The Philippine Competition Commission (PCC) is looking forward to continue its review of Mergers & Acquisition (M&A) deals under lower and adjusted thresholds once the two-year period under the Bayanihan 2 Act expires in September 2022.

This is part of the agenda set forth by the PCC for this year to “regain momentum for inclusive growth and a more resilient economy.”

It could be recalled that the merger notification thresholds of P50 billion for the Size of Person and Size of Transaction remain in force under the Bayanihan to Recover as One Act (Bayanihan 2 Act) enacted by Congress in 2020.

As such, the PCC received only four M&A notifications for the entire 2021. The PCC approved two of these, while two transactions were withdrawn because they were exempt from compulsory notification. These four transactions, with a total transaction value of P470 billion, were engaged in real estate (2), finance and insurance (1), and transportation and storage (1). The two approved M&A deals engaged in real estate were City of Manila -Waterfront Joint Venture, and City of Manila - JBros Joint Venture.

On 15 September 2021, the PCC regained its power to conduct motu proprio review of non-notifiable transactions after a one-year moratorium under the Bayanihan 2 Act.

The Mergers and Acquisitions Office (MAO) has continued to diligently monitor transactions that may have caused a substantial lessening of competition in the market.

For merger review and competition enforcement, PCC Chairperson Arsenio M. Balisacan stressed the “PCC shall monitor markets and initiate motu proprio merger reviews of transactions that may have substantially lessened competition.”

The Commission further reiterates that transactions that may significantly increase market concentration, lead to the creation of monopolies, erect barriers to entry, or encourage anti-competitive conduct must undergo competition review to ensure the protection of consumer welfare.

Moving forward, Balisacan said it is critical that the PCC remains mindful of the numerous lessons it has learned amid the crisis as it fulfills its mandate to protect and promote competition.

For 2022, Balisacan said the Commission will continue to prioritize sectors that are considered essential during these times: e-commerce, health and pharmaceuticals, food and agriculture, energy and electricity, insurance, construction, water, and telecommunications.

PCC will also develop and issue guidelines on the review of non-horizontal mergers.

Balisacan said that PCC will ramp up its enforcement activities to investigate markets in priority sectors, monitor complaints, and address consumer and stakeholder queries.

The anti-trust body also commits to further develop its bid-rigging screening tool in partnership with other agencies to enhance its ability to detect indicators of bid rigging in public procurement.

Under competition research and advocacy, the PCC commits to initiate market studies in the sectors of bus transport, telecommunications (internet service providers, wholesale broadband, and spectrum management), and water.

It will also conduct Competition Impact Assessments in the energy, food, and sports sectors.

For 2021, Balisacan reported that PCC has prioritized enforcement efforts since early 2020, focusing on priority sectors such as food and agriculture, e-commerce, health and pharmaceuticals, energy and electricity, insurance, water, real estate, and logistics and shipping.

The Competition Enforcement Office (CEO) seeks to protect vulnerable consumers and businesses from anti-competitive agreements and conduct, especially during times of economic hardship and uncertainty.

As of 26 December 2021, the CEO has addressed a total of 869 enforcement inquiries and complaints. These include informal complaints on possible cartels and abuses of dominance, as well as clarifications of the law and the PCC’s jurisdiction over certain cases.

Presently, the CEO is undertaking 1 preliminary inquiry and 18 full administrative investigations (FAIs). In 2021, it opened 10 FAIs concerning complaints involving firms in the telecommunications, water, energy, and health sectors.

It also filed two Statements of Objections or formal complaints with the Commission, which will now proceed to adjudication. One is in the tourism industry and the other is in the healthcare industry, both involving price-fixing cartels which are prohibited under

Section 14(a) of the Philippine Competition Act.

Since the PCC launched its Internet Service Provider (ISP) Task Force in March 2021, the CEO has received and processed over a hundred ISP-related complaints. Most of these complaints have been addressed through voluntary compliance upon issuance of enforcement advisory letters from the CEO. A few remaining cases are currently under evaluation.

As a result of efforts of the ISP Task Force, the CEO issued three show cause orders in May 2021 to a major real property developer and its property manager. This was in response to complaints by homeowners that only one ISP is allowed to operate inside the subdivisions of the property developer, thus limiting competition and consumer choice.

“These interventions are expected to result in greater consumer empowerment, lower prices, and better service quality as ISPs compete more vigorously for consumers.

The transition to work-from-home arrangements, the rise of remote methods in delivering healthcare and education, and the increasing use of digital platforms for everyday transactions underscore the need to safeguard competition in sectors that support such activities,” said Balisacan.