The Philippine Competition Commission (PCC) is set to conclude memorandums of agreement (MOAs) with the regulators of the energy and banking sectors to clarify their jurisdiction.
Johannes Bernabe, PCC commissioner, told the BusinessMirror that the agency will be coordinating closely with the Bangko Sentral ng Pilipinas (BSP) and the Energy Regulatory Commission (ERC) to thresh out their functions in relation to competition-related cases.
“Because the BSP has been consistent in saying that, in view of the Asean Economic Community, banks will become larger, and we will need consolidation of financial institutions in the Philippines to compete effectively with larger banks in Malaysia and Singapore. It’s in that context we’ll execute MOAs with sector regulators,” Bernabe said.
The PCC official said the impending consolidation in the sector should be further reviewed by the PCC to ensure that this does not impede competition, and the MOA with the BSP will have to ensure there will be no conflict in the jurisdiction of the two agencies.
“We have different policy objectives, so we need to execute an MOA to collaborate and cooperate, and avoid those potential conflicts in the exercise of jurisdiction,” he added. With the ERC, the need to clarify the regulatory function of each agency is more pressing, as the agency is also vested with the power to oversee competition-related issues.
“Of all the sector regulators, only one that has an explicit competition mandate is the ERC, so it becomes a little more delicate,” Bernabe said.
Notably, the draft implementing rules and regulations of the Philippine Competition Act repeals the Electric Power Industry Reform Act (Epira), or Republic Act (RA) 9136, which details some of the regulatory powers of the ERC.
The said provision is what gives the ERC adjudicative power to decide on competition-related cases in the energy sector.
This will most likely be turned over to the PCC, as Bernabe said the quasijudicial PCC is “given primary and original jurisdiction in the implementation and regulation of all competition-related issues in trade, industry and commerce.”
The ERC has not yet responded on how the revocation of this authority will affect its function and how the specific division of power will be spelled out in the MOA.
The PCC was created by virtue of RA 10667, or the Philippine Competition Act, which was signed into law by President Aquino in July 2015.
PCC Chairman Arsenio M. Balisacan said the agency has quasijudicial powers that allow it to build cases and impose penalties on erring companies or oppose certain mergers and acquisitions.
The commission also has to review powers in the sense that it can re-examine existing government policies that encourage uncompetitive behavior among firms.
Balisacan said the key to succeed in the implementation of the competition law is an “empirical-based PCC.”
Earlier, University of the Philippines School of Economics Associate Professor Agustin L. Arcenas said the competition law is necessary to make Philippine companies “more efficient” amid expected stiffer competition as the economic integration of the economies of the Asean continues to be implemented.
Prior to the enactment of RA 10667, only the Philippines did not have a law against anticompetitive practices in the Asean, according to Arcenas.