I.

Statement of the Problem

In every transaction, there are corresponding parties involved --- the sellers
and the buyers (also called consumers). The responsibilities of each party
must be realized so there will be a wide range of understanding from each
other, and so, to avoid conflicts that may arise.
However, conflicts are inevitable. The party that is most afflicted with these is
majorly the consumers. Thus, they must be protected to apply their rights,
conserve and preserve their right in the market and emphasize their
enormous role in the economy. Without them, revenues would, at least, hard
to earn. Besides, a rule or law should be observed to put regulation or
governance in the market arena.
Why is there a need for rules, principles or laws that will govern the consumer
rights against abusive participants in the economy?
II.

Facts of the Case

In the market, two important parties are majorly involved the sellers and the
consumers. Sellers or vendors are obligated to transfer the ownership of and
to deliver a determinate thing, and the other party, the buyers, is obligated to
pay the price certain in money or its equivalent. Article 1458, Civil Code of the Philippines
As transaction takes place in a simple market or a wider range of it, conflicts
may arise as to varying reasons. However, the majorly affected party is the
consumers. Thus, legislators find way to protect consumers themselves, their
rights, their benefits and even their obligations or responsibilities.
The Philippine law for consumers was known as Consumer Code of the
Philippines Republic Act 7394. This law entails:
1. The rights and responsibilities of consumers;
2. The sanctions and penalties in regards of conduct of prohibited acts;
3. Policies on regulation of food, drugs, cosmetics and devices, hazardous
substance;
4. Protection against deceptive, unfair, and unconscionable sales acts or
practices;
5. Regarding the labeling and fair packaging;

6.
7.
8.
9.

Liability for product and service;

In terms of consumer credit transaction;
The establishment of National Consumer Affairs Council; and
Transitory and final provisions.

In line with this, agencies of the government serve as main implementing

agents for the law. These agencies include:
1.
2.
3.
4.
5.
6.

Department of Trade and Industry

Department of Agriculture
Department of Education
Department of Health
Bangko Sentral ng Pilipinas
Securities and Exchange Commission

For respective implementing agencies, their some concerns include:

Department of Trade and Industry
a) Consumer Products and Service Warranties
b) Consumer Product Quality and Safety
c) Deceptive, unfair and unconscionable sales acts and practices
d) Price Tag
e) Weights and measures (metrication)
f) Labeling and Packaging
g) Advertising and sales promotion
h) Liability for Products and Services
i) Service and repair shops
Department of Agriculture (DA)
a) Agricultural Products
b) Quality and Safety
c) Labelling and Packaging
Department of Education (DepEd)
a)

Consumer education and information

Department of Health (DOH)

a.) Food, drugs, cosmetics and devices and hazardous substances
Quality and safety
Price Tag
Labelling and Packaging
Advertising & Sales Promotion
Bangko Sentral ng Pilipinas (BSP)
a.) Consumer credit transactions extended by banks and other financial intermediaries
Securities and Exchange Commission (SEC)

a.) Credit facilities extended to consumers by financing companies

Consumer Rights and Responsibilities

These rights and responsibilities, according to the National Consumer Affairs
Council (NCAC), a another implementing agency that was mandated by the law
to improve the management, coordination, and effectiveness of the countrys
consumer programs, lists the basic consumer rights and responsibilities.
Basic Consumer Rights:
1. THE RIGHT TO BASIC NEEDS- which guarantee survival, adequate food, clothing, shelter, health care,
education and sanitation.
2. THE RIGHT TO SAFETY- the right to be protected against the marketing of goods or the provision of
services that are hazardous to health and life.
3. THE RIGHT TO INFORMATION- the right to be protected against fraudulent/dishonest or misleading
advertising/labeling/promotion and the right to be given the facts and information needed to make an
informed choice.
4. THE RIGHT TO CHOOSE -the right to choose products at competitive prices with an assurance of
satisfactory quality.
5. THE RIGHT TO REPRESENTATION -the right to express consumer interests in the making and execution
of government policies.
6. THE RIGHT TO REDRESS -the right to be compensated for misrepresentation, shoddy goods or
unsatisfactory services.
7. THE RIGHT TO CONSUMER EDUCATION -the right to acquire the knowledge and skills necessary to be
an informed consumer; a series of seminars, conferences, for a, training, and public hearings for the welfare
of the consumers. Consumer education being integrated in the school curriculum from elementary to
secondary levels as mandated by R.A. 7394 also known as the Consumer Act of the Philippines; the
Consumer Empowerment Seminar organized by the NCAC.
8. THE RIGHT TO A HEALTHY ENVIRONMENT -the right to live and work in an environment which is
neither threatening nor dangerous, and which permits a life of dignity and well-being.
Basic Consumer Responsibilities
1. CRITICAL AWARENESS- the responsibility to be more alert and questioning about the use and the price
and quality of goods and services we use.
2. ACTION- the responsibility to assert ourselves and act to ensure that we get a fair deal. Remember that
as long as we remain passive consumers, we will continue to be exploited.
3. SOCIAL CONCERN- the responsibility to be aware of the impact of our consumption on other citizens,
especially the poor, exploited, disadvantaged or powerless groups, whether in the local, national or
international community.
4. ENVIRONMENTAL AWARENESS- the responsibility to understand the environmental consequences of
our consumption. We should recognize our individual and social responsibility to conserve natural resources
and protect the earth for future generations.
5. SOLIDARITY- the responsibility to organize together as consumers to develop the strength and influence
to promote and protect our interests.

With the rights and responsibilities stated above, consumer protection is

necessary. However, it does not entail only those rights and responsibilities; it
also encompasses comprehensive range of information such as:
1. Protection from Exploitation

Importance of the consumer protection is to safeguard the consumer from exploitation. In the
absence of consumer protection, consumers were exploited in many ways e.g. sale of unsafe products,
adulteration and hoarding of goods, using wrong weights and measures, charging excessive prices and sale
of inferior quality goods, etc. Through various Consumer Protection Acts; business organizations are under
pressure to keep away from exploiting consumers.
2. Consumer Education
Importance of consumer protection is to create awareness among consumers about their rights and
responsibilities by organizing workshops and seminars and gives them confidence to take legal action
against companies who have defaulted.
3. Redressal of Complaints
Importance of Consumer Protection is to present the consumer complaints in appropriate consumer
courts and make sure that justice is done to consumers.
4. Bulletins and Periodicals
Importance of consumer protection organization is to issue various journals and periodicals in
which wide publicity is given to the unfair trade practices adopted by business organizations so that they are
pressured to give fair treatment to consumers.
5. Encouraging Honest Businessmen
Importance of consumer protection is to encourage the honest businessmen. Organizations give
the credit to the business organizations which aims at consumer satisfaction by publishing favorable reports
in their periodical's about them. This helps in building goodwill for such organizations.
6. Connecting Link
Importance of consumer protection is they play connecting link between the consumers. Consumer
Protection organizations act as a link between consumers wanting to file complaints on one side and the
business organizations that have defaulted on other sides and make sure that justice is done to final
consumers.
7. Unity
Consumer Protection aims at bringing unity among consumers to fight collectively against the
business organizations which indulge in unfair trade practices. Consumers are encouraged to form cooperative societies so that the focus is on providing services to members rather than earning profit on the
cost of customers.
8. Quality life for Consumer
Importance of Consumer Protection is to aim at redressal of consumer complaints in an effective
manner but also on giving good-quality life to consumers by business organizations that have defaulted on
the other side and make sure that justice is done to final consumers.
9. Ethical Obligations
Importance of consumer protection, today ethics play a prominent role in business. Business
without ethical values is nothing but a criminal activity. Protecting the interests of the consumer includes
absence of unfair business practices such as black marketing, profiteering, creating an artificial shortage,
using wrong weights and measures, publishing false advertisement, etc. It is necessary for a businessman
not to practice such uneven means thereby protect the interest of consumers.
10. Getting Public Support
Importance of consumer protection does not isolate the business. Financial institutions and banks
provide finance to business. Government provides support and incentives. Employees contribute their time,
skill and labour. Consumers are ready to pay for value. The businessmen can get the best support of all
these parties only when it stops exploiting its customers.

III.

Evaluation

The consumer law in the Philippines has strengths and weaknesses. Those
strengths entail the laws rights, responsibilities, consumer protection. This
evaluation would see about the weaknesses of the law such as:
1. The perception of the people that this law has no teeth with difficult
implementation.
2. The people does not coordinate with the law because they even just not
seeing those little things which have already violated their rights, and thus,
less protection. For instance, they dont report those things that are
already significant and thus a thumb for violation already.

IV.

Recommendation
Consumer Code of the Philippines should be once talked about so, at least,
meetings for possible revision, amendment and sharpening and stricter
implementation by those agencies designated to govern. The talking would be of
great help to increase the alertness and consciousness of the consumers that
they must be protected and thus report what needs to be reported. In line with
this, at least true due process should be observed and implemented.
Extensive consumer education, as promulgated by the principle of consumer
protection, should be sharpened, intensified and emphasized.
People should also participate and be cooperative with government so there will
be a harmonious flow of implementation. Consumer consciousness, unity, and
vigilance are utmost matters needed for this. A harmonious flow means quality
implementation. Quality implementation is a sign of excellent governance of law.

Consumer
Protection
A Case Study

Submitted to:
Prof. Edgar E. Mabad, CPA

Submitted by:
Johanna Lyn Malicad
Kirsten Marie Exim
Jean Paul Jose
Hamida Abdulhamid
Leonaleen Orendain
Group 8