Tokyo-based MUFG Bank Ltd. is set to acquire a minority stake in JACCS Co. Ltd., also a Tokyo-based finance firm, after securing approval from the Philippine Competition Commission (PCC).

PCC, through its mergers and acquisitions (M&A) office, found that the transaction between MUFG Bank and JACCS is unlikely to result in a substantial lessening of competition (SLC) in the local market.

For its assessment, PCC said it sought to know if the transaction could have an impact on the nationwide provision of unsecured cash loans by non-bank financial institutions (NBFIs).

The transaction, through a capital and business alliance agreement, involves MUFG Bank acquiring both direct and indirect ownership of JACCS shares.

Through its review, the antitrust watchdog found that both companies’ market share remains limited in the Philippines.

PCC said the deal also preserves the market’s competitive conditions due to the presence of alternative lenders, regulatory interest rate caps, high consumer price sensitivity, ease of switching, widespread multihoming among borrowers, and the growing availability of digital financing platforms in the country.

“The parties are also unlikely to degrade loan quality, as this poses the risk of losing customers and would contradict their growth objectives,” it said.

PCC also evaluated the impact of the transaction on the nationwide provision of secured loans for large motorcycles by banks and NBFIs.

The commission said it found that the deal will unlikely lead to SLC in terms of loans for motorcycles with engine displacements of 400cc and above.

“The parties’ combined market share remains low, and competition is sustained by numerous banks and NBFIs that maintain extensive dealership networks and offer diverse loan products,” PCC said.

“Barriers to entry and expansion, while moderate, are manageable given advancements in digital lending and increasing consumer demand for premium motorcycles,” it added.

PCC noted that Filipino borrowers are highly sensitive to interest rates and service quality, with dealerships helping them compare multiple financing options.

These factors collectively limit the opportunity for both companies to raise prices or reduce service standards post-transaction.

This year, motorcycle loans are on an upward trajectory, translating into the massive uptake in motorcycles as seen in the 13-percent growth in sales to 1.4 million units at end-September.

PCC said its approval of MUFG Bank’s acquisition of a minority stake in JACCS would bolster competition in the consumer finance and vehicle loan sectors.

“This outcome reflects the PCC’s mandate to safeguard market competition, protect consumer choice, and ensure that mergers and acquisitions, whether domestic or cross-border, do not harm the competitive process in Philippine markets,” it explained.

MUFG Bank, one of the largest Japanese commercial banks, operates in the Philippines through its Manila branch.

MUFG Bank, through its Thailand-based subsidiary, Bank of Ayudhya PCL, is a majority shareholder in HC Consumer Finance Philippines Inc., or commonly known as Home Credit Philippines.

The company also holds a 20-percent equity interest in Security Bank Corp.

JACCS, also based in Japan, operates its consumer finance services locally through JACCS Finance Philippines Corp.