July 14, 2006

DTI ADMINISTRATIVE ORDER NO. 07-06

SUBJECT : Instituting the Simplified and Uniform Rules of Procedure for

Administrative Cases Filed with the Department of Trade
and Industry (DTI) for Violations of the Consumer Act of the
Philippines and Other Trade and Industry Laws

Pursuant to Article 159 of the Consumer Act of the Philippines (R.A. No.
7394) (approved on April 13, 1992) and to Sections 2 and 18 of Executive
Order No. 913 (entitled "Strengthening the Rule-Making and Adjudicatory
Powers of the Minister of Trade and Industry in Order to Further Protect
Consumers", issued on October 7, 1983) and to implement more effectively
the said two laws, the following rules and regulations are hereby prescribed
and promulgated:

RULE I
Title and Construction
SECTION 1. Title of the Rules . — These Rules shall be known as the
"Simplified and Uniform Rules of Procedure for Administrative Cases Filed
with the Department of Trade & Industry (DTI) for Violations of the Consumer
Act of the Philippines and Other Trade and Industry Laws." aSADIC

SECTION 2. Construction. — These Rules shall be liberally construed to

carry out their objective of promoting the just, speedy, and inexpensive
resolution of cases. Further, the best interest of the consumer shall be
considered in the interpretation and implementation of the provisions of
these Rules.
SECTION 3. Applicability of the Revised Rules of Court. — (a) Subject to
the requirements of due process, the technical rules of evidence (Part IV of
the Revised Rules of Court) prevailing in the courts of law shall not be strictly
applied hereto.
(b) In the absence of any applicable provision in these Rules, the
pertinent provisions of the Revised Rules of Court shall apply suppletorily.

RULE II
Definition of Terms
SECTION 1. Basic Terms . — For purposes of these Rules, the following
definitions shall be observed:
(a) "Consumer" — means a natural person who is a purchaser, lessee,
recipient or prospective purchaser, lessee or recipient of
consumer products or services over which the DTI has
jurisdiction.

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 (b) "Juridical person" — means:
1. The State and its political subdivisions;
2. Other corporations, institutions and entities for public interest
or purpose created by law;
3. Corporations, partnership and associations for private interest
or purpose to which the law grants a juridical personality
separate an distinct from that of each shareholder, partner
or member: Provided, however, That associations defined
by law as corporations or partnerships de facto or by
estoppel shall be considered as juridical persons under
these Rules; and
4. Entities authorized by law to sue and be sued.
(c) "Adjudication Officer" — means:
1. the Consumer Arbitration Officer (CAO) assigned to adjudicate
the cases mentioned in Section 5 (a), Rule III of this Order.
This term includes the Acting Consumer Arbitration Officer;
or
2. the Hearing Officer assigned to adjudicate the cases mentioned
in Section 5 (b), Rule III of this Order.
(d) "Mediation " — means an alternative mode of dispute resolution
forming part of the adjudication process under Rule X of these
Rules, under which the Adjudication Officer, as defined
hereinabove, facilitates communication and negotiation between
the parties, and assists the parties in reaching a voluntary
agreement regarding a dispute. This shall include the mediation
conducted by the Consumer Welfare Officer (CWO) at the pre-
adjudication level.
(e) "Adjudicate" and "adjudication" — includes "mediate" and
"mediation", respectively.
(f) "Complaint" — means a sworn written statement of ultimate facts,
filed by any consumer or any person, charging any person
(natural or juridical) with any violation of the Consumer Act, or
any Trade and Industry Law, or the Price Act and its IRR.
(g) "Formal Charge " — means a written statement of ultimate facts,
signed and sworn to by the duly authorized officer or
representative of the initiating office or agency, filed by any
office or agency of the DTI, charging any person (natural or
juridical) with any violation of the Consumer Act, or any Trade
and Industry Law, or the Price Act and its IRR.
(h) "Consumer Act" — refers to Republic Act No. 7394, otherwise
known as the "Consumer Act of the Philippines", including any
future amendment thereto.
(i) "Violations of the Consumer Act" — refers to any and all of the acts,
omissions, and offenses enumerated in Title II, Chapter I; and
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 Title III, Chapters I, II (except the provisions on the sealing and
testing of instruments of weights and measure), III, IV, V, VI, and
VII of the Consumer Act, as violative of said Act.
(j) "Trade and Industry Law " — means any Act, Batas Pambansa,
Presidential Decree, General Order, Letter of Instructions,
Executive Order, and other similar issuances, as well as any and
all amendments thereto, which regulates trade and industry
activities, the violation of which subjects the offender to criminal
or administrative penalties or civil liability, or does not subject the
offender to any penalty, sanction, or liability at all, and which law
or issuance is subject to the implementation, administration,
execution or enforcement of the Department, such as those
enumerated in Section 1 of Ministry Order No. 69, Series of 1983,
as amended, and Department Administrative Order No. 3, Series
of 1993.
(k) "Price Act" — refers to Republic Act No. 7581 otherwise known as
the "Price Act".
(l) "Department" or "DTI" — refers to the Department of Trade and
Industry.
(m) "Secretary" — refers to the Secretary of the DTI.
(n) "Regional Office " — refers to the DTI office having jurisdiction over
a particular region of the Philippines.
(o) "Provincial Office" — refers to the DTI office having jurisdiction over
a particular province of the Philippines.
(p) "Area Office" — refers to any office of the DTI-National Capital
Region (NCR) which has jurisdiction over a particular area of
Metro Manila.
(q) "Agency" — refers to any bureau or unit of DTI which handles
certain cases.
(r) "This Order" — refers to this Department Administrative Order.

RULE III
Jurisdiction
SECTION 1. Cases Covered. — These rules of procedure shall be
observed in the adjudication of:
(a) Cases filed by consumers for violations of the Consumer Act. The
rules herein that will govern are, all the rules which apply to
violations of the Consumer Act.
If the complainants are DTI offices or agencies (motu
proprio), the rules which will apply are those in (b) below.
(b) Cases filed by natural or juridical persons or by DTI offices or
agencies (motu proprio) for violations of Trade and Industry Laws.
The rules herein that will govern are, all the rules which apply to
violations of Trade and Industry Laws.
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 (c) Cases filed by natural or juridical persons or by DTI offices or
agencies motu proprio for violations of the Price Act (R.A. No.
7581) and its implementing rules and regulations. The rules
herein that will govern are, all the rules which apply to violations
of Trade and Industry Laws.
SECTION 2. Cases not Covered. — Cases which use a procedure other
than that provided under the Consumer Act or other than that provided
under E.O. No. 913, are not covered by these Rules. The following cases are
excluded from the coverage and application of these Rules:
(1) Cases handled by the Intellectual Property Office (IPO) pursuant to
the Intellectual Property Code (R.A. No. 8293);
(2) Cases handled by the Board of Investments (BOI) pursuant to the
Omnibus Investments Code (E.O. No. 226 as amended);
(3) Cases handled by the Construction Industry Arbitration Commission
(CIAC) pursuant to E.O. No. 1008 (issued on February 4,1985) and
the Alternative Dispute Resolution Act of 2004 (approved on April
2, 2004); and
(4) Cases handled by the Export Trade Complaints Committee (ETCC)
pursuant to DTI Department Administrative Order No. 11, Series
of 1999.
SECTION 3. Handling of Certain Cases. — (a) For cases involving
violations of R.A. No. 4566 (Contractor's License Law), as amended, and its
implementing rules and regulations, the Philippine Contractors' Accreditation
Board (PCAB) shall have original and exclusive jurisdiction over said cases
pursuant to R.A. No. 4566 as amended by P.D. No. 1746. However, with
regard to cases involving persons or entities engaging in construction
without a valid PCAB license, same shall constitute violations of a Trade and
Industry Law and accordingly shall be adjudicated under Executive Order No.
913 and these Simplified and Uniform Rules.
(b) For cases involving violations P.D. No. 1466 (law requiring the use
of Philippine flag vessels), and its revised implementing rules and
regulations, the Philippine Shippers' Bureau (PSB) shall have the option of
adjudicating said cases either (1) under P.D. No. 1466 and its revised
implementing rules and regulations, or (2) under E.O. No. 913 and these
Simplified and Uniform Rules of Procedure. Whenever option no. 2 is used,
only the Hearing Officers of PSB shall have original and exclusive jurisdiction
over said cases, notwithstanding the provisions of Sections 5 and 6, Rule III
of these Rules.
SECTION 4. Prosecution of a Separate Action/Prohibition on Forum
Shopping. — (a) Upon the filing of the complaint, the complainant or the duly
authorized officer filing the formal charge, as the case may be, shall certify
under oath therein or in a sworn certification annexed thereto and
simultaneously filed therewith: (a) that the complainant or office of agency
concerned has not theretofore commenced any action or filed any claim
involving the same issue in any court, tribunal or quasi-judicial agency and,
to the best of his knowledge, no such other action or claim is pending
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 therein; (b) if there is such other pending action or claim, a complete
statement of the present status thereof; and (c) if he should thereafter learn
that the same or similar action or claim has been filed or is pending, he shall
report that fact within five (5) days therefrom to the Adjudication Officer
before whom his aforesaid complaint or formal charge is pending.
(b) The failure to comply with the foregoing requirement shall not be
curable by mere amendment of the complaint or of the formal charge, but
shall be cause for the motu proprio dismissal without prejudice of the case by
the Adjudication Officer.
(c) Further, should any such separate action be filed prior in time, the
Adjudication Officer, upon notice and hearing, may order the suspension of
the action filed under these Rules if the resolution of the previously initiated
action, or any issue therein, is prejudicial to the resolution of the action filed
under these Rules.
SECTION 5. Jurisdiction of Adjudication Officers (AOs). — (a) Consumer
Arbitration Officers (CAOs) shall have original and exclusive jurisdiction to
adjudicate all cases filed by consumers under the Consumer Act.
(b) Hearing Officers (HEROs) shall have original and exclusive
jurisdiction to adjudicate: (1) all cases filed by natural or juridical persons for
violations of any Trade and Industry Law; and (2) all motu proprio cases filed
under a formal charge (as defined under these Rules) by any office or
agency of the Department for violations of any Trade and Industry Law, or of
the Consumer Act, or of the Price Act and its IRR. ECAaTS

SECTION 6. Concurrence of Jurisdiction. — Subject to Section 5 above

and to Rule IV hereof, the Provincial, Regional, Area Office, or the agency
where the complaint or formal charge is first filed shall take cognizance
thereof to the exclusion of all other offices or agencies of the Department
having jurisdiction over the same case.
SECTION 7. Jurisdiction Over Cases of Violation of PSB. — Revised Rules
on Freight Forwarding . — Notwithstanding the provisions of Sections 5 and 6
of this Rule, only the Hearing Officers of the Philippine Shippers' Bureau shall
have original and exclusive jurisdiction over cases involving violations of PSB
Administrative Order No. 6, Series of 2005 entitled "Philippine Shippers'
Bureau (PSB) — Revised Rules on Freight Forwarding".
SECTION 8. Qualifications of Adjudication Officers. — Adjudication
Officers shall have such qualifications as required by law, according to
whether they are CAOs or Hearing Officers.
SECTION 9. Consumer Arbitration Officers, Acting Consumer Arbitration
Officers, and Hearing Officers; To Whom They Refer To . — (a) "Consumer
Arbitration Officers" are lawyers who are holding the plantilla positions of
Attorney III in the various regional offices of DTI. "Acting Consumer
Arbitration Officers" are DTI employees/officers who will be designated as
Acting Consumer Arbitration Officers by the Undersecretary for Regional
Operations Group. "Hearing Officers" are DTI employees/officers who will
designated as Hearing Officers by the Undersecretary for Regmal Operations
Group and/or by their Supervising Undersecretary.
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 (b) Every such designation (whether original or renewal) shall be for a
period of not exceeding three (3) years.
(c) Under this Order, a Consumer Arbitration Officer or an Acting
Consumer Arbitration Officer can be designated further as a Hearing Officer.
A Hearing Officer can be designated further as an Acting Consumer
Arbitration Officer.
SECTION 10. Powers and Duties of the Adjudication Officer. — The
Adjudication Officer shall exercise the following powers and duties:
a. Issue summons;
b. Administer oaths and affirmations;
c. Conduct adjudication;
d. Regulate and maintain order during the proceedings;
e. Issue subpoena or subpoena duces tecum, motu proprio or when
requested by any party to compel the attendance of witnesses or
the production of documents, records or books during the
hearing;
f. Take or receive all relevant evidence;
g. Rule upon offers of proofs; HDIaST

h. Take or cause deposition to be taken whenever the ends of justice

would be served thereby;
i. Rule on any procedural request;
j. Issue preliminary orders, preventive orders, and temporary orders;
k. Exclude any party, witness, or any other person from the hearing
room;
l. Render a decision within fifteen (15) days from the time the
proceedings were terminated; and
m. Perform such other functions as would contribute to the just,
speedy, and inexpensive resolution of the case.

RULE IV
Venue
SECTION 1. Venue for Complaints Filed by Consumers for Violations of
the Consumer Act. — The complaint shall be filed in duplicate with the
Provincial Office (or with its field office) or with its mother Regional Office if
the province has no Provincial Office, or in the case of the National Capital
Region (NCR), with the Area Office, situated in the place specified by the
parties in a written agreement executed prior to the filing of the complaint. If
there is no such written agreement, then in any of the following places, at
the option of the complainant, to wit:
(a) Place where the transaction was done, wholly or partially;
(b) Place where the violation of the Consumer Act was committed,
wholly or partially;
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 (c) Place of the execution of the contract sued upon, as it appears
therefrom;
(d) Place of residence of the complainant at the time of the transaction,
or at the time of the violation, or at the time of the filing of the
complaint; and
(e) Place of residence of the respondent, or business domicile if the
respondent is a juridical person, at the time of the transaction; or
at the time of the violation, or at the time of the filing of the
complaint.
SECTION 2. Venue for Complaints filed for Violations of Trade and
Industry Laws, Including the Price Act and its IRR. — Section 1 of this Rule
shall apply to all complaints filed by natural or juridical persons for violations
of Trade d Indanustry Laws and the Price Act and its IRR.
SECTION 3. Venue for Formal Charges . — Formal charges shall be filed
in accordance with in Section 1 of this Rule: Provided, That should the office
filing the formal charge be a Provincial Office, the formal charge shall be
filed with its mother Regional Office.
SECTION 4. Change of Venue After the Complaint/Formal Charges Has
Been Filed . — After the complaint/formal charge has been filed but before
the mediation stage is finished, the parties to the case may agree in writing
to a change in venue: Provided, however, That this change can be done only
once. EcTaSC

RULE V
Commencement of Action
SECTION 1. Commencement of Action. — (a) In all cases filed under
these Rules, the party initiating the action shall be called the "Complainant"
and the opposing party the "Respondent". In the case of a formal charge, the
initiating office or agency is the complainant.
(b) All cases for violations of the Consumer Act, or of any Trade and
Industry Law, or of the Price Act and its IRR, shall be commenced
by filing a complaint or a formal charge, as the case may be.
(c) The full names of any and all real parties-in-interest, whether
natural or juridical persons, or of the DTI office or agency, shall
be stated in the caption of the complaint or formal charge, as well
as in the decisions and orders.
(d) All complaints shall be prosecuted by the complainant or by his/its
counsel. All formal charges shall be prosecuted by the duly
authorized officer or representative of the initiating office or
agency of DTI. The respondent shall defend himself personally or
by counsel.
SECTION 2. Essential Elements and Parts of a Complaint. — (a) The
following shall be alleged in the complaint:
(1) The names and addresses of the parties and their capacity to sue or
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 be sued;
(2) A statement of relevant facts, including all relevant dates;
(3) A statement of cause/s of action;
(4) A statement of law/s violated; and
(5) The relief/s prayed for, and the preliminary order, preventive
measure order, or temporary order sought, if any.
(b) The following documents shall be attached to the complaint, to
form integral parts thereof:
(1) Clear sworn statements of witness/es;
(2) Clear copies of documentary evidence; and
(3) A verified statement on any civil, criminal or administrative action
that has been filed or is/are pending, as provided in Section 4,
Rule III of this Order.
(c) The absence of any one, some, or all of the above shall be a ground
for the motu proprio dismissal without prejudice of the case.
SECTION 3. Essential Elements and Parts of a Formal Charge. — (a) The
following shall be alleged in the Formal Charge:
(1) The names and addresses of the parties;
(2) The designation of the violation/offense committed;
(3) The act/s and/or omission/s constituting the violation/offense;
(4) The approximate date of the commission of the violation/offense;
CTHDcS

(5) The place where the violation/offense was committed; and

(6) The relief/s prayed for, and the preliminary order, preventive
measure order, or temporary order sought, if any.
(b) The following documents shall be attached to the formal charge, to
form integral parts thereof:
(1) Clear sworn statements of witness/es;
(2) Clear copies of documentary evidence; and
(3) A verified statement on any civil, criminal or administrative action
that has been filed or is/are pending, as provided in Section 4,
Rule III of this Order.
(c) The absence of any one, some, or all of the above shall be a ground
for the motu proprio dismissal without prejudice of the case.
SECTION 4. Form of Complaint and/or Formal Charge. — The complaint
or formal charge shall be legibly printed on legal size paper. Its caption shall
state the name and address of the office with which it is filed, the title of the
action, and the words "Adm. Case No. ________". The caption shall include the
names of the parties, with the identifying words "Complainant" and
"Respondent". IHCSET

SECTION 5. Rule on Suit Against Associations Without Juridical

Personality. — When two or more persons associated in any business,
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 transact such business under a common name, whether it comprises names
of such persons or not, the association may be sued under such common
name.

RULE VI
Service of Pleadings and Other Papers
SECTION 1. Filing and Service of Pleadings. — All pleadings and other
papers in connection with the case shall be filed with the appropriate
docketing unit of the Regional office, Provincial or field office, Area Office, or
other appropriate office or agency of the Department, as the case may be.
SECTION 2. Service of Summons, Notices, Decisions and Orders. — (a)
Summons, notices, and copies of decisions and orders shall be served on the
parties to the case personally by the duly authorized process server or other
officer of the Department or by registered mail.
(b) The serving officer shall submit his return within five (5) days from
date of service thereof, stating legibly in his return, his name, the name of
person served, and the date of receipt, which return shall be immediately
attached to and shall form part of the records of the case. If no service was
effected, the serving officer shall state the reason therefor in his return.

RULE VII
Prohibited Pleadings and Motions
SECTION 1. Prohibited Pleadings or Motions. — For purposes of these
Rules, the following pleadings and motions shall be prohibited:
(a) Motion to dismiss, except a motion to dismiss based on lack of
jurisdiction; which must be raised at the earliest opportunity;
(b) Motion for judgment on the pleadings; cHDAIS

(c) Motion for summary judgment;

(d) Motion for bill of particulars;
(e) Motion for extension of time to file any required pleading;
(f) Counterclaim;
(g) Cross-claim;
(h) Reply;
(i) Rejoinder;
(j) Motion to Intervene; and
(k) Memorandum of any kind.
SECTION 2. Motion for Postponement. — No dilatory motions for
postponement shall be allowed. During the mediation stage, however, the
parties shall be allowed a maximum of two (2) postponements: Provided,
That these shall be for the purpose of seriously seeking an amicable
settlement of the case: Provided, further, That such postponements shall
cover a period of not more than a total of thirty (30) days. CTaSEI

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 RULE VIII
Prescription of Actions
SECTION 1. Prescription of Actions Under the Consumer Act. — Any
complaint of a consumer (as defined under Section 1 (a), Rule II of this
Order), for violation of the Consumer Act, shall be filed within two (2) years
from the time the consumer transaction was consummated, or the deceptive
or unfair and unconscionable act or practice was committed, or in case of
hidden defects, from the date of discovery thereof. After the said period, the
filing thereof shall be barred.
SECTION 2. Prescription of Actions Under Other Cases. — Any other
complaint or formal charge shall be filed within three (3) years from the date
of the commission of the violation/offense, or if such date is unknown at that
time, then within three (3) years from the date of discovery thereof. After the
said period, the filing thereof shall be barred.

RULE IX
Proceedings Before the Adjudication Officer
SECTION 1. Docketing of Cases and Assignment to an Adjudication
Officer. — (a) All complaints and formal charges shall be docketed. After
docketing, the Head of Office concerned shall assign the case to an
Adjudication Officer.
(b) The adjudication of any complaint, except one which is initiated by
a consumer for violation of the Consumer Act, is discretionary with the
Department, and not a matter of right for the complainant. Thus, after the
docketing and assignment of an administrative case number, the Head of
Office concerned shall determine whether or not the Department should
adjudicate the case, taking info consideration the following:
(i) Whether or not the adjudication of the case will aid in the
enforcement of the Trade and Industry Law allegedly violated,
and if it does, the extent thereof; SHECcD

(ii) The wisdom, propriety, and expediency of adjudicating the case;

(iii) The other legal remedies available to the parties in settling their
dispute/s; and
(iv) Whether or not the subject matter of the case is a priority in the
adjudication program of the Department.
(c) Unless the Secretary determines otherwise, if the Head of Office
elects not to submit the case for adjudication, he shall issue an order to such
effect. No reason shall be given for such elected action, except that it is
pursuant to Section 1 (b) of this Rule. The said order shall not be appealable.
SECTION 2. Preliminary Determination/Dismissal Motu Proprio by the
Adjudication Officer. —Upon assignment of the case, the Adjudication Officer
shall determine whether:
(a) the Head of Office has already elected to adjudicate the case (this is
not applicable to complaints filed by consumers for violations of
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 the Consumer Act);
(b) the case falls within the jurisdiction of the Department in
accordance with these Rules;
(c) the complaint or formal charge is sufficient in form and substance,
and a cause of action or the charge is sufficiently alleged, as the
case may be; and
(d) the action has not yet prescribed.
Should the Adjudication Officer find that any or some of the essential
elements required for a complaint or formal charge do not exist, or that the
complaint or formal charge do not have the required attachments, he shall
motu proprio dismiss the action without prejudice.
SECTION 3. Issuance of Summons. — If the Adjudication Officer
believes, based on the allegations of the complaint or of the formal charge
and the supporting evidence, that there exists a prima facie case and that
same complies with all the requirements heretofore mentioned, he shall
issue a summons to be served on the respondent, copy furnished the
complainant.
Summons shall be served by personal service, by registered mail, or by
publication. In case of summons by publication, the same shall be done once
in a newspaper of general circulation; the cost being borne by the
complainant.
SECTION 4. Answer. — The summons shall require the respondent to
file a written answer within ten (10) working days from receipt of the
summons.
SECTION 5. Preliminary Order. — (a) At any time after the
commencement of the action and before judgment, the Adjudication Officer
may motu proprio or upon verified application by the complainant, or by the
officer who signed the formal charge, issue a preliminary order requiring any
person to refrain from a particular act or to perform a particular act, if the
Adjudication Officer is satisfied that the commission or the continuance of
the act complained of during the pendency of the action or the non-
performance thereof would probably work injustice to the complainant or the
general public; or that the respondent is doing, threatens or is about to do,
or is procuring or suffering to be done, some act probably in violation of the
complainant's or the general public's rights respecting the subject of the
administrative action, and tending to render the judgment ineffectual. ACcHIa

(b) The Adjudication Officer may require the complainant to file with
the office of the Adjudication Officer, a bond executed to the respondent, in
an amount to be fixed by the Adjudication Officer, to the effect that the
complainant will pay to such party all damages which he may sustain by
reason of the preliminary order if the Adjudication Officer should finally
decide that the complainant was not entitled thereto: Provided, That no bond
shall be required in cases initiated by formal charge.
(c) The preliminary order may be granted with or without prior notice
and hearing on the application for issuance of preliminary order, at the
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 sound discretion of the Adjudication Officer.
(d) The preliminary order may be dissolved fully or partially at anytime
by the Adjudication Officer motu proprio, or upon application by the
respondent with or without prior notice and hearing on the application for
dissolution thereof, at the sound discretion of the Adjudication Officer. The
grounds for objecting to, or for a motion for dissolution, of any injunctive
relief under Section 6, Rule 58 of the Rules of Court shall be applicable.
SECTION 6. Preventive Measure Order. — At any time after the
commencement of the administrative action and before judgment, the
Adjudication Officer may motu proprio or upon application by the
complainant, issue a preventive measure order for the purpose of preventing
the disposition or tampering of evidence, the continuance of acts being
complained of, and the flight of the respondent, as the case may be:
(a) The seizure of the goods which are the subject of the said
adjudication or the padlocking of the warehouse, building,
factory, store, shop, or any other structure where the said goods
are contained or stored; or the withholding of such goods if for
any reason the possession thereof has passed to the Department;
(b) The seizure of paraphernalia, machines, vehicles and the like
believed to have been used in the commission of the offense, or
the padlocking of the warehouse, building, factory, store, shop, or
structure where the said paraphernalia, machines, vehicles and
the like are contained or stored; or the withholding of such
paraphernalia, machines, vehicles and the like if for any reason
the possession thereof has passed to the Department; cDHCAE

(c) The padlocking of the business establishment, warehouse, building,

factory, store, shop or any other structure which was used in the
commission of the offense;
(d) The holding in port of any vessel or aircraft which has been used in
the commission of the offense;
(e) The prevention of the departure from the Philippines of the
respondent regardless of citizenship; and
(f) Any other preventive measure which is deemed necessary by the
Adjudication Officer.
SECTION 7. Temporary Order. — Any of the following temporary orders
may also be issued by the Adjudication Officer if the case involves a violation
of the Price Act and its IRR:
(a) Temporary Closure Order (TCO) for a period not exceeding ten (10)
days; and
(b) Temporary Restraining Order (TRO) for a period not exceeding ten
(10) days (per Section 10 (11), Price Act).

RULE X
Mediation
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 SECTION 1. Statement of Policy. — In applying and implementing the
provisions of these Rules, primary consideration must be given to the need
to promote candor of parties and the Adjudication Officer through the policy
of fostering prompt, economical and amicable resolution of disputes in
accordance with principles of integrity of determination by the parties, and
the policy that the decision making authority in the mediation process rests
with the parties, pursuant to R.A. No. 9285 or the Alternative Dispute
Resolution Act of 2004.
SECTION 2. Mediation . — Within five (5) days from the filing of the
answer, or from the lapse of the period to answer if none has been filed, the
Adjudication Officer shall issue a notice of mediation, which shall be served
upon each of the parties concerned at least five (5) days before the holding
thereof. During mediation, the Adjudication Officer shall:
a. Explain to all parties the nature of the action; STDEcA

b. Clarify from the parties the relief/s sought;

c. Encourage the parties to settle the case, and ask for the parties
offers and counter offers;
d. In all cases, endeavor to facilitate the amicable settlement by the
parties, by stressing on the advantages thereof, e.g., cost-
effective, peace of mind and reliefs;
e. Propose to the parties alternative solutions and encourage counter-
offers; and
f. Resort to such other means toward the speedy and impartial
disposition of the case. A successful mediation shall operate as a
dismissal with prejudice of the case and is immediately final and
executory.
SECTION 3. Compromise and Execution During Mediation . — During the
mediation stage, if the parties agree on an amicable settlement of the case,
they shall sign an agreement indicating the terms and conditions thereof.
The agreement shall not be contrary to law, morals, good customs, public
order or public policy. The Adjudication Officer shall render a decision based
on the compromise agreement, which shall immediately be final and
executory.

RULE XI
Preliminary Conference
SECTION 1. Next Action When There is Failure of Mediation . — (a)
Should mediation fail to resolve the case, the Adjudication Officer shall
conduct a preliminary conference to consider the following:
(1) The simplification of the issues;
(2) The necessity or desirability of amendments to the pleadings;
(3) The possibility of obtaining stipulations or admissions of facts and
of documents to avoid unnecessary proof;
(4) The limitation of the number of affiant-witnesses; and
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 (5) Such other matters as may aid in the prompt disposition of the
case.
(b) The Adjudication Officer shall have the option of requiring the
parties to simultaneously submit preliminary conference briefs to aid him in
the conduct of the preliminary conference.
(c) Thereafter, the Adjudication Officer shall issue a Preliminary
Conference Order stating: (a) the stipulated and/or admitted facts, if any; (b)
the issues of law and of fact agreed upon; and (c) other matters taken up
during the preliminary conference.

RULE XII
Position Paper; Hearing
SECTION 1. Submission of Position Paper and Supporting Evidence. —
(a) In lieu of a formal hearing, the Adjudication Officer shall direct the parties
to simultaneously submit their respective position paper with supporting
affidavits and other documentary evidence not later than fifteen (15) days
from receipt of the Preliminary Conference Order.
(b) The supporting affidavits shall take the place of direct testimony.
Affidavits and supporting documentary evidence which were annexed to the
complaint or formal charge, and the answer, as the case may be, and
forming part of the records of the case, are deemed automatically
reproduced for purposes of presentation of evidence and need not be
annexed to the position papers. They shall, however, be distinctly identified
for reference in the position paper.
(c) The Adjudication Officer, at his option, may set the submission of
position paper and supporting evidence for hearing.
(d) Upon the submission of the position papers, or upon the expiration
of the fifteen (15)-day period mentioned in paragraph (a) of this section if no
position paper has been filed, or upon termination of the hearing mentioned
in the immediately following section, the case shall be deemed submitted for
decision.
SECTION 2. Hearing. — Should the Adjudication Officer believe that
there is/are question/s of fact, he may set the case for hearing before the
same is submitted for decision, purposely to resolve that issue. During the
said hearing, questions may be propounded by parties to each other's
affiants-witnesses.

RULE XIII
Decision and Administrative Penalties/Sanctions
SECTION 1. Decision. — Within fifteen (15) days from the time the case
is submitted for decision, the Adjudication officer shall issue a decision in
writing. The decision shall be clear and concise, and shall contain statements
on: (a) the relevant facts of the case; (b) the issue/s involved; (c) applicable
law and/or jurisprudence; (d) conclusions and reasons therefor; and (c) the
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 relief/s granted, if any, and the administrative penalty/ies imposed, if any. cDCEIA

SECTION 2. Imposition of Administrative Penalties. — The Adjudication

Officer shall have the power to impose administrative penalties upon the
respondent, if warranted, and even if these have not been prayed for by the
complainant, to wit:
(a) For the violation of the Consumer Act:
(1) The issuance of a Cease and Desist Order (CDO), which shall
be embodied in the decision: Provided; however, That such
order shall specify the acts that the respondent shall cease
and desist from and shall require him to submit a report of
compliance therewith within a reasonable time;
(2) The acceptance by the Adjudication Officer of a voluntary
assurance of compliance or discontinuance from the
respondent which may include any or all of the following
terms and conditions:
2.1 an assurance to comply with the provisions of R.A. No.
7394 and its implementing rules and regulations; HIACac

2.2 an assurance to refrain from engaging in unlawful acts

and practices or unfair or unethical trade practices
subject of the adjudication;
2.3 an assurance to comply with the terms and conditions
specified in the consumer transaction subject of the
complaint;
2.4 an assurance to recall, replace, repair or refund the
money value of defective products distributed in
commerce; and
2.5 an assurance to reimburse the complainant out of any
money and/or property in connection with the
complaint, if any, and to file a bond to guarantee
compliance therewith;
Said acceptance does not require as a condition precedent, the
consent of the complainant.
(3) The restitution or rescission of the contract without damages;
(4) The seizure and condemnation of the consumer product/s
found to be hazardous to health and safety unless the
respondent files a bond issued by an accredited bonding
company, equivalent to ten percent (10%) of the value of
the seized or condemned items, or such other percentage
as may be determined by the Adjudication Officer, to
answer for any damages or injury that may arise from the
continued use of the product;
(5) The imposition of an administrative fine in such amount as
deemed reasonable by the Adjudication Officer, which shall
in no case be less than Five Hundred Pesos (P/500.00) nor
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 more than Three Hundred Thousand Pesos (P/300,000.00)
depending on the gravity of the offense, and the additional
administrative fine of not more than One Thousand Pesos
(P/1,000.00) for each day of continuing violation; and
(6) Other penalties provided elsewhere in the Consumer Act.
(b) For the violation of any Trade and Industry Law:
(1) The issuance of a Cease and Desist Order (CDO), which shall
be embodied in the decision;
(2) The acceptance by the Adjudication Officer of a voluntary
assurance of compliance or discontinuance from the
respondent under such terms and conditions as may be
imposed by the Adjudication Officer. Said acceptance does
not require as a condition precedent, the consent of the
complainant;
(3) The seizure, forfeiture or condemnation of the products which
are the subject of the offense, as well as the proceeds of
the offense;
(4) The seizure and forfeiture of the paraphernalia and all
properties, real or personal, which have been used in the
commission of the offense;
(5) The imposition of an administrative fine in such amount as deemed
reasonable by the Adjudication Officer, which shall in no case be less than
Five Hundred Pesos (P/500.00) nor more than One Hundred Fifty Thousand
Pesos (P/150,000.00), plus the, additional administrative fine of not more
than One Thousand Pesos (P/1,000.00) for each day of continuing violation.
The fine imposed under this Section shall be regardless of the limits of the
criminal fine fixed in the trade and industry law violated;
(6) The cancellation of any permit, license, authority, or
registration which may have been granted by the
Department, or the suspension of the validity thereof for
such period of time as the Adjudication Officer may deem
reasonable which shall not however, exceed one year;
(7) The withholding of any permit, license, authority, or
registration which is being secured by the respondent from
the Department;
(8) The submission of a recommendation to the LGU concerned,
through proper channel, for the cancellation/suspension of a
Mayor's Business Permit;
(9) The awarding of nominal and liquidated damages;
(10) Censure; and
(11) Other penalties/sanctions analogous to the above, such as:
11.1 Closure of the business establishment for a period not
exceeding one year;
11.2 Ordering the respondent to recall, replace, repair, or
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 refund the money value of defective products
distributed in commerce; and/or
11.3 Ordering the respondent to reimburse the complainant
the expenses and the costs incurred in prosecuting
the case in the Department.
(c) For the violation of the Price Act and its IRR:
(1) The permanent closure of the establishment;
(2) The confiscation/seizure and forfeiture of all products and/or
effects subject of the offense;
(3) The confiscation/seizure and forfeiture of all paraphernalia
used in the commission of the offense/crime;
(4) The suspension, revocation or cancellation of any permit,
license, authority, or registration issued by the Department;
(5) The issuance of a cease and desist order, which shall be
embodied in the decision; cCTIaS

(6) Censure;
(7) Reprimand; and
(8) The imposition of an administrative fine of not less than One
Thousand Pesos (P/1,000.00) nor more than One Million
Pesos (P/1,000,000.00).
SECTION 3. Service of the Decision. — A copy of the decision may
either be served personally or by registered mail, to the parties or counsel. If
the decision is served on the respondent by way of publication once in a
newspaper of general circulation, the cost thereof shall be shouldered by the
complainant.

RULE XIV
Motion for Reconsideration
SECTION 1. Motion for Reconsideration. — (a) Cases Filed by
Consumers for Violations of the Consumer Act — Per Article 165 of the
Consumer Act, no Motion for Reconsideration is allowed for said cases.
(b) Cases Filed for Violations of Trade and Industry Laws or of the Price
Act and its IRR — Per Section 13 of E.O. No. 913, only one (1) Motion for
Reconsideration is allowed within the appeal period. The filing of the Motion
for Reconsideration shall suspend the running of the said appeal period, and
the number of days lapsed shall be deducted in the computation of the
remaining appeal period.
Should the Adjudication Officer believe that the motion for
reconsideration is merely pro forma and filed manifestly for delay, he shall
deny the same in writing. Otherwise, the Adjudication Officer shall ask the
adverse party to file a comment and/or opposition thereto within ten (10)
days from receipt of said order. Upon the lapse of said period, whether with
or without any comment and/or opposition being filed, the Adjudication
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 Officer shall proceed to resolve the motion. ISHCcT

RULE XV
Appeals
SECTION 1. Manner of Appeal. — (a) Under Article 165 of the Consumer
Act, an appeal may be taken from a final judgment or order of the
Adjudication Officer which completely disposes of a case, within fifteen (15)
days from receipt thereof. The appeal shall be taken by filing a
Memorandum of Appeal with the Secretary, with Notice of Appeal to the
Adjudication Officer, and with copy duly furnished the adverse party/ies, on
any of the following grounds:
(1) Grave abuse of discretion;
(2) The decision/order is in excess of jurisdiction or authority of the
Adjudication Officer; and
(3) The decision/order is not supported by the evidence or there is
serious error in the findings of facts.
(b) To ensure simplicity and uniformity in these Rules, paragraph (a) of
this section is hereby made applicable to appeals from decisions of
Adjudication Officers to the Secretary, in cases filed for violations of Trade
and Industry Laws and the Price Act and its IRR.
SECTION 2. Decision on Appeal. — The Secretary shall decide the said
appeal within thirty (30) days from receipt thereof. His decision on the
appeal shall become final and executory if no further appeal is made within
the reglementary period provided by law, as follows:
a. If the case falls under the Consumer Act (where the Complainant is a
consumer), the further appeal shall be by way of certiorari to the
Court of Appeals, pursuant to Section 4, Rule 65 of the Revised
Rules of Court, which must be filed by the appellant within sixty
(60) days from receipt of the decision to be assailed in the Court
of Appeals.
b. If the case falls under any Trade and Industry Law (E.O. No. 913) or
under the Price Act and its IRR, the further appeal shall be made
to either:
1. the Office of the President; or to the
2. Court of Appeals under Rule 43 of the Revised Rules of Court.
SECTION 3. Delegation of the Secretary's Appeal Function. — The
Secretary may delegate to subordinate officer/s his function of reviewing and
deciding said appeals from decisions/final orders of Adjudication Officers.

RULE XVI
Execution of Decisions
SECTION 1. When Decision Becomes Final and Executory. — All
decisions shall become final and executory when all periods for Motion for
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 Reconsideration and Appeal provided in these Rules, whether taken or not,
shall have lapsed.
SECTION 2. Execution. — (a) As soon as a decision becomes final and
executory, the Adjudication Officer shall, either on motion of the interested
party or motu proprio, issue an Order of Execution with the corresponding
Writ of Execution, requesting the proper Sheriff's Office to execute said
decision. No deputation is necessary.
(b) When there is a need to deputize and enlist the assistance of public
officers and government agencies (other than the Sheriff's Office), or private
individuals and entities, the Adjudication Officer may deputize anyone of
them, and the deputation shall take effect as soon as the said officers,
agencies, individuals, and entities give their consent to their deputation.

RULE XVII
Other Provisions
SECTION 1. Treatment of Pending Cases . — All cases (for violations of
the Consumer Act, or Trade and Industry Laws, or the Price Act and its IRR),
which are pending with the various DTI offices and agencies on the date this
Order takes effect, shall continuously be adjudicated in accordance with the
rules of procedures and designations existing immediately prior to the
effectivity of this Order: Provided, however, That to ensure uniformity and a
smooth transition, the DTI-National Capital Region shall observe the existing
procedures being observed by the other DTI Regional Offices and Provincial
Offices in the mediation and adjudication of cases involving violations of the
Consumer Act, Trade and Industry Laws, and the Price Act. SCaTAc

SECTION 2. Separability Clause. — If for any reason any section,

provision, or part of this Order, or the application of such section, provision,
or part to any person, group, or circumstance is declared invalid or
unconstitutional, the remainder of this Order shall not be affected by such
declaration.
SECTION 3. Repealing Clause . — (a) The following DTI orders are
hereby repealed:
(1) Ministry Order No. 69, Series of 1983, entitled "Rules and
regulations governing administrative actions for violations of
trade and industry laws", issued on 25 November 1983: Provided,
however, That the list of "Trade and Industry Laws" embodied in
Section 1 thereof, including all the amendments to said list, is
hereby excluded from the said repeal.
(2) Department Order No. 13, Series of 1989, entitled "Authorizing
Provincial Directors to sign Statements of Violation, for violations
of Trade and Industry Laws within their respective province",
issued on May 19, 1989.
(3) Department Order No. 25, Series of 1989, entitled "Expanding the
Authority of DTI Provincial Directors in the Enforcement of Trade
and Industry Laws", issued on July 6, 1989. DAHSaT

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 (4) Department Order No. 124, Series of 1992, entitled "Appointment
of Acting Consumer Arbitration Officer under Republic Act No.
7394, otherwise known as Consumer Act of the Philippines",
issued on October 28, 1992.
(5) Department Administrative Order No. 3, Series of 1993, entitled
"Amending Department Order No. 124, Series of 1992", issued on
June 30, 1993.
(6) Joint DTI-DOH-DA Administrative Order No. 1, Series of 1993,
entitled "Rules and Regulations implementing the provisions of
Chapter III, Title V of Republic Act No. 7394, otherwise known as
the Consumer Act of the Philippines", issued on December 27,
1993, insofar as it applies to the DTI.
(7) Department Administrative Order No. 10, Series of 1995, entitled
"Designation and jurisdiction of Consumer Arbitration
Officer/Alternate Acting Arbitration Officer", issued on October 26,
1995.
(8) Department Administrative Order No. 4, Series of 1997, entitled
"Venue of actions involving violations of the Consumer Act (R.A.
7394)", issued on June 17, 1997.
(9) Department Order No. 89, Series of 1998, entitled "Expanding the
Authority of the Consumer Arbitration Officers (CAO) to Include
Mediation and Adjudication of Administrative Cases Involving
Violations of Trade and Industry Laws under Executive Order No.
913", issued on December 14,1998.
(10) The following sections of Department Administrative Order No. 2,
Series of 2002, entitled "Defining the responsibilities and
liabilities of manufacturers, importers, traders, wholesalers,
distributors, retailers and or their agents, with regard to products
covered by mandatory product certification and prescribing
penalties for violation thereof", issued on July 1, 2002:
Section 8 - entitled "Adjudication of Cases";
Section 9 - entitled "Preliminary and Preventive Orders";
Section 10 - entitled "Procedure for Filing an Appeal";
Section 11 - entitled "Penalties and Sanctions";
Section 13 - entitled "Execution of Final Orders/Decisions/Judgments;
and
Section 15 - entitled "Prescription".
(11) The following sections of Department Administrative Order No. 8,
Series of 2002, entitled "Rules and Regulations Implementing
Article 53 of the Consumer Act of the Philippines (R.A. 7394) in
Relation to Section 8, Rule II, Chapter I, Title III of Department
Administrative Order No. 2, Series of 1993 Prohibiting Chain
Distribution Plans or Pyramid Sales Schemes in the Sale of
Consumer Products", issued on August 28, 2002:
Section 3 - entitled Administrative Proceedings; and
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 Section 4 - entitled "Administrative Proceedings under E.O. 913 and
M.O. 69".
(12) The following Sections of PSB-Administrative Order No. 6, Series of
2005, entitled "Philippine Shippers Bureau (PSB) — Revised Rules
on Freight Forwarding", issued on November 23, 2005:
Section 42 - entitled "Modes of commencing administrative
adjudication proceedings". ICaDHT

Section 43 - entitled "Mediation; three (3) types of decision enderable

by the Director of PSB".
Section 44 - entitled "Elevation of case".
Section 45 - entitled "When summons not necessary".
Section 46 - entitled "Probable cause rule".
Section 47 - entitled "Additional powers".
(b) All other Department Administrative Orders, Department Orders,
other issuances, or parts thereof which are inconsistent with this Order are
hereby likewise repealed or amended accordingly. TAECSD

SECTION 4. Effectivity. — This Order shall take effect fifteen (15) days
after full publication in two (2) newspapers of general circulation.
Makati City, July 14, 2006.

(SGD.) PETER B. FAVILA

Secretary
Recommended by:
(SGD.) ZENAIDA CUISON MAGLAYA
Undersecretary for Consumer
Welfare and Trade Regulation Group

(SGD.) VICTORIO MARIO A. DIMAGIBA

Director
Bureau of Trade Regulation and Consumer Protection and
Officer-in-Charge
Office of Legal Affairs
Published in The Manila Times on August 3, 2006.

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