Another ethical issue and problem in business and the corporate world is that of determining a fair price.

Prices assume 2 theories, first is that man is entitled to enjoy the fruits of his labor and as an effect sets a price he deems reasonable for his produce and second, is that price depends on the law of supply and demand. So, how do we determine a fair price? In a fixed- priced system, fair price is when a seller gives the lowest price for his good that he is willing to accept no other forces within. While in a bargaining or a movable price system, fair price is when price tends to reach the lowest point possible due to strict competition. But generally, fair pricing is one that man has not yet resolved. Although some factors are being considered as components of a fair price such as cost of materials, operating and marketing expenses and reasonable profit margin. These factors are not enough to established a standard on what really a fair price is. Here are the following ethical issues in fair pricing: TRUE COST OF THE PRODUCT IS CONCEALED. Most companies do not show the real cost behind the price of their products for confidentiality purposes. For seller, this information is part of their trade secrets, one that allows them to compete effectively with the other players in the industry. But a buyer would think that it is not fair to conceal such information to them since they wouldnt know that a seller might be taking the advantage of overpricing their products. SUGGESTED RETAIL PRICE (SRP) For some producers a suggested retail price serves as a price floor for a retailer. But sometimes, retailers do not really agree to what was suggested since it will deprive them from giving a certain amount of discounts promise to buyers. Thus a SRP makes determining a doubtful and suspicious. USE OF ELECTRONIC SCANNERS The vulnerability of these electronic scanners to manipulation, misuse and system failure doesnt prove a fair pricing method. PROMOTIONAL PRICING The use of odd price policy has a psychological impact on consumers making them believe that they re paying a lesser price. Odd price policy is the proccess of using prices like 49.99 pesos instead of 50.00 pesos. Sales in malls and stores add up to the issues concerning promotional pricing. Although I have not experienced it firsthand but a lot have been said about malls hiking up the prices of products a few days before the sale date so that when the sale comes and they have to mark down prices, it would only return back to its regular price but making an impression to the buyers that he had bought the product at a lesser price. FOLLOW THE LEADER PRICING This is done to purposely make the buyers believe that what is being sold is same as the well-known brands. It takes the impression that products that are priced higher have better quality while in fact they can be sold for less. An example I can cite are those imported Hongkong/Bangkok clothing that sells at high priced in a well- groomed high class boutiques in malls that can only be sold at a cheaper price in a Chinese store downtown. PRICE GOUGING This can already be considered as swindling since it takes advantage of economic situations. Price gouging like that during the wake of the storm Ondoy was controlled by DTI by setting ceiling prices on areas considered to be on a state of calamity. PRICE FIXING Uses the power of the retailers among the producers correspondingly controlling the product price. Price fixing usually occurs in an oligopoly type of market where there are few sellers that forms a cartel to set for the price of such product just like OPEC or the Organization for Petroleum Exporting Countries. Setting fair price depends on different market structures. For a perfect completion, a fair price is balanced between the price a seller sets and the willingness of the buyers to pay while on an imperfect competition which is where reality occurs the price is determined by the supply and demand. But for St. Thomas Aquinas, a just prices is set when both seller and buyer received exactly what they deserve. To conclude all these, fair price is therefore balance between the buyer and the seller. Sellers must set prices high enough to make profit but not too high for consumers to think the price is unfair. Both sellers and buyers in the pursuit of the interest to gain ample amount of profit and to acquire the best value theyve paid for, respectively, gives way to fair pricing. MONEY LAUNDERING- the process of disguising illegally obtained money so that the funds appear to come from legitimate sources or activities. BRIEF HISTORY Money laundering is said to originate from mafia ownership of Laundromats in the US. These gangsters were earning huge sums in cash from extortion, prostitution, gambling and bootleg liquor. They purchase legitimate businesses and combined their illicit earnings with the legitimate earnings they received from these dirty businesses. But according to the author, Robert Lacy, money laundering would have seem to have start during the prosecution of Al Capone (a known mafia) for tax evasion when his accountant, Meyer Lansky, was particularly affected. In order to escape from the same fate as Al Capone, Lansky looked for ways to hide money and he discovered the benefits of Swiss banks numbered accounts. Money laundering is clearly an enormous problem not only because it has an estimate total of 500 billion dollars annually but because it is an underground economy making it hard for the authorities to track and trace their operations. Examples of money laundering are: plunder (using of public funds), smuggling, piracy, graft and corruption, robbery, felony, swindling, drug trafficking, and kidnapping for ransom. There are 3 steps in money laundering. PLACEMENT, LAYERING AND INTEGRATION.

PLACEMENT- the launderer introduces his illegal profits into the financial system. That is by breaking up large amounts of cash into less smaller sums that are then deposited directly into a bank account, or by purchasing a series of monetary instruments (cheques, money orders, etc.) that are then collected and deposited into accounts at another location. LAYERING- the launderer engages in a series of conversions or movements of the funds to distance them from their illegal source. The funds might be transferred through the purchase and sales of investment instruments, or the launderer might simply wire the funds through a series bank transfers across the globe. INTEGRATION- the funds re-enter the legitimate economy. The launderer might choose to invest the funds into real estate, luxury assets, or business ventures. IMPACT OF MONEY LAUNDERING IN SOCIETY Money laundering if left unchecked will allow organized crimes to infiltrate into financial institutions, acquire control of large sectors of the economy through investments or bribes to public officials. With that, it helps criminal activity to continue and even provide them financially to operate and expand their criminal empires. HOW DO WE PREVENT IT The Financial Action Task Force (FATF) which promote the implementation of anti money laudering measures reviews and reports on laundering trends, techniques, and counter- measures and promotes the adaptation and implementation of FAFT anti money laundering standards globally. With that, FATF, have the FORTY RECOMMENDATIONS recognize as the international standard for anti- money laundering programmes. The FATF have identified certain choke points where the money launderer are most vulnerable. These are: ENTRY OF CASH IN TO THE FINANCIAL INSTITUTION, TRANSFERS FROM ONE FINANCIAL INSTITUTION TO ANOTHER and CROSS BORDER FLOW OF CASH. In the Philippines, anti-money laundering movementis being acted upon by the govt with the Anti Money Laundering Act R.A. 9160. R.A. 9160 has the following provisions: Criminalizes money launderer It creates intelligence financial task force It requires requirement for customers identification and record keeping and reporting suspicious transactions Relaxes bank secrecy laws Provides confiscation of dirty money Provides international cooperation

It Imposes penalties on money launderers and its accomplices. A deposit of 500K peso will be subject to examination by the BSP even without court order. It requires financial institutions such as banks, insurances and brokerages to keep record of their transactions with customers and to report suspicious transactions that might be a useful audit trail just in case. It provides the police and customs service with the power to seize cash they believe to proceeds from drug trafficking or any other illegal activity. Fighting money laundering helps stops crime. Money laundering investigations conducted helps located the source of the stolen funds and restores them to victims. Most importantly, targeting the money laundering aspect of the criminal activity and depriving the criminal from gaining mean hitting him where he is vulnerable because without usable profit, a criminal activity will not continue. To conclude, money laundering has to be stopped and be acted upon as immediate as possible because these criminal acts are also progressing and are looking for more ways to effectively execute money laundering like using the benefits of new technologies. Political peole who are sometimes and unfortunately accused as masters of criminal acts must initiate in the anti money laundering programs. Their influence and power are important in the combat against anti money laundering. Plus, we must also strengthen ties internationally to get useful information about effective anti money laundering measures.

LITERATURE 3 SCHED: 5:00-6:30PM TTH ROOM: 219 INSTRUCTOR: MS. WENDY PRADO GROUP I ILOCOS REGION MEMBERS: HONEY LIM DEBBIE LARGO ERMA CAMARENES