QuestionsQuestions (Act No. 3740)
It is unlawful to sell, barter, exchange, offer/expose for sale, barter, or exchange, or to cause to be sent/brought from or to the Philippines, any article that is falsely labeled/marked/branded or labeled/marked/branded in a way that misrepresents its character, value, properties, or the materials composing it.
It covers articles whose CONTAINER is mislabeled/misbranded or labeled/marked/branded in a way that misrepresents the character, value, properties, or condition of the article contained or of the materials of which it is composed—regardless of whether the article itself is mislabeled.
If the article is accompanied by advertising matter that misrepresents its character, value, properties, or condition, liability attaches under Act No. 3740 even if the article or its container is not mislabeled/misbranded.
Liability extends to any person, firm, or corporation, whether acting as principal or agent, including those who cause the prohibited acts or cause the articles or advertising to be sent/circulated.
It is unlawful to insert or cause to be inserted in any newspaper, book, or periodical printed in the Philippines any advertising that misrepresents the character, value, properties, or condition of the advertised article or its composing materials.
The law explicitly covers handbills, billboards, signs, pamphlets, circulars, projected lantern slides, and any other form of advertising whatsoever printed, displayed, or circulated in the Philippines.
Section 1 focuses on the SALE/transport of misbranded/mislabeled articles and their accompaniment by misleading advertising. Section 3 focuses specifically on the use of any advertising medium (including billboards/handbills) to misrepresent the character, value, properties, or condition of articles offered for sale.
Section 4 prohibits misrepresentation in advertising (prospectus, handbill, billboard, sign, pamphlet, circular, projected lantern slides, or any form of advertising) of the character or value of stocks, bonds, shares, or the properties/prospects of a firm.
It includes BOTH. Section 1 and related provisions cover articles/products, while Section 4 expressly covers misrepresentations in advertising of stocks, bonds, shares, and a firm’s prospects/properties.
It is unlawful to use the mails of the Philippines to circulate advertising matter prohibited by the Act. The exception allows the sale/delivery through the mails in the Philippines of standard books, magazines, or periodicals published in the US or foreign countries, while still applying the Act to publications issued for advertisement/promotion of the issuer’s own merchandise, stocks, bonds, or shares.
The prohibited acts involve circulation, printing, display, or distribution in the Philippine Islands (and includes importing/exporting articles for sale across borders). Advertising covered under Sections 2–4 must be printed/displayed/circulated “in the Philippine Islands.”
The penalty is a fine of not more than ₱5,000 and/or imprisonment for not to exceed six months—both may be imposed in the court’s discretion.
It takes effect six months after approval.