Philippine Competition Commission (PCC) Chairman Arsenio Balisacan has identified some provisions in the stimulus package bills that may restrict the enforcement of the Philippine Competition Act (PCA) to preserve fair and healthy market competition.
In an online seminar of Ateneo de Manila University Department of Economics on Wednesday, Balisacan said the provision on regulatory relief for business entities under the Accelerated Recovery and Investments Stimulus for the Economy (ARISE) bill in the House of Representatives and some provisions in the Bayanihan to Recover as One Act (BARO) bill in the Senate limit the mandate of the PCC.
Balisacan said ARISE bill requires the PCC to desist from imposing fines and other monetary penalties, requires submission by parties to proceedings such as fact-finding and preliminary inquiries, and issuing show cause order, cease and desist order, subpoena, statement of concern or similar statement and other similar issuances.
The BARO bill, on the other hand, requires moving of statutory deadlines and immediate action on all pending applications, particularly involving mergers and acquisitions (M&As) and joint ventures.
Balisacan further said the enforcement of competition policy amid the pandemic is crucial to avoid anti-competition behavior and protect consumers from abusive anti-competition behavior.
“Competition policy enforcement remains relevant during the pandemic, even more so on the way to recovery and building a resilient economy,” he said.
Balisacan said the PCA has built-in flexibility to undertake M&A applications quickly, but the antitrust body has to study these filings to ensure that market competition will be maintained.
“Acquisition of a failing firm by another firm is not prohibited provided that is the only feasible solution to save the failing firm,” he added.
Balisacan said the market dominance level in the Philippines is already high, and anti-competitive policies may only promote abuse of dominance.
Moreover, as more M&As will likely happen during or after the pandemic, lawmakers said PCC might be overwhelmed with M&A cases.
Balisacan said there is a small number of mandatory notifiable cases but potentially harmful to consumers and competitive processes therefore, the need for the PCA enforcement.
The PCC has also expedited merger rules for easy cases and provided exemption rules for public-private partnerships and joint ventures while offering pre-notification consultations, he said.
“Suspending PCA enforcement during the crisis can exacerbate the harm to consumers, and is bad for inclusive recovery and sustainable economic development,” he added. (PNA)