Price Act: Controls

Automatic Price Control

The president can freeze the prices of basic necessities in a given area at their prevailing prices in any of the following instances:

1.) State of calamity/disaster area

2.) State of emergency

3.) Suspension of the privilege of the writ of habeas corpus

4.) Martial law

5.) State of rebellion

6.) State of war

“Calamity” and “disaster” can be either natural or man-made.

If the prevailing price is unreasonable or excessive, the implementing agency in question can recommend the imposition of a ceiling price for the basic necessity different from the prevailing price. This power of price control has a maximum duration of 60 days.

Mandated Price Ceiling

The president, on the recommendation of the agency concerned or the Price Coordinating Council (which consists of the Secretary of the DTI as chair, the secretaries of Agriculture, Health, DENR DILG, DOJ and DOTC, Director General of the NEDA, 1 representative each from the consumers', agricultural producers', trading and manufacturers' sectors,) can impose a ceiling price on any basic necessity/prime commodity under any of the following conditions:

1.) Impendency, existence or effects of a calamity

2.) Threat, existence or effect of an emergency

3.) Prevalence/widespread acts of illegal price manipulation

4.) Impendency, existence or effect of any event causing artificial and unreasonable in the price of the basic necessity/prime commodity in question

5.) If the prevailing price of the basic necessity/prime commodity has risen to unreasonable levels

Determination of Price Ceilings

The following factors will be considered to determine a reasonable price ceiling:

1.) The average price of the last 3 months immediately before the proclamation of the price ceiling

2.) Supply availability in the market

3.) The cost to the producer, manufacturer, distributor or seller, including:

4.) The peso to foreign currency exchange rate to which the basic necessity/prime commodity or any of its components, ingredients or raw materials was paid for

5.) Changes in the amortization costs of machinery because of fluctuations in the foreign currency exchange rate with which the machinery was bought through credit facilities

6.) Changes in labor costs caused by changes in the minimum wage

7.) Changes in transportation costs