave thus or do they do it only as a matter of courtesy? Opinio juris, or the
belief that a certain form of behavior is obligatory, is what makes practice an international
rule. Without it, practice is not law.22 (Underscoring and Emphasis supplied)

Clearly, customary international law is deemed incorporated into our domestic system. 23

WHA Resolutions have not been embodied in any local legislation. Have they attained the status of
customary law and should they then be deemed incorporated as part of the law of the land?

The World Health Organization (WHO) is one of the international specialized agencies allied with the
United Nations (UN) by virtue of Article 57,24 in relation to Article 6325 of the UN Charter. Under the 1946
WHO Constitution, it is the WHA which determines the policies of the WHO, 26 and has the power to adopt
regulations concerning "advertising and labeling of biological, pharmaceutical and similar products
moving in international commerce,"27 and to "make recommendations to members with respect to any
matter within the competence of the Organization." 28 The legal effect of its regulations, as opposed to
recommendations, is quite different.

Regulations, along with conventions and agreements, duly adopted by the WHA bind member
states thus:

Article 19. The Health Assembly shall have authority to adopt conventions or agreements with
respect to any matter within the competence of the Organization. A two-thirds vote of the Health
Assembly shall be required for the adoption of such conventions or agreements, which shall
come into force for each Member when accepted by it in accordance with its constitutional
processes.

Article 20. Each Member undertakes that it will, within eighteen months after the adoption by
the Health Assembly of a convention or agreement, take action relative to the acceptance of
such convention or agreement. Each Member shall notify the Director-General of the action
taken, and if it does not accept such convention or agreement within the time limit, it will furnish a
statement of the reasons for non-acceptance. In case of acceptance, each Member agrees to
make an annual report to the Director-General in accordance with Chapter XIV.

Article 21. The Health Assembly shall have authority to adopt regulations concerning: (a) sanitary
and quarantine requirements and other procedures designed to prevent the international spread
of disease; (b) nomenclatures with respect to diseases, causes of death and public health
practices; (c) standards with respect to diagnostic procedures for international use; (d) standards
with respect to the safety, purity and potency of biological, pharmaceutical and similar products
 moving in international commerce; (e) advertising and labeling of biological, pharmaceutical and
similar products moving in international commerce.

Article 22. Regulations adopted pursuant to Article 21  shall come into force for all Members  after
due notice has been given of their adoption by the Health Assembly except for such Members as
may notify the Director-General of rejection or reservations within the period stated in the
notice. (Emphasis supplied)

On the other hand, under Article 23, recommendations of the WHA do not come into force for
members, in the same way that conventions or agreements under Article 19 and regulations under
Article 21 come into force. Article 23 of the WHO Constitution reads:

Article 23. The Health Assembly shall have authority to make recommendations to Members
with respect to any matter within the competence of the Organization. (Emphasis supplied)

The absence of a provision in Article 23 of any mechanism by which the recommendation would come
into force for member states is conspicuous.

The former Senior Legal Officer of WHO, Sami Shubber, stated that WHA recommendations are
generally not binding, but they "carry moral and political weight, as they constitute the judgment on a
health issue of the collective membership of the highest international body in the field of health." 29 Even
the ICMBS itself was adopted as a mere recommendation, as WHA Resolution No. 34.22 states:

"The Thirty-Fourth World Health Assembly x x x adopts, in the sense of Article 23 of the
Constitution, the International Code of Marketing of Breastmilk Substitutes annexed to the
present resolution." (Emphasis supplied)

The Introduction to the ICMBS also reads as follows:

In January 1981, the Executive Board of the World Health Organization at its sixty-seventh
session, considered the fourth draft of the code, endorsed it, and unanimously recommended to
the Thirty-fourth World Health Assembly the text of a resolution by which it would adopt the
code in the form of a recommendation rather than a regulation. x x x (Emphasis supplied)

The legal value of WHA Resolutions as recommendations is summarized in Article 62 of the WHO
Constitution, to wit:

Art. 62. Each member shall report annually on the action taken with respect to recommendations
made to it by the Organization, and with respect to conventions, agreements and regulations.

Apparently, the WHA Resolution adopting the ICMBS and subsequent WHA Resolutions urging member
states to implement the ICMBS are merely recommendatory and legally non-binding. Thus, unlike what
has been done with the ICMBS whereby the legislature enacted most of the provisions into law
which is the Milk Code, the subsequent WHA Resolutions,30 specifically providing for exclusive
breastfeeding from 0-6 months, continued breastfeeding up to 24 months, and absolutely
prohibiting advertisements and promotions of breastmilk substitutes, have not been adopted as a
domestic law.

It is propounded that WHA Resolutions may constitute "soft law" or non-binding norms, principles and
practices that influence state behavior.31

"Soft law" does not fall into any of the categories of international law set forth in Article 38, Chapter III of
the 1946 Statute of the International Court of Justice. 32 It is, however, an expression of non-binding
norms, principles, and practices that influence state behavior. 33 Certain declarations and resolutions of the
UN General Assembly fall under this category.34 The most notable is the UN Declaration of Human
Rights, which this Court has enforced in various cases, specifically, Government of Hongkong Special
Administrative Region v. Olalia,35 Mejoff v. Director of Prisons,36 Mijares v. Rañada37 and Shangri-la
International Hotel Management, Ltd. v. Developers Group of Companies, Inc.. 38

The World Intellectual Property Organization (WIPO), a specialized agency attached to the UN with the
mandate to promote and protect intellectual property worldwide, has resorted to soft law as a rapid means
of norm creation, in order "to reflect and respond to the changing needs and demands of its
constituents."39 Other international organizations which have resorted to soft law include the International
Labor Organization and the Food and Agriculture Organization (in the form of the Codex Alimentarius).40

WHO has resorted to soft law. This was most evident at the time of the Severe Acute Respiratory
Syndrome (SARS) and Avian flu outbreaks.

Although the IHR Resolution does not create new international law binding on WHO
member states, it provides an excellent example of the power of "soft law" in international
relations. International lawyers typically distinguish binding rules of international
law-"hard law"-from non-binding norms, principles, and practices that influence state
behavior-"soft law." WHO has during its existence generated many soft law norms,
creating a "soft law regime" in international governance for public health.

The "soft law" SARS and IHR Resolutions represent significant steps in laying the political
groundwork for improved international cooperation on infectious diseases. These resolutions
clearly define WHO member states' normative duty to cooperate fully with other countries and
with WHO in connection with infectious disease surveillance and response to outbreaks.

This duty is neither binding nor enforceable, but, in the wake of the SARS epidemic, the
duty is powerful politically for two reasons. First, the SARS outbreak has taught the lesson that
participating in, and enhancing, international cooperation on infectious disease controls is in a
country's self-interest x x x if this warning is heeded, the "soft law" in the SARS and IHR
Resolution could inform the development of general and consistent state practice on infectious
disease surveillance and outbreak response, perhaps crystallizing eventually into customary
international law on infectious disease prevention and control. 41

In the Philippines, the executive department implemented certain measures recommended by WHO to
address the outbreaks of SARS and Avian flu by issuing Executive Order (E.O.) No. 201 on April 26, 2003
and E.O. No. 280 on February 2, 2004, delegating to various departments broad powers to close down
schools/establishments, conduct health surveillance and monitoring, and ban importation of poultry and
agricultural products.

It must be emphasized that even under such an international emergency, the duty of a state to implement
the IHR Resolution was still considered not binding or enforceable, although said resolutions had great
political influence.

As previously discussed, for an international rule to be considered as customary law, it must be

established that such rule is being followed by states because they consider it obligatory to comply with
such rules (opinio juris). Respondents have not presented any evidence to prove that the WHA
Resolutions, although signed by most of the member states, were in fact enforced or practiced by at least
a majority of the member states; neither have respondents proven that any compliance by member states
with said WHA Resolutions was obligatory in nature.

Respondents failed to establish that the provisions of pertinent WHA Resolutions are customary
international law that may be deemed part of the law of the land.
Consequently, legislation is necessary to transform the provisions of the WHA Resolutions into domestic
law. The provisions of the WHA Resolutions cannot be considered as part of the law of the land
that can be implemented by executive agencies without the need of a law enacted by the
legislature.

Second, the Court will determine whether the DOH may implement the provisions of the WHA
Resolutions by virtue of its powers and functions under the Revised Administrative Code even in the
absence of a domestic law.

Section 3, Chapter 1, Title IX of the Revised Administrative Code of 1987 provides that the DOH
shall define the national health policy and implement a national health plan within the framework of the
government's general policies and plans, and issue orders and regulations concerning the
implementation of established health policies.

It is crucial to ascertain whether the absolute prohibition on advertising and other forms of promotion of
breastmilk substitutes provided in some WHA Resolutions has been adopted as part of the national health
policy.

Respondents submit that the national policy on infant and young child feeding is embodied in A.O. No.
2005-0014, dated May 23, 2005. Basically, the Administrative Order declared the following policy
guidelines: (1) ideal breastfeeding practices, such as early initiation of breastfeeding, exclusive
breastfeeding for the first six months, extended breastfeeding up to two years and beyond; (2) appropriate
complementary feeding, which is to start at age six months; (3) micronutrient supplementation; (4)
universal salt iodization; (5) the exercise of other feeding options; and (6) feeding in exceptionally difficult
circumstances. Indeed, the primacy of breastfeeding for children is emphasized as a national health
policy. However, nowhere in A.O. No. 2005-0014 is it declared that as part of such health policy, the
advertisement or promotion of breastmilk substitutes should be absolutely prohibited.

The national policy of protection, promotion and support of breastfeeding cannot automatically be equated
with a total ban on advertising for breastmilk substitutes.

In view of the enactment of the Milk Code which does not contain a total ban on the advertising and
promotion of breastmilk substitutes, but instead, specifically creates an IAC which will regulate said
advertising and promotion, it follows that a total ban policy could be implemented only pursuant to a
law amending the Milk Code passed by the constitutionally authorized branch of government, the
legislature.

Thus, only the provisions of the Milk Code, but not those of subsequent WHA Resolutions, can be
validly implemented by the DOH through the subject RIRR.

Third, the Court will now determine whether the provisions of the RIRR are in accordance with those of
the Milk Code.

In support of its claim that the RIRR is inconsistent with the Milk Code, petitioner alleges the following:

1. The Milk Code limits its coverage to children 0-12 months old, but the RIRR extended its
coverage to "young children" or those from ages two years old and beyond:

MILK CODE RIRR

WHEREAS, in order to ensure that safe and Section 2. Purpose – These Revised Rules and
adequate nutrition for infants is provided, there is Regulations are hereby promulgated to ensure
a need to protect and promote breastfeeding and the provision of safe and adequate nutrition for
to inform the public about the proper use of infants and young children by the promotion,
 breastmilk substitutes and supplements and
related products through adequate, consistent
and objective information and appropriate
regulation of the marketing and distribution of the
said substitutes, supplements and related
products;
SECTION 4(e). "Infant" means a person falling
within the age bracket of 0-12 months.
protection and support of breastfeeding and by
ensuring the proper use of breastmilk substitutes,
breastmilk supplements and related products
when these are medically indicated and only
when necessary, on the basis of adequate
information and through appropriate marketing
and distribution.
Section 5(ff). "Young Child" means a person
from the age of more than twelve (12) months up
to the age of three (3) years (36 months).

2. The Milk Code recognizes that infant formula may be a proper and possible substitute for
breastmilk in certain instances; but the RIRR provides "exclusive breastfeeding for infants from 0-
6 months" and declares that "there is no substitute nor replacement for breastmilk":

MILK CODE RIRR

WHEREAS, in order to ensure that safe and
adequate nutrition for infants is provided, there is
a need to protect and promote breastfeeding and
to inform the public about the proper use of
breastmilk substitutes and supplements and
related products through adequate, consistent
and objective information and appropriate
regulation of the marketing and distribution of the
said substitutes, supplements and related
products;
Section 4. Declaration of Principles – The
following are the underlying principles from which
the revised rules and regulations are premised
upon:
a. Exclusive breastfeeding is for infants from 0 to
six (6) months.
b. There is no substitute or replacement for
breastmilk.

3. The Milk Code only regulates and does not impose unreasonable requirements for advertising
and promotion; RIRR imposes an absolute ban on such activities for breastmilk substitutes
intended for infants from 0-24 months old or beyond, and forbids the use of health and nutritional
claims. Section 13 of the RIRR, which provides for a "total effect" in the promotion of products
within the scope of the Code, is vague:

MILK CODE RIRR

SECTION 6. The General Public and Mothers. Section 4. Declaration of Principles – The
– following are the underlying principles from which
the revised rules and regulations are premised
(a) No advertising, promotion or other marketing upon:
materials, whether written, audio or visual,
for products within the scope of this Code shall be x x x x
printed, published, distributed, exhibited and
broadcast unless such materials are duly f. Advertising, promotions, or sponsor-ships of
authorized and approved by an inter-agency infant formula, breastmilk substitutes and other
committee created herein pursuant to the related products are prohibited.
applicable standards provided for in this Code.
Section 11. Prohibition – No advertising,
promotions, sponsorships, or marketing materials
and activities for breastmilk substitutes
intended for infants and young children up to
twenty-four (24) months, shall be allowed,
because they tend to convey or give subliminal
messages or impressions that undermine
 breastmilk and breastfeeding or otherwise
exaggerate breastmilk substitutes and/or
replacements, as well as related products
covered within the scope of this Code.

Section 13. "Total Effect" - Promotion of

products within the scope of this Code must be
objective and should not equate or make the
product appear to be as good or equal to
breastmilk or breastfeeding in the advertising
concept. It must not in any case undermine
breastmilk or breastfeeding. The "total effect"
should not directly or indirectly suggest that
buying their product would produce better
individuals, or resulting in greater love,
intelligence, ability, harmony or in any manner
bring better health to the baby or other such
exaggerated and unsubstantiated claim.

Section 15. Content of Materials. - The

following shall not be included in advertising,
promotional and marketing materials:

a. Texts, pictures, illustrations or information

which discourage or tend to undermine the
benefits or superiority of breastfeeding or which
idealize the use of breastmilk substitutes and milk
supplements. In this connection, no pictures of
babies and children together with their mothers,
fathers, siblings, grandparents, other relatives or
caregivers (or yayas) shall be used in any
advertisements for infant formula and breastmilk
supplements;

b. The term "humanized," "maternalized," "close

to mother's milk" or similar words in describing
breastmilk substitutes or milk supplements;

c. Pictures or texts that idealize the use of infant

and milk formula.

Section 16. All health and nutrition claims for

products within the scope of the Code are
absolutely prohibited. For this purpose, any
phrase or words that connotes to increase
emotional, intellectual abilities of the infant and
young child and other like phrases shall not be
allowed.

4. The RIRR imposes additional labeling requirements not found in the Milk Code:

MILK CODE RIRR

SECTION 10. Containers/Label. – Section 26. Content – Each container/label shall
 contain such message, in both Filipino and
(a) Containers and/or labels shall be designed to English languages, and which message cannot
provide the necessary information about the be readily separated therefrom, relative the
appropriate use of the products, and in such a following points:
way as not to discourage breastfeeding.
(a) The words or phrase "Important Notice" or
(b) Each container shall have a clear, "Government Warning" or their equivalent;
conspicuous and easily readable and
understandable message in Pilipino or English (b) A statement of the superiority of
printed on it, or on a label, which message can breastfeeding;
not readily become separated from it, and which
shall include the following points: (c) A statement that there is no substitute for
breastmilk;
(i) the words "Important Notice" or their
equivalent; (d) A statement that the product shall be used
only on the advice of a health worker as to the
(ii) a statement of the superiority of breastfeeding; need for its use and the proper methods of use;

(iii) a statement that the product shall be used
only on the advice of a health worker as to the
need for its use and the proper methods of use;
and
(iv) instructions for appropriate preparation, and a improper use of infant formula and other related
warning against the health hazards of
inappropriate preparation.
(e) Instructions for appropriate prepara-tion, and
a warning against the health hazards of
inappropriate preparation; and
(f) The health hazards of unnecessary or
products including information that powdered
infant formula may contain pathogenic
microorganisms and must be prepared and used
appropriately.

5. The Milk Code allows dissemination of information on infant formula to health professionals;
the RIRR totally prohibits such activity:

MILK CODE RIRR

SECTION 7. Health Care System. – Section 22. No manufacturer, distributor, or
representatives of products covered by the Code
(b) No facility of the health care system shall be shall be allowed to conduct or be involved in any
used for the purpose of promoting infant formula activity on breastfeeding promotion, education
or other products within the scope of this and production of Information, Education and
Code. This Code does not, however, preclude the Communication (IEC) materials on
dissemination of information to health breastfeeding, holding of or participating as
professionals as provided in Section 8(b). speakers in classes or seminars for women and
children activities and to avoid the use of these
venues to market their brands or company
SECTION 8. Health Workers. -
names.
(b) Information provided by manufacturers and
SECTION 16. All health and nutrition claims for
distributors to health professionals regarding
products within the scope of the Code are
products within the scope of this Code shall be
absolutely prohibited. For this purpose, any
restricted to scientific and factual matters and
such information shall not imply or create a belief phrase or words that connotes to increase
emotional, intellectual abilities of the infant and
that bottle-feeding is equivalent or superior to
breastfeeding. It shall also include the information young child and other like phrases shall not be
allowed.
specified in Section 5(b).
6. The Milk Code permits milk manufacturers and distributors to extend assistance in research
and continuing education of health professionals; RIRR absolutely forbids the same.

MILK CODE RIRR

SECTION 8. Health Workers – Section 4. Declaration of Principles –

(e) Manufacturers and distributors of products
within the scope of this Code may assist in the
research, scholarships and continuing education,
of health professionals, in accordance with the
rules and regulations promulgated by the Ministry
of Health.
The following are the underlying principles from
which the revised rules and regulations are
premised upon:
i. Milk companies, and their
representatives, should not form part of any
policymaking body or entity in relation to the
advancement of breasfeeding.

SECTION 22. No manufacturer, distributor, or

representatives of products covered by the Code
shall be allowed to conduct or be involved in any
activity on breastfeeding promotion, education
and production of Information, Education and
Communication (IEC) materials on
breastfeeding, holding of or participating as
speakers in classes or seminars for women and
children activities and to avoid the use of these
venues to market their brands or company
names.

SECTION 32. Primary Responsibility of Health

Workers - It is the primary responsibility of the
health workers to promote, protect and support
breastfeeding and appropriate infant and young
child feeding. Part of this responsibility is to
continuously update their knowledge and skills on
breastfeeding. No assistance, support, logistics
or training from milk companies shall be
permitted.

7. The Milk Code regulates the giving of donations; RIRR absolutely prohibits it.

MILK CODE RIRR

SECTION 6. The General Public and Mothers. Section 51. Donations Within the Scope of
– This Code - Donations of products, materials,
defined and covered under the Milk Code and
(f) Nothing herein contained shall prevent these implementing rules and regulations, shall
donations from manufacturers and distributors of be strictly prohibited.
products within the scope of this Code upon
request by or with the approval of the Ministry of Section 52. Other Donations By Milk
Health. Companies Not Covered by this Code. -
Donations of products, equipments, and the like,
not otherwise falling within the scope of this Code
or these Rules, given by milk companies and
their agents, representatives, whether in kind or
in cash, may only be coursed through the Inter
Agency Committee (IAC), which shall determine
 whether such donation be accepted or otherwise.

8. The RIRR provides for administrative sanctions not imposed by the Milk Code.

MILK CODE RIRR

  Section 46. Administrative Sanctions. – The
following administrative sanctions shall be
imposed upon any person, juridical or natural,
found to have violated the provisions of the Code
and its implementing Rules and Regulations:

a) 1st violation – Warning;

b) 2nd violation – Administrative fine of a minimum

of Ten Thousand (P10,000.00) to Fifty Thousand
(P50,000.00) Pesos, depending on the gravity
and extent of the violation, including the recall of
the offending product;

c) 3rd violation – Administrative Fine of a minimum

of Sixty Thousand (P60,000.00) to One Hundred
Fifty Thousand (P150,000.00) Pesos, depending
on the gravity and extent of the violation, and in
addition thereto, the recall of the offending
product, and suspension of the Certificate of
Product Registration (CPR);

d) 4th violation –Administrative Fine of a minimum

of Two Hundred Thousand (P200,000.00) to Five
Hundred (P500,000.00) Thousand Pesos,
depending on the gravity and extent of the
violation; and in addition thereto, the recall of the
product, revocation of the CPR, suspension of
the License to Operate (LTO) for one year;

e) 5th and succeeding repeated violations –

Administrative Fine of One Million
(P1,000,000.00) Pesos, the recall of the offending
product, cancellation of the CPR, revocation of
the License to Operate (LTO) of the company
concerned, including the blacklisting of the
company to be furnished the Department of
Budget and Management (DBM) and the
Department of Trade and Industry (DTI);

f) An additional penalty of Two Thou-sand Five

Hundred (P2,500.00) Pesos per day shall be
made for every day the violation continues after
having received the order from the IAC or other
such appropriate body, notifying and penalizing
the company for the infraction.
 For purposes of determining whether or not there
is "repeated" violation, each product violation
belonging or owned by a company, including
those of their subsidiaries, are deemed to be
violations of the concerned milk company and
shall not be based on the specific violating
product alone.

9. The RIRR provides for repeal of existing laws to the contrary.

The Court shall resolve the merits of the allegations of petitioner seriatim.

1. Petitioner is mistaken in its claim that the Milk Code's coverage is limited only to children 0-12 months
old. Section 3 of the Milk Code states:

SECTION 3. Scope of the Code – The Code applies to the marketing, and practices related
thereto, of the following products: breastmilk substitutes, including infant formula; other milk
products, foods and beverages, including bottle-fed complementary foods, when marketed or
otherwise represented to be suitable, with or without modification, for use as a partial or total
replacement of breastmilk; feeding bottles and teats. It also applies to their quality and availability,
and to information concerning their use.

Clearly, the coverage of the Milk Code is not dependent on the age of the child but on the kind of
product being marketed to the public. The law treats infant formula, bottle-fed complementary food, and
breastmilk substitute as separate and distinct product categories.

Section 4(h) of the Milk Code defines infant formula as "a breastmilk substitute x x x to satisfy the normal
nutritional requirements of infants up to between four to six months of age, and adapted to their
physiological characteristics"; while under Section 4(b), bottle-fed complementary food refers to "any
food, whether manufactured or locally prepared, suitable as a complement to breastmilk or infant formula,
when either becomes insufficient to satisfy the nutritional requirements of the infant." An infant under
Section 4(e) is a person falling within the age bracket 0-12 months. It is the nourishment of this group of
infants or children aged 0-12 months that is sought to be promoted and protected by the Milk Code.

But there is another target group. Breastmilk substitute is defined under Section 4(a) as "any food being
marketed or otherwise presented as a partial or total replacement for breastmilk, whether or not suitable
for that purpose." This section conspicuously lacks reference to any particular age-group of
children. Hence, the provision of the Milk Code cannot be considered exclusive for children aged
0-12 months. In other words, breastmilk substitutes may also be intended for young children more than
12 months of age. Therefore, by regulating breastmilk substitutes, the Milk Code also intends to protect
and promote the nourishment of children more than 12 months old.

Evidently, as long as what is being marketed falls within the scope of the Milk Code as provided in
Section 3, then it can be subject to regulation pursuant to said law, even if the product is to be used by
children aged over 12 months.

There is, therefore, nothing objectionable with Sections 242 and 5(ff)43 of the RIRR.

2. It is also incorrect for petitioner to say that the RIRR, unlike the Milk Code, does not recognize that
breastmilk substitutes may be a proper and possible substitute for breastmilk.
The entirety of the RIRR, not merely truncated portions thereof, must be considered and construed
together. As held in De Luna v. Pascual,44 "[t]he particular words, clauses and phrases in the Rule should
not be studied as detached and isolated expressions, but the whole and every part thereof must be
considered in fixing the meaning of any of its parts and in order to produce a harmonious whole."

Section 7 of the RIRR provides that "when medically indicated and only when necessary, the use of
breastmilk substitutes is proper if based on complete and updated information." Section 8 of the RIRR
also states that information and educational materials should include information on the proper use of
infant formula when the use thereof is needed.

Hence, the RIRR, just like the Milk Code, also recognizes that in certain cases, the use of
breastmilk substitutes may be proper.

3. The Court shall ascertain the merits of allegations 3 45 and 446 together as they are interlinked with each
other.

To resolve the question of whether the labeling requirements and advertising regulations under the RIRR
are valid, it is important to deal first with the nature, purpose, and depth of the regulatory powers of the
DOH, as defined in general under the 1987 Administrative Code, 47 and as delegated in particular under
the Milk Code.

Health is a legitimate subject matter for regulation by the DOH (and certain other administrative agencies)
in exercise of police powers delegated to it. The sheer span of jurisprudence on that matter precludes the
need to further discuss it..48 However, health information, particularly advertising materials on apparently
non-toxic products like breastmilk substitutes and supplements, is a relatively new area for regulation by
the DOH.49

As early as the 1917 Revised Administrative Code of the Philippine Islands, 50 health information was
already within the ambit of the regulatory powers of the predecessor of DOH. 51 Section 938 thereof
charged it with the duty to protect the health of the people, and vested it with such powers as "(g) the
dissemination of hygienic information among the people and especially the inculcation of knowledge
as to the proper care of infants and the methods of preventing and combating dangerous
communicable diseases."

Seventy years later, the 1987 Administrative Code tasked respondent DOH to carry out the state policy
pronounced under Section 15, Article II of the 1987 Constitution, which is "to protect and promote the
right to health of the people and instill health consciousness among them."52 To that end, it was granted
under Section 3 of the Administrative Code the power to "(6) propagate health information and educate
the population on important health, medical and environmental matters which have health
implications."53

When it comes to information regarding nutrition of infants and young children, however, the Milk Code
specifically delegated to the Ministry of Health (hereinafter referred to as DOH) the power to ensure that
there is adequate, consistent and objective information on breastfeeding and use of breastmilk
substitutes, supplements and related products; and the power to control such information. These are
expressly provided for in Sections 12 and 5(a), to wit:

SECTION 12. Implementation and Monitoring –

xxxx
 (b) The Ministry of Health shall be principally responsible for the implementation and enforcement
of the provisions of this Code. For this purpose, the Ministry of Health shall have the following
powers and functions:

(1) To promulgate such rules and regulations as are necessary or proper for the
implementation of this Code and the accomplishment of its purposes and objectives.

xxxx

(4) To exercise such other powers and functions as may be necessary for or incidental to
the attainment of the purposes and objectives of this Code.

SECTION 5. Information and Education –

(a) The government shall ensure that objective and consistent information is provided on infant
feeding, for use by families and those involved in the field of infant nutrition. This responsibility
shall cover the planning, provision, design and dissemination of information, and
the control  thereof, on infant nutrition. (Emphasis supplied)

Further, DOH is authorized by the Milk Code to control the content of any information on breastmilk vis-
à-vis breastmilk substitutes, supplement and related products, in the following manner:

SECTION 5. x x x

(b) Informational and educational materials, whether written, audio, or visual, dealing with the
feeding of infants and intended to reach pregnant women and mothers of infants, shall include
clear information on all the following points: (1) the benefits and superiority of breastfeeding; (2)
maternal nutrition, and the preparation for and maintenance of breastfeeding; (3) the negative
effect on breastfeeding of introducing partial bottlefeeding; (4) the difficulty of reversing the
decision not to breastfeed; and (5) where needed, the proper use of infant formula, whether
manufactured industrially or home-prepared. When such materials contain information about
the use of infant formula, they shall include the social and financial implications of its use;
the health hazards of inappropriate foods or feeding methods; and, in particular, the
health hazards of unnecessary or improper use of infant formula and other breastmilk
substitutes. Such materials shall not use any picture or text which may idealize the use of
breastmilk substitutes.

SECTION 8. Health Workers  –

xxxx

(b) Information provided by manufacturers and distributors to health professionals regarding

products within the scope of this Code shall be restricted to scientific and factual matters,
and such information shall not imply or create a belief that bottlefeeding is equivalent or
superior to breastfeeding. It shall also include the information specified in Section 5(b).

SECTION 10.  Containers/Label –

(a) Containers and/or labels shall be designed to provide the necessary information about the
appropriate use of the products, and in such a way as not to discourage breastfeeding.

xxxx
 (d) The term "humanized," "maternalized" or similar terms shall not be used. (Emphasis supplied)

The DOH is also authorized to control the purpose of the information and to whom such information may
be disseminated under Sections 6 through 9 of the Milk Code 54 to ensure that the information that would
reach pregnant women, mothers of infants, and health professionals and workers in the health care
system is restricted to scientific and factual matters and shall not imply or create a belief that
bottlefeeding is equivalent or superior to breastfeeding.

It bears emphasis, however, that the DOH's power under the Milk Code to control information regarding
breastmilk vis-a-vis breastmilk substitutes is not absolute as the power to control does not encompass
the power to absolutely prohibit the advertising, marketing, and promotion of breastmilk substitutes.

The following are the provisions of the Milk Code that unequivocally indicate that the control over
information given to the DOH is not absolute and that absolute prohibition is not contemplated by the
Code:

a) Section 2 which requires adequate information and appropriate marketing and distribution of
breastmilk substitutes, to wit:

SECTION 2. Aim of the Code – The aim of the Code is to contribute to the provision of
safe and adequate nutrition for infants by the protection and promotion of breastfeeding
and by ensuring the proper use of breastmilk substitutes and breastmilk supplements
when these are necessary, on the basis of adequate information and through appropriate
marketing and distribution.

b) Section 3 which specifically states that the Code applies to the marketing of and practices
related to breastmilk substitutes, including infant formula, and to information concerning their use;

c) Section 5(a) which provides that the government shall ensure that objective and consistent
information is provided on infant feeding;

d) Section 5(b) which provides that written, audio or visual informational and educational
materials shall not use any picture or text which may idealize the use of breastmilk substitutes
and should include information on the health hazards of unnecessary or improper use of said
product;

e) Section 6(a) in relation to Section 12(a) which creates and empowers the IAC to review and
examine advertising, promotion, and other marketing materials;

f) Section 8(b) which states that milk companies may provide information to health professionals
but such information should be restricted to factual and scientific matters and shall not imply or
create a belief that bottlefeeding is equivalent or superior to breastfeeding; and

g) Section 10 which provides that containers or labels should not contain information that would
discourage breastfeeding and idealize the use of infant formula.

It is in this context that the Court now examines the assailed provisions of the RIRR regarding labeling
and advertising.

Sections 1355 on "total effect" and 2656 of Rule VII of the RIRR contain some labeling requirements,
specifically: a) that there be a statement that there is no substitute to breastmilk; and b) that there be a
statement that powdered infant formula may contain pathogenic microorganisms and must be prepared
and used appropriately. Section 1657 of the RIRR prohibits all health and nutrition claims for products
within the scope of the Milk Code, such as claims of increased emotional and intellectual abilities of the
infant and young child.

These requirements and limitations are consistent with the provisions of Section 8 of the Milk Code, to wit:

SECTION 8. Health workers -

xxxx

(b) Information provided by manufacturers and distributors to health professionals regarding

products within the scope of this Code shall be restricted to scientific and factual matters, and
such information shall not imply or create a belief that bottlefeeding is equivalent or superior to
breastfeeding. It shall also include the information specified in Section 5. 58 (Emphasis supplied)

and Section 10(d)59 which bars the use on containers and labels of the terms "humanized,"
"maternalized," or similar terms.

These provisions of the Milk Code expressly forbid information that would imply or create a belief that
there is any milk product equivalent to breastmilk or which is humanized or maternalized, as such
information would be inconsistent with the superiority of breastfeeding.

It may be argued that Section 8 of the Milk Code refers only to information given to health workers
regarding breastmilk substitutes, not to containers and labels thereof. However, such restrictive
application of Section 8(b) will result in the absurd situation in which milk companies and distributors are
forbidden to claim to health workers that their products are substitutes or equivalents of breastmilk, and
yet be allowed to display on the containers and labels of their products the exact opposite message. That
askewed interpretation of the Milk Code is precisely what Section 5(a) thereof seeks to avoid by
mandating that all information regarding breastmilk vis-a-vis breastmilk substitutes be consistent, at the
same time giving the government control over planning, provision, design, and dissemination of
information on infant feeding.

Thus, Section 26(c) of the RIRR which requires containers and labels to state that the product offered is
not a substitute for breastmilk, is a reasonable means of enforcing Section 8(b) of the Milk Code and
deterring circumvention of the protection and promotion of breastfeeding as embodied in Section 2 60 of
the Milk Code.

Section 26(f)61 of the RIRR is an equally reasonable labeling requirement. It implements Section 5(b) of
the Milk Code which reads:

SECTION 5. x x x

xxxx

(b) Informational and educational materials, whether written, audio, or visual, dealing with the
feeding of infants and intended to reach pregnant women and mothers of infants, shall include
clear information on all the following points: x x x (5) where needed, the proper use of infant
formula, whether manufactured industrially or home-prepared. When such materials contain
information about the use of infant formula, they shall include the social and financial implications
of its use;  the health hazards of inappropriate foods or feeding methods; and, in particular,
the health hazards of unnecessary or improper use of infant formula and other breastmilk
substitutes. Such materials shall not use any picture or text which may idealize the use of
breastmilk substitutes. (Emphasis supplied)
The label of a product contains information about said product intended for the buyers thereof. The
buyers of breastmilk substitutes are mothers of infants, and Section 26 of the RIRR merely adds a fair
warning about the likelihood of pathogenic microorganisms being present in infant formula and other
related products when these are prepared and used inappropriately.

Petitioner’s counsel has admitted during the hearing on June 19, 2007 that formula milk is prone to
contaminations and there is as yet no technology that allows production of powdered infant formula that
eliminates all forms of contamination.62

Ineluctably, the requirement under Section 26(f) of the RIRR for the label to contain the message
regarding health hazards including the possibility of contamination with pathogenic microorganisms is in
accordance with Section 5(b) of the Milk Code.

The authority of DOH to control information regarding breastmilk vis-a-vis breastmilk substitutes and

supplements and related products cannot be questioned. It is its intervention into the area of advertising,
promotion, and marketing that is being assailed by petitioner.

In furtherance of Section 6(a) of the Milk Code, to wit:

SECTION 6. The General Public and Mothers. –

(a) No advertising, promotion or other marketing materials, whether written, audio or visual, for
products within the scope of this Code shall be printed, published, distributed, exhibited and
broadcast unless such materials are duly authorized and approved by an inter-agency committee
created herein pursuant to the applicable standards provided for in this Code.

the Milk Code invested regulatory authority over advertising, promotional and marketing materials to an
IAC, thus:

SECTION 12. Implementation and Monitoring -

(a) For purposes of Section 6(a) of this Code, an inter-agency committee composed of the
following members is hereby created:

Minister of Health ------------------- Chairman

Minister of Trade and Industry ------------------- Member

Minister of Justice ------------------- Member

Minister of Social Services and Development ------------------- Member

The members may designate their duly authorized representative to every meeting of the
Committee.

The Committee shall have the following powers and functions:

(1) To review and examine all advertising. promotion or other marketing materials,
whether written, audio or visual, on products within the scope of this Code;

(2) To approve or disapprove, delete objectionable portions from and prohibit the printing,
publication, distribution, exhibition and broadcast of, all advertising promotion or other
 marketing materials, whether written, audio or visual, on products within the scope of this
Code;

(3) To prescribe the internal and operational procedure for the exercise of its powers and
functions as well as the performance of its duties and responsibilities; and

(4) To promulgate such rules and regulations as are necessary or proper for the
implementation of Section 6(a) of this Code. x x x (Emphasis supplied)

However, Section 11 of the RIRR, to wit:

SECTION 11. Prohibition – No advertising, promotions, sponsorships, or marketing materials and

activities for breastmilk substitutes intended for infants and young children up to twenty-four (24)
months, shall be allowed, because they tend to convey or give subliminal messages or
impressions that undermine breastmilk and breastfeeding or otherwise exaggerate breastmilk
substitutes and/or replacements, as well as related products covered within the scope of this
Code.

prohibits advertising, promotions, sponsorships or marketing materials and activities for breastmilk
substitutes in line with the RIRR’s declaration of principle under Section 4(f), to wit:

SECTION 4. Declaration of Principles –

xxxx

(f) Advertising, promotions, or sponsorships of infant formula, breastmilk substitutes and other
related products are prohibited.

The DOH, through its co-respondents, evidently arrogated to itself not only the regulatory authority given
to the IAC but also imposed absolute prohibition on advertising, promotion, and marketing.

Yet, oddly enough, Section 12 of the RIRR reiterated the requirement of the Milk Code in Section 6
thereof for prior approval by IAC of all advertising, marketing and promotional materials prior to
dissemination.

Even respondents, through the OSG, acknowledged the authority of IAC, and repeatedly insisted, during
the oral arguments on June 19, 2007, that the prohibition under Section 11 is not actually operational, viz:

SOLICITOR GENERAL DEVANADERA:

xxxx

x x x Now, the crux of the matter that is being questioned by Petitioner is whether or not there is
an absolute prohibition on advertising making AO 2006-12 unconstitutional. We maintained that
what AO 2006-12 provides is not an absolute prohibition because Section 11 while it states and it
is entitled prohibition it states that no advertising, promotion, sponsorship or marketing materials
and activities for breast milk substitutes intended for infants and young children up to 24 months
shall be allowed because this is the standard they tend to convey or give subliminal messages or
impression undermine that breastmilk or breastfeeding x x x.

We have to read Section 11 together with the other Sections because the other Section, Section
12, provides for the inter agency committee that is empowered to process and evaluate all the
advertising and promotion materials.
xxxx

What AO 2006-12, what it does, it does not prohibit the sale and manufacture, it simply regulates
the advertisement and the promotions of breastfeeding milk substitutes.

xxxx

Now, the prohibition on advertising, Your Honor, must be taken together with the provision on the
Inter-Agency Committee that processes and evaluates because there may be some information
dissemination that are straight forward information dissemination. What the AO 2006 is trying to
prevent is any material that will undermine the practice of breastfeeding, Your Honor.

xxxx

ASSOCIATE JUSTICE SANTIAGO:

Madam Solicitor General, under the Milk Code, which body has authority or power to promulgate
Rules and Regulations regarding the Advertising, Promotion and Marketing of Breastmilk
Substitutes?

SOLICITOR GENERAL DEVANADERA:

Your Honor, please, it is provided that the Inter-Agency Committee, Your Honor.

xxxx

ASSOCIATE JUSTICE SANTIAGO:

x x x Don't you think that the Department of Health overstepped its rule making authority when it
totally banned advertising and promotion under Section 11 prescribed the total effect rule as well
as the content of materials under Section 13 and 15 of the rules and regulations?

SOLICITOR GENERAL DEVANADERA:

Your Honor, please, first we would like to stress that there is no total absolute ban. Second, the
Inter-Agency Committee is under the Department of Health, Your Honor.

xxxx

ASSOCIATE JUSTICE NAZARIO:

x x x Did I hear you correctly, Madam Solicitor, that there is no absolute ban on advertising of
breastmilk substitutes in the Revised Rules?

SOLICITOR GENERAL DEVANADERA:

Yes, your Honor.

ASSOCIATE JUSTICE NAZARIO:

But, would you nevertheless agree that there is an absolute ban on advertising of breastmilk
substitutes intended for children two (2) years old and younger?
 SOLICITOR GENERAL DEVANADERA:

It's not an absolute ban, Your Honor, because we have the Inter-Agency Committee that can
evaluate some advertising and promotional materials, subject to the standards that we have
stated earlier, which are- they should not undermine breastfeeding, Your Honor.

xxxx

x x x Section 11, while it is titled Prohibition, it must be taken in relation with the other Sections,
particularly 12 and 13 and 15, Your Honor, because it is recognized that the Inter-Agency
Committee has that power to evaluate promotional materials, Your Honor.

ASSOCIATE JUSTICE NAZARIO:

So in short, will you please clarify there's no absolute ban on advertisement regarding milk
substitute regarding infants two (2) years below?

SOLICITOR GENERAL DEVANADERA:

We can proudly say that the general rule is that there is a prohibition, however, we take
exceptions and standards have been set. One of which is that, the Inter-Agency Committee can
allow if the advertising and promotions will not undermine breastmilk and breastfeeding, Your
Honor.63

Sections 11 and 4(f) of the RIRR are clearly violative of the Milk Code.

However, although it is the IAC which is authorized to promulgate rules and regulations for the approval
or rejection of advertising, promotional, or other marketing materials under Section 12(a) of the Milk Code,
said provision must be related to Section 6 thereof which in turn provides that the rules and regulations
must be "pursuant to the applicable standards provided for in this Code." Said standards are set forth in
Sections 5(b), 8(b), and 10 of the Code, which, at the risk of being repetitious, and for easy reference, are
quoted hereunder:

SECTION 5. Information and Education –

xxxx

(b) Informational and educational materials, whether written, audio, or visual, dealing with the
feeding of infants and intended to reach pregnant women and mothers of infants, shall include
clear information on all the following points: (1) the benefits and superiority of breastfeeding; (2)
maternal nutrition, and the preparation for and maintenance of breastfeeding; (3) the negative
effect on breastfeeding of introducing partial bottlefeeding; (4) the difficulty of reversing the
decision not to breastfeed; and (5) where needed, the proper use of infant formula, whether
manufactured industrially or home-prepared. When such materials contain information about the
use of infant formula, they shall include the social and financial implications of its use; the health
hazards of inappropriate foods of feeding methods; and, in particular, the health hazards of
unnecessary or improper use of infant formula and other breastmilk substitutes. Such materials
shall not use any picture or text which may idealize the use of breastmilk substitutes.

xxxx

SECTION 8. Health Workers. –

 xxxx

(b) Information provided by manufacturers and distributors to health professionals regarding

products within the scope of this Code shall be restricted to scientific and factual matters and
such information shall not imply or create a belief that bottle feeding is equivalent or superior to
breastfeeding. It shall also include the information specified in Section 5(b).

xxxx

SECTION 10. Containers/Label  –

(a) Containers and/or labels shall be designed to provide the necessary information about the
appropriate use of the products, and in such a way as not to discourage breastfeeding.

(b) Each container shall have a clear, conspicuous and easily readable and understandable
message in Pilipino or English printed on it, or on a label, which message can not readily become
separated from it, and which shall include the following points:

(i) the words "Important Notice" or their equivalent;

(ii) a statement of the superiority of breastfeeding;

(iii) a statement that the product shall be used only on the advice of a health worker as to
the need for its use and the proper methods of use; and

(iv) instructions for appropriate preparation, and a warning against the health hazards of
inappropriate preparation.

Section 12(b) of the Milk Code designates the DOH as the principal implementing agency for the
enforcement of the provisions of the Code. In relation to such responsibility of the DOH, Section 5(a) of
the Milk Code states that:

SECTION 5. Information and Education –

(a) The government shall ensure that objective and consistent information is provided on infant
feeding, for use by families and those involved in the field of infant nutrition. This responsibility
shall cover the planning, provision, design and dissemination of information, and the control
thereof, on infant nutrition. (Emphasis supplied)

Thus, the DOH has the significant responsibility to translate into operational terms the standards
set forth in Sections 5, 8, and 10 of the Milk Code, by which the IAC shall screen advertising,
promotional, or other marketing materials.

It is pursuant to such responsibility that the DOH correctly provided for Section 13 in the RIRR which
reads as follows:

SECTION 13. "Total Effect" - Promotion of products within the scope of this Code must be
objective and should not equate or make the product appear to be as good or equal to breastmilk
or breastfeeding in the advertising concept. It must not in any case undermine breastmilk or
breastfeeding. The "total effect" should not directly or indirectly suggest that buying their product
would produce better individuals, or resulting in greater love, intelligence, ability, harmony or in
any manner bring better health to the baby or other such exaggerated and unsubstantiated claim.
Such standards bind the IAC in formulating its rules and regulations on advertising, promotion, and
marketing. Through that single provision, the DOH exercises control over the information content of
advertising, promotional and marketing materials on breastmilk vis-a-vis breastmilk substitutes,
supplements and other related products. It also sets a viable standard against which the IAC may screen
such materials before they are made public.

In Equi-Asia Placement, Inc. vs. Department of Foreign Affairs,64 the Court held:

x x x [T]his Court had, in the past, accepted as sufficient standards the following: "public interest,"
"justice and equity," "public convenience and welfare," and "simplicity, economy and welfare." 65

In this case, correct information as to infant feeding and nutrition is infused with public interest and
welfare.

4. With regard to activities for dissemination of information to health professionals, the Court also finds
that there is no inconsistency between the provisions of the Milk Code and the RIRR. Section 7(b) 66 of the
Milk Code, in relation to Section 8(b)67 of the same Code, allows dissemination of information to health
professionals but such information is restricted to scientific and factual matters.

Contrary to petitioner's claim, Section 22 of the RIRR does not prohibit the giving of information to
health professionals on scientific and factual matters. What it prohibits is the involvement of the
manufacturer and distributor of the products covered by the Code in activities for the promotion, education
and production of Information, Education and Communication (IEC) materials regarding breastfeeding
that are intended for women and children. Said provision cannot be construed to encompass even
the dissemination of information to health professionals, as restricted by the Milk Code.

5. Next, petitioner alleges that Section 8(e)68 of the Milk Code permits milk manufacturers and distributors
to extend assistance in research and in the continuing education of health professionals, while Sections
22 and 32 of the RIRR absolutely forbid the same. Petitioner also assails Section 4(i) 69 of the RIRR
prohibiting milk manufacturers' and distributors' participation in any policymaking body in relation to the
advancement of breastfeeding.

Section 4(i) of the RIRR provides that milk companies and their representatives should not form part of
any policymaking body or entity in relation to the advancement of breastfeeding. The Court finds nothing
in said provisions which contravenes the Milk Code. Note that under Section 12(b) of the Milk Code, it
is the DOH which shall be principally responsible for the implementation and enforcement of the
provisions of said Code. It is entirely up to the DOH to decide which entities to call upon or allow to be
part of policymaking bodies on breastfeeding. Therefore, the RIRR's prohibition on milk companies’
participation in any policymaking body in relation to the advancement of breastfeeding is in accord with
the Milk Code.

Petitioner is also mistaken in arguing that Section 22 of the RIRR prohibits milk companies from giving
reasearch assistance and continuing education to health professionals. Section 2270 of the RIRR does
not pertain to research assistance to or the continuing education of health professionals; rather, it
deals with breastfeeding promotion and education for women and children. Nothing in Section 22 of
the RIRR prohibits milk companies from giving assistance for research or continuing education to health
professionals; hence, petitioner's argument against this particular provision must be struck down.

It is Sections 971 and 1072 of the RIRR which govern research assistance. Said sections of the RIRR
provide that research assistance for health workers and researchers may be allowed upon
approval of an ethics committee, and with certain disclosure requirements imposed on the milk
company and on the recipient of the research award.
The Milk Code endows the DOH with the power to determine how such research or educational
assistance may be given by milk companies or under what conditions health workers may accept the
assistance. Thus, Sections 9 and 10 of the RIRR imposing limitations on the kind of research done or
extent of assistance given by milk companies are completely in accord with the Milk Code.

Petitioner complains that Section 3273 of the RIRR prohibits milk companies from giving assistance,
support, logistics or training to health workers. This provision is within the prerogative given to the DOH
under Section 8(e)74 of the Milk Code, which provides that manufacturers and distributors of breastmilk
substitutes may assist in researches, scholarships and the continuing education, of health
professionals in accordance with the rules and regulations promulgated by the Ministry of Health, now
DOH.

6. As to the RIRR's prohibition on donations, said provisions are also consistent with the Milk Code.
Section 6(f) of the Milk Code provides that donations may be made by manufacturers and distributors of
breastmilk substitutes upon the request or with the approval of the DOH. The law does not proscribe
the refusal of donations. The Milk Code leaves it purely to the discretion of the DOH whether to request or
accept such donations. The DOH then appropriately exercised its discretion through Section 51 75 of the
RIRR which sets forth its policy not to request or approve donations from manufacturers and distributors
of breastmilk substitutes.

It was within the discretion of the DOH when it provided in Section 52 of the RIRR that any donation from
milk companies not covered by the Code should be coursed through the IAC which shall determine
whether such donation should be accepted or refused. As reasoned out by respondents, the DOH is not
mandated by the Milk Code to accept donations. For that matter, no person or entity can be forced to
accept a donation. There is, therefore, no real inconsistency between the RIRR and the law because the
Milk Code does not prohibit the DOH from refusing donations.

7. With regard to Section 46 of the RIRR providing for administrative sanctions that are not found in the
Milk Code, the Court upholds petitioner's objection thereto.

Respondent's reliance on Civil Aeronautics Board v. Philippine Air Lines, Inc. 76 is misplaced. The glaring
difference in said case and the present case before the Court is that, in the Civil Aeronautics Board, the
Civil Aeronautics Administration (CAA) was expressly granted by the law (R.A. No. 776) the power to
impose fines and civil penalties, while the Civil Aeronautics Board (CAB) was granted by the same law
the power to review on appeal the order or decision of the CAA and to determine whether to impose,
remit, mitigate, increase or compromise such fine and civil penalties. Thus, the Court upheld the CAB's
Resolution imposing administrative fines.

In a more recent case, Perez v. LPG Refillers Association of the Philippines, Inc.,77 the Court upheld the
Department of Energy (DOE) Circular No. 2000-06-10 implementing Batas Pambansa (B.P.) Blg. 33. The
circular provided for fines for the commission of prohibited acts. The Court found that nothing in the
circular contravened the law because the DOE was expressly authorized by B.P. Blg. 33 and R.A. No.
7638 to impose fines or penalties.

In the present case, neither the Milk Code nor the Revised Administrative Code grants the DOH the
authority to fix or impose administrative fines. Thus, without any express grant of power to fix or impose
such fines, the DOH cannot provide for those fines in the RIRR. In this regard, the DOH again exceeded
its authority by providing for such fines or sanctions in Section 46 of the RIRR. Said provision is,
therefore, null and void.

The DOH is not left without any means to enforce its rules and regulations. Section 12(b) (3) of the Milk
Code authorizes the DOH to "cause the prosecution of the violators of this Code and other pertinent laws
on products covered by this Code." Section 13 of the Milk Code provides for the penalties to be imposed
on violators of the provision of the Milk Code or the rules and regulations issued pursuant to it, to wit:
 SECTION 13. Sanctions –

(a) Any person who violates the provisions of this Code or the rules and regulations issued
pursuant to this Code shall, upon conviction, be punished by a penalty of two (2) months to one
(1) year imprisonment or a fine of not less than One Thousand Pesos (P1,000.00) nor more than
Thirty Thousand Pesos (P30,000.00) or both. Should the offense be committed by a juridical
person, the chairman of the Board of Directors, the president, general manager, or the partners
and/or the persons directly responsible therefor, shall be penalized.

(b) Any license, permit or authority issued by any government agency to any health worker,
distributor, manufacturer, or marketing firm or personnel for the practice of their profession or
occupation, or for the pursuit of their business, may, upon recommendation of the Ministry of
Health, be suspended or revoked in the event of repeated violations of this Code, or of the rules
and regulations issued pursuant to this Code. (Emphasis supplied)

8. Petitioner’s claim that Section 57 of the RIRR repeals existing laws that are contrary to the RIRR is
frivolous.

Section 57 reads:

SECTION 57. Repealing Clause - All orders, issuances, and rules and regulations or parts
thereof inconsistent with these revised rules and implementing regulations are hereby repealed or
modified accordingly.

Section 57 of the RIRR does not provide for the repeal of laws but only orders, issuances and rules and
regulations. Thus, said provision is valid as it is within the DOH's rule-making power.

An administrative agency like respondent possesses quasi-legislative or rule-making power or the power
to make rules and regulations which results in delegated legislation that is within the confines of the
granting statute and the Constitution, and subject to the doctrine of non-delegability and separability of
powers.78 Such express grant of rule-making power necessarily includes the power to amend, revise,
alter, or repeal the same.79 This is to allow administrative agencies flexibility in formulating and adjusting
the details and manner by which they are to implement the provisions of a law, 80 in order to make it more
responsive to the times. Hence, it is a standard provision in administrative rules that prior issuances of
administrative agencies that are inconsistent therewith are declared repealed or modified.

In fine, only Sections 4(f), 11 and 46 are ultra vires, beyond the authority of the DOH to promulgate and in
contravention of the Milk Code and, therefore, null and void. The rest of the provisions of the RIRR are in
consonance with the Milk Code.

Lastly, petitioner makes a "catch-all" allegation that:

x x x [T]he questioned RIRR sought to be implemented by the Respondents is unnecessary and

oppressive, and is offensive to the due process clause of the Constitution, insofar as the
same is in restraint of trade and because a provision therein is inadequate to provide the public
with a comprehensible basis to determine whether or not they have committed a
violation.81 (Emphasis supplied)

Petitioner refers to Sections 4(f),82 4(i),83 5(w),84 11,85 22,86 32,87 46,88 and 5289 as the provisions that

suppress the trade of milk and, thus, violate the due process clause of the Constitution.
The framers of the constitution were well aware that trade must be subjected to some form of regulation
for the public good. Public interest must be upheld over business interests. 90 In Pest Management
Association of the Philippines v. Fertilizer and Pesticide Authority,91 it was held thus:

x x x Furthermore, as held in Association of Philippine Coconut Desiccators v. Philippine Coconut

Authority, despite the fact that "our present Constitution enshrines free enterprise as a
policy, it nonetheless reserves to the government the power to intervene whenever
necessary to promote the general welfare." There can be no question that the unregulated use
or proliferation of pesticides would be hazardous to our environment. Thus, in the aforecited case,
the Court declared that "free enterprise does not call for removal of ‘protective regulations’."
x x x It must be clearly explained and proven by competent evidence just exactly how such
protective regulation would result in the restraint of trade. [Emphasis and underscoring
supplied]

In this case, petitioner failed to show that the proscription of milk manufacturers’ participation in any
policymaking body (Section 4(i)), classes and seminars for women and children (Section 22); the giving of
assistance, support and logistics or training (Section 32); and the giving of donations (Section 52) would
unreasonably hamper the trade of breastmilk substitutes. Petitioner has not established that the
proscribed activities are indispensable to the trade of breastmilk substitutes. Petitioner failed to
demonstrate that the aforementioned provisions of the RIRR are unreasonable and oppressive for being
in restraint of trade.

Petitioner also failed to convince the Court that Section 5(w) of the RIRR is unreasonable and oppressive.
Said section provides for the definition of the term "milk company," to wit:

SECTION 5 x x x. (w) "Milk Company" shall refer to the owner, manufacturer, distributor of infant
formula, follow-up milk, milk formula, milk supplement, breastmilk substitute or replacement, or by
any other description of such nature, including their representatives who promote or otherwise
advance their commercial interests in marketing those products;

On the other hand, Section 4 of the Milk Code provides:

(d) "Distributor" means a person, corporation or any other entity in the public or private sector
engaged in the business (whether directly or indirectly) of marketing at the wholesale or retail
level a product within the scope of this Code. A "primary distributor" is a manufacturer's sales
agent, representative, national distributor or broker.

xxxx

(j) "Manufacturer" means a corporation or other entity in the public or private sector engaged in
the business or function (whether directly or indirectly or through an agent or and entity controlled
by or under contract with it) of manufacturing a products within the scope of this Code.

Notably, the definition in the RIRR merely merged together under the term "milk company" the entities
defined separately under the Milk Code as "distributor" and "manufacturer." The RIRR also enumerated in
Section 5(w) the products manufactured or distributed by an entity that would qualify it as a "milk
company," whereas in the Milk Code, what is used is the phrase "products within the scope of this Code."
Those are the only differences between the definitions given in the Milk Code and the definition as re-
stated in the RIRR.

Since all the regulatory provisions under the Milk Code apply equally to both manufacturers and
distributors, the Court sees no harm in the RIRR providing for just one term to encompass both entities.
The definition of "milk company" in the RIRR and the definitions of "distributor" and "manufacturer"
provided for under the Milk Code are practically the same.
The Court is not convinced that the definition of "milk company" provided in the RIRR would bring about
any change in the treatment or regulation of "distributors" and "manufacturers" of breastmilk substitutes,
as defined under the Milk Code.

Except Sections 4(f), 11 and 46, the rest of the provisions of the RIRR are in consonance with the
objective, purpose and intent of the Milk Code, constituting reasonable regulation of an industry which
affects public health and welfare and, as such, the rest of the RIRR do not constitute illegal restraint of
trade nor are they violative of the due process clause of the Constitution.

WHEREFORE, the petition is PARTIALLY GRANTED. Sections 4(f), 11 and 46 of Administrative Order

No. 2006-0012 dated May 12, 2006 are declared NULL and VOID for being ultra vires. The Department
of Health and respondents are PROHIBITED from implementing said provisions.

The Temporary Restraining Order issued on August 15, 2006 is LIFTED insofar as the rest of the
provisions of Administrative Order No. 2006-0012 is concerned.

SO ORDERED.

Puno, (Chief Justice), Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Corona, Carpio-

Morales, Azcuna, Tinga, Chico-Nazario, Garcia, Velasco, Jr., Nachura, Reyes, JJ., concur.

h. Credit transaction

Art. 4, par. y), RA 7394

y) “Credit transaction” means a transaction between a natural person and a creditor in which real
or personal property, services or money acquired on credit and the person’s obligation is payable in
installment.

i. Price monitoring and regulation Sec. 18, 19, 23, RA 9502

SEC. 18. Drugs and Medicines Price Monitoring and Regulation Authority of the Secretary of the
Department of Health. - To implement the policies of this Act under this Chapter, the Secretary of the
Department of Health is hereby authorized to establish and initiate a price monitoring and regulation
system for drugs and medicines within one hundred twenty (120) days after the enactment of this Act.
The Secretary of the Department of Health may also create such bodies, consultative councils, from
which advice may be sought in the implementation of a drug or medicine price monitoring and regulation
policy. Such bodies or consultative councils created by the Secretary of the Department of Health shall
coordinate its efforts together with other government agencies.

SEC. 19. Functions and Responsibilities of the Secretary of the Department of Health. - Pursuant to
Section 18 of this Act, the Secretary of the Department of Health shall have the following powers:

(A) Power to Recommend the Maximum Retail Price of Drugs and Medicines Subject to Price Regulation
- (1) Upon application or motu proprio when the public interest so requires, the Secretary of the
Department of Health shall have the power to determine the maximum retail prices of drugs and
medicines which shall be recommended to the President of the Philippines for approval. In order that
affordable prices of drugs and medicines from the different manufacturers, importers, traders, distributors,
wholesalers, or retailers shall be made available to the public, the Secretary of the Department of Health,
as he/she may deem fit and after a proper determination, shall have such approved maximum retail prices
of drugs and medicines published;
(2) In recommending the maximum retail price, the Secretary of the Department of Health shall consider
the following factors:

(a) Retail prices of drugs and medicines that are subject to regulation in the Philippines and in other
countries;

(b) The supply available in the market;

(c) The cost to the manufacturer, importer, trader, distributor, wholesaler or retailer of the following, but
not limited to:

(i) The exchange rate of the peso to the foreign currency with which the drug or any of its component,
ingredient or raw material was paid for;

(ii) Any change in the amortization cost of machinery brought about by any change in the exchange rate
of the peso to the foreign currency with which the machinery was bought through credit facilities;

(iii) Any change in the cost of labor brought about by a change in minimum wage; or

(iv) Any change in the cost of transporting or distributing the medicines to the area of destination;

(d) Such other factors or conditions which will aid in arriving at a just and reasonable maximum price; and

(3) No retailer shall sell drugs and medicines at a retail price exceeding the maximum retail price
approved by the President of the Philippines as provided in Section 17 of this Act: Provided, That, the
Secretary of the Department of Health shall immediately undertake a study on the prevailing prices of
drugs and medicines subject to price regulation and provide an initial list of drugs and medicines, which
maximum retail prices he/she shall recommend to the President of the Philippines.

(B) Power to Include Other Drugs and Medicines in the List Subject to Price Regulation - Upon application
or motu proprio when the public interest so requires and after proper determination, the Secretary of the
Department of Health may order the inclusion of drugs and medicines to the list subject of price regulation
under Section 23 hereof.

(C) Power to Implement Cost-Containment and Other Measures - (1) The Secretary of the Department of
Health shall have the power to implement the fair price of drugs and medicines for purposes of public
health insurance and government procurement based on the order of the President of the Philippines
imposing maximum retail prices; and

(2) The Secretary of the Department of Health shall have the power to implement any other measures
that the government may avail of to effectively reduce the cost of drugs and medicines that shall include,
but not limited to, competitive bidding, price volume negotiations, and other appropriate mechanisms that
influence supply, demand and expenditures on drugs and medicines.

(D) Power to Impose Administrative Fines and Penalties - After due notice and hearing, the Secretary of
the Department of Health shall have the power to impose administrative fines against any person,
manufacturer, importer, trader, distributor, wholesaler, retailer, or any other entity, in such amount as it
may deem reasonable, which in no case shall be less than Fifty thousand pesos (Php50,000.00) nor more
than Five million pesos (Php5,000,000.00) for violations of the maximum retail price approved by the
President of the Philippines pursuant to the provisions of this Chapter.

(E) Power to Deputize Government Entities - The Secretary of the Department of Health shall have the
power to call upon and deputize any official, agent, employee, agency, or instrumentality of the national
and local government for any assistance that it may deem necessary to carry out the purposes of this
Chapter.
(F) Other Powers Necessary to Implement Provisions of this Chapter - The Secretary of the Department
of Health shall exercise such powers and functions as may be necessary to implement and enforce the
provisions of this Chapter of this Act, including the power to require the production and submission of
records, documents, books of account, bills of lading, input documents, records of purchase and sale,
financial statements, and such other documents, information and papers as may be necessary to enable
the Secretary of the Department of Health to carry out its functions, duties, and responsibilities.
Accordingly, within thirty (30) days from the effectivity of this Act and every December 31st of every year
thereafter, every manufacturer, importer, trader, distributor, wholesaler, and retailer of a drug and
medicine whether included in or excluded from the list of drugs and medicines that are subject to price
regulation shall furnish the Secretary of the Department of Health a list, containing on the minimum the
corresponding prices and inventory, of all drugs and medicines it manufactures, imports, trades,
distributes, wholesales, or retails, data pertaining to the factors enumerated under Section 19(A)(2), and
any and all necessary information that the Secretary of the Department of Health may require.

SEC. 23. List of Drugs and Medicines that are Subject to Price Regulation. - The list of drugs and
medicines that are subject to price regulation shall include, inter alia:

(a) All drugs and medicines indicated for treatment of chronic illnesses and life threatening conditions,
such as, but not limited to, endocrine disorders, e.g., diabetes mellitus; gastrointestinal disorders, e.g.,
peptic ulcer; urologic disorders, e.g., benign prostatic hyperplasia (BPH); cardiovascular diseases, e.g.,
hypertension; pulmonary diseases, e.g., pulmonary tuberculosis (PTB), asthma; auto-immune diseases,
e.g., systemic lupus erythematosus (SLE); skin diseases, e.g., psoriasis; neuro-psychiatric disorders;
other infectious diseases, e.g., human immunodeficiency virus-acquired immune deficiency syndrome
(HIV-AIDS); and other conditions such as organ transplants and neoplasm;

(b) Drugs and medicines indicated for prevention of diseases, e.g., vaccines, immunoglobulin, anti-sera;

(c) Drugs and medicines indicated for prevention of pregnancy, e.g., oral contraceptives;

(d) Anesthetic agents;

(e) Intravenous fluids;

(f) Drugs and medicines that are included in the Philippine National Drug Formulary (PNDF) Essential
Drug List; and

(g) All other drugs and medicines which, from time to time, the Secretary of the Department of Health
determines to be in need of price regulation.

Sec. 6, 7, 8, RA 7581

j. Traceability

Sec. 4 (mm), RA 10611 (mm) Traceability  refers to the ability to follow the movement of a food through
specified stages of production, processing and distribution.

k. Product recall Art. 10, RA 7394

ARTICLE 10. Injurious, Dangerous and Unsafe Products. — Whenever the departments find, by
their own initiative or 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 is immediate
recall, ban or seizure from public sale 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.

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. 4 (i), RA 3720 as amended by RA 9711

“(i) To require all manufacturers, traders, distributors, importers, exporters, wholesalers, retailers,
consumers, and non-consumer users of health products to report to the FDA any incident that reasonably
indicates that said product has caused or contributed to the death, serious illness or serious injury to a
consumer, a patient, or any person;

FDA Circular 2016-012 dated 25 July 2016 (Guidelines on Product Recall)