Refund for Events Affected by COVID-19 and Government-Imposed Restrictions

In its Memorandum Circular No. 20-30 released on 22 June 2020, the Department of Trade and Industry (DTI) provided guidelines on the refund of payments for events that may have been cancelled or scaled-down due to the COVID-19 pandemic and the social distancing directives under the community quarantine, whether ECQ, MECQ, or GCQ. A scaled-down event is one that reduces the number of guests to ensure compliance with social distancing restrictions in the venue.

The payments covered for possible refund under this DTI circular refer to partial (i.e. downpayment, reservation) or full payments. The DTI Circular also provides that provisions of the written contract on force majeure, if any, shall be recognized and in the absence thereof, the provisions of the Civil Code shall serve as a guide.

If payments were made after the community quarantine and COVID-19 restrictions were issued, then the paying party will not be entitled to a refund. If the venue owner/representative incurs expenses after such restrictions take effect, the venue owner/representative will not be allowed to charge such expenses to the other party and the venue owner/representative is obliged to give a full or proportional refund of the amount received.

For cancelled events, the paying party shall be given the following options: (1) consume the amount paid at a later date, which shall not be longer than one year from the lifting of the restrictions; or (2) get the net of the amount paid after deducting relevant actual expenses incurred before the imposition of restrictions; or (3) get back the full amount paid regardless of expenses incurred after the imposition of the restrictions.

For scaled-down events, the paying party shall be given the following options: (1) consume the amount paid at a later date, which shall not be longer than one year from the lifting of the restrictions; or (2) get a refund proportionate to the agreed scaling down after deducting actual expenses incurred before the imposition of restrictions; or (3) get a refund proportionate to the agreed scaling down regardless of expenses incurred after the imposition of restrictions.

In both cases (cancelled or scaled-down event), nothing prevents a party to return the full amount after deducting relevant costs or to make a full or partial refund of a prepayment.

Under the circular, the refund concession procedure is as follows:

• The party who made the advance reservation or payment notifies the venue of its decision to cancel or scale down the event.
• Within 5 days from receipt of the notice, the venue must send a reply acknowledging receipt, including the options available and details on how to proceed with each option.
• The party will then notify the venue of the option chosen.
• Within 5 days from receipt of notice of the option chosen, the venue must send a letter confirming receipt of the option.
• Refund will be implemented based on the period and terms agreed upon by the parties. In the absence of such agreement, the period for refund shall be within thirty days from receipt of notice confirming receipt of chosen option.

If the parties fail to agree to a refund, a party may file a written request with the DTI-Fair Trade Enforcement Bureau or DTI Regional/Provincial Office. The latter will then issue a letter directing both parties to undergo DTI’s alternative dispute resolution.

Click here to read the entire text of DTI Memorandum Circular No. 20-30.

As per the DTI Directory, the DTI-Fair Trade Enforcement Bureau may be reached at (+632) 72151165 or FTEB@dti.gov.ph