The Consumer Act of the Philippines, The Price Act; and the Lemon Law

A. Republic Act No. 7394

1. What are the eight (8) basic rights of a consumer under Republic Act No. 7394?
Explain each and provide examples for each right.

Right to basic needs is the right to have access on basic goods or necessities, and
services such as food, clothing, shelter, health care, utilities, water, and sanitation. For
example, as a consumer, we may look forward to the basic and prime commodities at
affordable prices and of good quality.

Right to safety is the right to have protection against marketing of hazardous goods and
services that can affect your health and life. For example, consumers who purchase
Christmas lights should first look for certification like PS marks to assure that the
product has certified quality and marked as safe.

Right to information is the right to be given facts to make informed decisions and be
protected against misleading advertising and labelling. For example, when buying
medicine such as Biogesic, make sure to look for information such as labels,
manufacturer, or expiration date to avoid getting harmed.

Right to choice is the right to select from a wide range of goods and services at
competitive prices with good quality assurance. For example, the consumer can choose
whatever shampoo suits him the most from the variety of selection at the grocery store.

Right to representation is the right to express interest in making and execution of

government policies. For example, if a consumer has a concern regarding the product
he purchased, he expects that this concern is addressed by the business.

Right to redress is the right to be compensated for misrepresentation, faulty goods, or

unsatisfactory services. For example, if the air conditioner bought cannot cool a room,
the consumer can return it to the store and ask for a replacement.

Right to consumer education is the right to obtain knowledge and skills necessary to be
an informed customer. For example, condominium agents can give flyers to clients
stating the necessary details of the units such as rooms, capacity, and accessibility.

Right to a healthy environment is the right to live and work in an environment that is not
threatening and not dangerous. For example, cleaning the hospital premises regularly
will prevent illness from spreading, thus, promotes a healthy working environment.

2. What is the importance of consumer act?

The consumer act is important because it protects the interests of the consumers
through promoting general welfare (public health and safety measures), and
establishing standards of conduct for businesses. This act advocates awareness
towards the consumers with regards to the products they are buying. For example, for
food ingredients, the consumer act makes sure that the advertising for this kind of
product is fair and not misleading.

3. What are the responsibilities of the consumers?

Critical awareness is the consumer’s responsibility to be more alert and question the
use, price, and quality of goods and services offered and used.
Action is the responsibility of the consumers to assert and ensure for a fair deal. If we
remain passive consumers, then we will continue to benefit unfairly.
Social Concern is the consumer’s responsibility to be aware on the impact of our
consumption to our fellow citizens, especially the poor, exploited, or powerless groups
of local, national, or international community.
Environmental Awareness is a consumer’s responsibility to ensure that the choice of
products do not harm the environment. Consumers are expected to segregate their
wastes, conserve electricity and water, and lessen the use of products that have
impacts on the environment such as the plastic usage.
Solidarity is the responsibility to organize together as consumers to develop the strength
and influence the promotion and protection of our interests.

B. Republic Act 7581

1. Define basic necessities, panic buying, price ceiling and prime commodities.
Basic necessities are goods essential for consumer’s everyday sustenance and
survival, and may be subject to imposition of price ceiling if triggered. These
commodities include, but not limited to rice, bread, marine products, poultry meet, fresh
eggs, milk, vegetables, coffee, sugar, cooking oil, salt, laundry soap, detergents,
candles, and drugs.
Panic buying is the consumer’s abnormal phenomenon of a sudden increase in
consumption and buying goods excessively when provoked by an adverse situation,
which will result to goods shortage for less privileged customers.
Price ceiling is the maximum price a seller is allowed to charge for both basic and prime
products or services offered to the general public.
Prime commodities are products not considered as basic necessities but are essential
to consumers, and it may also subject to price ceiling imposition when triggered. These
commodities include, but not limited to flour, processed poultry meat, dairy products that
do not fall under basic necessities, onions, garlic, vinegar, patis, soy sauce, toilet soap,
fertilizer, veterinary products, school supplies (including paper), cement, batteries,
electrical supplies, light bulbs, etc.
 2. Enumerate illegal acts of price manipulation.
Hoarding is the consumer’s undue accumulation of any basic commodity beyond his
normal inventory levels or the unreasonable refusal to dispose, sell, or distribute the
basic or prime commodity stocks to the general public. It can be also the unjustified
taking out of any basic necessity or prime commodity from reproduction, trade,
commerce, and industry channels.
Profiteering is the sale offering of any basic necessity or prime commodity at a price
excess of its true value. Prima facie evidence of profiteering of a basic or prime
commodity being sold has no price tag, misrepresentation of weight or measurement,
adulterated, and whenever a person raises the price by more than 10% of its price in
the preceding month.
Cartel is the agreement between two or more persons engaged in the production,
manufacture, processing, storage, supply, distribution, marketing, or sale of any basic
necessity or prime commodity designed to unreasonably increase the price.

3. When is automatic price control warranted?

Unless declared by the President, prices of basic necessities in an area shall freeze at
their prevailing prices whenever an area is declared under state of calamity or disaster,
emergency, rebellion, war, martial law, or when the privilege of the habeas corpus has
been suspended.

4. What are the conditions warranting price ceiling?

The President or the Price Coordinating Council may impose a price ceiling on any
basic or prime commodity if any of the following condition warrants:
(1) The independency, existence, or effects of calamity
(2) The threat, existence, or effect of an emergency
(3) The widespread manipulation of illegal price
(4) The independency, existence, or effect of any event that causes unreasonable
price increase of basic or prime commodities; and
(5) Whenever the prevailing price of any basic or prime commodity increased to
unreasonable levels

5. What is the composition of price coordinating council?

The Price Coordinating Council is composed of the following members:
(1) The Secretary of Trade and Industry, as Chairman;
(2) The Secretary of Agriculture;
 (3) The Secretary of Health;
(4) The Secretary of Environment and Natural Resources;
(5) The Secretary of Local Government;
(6) The Secretary of Transportation and Communications;
(7) The Secretary of Justice;
(8) The Director General of the National Economic and Development Authority;
(9) One (1) representative from the consumers’ sector;
(10) One (1) representative from the agricultural producers’ sector;
(11) One (1) representative from the trading sector; and
(12) One (1) representative from the manufacturers’ sector.

6. What are the powers and functions of the coordinating council?

The Price Coordinating Council has the functions of:
(1) Coordinating the productivity, distribution, and price stabilization programs,
project and measures of the Government, and develop strategies to stabilize the
price of basic necessities and prime commodities
(2) Reporting the status and progress of programs, projects, and measures
undertaken in stabilizing prices of basic and prime commodities to the President
and to the Philippine Congress
(3) Advising the President regarding the general policy matters for promotion and
productivity improvement, distribution, and prices stabilization of basic and prime
commodities
(4) Requiring information from its members or other government agency as it may
deem necessary; conduct public hearings for supply assessing, distribution and
price situation of any basic necessity or prime commodity
(5) Publicizing from time to time the developments in productivity, supply,
distribution, and prices of basic necessities and prime commodities
(6) Whenever automatic price control of basic necessities is imposed under Section
6 of this act, it shall cause the immediate dissemination of price ceilings imposed
through newspaper publication of general circulation of the affected area, and
through radio broadcast

C. Republic Act No. 10642

1. Why is Republic Act No. 10642 called "Lemon Law"?
When motor vehicles purchased in authorized dealers are easily damaged or has
defects, they are like lemons that can easily be rotten, that is why defective cars are
called lemon cars. That is why the RA 10642 or the Philippine Lemon Law is created to
protect the rights of consumers in the sale of motor vehicles against business that are
deceptive or unfair.
 2. What is the coverage of the law?
The Act shall cover brand new 4-wheeled motor vehicles purchased in the Philippines
that is reported by the consumer to be in nonconformity with the vehicle’s manufacturer
or distributor or specifications within 12 months from the date of original delivery to the
customer, or up to 20,000 kilometers of operation after delivery, whichever comes first.

3. What are excluded causes of nonconformity?

Excluded causes of nonconformity include noncompliance by the consumer of the
obligations under the warranty; modifications that are not authorized by the
manufacturer, distributor, authorized dealer or retailer; abuse or neglect of the brand
new motor vehicle; and, vehicle damage due to accident or force majeure.

4. What is Lemon law right?

The Lemon law right provides the consumers the right to report any non-conformity with
the vehicle’s manufacturer or authorized dealer. If the brand new vehicle is defective,
then the consumer may invoke this right.

5. What is the prescriptive period for lemon law right?

The Lemon law right period can either be 12 months after the original delivery date of
the brand new motor vehicle to the consumer or the first 20,000 kilometers of operation
after delivery. This period encompass the reporting of any nonconformity, as defined in
paragraph (k), to the standards and specifications of the manufacturer, authorized
distributor, dealer, or retailer.

6. Enumerate the requisites to avail of lemon law rights?

To avail the lemon law rights, the consumer shall bring the vehicle to the manufacturer,
distributor, authorized dealer or retailer from where the vehicle was purchased for the
final attempt to address the complaint.
It shall be the duty of the manufacturer, distributor, authorized dealer or retailer, to
attend to the consumer’s complaints including making repairs and undertaking actions
to conform to the standards or specifications of the manufacturer, distributor, authorized
dealer or retailer, upon the receipt of the motor vehicle and the notice of nonconformity
required under Section 6.
 7. Which agency has jurisdiction over violation of lemon law?
The Department of Trade and Industry is the agency that exercise exclusive and original
jurisdiction over violation of the Lemon law. All disputes arising from the provisions shall
be settled by the DTI in accordance with the Section I of the Lemon Law in relation with
the agency’s existing dispute resolution rules.

Honor Pledge
“I affirm that I have not given or received any unauthorized help on this assignment, and
that this work shall be my own.”