The Price Act

Case Overview and Summary

Summary of Republic Act No. 7581 (The Price Act)

Objectives and Basic Policy (Sec. 2):
- Ensure availability of basic necessities and prime commodities at reasonable prices
- Protect consumers against hoarding, profiteering, and cartels
- Develop measures to promote productivity, efficient distribution, and price stabilization
- Institute penalties for illegal price manipulation
- Establish mechanisms to protect consumers during calamities and emergencies

Definitions (Sec. 3):
- "Basic necessities" include rice, corn, bread, fish, meat, eggs, milk, vegetables, coffee, sugar, cooking oil, salt, soap, detergents, firewood, charcoal, candles, and essential drugs
- "Prime commodities" include fresh fruits, flour, processed meat, dairy products, noodles, onions, garlic, vinegar, soy sauce, toilet soap, fertilizers, pesticides, feeds, veterinary products, paper, school supplies, construction materials, batteries, electrical supplies, and non-essential drugs
- "Implementing agency" refers to the government department with jurisdiction over a specific basic necessity or prime commodity

Exclusions (Sec. 4):
- The implementing agency, with the President's approval, may exclude non-essential or luxury goods from coverage after a public hearing

Illegal Acts of Price Manipulation (Sec. 5):
- Hoarding: Undue accumulation of stocks beyond normal inventory levels or unreasonable limitation of supply (prima facie evidence if stocks exceed 50% of usual inventory)
- Profiteering: Selling goods at grossly excessive prices (prima facie evidence if goods have no price tag, misrepresented weight/measurement, adulterated/diluted, or price increased by more than 10% from previous month)
- Cartel: Agreement between entities to artificially increase prices (prima facie evidence if competing entities perform uniform acts leading to unreasonable price increase)

Automatic Price Control (Sec. 6):
- Prices of basic necessities shall be automatically frozen at prevailing prices in areas declared as disaster areas, under emergency, martial law, or state of war, unless the President declares otherwise
- The implementing agency may recommend a price ceiling if the prevailing price is excessive
- Price control shall remain effective for up to 60 days unless lifted earlier by the President

Mandated Price Ceiling (Sec. 7):
- The President, upon the implementing agency's recommendation, may impose a price ceiling on any basic necessity or prime commodity due to calamities, emergencies, illegal price manipulation, or unreasonable price increases

Determination of Price Ceilings (Sec. 8):
- Factors to consider include average price in the last 3 months, supply, costs to producers/sellers (exchange rates, machinery amortization, labor costs, transportation), and other relevant factors

Buffer Fund (Sec. 9):
- The implementing agency may procure, purchase, import, or stockpile basic necessities or prime commodities using a buffer fund allocated in its annual appropriations

Powers and Responsibilities of Implementing Agencies (Sec. 10):
- Promulgate rules and regulations for implementation
- Develop programs to promote productivity
- Facilitate establishment of effective procurement, storage, marketing, and distribution systems
- Institute temporary measures during panic-buying to ensure orderly distribution
- Issue suggested reasonable retail prices
- Disseminate mandated price ceilings through publication and broadcast
- Procure supplies through agreements with producers, suppliers, and distributors
- Conduct investigations and impose administrative fines of P1,000 to P1,000,000
- Issue cease and desist orders, revoke licenses, order closure of establishments
- Initiate seizure and sale of goods subject to violations
- Initiate prosecution of violations
- Deputize and enlist assistance from government officials and agencies

Price Coordinating Council (Sec. 11):
- Composed of Secretaries of Trade and Industry (Chairman), Agriculture, Health, Environment and Natural Resources, Local Government, Transportation and Communications, Justice, NEDA Director-General, and representatives from consumer, agricultural, trading, and manufacturing sectors
- Coordinates productivity, distribution, and price stabilization programs
- Advises the President on policy matters
- Publicizes developments in supply, distribution, and prices
- Disseminates prevailing prices or price ceilings during automatic price control

Price Action Officer (Sec. 13):
- May be appointed by the President from the Price Coordinating Council members
- Carries out and enforces policies and decisions of the Council
- Coordinates actions of implementing agencies
- Calls upon government agencies for assistance
- Establishes linkages with private organizations

Role of National Statistics Office (Sec. 14):
- Conducts periodic surveys and studies on selling prices of basic necessities and prime commodities, and their impact on family income

Penalties (Sec. 15-20):
- Illegal price manipulation: 5-15 years imprisonment and P5,000-P2,000,000 fine
- Violation of price ceiling: 1-10 years imprisonment and P5,000-P1,000,000 fine, or both
- Violations by juridical persons: Officials or employees responsible shall be held liable
- Violations by aliens: Deportation after serving sentence
- Violations by government officials: Permanent disqualification from public office
- Criminal penalties are without prejudice to administrative sanctions

Repealing Clause (Sec. 23):
- Repeals Republic Act No. 4164, Presidential Decree No. 1674, Letters of Instruction No. 1305, 1342, and 1359, and other inconsistent laws and issuances

Effectivity (Sec. 24):
- Takes effect 3 days after publication in two national newspapers of general circulation