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A collection of Philippine laws, statutes and codes
not included or cited in the main indices
of the Chan Robles Virtual Law Library.
 
This page features the full text of
    Republic Act No. 7394.
 
 
REPUBLIC ACT NO. 7394
THE CONSUMER ACT OF THE PHILIPPINES
   
TITLE I
GENERAL PROVISIONS

Article 1. Short Title. - This Act shall be known as the "Consumer Act of the Philippines."
 
Art. 2. Declaration of Basic Policy. - It is the policy of the State to protect the interests of the consumer, promote his general welfare and to establish standards of conduct for business and industry. Towards this end, the State shall implement measures to achieve the following objectives:

Art. 3. Construction. - The best interest of the consumer shall be considered in the interpretation and implementation of the provisions of this Act, including its implementing rules and regulations.
 
Art. 4. Definition of Terms. - For purposes of this Act, the term:
CHAPTER 1
CONSUMER PRODUCT QUALITY AND SAFETY
 
Art. 5. Declaration of Policy. - It shall be the duty of the State:
 
Art. 6. Implementing Agencies. - The provisions of this Article and its implementing rules and regulations shall be enforced by:
Art. 7. Promulgation and Adoption of Consumer Product Standards. - The concerned department shall establish consumer product quality and safety standards which shall consist of one or more of the following:
For this purpose, the concerned department shall adopt existing government domestic product quality and safety standards: Provided, That in the absence of such standards, the concerned department shall form specialized technical committees composed of equal number of representatives from each of the Government, business and consumer sectors to formulate, develop and purpose consumer product quality and safety standards. The said technical committees shall consult with the private sector, which may, motu proprio, develop its own quality and safety standards that shall be subject or agencies after public hearings have been conducted for that purpose; and shall likewise consider existing international standards recognized by the Philippine Government.
 
Art. 8. Publication of Consumer Product Standards. - 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.
 
Art. 9. Effectivity of Rules. - (a) 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.
 
(b) 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.
 
Art. 10. Injurious, Dangerous and Unsafe Products. - Whenever the departments find, by their own initiative or by petition of a consumer, that a consumer product is found to be injurious, unsafe or dangerous, it shall, after due notice and hearing, make the appropriate order for its recall, prohibition or seizure from public sale or distribution: Provided, That, in the sound discretion of the department it may declare a consumer product to be imminently injurious, unsafe or dangerous, and order is immediate recall, ban or seizure from public sale or distribution, in which case, the seller, distributor, manufacturer or producer thereof shall be afforded a hearing within forty-eight (48) hours from such order.
 
The ban on the sale and distribution of a consumer product adjudged injurious, unsafe or dangerous, or imminently injurious, unsafe or dangerous under the preceding paragraph shall stay in force until such time that its safety can be assured or measures to ensure its safety have been established.
 
Art. 11. Amendment and Revocation of Declaration of the Injurious, Unsafe or Dangerous Character of a Consumer Product. - Any interested person may petition the appropriate department to commence a proceeding for the issuance of an amendment or revocation of a consumer product safety rule or an order declaring a consumer product injurious, dangerous and unsafe.
 
In case the department, upon petition by an interested party or its own initiative and after due notice and hearing, determines a consumer product to be substandard or materially defective, it shall so notify the manufacturer, distributor or seller thereof of such finding and order such manufacturer, distributor or seller to:
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:
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.
 
Art. 12. Effectivity of Amendments and Revocation of Consumer Product Safety Rule. - 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. chanrobles law
 
Art. 13. New Products. - 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.
 
Art. 14. Certification of Conformity to Consumer Product Standards. - The concerned department shall aim at having consumer product standards established for every consumer product so that consumer products shall be distributed in commerce only after inspection and certification of its quality and safety standards by the department. The manufacturer shall avail of the Philippine Standard Certification Mark which the department shall grant after determining the product's compliance with the relevant standard in accordance with the implementing rules and regulations.
 
Art. 15. Imported Products. - (a) Any consumer product offered for importation into the customs of the Philippine territory shall be refused admission if such product:
(b) 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.
 
(c) 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.
 
(d) 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.
 
(e) 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.
 
(f) 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.
 
Art. 16. Consumer Products for Export. - The preceding article on safety not apply to any consumer product if:
Art. 17. Powers, functions and duties. - In addition to their powers, functions and duties under existing laws, the concerned department shall have the following powers, functions and duties:
PROHIBITED ACTS AND PENALTIES
 
Art. 18. Prohibited Acts. - It shall be unlawful for any person to:
Art. 19. Penalties. - (a) Any person who shall violate any provision of Article 18 shall upon conviction, be subject to a fine of not less than One thousand pesos (P1,000.00) but not more than Ten thousand pesos (P10,000.00) or imprisonment of not less than two (2) months but not more than one (1) year, or both upon the discretion of the court.
 
If the offender is an alien, he shall be deported after service of sentence and payment of fine without further deportation proceedings.
 
(b) In case the offender is a naturalized citizen, he shall, in addition to the penalty prescribed herein, suffer the penalty of cancellation of his naturalization certificate and its registration in the civil register and immediate deportation after service of sentence and payment of fine.
 
(c) Any director, officer or agent of a corporation who shall authorize, order or perform any of the acts or practices constituting in whole or in part a violation of Article 18, and who has knowledge or notice of noncompliance received by the corporation from the concerned department, shall be subject to penalties to which that corporation may be subject.
 
In case the violation is committed by, or in the interest of a foreign juridical person duly licensed to engage in business in the Philippines, such license to engage in business in the Philippines shall immediately be revoked.
 
CHAPTER II
FOOD, DRUGS, COSMETICS AND DEVICES
 
Art. 20. Declaration of Policy. - The State shall ensure safe and good quality of food, drugs, cosmetics and devices, and regulate their production, sale, distribution and advertisement to protect the health of the consumer.
 
Art. 21. Implementing Agency. - In the implementation of the foregoing policy, the State, through the Department of Health, hereby referred as the Department, shall, in accordance with the provisions of this Act:
Art. 22. Rules and Regulations on Definitions and Standards. - Whenever in the judgment of the Department, such action will promote honesty and fair dealing in the interest of consumers, it shall promulgate rules and regulations fixing and establishing a reasonable definition and standard of identity, a reasonable standard of quality and/or reasonable standard of fill of containers for food, drugs, cosmetics or devices.
 
Art. 23. Adulterated Food. - A food shall be deemed to be adulterated:
 
(a) (1) if it bears or contains any poisonous or deleterious substance which may render it injurious to health; but in case the substance is not an added substance, such food shall not be considered adulterated under this clause if the quantity of such substance does not ordinarily render it injurious to health;
 
(2) if it bears or contains any added poisonous or deleterious substance other than one which is (i) a pesticide chemical in or on a raw agricultural commodity, (ii) a food additive, (iii) a color additive, for which tolerances have been established and it conforms to such tolerances;
 
(3) if it consists in whole or in part of any filthy, putrid or decomposed substance, or if it is otherwise unfit for food;
 
(4) if it has been prepared, packed or held under unsanitary conditions whereby it may have become contaminated with filth, or whereby, it may have been rendered injurious to health;
 
(5) if it is, in whole or part, the product of a diseased animal or of an animal which has died other than by slaughter;
 
(6) if its container is composed, in whole or in part, of any poisonous or deleterious substance which may render the contents injurious to health; or
 
(7) if it has passed its expiry date.
 
(b) (1) If any valuable constituent has been, in whole or in part, omitted or abstracted therefrom and the same has not been substituted, by any healthful equivalent of such constituent;
 
(2) if any substance, not a valuable constituent, has been added or substituted or in part therefor;
 
(3) if damage or inferiority has been concealed in any manner; or
 
(4) if any substance has been added thereto or packed therewith so as to increase its bulk or weight, reduce its quality or strength, or make it appear better or of greater value than it is.
 
(c) if it is, or bears or contains a color additive which is unsafe under existing regulations: Provided, That the Department shall promulgate regulations providing for the listing of color additives which are harmless and suitable for use in food for which tolerances have been established;
 
(d) if it is confectionary, and it bears or contains any alcohol or non-nutritive article or substance except harmless coloring, harmless flavoring, harmless resinous glass not in excess of four-tenths (4/10) of one per centum (1%) natural gum and pectin: Provided, That this clause shall not apply to a safe non-nutritive article or substance if, in the judgment of the Department as provided by regulations, (1) such article or substance is of practical functional value in the manufacture, packaging or storage of such confectionery, (2) if the use of the substance does not promote deception of the consumer or otherwise results in adulteration or mislabeling in violation of any provision of this Act, and (3) would not render the product injurious or hazardous to health: Provided, further, That this paragraph shall not apply to any confectionery by reason of its containing less than one-half (1/2) of one per centum (1%) by volume of alcohol, derived solely from the use of flavoring extracts, or to any chewing gum by reason of its containing harmless non-nutritive masticatory substance: Provided, finally, That the Department may, for the purpose of avoiding or resolving uncertainty as to the application of this clause, promulgate regulations allowing or prohibiting the use of particular non-nutritive substances;
 
(e) if it is oleomargarine, margarine or butter and any of the raw materials used therein consists in whole or in part of any filthy, putrid or decomposed substance, or such oleomargarine, margarine or butter is otherwise unfit for food;
 
(f) if it has not been prepared in accordance with current acceptable manufacturing practice established by the Department through regulations.
 
Art. 24. Regulation of Unprocessed Food. - The provincial, municipal and city governments shall regulate the preparation and sale of meat, fresh fruits, poultry, milk, fish, vegetables and other foodstuff for public consumption, pursuant to the Local Government Code.
 
Art. 25. Tolerance for Poisonous Ingredients in Food. - Any poisonous or deleterious substance added to any food shall be deemed to be unsafe, except when such substance is required or can not be avoided in its production or can not be avoided by good manufacturing practice. In such case, the Department shall promulgate regulations limiting the quantity therein in such extent as he finds necessary for the protection of public health, and any quantity exceeding the limits so fixed shall be deemed to be unsafe. In determining the quantity of such added substance to be tolerated in different articles of food, the Department shall take into account the extent to which the use of such article is required or can not be avoided in the production or manufacture of such articles and the other ways in which the consumer may be affected by the same or other poisonous or deleterious substance.
 
Art. 26. Unsafe Food Additives, Exceptions for Conformity with Regulation. - A food additive, with respect to any particular use or intended use, shall be deemed unsafe unless: chanrobles law
 
(a) it and its use or intended use conforms to the terms of an exemption for being solely intended for investigational use by qualified experts; or
 
(b) it and its use or intended use is in conformity with a regulation issued by the Department prescribing the conditions under which such additives may be safely used.
 
Art. 27. Petition for Regulation of Food Additive. - Any person may, with respect to any intended use of a food additive, file with the Department a petition proposing the issuance of a regulation prescribing the conditions under which such additives may be safely used.
 
The Department shall (1) establish a regulation prescribing, with respect to one or more proposed uses of the food additive involved, (i) the conditions under which a food additive may be safely used including, but not limited to, specifications as to the particular food, classes of food, in which such additive may be used, (ii) the maximum quantity which may be used, or permitted to remain in or on such food; (iii) the manner in which such additive may be added to or used in or on such food, and (iv) any directions or other labeling or packaging requirement for such additive deemed necessary to assure the safety of such use, and shall notify the petitioner of such order and the reasons for such action; or (2) deny the petition and notify the petitioner of and the reasons for such action.
 
The Department may, at any time upon his own initiative, issue a regulation prescribing, with respect to any particular food additive, the conditions under which such additive may be safely used and the reasons thereof, and cause the publication of the same.
 
Art. 28. Effectivity of Regulations. - The regulations promulgated under the preceding articles shall take effect fifteen (15) days after its publication in a newspaper of general circulation but the Department may stay such effectivity if, after issuance of such order, a hearing is sought by any person adversely affected by such order.
 
DRUGS AND DEVICES
 
Art. 29. Adulterated Drugs and Devices. - A drug or device shall be deemed to be adulterated:
 
(a) (1) if it contains in whole or in part of any filthy, putrid, or decomposed substance which may affect its safety, efficacy or good quality; or (2) if it has been manufactured, prepared or held under unsanitary conditions whereby it may have been contaminated with dirt or filth or whereby it may have been rendered injurious to health; or (3) if its container is composed, in whole or in part, of any poisonous or deleterious substance which may render the contents injurious to health; or (4) if it bears or contains any color other than a permissible one as determined by the Department, taking into consideration standards of safety, efficacy or good quality.
 
(b)  If it purports to be or is represented as a drug, the name of which is recognized in an official compendium, and its strength differs from, or its safety, efficacy, quality or purity falls below the standards set forth in such compendium, except that whenever tests or methods of assay as prescribed are, in the judgment of the Department, insufficient for the making of such determination, the Department shall promulgate regulations prescribing appropriate tests or methods of safety, efficacy, quality or purity shall be made. No drug defined in an official compendium shall be deemed to be adulterated under this paragraph because it differs from the standards of strength, safety, efficacy, quality or purity therefor set forth in such compendium, if its difference in strength, safety, efficacy, quality or purity from such standards is plainly stated in its label and approved for registration as such.
 
(c) If it is not subject to the provisions of paragraph (b) and its strength differs from, or its efficacy, quality or purity falls below, that which it purports or is represented to possess.
 
(d) If a drug or device and any substance has been mixed or packed therewith, or any substance has been substituted wholly or in part thereof, so as to reduce its safety, efficacy, quality, strength or purity.
 
(e) If the methods used in, or the facilities or controls used for its manufacture or holding do not conform to or are not operated or administered in conformity with current good manufacturing practice to assure that such drug meets the requirements of this Act as to safety, quality and efficacy, and has the identity and strength, and meets the quality and purity characteristics which it purports or is represented to possess.
 
Art. 30. Exemption in Case of Drugs and Devices. - (a) The Department is hereby directed to promulgate regulations exempting from any labeling or packaging requirement of this Act drugs and devices which are, in accordance with the practice of the trade, to be processed, labeled or repacked in substantial quantities at establishments other than those where originally processes or packed, on conditions that such drugs and devices are not adulterated or mislabeled under the provisions of this Act upon removal from such processing, labeling or repacking establishment.
 
(b) (1) Drugs intended for use by man which:
shall be dispensed only (a) upon written prescription of a practitioner licensed by law to administer such drug, or (b) upon an oral prescription of such practitioner which is reduced promptly to writing and filed by the pharmacist, or (c) by refilling any such written or oral prescription if such refilling is authorized by the prescriber either in the original prescription or by oral order which is reduced promptly to writing and filed by the pharmacist. The act of dispensing a drug contrary to the provisions of this paragraph shall be deemed to be an act which results in the drug being mislabeled while held for sale.
 
(2) Any drug dispensed by filling or refilling a written prescription of a practitioner licensed by law to administer such drug shall be exempt from the requirements of Article 89, except paragraphs (a), (h), (2) and (3), and the packaging requirements of paragraphs (f) and (g), if the drug bears a label containing the name and address of the dispenser, the serial number and the date of the prescription or its filling, the name of the prescriber and, if stated in the prescription the name of the patient and the directions for use and cautionary statements, if any, container in such prescription. chanrobles law
 
(3) The Department may, by regulation, remove drugs subject to Article 89 (d) and Article 31 from the requirements of sub-article (b) (1) of this Article, when such requirements are not necessary for the protection of the public health.
 
(4) A drug which is subject to sub-article (b) (1) of this Article shall be deemed to be mislabeled if any time prior to dispensing, its label fails to bear the statement "Caution: Should not be dispensed without prescription." A drug to which sub-article (b) (1) of this Article does not apply shall de deemed to be mislabeled it at any time prior to dispensing, its label bears the caution statement quoted in the preceding sentence.
 
Art. 31. Licensing and Registration. - (a) No person shall manufacture, sell, offer for sale, import, export, distribute or transfer any drug or device, unless an application filed pursuant to sub-article (b) hereof is effective with respect to such drug or device.
 
(b) Any person may file with the Department, through the Department, an application under oath with respect to any drug or device subject to the provisions of sub-article (a) hereof. Such persons shall submit to the Department: (1) full reports of investigations which have been made to show whether or not such drug or device is safe, efficacious and of good quality for use based on clinical studies conducted in the Philippines; (2) a full list of the articles used as components of such drug or device; (3) a full statement of the composition of such drug or device; (4) a full description of the methods used in and the facilities and controls used for the manufacture of such drug or device; (5) such samples of such drug or device and of the articles used as components thereof as the Department may require; (6) specimens of the labeling proposed to be used for such drug or device; and (7) such other requirements as may be prescribed by regulations to ensure safety, efficacy and good quality of such drug and device.
 
(c) Within one hundred eighty (180) days after the filing of an application under this sub-article, or such additional period as may be agreed upon by the Department and the applicant, the Department shall either (1) approve the application if he then finds that none of the grounds for denying approval specified in sub-article (d) applies, or (2) give the applicant notice of an opportunity for a hearing before the Department under sub-article (d) on the question whether such application is approvable.
 
(d) If the Department finds, after due notice to the applicant and giving him an opportunity for a hearing, that (1) the reports of the investigations which are required to be submitted to the Department pursuant to sub-article (b) hereof, do not include adequate tests by all methods reasonably applicable to show whether or not such drug or device is safe, efficacious and of good quality for use under the conditions prescribed, recommended or suggested in the proposed labeling thereof; (2) the results of such test show that drug or device is unsafe, inefficacious or of doubtful therapeutic value for use under such conditions or do not show that such drug or device is safe, methods used in, and the facilities and controls used for the manufacture of such drug or device are inadequate to preserve its identity, strength, quality and purity; or (4) upon the basis of the information submitted to him as part of the application, or upon the basis of any other information before him with respect to such drug or device, he has insufficient information to determine whether such drug or device is safe, efficacious or of good equality for use under such conditions; or (5) evaluated on the basis of the information submitted to him as part of the application, and any other information before him with respect to such drug or device, there is a lack of substantial evidence that the drug or device will have the effect it purports or is represented to have under the conditions of use prescribed, recommended or suggested in the proposed labeling thereof; or (6) based on a fair evaluation of all material facts, such labeling is false or misleading in any way; he shall issue an order disapproving the application.
 
(e) The effectiveness of an application with respect to any drug or device shall, after due notice and opportunity for hearing to the applicant, by order of the Department be suspended if it finds (1) that clinical experience, tests by new methods, or tests by methods not deemed reasonably applicable when such application became effective show that such drug or device is unsafe or ineffective for use under the conditions of use upon the basis of which the application became effective, or (2) that the application contains any untrue statement of a material fact. The order shall state the findings upon which it is based.
 
(f) The Department shall promulgate regulations for exempting from the operation of this Article drugs and devices intended solely for investigational used by experts qualified by scientific training and experience to investigate the safety and effectiveness of drugs and devices.
 
(g) No person shall manufacture, sell, offer for sale, import, export, distribute or transfer any drug or device without first securing a license to operate from the Department after due compliance with technical requirements in accordance with the rules and regulations promulgated by the Department pursuant to this Act.
 
(h) No drug or device shall be manufactured, sold, offered for sale, imported, exported, distributed or transferred, unless registered by the manufacturer, imported or distributor thereof, in accordance with rules and regulations promulgated by the Department pursuant to this Act. The provisions of Article 31 (b), (d) and (e), to the extent applicable, shall govern the registration of such drugs and devices.
 
(i) The Department shall promulgate a schedule of fees for the issuance of the certificate of product registration and license to operate provided for under this Article.
 
Art. 32. Dangerous Drugs. - The importation, distribution, manufacture, production, compounding, prescription, dispensing and sale of, and other lawful acts in connection with, dangerous drugs of such kind and quantity as may be deemed necessary according to the medical and research needs of the country and the determination of the quantity/quantities to be imported, manufactured and held in stock at any given time by an authorized importer, manufacturer or distributor of dangerous drugs shall be under the jurisdiction and authority of the Dangerous Drugs Board as provided for by existing laws and regulations.
 
Art. 33. Banned or Restricted Drugs. - Banned or severely restricted drugs for health and safety reasons in their country of origin shall be banned and confiscated or its uses severely restricted whichever is appropriate, by the Department. The Department shall monitor the presence in the market of such drugs and cause the maintenance and regular publications of an updated consolidated list thereof.
 
CERTIFICATION OF DRUGS
CONTAINING ANTIBIOTICS
 
Art. 34. Certification of Certain Drugs. - (a) The Department shall, by regulations, provide for the certification of batches of drugs composed wholly or partially of any kind of antibiotic. A batch of such drug shall be certified if such drug has such characteristics of identity, strength, quality and purity, as the Department prescribes in such regulations as necessary to insure adequately safety and efficacy of use and good quality, but shall not otherwise be certified. Prior to the effective date of such regulations the Department, in lieu of certification, shall issue a release for any batch which, in his judgment, may be released without risk as to the safety and efficacy of its use. Such release shall prescribe the date of its expiration and other conditions under which it shall cease to be effective as to such batch and as to portions thereof. For purposes of this Article and of Article 89 (j), the term "antibiotic drug" means any drug intended for use by man containing any quantity of any chemical substance which is produced by a micro-organism and which has the capacity to inhibit or destroy micro-organisms in dilute solution (including the chemically synthesized equivalent of any such substance).
 
(b) Whenever in the judgment of the Department, the requirements of this Article and of Article 89 (j) with respect to any drug or class of drugs are not necessary to insure safety and efficacy of use and good quality, the Department shall promulgate regulations exempting such drug or class of drugs from such requirements.
 
(c) The Department shall promulgate regulations exempting from any requirement of this Article and of Article 89 (j), (l) drugs which are to be stored, processed, labeled, or repacked at establishments other than those where manufactured, or condition that such drugs comply with all such requirements upon removal from such establishments; (2) drugs which conform to applicable standards of identity, strength, quality, and purity prescribed by these regulations and are intended for use in manufacturing other drugs; and (3) drugs which are intended for investigational use by experts qualified by scientific training and experience to investigate the safety and efficacy of drugs.
 
COSMETICS
 
Art. 35. Adulterated cosmetics. - A cosmetic shall be deemed to be adulterated:
 
(a) if it bears or contains any poisonous or deleterious substance which may render it injurious to users under the condition of use prescribed in the labeling thereof, or under the condition of use as are customary or usual: Provided, That this provision shall not apply to color additive hair dye, the label of which bears the following legend conspicuously displayed thereon: "Caution: this product contains ingredients which may cause skin irritation on certain individuals and a preliminary test according to accompanying directions should first be made. This product must not be used for dyeing the eyelashes or eyebrows; to do so may cause blindness" and labeling of which bears adequate directions for such preliminary testing. For purposes of this paragraph (e) the term "hair dye" shall not include eyelash dyes or eyebrow dyes.
 
(b) if it consists in whole or in part of any filthy, putrid, or decomposed substance.
 
(c) if it has been prepared, packed or held under unsanitary conditions whereby it may have become contaminated with filth, or whereby it may have been rendered injurious to health.
 
(d) if its container is composed, in whole or in part, of any poisonous or deleterious substance which may render the contents injurious to health.
 
(e) if it is not a hair dye, and it bears or contains color additive other than which is permissible.
 
(f) if any of its substances has been (1) mixed or packed therewith so as to reduce its quality or strength or (2) substituted wholly or in parts therefor.
 
Art. 36. Factory Inspection. - a) For purposes of enforcement of this Article, officers or employees duly designated by the Department, upon presenting appropriate credentials to the owner, operator, or agent in charge, are authorized (1) to enter, at reasonable hours, any factory, warehouse or establishment in which food, drugs, devices or cosmetics are manufactured, processed, packed or held, for introduction into domestic commerce or are held after such introduction, or to enter any vehicle being used to transport or hold such food, drugs, devices, or cosmetics in domestic commerce; and (2) to inspect, in a reasonable manner, such factory, warehouse, or establishment or vehicle and all pertinent equipment, finished and unfinished materials, containers and labeling therein.
 
(b) If the officer or employee making any such inspection of a factory, warehouse or other establishment has obtained any sample in the course of the inspection, upon completion of the inspection and prior to leaving the premises he shall give to the owner, operator, or agent in charge a receipt describing the samples obtained.
 
(c) Whenever in the course of any such inspection of a factory or other establishment where food is manufactured, processed or packed, the officer or employee making the inspection obtains a sample of any such food, and an analysis made of such sample for the purpose of ascertaining whether such food consists in whole or in part of any filthy, putrid or decomposed substance, or is otherwise unfit for food, a copy of the results of such analysis shall be furnished promptly to the owner, operator or agent in charge.
 
Art. 37. Provisional Permits. - Whenever the Department finds, after investigation, that the sale or distribution in commerce of any class of food, cosmetics, drugs or devices, may be injurious to health, and that such injurious nature cannot be adequately determined after such articles have entered into domestic commerce, it shall promulgate regulations providing for the issuance, suspension and revocation of provisional permits, offer for sale or transfer of such classes of food, cosmetics, drugs or devices to manufacturers, processors or packers of the same in such locality to which shall be attached such conditions governing the manufacture, processing or packing of such consumer products for such temporary period of time as may be necessary to protect public health; and after the effective date of such regulations, and during such temporary period, no person shall, offer for sale or transfer any such food, cosmetics, drugs or devices unless such manufacturer, processor or packer holds such permit.
 
Art. 38. Publicity and Publication. - (a) The Department my cause to be disseminated information regarding food, drugs, devices, or cosmetics in situations involving, in the opinion of the Department, imminent danger to health, or gross deception to the consumer. Nothing in this Article shall be construed to prohibit the Department from collecting, reporting, and illustrating the results of its investigations.
 
(b) The Department shall publish a Drug Reference Manual and Drug Bulletin to serve as reference by manufacturers, distributors, physicians, consumers and such other groups as may be deemed necessary. The Department is hereby authorized to sell the Drug Reference Manual at cost.
 
Art. 39. Administrative Sanctions. - In addition to the administrative sanctions provided for under Letter of Instructions No. 1223, the Department is hereby authorized to impose, after notice and hearing, administrative fines of not less than One thousand pesos (P1,000.00) nor more than Five thousand pesos (P5,000.00) for any violation of this Act.
 
PROHIBITED ACTS AND PENALTIES
 
Art. 40. Prohibited Acts. - The following acts and the causing thereof are hereby prohibited:
 
(a) the manufacture, importation, exportation, sale, offering for sale, distribution or transfer of any food, drug, device or cosmetic that is adulterated or mislabeled;
 
(b) the adulteration or misbranding of any food, drug, device or cosmetic;
 
(c) the refusal to permit entry or inspection as authorized by Article 36 to allow samples to be collected;
 
(d) the giving of a guaranty or undertaking referred to in Article 41 (b) hereof which guaranty or undertaking is false, except by a person who relied upon a guaranty or undertaking to the same effect signed by, and containing the name and address of, the person residing in the Philippines from whom he received in good faith the food, drug, device, or cosmetic or the giving of a guaranty or undertaking referred to in Article 41 (b) which guaranty or undertaking is false;
 
(e) forging, counterfeiting, simulating, or falsely representing or without proper authority using any mark, stamp, tag, label, or other identification device authorized or required by regulations promulgated under the provisions of this Act;
 
(f) the using by any person to his own advantage, or revealing, other than to the Department or to the courts when relevant in any judicial proceeding under this Act, any information concerning any method or process which as a trade secret is entitled to protection;
 
(g) the alteration, mutilation, destruction, obliteration, or removal of the whole or any part of the labeling of, or the doing of any other act with respect to a food, drug, device, or cosmetic, if such act is done while such product is held for sale (whether or not the first sale) and results in such product being adulterated or mislabeled;
 
(h) the use, on the labeling of any drug or in any advertising relating to such drug, of any representation or suggestion that an application with respect to such drug is effective under Article 31 hereof, or that such drug complies with the provisions of such articles; chanrobles law
 
(i) the use, in labeling, advertising or other sales promotion, of any reference to any report or analysis furnished in compliance with Section 19 of Executive Order 175, Series of 1987;
 
(j) the manufacture, importation, exportation, sale, offering for sale, distribution, or transfer of any drug or device which is not registered with the Department pursuant to this Act;
 
(k) the manufacture, importation, exportation, sale, offering for sale, distribution, or transfer of any drug or device by any person without the license from the Department required in this Act;
 
(l) the sale or offering for sale of any drug or device beyond its expiration or expiry date;   cd
m) the release for sale or distribution of a batch of drugs without batch certification when required under Article 34 hereof.
 
Art. 41. Penalties. - (a) Any person who violates any of the provisions of Article 40 hereof shall, upon conviction, be subject to imprisonment of not less than one (1) year but not more than five (5) years, or a fine of not less than Five thousand pesos (P5,000.00) but not more than Ten thousand pesos (P10,000.00), or both such imprisonment and fine, in the discretion of the Court.
 
Should the offense be committed by a juridical person, the Chairman of the Board of Directors, the President, General Manager, or the partners and/or the persons directly responsible therefor shall be penalized.
 
(b) No person shall be subject to the penalties of sub-article (a) of this Article for (1) having sold, offered for sale or transferred any product and delivered it, if such delivery was made in good faith, unless he refuses to furnish on request of the Department, the name and address of the person from whom he purchased or received such product and copies of all documents, if any there be, pertaining to the delivery of the product to him; (2) having violated Article 40 (a) if he established a guaranty or undertaking signed by, and containing the name and address of, the person residing in the Philippines from whom he received in good faith the product, or (3) having violated Article 40 (a), where the violation exists because the product is adulterated by reason of containing a color other than the permissible one under regulations promulgated by the Department in this Act, if such person establishes a guaranty or undertaking signed by, and containing the name and address, of the manufacturer of the color, to the effect that such color is permissible, under applicable regulations promulgated by the Department in this Act.
 
CHAPTER III
HAZARDOUS SUBSTANCE
 
Art. 42. Declaration of Policy. - The State shall adopt measures designed to protect the consumer against substances other than food, drugs, cosmetics and devices that are hazardous to his health and safety.
 
Art. 43. Implementing Agency. - The Department of Health, hereby referred to as the Department, shall enforce the provisions of this Chapter.
 
Art. 44. Regulations Declaring Hazardous Substances and Establishing Variations and Exemptions. - The Department shall promulgate the rules and regulations governing the implementation of this Article.
 
To resolve uncertainty as to the coverage of this Article, the Department may, by regulations, declare as hazardous any substance of mixture of substances which he finds meets the requirements of paragraph (ak), clause (1) (i) of Article 4.
 
If the Department finds that for good and sufficient reasons, full compliance with the labeling requirements otherwise applicable under this Chapter is impracticable or is not necessary for the adequate protection of public health and safety, it shall promulgate regulations exempting such substances from these requirements to the extent he deems consistent with the objective of adequately safeguarding public health and safety, and any hazardous substance which does not bear a label in accordance with such regulations shall be deemed to be a mislabeled hazardous substance.
 
Art. 45. Imports: Regulations on Imported Hazardous Substances. - (a) The Commissioner of Customs shall deliver to the Department, upon its request, samples of hazardous substances being imported or offered for import to the Philippines, giving notice thereof to the owner or consignee who may appear before the Department and exercise the right to make testimony. If it appears from the examination of such samples that such hazardous substance is a mislabeled hazardous substance or banned hazardous substance, then such hazardous substance shall be refused admission except as may be provided in an order issued by the Department authorizing delivery of the refused products or substance under the requirements imposed therein. The Commissioner of Customs shall cause the destruction of any hazardous substance refused admission unless such is exported, under regulations issued by the Commissioner within ninety (90) days from the date of notice of such refusal or within such additional time as may be fixed by him.
 
(b) Pending decision on the admissibility of a hazardous substance being imported or offered for import, the Commissioner of Customs may authorize delivery of such hazardous substance to the owner or consignee upon execution by him of a good and sufficient bond providing for the payment of such liquidated damages in the event of default. If it appears to the Department that the hazardous substance can by relabeling or other action made to comply with the requirements of this Article final determination as to the admission of such hazardous substance may be deferred and upon filing of a timely written application by the owner or consignee and the execution by him of a bond as provided in the provision of this paragraph. The Department may, in accordance with regulations, authorize the applicant to perform such relabeling or other action specified in such authorization, including destruction or export of such rejected hazarous substance. All such relabeling or other action pursuant to such authorization shall be in accordance with regulations and shall be under the supervision of an officer or employee of the Commission of Customs and the Department.
 
PROHIBITED ACTS AND PENALTIES
 
Art. 46. Prohibited Acts. - It shall be unlawful for any person to:
 
(a) introduce or deliver for introduction into commerce of any mislabeled hazardous substance or banned hazardous substance;
 
(b) alter, mutilate, destroy, obliterate or remove the whole or any part of the label of a mislabeled hazardous substance, or banned hazardous substance, if such act is done while the substance is in commerce or while the substance is held for sale, whether or not it is the first sale;
 
(c) receive in commerce any mislabeled hazardous substance or banned hazardous substance and the delivery or preferred delivery thereof at cost or otherwise;
 
(d) give the guaranty or undertaking referred to in paragraph (b) of Article 93 and paragraph (b) of Article 45 if such guaranty or undertaking if false except by a person who relied upon a guaranty or undertaking which he received in good faith;
 
(e) introduce or deliver for introduction into commerce or receive in commerce and subsequently deliver or preferred at cost or otherwise, or a hazardous substance in a refused food, drug, cosmetic or device container or in a container which, though not a reused container, is identifiable as a food, drug, cosmetic or device container by its labeling or by other identification. The use of a used food, drug, cosmetic or device container for a hazardous substance does not diminish the danger posed by the hazardous substance involved, therefore, such substance shall be deemed a mislabeled hazardous substance.
 
Art. 47. Penalties; exception. - (a) Any person who violates any of the provisions of Article 46 shall, upon conviction, be subject to a fine of not less than One thousand pesos (P1,000.00) or an imprisonment of not less than six (6) months but not more than five (5) years or both upon the discretion of the court.
 
(b) No person shall be subject to the penalties of paragraph (a) of this Article for (1) having violated paragraph (c) of Article 46 unless he refuses to furnish, upon request by the Department or his representative, the name and address of the person from who he purchased such hazardous substances and (2) having violated paragraph (a) of Article 46, if he establishes a guaranty or undertaking signed by, and containing the name and address of, the person from whom he received in good faith, the hazardous substance to the effect that the hazardous substance is not a mislabeled hazardous substance or banned hazardous within the meaning of that term in this Act.
 
TITLE III
PROTECTION AGAINST DECEPTIVE, UNFAIR AND
UNCONSCIONABLE SALES ACTS OR PRACTICES
 
CHAPTER I
DECEPTIVE, UNFAIR AND UNCONSCIONABLE
SALES ACTS OR PRACTICES
 
Art. 48. Declaration of Policy. - 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.
 
Art. 49. Implementing Agency. - The Department of Trade and Industry, hereby referred to as the Department, shall enforce the provisions of this Chapter.
 
REGULATION OF SALES ACTS AND PRACTICES
 
Art. 50. Prohibition Against Deceptive Sales Acts or Practices. - 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.
 
Without limiting the scope of the above paragraph, the act or practice of a seller or supplier is deceptive when it represents that:
 
(a) a consumer product or service has the sponsorship, approval, performance, characteristics, ingredients, accessories, uses, or benefits it does not have;
 
(b) a consumer product or service is of a particular standard, quality, grade, style, or model when in fact it is not;
 
(c) a consumer product is new, original or unused, when in fact, it is in a deteriorated, altered, reconditioned, reclaimed or second-hand state;
 
(d) a consumer product or service is available to the consumer for a reason that is different from the fact;
 
(e) a consumer product or service has been supplied in accordance with the previous representation when in fact it is not;
 
(f) a consumer product or service can be supplied in a quantity greater than the supplier intends;
 
(g) a service, or repair of a consumer product is needed when in fact it is not;
 
(h) a specific price advantage of a consumer product exists when in fact it does not;
 
(i) 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
 
(j) the seller or supplier has a sponsorship, approval, or affiliation he does not have.
 
Art. 51. Deceptive Sales Act or Practices By Regulation. - The Department shall, after due notice and hearing, promulgate regulations declaring as deceptive any sales act, practice or technique which is a misrepresentation of facts other than these enumerated in Article 50.
 
Art. 52. Unfair or Unconscionable Sales Act or Practice. - An unfair or unconscionable sales act or practice by a seller or supplier in connection with a consumer transaction violates this Chapter whether it occurs before, during or after the consumer transaction. An act or practice shall be deemed unfair or unconscionable whenever the producer, manufacturer, distributor, supplier or seller, by taking advantage of the consumer's physical or mental infirmity, ignorance, illiteracy, lack of time or the general conditions of the environment or surroundings, induces the consumer to enter into a sales or lease transaction grossly inimical to the interests of the consumer or grossly one-sided in favor of the producer, manufacturer, distributor, supplier or seller.
In determining whether an act or practice is unfair and unconscionable, the following circumstances shall be considered:
 
(a) 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;
 
(b) that when the consumer transaction was entered into, the price grossly exceeded the price at which similar products or services were readily obtainable in similar transaction by like consumers;
 
(c) that when the consumer transaction was entered into, the consumer was unable to receive a substantial benefit from the subject of the transaction;
 
(d) 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
 
(e) that the transaction that the seller or supplier induced the consumer to enter into was excessively one-sided in favor of the seller or supplier.
 
Art. 53. Chain Distribution Plans or Pyramid Sales Schemes. - Chain distribution plans or pyramid sales schemes shall not be employed in the sale of consumer products.
 
Art. 54. Home Solicitation Sales. - 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.
 
Art. 55. Home Solicitation Sales; When Conducted. - 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.
 
Art. 56. Home Solicitation Sales; by Whom Conducted. - Home solicitation sales shall only be conducted by a person who has the proper identification and authority from his principal to make such solicitations.
 
Art. 57. Receipts for Home Solicitation Sales. - Sales generated from home solicitation sales shall be properly receipted as per existing laws, rules and regulations on sale transactions.
 
Art. 58. Prohibited Representations. - A home solicitation sale shall not represent that:
Art. 59. Referral Sales. - 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.
 
Art. 60. Penalties. - (a) Any person who shall violate the provisions of Title III, Chapter I, shall upon conviction, be subject to a fine of not less than Five Hundred Pesos (P500.00) but not more than Ten Thousand Pesos (P10,000.00) or imprisonment of not less than five (5) months but not more than one (1) year or both, upon the discretion of the court.
 
(b) In addition to the penalty provided for in paragraph (1), the court may grant an injunction restraining the conduct constituting the contravention of the provisions of Articles 50 and 51 and/or actual damages and such other orders as it thinks fit to redress injury to the person caused by such conduct.
 
CHAPTER II
REGULATION OF PRACTICES RELATIVE TO
WEIGHTS AND MEASURES
 
GENERAL PROVISION
 
Art. 61. Implementing Agency. - The provincial, city, or municipal treasurers shall strictly enforce the provisions of this Chapter, and its implementing rules and regulations: Provided, That, with respect to the use of the Metric System, it shall be enforced by the Department of Trade and Industry.
 
Art. 62. Sealing and Testing of Instruments of Weights and Measure. - All instruments for determining weights and measures in all consumer and consumer related transactions shall be tested, calibrated and sealed every six (6) months by the official sealer who shall be the provincial or city or municipal treasurer or his authorized representative upon payment of fees required under existing law: Provided, That all instruments of weights and measures shall continuously be inspected for compliance with the provisions of this Chapter.
 
Art. 63. Use of Metric System. - The system of weights and measures to be used for all products, commodities, materials, utilities, services and commercial transactions, in all contracts, deeds and other official and legal instruments and documents shall be the metric system, in accordance with existing laws and their implementing rules and regulations.
 
The Department of Trade and Industry shall also adopt standard measurement for garments, shoes and other similar consumer products.
 
PROHIBITED ACTS
 
Art. 64. Fraudulent Practices Relative to Weights and Measures. - The following acts relating to weights and measures are prohibited:
 
(a) for any person other than the official sealer or his duly authorized representative to place or attach an official tag, seal, sticker, mark, stamp, brand or other characteristic sign used to indicate that such instrument of weight and measure has officially been tested, calibrated, sealed or inspected;
 
(b) for any person to imitate any seal, sticker, mark, stamp, brand, tag or other characteristic sign used to indicate that such instrument of weight or measures has been officially tested, calibrated, sealed or inspected;
 
(c) for any person other than the official sealer or his duly authorized representative to alter in any way the certificate or receipt given by the official sealer or his duly authorized representative as an acknowledgment that the instrument for determining weight or measure has been fully tested, calibrated, sealed or inspected;
 
(d) for any person to make or knowingly sell or use any false or counterfeit seal, sticker, brand, stamp, tag, certificate or license or any dye for printing or making the same or any characteristic sign used to indicate that such instrument of weight or measure has been officially tested, calibrated, sealed or inspected;
 
(e) for any person other than the official sealer or his duly authorized representative to alter the written or printed figures, letters or symbols on any official seal, sticker, receipt, stamp, tag, certificate or license used or issued;
 
(f) for any person to use or reuse any restored, altered, expired, damaged stamp, tag certificate or license for the purpose of making it appear that the instrument of weight of measure has been tested, calibrated, sealed or inspected;
 
(g) for any person engaged in the buying and selling of consumer products or of furnishing services the value of which is estimated by weight or measure to possess, use or maintain with intention to use any scale, balance, weight or measure that has not been sealed or if previously sealed, the license therefor has expired and has not been renewed in due time;
 
(h) for any person to fraudulently alter any scale, balance, weight, or measure after it is officially sealed;
 
(i) for any person to knowingly use any false scale, balance, weight or measure, whether sealed or not;
 
(j) for any person to fraudulently give short weight or measure in the making of a scale;
 
(k) for any person, assuming to determine truly the weight or measure of any article bought or sold by weight or measure, to fraudulently misrepresent the weight or measure thereof; or
 
(l) for any person to procure the commission of any such offense abovementioned by another.
 
Instruments officially sealed at some previous time which have remained unaltered and accurate and the seal or tag officially affixed thereto remains intact and in the same position and condition in which it was placed by the official sealer or his duly authorized representative shall, if presented for sealing, be sealed promptly on demand by the official sealer or his authorized representative without penalty except a surcharge fixed by law or regulation.
 
Art. 65. Penalties. - (a) Any person who shall violate the provisions of paragraphs (a) to (f) and paragraph (l) of Article 64 or its implementing rules and regulations shall, upon conviction, be subject to a fine of not less than Two hundred pesos (P200.00) but not more than One thousand pesos (P1,000.00) or by imprisonment of not more than one (1) year or both upon the discretion of the court.
 
(b) Any person who shall violate the provisions of paragraph (g) of Article 64 for the first time shall be subject to a fine of not less than Five hundred pesos (P500.00) or by imprisonment of not less than one (1) month but not more than five (5) years or both, upon the discretion of the court.
 
(c) The owner-possessor or user of instrument of weights and measure enumerated in paragraphs (h) to (k) of Article 64 shall, upon conviction, be subject to a fine of not less than Three hundred pesos (P300.00) or imprisonment not exceeding one (1) year, or both, upon the discretion of the court.
 
CHAPTER III
CONSUMER PRODUCT AND SERVICE WARRANTIES
 
Art. 66. Implementing Agency. - The Department of Trade and Industry, shall strictly enforce the provision of this Chapter and its implementing rules and regulations.
 
Art. 67. Applicable Law on Warranties. - The provisions of the Civil Code on conditions and warranties shall govern all contracts of sale with conditions and warranties.
 
Art. 68. Additional Provisions on Warranties. - In addition to the Civil Code provisions on sale with warranties, the following provisions shall govern the sale of consumer products with warranty:
 
(a) Terms of express warranty. - Any seller or manufacturer who gives an express warranty shall:
(b) 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.
 
(1) 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.
 
(2) 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.
 
(3) 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.
 
(4) Enforcement of warranty or guarantee. - The warranty rights can be enforced by presentment of a claim. To this end, 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.
 
(5) 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.
 
(6) Contrary stipulations: null and void. - All covenants, stipulations or agreements contrary to the provisions of this Article shall be without legal effect.
 
(c)  Designation of warranties. - A written warranty shall clearly and conspicuously designate such warranty as:
(d) Minimum standards for warranties. - For the warrantor of a consumer product to meet the minimum standards for warranty, he shall:
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.
 
(e) 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.
 
(f) Breach of warranties. - (1) In case of breach of express warranty, the consumer may elect to have the goods repaired or its purchase price refunded by the warrantor. In case the repair of the product in whole or in part is elected, the warranty work must be made to conform to the express warranty within thirty (30) days by either the warrantor or his representative. The thirty-day period, however, may be extended by conditions which are beyond the control of the warrantor or his representative. In case the refund of the purchase price is elected, the amount directly attributable to the use of the consumer prior to the discovery of the non-conformity shall be deducted.
 
(2) In case of breach of implied warranty, the consumer may retain in the goods and recover damages, or reject the goods, cancel and contract and recover from the seller so much of the purchase price as has been paid, including damages.
 
Art. 69. Warranties in Supply of Services. - (a) 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.
 
(b) 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.
 
Art. 70. Professional Services. - 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.
 
Art. 71. Guaranty of Service Firms. - 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.
 
Art. 72. Prohibited Acts. - The following acts are prohibited:
Art. 73. Penalties. - (a) Any person who shall violate the provisions of Article 67 shall be subject to fine of not less than Five hundred pesos (P500.00) but not more than Five thousand pesos (P5,000.00) or an imprisonment of not less than three (3) months but not more than two (2) years or both upon the discretion of the court. A second conviction under this paragraph shall also carry with it the penalty or revocation of his business permit and license.
 
(b) Any person, natural or juridical, committing any of the illegal acts provided for in Chapter III, except with respect to Article 67, shall be liable for a fine of not less than One thousand pesos (P1,000.00) but not more than Fifty thousand pesos (P50,000.00) or imprisonment for a period of at least one (1) year but not more than five (5) years, or both, at the discretion of the court.
The imposition of any of the penalties herein provided is without prejudice to any liability incurred under the warranty or guarantee.
 
CHAPTER IV
LABELING AND FAIR PACKAGING
 
Art. 74. Declaration of Policy. - The State shall enforce compulsory labeling, and fair packaging to enable the consumer to obtain accurate information as to the nature, quality and quantity of the contents of consumer products and to facilitate his comparison of the value of such products.
 
Art. 75. Implementing Agency. - The Department of Trade and Industry shall enforce the provisions of this Chapter and its implementing rules and regulations: Provided, That with respect to food, drugs, cosmetics, devices and hazardous substances, it shall be enforced by the concerned department.
 
Art. 76. Prohibited Acts on Labeling and Packaging. - It shall be unlawful for any person, either as principal or agent, engaged in the labeling or packaging of any consumer product, to display or distribute or to cause to be displayed or distributed in commerce any consumer product whose package or label does not conform to the provisions of this Chapter.
 
The prohibition in this Chapter shall not apply to persons engaged in the business of wholesale or retail distributors of consumer products except to the extent that such persons:
Art. 77. Minimum Labeling Requirements for Consumer Products. - All consumer products domestically sold whether manufactured locally or imported shall indicate the following in their respective labels of packaging:
The following may be required by the concerned department in accordance with the rules and regulations they will promulgate under authority of this Act:
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.
 
Art. 78. Philippine Product Standard Mark. - The label may contain the Philippine Product Standard Mark if it is certified to have passed the consumer product standard prescribed by the concerned department.
 
Art. 79. Authority of the Concerned Department to Provide for Additional Labeling and Packaging Requirements. - Whenever the concerned department determines that regulations containing requirements other than those prescribed in Article 77 hereof are necessary to prevent the deception of the consumer or to facilitate value comparisons as to any consumer product, it may issue such rules and regulations to:
Art. 80. Special Packaging of Consumer Products for the Protection of Children. - The concerned department may establish standards for the special packaging of any consumer product if it finds that:
Art. 81. Price Tag Requirement. - It shall be unlawful to offer any consumer product for retail sale to the public without an appropriate price tag, label or marking publicly displayed to indicate the price of each article and said products shall not be sold at a price higher than that stated therein and without discrimination to all buyers: Provided, That lumber sold, displayed or offered for sale to the public shall be tagged or labeled by indicating thereon the price and the corresponding official name of the wood: Provided, further, That if consumer products for sale are too small or the nature of which makes it impractical to place a price tag thereon price list placed at the nearest point where the products are displayed indicating the retail price of the same may suffice.
 
Art. 82. Manner of Placing Price Tags. - Price tags, labels or markings must be written clearly, indicating the price of the consumer product per unit in pesos and centavos.
 
Art. 83. Regulations for Price Tag Placement. - The concerned department shall prescribe rules and regulations for the visible placement of price tags for specific consumer products and services. There shall be no erasures or alterations of any sort of price tags, labels or markings.
 
Art. 84. Additional Labeling Requirements for Food. - The following additional labeling requirements shall be imposed by the concerned department for food:
Art. 85. Mislabeled Food. - A food shall also be deemed mislabeled:
(h) if it purports to be or represented as:
i) if it is not subject to the provisions of paragraph (g) of this Article unless its label bears:
(j) if it purports to be or is represented for special dietary uses, unless its label bears such information concerning its vitamin or mineral or other dietary properties as the concerned department determines to be, or by regulations prescribed as necessary in order fully to inform purchasers as its value for such uses;
 
(k) if it bears or contains any artificial flavoring, artificial coloring, or chemical preservative, unless it bears labeling, stating that fact: Provided, That to the extent that compliance with the requirements of this paragraph is impracticable, exemptions shall be established by regulations promulgated by the concerned department. The provisions of this paragraph or paragraphs (g) and (i) with respect to the artificial coloring shall not apply in the case of butter, cheese or ice cream.
 
Art. 86. Labeling of Drugs. - The Generics Act shall apply in the labeling of drugs.
 
Art. 87. Additional Labeling Requirements for Cosmetics. - The following additional requirements may be required for cosmetics:
Art. 88. Special Labeling Requirements for Cosmetics. - A cosmetic shall be deemed mislabeled:
Art. 89. Mislabeled Drugs and Devices. - A drug or device shall be deemed to be mislabeled:
Art. 90. Regulation-making Exemptions. - The concerned department may promulgate regulations exempting from any labeling requirements of this Act food, cosmetics, drugs or devices which are, in accordance with the practice of trade, to be processed, labeled or repacked in substantial quantities at establishments other than those where originally processed, labeled or packed on condition that such food, cosmetics, drugs or devices are not adulterated or mislabeled under the provisions of this Act and other applicable laws upon approval from such processing, labeling and repacking establishments.
 
Art. 91. Mislabeled Hazardous Substances. - Hazardous substances shall be deemed mislabeled when:
Art. 92. Exemptions. - If the concerned department finds that for good or sufficient reasons, full compliance with the labeling requirements otherwise applicable under this Act is impracticable or is not necessary for the adequate protection of public health and safety, it shall promulgate regulations exempting such substances from these requirements to the extent it deems consistent with the objective of adequately safeguarding public health and safety, and any hazardous substance which does not bear a label in accordance with such regulations shall be deemed mislabeled hazardous substance.
 
Art. 93. Grounds for Seizure and Condemnation of Mislabeled Hazardous Substances. - (a) Any mislabeled hazardous substance when introduced into commerce or while held for sale shall be liable to be proceeded against and condemned upon order of the concerned department in accordance with existing procedure for seizure and condemnation of articles in commerce: Provided, That this Article shall not apply to a hazardous substance intended for export to any foreign country if:
(b) any hazardous substance condemned under this Article shall after entry of order of condemnation be disposed of by destruction or sale as the concerned department may direct, and the proceeds thereof, if sold, less the legal cost and charges, shall be paid into the treasury of the Philippines; but such hazardous substance shall not be sold under any order which is contrary to the provisions of this Act: Provided, That, after entry of the order and upon the payment of the costs of such proceedings and the execution of a good and sufficient bond conditioned that such hazardous substance shall not be sold or disposed of contrary to the provisions of this Act, the concerned department may direct that such hazardous substance be delivered to or retained by the owner thereof for destruction or for alteration to comply with the provisions of this Act under the supervision of an officer or employee duly designated by the concerned department. The expenses for such supervision shall be paid by the person obtaining release of the hazardous substance under bond.
c) all expenses in connection with the destruction provided for in paragraphs (a) and (b) of this Article and all expenses in connection with the storage and labor with respect to such hazardous substance shall be paid by the owner or consignee, and default in such payment shall constitute a lien against any importation by such owner or consignee.
 
Art. 94. Labeling Requirements of Cigarettes. - All cigarettes for sale or distribution within the country shall be contained in a package which shall bear the following statement or its equivalent in Filipino: "Warning: Cigarette Smoking is Dangerous to Your Health". Such statement shall be located in conspicuous place on every cigarette package and shall appear in conspicuous and legible type in contrast by typography, layout or color with other printed matter on the package. Any advertisement of cigarette shall contain the name warning as indicated in the label.
 
Art. 95. Penalties. - (a) Any person who shall violate the provisions of Title III, Chapter IV of this Act, or its implementing rules and regulations, except Articles 81 to 83 of the same Chapter, shall be subject to a fine of not less than Five hundred pesos (P500.00) but not more than Twenty thousand pesos (P20,000.00) or imprisonment of not less than three (3) months but not more than two (2) years or both, at the discretion of the court: Provided, That, if the consumer product is one which is not a food, cosmetic, drug, device or hazardous substance, the penalty shall be a fine of not less than Two hundred pesos (P200.00) but not more than Five thousand pesos (P5,000.00) or imprisonment of not less than one (1) month but not more than one (1) year or both, at the discretion of the court.
 
(b) Any person who violates the provisions of Articles 81 to 83 for the first time shall be subject to a fine of not less than Two hundred pesos (P200.00) but not more than Five thousand pesos (P5,000.00) or by imprisonment of not less than one (1) month but not more than six (6) months or both, at the discretion of the court. A second conviction under this paragraph shall also carry with it the penalty of revocation of business permit and license.
 
CHAPTER V
LIABILITY FOR PRODUCT AND SERVICE
 
Art. 96. Implementing Agency. - The Department of Trade and Industry shall enforce the provisions of this Chapter and its implementing rules and regulations.
 
Art. 97. Liability for the Defective Products. - Any Filipino or foreign manufacturer, producer, and any importer, shall be liable for redress, independently of fault, for damages caused to consumers by defects resulting from design, manufacture, construction, assembly and erection, formulas and handling and making up, presentation or packing of their products, as well as for the insufficient or inadequate information on the use and hazards thereof.
 
A product is defective when it does not offer the safety rightfully expected of it, taking relevant circumstances into consideration, including but not limited to:
A product is not considered defective because another better quality product has been placed in the market.
 
The manufacturer, builder, producer or importer shall not be held liable when it evidences:
Art. 98. Liability of Tradesman or Seller. - The tradesman/seller is likewise liable, pursuant to the preceding article when:
Art. 99. Liability for Defective Services. - The service supplier is liable for redress, independently of fault, for damages caused to consumers by defects relating to the rendering of the services, as well as for insufficient or inadequate information on the fruition and hazards thereof.
 
The service is defective when it does not provide the safety the consumer may rightfully expect of it, taking the relevant circumstances into consideration, including but not limited to:
A service is not considered defective because of the use or introduction of new techniques.
The supplier of the services shall not be held liable when it is proven:
Art. 100. Liability for Product and Service Imperfection. - The suppliers of durable or nondurable consumer products are jointly liable for imperfections in quality that render the products unfit or inadequate for consumption for which they are designed or decrease their value, and for those resulting from inconsistency with the information provided on the container, packaging, labels or publicity messages/advertisement, with due regard to the variations resulting from their nature, the consumer being able to demand replacement to the imperfect parts.
 
If the imperfection is not corrected within thirty (30) days, the consumer may alternatively demand at his option:
The parties may agree to reduce or increase the term specified in the immediately preceding paragraph; but such shall not be less than seven (7) nor more than one hundred and eighty (180) days.
 
The consumer may make immediate use of the alternatives under the second paragraph of this Article when by virtue of the extent of the imperfection, the replacement of the imperfect parts may jeopardize the product quality or characteristics, thus decreasing its value.
If the consumer opts for the alternative under sub-paragraph (a) of the second paragraph of this Article, and replacement of the product is not possible, it may be replaced by another of a different kind, mark or model: Provided, That any difference in price may result thereof shall be supplemented or reimbursed by the party which caused the damage, without prejudice to the provisions of the second, third and fourth paragraphs of this Article.
 
Art. 101. Liability for Product Quantity Imperfection. - Suppliers are jointly liable for imperfections in the quantity of the product when, in due regard for variations inherent thereto, their net content is less than that indicated on the container, packaging, labeling or advertisement, the consumer having powers to demand, alternatively, at his own option:
The provisions of the fifth paragraph of Article 99 shall apply to this Article.
 
The immediate supplier shall be liable if the instrument used for weighing or measuring is not gauged in accordance with official standards.
 
Art. 102. Liability for Service Quality Imperfection. - The service supplier is liable for any quality imperfections that render the services improper for consumption or decrease their value, and for those resulting from inconsistency with the information contained in the offer or advertisement, the consumer being entitled to demand alternatively at his option:
Reperformance of services may be entrusted to duly qualified third parties, at the supplier's risk and cost.
 
Improper services are those which prove to be inadequate for purposes reasonably expected of them and those that fail to meet the provisions of this Act regulating service rendering.
 
Art. 103. Repair Service Obligation. - When services are provided for the repair of any product, the supplier shall be considered implicitly bound to use adequate, new, original replacement parts, or those that maintain the manufacturer's technical specifications unless, otherwise authorized, as regards to the latter by the consumer.
 
Art. 104. Ignorance of Quality Imperfection. - The supplier's ignorance of the quality imperfections due to inadequacy of the products and services does not exempt him from any liability.
 
Art. 105. Legal Guarantee of Adequacy. - The legal guarantee of product or service adequacy does not require an express instrument or contractual exoneration of the supplier being forbidden.
 
Art. 106. Prohibition in Contractual Stipulation. - The stipulation in a contract of a clause preventing, exonerating or reducing the obligation to indemnify for damages effected, as provided for in this and in the preceding Articles, is hereby prohibited, if there is more than one person responsible for the cause of the damage, they shall be jointly liable for the redress established in the pertinent provisions of this Act. However, if the damage is caused by a component or part incorporated in the product or service, its manufacturer, builder or importer and the person who incorporated the component or part are jointly liable.
 
Art. 107. Penalties. - Any person who shall violate any provision of this Chapter or its implementing rules and regulations with respect to any consumer product which is not food, cosmetic, or hazardous substance shall upon conviction, be subject to a fine of not less than Five thousand pesos (P5,000.00) and by imprisonment of not more than one (1) year or both upon the discretion of the court.
 
In case of juridical persons, the penalty shall be imposed upon its president, manager or head. If the offender is an alien, he shall, after payment of fine and service of sentence, be deported without further deportation proceedings.
 
CHAPTER VI
ADVERTISING AND SALES PROMOTION
 
Art. 108. Declaration of Policy. - The State shall protect the consumer from misleading advertisements and fraudulent sales promotion practices.
 
Art. 109. Implementing Agency. - The Department of Trade and Industry shall enforce the provisions of this Chapter and its implementing rules and regulations: Provided, That with respect to food, drugs, cosmetics, devices and hazardous substances, it shall be enforced by the Department of Health.
 
FALSE, DECEPTIVE
AND MISLEADING ADVERTISEMENT
 
Art. 110. False, Deceptive or Misleading Advertisement. - It shall be unlawful for any person to disseminate or to cause the dissemination of any false, deceptive or misleading advertisement by Philippine mail or in commerce by print, radio, television, outdoor advertisement or other medium for the purpose of inducing or which is likely to induce directly or indirectly the purchase of consumer products or services.
 
An advertisement shall be false, deceptive or misleading if it is not in conformity with the provisions of this Act or if it is misleading in a material respect. In determining whether any advertisement is false, deceptive or misleading, there shall be taken into account, among other things, not only representations made or any combination thereof, but also the extent to which the advertisement fails to reveal material facts in the light of such representations, or materials with respect to consequences which may result from the use or application of consumer products or services to which the advertisement relates under the conditions prescribed in said advertisement, or under such conditions as are customary or usual.
 
Art. 111. Price Comparisons. - Comparative price advertising by sellers of consumer products or services shall conform to the following conditions:
Art. 112. Special Advertising Requirements for Food, Drug, Cosmetic, Device, or Hazardous Substance. - (a) No claim in the advertisement may be made which is not contained in the label or approved by the concerned department.
 
(b) No person shall advertise any food, drug, cosmetics, device, or hazardous substance in manner that is false, misleading or deceptive or is likely to create an erroneous impression regarding its character, value, quantity, composition, merit, or safety.
 
(c) Where a standard has been prescribed for a food, drug, cosmetic, or device, no person shall advertise any article or substance in such a manner that it is likely to be mistaken for such product, unless the article complies with the prescribed standard or regulation.
 
(d) No person shall, in the advertisement of any food, drug, cosmetic, device, or hazardous substance, make use of any reference to any laboratory report of analysis required to be furnished to the concerned department, unless such laboratory report is duly approved by such department.
 
(e) Any businessman who is doubtful as to whether his advertisement relative to food, drug, cosmetic, device, or hazardous substance will violate or does not conform with this Act or the concerned department's pertinent rules and regulations may apply to the same for consideration and opinion on such matter before such advertisement is disseminated to the public. In this case, the concerned department shall give its opinion and notify the applicant of its action within thirty (30) days from the date of application; otherwise, the application shall be deemed approved.
 
(f) No person shall advertise any food, drug, cosmetic, device, or hazardous substance unless such product is duly registered and approved by the concerned department for use in any advertisement.
 
Art. 113. Credit Advertising. - No advertisement to aid, promote, or assist, directly or indirectly, any extension of consumer credit may:
Art. 114. Advertising of Open-end Credit Plan. - In case of an open-end credit plan, the rate of interest and other material features of the plan shall be disclosed in the advertisement.
 
Art. 115. Special Claims. - Any advertisement which makes special claims shall:
PROMOTION OF SALES OF
CONSUMER PRODUCTS AND SERVICES
 
Art. 116. Permit to Conduct Promotion. - No person shall conduct any sales campaigns, including beauty contest, national in character, sponsored and promoted by manufacturing enterprises without first securing a permit from the concerned department at least thirty (30) calendar days prior to the commencement thereof. Unless an objection or denial is received within fifteen (15) days from filing of the application, the same shall be deemed approved and the promotion campaign or activity may be conducted: Provided, That any sales promotion campaign using medical prescriptions or any part thereof or attachment thereto for raffles or a promise of reward shall not be allowed, nor a permit be issued thereof.
 
Art. 117. Suspension of Publication or Dissemination of Information. - The concerned department may, after due notice and hearing, suspend the publication and dissemination of any information accompanying a sales promotion campaign, if it finds the campaign to be in violation of the provisions of this Chapter or its implementing rules and regulations.
 
Art. 118. Conduct of Sales Promotion. - A sales promotion which is intended for broad consumer participation and utilizes mass media shall indicate the duration, commencement and termination of the promotion, the deadline for submission of entries and the governing criteria or procedure to be followed therein.
 
Art. 119. Packaging of Products Under Promotion. - The packaging of the products covered by the sales promotion shall not be tampered, neither shall any change in the product's package be affected without the authority of the sponsoring agency or the owner or manufacturer of the product.
 
Art. 120. Change in Starting and Termination Dates of Promotion. - The concerned department shall be advised of nay delay of starting dates or termination dates and details of any change in the conduct of a sales promotion. Any change in the termination dates shall be published in a newspaper of general circulation before the expiration of the original schedule or the termination date, whichever comes first.
 
Art. 121. Determination of Winners. - The winners in any sales promotion shall be determined at a definite time and place and shall be verified by a representative of the concerned department and the sponsor. Immediately after the winners are selected or determined, a list with their addresses and corresponding prizes shall be submitted to the concerned department. All winners shall be announced or published in the same manner that the sales promotion was announced or published: Provided, That publication in a newspaper of general circulation shall be done in a legible manner at least once, if the sales promotion is national in scope: Provided, further, That such announcement and publication shall be done not later than two (2) weeks after the determination of winners. In all cases where the amount of the price is Five hundred pesos (P500.00) or more, the winners shall also be notified in writing by registered mail or any communication wherein proof of notice or service can be verified.
 
Art. 122. Injunctive Relief. - (a) Whenever the concerned department has the reason to believe (1) that any person, partnership or corporation is engaged in or is about to engage in the dissemination or the causing of dissemination of any advertisement in violation of Articles 110 to 115, and (2) that the enjoining thereof would be to the interest of the public, the concerned department shall direct the filing of a complaint in the court of competent jurisdiction, to enjoin the dissemination or the causing of the dissemination of such advertisement. Upon proper showing, a temporary injunction or restraining order shall be granted without bond. Any such complaint shall be filed in the locality in which the person, partnership or corporation resides or transacts business.
 
(b) Any person who may suffer loss, damage or injury due to a false, misleading or deceptive advertisement as defined in Article 4 may file a complaint with injunction in his own name with any court of competent jurisdiction to recover damages, cost of suit and reasonable attorney's fees.
 
Art. 123. Penalties. - (a) Any person, association, partnership or corporation who shall violate any of the provisions of Articles 110 to 115 shall, upon conviction, be subject to a fine of not less than Five Hundred Pesos (P500.00) but not more than Five thousand pesos (P5,000.00) or an imprisonment of not less than one (1) month but not more than (6) months or both upon the discretion of the court.
 
(b) Any violation of the provisions of Articles 116 to 121 shall, upon conviction, subject the offenders to a fine of not less than Two hundred pesos (P200.00) but not more than Six hundred pesos (P600.00) or an imprisonment of not less than one (1) month but not more than six (6) months or both upon the discretion of the court. If the violation was committed by a juridical person, the manager, representative, director, agent or employee of said juridical person responsible for the act shall be deported after service of sentence and payment of the fine without need for further deportation proceedings.
 
Art. 124. Exemption from Penalties. - No publisher, radio broadcast, television licensee or medium for the dissemination of advertising shall be liable, under this Chapter, by reason of dissemination by him of any false advertisement unless he refuses, on the request of appropriate authorities, to furnish the name and post office address of the manufacturer, packer, distributor seller or advertising agency. This exemption shall not apply however, to the manufacturer, packer, distributor or seller of the consumer product or service and the advertising agency responsible for the false and misleading advertising.
 
CHAPTER VII
REGULATION OF REPAIR AND SERVICE FIRMS
 
Art. 125. Declaration of Policy. - The State shall cause the accreditation of repair and service firms or establishments and their technical personnel in order to protect the interest of the consumers availing of their services.
 
Art. 126. Implementing Agency. - The Department of Trade and Industry, hereby referred to as the Department, shall enforce the provisions of this Chapter.
 
Art. 127. Minimum Requirements for Accreditation. - The following shall be the minimum requirements for accreditation or repair and service firms:
Art. 128. Accreditation of Repair and Service Firm. - No person shall operate a repair and service firm or act as technical personnel therein without first being accredited by the Department.
 
Art. 129. Certification of Accreditation. - Upon compliance with the requirements for accreditation, the Department shall issue the corresponding certificate of accreditation. A separate certificate shall be required for each branch of an enterprise located in areas outside of the main office. However, with respect to repair and service centers of factory authorized representatives of franchised dealers, such centers may display a certified true copy of the certificate of accreditation of the parent company.
 
Art. 130. Suspension, Revocation or Cancellation of Certification of Accreditation. - Any certificate of accreditation may be suspended, revoked or cancelled by the Department, for cause, after due notice and hearing.
 
TITLE IV
CONSUMER CREDIT TRANSACTION
 
Art. 131. Declaration of Policy. - The State shall simplify, clarify and modernize the laws governing credit transactions and encourage the development of fair and economically sound consumer credit practices. To protect the consumer from lack of awareness of the true cost of credit to the user, the State shall assure the full disclosure of the true cost of credit.
 
Art. 132. Determination of Finance Charges. - Except as otherwise provided, the amount of the finance charges in connection with any consumer credit transaction shall be determined as the sum of all charges, payable directly or indirectly by the person to whom the credit is extended and imposed directly or indirectly by the creditor as an accident to the extension of credit, including any of the following type of charges which are applicable:
Art. 133. Determination of Simple Annual Rate. - The simple annual rate applicable to any extension of consumer credit shall be determined in accordance with the rules and regulations promulgated by the implementing agency.
 
Art. 134. Delinquency Charges. - With respect to a consumer credit transaction other than one pursuant to an open-end credit plan, the parties may agree to a delinquency charge on any installment not paid in full on or before the tenth day after its scheduled or deferred due date.
 
Art. 135. Deferral Charges. - The parties in a consumer credit transaction may at any time agree in writing to a deferral of all or part of one or more unpaid installments and the creditor may make and collect a charge which shall not exceed the rate previously disclosed pursuant to the provisions on disclosure. A deferral charge may be collected at the time it is assessed.
 
Art. 136. Finance Charge on Refinancing. - The parties may agree on a finance charge in an open-end credit plan based on the amount financed resulting from the refinancing or consolidation at a rate not exceeding that permitted by the rules promulgated by the implementing agency.
 
Art. 137. Right to Prepay. - The person to whom credit is extended may prepay in full or in part, at any time without penalty, the unpaid balance of any consumer credit transaction.
 
Art. 138. Rebate on Prepayment. - Upon prepayment in full of the unpaid balance of a precomputed consumer credit transaction, refinancing or consolidation, an amount not less than the unearned portion of the finance charge calculated according to this Article shall be rebated to the person to whom credit is extended.
 
The unearned portion of the precomputed finance charge on consumer transactions repayable in substantially equal successive installments shall be equal to at least that portion of finance charge which the sums of the installment balances of the obligation scheduled to be outstanding after the installment date nearest the date of prepayment bears to the sum of all installment balances originally scheduled to be outstanding under the obligation.
 
For the purpose of determining the installment date nearest the date of prepayment when payments are monthly, any payment made on or before the fifteenth day following an installment due date shall be deemed to have been made as of the installment due date, and if prepayment occurs after the fifteenth day, it shall be deemed to have been made on the succeeding installment due date. This method of calculating rebates may be referred to as the "rule of 78" or "sum of the digits" method.
 
The implementing agency may promulgate and adopt rules and regulations with respect to other precomputed consumer credit transactions.
 
Art. 139. General Requirements on Credit Cost Disclosure. - Each creditor shall disclose, in accordance with the regulations of the implementing agency, to each person to whom consumer credit is extended, the disclosures required by this Act.
If there is more than one obligor, a creditor need not furnish a statement of information required under this Act to more than one of them.
 
Art. 140. Credit Sale, Required Disclosures. - Any creditor extending a consumer credit sale other than one pursuant to an open-end credit plan shall disclose in a statement to the extent applicable, the following information:
Art. 141. Required Disclosure on Open-end Credit Plan. - Before opening any account under an open-end consumer credit plan, the creditor shall disclose, to the extent applicable, the following information:
The implementing agency shall prescribe regulations consistent with commonly accepted accounting standards to carry out the requirements of this Article.
 
Art. 142. Required Disclosures on Consumer Loans Not Under Open-End Credit Plan. - Any creditor extending a consumer loan or in a transaction which is neither a consumer credit sale nor under an open-end consumer credit plan shall disclose, to the extent applicable, the following information:
Art. 143. Form and Timing of Disclosure. - All disclosures required under this Act shall be made clearly and conspicuously in writing before the transaction is consummated.
 
Art. 144. Periodic Statement of Charges. - The periodic statement transmitted by the creditor in connection with any extension of consumer credit other than under an open-end consumer credit plan, shall set forth the following information:
Art. 145. Exempted Transaction. - The foregoing requirements on consumer credit transactions shall not apply to the following credit transactions:
Art. 146. Sale of Consumer Products On Installment Payment. - In a consumer credit sale other than one pursuant to an open-end credit plan, the obligation of the consumer to whom credit is being extended shall be evidenced by a single instrument which shall include, in addition to the disclosures required by this act, the signature of the seller and the person to whom credit is extended, the date it was signed, a description of the property sold and a description of any property transferred as a trade-in. The instrument evidencing the credit shall contain a clear and conspicuous typewritten notice to the person to whom credit is being extended that:
In cases where the instrument will be sold at a discount to a bank, financing company or other lender, the said transferee shall be subject to all claims and defenses which the debtor could assert against the seller of consumer products obtained hereto or with the proceeds thereof.
 
Art. 147. Penalties. - Any creditor who in connection with any credit transaction fails to disclose to any person any information in violation of this Chapter or the Implementing rules and regulations issued thereunder shall be liable to such person in the amount of One thousand pesos (P1,000.00) or in amount equal to twice the finance charge required by such creditor in connection with such transaction, whichever is greater, except that such liability shall not exceed Three thousand pesos (P3,000.00) for any credit transaction and actual damages with the non-disclosure of the required information. Action to recover such penalty may be brought by such person within one (1) year from the date of the occurrence of the violation in any court of competent jurisdiction.
 
TITLE V
THE NATIONAL CONSUMER AFFAIRS COUNCIL
 
CHAPTER 1
ESTABLISHMENT AND COMPOSITION
 
Art. 148. National Consumer Affairs Council. - To improve the management, coordination and effectiveness of consumer programs, a National Consumer Affairs Council is hereby created, hereinafter referred to as the "Council".
 
Art. 149. Composition. - The Council shall be composed of representatives from the following government agencies and non-government agencies:
Art. 150. Chairman; Functions. - The Council shall be headed and presided by a Chairman who shall be elected by the members from among themselves. He shall establish, with the concurrence of the Council, the policies, procedures and standards to govern the implementation and interpretation of the functions and duties of the Council.
 
Art. 151. Per Diems of Members. - The members of the Council shall be entitled to an allowance of Five hundred pesos (P500.00) per meeting actually attended but not more than Two thousand pesos (P2,000.00) a month.
 
Art. 152. The Secretariat. - The Council shall appoint an Executive Director who shall assist the Chairman and act as Secretary of the Council. The Department of Trade and Industry shall provide the Secretariat which shall assist the Council in the effective performance of its functions.
 
CHAPTER II
POWERS AND FUNCTIONS
 
Art. 153. Powers and Functions. - The Council have the following powers and functions:
Art. 154. Consumer Education in Schools. - The Department of Education, Culture and Sports, with the cooperation and advice of the Council, shall develop and adopt a consumer education program which shall be integrated into existing curricula of all public and private schools from primary to secondary level.
 
A continuing consumer education program for out-of-school youth and adults shall likewise be developed and undertaken.
 
The consumer education program shall include information regarding:
Art. 155. Concerned Departments, Powers and Duties Under Existing Laws. - The concerned departments shall continue to exercise the powers and duties provided to them under existing laws, unless repealed or modified accordingly.
 
Art. 156. Consumer Participation. - The Departments shall establish procedures for meaningful participation by consumers or consumer organizations in the development and review of department rules, policies and programs. Such procedures shall include provisions for a forum, where consumers can express their concerns and recommendations to decision makers. The departments shall exert efforts to inform consumers of pending proceedings where their participation is important. chanrobles law
 
Art. 157. Advisory Services. - The departments shall render advisory services upon request. The technical and legal assistance shall be made available to consumers and their organizations and to the general public.
 
Art. 158. Consumer Program Reforms. - Each concerned Department shall formulate and develop a consumer program consonant with the objectives of its charter or the applicable laws which program shall embody the standards set forth in Sections 156 and 157 of this Act. Copies of these programs shall be furnished the Council. The Executive Director shall, among his other functions, monitor and coordinate the implementation by the concerned agencies of their respective consumer programs.
After the close of the fiscal year, the Council shall submit to Congress and the Office of the President, a full report on the progress of the implementation of consumer programs.
 
CHAPTER III
CONSUMER COMPLAINTS
 
Art. 159. Consumer Complaints. - The concerned department may commerce an investigation upon petition or upon letter-complaint from any consumer: Provided, That, upon a finding by the department of  prima facie violation of any provisions of this Act or any rule or regulation promulgated under its authority, it may motu proprio or upon verified complaint commerce formal administrative action against any person who appears responsible therefor. The department shall establish procedures for systematically logging in, investigating and responding to consumer complaints into the development of consumer policies, rules and regulations, assuring as far as practicable simple and easy access on the part of the consumer to seek redress for his grievances.
 
Art. 160. Consumer Arbitration Officers. - The concerned Department Secretaries shall appoint as many qualified consumer arbitration officers as may be necessary for the effective and efficient protection of consumer rights: Provided, however, That there shall be not more than ten (10) consumer arbitration officers per province, including the National Capital Region.
 
Art. 161. Consumer Arbitration Officers; Qualifications. - The consumer arbitration officer must be a college graduate with at least three (3) years experience in the field of consumer protection and shall be of good moral character.
 
Art. 162. Arbitration Officers; Jurisdiction. - The consumer arbitration officers shall have original and exclusive jurisdiction to mediate, conciliate, hear and adjudicate all consumer complaints, Provided, however, That this does not preclude the parties from pursuing the proper judicial action.
 
Art. 163. Investigation Procedure. - (a) The consumer arbitration officer shall conduct hearings on any complaint received by him or referred by the Council.
 
(b) Parties to the case shall be entitled to notice of the hearing, and shall be informed of the date, time and place of the same. A copy of the complaint shall be attached to the notice.
 
(c) The department shall afford all interested parties the opportunity to submit a statement of facts, arguments, offers of settlements or proposals of adjustments.
 
(d) The Consumer arbitration officer shall first and foremost ensure that the contending parties come to a settlement of the case.
 
(e) In the event that a settlement has not been effected, the Mediation officer may now proceed to formally investigate, hear and decide the case.
 
(f) The Consumer arbitration officer may summon witnesses, administer oaths and affirmations, issue subpoena and subpoena duces tecum, rule upon offers of proof and receive relevant evidence, take or cause deposition to be taken whenever the ends of justice would be served thereby, regulate the course of the hearing, rule on any procedural request or similar matter and decide the complaint.
 
In hearing the complaint, the mediation officer shall use every and all reasonable means to ascertain the facts in each complaint speedily and objectively without regard to strict rules of evidence prevailing in suits before courts. The complaints shall be decided within fifteen (15) days from the time the investigation was terminated.
 
Art. 164. Sanctions. - After investigation, any of the following administrative penalties may be imposed even if not prayed for in the complaint:
Art. 165. Appeal from Orders. - Any order, not interlocutory of the Consumer arbitration officer, becomes final and executory unless appealed to the Department Secretary concerned within fifteen (15) days from receipt of such order. An appeal may be entertained only on any of the following grounds:
Art. 166. Decision on Appeal. - The Secretary shall decide the appeal within thirty (30) days from receipt thereof. The decision becomes final after fifteen (15) days from receipt thereof unless a petition for certiorari is filed with the proper court.
 
TITLE VI
TRANSITORY AND FINAL PROVISIONS
 
Art. 167. Relation of the Act to Other Rights. - The provisions of this Act shall apply notwithstanding any agreement to the contrary but shall not restrict, limit or derogate from any other rights or remedies of a consumer under any other law.
 
Art. 168. Application of Laws Enacted Prior to the Act. - All actions or claims accruing prior to the effectivity of this Act shall be determined in accordance with the acts, laws, decrees and regulations in force at the time of the accrual.
 
Art. 169. Prescription. - All actions or claims accruing under the provisions of this Act and the rules and regulations issued pursuant thereto shall prescribe within two (2) years from the time the consumer transaction was consummated or the deceptive or unfair and unconscionable act or practice was committed and in case of hidden defects, from discovery thereof. chanrobles law
 
Art. 170. Repealing Clause. - All laws, executive orders, rules and regulations or parts thereof which are inconsistent with this Act are hereby repealed or amended accordingly.
 
Art. 171. Appropriations. - For the initial operating expenses of the National Consumer Affairs Council, the sum of Two million pesos (P2,000,000.00) is hereby appropriated out of funds of the National Treasury not otherwise appropriated. Thereafter, such sums as may be necessary to carry out its purpose shall be included in the General Appropriations Act.
 
Art. 172. Separability Clause. - If for any reason any article or provision of this Act or any portion thereof or the application of such article, provision or portion thereof to any person, group or circumstance is declared invalid or unconstitutional, the remainder of this Act shall not be affected by such decision. chanrobles law
 
Art. 173. Effectivity. - This Act shall take effect thirty (30) days from the date of its publication in the Official Gazette.
 
Approved: April 13, 1992
 







 
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