The Department of Trade and Industry will require all companies seeking to venture into direct selling to register to further protect consumers from getting involved in or becoming prey to scams.
Trade Secretary Ramon Lopez said the department will put mechanisms in place to accredit direct selling companies through a body that the department will create shortly.
“What we would want to do is to accredit direct sellers before they are able to sell to consumers. We will use the so-called 8-point test to accredit these companies,” he said.
The body may be composed of purely representatives from the Trade Department.
Lopez explained said the government saw the importance of placing added measures on direct selling to safeguard public interest and the well-being of consumers.
“Direct selling is good business, another income opportunity for many Filipinos—low entry cost if not free. But what we are guarding here is against letting loose new form of scam that may hurt retail or any related business and also as protection to end-users,” he said.
Only registered and Trade-accredited direct selling companies would be allowed to offer their services, said.
The Direct Selling Association of the Philippines said the group has already identified lawmakers who could sponsor the anti-pyramiding bill in both houses.
“We’re partnering with the Trade Department to help us draft it. Initially the department would like it to be part of the Consumer Code but we thought it will be better to have it as a separate law to give it more teeth,” said DSAP communications officer Leni Olmedo.
The bill will seek to address consumer and product scams that arise from networking or pyramiding schemes.
These are made possible through direct selling activities that taint the operations of legitimate direct selling companies.
“Companies when they register you will not know if they are direct selling until they start operating. In the future, should there be any company registered as direct selling and asked to be part of the screening committee, we’ll see whether the compensation on sales and communication plan is compliant, so they won’t do trial and error or pyramiding. It’s more instructive for companies than policing,” Olmedo said.
The Philippines is among the last few countries in Asia that does not have an anti-pyramiding law.
Meanwhile, the Trade Department plans to improve the Philippine ranking on the Ease of Doing Business to 58 in the next few years. The Philippines ranked 99 among 190 countries included with the World Bank’s program.
Lopez said the government is trying to reduce further the steps and days in registering a business.