By Jun Ebias / Special to the BusinessMirror
In a country ruled by big businesses, wealthy families and influential oligarchs, making sure that fair competition and a level-playing field across industries exist, and are practiced is a herculean task. It’s tough to say the least.
But trust the men and women at the country’s relatively young antitrust body, Philippine Competition Commission (PCC), to rise to the challenge.
Created in February 2016 under Republic Act (RA) 10667, also known as the Philippine Competition Act, signed in July 2015, the PCC’s main mandate is to protect and promote competition by prohibiting anticompetitive agreements, conduct, and mergers and acquisitions (M&A). The PCC is tasked to rid the country of cartels, monopolies, duopolies and the likes that put consumers at a disadvantage by leaving them with fewer choices, higher prices and inefficient, or worse, bad services.
Because of the difficulty of going after and facing some of the country’s biggest companies, the PCC has been likened to David battling Goliath.
In fact, one of its earliest challenges was the review of San Miguel Corp.’s sale of its telco assets to PLDT and Globe Telecom last year as part of its legislated mandate to ensure that the deal did not violate the then barely a year old competition law. But cases have been filed in court that stopped the PCC from further reviewing the nearly P70-billion transaction.
But PCC Chairman Arsenio M. Balisacan is quick to point out that being a giant company or a big player in any industry is not prohibited under RA 10667.
“Bigness in some cases may be necessary—a necessary thing for efficiency, for prices to go down. What we are watching [out for] are practices, conduct of businesses [and], firms that work the other way. If it’s not for the improvement of efficiency, but to make the economy less efficient by hindering competition and thereby making prices higher and limiting the availability of goods to consumers,” Balisacan explained.
The PCC is not just focusing its attention on companies, businesses and industry practices. It is also reviewing the country’s laws, policies and regulations that may impede competition to the detriment of the consumers. In short, the PCC won’t stop at nothing to make sure that consumers are empowered—that they have adequate choices of products and services, that they can choose freely based on price and quality, among other considerations.
Last but not the least
The creation of the antitrust agency is part of an agreement with the rest of the Asean, where the Philippines is a founding member, to introduce a competition law by 2015. This is to ensure that a level-playing field exists, and a culture of fair business competition is observed. The Philippines is the last among the original five Asean members, which includes Indonesia, Malaysia, Singapore and Thailand, to pass a competition law. Though it’s worth noting that in the expanded Asean universe, Cambodia has not yet passed any competition legislation, while Brunei Darussalam, Lao PDR and Myanmar have yet to put up an antitrust body.
But being last does not always mean being the least.
Just barely a year after its birth, PCC has accomplished a lot. As of end-January, it has received and acted upon 80 M&A notifications, with a combined value of P1.7 trillion. Even with a small manpower, it has maintained a zero backlog on M&A reviews that normally takes 90 days to complete from notification. The agency also has eight referrals for possible anticompetitive conduct in various industries.
It has forged alliances with its peers overseas, such as the United States Federal Trade Commission, Singapore Competition Commission, European Union Competition Commission and United Kingdom Competition and Markets Authority, to learn from their experiences and pick up pointers on how to make the country’s competition law more effective.
For this year, the PCC has set its priorities into looking at pharmaceuticals, power, cement, agriculture and international shipping to make sure that industries are not practicing anticompetitive conduct. It is part of the agency’s overall review of the country’s competition landscape that will help in identifying anticompetitive practices, as well as in pointing out government rules, policies and measures that impede market competition.
“The Competition Act is a game-changer for the Philippine economy. With the PCC as its main enforcer, we intend to leverage the powers vested in us by this law to hasten economic growth and enable the spread of this growth to all Filipinos,” said Balisacan, noting that it took 24 years for the country to pass the law.
Giving its growing number of tasks, the PCC is also beefing up its manpower. From a handful of staff comprising former employees from the National Economic Development and Authority and the Department of Justice, which occupied the upper floors of its office in the Development Academy of the Philippines in Ortigas, the PCC has now grown to 111 as of end of January. They are mostly lawyers, economists and analysts. But it won’t stop there as the PCC wants to bring its total personnel to 200 by end of this year.
Establishing its own identity
Aside from fostering competition in the business front, the PCC is also engaged in information dissemination to educate people about its mandate.
Balisacan jovially shares that until now some people mistake the PCC as the sports commission, or an agency tasks to ensure fair competition in sporting events.
“Whenever we mention that we work at the Philippine Competition Commission, a great many people would still ask us which particular sports we are promoting at the moment,” he said.
On a more serious note, Balisacan said:
“The Commission recognizes the need to intensify our outreach, education and advocacy campaigns to introduce the commission and our work better to the general public. Aside from this, the commission also seeks to deepen its relations and working agreements with key sector regulators in the government through memoranda of agreement by which we can intensify our collaboration, coordination and sharing of information while ensuring policy-coherence.
“As part of this information campaign, the PCC is forging ties with the country’s various business groups and other interested parties to discuss the PCC’s mandate and the benefits of competition not just in empowering consumers, but also in ensuring the sustainability of economic growth.
No less than the World Bank has recognized the value of a level-playing field in protecting the welfare of consumers: “Households with lower incomes suffer relatively larger losses from monopoly and imperfect competition in stable goods market than wealthier
households.”
This motivation is what fuels the engines of the PCC to create, promote and champion competition in the Philippines no matter what the odds are.