PCC to review M&A exemption under Bayanihan 2

MANILA, Philippines — The Philippine Competition Commission (PCC) will start its review of merger and acquisition (M&A) transactions under lower thresholds after the two-year period set under the Bayanihan 2 expires in September this year.

PCC chairperson Arsenio Balisacan said in the antitrust body’s year-end report released yesterday the PCC would “continue its review of the M&As under the lower and adjusted thresholds once the two-year period under the Bayanihan 2 expires in September 2022.”

The review will prioritize essential sectors, including e-commerce, health and pharmaceuticals, and telecommunications in competition enforcement.

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.

Given the merger notification thresholds of P50 billion for the size of person and size of transaction in force under the Bayanihan 2 Act, the PCC only approved four M&A transactions, with a total value of P470 billion last year.

Balisacan said the PCC would also monitor markets and initiate motu proprio merger reviews of transactions that may have substantially reduced competition.

“For 2022, the commission will continue to prioritize sectors that are considered essential during these times: e-commerce, health and pharmaceuticals, food and agriculture, energy and electricity, insurance, construction, water, and telecommunications,” he said.

He said the PCC would ramp up its enforcement activities to investigate markets in priority sectors, monitor complaints, and address consumer and stakeholder queries.

As of Dec.26 last year, he said the PCC’s Competition Enforcement Office (CEO) addressed a total of 869 enforcement inquiries and complaints that include those on possible cartels and abuses of dominance, as well as clarifications of the law and the PCC’s jurisdiction over certain cases.

He said the CEO also opened 10 full administrative investigations (FAIs) last year involving firms in the telecommunications, water, energy and health sectors.

It also filed two statements of objections or formal complaints with the PCC concerning price-fixing cartels in the tourism and healthcare industry and both will now proceed to adjudication.

Since the PCC launched its Internet Service Provider (ISP) Task Force in March last year, he said the CEO has received and processed over 100 ISP-related complaints.

He said the PCC would further develop its bid-rigging screening tool in partnership with other agencies for improved ability to detect indicators of bid rigging in public procurement.

In terms of competition research and advocacy, he said the PCC would conduct market studies in the sectors of bus transport, telecommunications covering internet service providers, wholesale broadband, and spectrum management, and water, while an assessment of competition in the energy, food, and sports sectors would be undertaken.

PCC will also forge partnerships with the Intellectual Property Office of the Philippines, Governance Commission for Government-Owned or Controlled Corporations, National Privacy Commission, as well as counterpart competition authorities such as the Japan Fair Trade Commission, Korea Fair Trade Commission, and the Australian Competition and Consumer Commission this year, as these are seen to help in the fulfillment of the agency’s mandate.

Balisacan said PCC would also expand its investigation stations to Legazpi City in South Luzon, Cebu City in the Visayas, and Davao City in Mindanao, as well as start efforts in building future regional offices in those areas.