Only president, not DTI can impose price ceiling - CA

MANILA, Philippines - A recent decision of the Court of Appeals said only the president, not the Department of Trade and Industry, can impose price ceiling on basic commodities.

The 17-page ruling penned by Associate Justice Isaias Dicdican stemmed from a petition filed by RFM Corp. (formerly Republic Flour Milling Corp.), a Concepcion-owned firm engaged in processing, manufacturing, and selling flour, flour-based products, milk and juice drinks, meat, ice cream, and bottled mineral water, questioning a DTI order that had suspended the distribution and sale of ex-mill flour at the price range of P770-P790 per bag and cut it to P360-P380 per bag while the administrative case filed by the Bureau of Trade Regulation and Consumer Protection (BTRCP) against RFM was being heard.

In a ruling, the special 17th division of the appellate court said the DTI can only recommend imposition of price ceilings on primary goods, which should be implemented upon order of the Office of the President.

Citing Section 7 of RA 7581 (Price Act of the Philippines), the CA held that “the President, upon, the recommendation of the implementing agency, or the Price Coordinating Council, may impose a price ceiling on any basic or prime commodity” based on certain existing conditions.

“Such authority to issue preliminary orders (of DTI) does not include the power to impose a price ceiling since as intimated earlier, the power to impose a price ceiling on certain commodities is only given to the President,” the appeals court stressed.

“Notwithstanding that the same is already revoked, we declare the preliminary order dated June 11, 2010... null and void. Consequently, respondents are enjoined from issuing any order setting the price ceiling for the sale of flour,” the ruling stated.

Associate Justices Stephen Cruz and Jane Aurora Lantion concurred in the ruling.

Records show that the BTRCP filed an administrative case against RFM, questioning the increase in the latter’s flour prices in January to May last year considering that the rates of the various factors affecting the ex-mill prices of flour were the same as those considered in January to September 2007.

It added that RFM’s ex-mill price for that period ranged from P610 to P670 while the ex-mill price from January 2010 to May 2010 was P790 or a difference of P120 to P180 per bag of flour.

In its petition filed before the CA, RFM sought the dismissal of the administrative proceedings filed by the BTRCP before the DTI as well as the nullification of its preliminary order setting a price ceiling on its flour prices.

The respondents, in their reply to the petition, sought the dismissal of RFM’s petition for being moot and academic considering that the subject preliminary order had already been revoked by the subsequent order issued by Ma. Carolina Carbonell, the adjudicating officer of the DTI NCR-LCAC.

Furthermore, the respondents said that the administrative case against RFM had already been dismissed upon the order of Carbonnel issued on July 29, 2010.

While the issue on the propriety of setting aside the administrative proceedings against RFM had already become moot and academic, the CA stressed that the same could not be said with regard to the issue on the propriety of the issuance of the preliminary order insofar as it imposed a price ceiling on RFM’s flour ex-mill prices.

The CA noted that the issue of the propriety of the imposition of a ceiling on the prices of RFM’s ex-mill flour “is capable of repetition yet evading review.”

It added that the doctrine of “capable of repetition yet evading review” can override mootness of the issue.