UNIVERSITY OF PERPETUAL HELP SYSYEM DALTA LAS PIÑAS CAMPUS

College of Business Administration and Accountancy

Price Act

Group 12: SUMMARY OF REPORT

Submitted by:

Group Leader: Dapadap, Maria Kristine:

Mercado, Nicole Ashley

Oquino, Sofia Faith

Porcel, Charles Julian

Izumi, Tanaka

2ndyr. BSBA MM

Submitted to:

Ms. Avegaile C. Padilla, MBA

Professor

11-07-22
 UNIVERSITY OF PERPETUAL HELP SYSYEM DALTA LAS PIÑAS CAMPUS
College of Business Administration and Accountancy

LEARNING OBJECTIVES

At the end of the lesson, the students should have learned to:

•Define Price Act 7851

◦Recognize How Price 7581 protect both consumers and businesses?

◦Enumarate and Explain what is the role of government in regulating prices?

Table of Contents

PRICE ACT

Summary

What is the price act?

Republic Act No. 7581, otherwise known as the Price Act as amended, declared as one
of its basic policies that the State shall ensure the availability of basic necessities and
prime commodities at reasonable prices at all times without denying legitimate
businesses a fair return on investment.

Declaration of Basic PolicyIt 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.

How can Republic Act 7581 protect both consumers and businesses?

What is Basic necessities and Prime commodities ?

Basic Necessities Rrice, corn, bread, fresh, dried and canned fish and other marine
products, fresh pork, beef and poultry meat, fresh eggs, fresh and processed milk, fresh
vegetables, root crops, coffee, sugar, cooking oil, salt, laundry soap, detergents, firewood,
charcoal, candles and drugs classified as essential by the Department of Health (DOH).
 UNIVERSITY OF PERPETUAL HELP SYSYEM DALTA LAS PIÑAS CAMPUS
College of Business Administration and Accountancy

Prime Commodities Flour, dried, processed and canned pork, beef and poultry
meat, dairy products not falling under basic necessities, noodles, onions, garlic, vinegar,
patis, soy sauce, toilet soap, fertilizer, pesticides, herbicides, poultry, swine and cattle
feeds, veterinary products for poultry, swine and cattle, paper, school supplies, nipa
shingles, sawali, cement, clinker, GI sheets, hollow blocks, plywood, plyboard,
construction nails, batteries, electrical supplies, light bulbs, steel wires, and all drugs not
classified as essential by the DOH (.Section 3, RA 7581).

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,

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.

Department of Health, with reference to drugs;

Department of Environment and Natural Resources, with reference to wood and other
forest products;

Department of Trade and Industry, with reference to all other basic necessities and
prime commodities.

What is a “buffer fund”?

A buffer fund is 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 of the Price Act.

What is Panic Buying ?

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;

Exclusion from the Coverage of this Act .Upon petition of the concerned parties and
afte public hearing, the implementing agency, with the approval of the President, may
exclude from the coverage of this Act, types or brands of the goods included in the
 UNIVERSITY OF PERPETUAL HELP SYSYEM DALTA LAS PIÑAS CAMPUS
College of Business Administration and Accountancy

definition of basic necessities and prime commodities, which may be deemed as

nonessential goods or luxury goods:

Illegal Acts of Price Manipulation

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.

Hoarding - the act of collecting large amounts of something and keeping it for yourself,
often in a secret place.

Profiteering - the act or activity of making an unreasonable profit on the sale of essential
goods especially during times of emergency.

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;

Cartel - a cartel is an organization created from a formal agreement between a group of

producers of a good or service to regulate supply in order to regulate or manipulate prices.

Price Controls The term "price controls" refers to the legal minimum or maximum prices
set for specified goods.

Price controls are normally mandated by the government in the free market

Price controls are put in place to manage the affordability of goods and services on the
market.

Price controls are opposite to prices set by market forces, which are determined by
producers because of supply and demand.
 UNIVERSITY OF PERPETUAL HELP SYSYEM DALTA LAS PIÑAS CAMPUS
College of Business Administration and Accountancy

Price controls can often lead to disruptions in the market, losses for producers, and
a noticeable change in quality.

History of Price Controls

According to historians, the production and distribution of grain were regulated by

Egyptian authorities in the third century B.C. Other civilizations implemented price
controls, including the Babylonians, the ancient Greeks, and the Roman empire.

In the United States, colonial governments controlled the prices of commodities required
by George Washington's army, which resulted in severe shortages.

The U.S. government also set price caps on energy prices during times of crisis, including
World War I and II and between 1971 and 1973.

Automatic Price Control (APC). Prices of basic necessities are automatically placed
under price control whenever the President declares an area under a state of calamity,
disaster, emergency, rebellion, war, martial law, or when the writ of habeas corpus has
been suspended.

Mandated Price Control (MPC). When there is threat, calamity or emergency or any
event that causes artificial or unreasonable increase in prices, the Price Coordinating
Council (PCC) can recommend the imposition of a mandates price ceiling on any or all of
the products listed as basic necessity or prime commodity.

Price floors are the minimum prices set for goods and services. They may be set by the
government or, in some cases, by producers themselves.

Price ceilings means the maximum price at which any basic necessity or prime commodity
may be sold to the general public.

Advantages

Price controls are often imposed when governments feel that consumers can't afford
goods and services.
 UNIVERSITY OF PERPETUAL HELP SYSYEM DALTA LAS PIÑAS CAMPUS
College of Business Administration and Accountancy

Governments may also set price limits on goods and services if they feel that
producers aren't benefiting from how goods and services are priced in the free market.

Controlling how prices are set keeps companies from developing monopolies. Companies
are at an advantage and can dictate prices when demand is high (and supply is short)

Protects consumers by eliminating price gouging

Helps producers remain competitive and profitable

Disadvantage

Price controls may be enacted with the best of intentions, but they often don't work

Critics say that, as a result, price controls often lead to an imbalance between supply and
demand.

Price controls can lead to losses and a significant drop in quality.

Can lead to shortages and illegal markets

May create excess demand or excess supply

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 UNIVERSITY OF PERPETUAL HELP SYSYEM DALTA LAS PIÑAS CAMPUS
College of Business Administration and Accountancy

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 UNIVERSITY OF PERPETUAL HELP SYSYEM DALTA LAS PIÑAS CAMPUS
College of Business Administration and Accountancy

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