The Supreme Court affirmed the constitutionality of the provision prohibiting speculation under Republic Act No. 7581, or the Price Act.
In a 25-page ruling, the high court rejected Universal Robina Corp.’s petition. (URC) seeking reversal of a 2012 lower court decision that denied the URC’s petition for declaratory relief “for failing to demonstrate the invalidity of the laws and executive issuances it attacks, and for being premature.”
The URC asked that the provision of the Prices Law prohibiting speculation be declared invalid, stressing that the definition of speculation “is void because it is vague and violates the constitutional right of an accused to be informed of the nature and cause of an accusation against him ”. .”
The case stemmed from profiteering allegations brought by Victorio Mario Dimagiba, then director of the Department of Trade and Regulation and Consumer Protection, against URC and other local flour mills in 2010, before the Department of Trade and Industry (DTI).
Before filing the complaint, Dimagiba sent letters to the companies involved asking why ex-mill flour prices had not been reduced despite the fall in the price of wheat on the world market, the cost of freight, the exchange rate and the imposition zero tariff.
The company led by Gokongwei responded that “the difference in the price of our bag of flour over a three-year period reflects the movement in the price of wheat on the world market and covers our other operating costs, which involve increases in our labor costs”.
Dimagiba reminded URC that wheat prices on the international market from January to September 2007, on the one hand, and from January to May 2010, on the other, were almost the same, despite retail and ex-factory prices in 2007 are lower than those of 2010.
In his complaint before the DTI, Dimagiba alleged that the price of URC flour at P790 per bag constituted profit under RA 7581, or the Price Law, as it did not represent the true value of the flour per bag. He asked that URC be fined and ordered the product to be sold at P630 to P680 per bag. INQ