Basic policy and consumer protection aims
- The State must protect the interests of consumers, promote general welfare, and establish standards of conduct for business and industry (Article 2).
- The State’s measures under Article 2 must achieve:
- protection against hazards to health and safety;
- protection against deceptive, unfair and unconscionable sales acts and practices;
- provision of information and education to facilitate sound choice and proper exercise of consumer rights;
- provision of adequate rights and means of redress; and
- involvement of consumer representatives in formulating social and economic policies.
- Article 5 additionally sets consumer product quality and safety duties of the State, including:
- developing safety and quality standards (including performance/use standards, codes of practice, and methods of tests);
- assisting consumers in evaluating quality (including safety and comparative utility);
- protecting the public against unreasonable risks of injury;
- conducting research on quality improvement and causes/prevention of product-related deaths, illness and injuries; and
- ensuring consistency of standardized products.
Key definitions for consumer transactions
- Article 4 defines key terms used throughout the Act, including consumer, consumer products and services, consumer credit, and consumer transaction.
- “Consumer” means a natural person who is a purchaser, lessee, recipient or prospective purchaser/lessor/recipient of consumer products, services or credit.
- “Consumer products and services” cover goods, services and credits/debts/obligations primarily for personal, family, household or agricultural purposes, including food, drugs, cosmetics, and devices.
- “Consumer credit” means any credit extended by a creditor to a consumer for the sale or lease of any consumer product or service where part or all of the price/payment is payable at some future time, in full or installments.
- “Consumer transaction” includes:
- a sale/lease/assignment/award by chance/other disposition of consumer products or services (or rights/titles/interests in them), excluding securities under the Securities Act and contracts of insurance under the Insurance Code;
- a grant of credit to a consumer for primarily personal/family/household/agricultural purposes; and
- a solicitation or promotion by a supplier regarding such transactions.
- “Advertisement” and “Advertising” are defined for mass-medium promotional activity, including conceptualizing and disseminating facts/data/information about attributes, features, quality, or availability.
- The Act expressly defines product/quality and safety related terms such as “Banned hazardous substance,” “Banned consumer product” (via defined concepts), “Imminently hazardous product,” “Injurious, unsafe or dangerous,” “Mislabeled hazardous substance,” “Substandard product,” and “Materially defective product.”
Implementing agencies and standards-making
- Article 6 assigns enforcement of Article 5 product-safety provisions and its implementing rules and regulations to:
- the Department of Health for food, drugs, cosmetics, devices and substances;
- the Department of Agriculture for agriculture-related products; and
- the Department of Trade and Industry for other consumer products not specified above.
- Article 7 requires the concerned department to establish consumer product quality and safety standards by one or more of the following:
- performance/composition/contents/design/construction/finish/packaging requirements;
- requirements on kind/class/grade/dimensions/weights/material;
- sampling, tests, and quality-check codes;
- precautions for storage/transport/packaging; and
- requirements that products include clear safety warnings/instructions (and their form).
- Article 7 directs adoption of existing government domestic quality and safety standards; where none exist, technical committees must be formed with equal representatives from government, business, and consumer sectors to formulate and propose standards.
- Article 7 allows the private sector to develop quality and safety standards motu proprio, subject to review and approval of the concerned government agency after public hearings, and the committees must also consider existing international standards recognized by the Philippine Government.
- Article 8 requires publication of promulgated consumer product standards in two (2) newspapers of general circulation at least once a week for not less than one (1) month, and authorizes information campaigns by other effective means.
- Article 17 further provides additional powers/functions, including:
- administering and supervising implementation;
- conducting research and developing standards in coordination with government/private agencies;
- inspecting and analyzing products for conformity;
- levying/assessing/collecting/retaining fees to cover inspection, certification, analysis and testing costs;
- maintaining records of product-related deaths, illness and injuries;
- accrediting independent nongovernment bodies for market monitoring and enforcement outreach; and
- accrediting independent competent testing laboratories.
Effectivity, recall orders, and amendment rules
- Article 9 requires each consumer product standard or safety rule to specify an effectivity date not exceeding ninety (90) days from promulgation, unless the concerned department finds good cause that a later effective date is in the public interest and publishes the reasons.
- After effectivity, it becomes illegal to sell or distribute consumer products that do not comply with the standards/rules (Article 9).
- Article 9 authorizes regulation prohibiting stockpiling to prevent circumvention; “stockpiling” is manufacturing or importing between promulgation and effective date at a rate significantly greater than a prescribed base period rate.
- Article 10 authorizes the concerned departments, upon a consumer petition or initiative, to impose recall/prohibition/seizure after due notice and hearing if a product is injurious, unsafe or dangerous.
- Article 10 allows the department, in sound discretion, to treat a product as imminently injurious, unsafe or dangerous and order immediate recall, ban or seizure, with a hearing within forty-eight (48) hours for the seller/distributor/manufacturer/producer.
- Article 10 mandates that a ban remains until the product’s safety can be assured or measures to ensure safety are established.
- Article 11 allows any interested person to petition for amendment or revocation of safety determinations or orders declaring injurious/unsafe/dangerous character.
- Article 11 requires notice to the manufacturer/distributor/seller and orders for public/distributor notifications if the department determines a product is substandard or materially defective after due notice and hearing.
- Article 11 directs the department to require remedies for injured persons, including:
- bringing the product into conformity or repairing the defect;
- replacing with a like or equivalent complying product;
- refunding the purchase price less a reasonable allowance for use; and
- paying reasonable damages as determined by the department.
- Article 11 prohibits the manufacturer/distributor/seller from charging the consumer who avails of the required remedies for any expense or cost incurred.
- Article 12 sets that amendments or revocations of consumer product safety rules take effect on a specified date not exceeding ninety (90) days from publication unless good cause supports a later effective date with published reasons.
- Article 12 requires the department to promulgate necessary rules for issuance, amendment and revocation of safety rules.
New products listing and certification requirement
- Article 13 requires the concerned department to take measures to make a list of new consumer products and cause manufacturers/importers to publish lists with descriptions in a newspaper of general circulation.
- Article 14 directs that standards be established for every consumer product so that products are distributed in commerce only after inspection and certification of quality and safety by the department.
- Article 14 requires use of the Philippine Standard Certification Mark, granted by the department after determining compliance with the relevant standard in accordance with implementing rules.
Importation rules and customs controls
- Article 15 requires the refusal of admission into Philippine customs of any consumer product that:
- fails to comply with applicable consumer product quality and safety standards/rules;
- has been determined injurious, unsafe and dangerous;
- is substandard; or
- has a material defect.
- Article 15 authorizes the concerned department to obtain import samples in a quantity necessary to determine non-admission grounds without charge from the owner or consignee.
- Article 15 provides that the owner or consignee must be afforded an opportunity for a hearing regarding importation.
- Article 15 requires refusal admission unless the owner/consignee manifests under bond that none of the non-admission grounds exists or that measures have been taken to cure the grounds before sale/distribution to the public.
- Article 15 prohibits importation of any consumer product whose sale or use was banned or withdrawn in the country of manufacture.
- Article 15 allows deferral of final admission determination for modification purposes for a period not exceeding ten (10) days, and permits release from customs custody under bond for modification, under jointly promulgated regulations of the department and the Commissioner of Customs.
- Article 15 subjects modifications to the supervision of the concerned department.
- Article 15 authorizes redelivery into customs custody and seizure if the product cannot be modified satisfactorily or if modification is not pursued satisfactorily.
- Article 15 requires that imported products not admitted be exported, except that the Commissioner of Customs may permit destruction upon application if, within a reasonable time, the owner/consignee fails to export.
- Article 15 imposes that expenses for destruction and expenses for storage/cartage/labor for refused admission are paid by the owner/consignee and, in default, constitute a lien against future importations by that owner/consignee.
- Article 16 exempts safety rules for consumer products intended for export when:
- it can be shown they are manufactured/sold/held for export (or imported for export) and are not in fact distributed in commerce for use in the Philippines; and
- the product or packaging bears a stamp/label stating intended for export and actually exported.
Prohibited acts and criminal penalties
- Article 18 makes it unlawful to:
- manufacture for sale, offer for sale, distribute in commerce, or import any consumer product not conforming to an applicable consumer product quality or safety standard promulgated under the Act;
- do the same for consumer products declared as banned consumer products by a rule under the Act;
- refuse access to or copying of pertinent records, or fail or refuse to permit entry or inspection by authorized department officers/employees;
- fail to comply with orders relating to notifications of substantial product hazards and recall/repair/replacement/refund of unsafe products issued under Article II; and
- fail to comply with the rule prohibiting stockpiling.
- Article 19 provides penalties for violations of Article 18: on conviction, the offender faces a fine of not less than PHP 1,000.00 but not more than PHP 10,000.00, or imprisonment of not less than two (2) months but not more than one (1) year, or both, at the court’s discretion.
- Article 19 requires that if the offender is an alien, the person shall be deported after service of sentence and payment of fine without further deportation proceedings.
- Article 19 imposes, for a naturalized citizen, cancellation of the naturalization certificate and its registration in the civil register, plus immediate deportation after sentence and payment of fine.
- Article 19 provides corporate responsibility: any director, office, or agent of a corporation who authorizes, orders, or performs any acts/practices constituting the violation, with knowledge or notice of noncompliance received from the concerned department, is subject to penalties that the corporation may be subject to.
- Article 19 provides that if the violation is committed by or in the interest of a duly licensed foreign juridical person engaging in business in the Philippines, it shall have its authority immediately revoked.
Food, drug, cosmetic and device regulation duties
- Article 20 requires the State to ensure safe and good quality food, drugs, cosmetics and devices, and regulate their production, sale, distribution and advertisement to protect consumer health.
- Article 21 assigns the Department of Health implementation functions, including establishing standards and quality measures, ensuring pure/safe supply of foods and cosmetics and safe/efficacious good-quality drugs and devices, ensuring rational drug and device use (including banning/recalling/withdrawing unregistered, unsafe, inefficacious, or of doubtful therapeutic value; adopting an official national drug formulary; and using generic names in labeling), and strengthening the Bureau of Food and Drugs.
Standards, adulteration, and regulatory effectivity
- Article 22 authorizes the Department to promulgate rules establishing reasonable definitions and standards of identity, quality, and/or container fill for food, drugs, cosmetics or devices when it promotes honesty and fair dealing in the interest of consumers.
- Article 23 deems food adulterated under multiple conditions, including contamination with poisonous/deleterious substances, unsafe additives outside tolerances, filthy/putrid/decomposed materials, preparation under unsanitary conditions, origin from diseased animals, harmful container composition, and expiration.
- Article 25 provides that any poisonous or deleterious substance added to food is unsafe, unless required or unavoidable in production and good manufacturing practice; the Department must issue regulations limiting quantities, and quantities exceeding limits are deemed unsafe.
- Article 26 provides that a food additive is unsafe unless it fits investigational-use exemptions for qualified experts or conforms to department regulations prescribing safe-use conditions.
- Article 27 gives any person a right to file a petition proposing safe-use regulations for a food additive by intended use; the Department must either issue a regulation with safe conditions and limits and notify the petitioner with reasons, or deny with reasons.
- Article 27 also authorizes the Department to issue safe-use regulations on its own initiative and publish them.
- Article 28 makes regulations issued under the prior articles effective fifteen (15) days after publication in a newspaper of general circulation, subject to the Department’s authority to stay effectivity if a hearing is sought by an adversely affected person.
Drugs and devices: adulteration rules
- Article 29 deems a drug or device adulterated if it consists of filthy/putrid/decomposed substances, is made under unsanitary conditions allowing contamination or injury, uses a poisonous/deleterious container material, bears/contains an impermissible color, or fails strength/safety/efficacy/quality/purity standards when represented as a compendial drug.
- Article 29 requires that where tests or assay methods are insufficient, the Department must promulgate regulations prescribing appropriate tests or methods of assay for determinations of strength/safety/efficacy/quality/purity.
- Article 29 provides that no drug in an official compendium is deemed adulterated solely because it differs from compendial standards where the difference is plainly stated in its label and approved for registration as such.
- Article 29 deems a drug or device adulterated if: its strength/efficacy/quality/purity differs from what it purports/represents; it is mixed/packed/substituted to reduce safety/efficacy/quality/strength/purity; or manufacturing/holding methods/facilities/controls do not conform to current good manufacturing practice ensuring identity and strength and quality/purity consistent with representation.
- Article 30 directs the Department to promulgate regulations exempting certain drugs and devices from labeling/packaging requirements when, under trade practice, they are processed/labeled/repacked in substantial quantities in establishments other than where originally processed/packed, provided the products are not adulterated or mislabeled under the Act upon removal from the repacking establishment.