PCC exempts public-private JVs from compulsory merger notification

Joint venture projects between government agencies ad private firms are exempted from compulsory merger notification, the Philippine Competition Commission (PCC) said.

The exemption is contained in a PCC Memorandum Circular No. 20-001 published Friday, June 26, 2020, and effective starting July 11 for public-private sector JV projects covered by the National Economic and Development Authority JV Guidelines.

“The PCC has been continuously streamlining its processes in support of the government’s push to ease doing business. Significantly, PCC’s issuance of these rules is aligned with the government’s relief, recovery and resiliency efforts, which direct the speedy roll-out of critical infrastructure projects in response to the current crisis,” said PCC Chairman Arsenio M. Balisacan.

The NEDA JV Guidelines cover JV arrangements entered into between private entities and government-owned or -controlled corporations, government corporate entities, government instrumentalities with corporate powers, government financial institutions, and state universities and colleges.

Under the circular, PCC will conduct a competitive assessment of the JV project in parallel with the approval process of the implementing agency or NEDA’s Investment Coordination Committee. This will expedite the rollout of key development projects that would otherwise undergo the regular merger review only after they have been awarded to the private sector proponent.

This, in effect, exempts the government agency and the private entity from notifying the Commission of the JV upon signing of a definitive agreement.

The government agency may apply for a Certificate of Project Exemption on behalf of the prospective bidders or proponents. In its review, PCC shall provide inputs on the project documents and assess how the JV project may affect competition in the relevant markets. Should competition concerns arise in the review, PCC may require the prospective bidders to undertake specific commitments to address them.

If the implementing agency adopts PCC’s inputs in the final project documents, PCC shall issue a Certificate of Project Exemption in favor of the prospective winning private sector participant. Failure to follow the requirements under the circular, the government agency and the winning private sector participant are required to file their notifications under the regular merger review process.