POSTSCRIPT / January 1, 2006 / Sunday


Philippine STAR Columnist

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DoJ asked: Is surcharge on credit card use legal?

GARBAGE OUT: If you missed throwing out your garbage last night along with the noisy departure of the old year, you better do it before this first day of the New Year is over.

The New Year means exactly that — a new beginning. You cannot begin anew if you still carry the garbage of the old year on your back. You deserve, and can claim, a fresh start.

The trash that needs to be thrown out is mostly problems littering your mind. Looking inward, you will discover that the problems troubling you are mostly just in your mind.

Most of the time, we worry and lose sleep and weight over what people might say, what somebody might think, what someone dear to us might do. These flexible relationships are open to adjustments.

These are not real problems. They exist mostly in the mind. Fear not, and decide right now not to bother with them — then stick to that decision — and you will see them vanish like the night exiting with the light of a new day.

The tougher problems are situations that confront us physically, like finding one’s self in a burning building or on the path of a runaway truck or being caught in a moviehouse stampede.

Most problems in the mind are our own creation. We allow them to creep into our consciousness. Just as easily, we should be able to ease them out at will.

So, will it! Right now! Throw out the garbage of your mind and do not look back. Make room for the joy and hope of a New Year!

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CREDIT CARDS: The Department of Trade has tossed the ball to the Department of Justice, asking it to render an opinion on the questions we raised on the legality of merchants adding a surcharge to the tag price when a buyer pays with a credit card.

Director Victorio Mario A. Dimagiba of the Bureau of Trade Regulation and Consumer Protection, wrote me: “As a rejoinder to your POSTSCRIPT dated 25 December 2005, per instruction of DTI Secretary Peter B. Favila, we have sought the opinion of the Department of Justice. We shall keep you informed on the opinion.”

My contention is that a surcharge violates RA 7394, the Consumer Act of the Philippines, which says: “ARTICLE 81. Price Tag Requirement — It shall be unlawful to offer any consumer product for retail sale to the public without an appropriate price tag, label or marking publicly displayed to indicate the price of each article and said products shall not be sold at a price higher than that stated therein and without discrimination to all buyers: xxx Provided, further, That if consumer products for sale are too small or the nature of which makes it impractical to place a price tag thereon price list placed at the nearest point where the products are displayed indicating the retail price of the same may suffice.”(Emphasis supplied)

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DTI DRIBBLE: Millions of pesos were gouged out of buyers caught in the last Christmas shopping madness armed only with their plastic money.

Credit cardholders victimized by profiteers may want to keep the receipts and packaging. Who knows the DoJ might just read the law right and render an opinion that tacking on a surcharge on the tag price is illegal.

But the skeptic in me says that with the gravity of the implications of such an opinion — plus a possible lobby, not to mention political pressure at work — it would not be surprising me if the DoJ handed down a pro-business ruling that there is no violation.

Such rulings not based on the law but on extra-legal considerations are not uncommon, even in regular courts, so it is still possible that the DoJ may decide to justify this apparent violation of Section 81 of RA 7394.

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BUYER HIT TWICE: When a penalty (for buying on credit) is added to the tag price, the cardholder is dealt two blows: one in the form of a surcharge, and another in the form of fees and interest collected by the bank/credit card company.

The surcharge is discriminatory since buyers paying in cash are not subjected to the same extortion. It is also illegal since it violates the rights of one class of consumers to equal protection of the same law.

In such a situation, the least that we small consumers expect of government is to step in to help us.

Consumer groups, including those pretending to expose trade malpractices while expecting businessmen to make ayos (fixing) to evade scrutiny, must come out in full force this time.

Also, I wish the more reputable credit card companies would issue statements affirming respect for the Price Tag law, and pledging to suspend stores or merchants caught imposing a surcharge on the tag price when their credit card is used.

I also wish a name law firm would take up the cudgels (to the very end) for consumers bent on suing voracious merchants. The legal fee, if any, could be contingent on the outcome of the suit.

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MABEY’S SIDE: Comes now an unsigned email from <> which I presume to be Mabey and Johnson, the British builder of allegedly overpriced temporary Bailey bridges in the countryside.

Some of these World War II-vintage steel spans reportedly valued so far at ¬£429 million (P39 billion) have been called “bridges to nowhere” by critics because no roads connected to them at the time they were built in isolated places.

Interest in M&J and its bridges, as well as its contacts who pushed the projects directly with Malacanang, was whetted again after the UK-based Guardian reported that M&J was being investigated by the British government for its operations in the Philippines and Iraq.

In its email, M&J said we should not pay attention to the Guardianreport because it quoted, among other sources, opposition Sen. Panfilo “Ping” Lacson, who it said was “politically biased, highly polluted and lacks credibility.”

That is a lame argument — to say that the accusations cannot be true because they were made by a member of the political opposition.

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TESTIMONIAL: To prove that the hundreds of bridges it has built did not lead “to nowhere,” M&J said it collected 63 testimonials from officials of localities where those Bailey spans were thrown.

It gave as sample a letter from Mayor Rodolfo dela Torre of Sibagat, Agusan del Sur, dated Sept. 7, 2005: “The municipality of Sibagat is very fortunate to have two permanent bridges under the Tulay ng Pangulo program. (They) are currently being used by people from various barangays. In fact, heavy equipment and other means of transportation can easily pass the bridge and transport agro-products to the main road, down to commercial centers. The bridges are built of permanent materials that cater to economic development.”

M&J said there was no space in its email “to quote all those testimonials but they are there for everyone to read.”

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PRICING: On the question of pricing, M&J said: “The claim of the Guardian that the British firm, Mabey & Johnson, had grossly overpriced the materials it supplied for the bridges, with loan guarantee from the British government, is utterly baseless. The Mabey bridge program had been evaluated by the British government and found to be the cheapest and most effective value for money.

“As for the bidding requirement, where there are no bidders the sole supplier is awarded the contract, in this case, Mabey & Johnson. While the Philippines has six other foreign suppliers, its awarding also considered the company performance. In fact, following bilateral protocol, the country providing the financing usually designates the contractor and the supplier. In this case, the British government, which financed the project, designated the supplier, Mabey & Johnson, after exhaustive due diligence.

“The Guardian‘s claim that the Austrian firm, Waagner-Biro, and a UK consortium, Balfour-Cleveland, had quoted lower costs for the same materials is based on an inaccurate analysis. Waagner-Biro’s costs did not include decks and substructures, while Balfour-Cleveland’s estimates did not include the counterpart cost for the Philippine government and the 40-percent grant from the British government.

“Mabey & Johnson had incurred no costs overrun, while Balfour had incurred costs overrun amounting to P1.5 billion in 2005. In fact, Mabey had incurred ‘costs underrun’ of P1.2 billion, enabling it to build two more flyovers and 150 more bridges without an additional cost to the Philippine government.”

“The claim that Mabey & Johnson profited illegally and excessively from the bridge contracts is totally unfair and groundless. Mabey & Johnson is a 157-year-old private company. The family owning the firm has been able to manage its business in a responsible and efficient manner as to make them one of the richest and well respected families in the United Kingdom. There has never been any scandal attached to that firm. Otherwise the British government would not deal with it.”

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(First published in the Philippine STAR of January 1, 2006)

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