Price Manipulations in the COVID Situation: Punishing Hoarding, Profiteering, and Cartel during crises in the Philippines

Consumer Protection during Crises

In the midst of the Coronavirus pandemic, are consumers protected?

Presidential Proclamation No. 929, s. 2020, was issued declaring a state of calamity throughout the Philippines and imposed an Enhanced Community Quarantine throughout Luzon, which started on 17 March 2020.

Republic Act No. 11469 or the Bayanihan to Heal as One Act was passed into law and enumerated the punishable offenses during the three-month declaration of a national emergency. Among the offenses punishable under the Bayanihan to Heal as One Act are hoarding, profiteering, cartel, and price manipulations.

Unlawful Acts Punished

What do these unlawful acts really mean?

Under the Price Act, hoarding, profiteering, and cartel are all considered as acts of price manipulations, and they are defined as follows:

1. Hoarding – is the undue accumulation by a person or combination of persons of any basic commodity beyond his or their normal inventory levels or the unreasonable limitation or refusal to dispose of, sell or distribute the stocks of any basic necessity of prime commodity to the general public or the unjustified taking out of any basic necessity or prime commodity from the channels of reproduction, trade, commerce and industry. There shall be prima facie evidence of hoarding when a person has stocks of any basic necessity or prime commodity fifty percent (50%) higher than his usual inventory and unreasonably limits, refuses or fails to sell the same to the general public at the time of discovery of the excess. The determination of a person’s usual inventory shall be reckoned from the third month immediately preceding before the discovery of the stocks in case the person has been engaged in the business for at least three (3) months; otherwise, it shall be reckoned from the time he started his business.

• Profiteering – is the sale or offering for sale of any basic necessity or prime commodity at a price grossly in excess of its true worth.  There shall be prima facie evidence of profiteering whenever a basic necessity or prime commodity being sold:

(a) has no price tag;

(b) is misrepresented as to its weight or measurement;

(c) is adulterated or diluted; or

(d) whenever a person raises the price of any basic necessity or prime commodity he sells or offers for sale to the general public by more than ten percent (10%) of its price in the immediately preceding month: Provided, That, in the case of agricultural crops, fresh fish, fresh marine products, and other seasonal products covered by this Act and as determined by the implementing agency, the prima facie provisions shall not apply; and

• Cartel – is any combination of or agreement between two (2) or more persons engaged in the production, manufacture, processing, storage, supply, distribution, marketing, sale or disposition of any basic necessity or prime commodity designed to artificially and unreasonably increase or manipulate its price. There shall be prima facie evidence of engaging in a cartel whenever two (2) or more persons or business enterprises competing for the same market and dealing in the same basic necessity or prime commodity, perform uniform or complementary acts among themselves which tend to bring about artificial and unreasonable increase in the price of any basic necessity or prime commodity or when they simultaneously and unreasonably increase prices on their competing products thereby lessening competition among themselves.

Republic Act No. 7581 or the Price Act is a law which provides protection to consumers by stabilizing the prices of basic necessities and prime commodities and providing measures against undue price increases during emergency situations like the COVID crisis.

About Nicolas and De Vega Law Offices

If you need assistance in commercial, trade and competition law-related issues,   we can help you. Nicolas and de Vega Law Offices is a full-service law firm in the Philippines.  You may visit us at the 16th Flr., Suite 1607 AIC Burgundy Empire Tower, ADB Ave., Ortigas Center, 1605 Pasig City, Metro Manila, Philippines.  You may also call us at +632 84706126, +632 84706130, +632 84016392 or e-mail us at [email protected]. Visit our website www.ndvlaw.com.