The Joint Foreign Chambers (JFC) has asked Congress to pass a well-crafted competition law that could show the world that President Aquino is fulfilling his promise to make the Philippines a level playing field for all types of investors.
That law, the group said, should also allow the reduction of barriers to market access, trade and investments through the liberalization of some sectors, including utilities.
Enhanced market access by new market players will lead to an increase in overall employment while allowing consumers to benefit from the competitive rivalry among firms, the group said. “Competition law and policy should apply across the board, to all entities—no matter their legal form—that engage in economic activities, including those not pursuing a profit. It is important to ensure an economy-wide application of competition policy in order to avoid discriminatory approaches in different industries. Both private and state-owned firms should be subject to the same competition law and policy principles,” the JFC said in a statement.
The group said the Executive and Legislative branches have already shown that they are determined to create an effective competition legislation and implement a competition policy, with the House of Representatives deliberating on a consolidated bill (HB 4835), while the Senate is moving toward a consolidated bill.
And while the passage of the law is in progress, the JFC said the President has signed Executive Order 45, creating a Competition Office under the Department of Justice, to “hit the ground running” and address competition issues immediately.
“A well-drafted and sensibly implemented competition law would contribute considerably to President Aquino’s promise of a level playing field for investors in the Philippines,” the group, which represents seven foreign associations, said.
The competition law, the JFC said, should prohibit competition-restricting agreements, be they formal and informal, written and oral. “To prove the existence of an agreement, it is sufficient to produce evidence that a consensus among participants was reached on the conduct to be followed in the marketplace, with respect to pricing or other important trading actions.”
These agreements maybe among firms that are competitors or potential competitors in the same market, or those arranged among firms operating at different stages of the same production-distribution chain.
Most jurisdictions, the JFC said, have singled out “hard-core” cartels, such as agreements with the object or effect to fix prices, or other trading conditions like discount terms to curb output, to share markets and to rig tender bids.
The competition law, it said, should prohibit autonomous business practices, such as restrictive agreements, abuses of dominant position and anti-competitive mergers distorting and restricting competition.
“These restrictive business practices are prohibited because they cause negative effects on consumers’ welfare as well as on market efficiency and ultimately on industry’s international competitiveness as incentives to operate efficiently are reduced,” the JFC said.
The law, the group added, also requires the establishment of a competition-enforcement agency and courts involved in the application of the legislation.
