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DEPARTMENT OF
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TRADE &INDUSTRY
PHILIPPINES

DEPARTMENT ADMINISTRATIVE ORDER NO. 10-02

Series of2010

SUBJECT: ADDENDA TO DEPARTMENT ADMINISTRATIVE ORDER NO.2,

SERIES OF 1993 OR THE RULES AND REGULATIONS
IMPLEMENTING REPUBLIC ACT NO. 7394, OTHERWISE KNOWN
AS THE CONSUMER ACT OF THE PlULIPPINES PARTICULARLY
CHAPTER VI THEREOF ON SALES PROMOTION.

WHEREAS, Republic Act No. 7394 or the Consumer Act of the Philippines
declares that it is the policy of the State to protect the interests of the consumer,
promote his general welfare and to establish standards of conduct for business and
industry. Towards this end, the State shall implement measures to achieve the
objective of protecting consumers against deceptive, unfair and unconscionable
sales act and practices, among others;

WHEREAS, the same Act further declares that the State shall protect the
consumer from misleading advertisements and fraudulent sales promotion
practices;

WHEREAS, there is a need to strengthen Department Administrative Order

No.2, Series of 1993 implementing the Consumer Act to effectively address various
evolving issues related to sales promotion campaigns particularly to effect its
conduct with honesty, transparency and fairness;

NOW, THEREFORE, pursuant to the provisions of the Consumer Act of the

Philippines, the following Order is hereby prescribed for the information, guidance
and compliance of all concerned:

SECTION 1. Section 1 of Rule 1, Chapter Vl, Title III is hereby amended to

read as follows:

"Section 1. Coverage. - The following rules shall apply to the advertising

and sales promotion of all consumer products, services and credit
facilities, which include sponsorships of game shows and similar
activities. Provided, that with respect to food, drugs, devices, cosmetics
and hazardous substances and agricultural products, the same shall be
under the jurisdiction of the concerned departments."

OFFICE OF THE UNDERSECRETARY FOR CONSUMER WELFARE AND TRADE REGULATION

6F, Trade & Industry Building, 361 Sen. Gil PuyatAvenue, 1200 Makati City, Philippines
Telephone (+632) 751.3334/751. 4625· Fax (+632) 751.3335· E-mail: [email protected]
www.dtLgov.ph
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SECTION 2. Section 1.81 of Rule IV, Title I is hereby amended to read as
follows:

"1.81. Sales Promotions - x x x

1.81.a In-Store Promotion means promotional campaign

conducted within the retailer's store in which no advertisement or
public announcement is made on such activity including, but not
limited to, window displays and/or signages that are visible
outside of the retailer's premises."

SECTION 3. Section 1 of Rule VlII, Chapter VI, Title III is hereby amended to
read as follows:

"Section 1. Coverage - The following rules and regulations shall

apply to all promotional campaigns/announcements for consumer
products, services, credit facilities which include sponsorships of
games shows and similar activities, as well as beauty contests,
nationwide in character.

SECTION 4. Section 2 of Rule VIII, Chapter VI, Title III is hereby amended to
read as follows:

"Sec. 2. Exemptions - The rules on promotional campalgns

shall not apply to the promotional campaign or activities of the
following:

2.1. The government or any of its agencies or

instrumentalities when the same is conducted in the exercise of
their governmental functions.

2.2. Private entities in joint project/s with any government

agency under the preceding paragraph.

2.3 Social, civic, political, religious, educational, professional

and other similar organizations which extend promotional activity
among their members. Provided, that the promotional activity is not
considered sales promotion campaign as defined under these Rules."

SECTION 5. Section 1 of Rule IX, Chapter VI, Title III is hereby amended to
read as follows:

"Section 1. Application for Permit to Conduct Any of the

Activities Covered Under Rule VIII, Section 1 - Any person
intending to conduct any form or scheme for any of the covered
activities shall first file an application for a permit with complete
supporting documents before the proper office of the Department
at least thirty (30) days before the commencement of such activity. An
incomplete application shall be deemed not filed for this purpose.

The concerned DTI office shall immediately act on the

application; provided that an application not acted upon within

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ten (10) days from its receipt, shall be considered approved.
Notwithstanding the date the application is approved, the
commencement of the promotional activity should be on the date
stated in the application.

No person shall conduct any covered promotional campaign

or activity prior to the issuance of the DTI permit."

SECTION 6. Section 7 of Rule IX, Chapter VI, Title III is hereby amended to
read as follows:

"Sec. 7. - Form and Contents of the Application - The application

for permit shall be in the form prescribed by the Department which
shall contain the following information and documents:

7.1. The complete name, address and telephone number, if any, of the
sponsor(s) of the promotional campaign/activity;
7.2. The complete name, address, telephone number, fax number,
email address, if any, in case the person who lodges the
application is the sponsor's duly authorized representative or
agent;
7.3 The complete name, address, telephone number, fax number,
email address, if any, of the person who may be contacted by the
participant of the promotion for inquiries, complaints and similar
purposes;
7.4. A description of the consumer product/s and/or the
extent of the service or credit to be promoted, and/ or the
details of the contest, competition, game show and the like,
being sponsored.
7.5. Proof of registration of the business and/or the product subject
of promotional campaign or activity, if the same is required by
any government agency;
7.6. The type of announcement/information that will be used for the
promotion campaign or activity including the text or substance
thereof;
7.7. The geographical area to be covered;
7.8. The period of the promotion campaign/activity;
7.9. The target participants and the required qualifications, if any;
7.1 a.The mechanics and the criteria, if any, for participating and
winning in the promotion campaign/activity;
7.11.The procedure in the predetermination of winning entry forms,
and if applicable, the computer program to be used;
7.12.The type of entry forms and or paraphernalia or electronic
device to be used in the promotion campaign/activity;
7.13.The plan for the seeding of qualifying entry forms, paraphernalia or
predetermined winning entry forms;
7.14.The date, time and place for auditions, try-outs, pre-qualification
and/ or qualification of participants to the promotion, if the same
is required;
7. 15.The security marks, if any, or the nature thereof in the entry forms
and/or paraphernalia to be used in the promotion, their purpose,
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the method of their verification and a sample specimen of such
entry form or paraphernalia containing such security mark;
7.16. The deadline of submission of entries;
7.17. The specific city, municipality, or province and number of drop
boxes and the name of the business entities and their
addresses or telephone numbers where entries may be sent;
7.18. The prizes for each category of winners indicating the amount
thereof, or if in kind, the description, brand, size, model, or
make and their market value at the time of the application;
7. 19.Whether a prize in kind is transferable and/or convertible to cash;
7.20.Whether the required taxes for the winnings shall be shouldered
by the sponsors/applicants or by the winners, and
in case of the latter, whether the same shall be withheld by the
sponsors/ applicants;
7.21. Time and dates within which the prize is demandable after the
termination of the promotion campaign/activity, which shall not
be less than sixty (60) days from the notification or publication,
whichever comes last;
7.22. The requirements and/or the type of identification which will be
required to claim prizes;
7.23. The locations of redemption or exchange centers, or where prizes
may be claimed, and
7.24. Such other information, documents as may be required by the
Department in order to protect public interest.

SECTION 7. Sections 8 to 10 of Rule IX of Chapter VI, Title III are hereby

redesignated as Sections 9 to 11, respectively, and a new Section 8 is inserted
accordingly, to read as follows:

"Section 8. Who May File the Application for Pennit -

The persons whose consumer products, services, credit

facilities, beauty contests, competition, game shows and the like
are being promoted may file the application for permit.

The above persons shall sign the application individually or

jointly with the others or submit therewith a true copy of any
written agreement between or among themselves, reflecting the
degree or extent of their participation and responsibility in the
conduct of the promotion activity covered by these rules. Where
no limitation as to the extent of the liability or responsibility is
indicated in such agreement, all of them shall be jointly and
severally liable and responsible therefor.

Where an application for permit is filed and facilitated for

and in behalf of the persons mentioned in 8.1 hereof, the agent
shall be authorized by a Special Power of Attorney or Secretary's
Certificate, as the case may be."

SECTION 8. The herein renumbered Section 11.5 of Rule IX, Title III is
hereby amended to read as follows:

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"11.5. In-store promotions such as but not limited to price
reduction, special offers, product demonstration, product samples,
rebates, premium-in-pack, expert advise, and other analogous
activities.
Provided, however, that sales promotion campaigns exempted
from the permit requirement shall be subject to all the other pertinent
rules and regulations on sales promotion campaigns."

SECTION 9. The Section 3 of Rule X, Chapter VI, Title III is hereby amended
to read as follows:

"Sec. 3. Other Prohibited Acts

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3.2. No person shall directly or indirectly tamper with the entries,
paraphernalia, and/ or electronic device in a promotional
campaign/activity covered by these Rules, nor unduly
influence the results thereof, or perform any act to the
prejudice of legitimate participants and/or winners."

SECTION 10. Rule XI, Chapter VI, Title III is hereby amended to read as
follows:

"Rule XI. Voluntary Cancellation ofApproved Promotional Campaign!

Activity

Section 1. Voluntary Cancellation Before Publication - A person

may voluntarDy cancel or discontinue the approved promotional
campaign/activity provided no information dissemination and
advertising thereon has been made and that a written notice be
submitted to the Department prior to such voluntary cancellation.

Sec. 2. Voluntary Cancellation After Publication - If any

announcement, information dissemination or advertising of the
promotional campaign/activity has already been made, but the
promotion period has not yet commenced, the discontinuance or
cancellation of the promotion may be made only upon prior written
notice to the Department within a period of not less than five 15)
days before the commencement of the original intended date of
promotion.

The sponsor shall honor the promotional commitments

should it fall to comply with the required period.

Sec. 3. Voluntary Cancellation of Ongoing Promotion- Voluntary

cancellation or discontinuance or suspension of any ongoing
promotional campaigns/activities shall not be allowed except upon
prior written approval by the Department which shall be based on
any of the following grounds:

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3.1 A final judgment of voluntary insolvency/bankruptcy against
the applicant referred to in Sec. 8.1;

3.2. Occurrence of any fortuitous event or force majeure that

will make it impossible to continue the promotional
campaign/activity. Provided, however, that those who had
already won in the promotion before the approval of the
cancellation or discontinuance or suspension shall be paid
or given their prizes."

SECTION 11. Rule XII, Chapter VI, Title 1II is hereby amended to read as
follows:
"Section 1. Application of the General Rules on Mechanics -
Unless otherwise provided for in these Rules, all covered promotional
campaigns/activities shall abide by or comply with the following
rules on the mechanics of the promotion.

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Section 5. Where the entry forms are to be obtained at

specific places, the same shall be made available to qualified

participants during office or store hours, unless other ways of

obtaining them are specified in the mechanics."

5.1 Mode of Selection of Prospective ParticipantsjEntrie:r-

Prospective participants/entries shall be selected in a fair, honest
and transparent manner. There must be proof of notice of
selection and such other relevant information to the selected
participants in a manner expressly provided for in the mechanics.

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Sec 7. Draw Date; Determination Of Winners - Draw date or

dates for the selection or determination of participants or winners
to a promotion campaign or activity shall not be more than
fourteen (14) days after the deadline of the submission of entries.

Determination of winners maybe through the use of any

technique not contrary to law, morals and public policy provided
the same shall be conducted in a fair, honest and transparent
manner.

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Sec. 10. Use of Sophisticated or Uncommon Techniques in

Detemlination of Winners and Winning Entry Forms/Entries.

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For raffies/sales promotion utilizing electronic means, the

DTI Regional and Provincial Offices shall check the program

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software source code and the database for prizes to ensure that
prizes will be distributed on the whole duration of the promo
period. Without this verification, there can be no approval of the
sales promo.

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Sec. 17. Announcement Required on the Changes. - The changes
in the sales promotion campaign as well as the fact of the approval
shall be published, announced or advertised at least twice on two 12)
different dates before such change is effected and in the same
manner and medium that the sales promotion campaign was
announced, published or advertised by the promoter or sponsor."

SECTION 12. Rule XlII, Chapter VI, Title II! is hereby amended to read as
follows:
"Rule XIII. Additional Rules on Mechanics for Certain Special
Promotion Campaigns/Activities

x x x"

SECTION 13 Section 1 of Rule XV, Chapter VI, Title 1II is hereby

amended to read as follows:

"Section 1. Dissemination of Information Regarding Sales

Promotion Campaigns/Activities. - A sales promotion intended for
broad consumer participation shall disclose the following information
in its announcement, information dissemination or advertisement of
the promotion:

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1.6. The location where/manner how entry forms/entries may
be dropped or submitted, the person and his address to which entry
forms/ entries may be sent.
1.7. The deadline for submission of entry forms/entries.

x x x"

SECTION 14. Section 1 of Rule XVI, Chapter VI, Title 1II is hereby amended
to read as follows:

"Section 1. Presence and Verification of Winners by the

Department's Representative. - A representative from the Department
shall be invited and/or notified:

1.1. To inspect and verify the electronic device or similar

contraption to be used in determining or selecting the
participants and/or winnerls) or winning entries.

1.2. To witness the drawing of pre-determined winning entry

forms / entries;

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1.3. To witness the printing and seeding of winning pre-

determined entry forms/entries;
1.4 To witness pre-qualifications, try-outs, auditions and to
verify and certify the participants who passed or qualified the same;
1.5. To witness any pre-draws or drawing of minor prizes and
to verify and certify the winners of the same; and
1.6. To witness final draws or final determination of winners.

For the foregoing purposes, the sponsor of the promotion shall

send an invitation and notification to the Department at least seven
(7) calendar days before the said event provided however that where
printing, seeding and/or drawing of winners is to be held outside
the country, notification to the said event shall be at least
fourteen (14) calendar days prior to the conduct of the foregoing
activities. A list of the complete names and addresses of the winners
and their corresponding prizes shall be provided the Department."

SECTION 15. Separability Clause. In the event that any provision of this
Order is declared unconstitutional, the validity of the other provisions shall not be
affected by such declaration.

SECTION 16. Repealing Clause. All Department Administrative Orders,

Department Orders, other issuances, or parts thereof which are inconsistent with
this Order are hereby repealed or amended accordingly.

SECTION 17. Publication and Effectivity. This Order shall take effect fifteen
(15) days after its publication in two (2) newspapers of general circulation and upon
filing with the University of the Philippines Law Center three (3) certified copies
hereof pursuant to Sec. 3 (1) of Chapter II, Book VII of Executive Order No. 292, as
amended.

Issued this ~day of February 2010 in Makati City, Philippines.

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PETER B. FAVILA
DTI Secretary

Recommending Approval:

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ZENAIDA ~[$bN MAGLAYA VICTORIO MARIO A. DIMAGIBA
Und se etary Director
Cons er Welfare Bureau of Trade Regulation
and Trade egulation Group and Consumer Protection