MANILA, Philippines — The Philippine Competition Commission (PCC) has issued guidelines on the implementation of the Bayanihan 2 law provision which exempts certain mergers and acquisitions (M&A) from the body’s review.
The rules, which took effect yesterday, provides details on the exemptions from compulsory notification and motu proprio, computation of new thresholds, and the option for voluntary notification of M&A transactions under Section 4 (eee) of the Bayanihan 2.
Section 4 (eee) of Republic Act 11494 or the Bayanihan To Recover As One (Bayanihan 2) Act signed by President Duterte last Sept.11, exempts M&As with transaction value lower than P50 billion and entered into within two years from effectivity of the law from compulsory notification with the PCC.
In addition, the Bayanihan 2 suspends PCC’s exercise of motu proprio review of these transactions for one year.
Under the rules released by the PCC, M&As with a transaction value of at least P50 billion or those entered into before the Bayanihan 2 took effect and exceeding the applicable thresholds would, still have to notify the antitrust body.
PCC said the new size of person (SOP) and size of transaction (SOT) thresholds for compulsory notification is at P50 billion.
Earlier this year, the PCC raised the thresholds to P2.4 billion for SOT and P6 billion for SOP in line with a memorandum circular issued in 2018 which sets an annual automatic adjustment based on the country’s economic performance in the previous year using the nominal gross domestic product.
M&As that meet the thresholds are put under PCC’s scrutiny to ensure the deals would not restrict competition and harm consumer interest.
PCC said five transactions notified before Bayanihan 2 took effect are currently under review.
M&As entered into before the effectivity of Bayanihan 2 which have not been reviewed or those pending review before the law took effect are not covered by the exemption from motu proprio review.
PCC said it may conduct a motu proprio review of M&As seen to reduce competition in the market one year from the date the Bayanihan 2 takes effect.
While the Bayanihan 2 exempts M&As below P50 billion from compulsory notification, the PCC said parties to the transaction may opt to voluntarily notify the body for merger review.
In its discretion, the PCC may give due course to voluntary notification with review periods of 45 days for Phase 1 and 90 days for Phase 2.
“The PCC recognizes the need to strike a balance in implementing the policy objectives of promoting business continuity under the Bayanihan 2 and looking after market efficiency and consumer welfare under the Philippine Competition Act,” PCC chairperson Arsenio Balisacan said.
“With fewer merger notifications expected, the PCC will intensify action in other areas of enforcing the competition law especially against anti-competitive agreements and abusive practices that harm consumers or unscrupulously take advantage of the crisis,” he added.