RFBT 06 03c Special Laws For Consumer Protection

No. 125 Brgy.
San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com
Special Laws for Consumer Protection

Coverage:
1. Consumer Protection Act
2. Lemon Law
3. Maceda Law
4. PD 957
5. Price Tag Act
6. Recto Law
7. Price Act
Consumer Protection Act of the Philippines
I. Consumer Product Quality and Safety
a. Policies of the State

i. to develop and provide safety and quality standards for consumer products,
including performance or use-oriented standards, codes of practice and methods
of tests;
ii. to assist the consumer in evaluating the quality, including safety, performance
and comparative utility of consumer products;
iii. to protect the public against unreasonable risks of injury associated with
consumer products;
iv. to undertake research on quality improvement of products and investigation into
causes and prevention of product related deaths, illness and injuries;
v. to assure the public of the consistency of standardized products.
b. Implementing Agencies
i. the Department of Health (DOH) with respect to food, drugs, cosmetics, devices
and substances;
ii. the Department of Agriculture (DA) with respect to products related to
agriculture, and;
iii. the Department of Trade and Industry (DTI) with respect to other consumer
products not specified above.
c. 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:
i. requirements to performance, composition, contents, design, construction, finish,
packaging of a consumer product;
ii. requirements as to kind, class, grade, dimensions, weights, material;
iii. requirements as to the methods of sampling, tests and codes used to check the
quality of the products;
iv. requirements as to precautions in storage, transporting and packaging;
v. 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.
d. Publication of Consumer Product Standards

i. The concerned departments shall, upon promulgation of the above standards,
publish or cause the publication of the same in two (2) newspapers of general
circulation at least once a week for a period of not less than one (1) month. It
may likewise conduct an information campaign through other means deemed
effective to ensure the proper guidance of consumers, businesses, industries and
other sectors concerned.
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No. 125 Brgy. San Sebastian
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e. Effectivity of Rules
i. Each consumer product standard or safety rule shall specify the date such rule is
to take effect, which shall not exceed ninety (90) days from the date
promulgated unless the concerned department funds, for good cause shown,
that a later effective date is in the public interest and publishes its reasons for
such finding. After which, it shall no longer be legal to, or cause to, sell or
distribute the consumer product not complying with the standards or rules.
ii. The department may, by regulation, prohibit a manufacturer from stockpiling
consumer products so as to prevent such manufacturer from circumventing the
purposes of this paragraph. The term "stockpiling" means manufacturing or
importing a product between the date of promulgation of its consumer product
safety rule and its effective date, at a rate which is significantly greater than the
rate at which such product was produced or imported during a base period as
prescribed in the regulation under this paragraph, ending before the date of
promulgation of consumer product safety rule.
f. Injurious, Dangerous and Unsafe Products

i. 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.
g. Amendment and Revocation of Declaration of the Injurious, Unsafe or

Dangerous Character of a Consumer Product
i. Any interested person may petition the appropriate department to commence a
proceeding for the issuance of an amendment or revocation of a consumer
product safety rule or an order declaring a consumer product injurious,
dangerous and unsafe.
ii. In case the department, upon petition by an interested party or its own initiative
and after due notice and hearing, determines a consumer product to be
substandard or materially defective, it shall so notify the manufacturer,
distributor or seller thereof of such finding and order such manufacturer,
distributor or seller to:
1. give notice to the public of the defect or failure to comply with the
product safety standards; and
2. give notice to each distributor or retailer of such product.
iii. The department shall also direct the manufacturer, distributor or seller of such
product to extend any or all of the following remedies to the injured person:
1. to bring such product into conformity with the requirements of the
applicable consumer product standards or to repair the defect in order to
conform with the same;
2. to replace the product with a like or equivalent product which complies
with the applicable consumer product standards which does not contain
the defect;
3. to refund the purchase price of the product less a reasonable allowance
for use; and
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4. to pay the consumer reasonable damages as may be determined by the

department.
iv. The manufacturer, distributor or seller shall not charge a consumer who avails
himself of the remedy as provided above of any expense and cost that may be
incurred.
h. Effectivity of Amendments and Revocation of Consumer Product Safety Rule

i. Any amendment or revocation of a consumer product safety rule made by the
concerned department shall specify the date on which it shall take effect which
shall not exceed ninety days from the date of amendment or revocation is
published unless the concerned department finds, for a good cause shown, that
a later effective date is in the public interest and publishes its reasons for such
finding. The department shall promulgate the necessary rules for the issuance,
amendment or revocation of any consumer product safety rule.
i. New Products
i. The concerned department shall take measures to make a list of new consumer
products and to cause the publication by the respective manufacturers or
importers of such products a list thereof together with the descriptions in a
newspaper of general circulation.
j. Certification of Conformity to Consumer Product Standards

i. 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.
k. Rules on Imported Products

i. Any consumer product offered for importation into the customs of the Philippine
territory shall be refused admission if such product:
1. fails to comply with an applicable consumer product quality and safety
standard or rule;
2. is or has been determined to be injurious, unsafe and dangerous;
3. is substandard; or
4. has material defect.
ii. Samples of consumer products being imported into the Philippines in a quantity
necessary for purposes of determining the existence of any of the above causes
for non-admission may be obtained by the concerned department or agency
without charge from the owner or consignee thereof. The owner or consignee of
the imported consumer product under examination shall be afforded an
opportunity to a hearing with respect to the importation of such products into
the Philippines. If it appears from examination of such samples or otherwise that
an imported consumer product does not conform to the consumer product safety
rule or is injurious, unsafe and dangerous, is substandard or has a material
defect, such product shall be refused admission unless the owner or the
consignee thereof manifests under bond that none of the above ground for non-
admission exists or that measures have been taken to cure them before they are
sold, distributed or offered for sale to the general public. Any consumer product,
the sale or use of which has been banned or withdrawn in the country of
manufacture, shall not be imported into the country.
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iii. If it appears that any consumer product which may not be admitted pursuant to
paragraph (a) of this Article can be so modified that it can already be accepted,
the concerned department may defer final examination as to the admission of
such product for a period not exceeding ten (10) days, and in accordance with
such regulations as the department and the Commissioner of Customs shall
jointly promulgate, such product may be released from customs custody under
bond for the purpose of permitting the owner or consignee an opportunity to so
modify such product.
iv. All modifications taken by an owner or consignee for the purpose of securing
admission of an imported consumer product under paragraph (c) shall be subject
to the supervision of the concerned department. If the product cannot be so
modified, or if the owner or consignee is not proceeding to satisfactorily modify
such product, it shall be refused admission and the department may direct
redelivery of the product into customs custody, and to seize the product if not so
redelivered.
v. Imported consumer products not admitted must be exported, except that upon
application, the Commissioner of Customs may permit the destruction of the
product if, within a reasonable time, the owner or consignee thereof fails to
export the same.
vi. All expenses in connection with the destruction provided for in this Article, and all
expenses in connection with the storage, cartage or labor with respect to any
consumer product refused admission under this Article, shall be paid by the
owner or consignee and, in default of such payment, shall constitute a lien
against any future importation made by such owner or consignee.
l. Consumer products for export

i. The preceding article on safety not apply to any consumer product if:
1. it can be shown that such product is manufactured, sold or held for sale
for export from the Philippines, or that such product was imported for
export, unless such consumer product is in fact distributed in commerce
for use in the Philippines; and
2. such consumer product or the packaging thereof bears a stamp or label
stating that such consumer product is intended for export and actually
exported.
m. Additional powers, functions and duties of DOH, DA and DTI:

i. to administer and supervise the implementation of this Article and its
implementing rules and regulations;
ii. to undertake researches, develop and establish quality and safety standards for
consumer products in coordination with other government and private agencies
closely associated with these products;
iii. to inspect and analyze consumer products for purposes of determining
conformity to established quality and safety standards;
iv. to levy, assess, collect and retain fees as are necessary to cover the cost of
inspection, certification, analysis and tests of samples of consumer products and
materials submitted in compliance with the provisions of this Article;
v. to investigate the causes of and maintain a record of product-related deaths,
illnesses and injuries for use in researches or studies on the prevention of such
product-related deaths, illnesses and injuries.
vi. to accredit independent, competent non-government bodies, to assist in (1)
monitoring the market for the presence of hazardous or non-certified products
and other forms of violations of Article 18; and (2) other appropriate means to
expand the monitoring and enforcement outreach of the department in relation
to its manpower, testing and certification resources at a given time.
vii. to accredit independent competent testing laboratories.
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n. Prohibited Acts under Consumer Product Quality and Safety

i. To manufacture for sale, offer for sale, distribute in commerce, or import into the
Philippines any consumer product which is not in conformity with an applicable
consumer product quality or safety standard promulgated in this Act;
ii. To manufacture for sale, offer for sale, distribute in commerce, or import into the
Philippines any consumer product which has been declared as banned consumer
product by a rule in this Act;
iii. To refuse access to or copying of pertinent records or fail or refuse to permit
entry of or inspection by authorized officers or employees of the department;
iv. To fail to comply with an order issued under Article II relating to notifications of
substantial product hazards and to recall, repair, replacement or refund of unsafe
products;
v. To fail to comply with the rule prohibiting stockpiling.
II. Protection against deceptive, unfair and unconscionable sales acts or practices
a. Policy of State
i. The State shall promote and encourage fair, honest and equitable relations
among parties in consumer transactions and protect the consumer against
deceptive, unfair and unconscionable sales acts or practices.
b. Implementing Agency
i. The Department of Trade and Industry (DTI), hereby referred to as the
Department, shall enforce the provisions of this Chapter.
c. Prohibition Against Deceptive Sales Acts or Practices
i. A deceptive act or practice by a seller or supplier in connection with a consumer
transaction violates this Act whether it occurs before, during or after the
transaction. An act or practice shall be deemed deceptive whenever the
producer, manufacturer, supplier or seller, through concealment, false
representation of fraudulent manipulation, induces a consumer to enter into a
sales or lease transaction of any consumer product or service.
d. Examples of acts or practices of a seller or supplier which is deceptive
i. a consumer product or service has the sponsorship, approval, performance,
characteristics, ingredients, accessories, uses, or benefits it does not have;
ii. a consumer product or service is of a particular standard, quality, grade, style, or
model when in fact it is not;
iii. a consumer product is new, original or unused, when in fact, it is in a
deteriorated, altered, reconditioned, reclaimed or second-hand state;
iv. a consumer product or service is available to the consumer for a reason that is
different from the fact;
v. a consumer product or service has been supplied in accordance with the previous
representation when in fact it is not;
vi. a consumer product or service can be supplied in a quantity greater than the
supplier intends;
vii. a service, or repair of a consumer product is needed when in fact it is not;
viii. a specific price advantage of a consumer product exists when in fact it does not;
ix. the sales act or practice involves or does not involve a warranty, a disclaimer of
warranties, particular warranty terms or other rights, remedies or obligations if
the indication is false; and
x. the seller or supplier has a sponsorship, approval, or affiliation he does not
have.
e. Unfair or Unconscionable Sales Act or Practice
i. An unfair or unconscionable sales act or practice by a seller or supplier in
connection with a consumer transaction violates this Chapter whether it occurs
before, during or after the consumer transaction. An act or practice shall be
deemed unfair or unconscionable whenever the producer, manufacturer,
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distributor, supplier or seller, by taking advantage of the consumer's physical or

mental infirmity, ignorance, illiteracy, lack of time or the general conditions of
the environment or surroundings, induces the consumer to enter into a sales or
lease transaction grossly inimical to the interests of the consumer or grossly one-
sided in favor of the producer, manufacturer, distributor, supplier or seller.
f. Circumstances to consider whether an act or practice is unfair and
unconscionable
i. that the producer, manufacturer, distributor, supplier or seller took advantage of
the inability of the consumer to reasonably protect his interest because of his
inability to understand the language of an agreement, or similar factors;
ii. that when the consumer transaction was entered into, the price grossly
exceeded the price at which similar products or services were readily obtainable
in similar transaction by like consumers;
iii. that when the consumer transaction was entered into, the consumer was unable
to receive a substantial benefit from the subject of the transaction;
iv. that when the consumer was entered into, the seller or supplier was aware that
there was no reasonable probability or payment of the obligation in full by the
consumer; and
v. that the transaction that the seller or supplier induced the consumer to enter into
was excessively one-sided in favor of the seller or supplier.
g. Chain Distribution Plans or Pyramid Sales Schemes
i. Chain distribution plans or pyramid sales schemes shall not be employed in the
sale of consumer products.
h. Rules on Home Solicitation Sales
i. Permit from DTI
1. No business entity shall conduct any home solicitation sale of any
consumer product or service without first obtaining a permit from the
Department. Such permit may be denied suspended or revoked upon
cause as provided in the rules and regulations promulgated by the
Department, after due notice and hearing.
ii. Home Solicitation Sales; When Conducted
1. Home solicitation sales may be conducted only between the hours of
nine o'clock in the morning and seven o'clock in the evening of each
working day: Provided, That solicitation sales may be made at a time
other than the prescribed hours where the person solicited has
previously agreed to the same.
iii. Home Solicitation Sales; by Whom Conducted
1. Home solicitation sales shall only be conducted by a person who has the
proper identification and authority from his principal to make such
solicitations.
iv. Receipts for Home Solicitation Sales
1. Sales generated from home solicitation sales shall be properly receipted
as per existing laws, rules and regulations on sale transactions.
v. Prohibited Representations in Home Solicitation

1. A home solicitation sale shall not represent that
a. the buyer has been specially selected;
b. a survey, test or research is being conducted; or
c. the seller is making a special offer to a few persons only for a
limited period of time.
i. Referral Sales
i. Referral selling plans shall not be used in the sale of consumer products unless
the seller executes in favor of the buyer a written undertaking that will grant a
specified compensation or other benefit to said buyer in return for each and
every transaction consummated by said seller with the persons referred by said
buyer or for subsequent sales that said buyers has helped the seller enter into.
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III. Consumer Product and Service Warranties

a. Implementing Agency
i. The Department of Trade and Industry, shall strictly enforce the provision of this
Chapter and its implementing rules and regulations.
b. Applicable Law on Warranties
i. The provisions of the Civil Code on conditions and warranties shall govern all
contracts of sale with conditions and warranties.
c. Additional Provisions on Warranties.
i. In addition to the Civil Code provisions on sale with warranties, the following
provisions shall govern the sale of consumer products with warranty:
1. Terms of express warranty. – Any seller or manufacturer who gives
an express warranty shall:
a. set forth the terms of warranty in clear and readily
understandable language and clearly identify himself as the
warrantor;
b. identify the party to whom the warranty is extended;
c. state the products or parts covered;
d. state what the warrantor will do in the event of a defect,
malfunction of failure to conform to the written warranty and at
whose expense;
e. state what the consumer must do to avail of the rights which
accrue to the warranty; and
f. stipulate the period within which, after notice of defect,
malfunction or failure to conform to the warranty, the warrantor
will perform any obligation under the warranty.
2. Express warranty – operative from moment of sale. – All written
warranties or guarantees issued by a manufacturer, producer, or
importer shall be operative from the moment of sale.
a. Sales Report. – All sales made by distributors of products
covered by this Article shall be reported to the manufacturer,
producer, or importer of the product sold within thirty (30) days
from date of purchase, unless otherwise agreed upon. The
report shall contain, among others, the date of purchase, model
of the product bought, its serial number, name and address of
the buyer. The report made in accordance with this provision
shall be equivalent to a warranty registration with the
manufacturer, producer, or importer. Such registration is
sufficient to hold the manufacturer, producer, or importer liable,
in appropriate cases, under its warranty.
b. Failure to make or send report. – Failure of the distributor to
make the report or send them the form required by the
manufacturer, producer, or importer shall relieve the latter of its
liability under the warranty: Provided, however, That the
distributor who failed to comply with its obligation to send the
sales reports shall be personally liable under the warranty. For
this purpose, the manufacturer shall be obligated to make good
the warranty at the expense of the distributor.
c. Retail. – The retailer shall be subsidiarily liable under the
warranty in case of failure of both the manufacturer and
distributor to honor the warranty. In such case, the retailer shall
shoulder the expenses and costs necessary to honor the
warranty. Nothing therein shall prevent the retailer from
proceeding against the distributor or manufacturer.
d. Enforcement of warranty or guarantee. – The warranty
rights can be enforced by presentment of a claim. To this end,
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the purchaser needs only to present to the immediate seller

either the warranty card of the official receipt along with the
product to be serviced or returned to the immediate seller. No
other documentary requirement shall be demanded from the
purchaser. If the immediate seller is the manufacturer's factory
or showroom, the warranty shall immediately be honored. If the
product was purchased from a distributor, the distributor shall
likewise immediately honor the warranty. In the case of a
retailer other than the distributor, the former shall take
responsibility without cost to the buyer of presenting the
warranty claim to the distributor in the consumer's behalf.
e. Record of purchases. – Distributors and retailers covered by
this Article shall keep a record of all purchases covered by a
warranty or guarantee for such period of time corresponding to
the lifetime of the product's respective warranties or guarantees.
f. Contrary stipulations – null and void. – All covenants,
stipulations or agreements contrary to the provisions of this
Article shall be without legal effect.
3. Designation of warranties. – A written warranty shall clearly and
conspicuously designate such warranty as:
a. "Full warranty" if the written warranty meets the minimum
requirements set forth in paragraph (d); or
b. "Limited warranty" if the written warranty does not meet such
minimum requirements.
4. Minimum standards for warranties. – For the warrantor of a
consumer product to meet the minimum standards for warranty, he
shall:
a. remedy such consumer product within a reasonable time and
without charge in case of a defect, malfunction or failure to
conform to such written warranty;
b. permit the consumer to elect whether to ask for a refund or
replacement without charge of such product or part, as the case
may be, where after reasonable number of attempts to remedy
the defect or malfunction, the product continues to have the
defect or to malfunction.
c. The warrantor will not be required to perform the above duties if
he can show that the defect, malfunction or failure to conform to
a written warranty was caused by damage due to unreasonable
use thereof.
5. Duration of warranty. – The seller and the consumer may stipulate
the period within which the express warranty shall be enforceable. If the
implied warranty on merchantability accompanies an express warranty,
both will be of equal duration. Any other implied warranty shall endure
not less than sixty (60) days nor more than one (1) year following the
sale of new consumer products.
6. Breach of warranties. – 1) In case of breach of express warranty, the
consumer may elect to have the goods repaired or its purchase price
refunded by the warrantor. In case the repair of the product in whole or
in part is elected, the warranty work must be made to conform to the
express warranty within thirty (30) days by either the warrantor or his
representative. The thirty-day period, however, may be extended by
conditions which are beyond the control of the warrantor or his
representative. In case the refund of the purchase price is elected, the
amount directly attributable to the use of the consumer prior to the
discovery of the non-conformity shall be deducted. 2) In case of breach
of implied warranty, the consumer may retain in the goods and recover
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damages, or reject the goods, cancel and contract and recover from the
seller so much of the purchase price as has been paid, including
damages.
d. Warranties in Supply of Services
i. In every contract for the supply of services to a consumer made by a seller in the
course of a business, there is an implied warranty that the service will be
rendered with due care and skill and that any material supplied in connection
with such services will be reasonably fit for the purpose for which it is supplied.
ii. Where a seller supplies consumer services in the course of a business and the
consumer, expressly or by implication, makes known to the seller the particular
purpose for which the services are required, there is an implied warranty that the
services supplied under the contract and any material supplied in connection
therewith will be reasonably fit for that purpose or are of such a nature or quality
that they might reasonably be expected to achieve that result, unless the
circumstances show that the consumer does not rely or that it is unreasonable
for him to rely, on the seller's skill or judgment.
e. Inapplicability of law on warranty on Professional Services
i. The provision of this Act on warranty shall not apply to professional services of
certified public accountants, architects, engineers, lawyers, veterinarians,
optometrists, pharmacists, nurses, nutritionists, dietitians, physical therapists,
salesmen, medical and dental practitioners and other professionals engaged in
their respective professional endeavors.
f. Guaranty of Service Firms
i. Service firms shall guarantee workmanship and replacement of spare parts for a
period not less than ninety (90) days which shall be indicated in the pertinent
invoices.
g. Prohibited acts under Consumer Product and Service Warranties
i. refusal without any valid legal cause by the total manufacturer or any person
obligated under the warranty or guarantee to honor a warranty or guarantee
issued;
ii. unreasonable delay by the local manufacturer or any person obligated under the
warranty or guarantee in honoring the warranty;
iii. removal by any person of a product's warranty card for the purpose of evading
said warranty obligation;
iv. any false representation in an advertisement as to the existence of a warranty
or guarantee.
IV. Labeling and Packaging

a. State Policy
i. 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.
b. Implementing Agency
i. 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.
c. Prohibited Acts on Labeling and Packaging
i. 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:
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1. are engaged in the packaging or labeling of such products;

2. prescribe or specify by any means the manner in which such products
are packaged or labeled; or
3. having knowledge, refuse to disclose the source of the mislabeled or
mispackaged products.
ii. Minimum Labeling Requirements for Consumer Products
1. 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.
2. 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.
3. 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.
d. Philippine Product Standard Mark
i. 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.
e. Authority of the Concerned Department to Provide for Additional Labeling and
Packaging Requirements
i. 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:
1. 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;
2. 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
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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;
3. prevent the nonfunctional slack-fill of packages containing consumer
products.
ii. 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.
f. Special Packaging of Consumer Products for the Protection of Children.
i. The concerned department may establish standards for the special packaging of
any consumer product if it finds that:
1. 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
2. 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:
a. the reasonableness of such standard;
b. available scientific, medical and engineering data concerning
special packaging and concerning accidental, ingestions, illnesses
and injuries caused by consumer product;
c. the manufacturing practices of industries affected by this Article;
and
d. the nature and use of consumer products.
g. Additional Labeling Requirements for Food

i. The following additional labeling requirements shall be imposed by the concerned
department for food:
1. expiry or expiration date, where applicable;
2. whether the consumer product is semi-processed, fully processed, ready-
to-cook, ready-to-eat, prepared food or just plain mixture;
3. nutritive value, if any;
4. whether the ingredients use are natural or synthetic, as the case may
be;
5. such other labeling requirements as the concerned department may
deem necessary and reasonable.
h. Instances of Mislabeled Food

i. if its labeling or advertising is false or misleading in any way;
ii. if it is offered for sale under the name of another food;
iii. 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;
iv. its containers is so made, formed, or filled as to be misleading;
v. 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;
vi. 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
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render it likely to be read and understood by the ordinary individual under

customary conditions of purchase and use;
vii. if it purports to be or is represented as a food for which a definition or standard
of identity has been prescribed unless:
1. 1) it conforms to such definition and standard; and
2. 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;
viii. if it purports to be or represented as:
1. 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. 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;
ix. if it is not subject to the provisions of paragraph (g) of this Article unless its label
bears:
1. 1) the common or usual name of the food, if there be any; and
2. 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;
x. 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;
xi. 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.
i. Labeling of Drugs
i. The Generics Act shall apply in the labeling of drugs.
j. Additional Labeling Requirements for Cosmetics.
i. The following additional requirements may be required for cosmetics:
1. expiry or expiration date;
2. whether or not it may be an irritant;
3. precautions or contra-indications; and
4. such other labeling requirements as the concerned department may
deem necessary and reasonable
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k. Special Labeling Requirements for Cosmetics

i. A cosmetic shall be deemed mislabeled:
1. if its labeling or advertising is false or misleading in any way;
2. 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;
3. 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;
4. if its container is so made, formed or filled as to be misleading; or
5. if its label does not state the common or usual name of its ingredients.
l. Mislabeled Drugs and Devices

i. if its labeling is false or misleading in any way;
1. if its 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.
2. 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;
3. 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";
4. its labeling does not bear:
a. adequate directions for use; and
b. 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;
5. 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;
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6. 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;
a. if it is a drug and its container is so made, formed or filled as to
be misleading; or
b. if it is an imitation of another drug; or
c. 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;
7. 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:
a. it is from a batch with respect to which a certificate of release
has been issued pursuant to regulations of the concerned
department; and
b. 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.
ii. Mislabeled Hazardous Substances

1. 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;
i. which states conspicuously:
1. the name and the place of business of the
manufacturer, packer, distributor or seller;
2. 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;
3. the signal word "danger" on substances which
are extremely flammable, corrosive or highly
toxic;
4. the signal word "warning" or "caution" with a
bright red or orange color with a black symbol
on all other hazardous substances;
5. a clear statement as to the possible injury it may
cause if used improperly;
6. precautionary measures describing the action to
be followed or avoided;
7. instructions when necessary or appropriate for
first-aid treatment;
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8. the word" poison" for any hazardous substance

which is defined as highly toxic;
9. instructions for handling and storage of
packages which require special care in handling
and storage; and
10. 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 English
language or its equivalent in Filipino; and
ii. 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.
iii. Grounds for Seizure and Condemnation of Mislabeled Hazardous
Substances
1. 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:
a. it is in a package labeled in accordance with the specifications of
the foreign purchaser;
b. it is labeled in accordance with the laws of the foreign country;
c. it is labeled on the outside of the shipping package to show that
it is intended for export; and
d. it is so exported,
2. 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.
3. 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.
iv. Labeling Requirements of Cigarettes
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1. 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.
Philippine Lemon Law (Republic Act No. 10642: An Act Strengthening Consumer Protection
In The Purchase Of Brand New Motor Vehicles)
I. State Policy
a. It is hereby declared the policy of the State to promote full protection to the rights of
consumers in the sale of motor vehicles against business and trade practices which are
deceptive, unfair or otherwise inimical to consumers and the public interest. The State
recognizes that a motor vehicle is a major consumer purchase or investment. Hence, the
rights of consumers should be clearly defined, including the means for redress for
violations thereof.
II. Important Terms

a. Brand new motor vehicle refers to a vehicle constructed entirely from new parts and
covered by a manufacturer’s express warranty at the time of purchase that it has never
been sold or registered with the Department of Transportation and Communications
(DOTC) or an appropriate agency or authority, and has never been operated on any
highway of the Philippines, or in any foreign state or country.
b. Collateral charges refer to the fees paid’ to the Land Transportation Office (LTO) for
the registration of a brand new motor vehicle and other incidental expenses such as, but
not limited to, the cost of insurance pertaining to the vehicle, chattel mortgage fees and
interest expenses if applicable.
c. Comparable motor vehicle refers to a motor vehicle that is identical or reasonably
equivalent to the motor vehicle to be replaced, in terms of specifications and values,
subject to availability, as the motor vehicle existed at the time of purchase: Provided,
That there shall be an offsetting from this value for reasonable allowance for its use.
d. Lemon Law rights period refers to the period ending twelve (12) months after the date
of the original delivery of a brand new motor vehicle to a consumer or the first twenty
thousand (20,000) kilometers of operation after such delivery, whichever comes first.
This shall be the period during which the consumer can report any nonconformity, as
defined in paragraph (k) herein, to the standards and specifications of the manufacturer,
authorized distributor, authorized dealer or retailer, and pursue any right as provided for
under this Act.
e. Motor vehicle refers to any self-propelled, four (4) wheeled road vehicle designed to
carry passengers including, but not limited to, sedans, coupes, station wagons,
convertibles, pick-ups, vans, sports utility vehicles (SUVs) and Asian Utility Vehicles
(AUVs) but excluding motorcycles, delivery trucks, dump trucks, buses, road rollers,
trolley cars, street sweepers, sprinklers, lawn mowers and heavy equipment such as, but
not limited to, bulldozers, payloaders, graders, forklifts, amphibian trucks, cranes, and
vehicles which run only on rails or tracks, and tractors, trailers and traction engines of all
kinds used exclusively for agricultural purposes. Trailers having any number of wheels,
when propelled or intended by attachment to a motor vehicle, shall be classified as
separate motor vehicle with no power rating.
f. Nonconformity refers to any defect or condition that substantially impairs the use,
value or safety of a brand new motor vehicle which prevents it from conforming to the
manufacturer’s or distributor’s standards or specifications, which cannot be repaired, but
excluding conditions resulting from noncompliance by the consumer of his or her
obligations under the warranty, modifications not authorized by the manufacturer or
distributor, abuse or neglect, and damage due to accident or force majeure.
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g. Warranty refers to the written assurance, so labeled, of the manufacturer of a brand

new motor vehicle including any term or condition precedent to the enforcement of
obligations under the warranty.
h. Warranty rights period refers to the period provided for under the contract of sale
when the manufacturer would guarantee the materials used, the workmanship and the
roadworthiness of a brand new motor vehicle for ordinary use or reasonable intended
purposes.
III. Coverage of Lemon Law

a. This Act shall cover brand new motor vehicles purchased in the Philippines reported by a
consumer to be in nonconformity with the vehicle’s manufacturer or distributor’s
standards or specifications within twelve (12) months from the date of .original delivery
to the consumer, or up to twenty thousand (20,000) kilometers of operation after such
delivery, whichever comes first.
IV. Causes of Nonconformity which are not covered by Lemon Law

a. Noncompliance by the consumer of the obligations under the warranty;
b. Modifications not authorized by the manufacturer, distributor, authorized dealer or
retailer;
c. Abuse or neglect of the brand new motor vehicle; and
d. Damage to the vehicle due to accident or force majeure.
V. Repair Attempts
a. At any time within the Lemon Law rights period, and after at least four (4) separate
repair attempts by the same manufacturer, distributor, authorized dealer or retailer for
the same complaint, and the nonconformity issue remains unresolved, the consumer may
invoke his or her rights under this Act. The repair may include replacement of parts
components, or assemblies.
VI. Notice of Availment of Lemon Law Rights

a. Before availing of any remedy under this Act and subject to compliance with the
provisions of Section 5 hereof, the consumer shall, in writing, notify the manufacturer,
distributor, authorized dealer or retailer of the unresolved complaint, and the consumer’s
intention to invoke his or her rights under this Act within the Lemon Law rights period.
The warranty booklet issued by the manufacturer, distributor, authorized dealer or
retailer shall clearly state the manner and form of such notice to constitute a valid and
legal notice to the manufacturer, distributor, authorized dealer or retailer. It shall also
clearly state the responsibility of the consumer under this section.
VII. Availment of Lemon Law Rights

a. Subsequent to filing the notice of availment referred to in the preceding section, the
consumer shall bring the vehicle to the manufacturer, distributor, authorized dealer or
retailer from where the vehicle was purchased for a final attempt to address the
complaint of the consumer to his or her satisfaction.
b. It shall be the duty of the manufacturer, distributor, authorized dealer or retailer, upon
receipt of the motor vehicle and the notice of nonconformity required under Section 6
hereof, to attend to the complaints of the consumer including, as may be necessary,
making the repairs and undertaking such actions to make the vehicle conform to the
standards or specifications of the manufacturer, distributor, authorized dealer or retailer
for such vehicle.
c. In case the nonconformity issue remains unresolved despite the manufacturer,
distributor, authorized dealer or retailer’s efforts to repair the vehicle, pursuant to the
consumer’s availment of his or her Lemon Law rights, the consumer may file a complaint
before the DTI as provided for under this Act: Provided, however, That if the vehicle is
not returned for repair, based on the same complaint, within thirty (30) calendar days
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from the date of notice of release of the motor vehicle to the consumer following this
repair attempt within the Lemon Law rights period, the repair is deemedsuccessful:
Provided, finally, That, in the event that the nonconformity issue still exists or persists
after the thirty (30)-day period but still within the Lemon Law rights period, the
consumer may be allowed to avail of the same remedies under Sections 5 and 6 hereof.
d. To compensate for the non-usage of the vehicle while under repair and during the period
of availment of the Lemon Law rights, the consumer shall be provided a reasonable daily
transportation allowance, an amount which covers the transportation of the consumer
from his or her residence to his or her regular workplace or destination and vice versa,
equivalent to air-conditioned taxi fare, as evidenced by official receipt, or in such amount
to be agreed upon by the parties, or a service vehicle at the option of the manufacturer,
distributor, authorized dealer or retailer. Any disagreement on this matter shall be
resolved by the DTI.
e. Nothing herein shall be construed to limit or impair the rights and remedies of a
consumer under any other law.
VIII. Remedies for Dispute Resolution under Lemon Law

a. The DTI shall exercise exclusive and original jurisdiction over disputes arising from the
provisions of this Act.
b. All disputes arising from the provisions of this Act shall be settled by the DTI in
accordance with the following dispute resolution mechanisms:
i. Mediation
1. The principles of negotiation, conciliation and mediation towards
amicable settlement between the manufacturer, distributor, authorized
dealer or retailer and the consumer shall be strictly observed;
2. In the course of its dispute resolution efforts, the DTI shall endeavor to
independently establish the validity of the consumer’s outstanding
complaint. The DTI shall likewise retain the services of other government
agencies or qualified independent private entities in the ascertainment of
the validity of the consumer’s complaint. Any cost incurred in
establishing the validity of the consumer’s complaint shall be borne
jointly by the consumer and the manufacturer, distributor, authorized
dealer or retailer;
3. The complaint shall be deemed valid if it is independently established
that the motor vehicle does not conform to the standards or
specifications set by the manufacturer, distributor, authorized dealer or
retailer;
4. Upon failure of the negotiation or mediation between the manufacturer,
distributor, authorized, dealer or retailer and the consumer, the parties
shall execute a certificate attesting to such failure; and
5. At any time during the dispute resolution period, the manufacturer,
distributor, authorized dealer or retailer and the consumer shall be
encouraged to settle amicably. All disputes that have been submitted for
mediation shall be settled not later than ten (10) working days from the
date of filing of the complaint with the DTI.
ii. Arbitration
1. In the event there is a failure to settle the complaint during the
mediation proceedings, both parties may voluntarily decide to undertake
arbitration proceedings.
iii. Adjudication
1. In the event that both parties do not undertake arbitration proceedings,
at least one of the parties may commence adjudication proceedings,
administered by the DTI. The DTI shall rely on the qualified independent
findings as to conformity to standards and specifications established
herein. In no case shall adjudication proceedings exceed twenty (20)
working days;
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2. In case a finding of nonconformity is arrived at, the DTI shall rule in

favor of the consumer and direct the manufacturer, distributor,
authorized dealer or retailer to grant either of the following remedies to
the consumer:
a. Replace the motor vehicle with a similar or comparable motor
vehicle in terms of specifications and values, subject to
availability; or
b. Accept the return of the motor vehicle and pay the consumer the
purchase price plus the collateral charges.
In case the consumer decides to purchase another vehicle with a

higher value and specifications from the same manufacturer,
distributor, authorized dealer or retailer, the consumer shall pay
the difference in cost.
In both cases of replacement and repurchase, the reasonable
allowance for use, as defined in this Act, shall be deducted in
determining the value of the nonconforming motor vehicle; and
c. In case a nonconformity of the motor vehicle is not found by the
DTI, it shall rule in favor of the manufacturer, distributor,
.authorized dealer or retailer, and direct the consumer to
reimburse the manufacturer, distributor, authorized dealer or
retailer the costs incurred by the latter in validating the
consumer’s complaints.
d. An appeal may be taken from a final judgment or order of the
Adjudication Officer which completely disposes of the case within
fifteen (15) days from receipt thereof.1âwphi1 The appeal shall
be taken by filing a Memorandum of Appeal with the Secretary
of the DTI, with Notice of Appeal to the Adjudication Officer, and
with a copy duly furnished the adverse party or parties on any of
the following grounds:
i. Grave abuse of discretion;
ii. The decision/order is in excess of jurisdiction or
authority of the Adjudication Officer; and
iii. (The decision/order is not supported by the evidence or
there is serious error in the findings of facts.
e. The Secretary of the DTI shall decide on the appeal within thirty
(30) days from receipt thereof. A party seeking further appeal
from the decision of the Secretary of the DTI may file a case for
certiorari to the Court of Appeals under Section 4, Rule 65 of the
Revised Rules of Court.
IX. Determination of Reasonable Allowance for Use

a. For purposes of this Act, "reasonable allowance for use" shall mean twenty percent
(20%) per annum deduction from the purchase price, or the product of the distance
traveled in kilometers and the purchase price divided by one hundred thousand
(100,000) kilometers, whichever is lower.
I. Disclosure on Resale
i. Should the returned motor vehicle be made available for resale, the
manufacturer, distributor, authorized dealer or retailer shall, prior to sale or
transfer, disclose in writing to the next purchaser of the same vehicle the
following information:
1. The motor vehicle was returned to the manufacturer, distributor,
authorized dealer or retailer;
2. The nature of the nonconformity which caused the return; and
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3. The condition of the motor vehicle at the time of the transfer to the
manufacturer, distributor, authorized dealer or retailer.
ii. The responsibility of the manufacturer, distributor, authorized dealer or retailer
under this section shall cease upon the sale of the affected motor vehicle to the
first purchaser.
iii. Penalty for violation of requirements on disclosure on resale
1. The manufacturer, distributor, authorized dealer or retailer adjudged to
have violated the provisions requiring disclosure as mentioned in the
preceding section shall be liable to pay a minimum amount of One
hundred thousand pesos (P100,000.00) as damages to the aggrieved
party without prejudice to any civil or criminal liability they and/or the
responsible officer may incur under existing laws.
MACEDA Law (Republic Act No. 6552: Realty Installment Buyer Act)
I. Rationale of Maceda Law

a. It is hereby declared a public policy to protect buyers of real estate on installment
payments against onerous and oppressive conditions.
II. Transactions covered by Maceda Law

a. Sale or in-house financing on installment payments of residential lot, residential house,
residential house and lot or residential condominium apartments
III. Transactions not covered by Maceda Law

a. Installment sale of industrial lots or commercial buildings
b. Installment sale to tenants under Agrarian Reform Law
c. Absolute sale of residential real property with bank financing whereby the loan is payable
in instalments
d. Housing loans of PAG-IBIG, GSIS and other government agencies, instrumentalities and
GOCCs.
IV. Buyer’s right to Grace Period in case of default in payment of installment (Section 3
and Section 4)
a. Right to Grace Period without additional interest
i. Buyer who has paid less than two years of instalments
1. The seller shall give the buyer a grace period of not less than sixty (60)
days from the date the installment became due.
ii. Buyer who has paid at least two years of installment
1. The buyer earned a total grace period of one month grace period for
every year of installments payments made.
Note: The right to grace period without additional interest shall be exercised by
the buyer only once in every five years of the life of the contract and its
extensions, if any.
b. Right to additional grace period with additional interest before the cancellation or
rescission of the sale
i. If the buyer fails to pay the installments due at the expiration of the grace
period, the seller may cancel the contract after thirty days from receipt by the
buyer of the notice of cancellation or the demand for rescission of the contract
by a notarial act.
V. Buyer’s right to Cash Surrender Value in case the seller elects to cancel the sale
(Section 3)
a. Buyer who has paid less than two years of instalments
i. The buyer is not entitled to any cash surrender value.
b. Buyer who has paid at least two to five years of installments
i. 2-5 years of instalments = 50% of total payments made
ii. 6 years of instalments = 55% of total payments made
iii. 7 years of instalments = 60% of total payments made
iv. 8 years of instalments = 65% of total payments made
v. 9 years of instalments = 70 of total payments made
vi. 10 years of instalments = 75% of total payments made
vii. 11 years of instalments = 80% of total payments made
viii. 12 years of instalments = 85% of total payments made
ix. 13 years or more of instalments = maximum of 90% of total payments made
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VI. Moment of Actual Cancellation of Sale in case of default by buyer (Section 3 and 4)
a. Buyer who has paid less than two years of instalments
i. Upon lapse of thirty (30) days from receipt by the buyer of the notice of
cancellation or the demand for rescission of the contract by a notarial act;
b. Buyer who has paid at least two years of instalments
i. Upon lapse of thirty (30) days from receipt by the buyer of the notice of
cancellation or the demand for rescission of the contract by a notarial act; and
ii. Upon full payment of the cash surrender value to the buyer.
VII. Buyer’s right to sell or assign his right to grace period and right to cash surrender
value (Section 5)
a. The buyer shall have the right to sell his rights or assign the same to another person or
to reinstate the contract by updating the account during the grace period and before
actual cancellation of the contract. The deed of sale or assignment shall be done by
notarial act.
VIII. Buyer’s right to pay in advance any installment or to fully pay the unpaid balance
(Section 6)
a. The buyer shall have the right to pay in advance any installment or the full unpaid
balance of the purchase price any time without interest and to have such full payment of
the purchase price annotated in the certificate of title covering the property.
IX. Void provisions in Sale of Residential Real Property in Installments

a. Any stipulation in any contract hereafter entered into contrary to the provisions of
Sections 3, 4, 5 and 6 of Maceda Law shall be void.
PD 957 (REGULATING THE SALE OF SUBDIVISION LOTS AND CONDOMINIUMS, PROVIDING

PENALTIES FOR VIOLATIONS THEREOF)
I. Rationale of PD 957
a. WHEREAS, it is the policy of the State to afford its inhabitants the requirements of decent
human settlement and to provide them with ample opportunities for improving their
quality of life;
b. WHEREAS, numerous reports reveal that many real estate subdivision owners,
developers, operators, and/or sellers have reneged on their representations and
obligations to provide and maintain properly subdivision roads, drainage, sewerage,
water systems, lighting systems, and other similar basic requirements, thus endangering
the health and safety of home and lot buyers;
c. WHEREAS, reports of alarming magnitude also show cases of swindling and fraudulent
manipulations perpetrated by unscrupulous subdivision and condominium sellers and
operators, such as failure to deliver titles to the buyers or titles free from liens and
encumbrances, and to pay real estate taxes, and fraudulent sales of the same subdivision
lots to different innocent purchasers for value;
d. WHEREAS, these acts not only undermine the land and housing program of the
government but also defeat the objectives of the New Society, particularly the promotion
of peace and order and the enhancement of the economic, social and moral condition of
the Filipino people;
e. WHEREAS, this state of affairs has rendered it imperative that the real estate subdivision
and condominium businesses be closely supervised and regulated, and that penalties be
imposed on fraudulent practices and manipulations committed in connection therewith.
II. Obligations of the Developer with the corresponding rights of buyer of units from
subdivisions and condominiums
a. Registration of Subdivision or Condominium Project
i. The registered owner of a parcel of land who wishes to convert the same into a
subdivision project shall submit his subdivision plan to the National Housing
Authority which shall act upon and approve the same, upon a finding that the
plan complies with the Subdivision Standards' and Regulations enforceable at the
time the plan is submitted.
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b. License to Sell
i. Such owner or dealer to whom has been issued a registration certificate shall
not, however, be authorized to sell any subdivision lot or condominium unit in
the registered project unless he shall have first obtained a license to sell the
project within two weeks from the registration of such project. The Authority,
upon proper application therefor, shall issue to such owner or dealer of a
registered project a license to sell the project if, after an examination of the
registration statement filed by said owner or dealer and all the pertinent
documents attached thereto, he is convinced that the owner or dealer is of good
repute, that his business is financially stable, and that the proposed sale of the
subdivision lots or condominium units to the public would not be fraudulent.
c. Performance Bond
i. No license to sell subdivision lots or condominium units shall be issued by the
Authority under Section 5 of PD 957 unless the owner or dealer shall have filed
an adequate performance bond approved by National Housing Authority to
guarantee the construction and maintenance of the roads, gutters, drainage,
sewerage, water system, lighting systems, and full development of the
subdivision project or the condominium project and the compliance by the owner
or dealer with the applicable laws and rules and regulations. The performance
bond shall be executed in favor of the Republic of the Philippines and shall
authorize the National Housing Authority to use the proceeds thereof for the
purposes of its undertaking in case of forfeiture as provided in this Decree.
d. Exempt transactions from license to sell and performance bond. A license to
sell and performance bond shall not be required in any of the following
transactions:
i. Sale of a subdivision lot resulting from the partition of land among co-owners
and co-heirs.
ii. Sale or transfer of a subdivision lot by the original purchaser thereof and any
subsequent sale of the same lot.
iii. Sale of a subdivision lot or a condominium unit by or for the account of a
mortgagee in the ordinary course of business when necessary to liquidate a bona
fide debt.
e. Registration of deeds to Registry of Deeds
i. All contracts to sell, deeds of sale and other similar instruments relative to the
sale or conveyance of the subdivision lots and condominium units, whether or
not the purchase price is paid in full, shall be registered by the seller in the Office
of the Register of Deeds of the province or city where the property is situated.
Whenever a subdivision plan duly approved in accordance with Section 4 of PD
957, together with the corresponding owner's duplicate certificate of title, is
presented to the Register of Deeds for registration, the Register of Deeds shall
register the same in accordance with the provisions of the Land Registration Act,
as amended: Provided, however, that it there is a street, passageway or required
open space delineated on a complex subdivision plan hereafter approved and as
defined in this Decree, the Register of Deeds shall annotate on the new
certificate of title covering the street, passageway or open space, a
memorandum to the effect that except by way of donation in favor of a city or
municipality, no portion of any street, passageway, or open space so delineated
on the plan shall be closed or otherwise disposed of by the registered owner
without the requisite approval as provided under Section 22 of this Decree.
f. Mortgages on the subdivision or condominium
i. No mortgage on any unit or lot shall be made by the owner or developer without
prior written approval of the National Housing Authority. Such approval shall not
be granted unless it is shown that the proceeds of the mortgage loan shall be
used for the development of the condominium or subdivision project and
effective measures have been provided to ensure such utilization. The loan value
of each lot or unit covered by the mortgage shall be determined and the buyer
thereof, if any, shall be notified before the release of the loan. The buyer may, at
his option, pay his installment for the lot or unit directly to the mortgagee who
shall apply the payments to the corresponding mortgage indebtedness secured
by the particular lot or unit being paid for, with a view to enabling said buyer to
obtain title over the lot or unit promptly after full payment thereto.
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g. Advertisements of subdivision or condominium project

i. Advertisements that may be made by the owner or developer through
newspaper, radio, television, leaflets, circulars or any other form about the
subdivision or the condominium or its operations or activities must reflect the
real facts and must be presented in such manner that will not tend to mislead or
deceive the public. The owner or developer shall answerable and liable for the
facilities, improvements, infrastructures or other forms of development
represented or promised in brochures, advertisements and other sales
propaganda disseminated by the owner or developer or his agents and the same
shall form part of the sales warranties enforceable against said owner or
developer, jointly and severally. Failure to comply with these warranties shall
also be punishable in accordance with the penalties provided for in this Decree.
h. Time of Completion
i. Every owner or developer shall construct and provide the facilities,
improvements, infrastructures and other forms of development, including water
supply and lighting facilities, which are offered and indicated in the approved
subdivision or condominium plans, brochures, prospectus, printed matters,
letters or in any form of advertisement, within one year from the date of the
issuance of the license for the subdivision or condominium project or such other
period of time as may be fixed by the National Housing Authority.
i. Alteration of Subdivision or Condominium Plans
i. No owner or developer shall change or alter the roads, open spaces,
infrastructures, facilities for public use and/or other form of subdivision
development as contained in the approved subdivision plan and/or represented
in its advertisements, without the permission of the National Housing Authority
and the written conformity or consent of the duly organized homeowners
association, or in the absence of the latter, by the majority of the lot buyers in
the subdivision.
j. Non-forfeiture of payments
i. No installment payment made by a buyer in a subdivision or condominium
project for the lot or unit he contracted to buy shall be forfeited in favor of the
owner or developer when the buyer, after due notice to the owner or developer,
desists from further payment due to the failure of the owner or developer to
develop the subdivision or condominium project according to the approved plans
and within the time limit for complying with the same. Such buyer may, at his
option, be reimbursed the total amount paid including amortization interests but
excluding delinquency interests, with interest thereon at the legal rate.
k. Failure to pay instalments
i. The rights of the buyer in the event of this failure to pay the installments due for
reasons other than the failure of the owner or developer to develop the project
shall be governed by Republic Act No. 6552 or Maceda Law.
l. Issuance of Title
i. The owner or developer shall deliver the title of the lot or unit to the buyer upon
full payment of the lot or unit. No fee, except those required for the registration
of the deed of sale in the Registry of Deeds, shall be collected for the issuance of
such title. In the event a mortgage over the lot or unit is outstanding at the time
of the issuance of the title to the buyer, the owner or developer shall redeem the
mortgage or the corresponding portion thereof within six months from such
issuance in order that the title over any fully paid lot or unit may be secured and
delivered to the buyer in accordance herewith.
m. Payment of Real Property Tax
i. Real estate tax and assessment on a lot or unit shall de paid by the owner or
developer without recourse to the buyer for as long as the title has not passed
the buyer; Provided, however, that if the buyer has actually taken possession of
and occupied the lot or unit, he shall be liable to the owner or developer for such
tax and assessment effective the year following such taking of possession and
occupancy.
n. Association Dues and Other Charges
i. No owner or developer shall levy upon any lot or buyer a fee for an alleged
community benefit. Fees to finance services for common comfort, security and
sanitation may be collected only by a properly organized homeowners association
and only with the consent of a majority of the lot or unit buyers actually residing
in the subdivision or condominium project.
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o. Access to Public Offices in the Subdivisions

i. No owner or developer shall deny any person free access to any government
office or public establishment located within the subdivision or which may be
reached only by passing through the subdivision.
p. Right of Way to Public Road
i. The owner or developer of a subdivision without access to any existing public
road or street must secure a right of way to a public road or street and such
right of way must be developed and maintained according to the requirement of
the government and authorities concerned.
q. Organization of Homeowners Association
i. The owner or developer of a subdivision project or condominium project shall
initiate the organization of a homeowners association among the buyers and
residents of the projects for the purpose of promoting and protecting their
mutual interest and assist in their community development.
r. Donations of roads and open spaces to local government
i. The registered owner or developer of the subdivision or condominium project,
upon completion of the development of said project may, at his option, convey
by way of donation the roads and open spaces found within the project to the
city or municipality wherein the project is located. Upon acceptance of the
donation by the city or municipality concerned, no portion of the area donated
shall thereafter be converted to any other purpose or purposes unless after
hearing, the proposed conversion is approved by the National Housing Authority.
s. Nullity of Waivers
i. Any condition, stipulation, or provision in contract of sale whereby any person
waives compliance with any provision of this PD 957 or of any rule or regulation
issued thereunder shall be void.
Price Tag Act
I. Price Tag Act
a. Price Tag Requirement

i. 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.
b. Manner of Placing Price Tags

i. Price tags, labels or markings must be written clearly, indicating the price of the
consumer product per unit in pesos and centavos.
c. Regulations for Price Tag Requirement

i. 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.
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II. Purpose of Price Tag Act

● Prevent abusive price increases
● Keep retailers from changing prices of goods without warning
III. Definition of Terms

a. Price tag → any device, written, printed, affixed or attached to a consumer product or displayed in a
consumer repair or service establishment for the purpose of indicating the retail price per unit or service.
b. Retail sale → the business of selling consumer products directly to consumers. c. Consumer products
and services → goods, services and credits, debts or obligations which are primarily for personal, family,
household or agricultural purposes, which shall include but not limited to food, drugs, cosmetics, and
devices.
IV. Essential elements for a sale to be considered as retail:

1. The seller should be habitually engaged in selling;
2. The sale must be direct to the general public; and,
3. The object of the sale is limited to merchandise, commodities or goods for consumption. (Marsman &
Company, Inc. vs. First Coconut Central Co. Inc., G.R. No. L-39841, 20 June 1988)
V. Manner of Placing Price Tags (DTI Department Administrative Order No. 2, series of 1993, Rule X)
● Price tags, labels or markings must be written clearly, indicating the price of the consumer product per
unit in pesos and centavos.
● All consumer products sold in retail to the public shall bear an appropriate price tag, label or marking
indicating the price of the article. Such consumer products shall not be sold at a price higher than that
stated therein.
● Samples or dummies of products offered for sale on retail when displayed within the retail outlets shall
also bear the prices of products which they represent.
● In the case of lumber sold. displayed or offered for sale to the public, the same shall be tagged or
labeled indicating thereon the price and the corresponding official name of the wood.
● Prices of consumer products which are too small or the nature of which makes it impractical to place a
price tag thereon, shall be listed.
● In the case of consumer services, price lists may also be used in lieu of price tags. Price lists shall be
posted/placed in conspicuous places in the establishment.
VI. Regulations for Price Tag Placement

● The Department of Trade and Industry (DTI) shall prescribe rules and regulations for the visible
placement of price tags for specific consumer products and services. ● Price tags, labels or markings
must be written clearly, indicating the price of the consumer product per unit in pesos and centavos.
(Article 82)
● Prices of consumer products and services shall not be written in code except in addition to price tags,
labels, markings, or price lists. (DTI Department Administrative Order No. 2, series of 1993, Rule XI,
Section 2)
● All products sold in the Philippines shall bear price tags and/or price lists in pesos except when a law or
regulation allows consumer products to be sold in foreign currency as in the case of duty-free shops.
(DTI Department Administrative Order No. 2, series of 1993, Rule XI, Section 3)
● Except as allowed or required in price reduction sales promotions campaigns, there shall be no
erasures or alterations in price tags. labels or markings or in price lists. (DTI Department Administrative
Order No. 2, series of 1993, Rule XI, Section 4)
VII. Inclusions and Exclusions to the Price (DTI Department Administrative Order No. 10, series of
2006)
a. Value Added Tax (VAT), whenever the product is vatable, shall be included in the price indicated in the
price tag.
b. Service Charge shall NOT be included in the price tag
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VIII. Modes of Payment and other Price Tag Practices (DTI Department Administrative Order No.
10, series of 2006)
1. When the consumer pays in cash, he shall pay only the price indicated in the price tag.
2. When the consumer pays through a credit/ATM/debit card, he shall pay only the price indicated in the
price tag.
3. When the retailer offers the consumer an option to pay in cash, card or on installment, the same is
allowed provided the payment options shall be disclosed by way of a separate information to the
consumer but not in the price tag.
4. Price tag indicating a separate CASH PRICE TAG and REGULAR PRICE TAG on each product or service
is not allowed.
5. Price tag indicating a separate CASH PRICE TAG and CARD PRICE TAG on each product or service is
not allowed.
IX. Available Course of Action for Consumers

The consumer may file a petition or letter-complaint to the Department of Trade and Industry to conduct
an investigation for violations of the Price Tag Law. Upon finding a violation, DTI may commence formal
administrative action against any person who appears responsible therefor.
X. Administrative Penalties
After formal investigation, any of the following administrative penalties may be imposed on the
respondent even if not prayed for in the complaint:
a) the issuance of a cease and desist order;
b) the acceptance of a voluntary assurance of compliance or discontinuance from the respondent;
c) restitution or rescission of the contract without damages;
d) condemnation and seizure of the consumer product found to be hazardous to health and safety unless
the respondent files a bond to answer for any damage or injury that may arise from the continued use of
product;
e) the imposition of administrative fines in such amount as deemed reasonable by the Secretary, which
shall in no case be less than Five hundred pesos (P500.00) nor more than Three hundred thousand pesos
(P300,000.00) depending on the gravity of the offense, and an additional fine of not more than One
thousand pesos (P1,000.00) or each day of continuing violation.
XI. Penalties
Any person who violates the provisions of Article 81 to 83 for the first time shall be subject: a) to a fine
of not less than Two hundred pesos (P200.00) but not more than Five thousand pesos (P5,000.00); or,
b) by imprisonment of not less than one (1) month but not more than six (6) months; or, c) both, at the
discretion of the court.
A second conviction shall also carry with it the penalty of revocation of business permit and license.
RECTO Law (Article 1484 to 1486 of New Civil Code)
I. Rationale of Recto Law
i. The purpose of Recto Law is to prevent potential abuses by the seller in the
event that the buyer is unable to make further installments for a personal
property sold in installments.
ii. This is intended to remedy the abuses committed in connection with the
foreclosure of chattel mortgages.
iii. This prevents mortgagees from seizing the mortgaged property, buying it at
foreclosure sale for a low price and then brining suit against the mortgagor for a
deficiency judgment.
iv. This is intended to protect the buyers of personal property on installment who
more often than not have been victimized by sellers who, before the enactment
of this law, succeeded in unjustly enriching themselves at the expense of the
buyers because aside from recovering the goods sold, upon default of the buyer
in the payment of two installments, still retained for themselves all amounts
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already paid, in addition, furthermore, to other damages, such as attorney’s

fees and costs.
v. By providing restrictions as to the remedies available to the seller in case of
default by the buyer, Recto Law indirectly protects the buyer of personal
property in installments.
II. Contracts covered by Recto Law

i. Sale of personal or movable property in installments
ii. Contracts purporting to be leases of personal or movable property with option
to buy, when the lessor has deprived the lessee of the possession or
enjoyment of the thing (Finance lease of personal or movable property with
bargain purchase option)
III. Contracts not covered by Recto Law

i. Sale of personal or movable property on credit or under one-time payment
ii. Sale of personal or movable property whereby the price paid by the buyer to
the seller is financed by a third party (lending company) and the loan is
payable in installments
IV. Remedies available to seller or lessor under Recto Law
i. Sole Remedy of the seller if the buyer or lessee defaulted a single

installment
1. Exact fulfillment
a. The seller will send a demand letter to the buyer. Afterwards,
the seller will file a civil action for exact fulfillment a.k.a. civil
action to collect a sum of money. Afterwards, the court will issue
a writ of attachment to enforce the judgment. In case there will
be deficiency arising from the public sale of the movable
property, the seller can still recover the deficiency by attaching
the other properties of the buyer.
ii. Three Alternative or Non-cumulative remedies of the seller if the

buyer or lessee defaulted in two or more installments
2. Exact fulfillment; or
a. The seller will send a demand letter to the buyer. Afterwards,
the seller will file a civil action for exact fulfillment a.k.a. civil
action to collect a sum of money. Afterwards, the court will issue
a writ of attachment to enforce the judgment. In case there will
be deficiency arising from the public sale of the movable
property, the seller can still recover the deficiency by attaching
the other properties of the buyer.
3. Cancel the sale; or
a. This remedy is deemed chosen when any of the following is

done by the seller:
i. He sends notice of rescission to buyer;
ii. He takes possession of the personal property; or
iii. He files a civil action for rescission.
b. Rescission of contract of sale will result to mutual restitution.

The buyer must return the personal property to the seller while
the seller must generally return all installments received to the
buyer. A stipulation that the installments or rents paid shall not
be returned to the vendee or lessee and will be forfeited in favor
of the seller or lessor shall be valid insofar as the same may not
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be unconscionable under the circumstances. If the agreement

for retention or forfeiture of installments received is
unconscionable, the seller may only retain reasonable rent and
return the unconscionable portion to the buyer.
4. Foreclose the chattel mortgage constituted on the personal property sold

without recourse for recovery of deficiency (Any agreement for recovery
of deficiency is void.)
a. Under the law, the delivery of possession of the mortgaged
property to the mortgagee-seller can only operate to extinguish
mortgagor-buyer’s liability if the mortgagee-seller had actually
caused the foreclosure sale of the mortgaged property when it
recovered possession thereof. It is worth noting that it is the fact
of foreclosure and actual sale of the mortgaged chattel that bar
recovery by the vendor of any balance of the purchaser’s
outstanding obligation not satisfied by the sale (New Civil Code,
par. 3, Article 1484). As held by the Supreme Court, if the
vendor desisted, on his own initiative, from consummating the
auction sale from the foreclosure of chattel mortgage, such
desistance was a timely disavowal of the remedy of foreclosure,
and the vendor can still sue for specific performance with
recovery for deficiency.
Price Act (R.A. No. 7581)
I. State Policy
a. It is the policy of the State to ensure the availability of basic necessities and prime
commodities at reasonable prices at all times without denying legitimate business a fair
return on investment. It is also a declared policy of the State to provide effective and
sufficient protection to consumers against hoarding, profiteering and cartels with respect
to the supply, distribution, marketing and pricing of said goods, especially during periods
of calamity, emergency, widespread illegal price manipulation and other similar
situations. To these ends, the State shall:
i. (1) Develop, adopt and promulgate measures to promote productivity in basic
necessities and prime commodities;
ii. (2) Develop an improved and efficient transport and distribution system;
iii. (3) Develop, adopt and promulgate measures to stabilize prices at reasonable
levels;
iv. (4) Institute appropriate penalties for illegal price manipulation and other
violations of this Act; and
v. (5) Establish a mechanism that will readily protect consumers from inadequate
supply and unreasonable price increase on occasions of calamities, emergencies
and like occurrences.
II. Definition of Terms

a. Basic necessities are goods vital to the needs of consumers for their sustenance and
existence in times of any of the cases provided under Section 6 or 7 of this Act such as,
but not limited to, rice, corn, root crops, bread; fresh, dried or canned fish and other
marine products; fresh pork, beef and poultry meat; fresh eggs; potable water in bottles
and containers; fresh and processed milk; fresh vegetables and fruits; locally
manufactured instant noodles; coffee; sugar; cooking oil; salt; laundry soap and
detergents; firewood; charcoal; household liquefied petroleum gas (LPG) and kerosene;
candles; drugs classified as essential by the Department of Health and such other goods
as may be included under Section 4 of this Act;
b. “Butter fund” means a contingent fund in the budget of the implementing agency
which shall not be used in its normal or regular operations but only for purposes
provided for in this Act;
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c. “Implementing agency” means the department, agency or office of the Government

which has jurisdiction over a basic necessity or prime commodity as defined in this Act,
which shall be:
i. The Department of Agriculture, with reference to agricultural crops, fish and
other marine products, fresh meat, fresh poultry and dairy products, fertilizers,
and other farm inputs;
ii. The Department of Health, with reference to drugs;
iii. The Department of Environment and Natural Resources, with reference to wood
and other forest products; and
iv. The Department of Trade and Industry, with reference to all other basic
necessities and prime commodities.
d. Panic-buying is the abnormal phenomenon where consumers buy basic necessities and
prime commodities grossly in excess of their normal requirement resulting in undue
shortages of such goods to the prejudice of less privileged consumers;
e. “Person” means a natural person or juridical person;
f. “Prevailing price” means the average price at which any basic necessity has been sold
in a given time within a month from the occurrence of any of the conditions enumerated
under Section 6 of this Act;
g. “Price ceiling” means the maximum price at which any basic necessity or prime
commodity may be sold to the general public; and
h. ‘Prime Commodities’ are goods not considered as basic necessities but are essential to
consumers in times of any of the cases provided under Section 7 of this Act such as, but
not limited to, flour; dried, processed or canned pork, beef and poultry meat; dairy
products not falling under basic necessities; onions, garlic, vinegar, patis, soy sauce;
toilet soap; fertilizer, pesticides and herbicides; poultry, livestock and fishery feeds and
veterinary products; paper; school supplies; nipa shingles; sawali; cement; clinker; GI
sheets; hollow blocks; plywood; plyboard; construction nails; batteries; electrical
supplies; light bulbs; steel wire; all drugs not classified as essential drugs by the
Department of Health and such other goods as may be included under Section 4 of this
Act."
III. Inclusion or Exclusion from the Coverage of this Act

a. Upon petition of the concerned parties or motu proprio action from the concerned
agency of the Price Coordinating Council and after public hearing, the implementing
agency, with the approval of the President, may include in the definition of basic
necessities or prime commodities types and brands of the goods or may exclude from the
coverage of this Act, types or brands of the goods included in the definition of basic
necessities and prime commodities, which may be deemed as nonessential goods or
luxury goods: Provided, That, any type or brand so excluded may be reinstated by the
implementing agency during occasions of acute shortage in the supply of the basic
necessity or prime commodity to which the excluded type or brand used to belong
IV. Illegal Acts of Price Manipulation

a. Hoarding, which is the undue accumulation by a person or combination of persons of
any basic commodity beyond his or their normal inventory levels or the unreasonable
limitation or refusal to dispose of, sell or distribute the stocks of any basic necessity of
prime commodity to the general public or the unjustified taking out of any basic
necessity or prime commodity from the channels of reproduction, trade, commerce and
industry. There shall be prima facie evidence of hoarding when a person has stocks of
any basic necessity or prime commodity fifty percent (50%) higher than his usual
inventory and unreasonably limits, refuses or fails to sell the same to the general public
at the time of discovery of the excess. The determination of a person’s usual inventory
shall be reckoned from the third month immediately preceding before the discovery of
the stocks in case the person has been engaged in the business for at least three (3)
months; otherwise, it shall be reckoned from the time he started his business.
b. Profiteering, which is the sale or offering for sale of any basic necessity or prime
commodity at a price grossly in excess of its true worth. There shall be prima facie
evidence of profiteering whenever a basic necessity or prime commodity being sold: (a)
has no price tag; (b) is misrepresented as to its weight or measurement; (c) is
adulterated or diluted; or (d) whenever a person raises the price of any basic necessity
or prime commodity he sells or offers for sale to the general public by more than ten
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percent (10%) of its price in the immediately preceding month: Provided, That, in the
case of agricultural crops, fresh fish, fresh marine products, and other seasonal products
covered by this Act and as determined by the implementing agency, the prima facie
provisions shall not apply; and
c. Cartel, which is any combination of or agreement between two (2) or more persons
engaged in the production, manufacture, processing, storage, supply, distribution,
marketing, sale or disposition of any basic necessity or prime commodity designed to
artificially and unreasonably increase or manipulate its price. There shall be prima facie
evidence of engaging in a cartel whenever two (2) or more persons or business
enterprises competing for the same market and dealing in the same basic necessity or
prime commodity, perform uniform or complementary acts among themselves which
tend to bring about artificial and unreasonable increase in the price of any basic
necessity or prime commodity or when they simultaneously and unreasonably increase
prices on their competing products thereby lessening competition among themselves.
V. Automatic Price Control

a. Unless otherwise declared by the President, prices of basic necessities in an area shall
automatically be frozen at their prevailing prices or placed under automatic price control
whenever:
i. That area is proclaimed or declared a disaster area or under a state of calamity;
ii. That area is declared under an emergency;
iii. The privilege of the writ of habeas corpus is suspended in that area;
iv. That area is placed under martial law;
v. That area is declared to be in a state of rebellion; or
vi. A state of war is declared in that area.
b. If the prevailing price of any basic necessity is excessive or unreasonable, the
implementing agency may recommend to the President the imposition of a price ceiling
for the sale of the basic necessity at a price other than its prevailing price.
c. "Unless sooner lifted by the President, price control of basic necessities under this section
shall remain effective for the duration of the condition that brought it about, but not for
more than sixty (60) days: Provided, That, in the case of basic necessities that are wholly
imported and deregulated under existing laws such as, but not limited to, household LPG
and kerosene, price control thereon shall remain effective for a period of not more than
fifteen (15) days, taking into consideration the current inventory or supply levels
thereof."
VI. Mandated Price Ceiling

a. The President, upon the recommendation of the implementing agency, or the Price
Coordinating Council, may impose a price ceiling on any basic necessity or prime
commodity if any of the following conditions so warrants:
i. The impendency, existence, or effects of a calamity;
ii. The threat, existence, or effect of an emergency;
iii. The prevalence or widespread acts of illegal price manipulation:
iv. The impendency, existence, or effect of any event that causes artificial and
unreasonable increase in the price of the basic necessity or prime-commodity;
and
v. Whenever the prevailing price of any basic necessity or prime commodity has
risen to unreasonable levels.
VII. Determination of Price Ceilings

a. In determining the reasonable price ceiling, the following factors may be taken into
consideration:
i. The average price, in the last three (3) months immediately preceding the
proclamation of the price ceiling, of the basic necessity or prime commodity
under consideration;
ii. The supply available in the market;
iii. The cost to the producer, manufacturer, distributor or seller including but not
limited to:
1. The exchange rate of the peso to the foreign currency with which a basic
necessity or prime commodity or any component, ingredient or raw
material thereof was paid for;
Mobile : 0927 283 8234
Telephone : (043) 723 8412
2. 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;
3. Any change in the cost of labor brought about by a change in the
minimum wage; and
4. Any increase in the cost of transporting or distributing the basic
necessity or prime commodity to the area of destination.
iv. Such other factors or conditions which will aid in arriving at a just and
reasonable price ceiling.
VIII. Allocation of a Buffer Fund to the Implementing Agency.

a. The implementing agency may procure, purchase, import, or stockpile any basic
necessity or prime commodity, devise ways and means of distributing them for sale at
reasonable prices in areas where there is shortage of supply or a need to effect changes
in its prevailing price. For any or all of these purposes, a buffer fund shall be allocated in
the annual appropriations of the implementing agencies.
IX. Powers and Responsibilities of Implementing Agencies

a. He shall, with the approval of the President, promulgate rules, regulations, and
procedure for the implementation of this Act;
b. He shall develop, promulgate and implemental programs, projects or measures to
promote productivity in all basic necessities and prime commodities under his agency’s
jurisdiction;
c. He shall promote and facilitate the establishment of an effective procurement, storage,
marketing and distribution system of basic necessities and prime commodities to ensure
their availability in all areas of the country where they are needed;
d. During instances of panic-buying, he may, with the approval of the President, institute
temporary measures to ensure orderly and equitable distribution to consumers of basic
necessities and prime commodities in the affected area;
e. Form time to time, he may issue suggested reasonable retail prices for any or all basic
necessities and prime commodities under his jurisdiction for the information and
guidance of producers, manufacturers, traders, dealers, sellers, retailers, and consumers;
f. He shall cause the immediate dissemination of any mandated price ceiling for any basic
necessity or prime commodity under his agency’s jurisdiction through publication in a
newspaper of general circulation in the area affected, and through broadcast by radio, or
whenever deemed to materially make dissemination of the information more effective, by
television. He may also cause the information to be disseminated through posting in
public markets, supermarkets or other public places;
g. He may, upon approval of the President, and subject to existing laws, rules and
regulations on bidding, enter into any agreement with any local or foreign producer,
manufacturer, supplier, distributor, or seller for the procurement of supplies of stocks of
any basic necessity or prime commodity for purposes of buffer stocking: Provided, That,
in areas where there are shortages or rampant illegal manipulation of prices, he may
order their immediate sale;
h. He may, subject to existing laws, rules and regulations on bidding, enter into any
agreement with owners or operators of warehouses or storage houses or with owners,
operators of franchise holders of vehicles or public utilities for the storage, transport, or
distribution of any basic necessity or prime commodity;
i. He may conduct investigations of any violation of this Act and, after due notice and
hearing, impose administrative fines in such amount as he may deem reasonable which
shall in no case be less than One thousand pesos (P1,0000) nor more than One million
pesos (P1,000,000). In the imposition of administrative fines the following factors shall
be taken into consideration:
i. Whether the subject of the violation is a basic necessity or a prime commodity;
violations involving basic necessities shall be deemed more serious;
ii. Whether the subject of the violation is under price control under Sections 6 and
7 of this Act; violations involving basic necessities and prime commodities under
price control shall be deemed more serious;
iii. The number of violations committed; respondents who had previously been
found to have violated any of the provisions of this Act shall be imposed a higher
fine; and
Mobile : 0927 283 8234
Telephone : (043) 723 8412
iv. Such other considerations as may be deemed necessary to carry out the intents
purposes and provisions of this Act.
j. He may require the attendance and testimony of witnesses or the production of goods,
objects, books, papers, documents, contracts, records, financial statements, accounts,
agreements and such other evidences material in the determination of any violation of
this Act;
k. Without prejudice to the power to issue temporary closure or temporary restraining order
for a period which shall not be more than ten (10) days, he may, after due notice and
hearing issue cease and desist orders; reprimand; censure; suspend, revoke or cancel
any permit, license, authority or registration issued by his office; or order the permanent
closure of any establishment violating the provisions of this Act;
l. He may initiate summary proceedings to cause the seizure by the Government of basic
necessities and prime commodities subject of a violation of this Act and order their sale
to the public at reasonable prices whenever the nature of or the demand for such goods
so requires: Provided, That, pending litigation, the proceeds of the sale shall be held in
trust or escrow by the implementing agency: Provided, further, That, should the owner
of the basic necessity or prime commodity seized and sold be found not liable for the
violation which was the basis of the seizure, the proceeds from their sale shall be paid to
him, otherwise, they shall accrue to the general fund of the Government and: Provided,
finally, That, the head of the implementing agency shall cause the broadcast in radio or
television and the publication in at least two (2) newspapers of general circulation of the
fact of sale or disposition of such seized goods at least three (3) days before the date of
sale or disposition;
m. He may initiate action and cause the prosecution before the proper court of law of
violations of this Act;
n. He may deputize and enlist the assistance of any government official or agency in
carrying out the provisions of this Act; and
o. Such other functions and ancillary powers as may be necessary to effectively implement
this Act.
X. Price Coordinating Council - There is hereby created a Price Coordinating Council,

hereinafter referred to as the Council, to be composed of the following members:
a. The Secretary of Trade and Industry, as chairman;
b. The Secretary of Agriculture;
c. The Secretary of Health;
d. The Secretary of Environment and Natural Resources;
e. The Secretary of Local Government;
f. The Secretary of Transportation and Communications;
g. The Secretary of Justice;
h. The Secretary of Energy;
i. The Director General of the National Economic and Development Authority;
j. One (1) representative from the consumers’ sector;
k. One (1) representative from the agricultural producers’ sector;
l. One (1) representative from the trading sector; and
m. One (1) representative from the manufacturers’ sector.
i. The Council shall meet every quarter and whenever the President or the
Chairman shall convene the same. Each member shall receive reasonable
reimbursements for transportation.
ii. The Council shall meet every quarter and whenever the President or the
Chairman shall convene the same. Each member shall receive reasonable
reimbursements for transportation.
iii. Members from the government sector may designate their representative to the
Council;
iv. The Department of Trade and Industry shall provide the secretariat to the
Council from its existing organizational structure.
XI. Functions of the Price Coordinating Council

a. It shall coordinate the productivity, distribution and price stabilization programs, project
and measures of the Government and develop comprehensive strategies to effect a
general stabilization of prices of basic necessities and prime commodities at affordable
levels;
Mobile : 0927 283 8234
Telephone : (043) 723 8412
b. It shall report to the President and to the Congress of the Philippines the status and
progress of the programs, projects, and measures undertaken by each implementing
department, agency or office as well as the comprehensive strategies developed by the
Council to stabilize the prices of basic necessities and prime commodities;
c. It shall advise the President on general policy matters for promotion and improvement in
productivity, distribution and stabilization of prices of basic necessities and prime
commodities;
d. It may require from its members or any other government agency such information as it
may deem necessary, and conduct public hearings for purposes of assessing the supply,
distribution and price situation of any basic necessity or prime commodity;
e. It shall publicize from time to time developments in productivity, supply, distribution and
prices of basic necessities and prime commodities; and
f. Whenever automatic price control of basic necessities is imposed under Section 6 of this
Act, it shall cause the immediate dissemination of their prevailing prices or the price
ceilings imposed in lieu thereof, as the case may be, through publication in a newspaper
of general circulation in the area affected, and through broadcast by radio and,
whenever the same is deemed to materially make dissemination of the information more
effective, by television. It may also disseminate the information through posting in public
markets, supermarkets and other public places.
XII. The Price Action Officer Powers and Functions - Whenever the President deems it
necessary, he may appoint any of the members of the Price Coordinating Council as Price
Action Officer for the duration of the automatic price control under Section 6 of this Act
who shall have the following powers and functions:
a. He shall carry out, implement and enforce the policies and decisions of the Council;
b. He shall coordinate the actions of all implementing agencies involved in the monitoring
and investigation of abnormal price movements and shortages of basic necessities and
prime commodities;
c. He may call upon any official, agent, employee, agency or instrumentality of the national
or local government for any other assistance that he may deem necessary to carry out
the purposes of this Act;
d. He shall establish linkage and coordinate with nongovernment or private organizations in
the affected are to assist in the monitoring and implementation of price control therein;
and
e. He shall exercise such other functions and duties as may be given to him by the
President.
XIII. Role of the National Statistics Office.

a. The National Statistics Office shall conduct independent periodic surveys and studies of
the selling prices of all basic necessities and prime commodities all over the country as
well as their share or effect on the family income of the different economic groups in the
country for purposes of serving as data base for government efforts to stabilize prices, as
well as evaluating the effectivity of the same.

RFBT 06 03c Special Laws For Consumer Protection

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RFBT 06 03c Special Laws For Consumer Protection

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No. 125 Brgy.

Special Laws for Consumer Protection

Consumer Protection Act of the Philippines

I. Consumer Product Quality and Safety

a. Policies of the State

c. Promulgation and Adoption of Consumer Product Standards. The concerned

d. Publication of Consumer Product Standards

f. Injurious, Dangerous and Unsafe Products

g. Amendment and Revocation of Declaration of the Injurious, Unsafe or

4. to pay the consumer reasonable damages as may be determined by the

h. Effectivity of Amendments and Revocation of Consumer Product Safety Rule

j. Certification of Conformity to Consumer Product Standards

k. Rules on Imported Products

l. Consumer products for export

m. Additional powers, functions and duties of DOH, DA and DTI:

n. Prohibited Acts under Consumer Product Quality and Safety

distributor, supplier or seller, by taking advantage of the consumer's physical or

v. Prohibited Representations in Home Solicitation

III. Consumer Product and Service Warranties

the purchaser needs only to present to the immediate seller

IV. Labeling and Packaging

1. are engaged in the packaging or labeling of such products;

g. Additional Labeling Requirements for Food

h. Instances of Mislabeled Food

render it likely to be read and understood by the ordinary individual under

k. Special Labeling Requirements for Cosmetics

l. Mislabeled Drugs and Devices

5. if it purports to be a drug the name of which is recognized in an official

6. if it has been found by the concerned department to be a drug liable to

c. if it is dangerous to health when used in the dosage, or with the

7. if it is, purports to be or is represented as a drug composed wholly or

ii. Mislabeled Hazardous Substances

8. the word" poison" for any hazardous substance

II. Important Terms

g. Warranty refers to the written assurance, so labeled, of the manufacturer of a brand

III. Coverage of Lemon Law

IV. Causes of Nonconformity which are not covered by Lemon Law

VI. Notice of Availment of Lemon Law Rights

VII. Availment of Lemon Law Rights

VIII. Remedies for Dispute Resolution under Lemon Law

2. In case a finding of nonconformity is arrived at, the DTI shall rule in

In case the consumer decides to purchase another vehicle with a

IX. Determination of Reasonable Allowance for Use

I. Rationale of Maceda Law

II. Transactions covered by Maceda Law

III. Transactions not covered by Maceda Law

IX. Void provisions in Sale of Residential Real Property in Installments

PD 957 (REGULATING THE SALE OF SUBDIVISION LOTS AND CONDOMINIUMS, PROVIDING

g. Advertisements of subdivision or condominium project

o. Access to Public Offices in the Subdivisions

Price Tag Act

I. Price Tag Act

a. Price Tag Requirement

b. Manner of Placing Price Tags

c. Regulations for Price Tag Requirement

II. Purpose of Price Tag Act

III. Definition of Terms

IV. Essential elements for a sale to be considered as retail:

VI. Regulations for Price Tag Placement

IX. Available Course of Action for Consumers

RECTO Law (Article 1484 to 1486 of New Civil Code)

I. Rationale of Recto Law

already paid, in addition, furthermore, to other damages, such as attorney’s