State policy and declared intent
- Section 2 declares State policy to ensure the availability of basic necessities and prime commodities at reasonable prices at all times without denying legitimate business a fair return on investment.
- Section 2 requires effective and sufficient protection to consumers against hoarding, profiteering, and cartels regarding the supply, distribution, marketing, and pricing of covered goods.
- Section 2 directs special protection especially during periods of calamity, emergency, widespread illegal price manipulation, and other similar situations.
- Section 2 mandates the State to develop measures to promote productivity, develop an efficient transport and distribution system, stabilize prices at reasonable levels, institute penalties for illegal manipulation, and establish a mechanism to protect consumers from inadequate supply and unreasonable price increases.
Key definitions and regulated goods
- Section 3 defines “Basic necessities” to include: rice; corn; bread; fresh, dried and canned fish and other marine products; fresh pork, beef and poultry meat; fresh eggs; fresh and processed milk; fresh vegetables; root crops; coffee; sugar; cooking oil; salt; laundry soap; detergents; firewood; charcoal; candles; and drugs classified as essential by the Department of Health.
- Section 3 defines “Prime commodities” to include: fresh fruits; flour; dried, processed and canned pork; beef and poultry meat; dairy products not falling under basic necessities; noodles; onions; garlic; vinegar; patis; soy sauce; toilet soap; fertilizer; pesticides; herbicides; poultry; swine and cattle feeds; veterinary products for poultry, swine and cattle; paper; school supplies; nipa shingles; sawali; cement; clinker; GI sheets; hollow blocks; plywood; plyboard; construction nails; batteries; electrical supplies; light bulbs; steel wire; and all drugs not classified as essential drugs by the Department of Health.
- Section 3 defines “Buffer fund” as a contingent fund in the budget of the implementing agency not used in normal operations but only for purposes under the Act.
- Section 3 defines “Implementing agency” by product coverage:
- Department of Agriculture for agricultural crops, fish and other marine products, fresh meat, fresh poultry and dairy products, fertilizers, and other farm inputs;
- Department of Health for drugs;
- Department of Environment and Natural Resources for wood and other forest products; and
- Department of Trade and Industry for all other basic necessities and prime commodities.
- Section 3 defines “Panic-buying” as consumers buying basic necessities and prime commodities grossly in excess of normal requirement, causing undue shortages prejudicing less privileged consumers.
- Section 3 defines “Prevailing price” as the average price at which any basic necessity has been sold in a given area within a month from the occurrence of any condition enumerated in Section 6.
- Section 3 defines “Price ceiling” as the maximum price at which any basic necessity or prime commodity may be sold to the general public.
- Section 3 defines “Person” as a natural person or a juridical person.
Coverage and exclusion of goods
- Section 5 applies its prohibitions to any person habitually engaged in production, manufacture, importation, storage, transport, distribution, sale, or other disposition of covered goods.
- Section 4 authorizes the implementing agency, upon petition of the concerned parties and after public hearing, with approval of the President, to exclude types or brands of covered goods deemed nonessential goods or luxury goods from the Act’s coverage.
- Section 4 provides that an excluded type or brand may be reinstated by the implementing agency during occasions of acute shortage in supply of the basic necessity or prime commodity to which the excluded type or brand belonged.
Prohibited acts: hoarding, profiteering, cartel
- Section 5 declares it unlawful for a covered person habitually engaged in covered business activities to engage in price manipulation of any basic necessity or prime commodity.
- Section 5 prohibits hoarding, including: undue accumulation beyond normal inventory levels; unreasonable limitation/refusal to dispose of stocks to the general public; and unjustified removal from channels of production, trade, commerce, and industry.
- Section 5 establishes prima facie evidence of hoarding when a person’s stocks are fifty percent (50%) higher than usual inventory and the person unreasonably limits, refuses, or fails to sell to the general public at discovery.
- Section 5 provides how “usual inventory” is determined:
- if engaged for at least three (3) months, inventory is reckoned from the third month immediately preceding discovery;
- otherwise, it is reckoned from the time the business started.
- Section 5 prohibits profiteering as selling/offering basic necessities or prime commodities at a price grossly in excess of true worth.
- Section 5 establishes prima facie evidence of profiteering when the item (a) has no price tag; (b) is misrepresented as to weight/measurement; (c) is adulterated or diluted; or (d) the seller raises the price by more than ten percent (10%) of the immediately preceding month’s price.
- Section 5 provides a special rule that, for agricultural crops, fresh fish, fresh marine products, and other seasonal products covered by the Act (as determined by the implementing agency), the prima facie profiteering rule under the ten percent (10%) price increase does not apply.
- Section 5 prohibits cartel arrangements: any combination or agreement among two (2) or more persons engaged in production, manufacture, processing, storage, supply, distribution, marketing, sale, or disposition, designed to artificially and unreasonably increase/manipulate price.
- Section 5 establishes prima facie evidence of engaging in a cartel when competing entities perform uniform or complementary acts tending to bring about artificial and unreasonable price increases, or simultaneously and unreasonably increase prices that lessen competition among themselves.
Automatic price control and ceilings
- Section 6 mandates that, unless otherwise declared by the President, prices of basic necessities in an area automatically freeze at prevailing prices or are placed under automatic price control when any of the following exists in the area:
- proclamation/disaster area or state of calamity;
- declaration of emergency;
- suspension of the privilege of the writ of habeas corpus;
- martial law;
- state of rebellion; or
- state of war.
- Section 6 allows the implementing agency to recommend to the President a price ceiling if the prevailing price of any basic necessity is excessive or unreasonable.
- Section 6 provides the duration: price control remains effective for the duration of the condition that brought it about, but not for more than sixty (60) days unless sooner lifted by the President.
- Section 6 defines “disaster” and “calamity” to include causes by natural or man-made causes, whether local or foreign.
- Section 7 authorizes the President, upon recommendation of the implementing agency or the Price Coordinating Council, to impose a price ceiling on any basic necessity or prime commodity when warranted by:
- impendency/existence/effects of a calamity;
- threat/existence/effects of an emergency;
- prevalence or widespread acts of illegal price manipulation;
- impendency/existence/effects of events causing artificial and unreasonable price increase; and
- when the prevailing price has risen to unreasonable levels.
- Section 8 governs determination of reasonable price ceilings by allowing consideration of:
- average price in the last three (3) months immediately preceding the proclamation;
- market supply;
- producer/manufacturer/distributor/seller costs including: peso exchange rate for foreign-currency payments, changes in amortization costs due to exchange-rate changes on machinery bought through credit facilities, changes in labor cost due to changes in the minimum wage, and increases in transport/distribution costs to the destination; and
- other factors or conditions aiding in arriving at a just and reasonable ceiling.
Implementing powers and dissemination duties
- Section 9 permits the implementing agency to procure, purchase, import, or stockpile any covered basic necessity or prime commodity and devise distribution for sale at reasonable prices in areas with shortage or need to change prevailing price; a buffer fund shall be allocated in annual appropriations for such purposes.
- Section 10 authorizes the head of the implementing agency (with Presidential approval when required) to:
- promulgate rules, regulations, and procedures for implementation;
- develop and implement productivity programs and measures;
- promote an effective procurement, storage, marketing, and distribution system nationwide;
- during panic-buying, institute temporary measures to ensure orderly and equitable distribution to consumers in the affected area (with Presidential approval);
- issue suggested reasonable retail prices for guidance; and
- disseminate mandated price ceilings immediately through publication in a newspaper of general circulation and broadcast by radio, and by television when more effective; dissemination may also include posting in public markets, supermarkets, or public places.
- Section 10 authorizes the head, with Presidential approval and subject to bidding laws and rules, to enter into agreements for buffer stocking with local or foreign producers/suppliers/sellers, and provides that in areas with shortages or rampant illegal manipulation, the head may order immediate sale.
- Section 10 authorizes the head, subject to bidding laws and rules, to enter into agreements with owners/operators of warehouses or storage houses and owners/operators/franchise holders of vehicles or public utilities for storage, transport, or distribution.
- Section 10 authorizes investigations of violations and, after due notice and hearing, the imposition of administrative fines between P1,000 and P1,000,000.
- Section 10 requires administrative fine determination to consider: seriousness depending on whether the violation concerns basic necessities; whether the goods are under price control under Sections 6 and 7 (basic necessities under control deemed more serious); number of violations; prior violations leading to higher fines; and other necessary considerations.
- Section 10 authorizes requiring witness attendance and testimony, or production of goods and documentary evidence, including books, papers, documents, contracts, records, financial statements, accounts, and agreements, material to determining a violation.
- Section 10 authorizes, without prejudice to temporary closure or TRO for not more than ten (10) days, the issuance of cease and desist orders, reprimand, censure, suspension/revocation/cancellation of permits/licenses/authority/registration, or permanent closure after due notice and hearing.
- Section 10 authorizes summary proceedings to cause seizure of basic necessities and prime commodities subject of a violation and order their sale to the public at reasonable prices when warranted by the nature of or demand for the goods.
- Section 10 requires that pending litigation, seizure-sale proceeds be held in trust or escrow by the implementing agency.
- Section 10 provides the proceeds rule: if the owner is found not liable, proceeds are paid to the owner; otherwise, proceeds accrue to the general fund of the Government.
- Section 10 requires the head to cause radio/television broadcast and publication in at least two (2) newspapers of general circulation of the fact of sale/disposition at least three (3) days before sale/disposition.
- Section 10 authorizes initiating court prosecution of violators and deputizing government officials/agencies for assistance.
Price Coordinating Council and monitoring roles
- Section 11 creates the Price Coordinating Council composed of: the Secretary of Trade and Industry (Chairman); the Secretaries of Agriculture, Health, Environment and Natural Resources, Local Government, and Transportation and Communications; the Secretary of Justice; the Director General of the National Economic and Development Authority; and sectoral representatives from consumers, agricultural producers, trading, and manufacturers.
- Section 11 provides that sectoral representatives are appointed by the President for a term of one (1) year, without prejudice to reappointment for another term.
- Section 11 requires the Council to meet every quarter and whenever convened by the President or Chairman, with reasonable transportation reimbursements for each member.
- Section 11 allows government-sector members to designate a representative, and provides that the Department of Trade and Industry shall provide the secretariat from its existing organizational structure.
- Section 12 requires the Council to coordinate productivity, distribution, and price stabilization strategies, develop comprehensive strategies, report status/progress to the President and Congress, advise the President on policy matters, may require information and conduct public hearings on supply/distribution/price, and publicize developments from time to time.
- Section 12 requires that when automatic price control is imposed under Section 6, the Council shall immediately disseminate prevailing prices or the imposed price ceilings via newspaper of general circulation and broadcast by radio, with television when effective; posting may also be used.
- Section 13 authorizes the President to appoint any Council member as Price Action Officer for the duration of automatic price control under Section 6 when the President deems it necessary.
- Section 13 requires the Price Action Officer to enforce Council policies and decisions, coordinate implementing-agency actions for monitoring and investigation, call on national or local government officials/agents for assistance, establish linkages with nongovernment/private organizations in the affected area, and perform other functions the President assigns.
National Statistics Office data role
- Section 14 requires the National Statistics Office to conduct independent periodic surveys and studies of selling prices of all basic necessities and prime commodities nationwide, and their share/effect on family income across economic groups.
- Section 14 makes those surveys and studies a database for government efforts to stabilize prices and evaluates effectiveness of such efforts.
Criminal offenses and penalties
- Section 15 imposes for acts of illegal price manipulation under Section 5: imprisonment of not less than five (5) years and not more than fifteen (15) years, and a fine of not less than P5,000 and not more than P2,000,000.
- Section 16 imposes for violations of Sections 6 or 7: imprisonment of not less than one (1) year and not more than ten (10) years, or a fine of not less than P5,000 and not more than P1,000,000, or both, at the discretion of the court.
- Section 17 provides that when a juridical person commits a violation, its officials or employees are liable; for a foreign corporation or association, its agent or representative in the Philippines responsible for the violation is liable.
- Section 18 provides that for aliens, in addition to the penalty under Section 15 or 16, the offender shall be immediately deported upon conviction and after service of sentence, without need of further proceedings.
- Section 19 imposes enhanced liability on public officials or employees who, by reason of office, conspire in violations or knowingly conceal violations: they are principally responsible and suffer the additional penalty of permanent disqualification to hold public office.
- Section 20 provides that criminal penalties are without prejudice to administrative sanctions the implementing agency may impose under the Act or any other law.
Relationship with other laws; separability; repeal
- Section 21 preserves existing jurisdiction of government agencies over goods or products conferred by other laws or presidential issuances, stating nothing in the Act removes or diminishes that jurisdiction.
- Section 22 establishes separability: if any provision or application is declared invalid or unconstitutional, the remainder of the Act remains unaffected.
- Section 23 repeals, to the extent inconsistent with the Act, Republic Act No. 4164, Presidential Decree No. 1674, and Letter of Instruction No. 1305, Letter of Instruction No. 1342, and Letter of Instruction No. 1359, and also repeals or modifies all inconsistent laws and rules and regulations.