The House Committee on Trade and Industry and the House Committee on Appropriations on Tuesday approved a consolidated bill on Philippine fair competition.
Liberal Party Rep. Antonio Rafael del Rosario of Davao del Norte, one of the authors of the bill, said the committee report for the proposed Philippine Fair Competition Act is now being prepared to be presented in the plenary for the second reading after the lower chamber’s All Saints’ Day break.
“We are hoping that by [the] end of this year, we will be able to approve it or hopefully between one month before our Christmas break,” del Rosario said.
Congress will take a two-week break from November 1 to November 16 for its All Saints’ Day break and on December 20, 2014, to January 19, 2015, for its Christmas break.
Del Rosario said that a competition law will be passed in preparation for the 2015 Asean integration which seeks to establish “a single market and production base with free movement of goods, services, labor and capital by 2015.”
Speaker Feliciano Belmonte Jr., the main author of the bill, has said the Philippine Fair Competition Act has been included to the priority bills of the Palace and the 16th Congress, adding that the measure aims to minimize, if not totally eradicate, unfair competition, monopolies and cartels.
The bill also heavily penalizes monopoly, anti-competitive mergers and other unfair trade practices.
Monopoly shall mean a privilege or undue advantage of one or more firms, consisting in the exclusive right to carry on a particular business or trade, and/or manufacture a particular product, article or object of trade, commerce or industry. It is a form of market structure in which or only a few firms dominate the total sales of a product or service.
The bill also proposes to create the Philippine Fair Trade Commission that will prosecute those engaged in unfair and deceptive trade practices and other such practices with the purpose of preventing, restricting, or distorting competition.
Moreover, the approved consolidated bill is a substitute measure to Belmonte’s House Bill (HB) 1133, Deputy House Speaker and Leyte Rep. Sergio Apostol’s HB 4320; HB 2627 of Rep. Diosdado Ignacio “Dato” Arroyo of Camarines Sur and Rep. Gloria Arroyo of Pampanga; HB 3366 of Rep. Teodorico Haresco Jr. of Lone District of Aklan; HB 388 of Rep. Rufus Rodriguez of Cagayan de Oro City; and HB 453 of Rep. Marcelino Teodoro of Marikina City.
According to Apostol the bill is in response to Section 19, Article XII of the 1987 Constitution which provides that, “The State shall regulate or prohibit monopolies when the public interest so requires,” adding that any violation of Section 22 of the same article shall be considered inimical to the national interest and subject to criminal and civil sanctions.
Apostol informed Belmonte that the draft law imposes heavy penalties on violators.
“If the violator is a foreigner, he shall, in addition to the other penalties imposed by it, be deported after serving a jail term without need of any further proceedings,” he emphasized.
Under the bill, any person who fails or neglects to comply with any term or condition of a binding ruling, a cease and desist order or an order for readjustment issued by the commission, shall pay a fine of not less than P50,000 and not more P200,000 for each violation.
The commission may also impose upon entities fines of not less than P5,000 to not more than P100,000 where, intentionally or negligently, they supply incorrect or misleading information in any document, application or other paper filed with or submitted to the commission.
The bill also provides that an entity that enters into any anti-competitive agreement or conduct as defined under this act shall, for each and every violation, be penalized by imprisonment from five to 10 years or a fine up to 10 percent of the annual turnover of infringed during the previous fiscal year or up to 10 percent of the value of the assets of the infringed, whichever is higher, or both imprisonment and fine.
According to Apostol, “The increased deviousness and complexity of schemes in perpetuating monopolies in the country by multinational competitors necessitates an equally sophisticated legislation that would effectively address this concern.”
“Protection against price manipulation is an effective way by which the government can provide our people better access to various goods and commodities in the market. By providing an equal playing field in the business sector, consumers will have an improved access to affordable and, at the same time, quality goods,” Apostol said.
The Arroyos, for their part, said, “for too long, our people have stood up at the mercy of huge industries. Due to lack of regulation and safeguards, unscrupulous businessmen have found ingenious ways to artificially control prices and manipulate the free market system.”
For Haresco, the existing antitrust laws do not provide for clear cut guidelines, elements/requisites or evidence to determine whether an act constitutes unfair competition, monopolistic behavior or restraint of trade.
“We need a proper body to determine whether there is any violation of antitrust laws,” he said.
Teodoro said that the bill is a reaction to observation of industries being cartelized when few suppliers of a vital product conspire to fix prices to the detriment of the public. Rodriguez, meanwhile, said the lack of genuine competition in certain industries impairs public welfare and undermines the country’s credibility to provide a business climate conducive to investment.
Earlier, Alfredo Yao, president of the Philippine Chamber of Commerce and Industry, during the House of Representatives meeting with the Joint Foreign Chamber of Commerce and Philippine business groups, said that Congress should consider the fair competition law.
“There should be a level playing field for businesses to provide better services and products,” he said.