PCC to issue new guidelines on M&A review moratorium

MANILA, Philippines — The Philippine Competition Commission (PCC) is set to issue guidelines on the exemption of merger and acquisition deals below P50 billion from the body’s review under the recently approved Bayanihan 2 Law.

Republic Act 11494 or the Bayanihan To Recover As One (Bayanihan 2) Act, signed by President Duterte on Sept.11, exempts from compulsory notification mergers and acquisitions with transaction value of less than P50 billion, which are entered into within two years from the effectivity of the law.

In addition, Bayanihan 2 Act suspends PCC’s exercise of motu proprio review of these mergers and acquisitions for a period of one year.

“Pursuant to this provision, the PCC will be issuing implementing guidelines for pending and future transactions,” the antitrust body said.

At present, mergers and acquisitions with a transaction value of P2.4 billion should be notified with the PCC for review.

The review is undertaken to ensure these would not restrict competition and harm consumer interest.

Earlier, John Forbes, senior advisor of the American Chamber of Commerce of the Philippines, said the provision would result in more mergers proceeding at a faster pace without prior review by the PCC.

“We hope they could still be reviewed post facto should they violate the competition policy that the PCC is bound by law to enforce and was the intent of Congress in passing the PCA

(Philippine Competition Act) in 2015, after over 20 years,” he said.

Francis Lim, professor of competition law at the Ateneo Law School, said earlier that while a lower threshold provided under the Bayanihan 2 would be better for competition law purposes since the threshold is 20 times higher than the present threshold, the new threshold does not prevent PCC from putting a deal under scrutiny when a complaint is filed.

“In the long run, it is better for the parties to submit a proposed M&A for review by the PCC, because if the PCC gives its go-signal, it is forever precluded from challenging its validity. That is crystal clear under the PCA ,” he said.

In line with the Bayanihan 2’s policy objective of enforcing measures to protect the people from cartels, monopolies, and combinations in restraint of trade affecting the supply, distribution and movement of essential goods and services, the PCC said it would step up enforcement activities.

It said it would scan the market for anti-competitive agreements and abusive practices that harm the Filipino people.

“The PCC will work even harder to ensure that consumer welfare and competition are safeguarded especially at a time when consumers and small businesses are more vulnerable to unscrupulous business practices. Rest assured that the PCC will exert all efforts to protect competition in the present for the future,” the antitrust body said.