Violations of the Price Act

Illegal Price Manipulation

Price manipulation is not illegal per se, but there are certain forms of price manipulation that are expressly declared illegal because of the economic damage that can result from their implementation. The penalty for these forms of price manipulation are imprisonment for 5 to 15 years and a fine of Php5,000.00 to 2,000,000.00 (sec. 15.)

Producers, distributors and sellers of basic necessities and prime commodities are prohibited from performing the following acts of price manipulation:

1.) Hoarding

Prima facie evidence of hoarding exists when somebody has stocks of any basic necessity or prime commodity 50% higher than his normal inventory and unreasonably limits, refuses or fails to sell them to the general public at the time the excess was discovered. The determination of a person's usual inventory is reckoned from the 3^rd month immediately before the discovery of the excess or, if the business has been operating for at least 3 months, it will be reckoned from the time it opened.

The following are considered acts of hoarding:

a.) Undue accumulation of basic necessities/prime commodities above one's normal inventory level

b.) Unreasonable limitation or refusal to sell/dispose of or distribute the stocks of any basic necessity/prime commodity to the general public

c.) Unjustified taking of a basic necessity/prime commodity from the channels of reproduction, trade and industry

2.) Profiteering

Selling/offering to sell a basic necessity/prime commodity at a price grossly higher than its true worth.

Prima facie evidence of profiteering happens in the following instances:

a.) No price tag

b.) Misrepresentation on the product's weight and measurement

c.) Adulteration/dilution

d.) The price is increased to more than 10% from that of the immediately preceding month

3.) Cartel

This happens when 2 or more persons engaged in the production, manufacture, distribution, processing, storage, supply, marketing, sale or disposition of any basic necessity/prime commodity agree to artificially and unreasonably increase or manipulate their products' prices. The result is a monopoly.

Prima facie evidence of a cartel/monopoly exists when 2 or more “competitors” perform uniform or complimentary acts among themselves to cause an artificial and unreasonable increase in the price or if they simultaneously and unreasonably increase the prices of their competing products and thereby lessening competition among themselves.

Violations of the Price Ceiling

A violation of the price ceiling is punishable by a prison term of 1 to 10 years and/or a fine of Php5,000.00 to 1,000,000.00 (sec. 16.)

If the violations are committed by juridical persons, the officers, employees or agents in question will be held liable. Aliens, after serving sentence for violations of the price act, will be deported without further proceedings. Government officials or employees who, with or without consideration, conspire in the commission of the violations or knowingly conceal them will be held principally responsible and will also be permanently disqualified from holding public office.

Administrative sanctions can also be imposed alongside the criminal penalties for violations of the price act.