Dear PAO,
I walk around my village every day for exercise, and I started to notice that there is one store that sells goods at a higher price compared to the other stores. After a while, I realized that the store had increased all of their prices by more than 20 percent in a month! Is this even allowed under the law?
Rodlyn
Dear Rodlyn,
Please be informed of the Section 5(2) of Republic Act (RA) 7581, An Act Providing Protection to Consumers by Stabilizing the Prices of Basic Necessities and Prime Commodities and by Prescribing Measures Against Undue Price Increases During Emergency Situations and Like Occasion, which states that:
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“Sec. 5. Illegal Acts of Price Manipulation. – Without prejudice to the provisions of existing laws on goods not covered by this Act, it shall be unlawful for any person habitually engaged in the production, manufacture, importation, storage, transport, distribution, sale or other methods of disposition of goods to engage in the following acts of price manipulation of the price of any basic necessity or prime commodity: xxx
“(2) Profiteering, which 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 xxx”
The store owner, in the situation that you mentioned, may have committed the illegal act of price manipulation, or specifically the act of profiteering, which is raising the price of any basic necessity or prime commodity that he/she sells or offers for sale to the general public by more than 10 percent of its price in the immediately preceding month.
Section 5 of RA 7581 states that engaging in the act of price manipulation of any basic necessity or prime commodity shall be considered unlawful for any person who habitually engages in the production, manufacture, importation, storage, transport, distribution, sale, or other methods of disposition of goods to the general public. One of the illegal acts of price manipulation is called “profiteering,” which may be committed when a basic necessity or prime commodity being sold has no price tag, is misrepresented as to its weight or measurement, is adulterated or diluted, or whenever a person sells or offers it for sale by more than 10 percent of its price in the immediately preceding month.
The law considers this act unlawful in order to ensure the availability of basic necessities and prime commodities at reasonable prices at all times without denying legitimate businesses a fair return on their investment.
Applying the said provision in the situation that you mentioned, the store owner committed the prohibited act of profiteering when he or she sold a basic necessity or prime commodity at a price of more than 10 percent of their price in the immediately preceding month. Accordingly, any person who may be guilty of violating the aforementioned law may suffer the penalty of imprisonment for a period of not less than five years nor more than 15 years, and shall be imposed with a fine of not less than P5,000 nor more than P2,000,000, as provided under Section 15 of RA 7581.
We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated on.
Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to [email protected]
