Atty. Julius Gregory Delgado

ON PRICE FREEZE AND PRICE CEILING

A day after Super Typhoon Odette hit and ravaged the province, Governor Arthur C. Yap, issued an Executive Order placing the Province under a State of Calamity. It is an exercise of his power under Republic Act No. 10121, otherwise known as the Philippine Disaster Risk Reduction and Management Act of 2010, particularly Section 16 thereof, as Chairman of the Provincial Disaster Risk Reduction and Management Council, to recommend to the local sanggunian the declaration of such state. On 20 December 2021, the Sangguniang Panlalawigan of Bohol declared and placed the entire province under a State of Calamity. Under Section 17 of the Philippine Disaster Risk Reduction and Management Act, the declaration shall make mandatory the following remedial measures, among others, 1) imposition of price ceiling on basic necessities and prime commodities by the President upon the recommendation of the implementing agency as provided under Republic Act No. 7581, otherwise known as the “Price Act”, or the National Price Coordinating Council; 2) monitoring, preventing and control by the Local Price Coordination Council of overpricing/profiteering and hoarding of prime commodities, medicines and petroleum products.

Under Section 6 of the Price Act, only prices of basic necessities in an area declared under a State of Calamity shall automatically be frozen at their prevailing prices or placed under automatic price control. Unless sooner lifted by the President, price control of basic necessities shall remain effective for the duration of the condition that brought it about, but not for more than sixty (60) days. What are considered basic necessities? Under Section 3 (1) of the Price Act, as amended by Section 1 of 10623, “’Basic Necessities’ are goods vital to the needs of consumers for their sustenance and existence in times of any of the cases provided under Section 6 or 7 of this Act such as, but not limited to, rice, corn, root crops, bread; fresh, dried or canned fish and other marine products; fresh pork, beef and poultry meat; fresh eggs; potable water in bottles and containers; fresh and processed milk; fresh vegetables and fruits; locally manufactured instant noodles; coffee; sugar; cooking oil; salt; laundry soap and detergents; firewood; charcoal; household liquefied petroleum gas (LPG) and kerosene; candles; drugs classified as essential by the Department of Health and such other goods as may be included under Section 4 of the Price Act.” As amended by Section 4 of Republic Act No. 10623, “basic necessities that are wholly imported and deregulated under existing laws such as, but not limited to, household LPG and kerosene, price control thereon shall remain effective for a period of not more than fifteen (15) days, taking into consideration the current inventory or supply levels thereof.”

With respect to prime commodities, there is no automatic price freeze, but the declaration of a State of Calamity makes it mandatory to impose a price ceiling. What are considered prime commodities? Under Section 6 (8) of the Price Act, as amended by Section 4 of Republic Act No. 10623, “‘Prime Commodities’ are goods not considered as basic necessities but are essential to consumers in times of any of the cases provided under Section 7 of the Price Act such as, but not limited to, flour; dried, processed or canned pork, beef and poultry meat; dairy products not falling under basic necessities; onions, garlic, vinegar, patis, soy sauce; toilet soap; fertilizer, pesticides and herbicides; poultry, livestock and fishery feeds and veterinary products; paper; school supplies; nipa shingles; sawali; cement; clinker; GI sheets; hollow blocks; plywood; plyboard; construction nails; batteries; electrical supplies; light bulbs; steel wire; all drugs not classified as essential drugs by the Department of Health and such other goods as may be included under Section 4 of the Price Act.”

What are then the prohibited acts and the penalties in relation to the automatic price control or price freeze on basic necessities and the price ceiling on prime commodities? Section 15 of the Price Act provides that any person who commits any act of illegal price manipulation of any basic necessities or prime commodities shall suffer a penalty of imprisonment for a period of not less than Five (5) years nor more than Fifteen (15) years and shall be imposed a fine of not less than Five Thousand Pesos (Php5,000.00) nor more than Two Million Pesos (Php2,000,000.00). Section 16 of the Price Act provides that any person who violates the price freeze on basic commodities or price ceiling on prime commodities shall suffer the penalty of imprisonment for a period of not less than One (1) year nor more than Ten (10) years or a fine of not less than Five Thousand Pesos (Php5,000.00) nor more than One Million Pesos (Php1,000,000.00), or both, at the discretion of the court.