PCC developing a tool against bid rigging

Published July 6, 2022, 5:10 PM

by Bernie Cahiles-Magkilat

The Philippine Competition Commission (PCC) is developing a screening tool against bid rigging as part of its priorities to accomplish this year as the anti-trust body braces for heightened competition challenges in local businesses and to respond to its even greater role in the country’s economic recovery.

PCC Officer-in-Charge Chairperson Johannes R. Bernabe said at the press conference that the commission will build on what had been set out to accomplish by its former Chairman Arsenio Balisacan, who had to leave PCC after he was named socio-economic planning secretary of President Ferdinand Marcos Jr.

For 2022, Bernabe said the PCC aims to rule on all competition cases submitted for decision, resolve six cartel or abuse of dominant cases, including concluding all investigations that have been ongoing for at least two years, initiate two motu proprio unnotified or anticompetitive merger cases, codify all PCC rules and procedures, and roll out the national competition policy in the public sector.

On the issue of bid rigging, PCC Competition Enforcement Office OIC Director Atty. Christian B. Delos Santos said it is a priority for the commission to work on this year. He, however, refused to comment and divulge details of ongoing cases.

But Delos Reyes said they need a tool to screen and detect bid rigging violations.

He said that PCC is already on their three months into developing bid rigging screening tool,

supposedly a program where data will be used and if it hits the parameters, it will show the probability that there was a violation or bid rigging and the red flags will be indicated.

“So we hope to finish that within the year. It’s one of our strategic initiatives for the year. And we got inputs from different government agencies like external, from other jurisdictions that the Korean government on how to develop this screening tool but it’s a work in progress and hopefully we can roll it out this year,” he said.

PCC had also consultations with different government agencies, which they want to partner with once the screening tool is completed.

Bid rigging is also referred to as collusive tendering. Bid rigging occurs when two or more competitors agree they will not compete genuinely with each other for tenders, allowing one of the cartel members to ‘win’ the tender.

On other priorities, Bernabe said that foremost is for PCC to rule with finality on the four statements of objections arising from investigation by its enforcement office.

These involve various sectors ranging from tourism, to medical services to trade associations, and property development arrangement with internet service providers (ISP) that are under investigation.

“Statements of objections have been filed. And it behooves on us to render decisions on this before the year is over,” said Bernabe.

Bernabe admitted the difficulty to resolve these case give their complexity and need to gather evidence within a two year limit they set for the anti-trust body to conclude their investigations.

There are certain cases which are really difficult, not only to get the necessary evidence, but also to conduct the economic analysis that might lead to a finding of either concerted practice leading towards collusion or possible abuse of an entity’s dominant position,” he said.

On ISP, it could be recalled that PCC conducted a probe on complaints against certain property developers that imposed exclusivity for internet service providers to their homeowners.

PCC Commissioner Marah Victoria S. Querol said they are currently drafting the guidelines for the ISP and is targeting completion of the guideline by third quarter this year. “Through the guidelines we will take into consideration the inputs of the key regulators in this sector,” she said.

Basically, Querol said the objective is to ensure the ease of entering ISP providers in the market. “The objective is that the venture good competition, we require that there is at least one or more ISP provider in the market. So the goal of the guideline is to ensure of course the entry that there is no barrier to entry in this sector,” she explained.

“We are keeping a watchful eye on this sector,” she added reiterating its man=date to ensure that there is healthy competition in this in this sector. The PCC also recognizes that internet is already considered a basic need and that the public must be assured that they have the choice in selecting which ISP they want.

“We want healthy competition in this market to improve not only the services but also the prices since we want prices of these providers also to be reasonable and this will only happen if there is a healthy competition in the market.”

Moving on, Bernabe said that that the moratorium on the compulsory notification of review of mergers and acquisitions transactions will lapse in September this year. Bernabe said they will revise the amount thresholds to address inflation. The current thresholds are for M&A transactions with P6 billion size of party value and P2.4 billion size of transaction value.

“We expect more of the mandatory notifications of transactions which exceed these old thresholds will resume,” he said adding that PCC hopes to come up with the revised thresholds by September this year.

Also, PCC has unfinished work in terms of the streamlining and codification of its rules and guidelines with possible improvements. Bernabe said they will have to prioritize so they can handover to the new permanent PCC chair, who will be appointed by the president.

The PCC also seeks to come up with a full slate of officers and staff, who will provide the necessary ground work to allow the commission to undertake its task. He noted there are still a number of posts which need to be filled up.