New PCC commissioner vows review of M&As

MANILA, Philippines — The Philippine Competition Commission (PCC) welcomes the appointment of Lolibeth Ramit-Medrano as commissioner, saying she will take an active role in the agency’s robust merger reviews.

“As the PCC anticipates renewed appetite for mergers, acquisitions, and post-pandemic restructuring among firms this year, Commissioner Medrano’s expertise in trade, IP (intellectual property) , and commercial law is seen to champion robust merger reviews, competition cases, and market policies in aid of the recovering economy,”the PCC said in a statement yesterday.

“This comes at a time after the PCC Mergers and Acquisitions Office (PCC-MAO) regained its merger review powers in September 2022,”it said.

The PCC said its MAO has since resolved three merger transactions and launched a motu proprio case in the pharmaceuticals sector last year.

Among these transactions are the proposed acquisition of Union Bank of the Philippines (UnionBank) of Citibank, N.A. Philippine Branch (Citibank PH), Citicorp Financial Services & Insurance Brokerage Philippines, Inc. (Citicorp), and Citibank Square Building (Citi Square); the proposed acquisition of 100 percent shares in MediCard Philippines Inc. (MediCard) by AIA Philippines Life and General Insurance Company Inc. (AIA); and AC Logistics Holdings Corp.’s proposed acquisition of a controlling interest in Air 21 Holding Inc.

In September, the PCC set a provisional threshold for compulsory notification of mergers and acquisitions (M&As) as the two-year temporary thresholds under the Bayanihan to Recover as One Act (Bayanihan 2) already lapsed.

According to the PCC, proponents of M&A transactions that reach a size of party (SoP) of P6.1 billion and a size of transaction (SoT) of P2.5 billion now need to notify the PCC for mandatory merger review.

The SoP refers to the aggregate value of assets or revenues in the Philippines of the ultimate parent entity of one of the parties to a transaction, while the SoT refers to the value of assets or revenues of the acquired entity and the entities it controls.

“These thresholds will remain effective until the approval of the commission en banc of new thresholds for compulsory notification,” the PCC said earlier.

The PCC said the provisional thresholds were effective Sept. 16 and would be implemented until March 2023, when the PCC usually adjusts the thresholds for the M&A compulsory notifications.

Under the Bayanihan 2, which came into effect in September 2020, M&As with transaction values below P50 billion are exempt from the compulsory notification with PCC within two years from the effectivity of the law.

Prior to the Bayanihan 2 law, M&As that meet the P2.4 billion threshold for size of transaction and P6 billion for the size of party are required to be notified with the PCC.

The Office of the President recently announced the appointment of Medrano as PCC commissioner.

“Commissioner Medrano’s 22-year public service record spans different technical and leadership roles, most recently as Undersecretary of the Office of the President and prior to that as director of the Bureau of Patents at the Intellectual Property Office of the Philippines (IPOPHL),”the PCC said.