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Republic Act No. 7394.
REPUBLIC
ACT NO.
7394THE
CONSUMER ACT
OF
THE PHILIPPINES
TITLE IGENERAL 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:
(a) protection against
hazards
to health and safety; (b) protection against
deceptive,
unfair and unconscionable sales acts and practices; (c) provision of
information
and education to facilitate sound choice and the proper exercise of
rights
by the consumer; (d) provision of
adequate
rights and means of redress; and (e) involvement of
consumer
representatives in the formulation of social and economic policies.
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:
(a) "Advertisement"
means the prepared and through any form of mass medium, subsequently
applied,
disseminated or circulated advertising matter. (b) "Advertising"
means the business of conceptualizing, presenting or making available
to
the public, through any form of mass media, fact, data or information
about
the attributes, features, quality or availability of consumer products,
services or credit. (c) "Advertising
agency
or Agent" means a service organization or enterprise creating,
conducting,
producing, implementing or giving counsel on promotional campaigns or
programs
through any medium for and in behalf of any advertiser. (d) "Advertiser"
means the client of the advertising agency or the sponsor of the
advertisement
on whose account the advertising is prepared, conceptualized, presented
or disseminated. (e) "Agricultural
purpose"
means a purpose related to the production, harvest, processing,
manufacture,
distribution, storage, transportation, marketing, exhibition or
disposition
of agricultural, fishery or marine products. (f) "Amount
financed" in a consumer credit sale constitutes the cash price
plus
non-finance
charges less the amount of any downpayment whether made in cash or in
property
traded in, or in a consumer loan the amount paid to, receivable by or
paid
or payable to the buyer or to another person in his behalf. (g) "Banned
hazardous
substance" means (1) any toy or other articles intended for use by
children, which are hazardous per se, or which bear or contain
substances
harmful to human beings; or (2) any hazardous substance intended or
packaged
in a form suitable for use in the household, which the implementing
agency
by regulation, classifies as "banned hazardous substance"
notwithstanding
the existence of cautionary labels, to safeguard public health and
safety: Provided, That the implementing agency may, by
regulation,
exempt
from this Act, articles which by reason of their functional purpose
require
the inclusion of the hazardous substance involved and which bear
appropriate
labels giving adequate directions and warnings for their safe use. Procedures for the
issuance,
amendment or repeal of regulations pursuant to clause (2) or paragraph
(g) of this Article shall be governed by the rules and regulations
promulgated
by the Department of Health; Provided, That if the Department
of
Health finds that the distribution for household use of the hazardous
substance
involved presents an imminent hazards to the public health, it may
publish
in a newspaper of general circulation a notice of such finding and such
substance shall be deemed to be a "banned hazardous substance"
pending
the issuance of regulation formally banning such substance. (h) "Batch" means
a quantity of any drug or device produced during a given cycle of
manufacture. (i) "Business name,
firm
name, or style" means any name or designation other than the true
name
of a person, partnership, corporation or association which is used or
signed
in connection with his/its business or in - (1) any written or
printed
receipt, including receipt for tax or business; (2) any written or
printed
contract not verified by a notary public; (3) any written or
printed
evidence of any agreement or business transaction; and (4) any sign or
billboard
kept conspicuously exhibited in plain view in or at the place of the
business,
announcing a firm name or business name or style. (j) "Cash price or
delivered
price", in case of trade transaction, means the amount of money
which
would constitute full payment upon delivery of the property (except
money)
or service purchased at the creditor's place of business. In the case
of
financial transactions, cash price represents the amount received by
the
debtor upon consummation of the credit transaction, net of finance
charges
collected at the time the credit is extended, if any. (k) "Chain
distribution
plans" or "pyramid sales schemes" means sales devices
whereby
a person, upon condition that he makes an investment, is granted by the
manufacturer of his representative a right to recruit for profit one or
more additional persons who will also be granted such right to recruit
upon condition of making similar investments: Provided, That the
profits of the person employing such a plan are derived primarily from
the recruitment of other persons into the plan rather than from the
sale
of consumer products, services and credit: Provided, further,
That
the limitation on the number of participants does not change the nature
of the plan. (l) "Closing out
sale" means a consumer sale wherein the seller uses the
announcement to
create
the impression that he is willing to give large discounts or
merchandise
in order to reduce, dispose or close out his inventory and business. (m) "Commerce"
means
the sale, lease, exchange, traffic or distribution of goods,
commodities,
productions, services or property, tangible or intangible. (n) "Consumer" means
a natural person who is a purchaser, lessee, recipient or prospective
purchaser,
lessor or recipient of consumer products, services or credit.chanrobles
law (o) "Consumer credit"
means any credit extended by a creditor to a consumer for the sale or
lease
of any consumer product or service under which part or all of the price
or payment therefor is payable at some future time, whether in full or
in installments. (p) "Consumer loan"
means a loan made by the lender to a person which is payable in
installments
for which a finance charge is or may be imposed. This term includes
credit
transactions pursuant to an open-end-credit plan other than a seller
credit
card. (q) "Consumer
products
and services" means goods, services and credits, debts or
obligations
which are primarily for personal, family, household or agricultural
purposes,
which shall include but not limited to food, drugs, cosmetics, and
devices. (r) "Consumer
product
safety rule" means a consumer product safety standard described in
Article 78 or a rule under this Chapter declaring a consumer product
banned
hazardous product. (s) "Consumer
transaction" means (1) (i) a sale, lease, assignment, award by
chance, or
other
disposition of consumer products, including chattels that are intended
to be affixed to land, or of services, or of any right, title, or
interest
therein, except securities as defined in the Securities Act and
contracts
of insurance under the Insurance Code, or (ii) a grant of provision of
credit to a consumer for purposes that are primarily personal, family,
household or agricultural, or (2) a solicitation or promotion by a
supplier
with respect to a transaction referred to in clause (1). (t) "Corrosive"
means
any substance which on contact with living tissue will cause
destruction
of tissue by chemical action. (u) "Cosmetics" means
(1) articles intended to be rubbed, poured, sprinkled or sprayed on,
introduced
into or otherwise applied to the human body or any part thereof for
cleansing,
beautifying, promoting attractiveness, or altering the appearance, and
(2) article intended for use as a component of any such article except
that such term shall not include soap. (v) "Counterfeit
product"
means any consumer product which, or the container or labeling of
which,
without authorization, bears the trademark, trade name, or other
identifying
mark, imprint, or device, or any likeness thereof, of a consumer
product
manufacturer, processor, packer, distributor, other than the person or
persons who in fact manufactured, processed, packed or distributed such
product and which thereby falsely purports or is represented to be the
product of, or to have been packed or distributed by such consumer
product
manufacturer, processor, packer, or distributor. (w) "Credit card"
means any card, plate, coupon book or other credit device existing for
the purpose of obtaining money, property, labor or services on credit. (x) "Credit Sale" means
a sale products, services or an interest in land to a person on credit
where a debt is payable in installments or a finance charge is imposed
and includes any agreement in the form of a bailment of products or
lease
of products or real property if the bailee or lessee pays or agrees to
pay compensation for use a sum substantially equivalent to or in excess
of the aggregate value of the products or real property involved and it
is agreed that the bailee or lessee will become, or for no other or a
nominal
consideration has the option to become, the owner of the products or
real
property upon full compliance with the terms of the agreement. (y) "Credit
transaction"
means a transaction between a natural person and a creditor in which
real
or personal property, services or money acquired on credit and the
person's
obligation is payable in installment. (z) "Creditor" means
any person engaged in the business of extending credit and shall
include
any person who as a regular business practice makes loans or sells or
rents
property or services on a time, credit or installment basis, either as
principal or as agent who requires as an incident to the extension of
credit,
the payment of a finance charge. (aa) "Default or
delinquency
charge" means, with respect to a consumer credit transaction, the
penalty
charge payable by the consumer-debtor for failure to pay an amount or
installment
in full on the date the same becomes due and demandable, or on or
before
the period specified for the purpose in the consumer credit sale
documents. (ab) "Device" means
an instrument, apparatus, implement, machine, contrivance, implant, in
vitro reagent, or other similar or related article, including any
component,
part or accessory which is (1) recognized in the official United States
Pharmacopoeia-National Formulary (USP-NF) or any supplement to them;
(2)
intended for use in the diagnosis of disease or other condition or in
the
cure, mitigation, treatment or prevention of disease, in man or other
animals;
or (3) intended to affect the structure or any function of the body of
man or other animals, and which does not achieve any of its principal
intended
purposes through chemical action within or on the body of man or other
animals and which is not dependent upon being metabolized for the
achievement
of any of its principal intended purposes. (ac) "Distributor"
means any person to whom a consumer product is delivered or sold for
purposes
of distribution in commerce, except that such term does not include a
manufacturer
or retailer of such product. (ad) "Drugs"
mean
(1) articles recognized in the current official United States
Pharmacopoeia-National
Formulary, official Homeopathic Pharmacopoeia of the United States,
official
National Drug Formulary, or any supplement to any of them; and (2)
articles
intended for use in the diagnosis, cure, mitigation, treatment, or
prevention
of disease in man or other animals; and (3) articles (other than food)
intended to affect the structure or any function of the body of man or
animals; and (4) articles intended for use as a component of any
articles
specified in clauses (1), (2), or (3) but do not include devices or
their
components, parts or accessories. The term "drug" when
used in this Act shall include herbal and/or traditional drug. They are
defined as articles from indigenous plant or animal origin used in folk
medicine which are: (1) recognized in the Philippine National
Formulary;
(2) intended for use in the treatment or cure, mitigation, of disease
symptoms,
injury or bodily defect for use in man; (3) other than food, intended
to
affect the structure of any function of the body of man; (4) put into
finishes,
ready to use form by means of formulation, dosage or dosage directions;
and (5) intended for use as a component of any of the articles
specified
in clauses (1), (2), (3) and (4) of this paragraph. (ae) "Expiry
or
expiration date" means the date stated on the label of food, drug,
cosmetic, device or hazardous substance after which they are not
expected
to retain their claimed safety, efficacy and quality or potency and
after
which it is no longer permissible to sell them. (af) "Extremely
flammable"
means any substance which has a flash point at or below negative six
and
six-tenths degrees centigrade as determined by the Tagliabue Open Cub
Tester;
and term "combustible" shall apply to any substance which has a
flash point of above twenty-six and six-tenths degrees to and including
sixty-five and five-tenths degrees centigrade as determined by the
Tagliabue
Open Cub Tester: Provided, That the flammability or
combustibility
of solids and of the contents of self-pressurized containers shall be
determined
through methods found by the implementing agency to be generally
applicable
to such materials or containers, respectively, and established by
regulations
issued by it. (ag) "Food" means
any substance, whether processed, semi-processed or raw, intended for
human
consumption and includes chewing gum, drinks and beverages and any
substance
which has been used as an ingredient or a component in the manufacture,
preparation or treatment of food. (ah) "Food additive"
means any substance, the intended use of which results or may
reasonably
be expected to result, directly or indirectly, in its becoming a
component
or otherwise affecting the characteristics of any food (including any
substance
intended for use in producing, manufacturing, packing, processing,
preparing,
treating, packaging, transporting, or holding food; and including any
source
of radiation intended for any such use), if such substance is not
generally
recognized, among experts qualified as having been adequately shown
through
scientific procedures to be safe under the conditions of the intended
use. (ai) "Generic name"
is the identification of drugs and medicines by their scientifically
and
internationally recognized active ingredients or by their official
generic
name as determined by the Bureau of Food and Drugs of the Department of
Health. (aj) "Guarantee" means
an expressed or implied assurance of the quality of the consumer
products
and services offered for sale or length of satisfactory use to be
expected
from a product or other similar specified assurances. (ak) "Hazardous
substance" means: (1) (i) Any substance or mixture of substances
which is
toxic,
corrosive, irritant, a strong sensitizer, flammable or combustible, or
generates pressure through decomposition, heat or other means, if such
substance or mixture or substances any cause substantial injury or
substantial
illness during or as a proximate result of any customary or reasonably
foreseeable ingestion by children. (ii) Any substance which
the department finds to be under the categories enumerated in clause
(1)
(i) of this paragraph; (iii) Any radioactive
substance,
if, with respect to such substance as used in a particular class of
article
or as packaged, the Department, upon approval of the Department
determines
by regulation that the substance is sufficiently hazardous to require
labeling
in accordance with this section in order to protect the public health; (iv) Any toy or other
articles
intended for use by children which the director may, by regulation,
determine
the presence of an electrical, mechanical or thermal hazard. (2) This term shall not
apply to food, drugs, cosmetics, and devices nor to substances intended
for use as fuels when stored in containers and used in the heating,
cooking
or refrigeration system of a house, but such term shall apply to any
article
which is not in itself a pesticide but which is a hazardous substance,
as construed in clause (a) of paragraph (1), by reason of bearing or
containing
such harmful substances described therein.chanrobles
law (al) "Highly Toxic"
means any substance which has any of the following effects: (1)
produces
death within fourteen days to one-half or more than one-half of a group
of ten or more laboratory white rats each weighing between Two hundred
and three hundred grams, at a single dose of fifty milligrams or less
per
kilogram of body weight, when orally administered; or (2) produces
death
within fourteen days to one-half or more of a group of ten or more
laboratory
white rats each weighing between two hundred and three hundred grams,
when
inhaled continuously for a period of one hour or less at an atmospheric
concentration of two hundred parts per million by volume or less of gas
or vapor or two milligrams per liter by volume or less of mist or dust,
provided such concentration is likely to be encountered by man when the
substance is used in any reasonably foreseeable manner, or (3) produces
death within fourteen days to one-half or more of a group of ten or
more
rabbits, when tested in a dosage of two hundred milligrams or less per
kilogram of body weight, or when administered through continuous
contact
with the bare skin for twenty-four hours or less. (am) "Home
solicitation
sale" means consumer sales or leases which are personally
solicited
by any person or organization by telephone, person-to-person contact or
by written or printed communication other than general advertising or
consummated
at the buyer's residence or a place of business, at the seller's
transient
quarters, or away from a seller's regular place of business. (an) "Immediate
container"
means the container or package which is immediately after or near the
substance
but does not include package liners. (ao) "Imminently
hazardous
product" means a consumer product which presents an unreasonable
risk
of death, serious illness or severe personal injury.
chanrobles law (ap) "Irritant" means
any substance not corrosive within the meaning of paragraph (t) of this
Article which, on immediate, prolonged or repeated contact with normal
living tissue will induce a local inflammatory reaction. (aq) "Label,
labeling" means the display of written, printed or graphic matter
on any
consumer
product its immediate container, tag, literature or other suitable
material
affixed thereto for the purpose of giving information as to identify,
components,
ingredients, attributes, directions for use, specifications and such
other
information as may be required by law or regulations. (ar) "Manufacture"
means and any and all operations involved in the production, including
preparation, propagation, processing, formulating, filing, packing,
repacking,
altering, ornamenting, finishing or otherwise changing the container,
wrapper
or labeling of a consumer product in the furtherance of the
distribution
of the same from the original place of manufacture to the person who
makes
the final delivery or sale to the ultimate consumer. (as) "Manufacturer"
means any person who manufactures, assembles or processes consumer
products,
except that if the goods are manufactured, assembled or processed for
another
person who attaches his own brand name to the consumer products, the
latter
shall be deemed the manufacturer. In case of imported products, the
manufacturer's
representatives or, in his absence, the importer, shall be deemed the
manufacturer. (at) "Mass media" refers
to any means or methods used to convey advertising messages to the
public
such as television, radio, magazines, cinema, billboards, posters,
streamers,
hand bills, leaflets, mails and the like.chanrobles
law (au) "Materially
defective
product" means a product which, because of the pattern of the
defect,
the number of defective products distributed in commerce and the
severity
of the risk or otherwise, creates a substantial risk of injury to the
public. (av) "Mislabeled
hazardous
substance" means any hazardous substance intended, or packaged in
a
form suitable, for use in households, especially by children, the
packaging
or labeling of which is in violation of the special packaging
regulation
issued by the Department of Health under Article 91 or if such
substance
fails to bear a label which (1) states conspicuously (i) the name and
the
exact address of the manufacturer, packer, distributor, or seller; (ii)
the common or usual name of the hazardous substance or of each
component
which contributes substantially to the harmfulness of the substance,
unless
the Department by regulation approved by the Department permits or
requires
the use of the recognized generic name; (iii) the signal word "danger"
on substances which are extremely flammable, corrosive, or highly
toxic;
(iv) the signal word "warning" or "caution" on all
other
hazardous substances; (v) a frank statement of the principal hazard or
hazards involved, as "flammable", "vapor harmful", "causes
burns", "absorbed through skin", or similar wording
describing
the action to be followed or avoided, except when modified by
regulation
by the Department pursuant to Section 46; (vi) instructions, when
necessary
or appropriate, for first aid treatment; (vii) the word "poison" for
any
hazardous substance which is defined as highly toxic; (viii)
instructions
for handling and storage of packages which require special care in
handling
or storage; and (ix) the statement "keep out of the reach of
children",
or its practical equivalent, if the article is intended for use by
children
and is not a banned hazardous substance, with adequate directions for
the
protection of children from the hazard involved. The aforementioned
signal
words, affirmative statements, description of precautionary measures,
necessary
instructions or other words or statements may be in the English
language
or its equivalent in Filipino; and (2) on which any
statement
required under clause (1) of this paragraph are located prominently and
in contrast by typography are located prominently and in contrast by
typography,
layout, with other printed matters on the label. (aw) "New Drugs"
mean (1) any drug the composition of which is such that said drug is
not
generally recognized among experts qualified by scientific training and
experience to evaluate the safety, efficacy and quality of drugs as
safe,
efficacious and of good quality for use under the conditions
prescribed,
recommended, or suggested in the labeling thereof; or (2) any drug the
composition of which is such that said drug, as a result of its
previous
investigations to determine its safety, efficacy and good quality for
use
under certain conditions, has become so recognized but which has not,
otherwise
than in such investigations, been used to a material extent or for a
material
time under new conditions. "New Drugs" shall
include drugs (a) containing a newly discovered active ingredient; (b)
containing a new fixed combination of drugs, either by molecular or
physical
combination; (c) intended for new indications; (d) an additional new
mode
of administration; or (e) in an additional dosage or strength of the
dosage
form, which meets the conditions as defined under the new drug. The definition of "new
drugs" covers to the extent applicable, "new devices". (ax) "New Product"
means a consumer product which incorporates a design, material or form
of energy exchange which has not previously been used substantially in
consumer products and as to which there exists a lack of adequate
information
to determine the quality and safety of such product if used by the
consumers. (ay) "Open-end-credit
plan" means a consumer credit extended on an account pursuant to a
plan under which: (1) the creditor may
permit
the person to make purchases or obtain loans, from time to time,
directly
from the creditor or indirectly by use of credit card, check or other
device; (2) the person has the
privilege
of paying the balance; or (3) a finance charge
may
be computed by the creditor from time to time on an outstanding unpaid
balance. (az) "Package" or
"packaging"
means any container or wrapping in which any consumer product is
enclosed
for use in the delivery or display of that consumer product to retail
purchasers,
but does not include: (1) shipping
containers
or wrappings used solely for the transportation of any consumer product
in bulk or in big quantities by manufacturers, packers, or processors
to
wholesale retail distributors thereof; (2) shipping
containers
or outer wrappings used by retailers to ship or deliver any product to
retail costumers if such containers and wrappings bear no printed
matter
pertaining any particular product; (3) The wrappers or
containers
of consumer products sold in small quantities by small retail stores to
the consumer which by tradition are wrapped with ordinary paper. (ba) "Person"
means any
individual, partnership, corporation or association, trust, government
or governmental subdivision or any other legal entity.chanrobles
law (bb) "Poisonous
substance"
means any substance capable of destroying life or seriously endangering
health when applied externally to the body or introduced internally in
moderate doses. (bc) "Price
comparison"
means the direct comparison in any advertisement of a seller's current
price for consumer products or services with any other price or
statement
of value for such property or services expressed in pesos, centavos,
fractions
or percentages. (bd) "Price tag"
means any device, written, printed, affixed or attached to a consumer
product
or displayed in a consumer repair or service establishment for the
purpose
of indicating the retail price per unit or service. (be) "Principal
display
panel" means that part of the label that is most likely to be
displayed,
presented, shown or examined under normal and customary conditions of
display
for retail or sale. (bf) "Private
labeler"
means an owner of a brand or trademark on the label of consumer product
other than a manufacturer of the product. A consumer product bears
a private label if (1) the product or its container is labeled with a
brand
or trademark of a person other than its manufacturer; or (2) the brand
or trademark of the manufacturer of such product does not appear on
such
label. (bg) "Radioactive
substance"
means any substance which emits ionizing radiation. (bh) "Referral
selling"
means the sales device employed by the sellers wherein the buyer is
induced
to acquire goods or services by representing that after the acquisition
of the goods or services, he will receive a rebate, commission or other
benefit in return for the submission of names of potential customers or
otherwise helping the seller enter into other sales, if the receipt of
such benefit is contingent on an event occurring after the sale is made. (bi) "Repair and
service
firm" means any business establishment, engaged directly or
indirectly,
in the repair, service or maintenance of any consumer product. (bk) "Retailer" means
a person engaged in the business of selling consumer products directly
to consumers. (bl) "Sale or
distribution"
shall mean an act made by a manufacturer or seller, or their respective
representative or agent, to make available consumer products, services
or credit to the end consumers under a consumer sale transaction. It
shall
not include sampling or any distribution not for sale. (bm) "Sales Promotion"
means techniques intended for broad consumer participation which
contain
promises of gain such as prizes, in cash or in kind, as reward for the
purchase of a product, security, service or winning in contest, game,
tournament
and other similar competitions which involve determination of winner/s
and which utilize mass media or other widespread media of information.
It also means techniques purely intended to increase the sales,
patronage
and/or goodwill of a product. (bn) "Seller"
means
a person engaged in the business of selling consumer products directly
to consumers. It shall include a supplier or distributor if (1) the
seller
is a subsidiary or affiliate of the supplier or distributor; (2) the
seller
interchanges personnel or maintains common or overlapping officers or
directors
with the supplier or distributor; or (3) the supplier or distributor
provides
or exercises supervision, direction or control over the selling
practices
of the seller. (bo) "Service"
shall
mean, with respect to repair and service firms, services supplied in
connection
with a contact for construction, maintenance, repair, processing,
treatment
or cleaning of goods or of fixtures on land, or distribution of goods,
or transportation of goods. (bp) "Services"
means
services that are the subject of a consumer transaction, either
together
with, or separate from any kind of personal property, whether tangible
or intangible. (bq) "Special
packaging"
means packaging that is designed or constructed to be significantly
difficult
for children five years of age to open or to obtain a toxic or harmful
amount of the substance contained therein within a reasonable time and
not difficult for normal adults to use properly but does not mean
packaging
which all such children cannot open or obtain a toxic or harmful amount
within a reasonable time. (br) "Standard"
means
a set of conditions to be fulfilled to ensure the quality and safety of
a product; (bs) "Strong
sensitizer"
means any substance which will cause on normal living tissue, allergy
or
photodynamic quality of hypersensitivity which becomes evident on
reapplication
of the same substance, to be designated as such by the implementing
agency.
Before designating any substance as a strong sensitizer, the
implementing
agency, upon consideration of the frequency of occurrence and severity
of the reaction, shall find that the substance has a significant
capacity
to cause hypersensitivity. (bt) "Substandard
product"
means a product which fails to comply with an applicable consumer
product
safety rule which creates a substantial risk of injury to the public. (bu) "Supplier"
means
a person, other than a consumer, who in the course of his business,
solicits,
offers, advertises, or promotes the disposition or supply of a consumer
product or who other than the consumer, engages in, enforces, or
otherwise
participates in a consumer transaction, whether or not any privity of
contract
actually exists between that person and the consumer, and includes the
successor to, or assignee of, any right or obligation on of the
supplier. (bv) "Technical
personnel
of repair and service enterprise" shall mean a machine or
technician
or any person who works or renders diagnosis or advice in connection
with
repair, service and maintenance of the consumer products in a repair
and
service firm.chanrobles law (bw) "Toxic
substance" means any substance other than a radioactive substance
which can
cause
injury, illness or death to man through ingestion, inhalation or
absorption
through any body surface. (bx) "Trade name"
or "trademark" means a word or words, name, title, symbol,
emblem,
sign or device or any combination thereof used as an advertisement,
sign,
label, poster or otherwise for the purpose of enabling the public to
distinguish
the business of the person who owns and uses said trade name or
trademark.
CHAPTER 1CONSUMER PRODUCT
QUALITY
AND SAFETY Art. 5. Declaration of
Policy. - It shall be the duty of the State:
(a) to develop and
provide
safety and quality standards for consumer products, including
performance
or use-oriented standards, codes of practice and methods of tests; (b) to assist the
consumer
in evaluating the quality, including safety, performance and
comparative
utility of consumer products; (c) to protect the
public
against unreasonable risks of injury associated with consumer products; (d) to undertake
research
on quality improvement of products and investigation into causes and
prevention
of product related deaths, illness and injuries; (e) to assure the public
of the consistency of standardized products.
Art. 6. Implementing
Agencies. - The provisions of this Article and its implementing
rules
and regulations shall be enforced by:
(a) the Department of
Health
with respect to food, drugs, cosmetics, devices and substances; (b) the Department of
Agriculture
with respect to products related to agriculture; and (c) the Department of
Trade
and Industry with respect to other consumer products not specified
above.
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:
(a) requirements to
performance,
composition, contents, design, construction, finish, packaging of a
consumer
product; (b) requirements as to
kind,
class, grade, dimensions, weights, material; (c) requirements as to
the
methods of sampling, tests and codes used to check the quality of the
products; (d) requirements as to
precautions
in storage, transporting and packaging; (e) requirements that a
consumer product be marked with or accompanied by clear and adequate
safety
warnings or instructions, or requirements respecting the form of
warnings
or instructions.
For this purpose, the concerned
department shall adopt existing government domestic product quality and
safety standards: Provided, That in the absence of such
standards,
the concerned department shall form specialized technical committees
composed
of equal number of representatives from each of the Government,
business
and consumer sectors to formulate, develop and purpose consumer product
quality and safety standards. The said technical committees shall
consult
with the private sector, which may, motu proprio, develop its
own
quality and safety standards that shall be subject 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:
(a) give notice to the
public
of the defect or failure to comply with the product safety standards;
and (b) give notice to each
distributor or retailer of such product.
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:
(a) to bring such
product
into conformity with the requirements of the applicable consumer
product
standards or to repair the defect in order to conform with the same; (b) to replace the
product
with a like or equivalent product which complies with the applicable
consumer
product standards which does not contain the defect; (c) to refund the
purchase
price of the product less a reasonable allowance for use; and (d) to pay the consumer
reasonable damages as may be determined by the department.
The manufacturer, distributor
or seller shall not charge a consumer who avails himself of the remedy
as provided above of any expense and cost that may be incurred. 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:
(1) fails to comply
with
an applicable consumer product quality and safety standard or rule; (2) is or has been
determined
to be injurious, unsafe and dangerous; (3) is substandard; or (4) has material
defect.
(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:
(a) it can be shown that
such product is manufactured, sold or held for sale for export from the
Philippines, or that such product was imported for export, unless such
consumer product is in fact distributed in commerce for use in the
Philippines;
and (b) such consumer
product
or the packaging thereof bears a stamp or label stating that such
consumer
product is intended for export and actually exported.
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:
(a) to administer and
supervise
the implementation of this Article and its implementing rules and
regulations; (b) to undertake
researches,
develop and establish quality and safety standards for consumer
products
in coordination with other government and private agencies closely
associated
with these products; (c) to inspect and
analyze
consumer products for purposes of determining conformity to established
quality and safety standards; (d) to levy, assess,
collect
and retain fees as are necessary to cover the cost of inspection,
certification,
analysis and tests of samples of consumer products and materials
submitted
in compliance with the provisions of this Article; (e) to investigate the
causes
of and maintain a record of product-related deaths, illnesses and
injuries
for use in researches or studies on the prevention of such
product-related
deaths, illnesses and injuries. (f) to accredit
independent,
competent non-government bodies, to assist in (1) monitoring the market
for the presence of hazardous or non-certified products and other forms
of violations of Article 18; and (2) other appropriate means to expand
the monitoring and enforcement outreach of the department in relation
to
its manpower, testing and certification resources at a given time. (g) to accredit
independent
competent testing laboratories.
PROHIBITED ACTS
AND
PENALTIES Art. 18. Prohibited
Acts.
- It shall be unlawful for any person to:
(a) manufacture for
sale,
offer for sale, distribute in commerce, or import into the Philippines
any consumer product which is not in conformity with an applicable
consumer
product quality or safety standard promulgated in this Act; (b) manufacture for
sale,
offer for sale, distribute in commerce, or import into the Philippines
any consumer product which has been declared as banned consumer product
by a rule in this Act; (c) refuse access to or
copying of pertinent records or fail or refuse to permit entry of or
inspection
by authorized officers or employees of the department; (d) fail to comply with
an order issued under Article II relating to notifications of
substantial
product hazards and to recall, repair, replacement or refund of unsafe
products; (e) fail to comply with
the rule prohibiting stockpiling.
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 IIFOOD, 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:
(a) establish standards
and quality measures for food, drugs, devices and cosmetics; (b) adopt measures to
ensure
pure and safe supply of foods and cosmetics, and safe, efficacious and
good quality of drugs and devices in the country; (c) adopt measures to
ensure
the rational use of drugs and devices, such as, but not limited to,
banning,
recalling or withdrawing from the market drugs and devices which are
unregistered,
unsafe, inefficacious or of doubtful therapeutic value, the adoption of
an official National Drug Formulary, and the use of generic names in
the
labeling of drugs; (d) strengthen the
Bureau
of Food and Drugs.
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:
(i) are habit-forming; (ii) because of their
toxicity
or other potentiality for harmful effect, or method of their use is not
safe for use except under the supervision of practitioner licensed by
law
to administer such drug; (iii) are new drugs
whose
applications are limited to investigational use;
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
DRUGSCONTAINING
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; 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 IIIHAZARDOUS 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 IIIPROTECTION AGAINST
DECEPTIVE,
UNFAIR ANDUNCONSCIONABLE
SALES
ACTS OR PRACTICES CHAPTER IDECEPTIVE, UNFAIR
AND
UNCONSCIONABLESALES 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:
(a) the buyer has been
specially
selected; (b) a survey, test or
research
is being conducted; or (c) the seller is making
a special offer to a few persons only for a limited period of time.
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 IIREGULATION OF
PRACTICES
RELATIVE TOWEIGHTS 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 IIICONSUMER 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:
(1) set forth the terms
of warranty in clear and readily understandable language and clearly
identify
himself as the warrantor; (2) identify the party
to
whom the warranty is extended; (3) state the products
or
parts covered; (4) state what the
warrantor
will do in the event of a defect, malfunction of failure to conform to
the written warranty and at whose expense; (5) state what the
consumer
must do to avail of the rights which accrue to the warranty; and (6) stipulate the period
within which, after notice of defect, malfunction or failure to conform
to the warranty, the warrantor will perform any obligation under the
warranty.
(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:
(1) "Full warranty"
if the written warranty meets the minimum requirements set forth in
paragraph
(d); or (2) "Limited
warranty"
if the written warranty does not meet such minimum requirements.
(d) Minimum standards for
warranties. - For the warrantor of a consumer product to meet the
minimum
standards for warranty, he shall:
(1) remedy such consumer
product within a reasonable time and without charge in case of a
defect,
malfunction or failure to conform to such written warranty; (2) permit the consumer
to elect whether to ask for a refund or replacement without charge of
such
product or part, as the case may be, where after reasonable number of
attempts
to remedy the defect or malfunction, the product continues to have the
defect or to malfunction.
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:
(a) refusal without any
valid legal cause by the local manufacturer or any person obligated
under
the warranty or guarantee to honor a warranty or guarantee issued; (b) unreasonable delay
by
the local manufacturer or any person obligated under the warranty or
guarantee
in honoring the warranty; (c) removal by any
person
of a product's warranty card for the purpose of evading said warranty
obligation; (d) any false
representation
in an advertisement as to the existence of a warranty or guarantee.
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 IVLABELING 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:
(a) are engaged in the
packaging
or labeling of such products; (b) prescribe or specify
by any means the manner in which such products are packaged or labeled;
or (c) having knowledge,
refuse
to disclose the source of the mislabeled or mispackaged products.
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:
(a) its correct and
registered
trade name or brand name; (b) its duly registered
trademark; (c) its duly registered
business name; (d) the address of the
manufacturer,
importer, repacker of the consumer product in the Philippines; (e) its general make or
active ingredients;(f) the net quality
of contents,
in terms of weight, measure or numerical count rounded of to at least
the
nearest tenths in the metric system; (g) country of
manufacture,
if imported; and (h) if a consumer
product
is manufactured, refilled or repacked under license from a principal,
the
label shall so state the fact.
The following may be required
by the concerned department in accordance with the rules and
regulations
they will promulgate under authority of this Act:
(a) whether it is
flammable
or inflammable; (b) directions for use,
if necessary; (c) warning of toxicity; (d) wattage, voltage or
amperes; or (e) process of
manufacture
used if necessary.
Any word, statement or other
information required by or under authority of the preceding paragraph
shall
appear on the label or labeling with such conspicuousness as compared
with
other words, statements, designs or devices therein, and in such terms
as to render it likely to be read and understood by the ordinary
individual
under customary conditions of purchase or use. The above requirements
shall
form an integral part of the label without danger of being erased or
detached
under ordinary handling of the product. 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:
(a) establish and define
standards for characterization of the size of a package enclosing any
consumer
product which may be used to supplement the label statement of net
quality,
of contents of packages containing such products but this clause shall
not be construed as authorizing any limitation on the size, shape,
weight,
dimensions, or number of packages which may be used to enclose any
product; (b) regulate the
placement
upon any package containing any product or upon any label affixed to
such
product of any printed matter stating or representing by implication
that
such product is offered for retail at a price lower than the ordinary
and
customary retail price or that a price advantage is accorded to
purchases
thereof by reason of the size of the package or the quantity of its
contents; (c) prevent the
nonfunctional
slack-fill of packages containing consumer products. For purposes of
paragraph
(c) of this Article, a package shall be deemed to be nonfunctionally
slack-filled
if it is filled to substantially less than its capacity for reasons
other
than (1) protection of the contents of such package; (2) the
requirements
of machines used for enclosing the contents in such package; or (3)
inherent
characteristics of package materials or construction being used.
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:
(a) the degree or nature
of the hazard to children in the availability of such product, by
reason
of its packaging, is such that special packaging is required to protect
children from serious personal injury or serious illness resulting from
handling and use of such product; and (b) the special
packaging
to be required by such standard is technically feasible, practicable
and
appropriate for such product. In establishing a standard under this
Article,
the concerned department shall consider: (1) the reasonableness
of
such standard; (2) available
scientific,
medical and engineering data concerning special packaging and
concerning
accidental, ingestions, illnesses and injuries caused by consumer
product; (3) the manufacturing
practices
of industries affected by this Article; and (4) the nature and use
of
consumer products.
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:
(a) expiry or expiration
date, where applicable; (b) whether the consumer
product is semi-processed, fully processed, ready-to-cook,
ready-to-eat,
prepared food or just plain mixture; (c) nutritive value, if
any; (d) whether the
ingredients
use are natural or synthetic, as the case may be; (e) such other labeling
requirements as the concerned department may deem necessary and
reasonable.
Art. 85. Mislabeled Food.
- A food shall also be deemed mislabeled:
(a) if its labeling or
advertising
is false or misleading in any way; (b) if it is offered for
sale under the name of another food; (c) if it is an
imitation
of another food, unless its label bears in type of uniform size and
prominence,
the word "imitation" and, immediately thereafter, the name of
the
food imitated; (d) its containers is so
made, formed, or filled as to be misleading; (e) if in package form
unless
it bears a label conforming to the requirements of this Act: Provided,
That reasonable variation on the requirements of labeling shall be
permitted
and exemptions as to small packages shall be established by the
regulations
prescribed by the concerned department of health; (f) if any word,
statement
or other information required by or under authority of this Act to
appear
on the principal display panel of the label or labeling is not
prominently
placed thereon with such conspicuousness as compared with other words,
statements, designs or devices in the labeling and in such terms as to
render it likely to be read and understood by the ordinary individual
under
customary conditions of purchase and use; (g) if it purports to be
or is represented as a food for which a definition or standard of
identity
has been prescribed unless: (1) it conforms to
such
definition and standard; and (2) its labels bears
the
name of the food specified in the definition or standards, and insofar
as may be required by such regulations, the common names of optional
ingredients
other than spices, flavoring and coloring, present in such food;
(h) if it purports to be or
represented as:
(1) a food for which a
standard
of quality has been prescribed by regulations as provided in this Act
and
its quality fall below such standard, unless its label bears in such
manner
and form as such regulations specify, a statement that it falls below
such
standard; or (2) a food for which a
standard
or standards or fill of container have been prescribed by regulations
as
provided by this Act and it falls below the standard of fill of
container
applicable thereto, unless its label bears, in such manner and form as
such regulations specify, a statement that it falls below such standard;
i) if it is not subject to the
provisions of paragraph (g) of this Article unless its label bears:
(1) the common or usual
name of the food, if there be any; and (2) in case it is
manufactured
or processed from two or more ingredients, the common or usual name of
such ingredient; except the spices, flavorings and colorings other than
those sold as such, may be designated as spices, flavorings and
colorings
without naming each: Provided, That to the extent that
compliance
with the requirement of clause (2) of this paragraph is impracticable
or
results in deception or unfair competition, exemptions shall be
established
by regulations promulgated by the concerned department of health;
(j) if it purports to be or
is represented for special dietary uses, unless its label bears such
information
concerning its vitamin or mineral or other dietary properties as the
concerned
department determines to be, or by regulations prescribed as necessary
in order fully to inform purchasers as its value for such uses; (k) if it bears or
contains
any artificial flavoring, artificial coloring, or chemical
preservative,
unless it bears labeling, stating that fact: Provided, That to
the
extent that compliance with the requirements of this paragraph is
impracticable,
exemptions shall be established by regulations promulgated by the
concerned
department. The provisions of this paragraph or paragraphs (g) and (i)
with respect to the artificial coloring shall not apply in the case of
butter, cheese or ice cream. 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:
(a) expiry or expiration
date; (b) whether or not it
may
be an irritant; (c) precautions or
contra-indications;
and (d) such other labeling
requirements as the concerned department may deem necessary and
reasonable.
Art. 88. Special Labeling
Requirements for Cosmetics. - A cosmetic shall be deemed mislabeled:
(a) if its labeling or
advertising
is false or misleading in any way; (b) if in package form
unless
it bears a label conforming to the requirements of labeling provided
for
in this Act or under existing regulations: Provided, That reasonable
variations
shall be permitted, and exemptions as to small packages shall be
established
by regulations prescribed by the concerned department; (c) if any word,
statement
or other information required by or under authority of this Act to
appear
on the label or labeling is not prominently placed thereon with such
conspicuousness,
as compared with other words, statements, designs or devices in the
labeling,
and in such terms as to render it likely to be read and understood by
the
ordinary individual under customary conditions of purchase and use; (d) if its container is
so made, formed or filled as to be misleading; or (e) if its label does
not
state the common or usual name of its ingredients.
Art. 89. Mislabeled Drugs
and Devices. - A drug or device shall be deemed to be mislabeled:
(a) if its labeling is
false
or misleading in any way; (b) if its in package
form
unless it bears a label conforming to the requirements of this Act or
the
regulations promulgated therefor: Provided, that reasonable
variations
shall be permitted and exemptions as to small packages shall be
established
by regulations prescribed by the concerned department. (c) if any word,
statement
or other information required by or under authority of this Act to
appear
on the principal display panel of the label or labeling is not
prominently
placed thereon with such conspicuousness as compared with other words,
statements, designs or devices in the labeling and in such terms as to
render it likely to be read and understood by the ordinary individual
under
customary conditions of purchase and use; (d) if it is for use by
man and contains any quantity of the narcotic or hypnotic substance
alpha-eucaine,
barbituric acid, beta-eucaine, bromal, cannabis, carbromal, chloral,
coca,
cocaine, codeine, heroin, marijuana, morphine, opium, paraldehyde,
peyote
or sulfonmethane, or any chemical derivative of such substance, which
derivative
has been designated by the concerned department after investigation,
and
by regulations as habit forming; unless its label bears the name and
quantity
or proportion of such substance or derivative and in juxtaposition
therewith
the statement "Warning-May be habit forming"; (e) its labeling does
not
bear: (1) adequate
directions
for use; and(2) such adequate
warning
against use in those pathological conditions or by children where its
use
may be dangerous to health, or against unsafe dosage or methods or
duration
of administration or application, in such manner and form, as are
necessary
for the protection of users: Provided, That where any requirement of
clause
(1) of this paragraph, as applied to any drug or device, is not
necessary
for the protection of the public health, the concerned department may
promulgate
regulations exempting such drug or device from such requirement;
(f) if it purports to be
a drug
the name of which is recognized in an official compendium, unless it is
packaged and labeled as prescribed therein: Provided, That the
method
of packing may be modified with the consent of the concerned department; (g) if it has been found
by the concerned department to be a drug liable to deterioration,
unless
it is packaged in such form and manner, and its label bears a statement
of such precautions, as the concerned department, shall by regulations,
require as necessary for the protection of the public health; (h) (1) if it is a drug
and its container is so made, formed or filled as to be misleading; or (2) if it is an
imitation
of another drug; or (3) if it is dangerous
to
health when used in the dosage, or with the frequency of duration
prescribed,
recommended or suggested in the labeling thereof; (i) if it is, purports
to
be or is represented as a drug composed wholly or partly of insulin or
of any kind of penicillin, streptomycin, chlortetracycline,
chloramphenicol,
bacitracin, or any other antibiotic drug, or any derivative thereof,
unless: (1) it is from a batch
with
respect to which a certificate of release has been issued pursuant to
regulations
of the concerned department; and (2) such certificate
of
release is in effect with respect to such drug: Provided, That this
paragraph
shall not apply to any drug or class of drugs exempted by regulations
promulgated
under Authority of this Act.
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:
(a) having been intended
or packaged in a form suitable for use in households, especially for
children,
the packaging or labeling of which is in violation of the special
packaging
regulations issued by the concerned department; (b) such substance fails
to bear a label: (1) which states
conspicuously: (i) the name and the
place
of business of the manufacturer, packer, distributor or seller; (ii) the common or
usual
name or the chemical name, if there be no common or usual name, of the
hazardous substance or of each component which contributes
substantially
to the harmfulness of the substance, unless the concerned department by
regulation permits or requires the use of the recognized generic name; (iii) the signal
word "danger" on substances which are extremely flammable,
corrosive or
highly toxic; (iv) the signal word
"warning" or "caution" with a bright red or
orange color with a
black
symbol on all other hazardous substances; (v) a clear
statement as
to the possible injury it may cause if used improperly; (vi) precautionary
measures
describing the action to be followed or avoided; (vii) instructions
when
necessary or appropriate for first-aid treatment; (viii) the word
"poison"
for any hazardous substance which is defined as highly toxic; (ix) instructions
for handling
and storage of packages which require special care in handling and
storage;
and (x) the statement "keep
out of the reach of children", or its practical equivalent, if the
article is not intended for use by children and is not a banned
hazardous
substance, with adequate directions for the protection of children from
the hazard involved. The aforementioned signal words, affirmative
statements,
description of precautionary measures, necessary instructions or other
words or statements may be in English language or its equivalent in
Filipino;
and (2) on which any
statement required
under clause 1) of this paragraph is located prominently in bright red
and orange color with a black symbol in contrast typography, layout or
color with the other printed matters on the label.
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:
(1) it is in a package
labeled
in accordance with the specifications of the foreign purchaser; (2) it is labeled in
accordance
with the laws of the foreign country; (3) it is labeled on the
outside of the shipping package to show that it is intended for export;
and(4) it is so exported,
(b) any hazardous substance
condemned under this Article shall after entry of order of condemnation
be disposed of by destruction or sale as the concerned department may
direct,
and the proceeds thereof, if sold, less the legal cost and charges,
shall
be paid into the treasury of the Philippines; but such hazardous
substance
shall not be sold under any order which is contrary to the provisions
of
this Act: Provided, That, after entry of the order and upon the
payment of the costs of such proceedings and the execution of a good
and
sufficient bond conditioned that such hazardous substance shall not be
sold or disposed of contrary to the provisions of this Act, the
concerned
department may direct that such hazardous substance be delivered to or
retained by the owner thereof for destruction or for alteration to
comply
with the provisions of this Act under the supervision of an officer or
employee duly designated by the concerned department. The expenses for
such supervision shall be paid by the person obtaining release of the
hazardous
substance under bond. c) all expenses in
connection
with the destruction provided for in paragraphs (a) and (b) of this
Article
and all expenses in connection with the storage and labor with respect
to such hazardous substance shall be paid by the owner or consignee,
and
default in such payment shall constitute a lien against any importation
by such owner or consignee. 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 VLIABILITY 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) presentation of
product; (b) use and hazards
reasonably
expected of it; (c) the time it was put
into circulation.
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:
(a) that it did not
place
the product on the market; (b) that although it did
place the product on the market such product has no defect; (c) that the consumer or
a third party is solely at fault.
Art. 98. Liability of Tradesman
or Seller. - The tradesman/seller is likewise liable, pursuant to
the
preceding article when:
(a) it is not possible
to
identify the manufacturer, builder, producer or importer; (b) the product is
supplied,
without clear identification of the manufacturer, producer, builder or
importer; (c) he does not
adequately
preserve perishable goods. The party making payment to the damaged
party
may exercise the right to recover a part of the whole of the payment
made
against the other responsible parties, in accordance with their part or
responsibility in the cause of the damage effected.
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) the manner in which
it is provided; (b) the result of
hazards
which may reasonably be expected of it; (c) the time when it was
provided.
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:
(a) that there is no
defect
in the service rendered; (b) that the consumer or
third party is solely at fault.
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:
(a) the replacement of
the
product by another of the same kind, in a perfect state of use; (b) the immediate
reimbursement
of the amount paid, with monetary updating, without prejudice to any
losses
and damages; (c) a proportionate
price
reduction.
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:
(a) the proportionate
price; (b) the supplementing of
weight or measure differential; (c) the replacement of
the
product by another of the same kind, mark or model, without said
imperfections; (d) the immediate
reimbursement
of the amount paid, with monetary updating without prejudice to losses
and damages if any.
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:
(a) the performance of
the
services, without any additional cost and when applicable; (b) the immediate
reimbursement
of the amount paid, with monetary updating without prejudice to losses
and damages, if any; (c) a proportionate
price
reduction.
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 VIADVERTISING 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, DECEPTIVEAND 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:
(a) Where the comparison
relates to a former price of the seller, the item compared shall either
have been sold at that price within the ninety (90) days immediately
preceding
the date of the advertisement, or it shall have been offered for sale
for
at least four (4) weeks during such ninety-day period. If the
comparison
does not relate to an item sold or offered for sale during the
ninety-day
period, the date, time or seasonal period of such sale or offer shall
be
disclosed in the advertisement. (b) Where the comparison
relates to a seller's future price, the future price shall take effect
on the date disclosed in the advertisement or within ninety (90) days
after
the price comparison is stated in the advertisement. The stated future
price shall be maintained by the seller for a period of at least four
(4)
weeks after its effective date: Provided, That compliance thereof may
be
dispensed with in case of circumstances beyond the seller's control. (c) Where the comparison
relates to a competitor's price, the competitor's price shall relate to
the consumer products or services advertised or sold in the ninety-day
period and shall be representative of the prices similar consumer
products
or services are sold or advertised in the locality where the price
comparison
was made.
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:
(a) state that a
specific
periodic consumer credit amount or installment amount can be arranged,
unless the creditor usually and customarily arranges credit payment or
installments for that period and in that amount; and (b) state that a
specified
down payment is required in any extension of consumer credit, unless
the
creditor usually or customarily arranges down payment in that amount.
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:
(a) substantiate such
claims;
and (b) properly use
research
result, scientific terms, statistics or quotations.
PROMOTION OF SALES
OFCONSUMER 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 VIIREGULATION 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:
(a) the duly registered
business name, firm name or style of the firm;chanrobles
law (b) date of issue and
effectivity
of the certificate of accreditation; (c) number and skills of
technical personnel; and (d) required license for
the repair or servicing of any consumer product as required by special
laws.
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 IVCONSUMER 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:
(a) interest or time
price
differential and any amount payable under point or other system of
additional
charges; (b) collection fees
which
include finder's fees or similar charges; (c) credit investigation
fees; (d) notarial fees, if
any; (e) premium or other
charges
for any guarantee or insurance protecting the creditor against the
obligor's
default or other credit loss. The implementing agency shall determine
what
items shall be exempted from the computation of the finance charges.
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:
(a) the cash price or
delivered
price of the property or service to be acquired; (b) the amounts, if any,
to be credited as downpayment and/or trade in; (c) the total amount to
be financed or the difference between the amounts set forth under
paragraphs
(1) and (2); (d) the charges,
individually
itemized, which are paid or to be paid by such person in connection
with
the transaction but which are not incident to the extension of credit; (e) the finance charge
expressed
in terms of pesos and centavos; (f) the percentage that
the finance charge bears to the total amount to be financed expressed
as
a simple annual rate on the outstanding balance of the obligation; (g) the effective
interest
rate; (h) the number, amount
and
due dates or periods of payments scheduled to repay the indebtedness;
and (i) the default,
delinquency
or similar charges payable in the event of late payments.
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:
(a) the conditions under
which a finance charge may be imposed, including the time period, if
any,
within which any credit extended may be repaid without incurring a
finance
charge; (b) the method of
determining
the balance upon which a finance charge may be imposed; (c) the method of
determining
the amount of the finance charges, including any minimum or fixed
amount
imposed as a finance charge; (d) where one or more
periodic
rates may be used to compute a finance charge, each such rate, the
range
of balances to which it is applicable, and the corresponding simple
annual
rate; (e) the conditions under
which the creditor may impose a security lien and a description of the
goods to which such lien may attach.
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:
(a) the amount of credit
of which the debtor will have the actual use, or which is or will be
paid
to him or for his account or to another person on his behalf; (b) all charges,
individually
itemized, which are included in the amount of credit extended but which
are not part of the finance charge; (c) the total amount to
be financed or the sum of the amounts referred to in paragraphs (a) and
(b); (d) the finance charge
expressed
in terms or pesos and centavos; (e) the effective
interest
rate; (f) the percentage that
the finance charge bears to the total amount to be financed expressed
as
a simple annual rate on the outstanding unpaid balance of the
obligation; (g) the default,
delinquency
or similar charges payable in the event of late payments; (h) a description of any
security interest held or to be held or to be retained or acquired by
the
creditor in connection with the extension of credit and a clear
identification
of the property to which the security interest relates.
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:
(a) the simple annual
rate; (b) the effective
interest
rate; (c) the date by which,
or
the period (if any) within which payment must be made in order to avoid
additional finance charges; (d) method of
determining
the balance upon which the finance charge may be imposed.
Art. 145. Exempted Transaction.
- The foregoing requirements on consumer credit transactions shall
not apply to the following credit transactions:
(a) those involving
extension
of credits for business or commercial purposes, or to the Government
and
governmental agencies and instrumentalities, juridical entities or to
organizations; (b) those in which the
debtor
is the one specifying the definite set of credit terms such as bank
deposits,
insurance contracts, sale of bonds or analogous 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:
(a) he should not sign
the
instrument if it contains any blank space; (b) he is entitled to a
reasonable return of the precomputed finance charge if the balance is
prepaid;
and (c) he is entitled to an
exact, true copy of the agreement.
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 VTHE NATIONAL
CONSUMER
AFFAIRS COUNCIL CHAPTER 1ESTABLISHMENT 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:
(a) Department of Trade
and Industry; (b) Department of
Education,
Culture and Sports; (c) Department of Health; (d) Department of
Agriculture; (e) four (4)
representatives
from consumer organizations of nationwide base to be chosen by the
President
from among the nominees submitted by the various consumer groups in the
Philippines; (f) two (2)
representatives
from business/industry sector to be chosen by the President from among
the nominees submitted by the various business organizations.
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 IIPOWERS AND
FUNCTIONS Art. 153. Powers and
Functions.
- The Council have the following powers and functions:
(a) to rationalize and
coordinate
the functions of the agencies charged with consumer programs and
enforcement
of consumer related laws to the end that an effective, coordinated and
integrated system of consumer protection, research and implementation
and
enforcement of such laws shall be achieved; (b) to recommend new
policies
and legislation or amendments to existing ones; (c) to monitor and
evaluate
implementation of consumer programs and projects and to take
appropriate
steps to comply with the established priorities, standards and
guidelines; (d) to seek the
assistance
of government instrumentalities in the form of augmenting the need for
personnel facilities and other resources; (e) to undertake a
continuing
education and information campaign to provide the consumer with, among
others: (1) facts about
consumer
products and services; (2) consumer rights
and
the mechanism for redress available to him; (3) information on new
concepts
and developments on consumer protection; (4) general knowledge
and
awareness necessary for a critical and better judgment on consumption;
and (5) such other matters
of
importance to the consumer's general well-being.
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:
(a) the consumer as a
responsible
member of society and his responsibility to develop: (1) critical awareness
which
is the responsibility to be alert and questioning about the use of and
price and quality of goods he uses; (2) assertiveness
which
is the responsibility to assert himself and act so he is assured of a
fair
deal, aware that for as long as he remains to be a passive consumer he
will continue to be exploited; (3) social concern
which
is the responsibility to be aware of the impact of his consumption on
other
citizens, especially the disadvantaged; and (4) environmental
awareness
which is the responsibility to understand the environmental
consequences
of his consumption, recognizing his individual and social
responsibility
to conserve natural resources for future generations; (b) consumer rights; and (c) practical problems
the
consumer faces in daily life.
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 IIICONSUMER 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:
(a) the issuance of a
cease
and desist order, Provided, however, That such order shall
specify
the acts that respondent shall cease and desist from and shall require
him to submit a report of compliance therewith within a reasonable time; (b) the acceptance of a
voluntary assurance of compliance or discontinuance from the respondent
which may include any or all of the following terms and conditions:
(1) an assurance to
comply
with the provisions of this Act and its implementing rules and
regulations; (2) an assurance to
refrain
from engaging in unlawful acts and practices or unfair or unethical
trade
practices subject of the formal investigation; (3) an assurance to
comply
with the terms and conditions specified in the consumer transaction
subject
of the complaint; (4) an assurance to
recall,
replace, repair, or refund the money value of defective products
distributed
in commerce; (5) an assurance to
reimburse
the complaint out of any money or property in connection with the
complaint,
including expenses in making or pursuing the complaint, if any, and to
file a bond to guarantee compliance therewith.
(c) restitution or
rescission
of the contract without damages; (d) condemnation and
seizure
of the consumer product found to be hazardous to health and safety
unless
the respondent files a bond to answer for any damage or injury that may
arise from the continued use of the product; (e) the imposition of
administrative
fines in such amount as deemed reasonable by the Secretary, which shall
in no case be less that Five hundred pesos (P500.00) nor more than
Three
hundred thousand pesos (P300,000.00) depending on the gravity of the
offense,
and an additional fine of not more than One thousand pesos (P1,000.00)
or each day of continuing violation.
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:
(a) grave abuse of
discretion; (b) the order is in
excess
of the jurisdiction or authority of the consumer arbitration officer; (c) the order is not
supported
by the evidence or there is serious error in the findings of facts.
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 VITRANSITORY 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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