Published 1 May 2020, The Daily Tribune
It is said that bad times bring out either the best or the worst in people. Amid COVID-19, the best in people is exemplified by the doctors, health workers and other frontliners trying their best to contain the disease; and the private sector shelling out resources to assist the government in giving aid to the public, as well as protecting their employees. On the other hand, the worst in people is shown by, among others, unscrupulous people who are taking advantage of the pandemic by profiting themselves from hoarding and overpricing goods.
There have been numerous reports of individuals hoarding in-demand commodities, particularly rubbing alcohols, sanitizers and facemasks and then selling them for unreasonably marked up prices. These individuals should be reminded that they are committing crimes.
Republic Act (RA) 7581 or “The Price Act” punishes both hoarding and profiteering.
Hoarding is defined as “the undue accumulation by a person or combination of persons of any basic or prime commodity beyond his or their normal inventory levels or the unreasonable limitation or refusal to dispose of, sell or distribute the stocks of any basic necessity of prime commodity to the general public or the unjustified taking out of any basic necessity or prime commodity from the channels of reproduction, trade, commerce and industry.” The law adds that “there shall be prima facie evidence of hoarding when a person has stocks of any basic necessity or prime commodity 50 percent higher than his usual inventory and unreasonably limits, refuses or fails to sell the same to the general public at the time of discovery of the stocks.” (Section 5, par. 1 of the Price Act)
On the other hand, profiteering 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 10 percent of its price in the immediately preceding month.” (Section 5, par. 2 of the Price Act)
Under Section 15 of the Price Act, a person found guilty of hoarding and profiteering shall suffer the penalty of imprisonment for a period ranging from five to 15 years and a fine ranging from P5,000.00 to P2,000,000.
Note that the Department of Trade and Industry (DTI) issued Memorandum Circular (MC) 007-20 “to implement measures to prevent the unreasonable increase in the prices of all basic necessities as enumerated in the Price Act.” It emphasized that “products intended for the protection of health including, but not limited to, surgical and industrial masks, medical devices, alcohol, hand sanitizers and other disinfectants” are covered by the Price Act during the duration of the declared Public Health Emergency. It was also stated that the provisions of the Memorandum Circular “shall apply to any and all persons, natural or juridical, who purchase or sell or offer for sale products covered by this MC.”
Aside from the Price Act, RA 7394 or the “Consumer Act” also punishes overpricing which may be considered as an unfair or unconscionable sales act or practices. Under Article 52 of the Consumer Act, “an act or practice shall be deemed unfair or unconscionable whenever the producer, manufacturer, distributor, supplier or seller, by taking advantage of the consumer’s physical or mental infirmity, ignorance, illiteracy, lack of time or the general conditions of the environment or surroundings, induces the consumer to enter into a sales or lease transaction grossly inimical to the interests of the consumer or grossly one-sided in favor of the producer, manufacturer, distributor, supplier or seller.” In the context of COVID-19, the pandemic may be considered as the “general condition of the environment” which the seller is taking advantage of to induce the consumer to buy over-priced goods.
Pursuant to Article 60 of the Consumer Act, a person found guilty of unfair or unconscionable sales act or practice shall be punished with imprisonment ranging from five months to one year, or a fine ranging from P500 to P10,000, or both.
It also bears stressing that the crimes defined under Price Act and the Consumer Act are considered special penal laws, which means they are crimes mala prohibita. If a crime is considered malum prohibitum, its offender can be held liable regardless of motive or criminal intent. (Matalam vs People of the Philippines, G.R. 221849-50, 4 April 2016)
Thus, hoarders and profiteers should think twice, otherwise, they’ll find themselves using their profits to post bail.
For comments and questions, please send an email to cabdo@divinalaw.com.
