By Egay Uy
WHAT is with the panic buying of face masks? Why should the citizenry resort to ordering face masks from online suppliers? Why are stocks in local stores and pharmacies down to zero?
What we see is probably the result of inept national government officials who are supposed to address the entry of both local and foreign nationals and yet they seemingly are doing nothing. Add to that the pronouncement that there will be no ban on tourists coming from nCoV-infected countries or places of origin.
The inventory of face masks in local retailers have literally gone to zero. Could this be because of panic-buying at the demand side, or simply a case of hoarding or profiteering at the supply side? Whatever it is, the fact is the city and the country have apparently run out of face masks. Even online shopping sites have posted “out-of-stock” notices on face mask order points.
Could all of these [panic-buying and depleted inventories] have been avoided? Maybe, maybe not, but this will be verified not only by the DTI, not only by the City Price Coordinating Council, not only by the City Health Office nor by the DOH, but by a composite team of representatives of these offices and others.
Under the Price Act, hoarding, cartelization, and profiteering are punishable. Various penalties range from the imprisonment of up to fifteen years, and/or fine of up to two million pesos. Applying the provisions of the Price Act (RA 7581), I would venture to connect these definitions to the sale of face masks.
Cartelization exists when there is any combination of or agreement between two or more persons engaged in the production, manufacture, processing, storage, supply, distribution, marketing, sale or disposition of any basic necessity or prime commodity designed to artificially and unreasonably increase or manipulate its price.
There shall be prima facie evidence of engaging in a cartel whenever two or more persons competitors for the same market and dealing in the same basic necessity or prime commodity, perform uniform or complementary acts among themselves which tend to bring about artificial and unreasonable increase in the price of any basic necessity or prime commodity or when they simultaneously and unreasonably increase prices on their competing products thereby lessening competition among themselves.
On the other hand, there is profiteering when the sale or offering for sale of any basic necessity or prime commodity is 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 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.
Hoarding, which is also punishable, is the undue accumulation by a person or combination of persons of any basic necessity 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 or prime commodity to the general public or the unjustified taking out of any basic necessity or prime commodity from the channels of production, trade, commerce, and industry.
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. The determination of a person’s usual inventory shall be reckoned from the third month immediately preceding before the discovery of the stocks in case the person has been engaged in the business for at least three months; otherwise, it shall be reckoned from the time he started his business.
(Egay Uy is a lawyer. He chairs the City’s Regulatory and Complaint Board, co-chairs with the city mayor the City Price Coordinating Council, and chairs the city’s Joint Inspection Team. He retired as a vice president of Cepalco.)
