Section 4April 13, 1992, Sec./Art. 4

Definition of Terms. – For purposes of this Act, the term:

a) "Advertisement" means the prepared and through any form of mass medium, subsequently applied, disseminated or circulated advertising matter.

b) "Advertising" means the business of conceptualizing, presenting or making available to the public, through any form of mass media, fact, data or information about the attributes, features, quality or availability of consumer products, services or credit.

c) "Advertising agency or Agent" means a service organization or enterprise creating, conducting, producing, implementing or giving counsel on promotional campaigns or programs through any medium for and in behalf of any advertiser.

d) "Advertiser" means the client of the advertising agency or the sponsor of the advertisement on whose account the advertising is prepared, conceptualized, presented or disseminated.

e) "Agricultural purpose" means a purpose related to the production, harvest, processing, manufacture, distribution, storage, transportation, marketing, exhibition or disposition of agricultural, fishery or marine products.

f) "Amount financed" in a consumer credit sale constitutes the cash price plus non-finance charges less the amount of any down payment whether made in cash or in property traded in, or in a consumer loan the amount paid to, receivable by or paid or payable to the buyer or to another person in his behalf.

g) "Banned hazardous substance" means (1) any toy or other articles intended for use by children, which are hazardous per se, or which bear or contain substances harmful to human beings; or (2) any hazardous substance intended or packaged in a form suitable for use in the household, which the implementing agency by regulation, classifies as "banned hazardous substance" notwithstanding the existence of cautionary labels, to safeguard public health and safety: Provided, That the implementing agency may, by regulation, exempt from this Act, articles which by reason of their functional purpose require the inclusion of the hazardous substance involved and which bear appropriate labels giving adequate directions and warnings for their safe use.

Procedures for the issuance, amendment or repeal of regulations pursuant to clause (2) or paragraph (g) of this Article shall be governed by the rules and regulations promulgated by the Department of Health; Provided, That if the Department of Health finds that the distribution for household use of the hazardous substance involved presents an imminent hazards to the public health, it may publish in a newspaper of general circulation a notice of such finding and such substance shall be deemed to be a "banned hazardous substance" pending the issuance of regulation formally banning such substance.

h) "Batch" means a quantity of any drug or device produced during a given cycle of manufacture.

i) "Business name, firm name, or style" means any name or designation other than the true name of a person, partnership, corporation or association which is used or signed in connection with his/its business or in

1) any written or printed receipt, including receipt for tax or business;

2) any written or printed contract not verified by a notary public;

3) any written or printed evidence of any agreement or business transaction; and

4) any sign or billboard kept conspicuously exhibited in plain view in or at the place of the business, announcing a firm name or business name or style.

j) "Cash price or delivered price", in case of trade transaction, means the amount of money which would constitute full payment upon delivery of the property (except money) or service purchased at the creditor's place of business. In the case of financial transactions, cash price represents the amount received by the debtor upon consummation of the credit transaction, net of finance charges collected at the time the credit is extended, if any.

k) "Chain distribution plans" or "pyramid sales schemes" means sales devices whereby a person, upon condition that he makes an investment, is granted by the manufacturer of his representative a right to recruit for profit one or more additional persons who will also be granted such right to recruit upon condition of making similar investments: Provided, That the profits of the person employing such a plan are derived primarily from the recruitment of other persons into the plan rather than from the sale of consumer products, services and credit: Provided, further, That the limitation on the number of participants does not change the nature of the plan.

l) "Closing out sale" means a consumer sale wherein the seller uses the announcement to create the impression that he is willing to give large discounts or merchandise in order to reduce, dispose or close out his inventory and business.

m) "Commerce" means the sale, lease, exchange, traffic or distribution of goods, commodities, productions, services or property, tangible or intangible.

n) "Consumer" means a natural person who is a purchaser, lessee, recipient or prospective purchaser, lessor or recipient of consumer products, services or credit.

o) "Consumer credit" means any credit extended by a creditor to a consumer for the sale or lease of any consumer product or service under which part or all of the price or payment therefor is payable at some future time, whether in full or in installments.

p) "Consumer loan" means a loan made by the lender to a person which is payable in installments for which a finance charge is or may be imposed. This term includes credit transactions pursuant to an open-end-credit plan other than a seller credit card.

q) "Consumer products and services" means goods, services and credits, debts or obligations which are primarily for personal, family, household or agricultural purposes, which shall include but not limited to food, drugs, cosmetics, and devices.

r) "Consumer product safety rule" means a consumer product safety standard described in Article 78 or a rule under this Chapter declaring a consumer product banned hazardous product.

s) "Consumer transaction" means (1) (i) a sale, lease, assignment, award by chance, or other disposition of consumer products, including chattels that are intended to be affixed to land, or of services, or of any right, title, or interest therein, except securities as defined in the Securities Act and contracts of insurance under the Insurance Code, or (ii) a grant of provision of credit to a consumer for purposes that are primarily personal, family, household or agricultural, or (2) a solicitation or promotion by a supplier with respect to a transaction referred to in clause (1).

t) "Corrosive" means any substance which on contact with living tissue will cause destruction of tissue by chemical action.

u) "Cosmetics" means (1) articles intended to be rubbed, poured, sprinkled or sprayed on, introduced into or otherwise applied to the human body or any part thereof for cleansing, beautifying, promoting attractiveness, or altering the appearance, and (2) article intended for use as a component of any such article except that such term shall not include soap.

v) "Counterfeit product" means any consumer product which, or the container or labeling of which, without authorization, bears the trademark, trade name, or other identifying mark, imprint, or device, or any likeness thereof, of a consumer product manufacturer, processor, packer, distributor, other than the person or persons who in fact manufactured, processed, packed or distributed such product and which thereby falsely purports or is represented to be the product of, or to have been packed or distributed by such consumer product manufacturer, processor, packer, or distributor.

w) "Credit card" means any card, plate, coupon book or other credit device existing for the purpose of obtaining money, property, labor or services on credit.

x) "Credit Sale" means a sale products, services or an interest in land to a person on credit where a debt is payable in installments or a finance charge is imposed and includes any agreement in the form of a bailment of products or lease of products or real property if the bailee or lessee pays or agrees to pay compensation for use a sum substantially equivalent to or in excess of the aggregate value of the products or real property involved and it is agreed that the bailee or lessee will become, or for no other or a nominal consideration has the option to become, the owner of the products or real property upon full compliance with the terms of the agreement.

y) "Credit transaction" means a transaction between a natural person and a creditor in which real or personal property, services or money acquired on credit and the person's obligation is payable in installment.

z) "Creditor" means any person engaged in the business of extending credit and shall include any person who as a regular business practice makes loans or sells or rents property or services on a time, credit or installment basis, either as principal or as agent who requires as an incident to the extension of credit, the payment of a finance charge.

aa) "Default or delinquency charge" means, with respect to a consumer credit transaction, the penalty charge payable by the consumer-debtor for failure to pay an amount or installment in full on the date the same becomes due and demandable, or on or before the period specified for the purpose in the consumer credit sale documents.

ab) "Device" means an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including any component, part or accessory which is (1) recognized in the official United States Pharmacopoeia-National Formulary (USP-NF) or any supplement to them, (2) intended for use in the diagnosis of disease or other condition or in the cure, mitigation, treatment or prevention of disease, in man or other animals; or (3) intended to affect the structure or any function of the body of man or other animals, and which does not achieve any of its principal intended purposes through chemical action within or on the body of man or other animals and which is not dependent upon being metabolized for the achievement of any of its principal intended purposes.

ac) "Distributor" means any person to whom a consumer product is delivered or sold for purposes of distribution in commerce, except that such term does not include a manufacturer or retailer of such product.

ad) "Drugs" mean (1) articles recognized in the current official United States Pharmacopoeia-National Formulary, official Homeopathic Pharmacopoeia of the United States, official National Drug Formulary, or any supplement to any of them; and (2) articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man or other animals; and (3) articles (other than food) intended to affect the structure or any function of the body of man or animals; and (4) articles intended for use as a component of any articles specified in clauses (1), (2), or (3) but do not include devices or their components, parts or accessories.

The term "drug" when used in this Act shall include herbal and/or traditional drug. They are defined as articles from indigenous plant or animal origin used in folk medicine which are: (1) recognized in the Philippine National Formulary; (2) intended for use in the treatment or cure, mitigation, of disease symptoms, injury or bodily defect for use in man; (3) other than food, intended to affect the structure of any function of the body of man; (4) put into finishes, ready to use form by means of formulation, dosage or dosage directions; and (5) intended for use as a component of any of the articles specified in clauses (1), (2), (3) and (4) of this paragraph.

ae) "Expiry or expiration date" means the date stated on the label of food, drug, cosmetic, device or hazardous substance after which they are not expected to retain their claimed safety, efficacy and quality or potency and after which it is no longer permissible to sell them.

af) "Extremely flammable" means any substance which has a flash point at or below negative six and six-tenths degrees centigrade as determined by the Tagliabue Open Cub Tester; and term "combustible" shall apply to any substance which has a flash point of above twenty-six and six-tenths degrees to and including sixty-five and five-tenths degrees centigrade as determined by the Tagliabue Open Cub Tester: Provided, That the flammability or combustibility of solids and of the contents of self-pressurized containers shall be determined through methods found by the implementing agency to be generally applicable to such materials or containers, respectively, and established by regulations issued by it.

ag) "Food" means any substance, whether processed, semi-processed or raw, intended for human consumption and includes chewing gum, drinks and beverages and any substance which has been used as an ingredient or a component in the manufacture, preparation or treatment of food.

ah) "Food additive" means any substance, the intended use of which results or may reasonably be expected to result, directly or indirectly, in its becoming a component or otherwise affecting the characteristics of any food (including any substance intended for use in producing, manufacturing, packing, processing, preparing, treating, packaging, transporting, or holding food; and including any source of radiation intended for any such use), if such substance is not generally recognized, among experts qualified as having been adequately shown through scientific procedures to be safe under the conditions of the intended use.

ai) "Generic name" is the identification of drugs and medicines by their scientifically and internationally recognized active ingredients or by their official generic name as determined by the Bureau of Food and Drugs of the Department of Health.

aj) "Guarantee" means an expressed or implied assurance of the quality of the consumer products and services offered for sale or length of satisfactory use to be expected from a product or other similar specified assurances.

ak) "Hazardous substance" means:

(1) (i) Any substance or mixture of substances which is toxic, corrosive, irritant, a strong sensitizer, flammable or combustible, or generates pressure through decomposition, heat or other means, if such substance or mixture or substances any cause substantial injury or substantial illness during or as a proximate result of any customary or reasonably foreseeable ingestion by children.

(ii) Any substance which the department finds to be under the categories enumerated in clause (1) (i) of this paragraph;

(iii) Any radioactive substance, if, with respect to such substance as used in a particular class of article or as packaged, the Department, upon approval of the Department determines by regulation that the substance is sufficiently hazardous to require labeling in accordance with this section in order to protect the public health;

(iv) Any toy or other articles intended for use by children which the director may, by regulation, determine the presence of an electrical, mechanical or thermal hazard.

(2) This term shall not apply to food, drugs, cosmetics, and devices nor to substances intended for use as fuels when stored in containers and used in the heating, cooking or refrigeration system of a house, but such term shall apply to any article which is not in itself a pesticide but which is a hazardous substance, as construed in clause (a) of paragraph (1), by reason of bearing or containing such harmful substances described therein.

al) "Highly Toxic" means any substance which has any of the following effects: (1) produces death within fourteen days to one-half or more than one-half of a group of ten or more laboratory white rats each weighing between Two hundred and three hundred grams, at a single dose of fifty milligrams or less per kilogram of body weight, when orally administered; or (2) produces death within fourteen days to one-half or more of a group of ten or more laboratory white rats each weighing between two hundred and three hundred grams, when inhaled continuously for a period of one hour or less at an atmospheric concentration of two hundred parts per million by volume or less of gas or vapor or two milligrams per liter by volume or less of mist or dust, provided such concentration is likely to be encountered by man when the substance is used in any reasonably foreseeable manner, or (3) produces death within fourteen days to one-half or more of a group of ten or more rabbits, when tested in a dosage of two hundred milligrams or less per kilogram of body weight, or when administered through continuous contact with the bare skin for twenty-four hours or less.

am) "Home solicitation sale" means consumer sales or leases which are personally solicited by any person or organization by telephone, person-to-person contact or by written or printed communication other than general advertising or consummated at the buyer's residence or a place of business, at the seller's transient quarters, or away from a seller's regular place of business.

an) "Immediate container" means the container or package which is immediately after or near the substance but does not include package liners.

ao) "Imminently hazardous product" means a consumer product which presents an unreasonable risk of death, serious illness or severe personal injury.

ap) "Irritant" means any substance not corrosive within the meaning of paragraph (t) of this Article which, on immediate, prolonged or repeated contact with normal living tissue will induce a local inflammatory reaction.

aq) "Label, labeling" means the display of written, printed or graphic matter on any consumer product its immediate container, tag, literature or other suitable material affixed thereto for the purpose of giving information as to identify, components, ingredients, attributes, directions for use, specifications and such other information as may be required by law or regulations.

ar) "Manufacture" means and any and all operations involved in the production, including preparation, propagation, processing, formulating, filing, packing, repacking, altering, ornamenting, finishing or otherwise changing the container, wrapper or labeling of a consumer product in the furtherance of the distribution of the same from the original place of manufacture to the person who makes the final delivery or sale to the ultimate consumer.

as) "Manufacturer" means any person who manufactures, assembles or processes consumer products, except that if the goods are manufactured, assembled or processed for another person who attaches his own brand name to the consumer products, the latter shall be deemed the manufacturer. In case of imported products, the manufacturer's representatives or, in his absence, the importer, shall be deemed the manufacturer.

at) "Mass media" refers to any means or methods used to convey advertising messages to the public such as television, radio, magazines, cinema, billboards, posters, streamers, hand bills, leaflets, mails and the like.

au) "Materially defective product" means a product which, because of the pattern of the defect, the number of defective products distributed in commerce and the severity of the risk or otherwise, creates a substantial risk of injury to the public.

av) "Mislabeled hazardous substance" means any hazardous substance intended, or packaged in a form suitable, for use in households, especially by children, the packaging or labeling of which is in violation of the special packaging regulation issued by the Department of Health under ARTICLE 91 or if such substance fails to bear a label which (1) states conspicuously (i) the name and the exact address of the manufacturer, packer, distributor, or seller; (ii) the common or usual name of the hazardous substance or of each component which contributes substantially to the harmfulness of the substance, unless the Department by regulation approved by the Department permits or requires the use of the recognized generic name; (iii) the signal word "danger" on substances which are extremely flammable, corrosive, or highly toxic; (iv) the signal word "warning" or "caution" on all other hazardous substances; (v) a frank statement of the principal hazard or hazards involved, as "flammable", "vapor harmful", "causes burns", "absorbed through skin", or similar wording describing the action to be followed or avoided, except when modified by regulation by the Department pursuant to Section 46; (vi) instructions, when necessary or appropriate, for first aid treatment; (vii) the word "poison" for any hazardous substance which is defined as highly toxic; (viii) instructions for handling and storage of packages which require special care in handling or storage; and (ix) the statement "keep out of the reach of children", or its practical equivalent, if the article is intended for use by children and is not a banned hazardous substance, with adequate directions for the protection of children from the hazard involved.

The aforementioned signal words, affirmative statements, description of precautionary measures, necessary instructions or other words or statements may be in the English language or its equivalent in Filipino; and

(2) on which any statement required under clause (1) of this paragraph are located prominently and in contrast by typography are located prominently and in contrast by typography, layout, with other printed matters on the label.

aw) "New Drugs" mean (1) any drug the composition of which is such that said drug is not generally recognized among experts qualified by scientific training and experience to evaluate the safety, efficacy and quality of drugs as safe, efficacious and of good quality for use under the conditions prescribed, recommended, or suggested in the labeling thereof; or (2) any drug the composition of which is such that said drug, as a result of its previous investigations to determine its safety, efficacy and good quality for use under certain conditions, has become so recognized but which has not, otherwise than in such investigations, been used to a material extent or for a material time under new conditions.

"New Drugs" shall include drugs (a) containing a newly discovered active ingredient; (b) containing a new fixed combination of drugs, either by molecular or physical combination; (c) intended for new indications; (d) an additional new mode of administration; or (e) in an additional dosage or strength of the dosage form, which meets the conditions as defined under the new drug.

The definition of "new drugs" covers to the extent applicable, "new devices".

ax) "New Product" means a consumer product which incorporates a design, material or form of energy exchange which has not previously been used substantially in consumer products and as to which there exists a lack of adequate information to determine the quality and safety of such product if used by the consumers.

ay) "Open-end-credit plan" means a consumer credit extended on an account pursuant to a plan under which:

1) the creditor may permit the person to make purchases or obtain loans, from time to time, directly from the creditor or indirectly by use of credit card, check or other device;

2) the person has the privilege of paying the balance; or

3) a finance charge may be computed by the creditor from time to time on an outstanding unpaid balance.

az) "Package" or "packaging" means any container or wrapping in which any consumer product is enclosed for use in the delivery or display of that consumer product to retail purchasers, but does not include:

1) shipping containers or wrappings used solely for the transportation of any consumer product in bulk or in big quantities by manufacturers, packers, or processors to wholesale retail distributors thereof;

2) shipping containers or outer wrappings used by retailers to ship or deliver any product to retail costumers if such containers and wrappings bear no printed matter pertaining any particular product;

3) The wrappers or containers of consumer products sold in small quantities by small retail stores to the consumer which by tradition are wrapped with ordinary paper.

ba) "Person" means any individual, partnership, corporation or association, trust, government or governmental subdivision or any other legal entity.

bb) "Poisonous substance" means any substance capable of destroying life or seriously endangering health when applied externally to the body or introduced internally in moderate doses.

bc) "Price comparison" means the direct comparison in any advertisement of a seller's current price for consumer products or services with any other price or statement of value for such property or services expressed in pesos, centavos, fractions or percentages.

bd) "Price tag" means any device, written, printed, affixed or attached to a consumer product or displayed in a consumer repair or service establishment for the purpose of indicating the retail price per unit or service.

be) "Principal display panel" means that part of the label that is most likely to be displayed, presented, shown or examined under normal and customary conditions of display for retail or sale.

bf) "Private labeler" means an owner of a brand or trademark on the label of consumer product other than a manufacturer of the product.

A consumer product bears a private label if (1) the product or its container is labeled with a brand or trademark of a person other than its manufacturer; or (2) the brand or trademark of the manufacturer of such product does not appear on such label.

bg) "Radioactive substance" means any substance which emits ionizing radiation.

bh) "Referral selling" means the sales device employed by the sellers wherein the buyer is induced to acquire goods or services by representing that after the acquisition of the goods or services, he will receive a rebate, commission or other benefit in return for the submission of names of potential customers or otherwise helping the seller enter into other sales, if the receipt of such benefit is contingent on an event occurring after the sale is made.

bi) "Repair and service firm" means any business establishment, engaged directly or indirectly, in the repair, service or maintenance of any consumer product.

bk) "Retailer" means a person engaged in the business of selling consumer products directly to consumers.

bl) "Sale or distribution" shall mean an act made by a manufacturer or seller, or their respective representative or agent, to make available consumer products, services or credit to the end consumers under a consumer sale transaction. It shall not include sampling or any distribution not for sale.

bm) "Sales Promotion" means techniques intended for broad consumer participation which contain promises of gain such as prizes, in cash or in kind, as reward for the purchase of a product, security, service or winning in contest, game, tournament and other similar competitions which involve determination of winner/s and which utilize mass media or other widespread media of information. It also means techniques purely intended to increase the sales, patronage and/or goodwill of a product.

bn) "Seller" means a person engaged in the business of selling consumer products directly to consumers. It shall include a supplier or distributor if (1) the seller is a subsidiary or affiliate of the supplier or distributor; (2) the seller interchanges personnel or maintains common or overlapping officers or directors with the supplier or distributor; or (3) the supplier or distributor provides or exercises supervision, direction or control over the selling practices of the seller.

bo) "Service" shall mean, with respect to repair and service firms, services supplied in connection with a contact for construction, maintenance, repair, processing, treatment or cleaning of goods or of fixtures on land, or distribution of goods, or transportation of goods.

bp) "Services" means services that are the subject of a consumer transaction, either together with, or separate from any kind of personal property, whether tangible or intangible.

bq) "Special packaging" means packaging that is designed or constructed to be significantly difficult for children five years of age to open or to obtain a toxic or harmful amount of the substance contained therein within a reasonable time and not difficult for normal adults to use properly but does not mean packaging which all such children cannot open or obtain a toxic or harmful amount within a reasonable time.

br) "Standard" means a set of conditions to be fulfilled to ensure the quality and safety of a product;

bs) "Strong sensitizer" means any substance which will cause on normal living tissue, allergy or photodynamic quality of hypersensitivity which becomes evident on reapplication of the same substance, to be designated as such by the implementing agency. Before designating any substance as a strong sensitizer, the implementing agency, upon consideration of the frequency of occurrence and severity of the reaction, shall find that the substance has a significant capacity to cause hypersensitivity.

bt) "Substandard product" means a product which fails to comply with an applicable consumer product safety rule which creates a substantial risk of injury to the public.

bu) "Supplier" means a person, other than a consumer, who in the course of his business, solicits, offers, advertises, or promotes the disposition or supply of a consumer product or who other than the consumer, engages in, enforces, or otherwise participates in a consumer transaction, whether or not any privity of contract actually exists between that person and the consumer, and includes the successor to, or assignee of, any right or obligation on of the supplier.

bv) "Technical personnel of repair and service enterprise" shall mean a machine or technician or any person who works or renders diagnosis or advice in connection with repair, service and maintenance of the consumer products in a repair and service firm.

bw) "Toxic substance" means any substance other than a radioactive substance which can cause injury, illness or death to man through ingestion, inhalation or absorption through any body surface.

bx) "Trade name" or "trademark" means a word or words, name, title, symbol, emblem, sign or device or any combination thereof used as an advertisement, sign, label, poster or otherwise for the purpose of enabling the public to distinguish the business of the person who owns and uses said trade name or trademark.

TITLE II

CHAPTER I

CONSUMER PRODUCT QUALITY AND SAFETY