1. PES Panel Discussion on the National Competition Policy
8 November 2016
Arsenio M. Balisacan
Chairman
Philippine Competition Commission
Good morning everyone.
I would like to thank all of you for coming here today and meeting us.

2. The Road to the Philippine Competition Act & its IRR
The first competition bill was filed in the Philippine Congress sometime in the early 1990s. On 21 July 2015, the Philippine Competition Act or PCA was signed into law and the same became effective on 8 August Between the months of February to March 2016, the Members of the Commission assumed office. Sometime also in February 2016, the Philippine Competition Commission issued its transitory rules on mergers and acquisitions. On 18 June 2016, the Implementing Rules and Regulations of the Philippine Competition Act became effective. On 8 August 2017, the transitory period provided in the PCA will end.

3. Key Features of the Philippine Competition Act
Mixture of influences, quite extensively from EU and US competition regimes
Wide net of prohibitions: Anti-competitive conduct or agreements, abuse of dominant position, and anti-competitive mergers & acquisition.
Threshold for Dominance
Presumption of dominance if the market share of an entity is at least 50%
Compulsory notification regime
For transactions with value exceeding 1 Billion Pesos (around 21 million US $)
Length of Review/Inquiry
Enforcement – 90 calendar days upon the filing of a verified complaint, referral by a regulatory agency, or date of initiation by PCC, motu proprio , to conduct its fact-finding/preliminary inquiry.
M&A – 30 calendar days after parties notified, additional 60 calendar days if PCC requests for further information from the parties
Leniency program
Some of the key features of the Philippine Competition Act are the following:
Mixture of influences, quite extensively from EU and US competition laws;
Prohibits horizontal and vertical anti-competitive conduct or agreements, abuse of dominant position, and anti-competitive mergers and acquisition;
Presumption of dominance if the market share of an entity is at least fifty percent;
Under a compulsory notification regime in which parties to the merger or acquisition agreement, wherein the value of the transaction exceeds One Billion Pesos (around 21 Million USD), are required to notify PCC of the said transaction;
Gives 90 calendar days to the Enforcement Office, upon the filing of a verified complaint of an interested party, referral by a regulatory agency, or date of initiation by PCC, motu proprio, to conduct its fact-finding or preliminary inquiry. The Mergers and Acquisitions Office, on the other hand, is given 30 calendar days upon notification by the parties to conclude its review. However, PCC may request further information from the parties which will extend the said period for additional 60 calendar days.
Mandates the PCC to develop a Leniency Program.

4. The Philippine Competition Commission
Independent quasi-judicial body
Fixed-term, full-time appointment of Chairman and 4 Commissioners
Attached to the Office of the President only for budgetary purposes
Commissioners and personnel exempted from the coverage of the Government’s Salary Standardization Act
Has primary and original jurisdiction in the enforcement of all competition-related issues across all business sectors
Can adjudicate administrative cases and impose administrative
fines and sanctions on its own.
The Philippine Competition Commission is an independent quasi-judicial body tasked to implement the provisions of the PCA and the national competition policy. It is composed of a Chairman and four commissioners who are all appointed with a fixed-term and on a full-time basis.
The PCC is attached to the Office of the President only for budgetary purposes. Moreover, given its independent nature, the compensation and other emoluments for the members and personnel of the PCC are exempted from the coverage of the Government’s Salary Standardization Act, the compensation scheme applicable to all government positions in the Philippines.
Furthermore PCC has the primary and original jurisdiction in the enforcement of all competition-related issues across all business sectors. In fact, PCC shall still have jurisdiction if the issue involves both competition and non-competition issues, but the concerned sector regulator shall be consulted and afforded reasonable opportunity to submit its own opinion and recommendation on the matter before the Commission makes a decision on any case.
It is also important to note that PCC can adjudicate administrative cases and impose administrative fines and sanctions on its own.

5. Accomplishments (February – October 2016)
IRR was published after
3 months from organization
of the PCC
4 public consultations for IRR
71 M&A notifications received
0 backlog on
merger review
5 referrals for possible anti-competitive conduct in the telco, cement, power, rice and insurance industries
4 procedural
guidelines issued
46 seminars
and workshops conducted/attended
60 personnel hired (out of 200 to be filled up)
Let me now present what we have thus far achieved for the current year.
3 months after PCC was organized, we published the Implementing Rules and Regulations of the Philippine Competition Act
Moreover, PCC has received 71 Notifications for Mergers and Acquisitions. Out of these, 7 are still being reviewed. May we point out that our Mergers and Acquisitions Office has no backlog in its merger reviews.
Our Competition Enforcement Office (CEO) has looked into five (5) referrals pertaining to possible anti-competitive conduct in the telco, cement, power, rice and insurance industries
To further strengthen the capacity of the PCC, the Commission held a Partnership for Competition Forum with various multilateral and bilateral development partners who have expressed support for PCC’s priority activities, as stated in PCC’s Strategic and Operational Business Plan and Development Assistance Framework covering the period of
For personnel capacity building, we have so far attended or conducted 46 seminars and workshops for personnel.
This will be a continuing activity for PCC, as more personnel are hired. The Commission, to date, has hired 60 permanent staff out of the 200 positions it is expecting to fill up.

6. Challenges Too much (many) too soon: Big cases lodged to PCC
”Baptism of fire”: Ongoing legal case against two of the largest telecom companies in the Philippines re transaction worth around 1.5 billion USD
Requests to look into
Possible anti-collusive practices by power generators
Alleged abuse of dominance by cement manufacturers
Monopoly of rice importation by a government entity
Jurisdiction issues: Coordination between PCC and sector-regulators
The PCC is facing a number of challenges in its early stage of implementing the PCA:
1. First, PCC is being bombarded by a lot of big cases too soon in its early life. In fact, we are currently dealing with our “baptism of fire”: PCC’s ongoing legal case against two of the largest telecom companies in the Philippines regarding a transaction worth around 1.5 billion USD. Moreover, PCC was also requested to look into a number of matters, spanning a diverse set of sectors, including possible 1.) anti-collusive practices by power generators, 2.) abuse of dominance by cement manufacturers and 3.) monopoly of rice importation by a government entity.
2. At the same time, PCC is also facing issues on the possible overlap of its jurisdiction with other sector-regulators. Thus, we are closely coordinating with them to ensure that our processes are aligned and that there is no duplication in our requirements

7. Priorities
Develop guidelines for PCC’s Leniency Program, Forbearance and Non-Adversarial Remedies
Enter into MOAs with sector regulators
Complete the National Competition Policy Review
Speed up capacity building on competition law and economics for PCC, the judiciary, and other government partner-agencies
Forge partnership with competition jurisdictions in other countries for information exchange & coordination
Moving into the coming months, we expect to confront new challenges and we are thus preparing ourselves accordingly by prioritizing the following:
Develop guidelines for PCC’s Leniency Program, Forbearance and Non-Adversarial Remedies;
Enter into MOAs with sector regulators;
Complete the National Competition Policy Review
Speed up the capacity building on competition law and economics for PCC, judiciary, and other government partner-agencies; and
Forge partnership with competition jurisdictions in other countries for information exchange and coordination.

8. Thank you