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House panels OK substitute bill enhancing PCC’s mandate

The House Committee on Economic Affairs and House Committee on Trade and Industry on Wednesday jointly approved a bill strengthening the Philippine Competition Commission (PCC).

The approved measure substituted House Bill (HB) 5906 of Marikina Rep. Stella Luz Quimbo and HB 6243 of Economic Affairs  Chairman Sharon Garin of AAMBIS-OWA.

Quimbo, a former PCC commissioner, said the passage of the bill is needed to strengthen the powers of the commission and to increase the agency’s effectiveness.

According to Quimbo, one of the amendments to Republic Act 10667, or the Philippine Competition Act seeks to increase enforcement powers of the PCC against cartels.

She said it also seeks to increase the agency’s effectiveness by incentivizing its staff, as their pay is deemed not competitive enough.

“We want to match it with Bangko Sentral ng Pilipinas’ [salary] level and bring [in the] best lawyers and economists in the agency,” she said.

Quimbo also said the bill also institutionalized a national competition policy by directing government agencies to review their policies and make sure that none of them are anti-competitive.

Moreover, Negros Occidental Rep. Jose Francisco Benitez, chairman of the technical working group (TWG) that drafted the bill, said the measure expands the definition of “dominant position” to include significant market power.

He also said the substitute bill strengthens the powers and functions of the PCC by requiring entities to modify or terminate contracts; opening access to competitors; prohibiting restrictive contracting practices; setting up of information firewalls and making information available to third parties.

Benitez said the measure allows the PCC to deputize a law enforcement agency to conduct investigation activities.

He added it also mandates the PCC to prepare and formulate, in coordination with National Economic and Development Authority, the National Competition Policy.

The bill allows the PCC to issue guidance to relevant agencies, provide advisory opinion to legislation, and recommend remedies to Congress on competition-related issues, he said.

According to the lawmaker, the bill also authorizes the PCC to create an antitrust fund from all fees, fines and penalties collected.

Benitez said the measure also simplifies identification of anti-competitive behavior of economic entities, while articulating PCC’s authority to impose obligations upon entities with significant market power.

Benitez said one of the important provisions of the measure provides the procedure for a hybrid compulsory-voluntary notification regime for mergers and acquisitions with compulsory notification and review for transactions exceeding P50 billion.

But for his part, PCC Chairman Arsenio Balisacan asked the committee to maintain the current threshold provided under the country’s competition law or RA 10667 with provision of a regular updating for inflation.

“We note that the mandatory merger notification threshold in the bill is set at P50 billion. We respectfully reiterate the commission’s position that the P50 billion is to high at threshold that many mergers and acquisition with potential anti-competitive effects in the marketplace would evade the scope of mandatory antitrust reviews,” he said.

“We also respectfully note that under Bayanihan 2, Congress’s wisdom was for temporary increase in the threshold correspond to the challenges brought about by the pandemic,” he said.

House economic affairs chairman Garin, however, rejected the PCC position, saying the TWG carefully studied the threshold figure through several hearings before recommending it to her committee.

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