Talks start for rules of Competition Act

Former Economic Planning secretary Arsenio Balisacan, Philippine Competition Commission chairman, leads consultations to draft implementing rules and regulations of the Philippine Competition Law in yesterday’s meeting in Cebu City. (CDN PHOTO/LITO TECSON)

Public consultations started yesterday in Cebu for the drafting of the implementing rules and regulations (IRRs) of a law that protects, among others, small companies from big companies that hinder the former’s growth in the market.

Republic Act (RA) 10667 or the Philippine Competition Act, which was sponsored by Senator Paolo Benigno “Bam” Aquino IV, seeks to provide consumers with more choices and lower prices of goods by opening the market to more competitors.

“Our interest is to level the playing field. All kinds of investments should prosper, whether small, medium, or large,” said former Economic Planning secretary Arsenio Balisacan, who is the Philippine Competition Commission (PCC) chairman, during yesterday’s consultation at Hotel Elizabeth.

Organized by the Trade Related Technical Assistance (TRTA) 3 Project which is funded by the European Union, further consultations will also be held in Manila, Davao and Clark within the week.

Balisacan said they plan to publish the final IRR by June.

The Competition Law, signed into effect by President Benigno Aquino III in July 2015, prohibits anti-competitive agreements, abuse of dominant position, and anti-competitive mergers and acquisitions, and imposes fines and penalties, both administrative and criminal, on entities violating these restrictions.

With the implementation of the law came the creation of the PCC, an independent quasi-judicial body mandated to implement the country’s national competition policy in order to ensure economic efficiency, protect consumer welfare, and promote free and fair competition in trade, industry and all commercial activities in the Philippines.

The PCC is tasked to promulgate the necessary IRR of the law in consultation with the Department of Justice-Office for Competition and concerned sector regulators.

Among those present during yesterday’s activity, aside from the PCC and its commissioners, were members of the business sector, the academe, media, chamber groups, non-government organizations, professional associations, and law firms.

During the meeting, some business groups complained that the PCC will be another burden to them.

But Balisacan pointed out that they are trying to “grow the economy in a way that is beneficial to everyone, particularly the poor.”

He said that real economic growth is “shared growth” and must spread down to the grassroots.

“In the end, that’s what will sustain the growth of the economy over a long period of time. That will bring shared prosperity,” he said.

Balisacan said that under the law, large companies should not “swallow” small ones because “they don’t want any future competitors.”

“That’s what we are guarding off — for the big ones not to prevent small ones from rising so they can continue to control the market,” he said.

An example of anti-competitive mergers or acquisitions is what telecommunications companies in the Philippines are doing, said Balisacan, where established firms acquire the smaller ones to “eliminate” competition.

When market prices are controlled, in the case of cartels which are prohibited in the law, prices usually end up higher, quality of goods becomes poorer, and variety becomes more restrictive.

“(The law) is really a game-changer, coming from (an) economic planning (perspective),” said Balisacan.

Meanwhile, Department of Trade and Industry Central Visayas (DTI 7) Director Asteria Caberte said she looks at the law as a very welcome development on the side of the consumers.

“The consumers are always on the losing side when two or three businesses conglomerate,” she said.

She also cited telecommunications companies as an example.

Aside from that, Caberte also cited bid rigging as an example of anti-competitive agreements.

“This means two or three bidders of government projects agree and make it appear as if there’s one bidder who made the least offer. They make it appear like there was a bidding process conducted, but there was none,” said Caberte.