Regulatory Framework and Legal Issues in Business

Consumer Protection: Department of Trade and Industry and Consumer 1

Protection Act

Module 5 Consumer Protection: Department of Trade and

Industry and Consumers’ Protection Act

At the end of this module, you are expected to:

1. Cognitive: Identify the function of the Department of Trade and Industry
as well as the provisions under the Consumers Protection Act
2. Affective: Discern the role that DTI plays in the Philippine business
setting and the relevance of Consumers Protection
3. Psychomotor: Align concepts and terms related to DTI and Consumers
Protection Act to particular commercial situations happening in the
actual business setup

What is the Department of Trade and Industry?

The government is in for a lot of work, so it needs different departments that will act upon
different roles and responsibilities to maintain order in the nation. In the field of trade and
industry, the nation has the Department of Trade and Industry or DTI.
Department of Trade and Industry of DTI is a government department in charge of being
a catalyst for innovation and growth of the economy through maintaining an efficient and fair
business environment. The department was originally a separate department of trade and another
for the industry, yet eventually, it was enjoined together. As it was stated in the Department of
Trade and Industry official website, the department’s works are anchored on the values of
Passion, Integrity, Competence, Creativity, Synergy, and Love of Country. It aims, “A more inclusive
and prosperous Philippines with employment and income opportunities for all.” as a part of their
Vision 2020.

Figure 1. The logo of the Department of Trade and Industry;

[Link]
2Fdti-grants-up-to-php-500k-loans-to-smes%2F&psig=AOvVaw1gQCSSH35WPUIZAhZCt-
l2&ust=1603119362649000&source=images&cd=vfe&ved=0CAIQjRxqFwoTCNitqorIvuwC
Course Module FQAAAAAdAAAAABAJ. October 18, 2020
 Regulatory Framework and Legal Issues in Business
Consumer Protection: Department of Trade and Industry and Consumer 2
Protection Act

The department is currently eyeing and looking forward to 2022 with an increased
rate of direct investment from both local and foreign investors, more competitive,
innovative, and resilient industries and services, improved finance, production network,
market access, and safe and good quality goods and services for consumers. The
department is very positive that they will achieve these things with all their ongoing
programs.
The foundation of the department was mandated by four major laws or a legal basis,
namely:
1. Presidential Decree 488- stating the establishment of a Department of
Industry, aimed to help the growing industry of the country to flourish, signed,
June 21, 1974

2. Presidential Decree 722- contains the establishment of the Department of

Trade and Bureau of Foreign Trade to cater to the socio-economic development
of the country in terms of commercial practices as well as push through
domestic marketing and trade, signed, June 2, 1975

3. Executive Order 709 - established a Ministry of Trade and Industry which

acted upon the duties of the then abolished Department of Trade and of industry,
signed, July 27, 1981

4. Executive Order 133- made some changes with the Ministry of Trade and
Industry then called it Department of Trade and Industry, signed, February 27,
1987

Figure 2. Trade and Industry in the Philippines.

[Link]
certification-procedures-for-steel-bars%2Fdepartment-of-trade-and-
industry%2F&psig=AOvVaw1aciaphwTn6PGz2WzH02dk&ust=1603121312675000&source=images&cd=vfe&v
ed=0CAIQjRxqFwoTCNCB16zPvuwCFQAAAAAdAAAAABAD. October 18, 2020

Course Module
 Regulatory Framework and Legal Issues in Business
Consumer Protection: Department of Trade and Industry and Consumer 3
Protection Act

Other Private and Public Agencies where DTI is closely related to

It is not a common concept that government agencies and departments partner with
other agencies in and out of the public sector to achieve the goal of efficiency and
competitiveness within the department. With this to say, here are the following agencies
that are directly attached to DTI as per the government’s Official Gazette:
• Philippine Economic Zone Authority (PEZA)
- It is the agency in charge of promoting investments, assisting, registering,
and granting incentives. It is also responsible for facilitating export-
oriented businesses of different investors located in different areas in the
Philippines as mandated by the PEZA president.

• Board of Investments
- It is basically in control of investments, as the name suggests. It also
promotes the act of investing by serving as the one-stop-shop for local
and foreign investors. This bureau guides business investors with
different ways and avenues on how to make their investment worth it
and grow.

• Intellectual Property Office of the Philippines

- Just like any other thing in this world, business is also a product of the
intellectual ability of a human; therefore, it is a must that there is an
agency fitting to ensure that the Intellectual Property of businesses is
properly taken care of. Intellectual Property Office of the Philippines is
one of the administrators and implementers of policies concerning
intellectual property protection.

• Subic Bay Metropolitan Authority

- It aims to grow a Freeport that can sustain a quality life for all its locators
and stakeholders.

• Small Business Corporation

- This is the agency that looks after the welfare of small and starting
businesses. This agency aims to be an avenue for small businesses to gain
capital without subjecting their business to lifetime debts.

• Clark Development Corporation

- This is the government-owned agency that ensures the development and
progress of the Clark Freeport Zone in the Philippines. It aims to
contribute to the growth of the rate of employment and the economy as a
whole.

• Design Center Philippines

- This agency is focused on maintaining and ensuring that products of the
Philippines are all out of creativity. It aims to put a big in the economic
Course Module
 Regulatory Framework and Legal Issues in Business
Consumer Protection: Department of Trade and Industry and Consumer 4
Protection Act

growth by honing the creative minds of Filipinos and imparting it to

business.

Who are the authorities behind the DTI?

An agency, may it be a public or private one, needs someone to administer and
initiate its policies and mandates so as to realize its goal in reality. Therefore, the
Department of Industry, a government agency, also has its administrators who make things
in the department work.
The following are the main administrative positions that lead the department
towards its goals for the nation:
1. Secretary of Trade and Industry

SEC. 4. Secretary of Trade and Industry. The authority and responsibility

for the exercise of the mandate of the Department and for the discharge of
its powers and functions are hereby vested in the Secretary of Trade and
Industry, hereinafter referred to as Secretary, who shall be appointed by
the President (as cited from Executive Order No. 133)

The Secretary of the Department carries the duties of being the advisor of the
President with regards to matters concerning trade and the industry; establishing
the orders and policies that will make up to the growth of the economy aligned to
the government programs, supervising all offices connected to the department,
appoint or delegate people that will carry out duties and functions of the
department and many more.
2. Five Undersecretaries

SEC. 5. Undersecretaries. The Secretary shall be assisted by five (5)

Undersecretaries, who shall all be appointed by the President upon the
recommendation of the Secretary… (as cited from Executive Order No.
133)

3. Assistant Secretaries

SEC. 6. Assistant Secretaries. The Secretary shall also be assisted by five

(5) Assistant Secretaries who shall be appointed by the President upon
the recommendation of the Secretary. The Secretary is hereby authorized
to delineate and assign the respective areas of functional responsibility of
the Assistant Secretaries. Within his functional area of responsibility, an
Assistant Secretary shall assist the Secretary and the Undersecretaries in
the formulation, determination and implementation of laws, policies,
Course Module plans, programs and projects on trade and industry and shall oversee the
day-to-day administration of the constituent units of the Department. (as
cited from Executive Order No. 133)
 Regulatory Framework and Legal Issues in Business
Consumer Protection: Department of Trade and Industry and Consumer 5
Protection Act

Programs and Projects spearheaded by the Department of Trade and Industry

Department of Trade and Industry, or DTI, is a functioning department that is also
on duty to layout programs and projects that will best benefit the nation’s citizens,
consumers, potential business starters, and even the economy. Here are some of the
programs and projects that DTI launched:
1. SME Roving Academy
This training program is accessible or open for small to medium business
entities who wish to step up their businesses to another level. It trains
entrepreneurs to improve their business operations so they’ll eventually appeal
to a bigger market.

2. Shared Service Facilities Project

The goal of this program is to improve the economy by providing machinery
and equipment that will be given to well-deserved MSME’s (Micro Small and
Medium Enterprises).

3. Great Women Project

The aim of this project is to empower women in the field of trade and
industry by upgrading policies and programs for them and providing assistance
so they would be able to participate and be involved in the field if they wish to.

4. Negosyo Centers
Negosyo Centers were established after the enactment of Republic Act 10644
or the Go Negosyo Act. This aims to bring government services closer to MSME
in the different areas in the Philippines.

You have reached the final part of the discussion about the Department of
Trade and Industry. Now, let us test your understanding of the things discussed
by answering the guide questions below.

Course Module
 Regulatory Framework and Legal Issues in Business
Consumer Protection: Department of Trade and Industry and Consumer 6
Protection Act

Guide Questions:
Answer the following to check what you learned from the discussions so far. Check your
answers from the provided answer key at the end of this module. There is no need to submit
your answers to OEd.

1. What is the sole function of the Department of Trade and Industry?

2. Why is it important that there is a separate department that will govern trade and
industry-related matters in the nation?

Consumers’ Protection Act

Consumers keep a business going; there would be no businesses, markets, or stores
without consumers. They are the ones who use, consume or avail products and services available
in the market. Investopedia stated that consumers could either be an individual or business that
consumes a good or service. Therefore, it is just to say that consumers are vital aspects of how
business goes. Their demands shall be met, and their safety shall be ensured and protected by the
businesses and by the government too.
One step of protecting the consumers is the emergence or implementation of the
Consumers’ Protection Act.

Figure 3.. Consumers in the market.

[Link]
mers-hold-the-key-to-philippines-growth-in
2020%2F458172&psig=AOvVaw0g705GgTIaAobeXhiA_BfI&ust=1603209159256000&source=images
&cd=vfe&ved=0CAIQjRxqFwoTCNi0hdmWwewCFQAAAAAdAAAAABAE. October 20, 2020

Course Module
 Regulatory Framework and Legal Issues in Business
Consumer Protection: Department of Trade and Industry and Consumer 7
Protection Act

The Consumer Protection Act in the Philippines was tailored and adopted based on R.A.
7394 (Consumer Act of the Philippines of 1991). This act aims to “protect the interests of the
consumer, promote his general welfare and to establish standards of conduct for business and
industry”. It is cited from R.A. 7394 Art. 2, that the goal of the act is to achieve the following
objectives:

a) protection against hazards to health and safety;

It is the aim of this act to protect consumers from potential or possible harms in their
health and safety, considering sanitations, authenticity, and legal and health expert
approvals of products and services

b) protection against deceptive, unfair, and unconscionable sales acts and practices;

It is also the aim of this act to save the consumers from being deceived by different
scamming practices and other unlawful activities on sales in the market

c) provision of information and education to facilitate sound choice and the proper
exercise of rights by the consumer;

This act aims to discuss and educate consumers on the information about their
rights as a consumer.

d) provision of adequate rights and means of redress; and

This act also aims to discuss the rights and unfair setups or situations that are
considered a violation of the act and clearly endanger the welfare of the consumers.

e) involvement of consumer representatives in the formulation of social and economic

policies.

Social and economic policies in trade and industry involve consumer

representatives who voice consumer experiences, demands, and needs.

Course Module
 Regulatory Framework and Legal Issues in Business
Consumer Protection: Department of Trade and Industry and Consumer 8
Protection Act

What are the provisions stated in the act with regards to Consumer Product and
Quality?

As cited from R.A. 7394 Chapter I Article 5; the following are the duties of the state
to its consumers:

a) to develop and provide safety and quality standards for consumer products,
including performance or use-oriented standards, codes of practice and methods
of tests;

b) to assist the consumer in evaluating the quality, including safety, performance

and comparative utility of consumer products;

c) to protect the public against unreasonable risks of injury associated with

consumer products;

d) to undertake research on quality improvement of products and investigation

into causes and prevention of product related deaths, illness and injuries;

e) to assure the public of the consistency of standardized products.

The above-mentioned provisions emphasized aspects such as standard, quality, and

risks that all businesses should bear in mind in delivering and marketing their products
and services to the market. Conducting of research was also made mentioned, for it will
best figure out if a certain product is harmful or not to the consumers that will potentially
purchase it. Standards are also a good point to be taken care of; products and services shall
meet a certain standard so that it will be considered a product of quality.

What government agencies or departments are involved in ensuring that the above-
mentioned provisions are being met by businesses?
According to the provisions stated in R.A. 7394 Chapter I Article 6, the following are
the government departments involved in taking part in protecting the consumers of the
state, specifically, in line with the provisions above:

a) the Department of Health with respect to food, drugs, cosmetics, devices and
substances;

b) the Department of Agriculture with respect to products related to

agriculture, and;

c the Department of Trade and Industry with respect to other consumer

products not specified above.

Course Module
 Regulatory Framework and Legal Issues in Business
Consumer Protection: Department of Trade and Industry and Consumer 9
Protection Act

What are the things that the above-mentioned government agencies should check to
consider a product to be safe for sale in the market?
The following are the things that a product should meet so it can be considered an
approved product to be legally purchased by people:

a) requirements as to performance, composition, contents, design, construction,

finish, packaging of a consumer product;

b) requirements as to kind, class, grade, dimensions, weights, material;

c) requirements as to the methods of sampling, tests and codes used to check the
quality of the product;

d) requirements as to precautions in storage, transporting and packaging;

e) requirements that a consumer product be marked with or accompanied by

clear and adequate safety warnings or instructions, or requirements respecting
the form of warnings or instructions.

(Cited from R.A. 7394 Chapter I Article 7)

The above-mentioned provisions are just some of the provisions stated in the
Republic Act 7394 or Consumer Act of the Philippines of 1991, which will guide us on our
rights as consumers of the state.

To check your understanding of the things discussed in the previous parts of this
module, kindly answer the guide questions below.

Guide Questions:
Answer the following to check what you learned from the discussions so far. Check your
answers from the provided answer key at the end of this module. There is no need to
submit your answers to OEd.
1. What are the government agencies or departments involved in ensuring that
consumer rights are being protected?

2. Why is there a need for Consumer Protection Act?

Course Module
 Regulatory Framework and Legal Issues in Business
Consumer Protection: Department of Trade and Industry and Consumer 10
Protection Act

Answers to the Guide Questions

What is the Department of Trade and Industry?
1. What is the sole function of the Department of Trade and Industry?

It is an agency that serves as a catalyst of growth in business, employment,

trade, and industry for the development and growth of the economy at large.

2. Why is it important that a separate department govern trade and industry-related

matters in the nation?

It is important for the field of trade, and industry is a very complex and vast
thing to deal with. It needs an ample amount of attention from experts for trade and
industry impacts a great part of the economy. If the field is neglected, the economy
will deteriorate.

Consumers’ Protection Act

1. What are the government agencies or departments involved in ensuring that
consumer rights are being protected?

The government agencies or departments involved in this matter are the

Department of Health, Agriculture, and the Department of Trade and Industry.

2. Why is there a need for Consumer Protection Act?

There is a great need for the Consumer Protection Act to protect consumers
from unexpected hazards that a certain product or service may bring. It ensures that
the welfare of the consumers is an optimal priority.

Course Module
 Regulatory Framework and Legal Issues in Business
Consumer Protection: Department of Trade and Industry and Consumer 11
Protection Act

References and Supplementary Materials

Online Supplementary Reading Materials

1. About the department of Trade and Industry; [Link]

October 19, 2020

2. Clark Development Authority;

[Link]
October 19, 2020

3. Client Protection in the Philippines;

[Link]
October 19, 2020

4. Customer;
[Link]
20defined%20as%2; October 19, 2020

5. Department of Trade and Industry; [Link]

content/uploads/OPCCB/OPIF_2007/[Link]; October 19, 2020

6. Department of Trade and Industry;

[Link]
industry/; October 19, 2020

7. Department of Trade and Industry;

[Link]
industry/; October 19, 2020

8. Department of Trade and Industry; [Link]

content/uploads/OPCCB/OPIF_2007/[Link]; October 19, 2020

9. DTI-NCR Summary of Programs and Projects;

[Link] October 19, 2020

Course Module
 Regulatory Framework and Legal Issues in Business
Consumer Protection: Department of Trade and Industry and Consumer 12
Protection Act

10. Executive Order No. 133, s. 1987;

[Link]
October 19, 2020

11. Intellectual Property Office of the Philippines; [Link]

main-office/; October 19, 2020

12. Philippine Board of Investments; [Link] October 19, 2020

13. Philippine Economic Zone Authority; [Link] October 19, 2020

14. Small Business Corporation; [Link] October 19, 2020

15. The Role of the Department of Trade and Industry (DTI) in SME Development;
[Link]
in-sme-development/; October 19, 2020

16. Who we are; [Link] October 19, 2020

17. The other Tech-Focused Initiative: The FTC’s Expanding Consumer Protection Efforts
Targeting E-Commerce. Retrieved from;
[Link]
chResultsType=SingleTab&hitCount=381&searchType=BasicSearchForm&currentPos
ition=1&docId=GALE%7CA637207767&docType=Article&sort=Relevance&contentSe
gment=ZONE-
MOD1&prodId=AONE&pageNum=1&contentSet=GALE%7CA637207767&searchId=R
53&userGroupName=phama&inPS=true

Online Instructional Video:

1. [Link]
2. [Link]

Course Module