The National Economic and Development Authority (Neda) is urging the formulation of a national competition policy to ensure that both state-owned and private corporations operate on a level playing field.
Neda Officer in Charge and Undersecretary for Planning and Policy Rosemarie G. Edillon told the BusinessMirror that this will show the government’s commitment to strengthen the Government Owned and Controlled Corporation (GOCC) Governance Act of 2011 or Republic Act (RA) 10149 and the Philippine Competition Act (PCA) or RA 10667.
To integrate these reforms, Neda, with assistance from the Philippine Competition Commission (PCC), will formulate a National Competition Policy this year.
“RA 10149 and the Phil Competition Act are landmark legislations. Now, we want to take it to the next level where we have a comprehensive and coherent National Competition Policy,” Edillon said via SMS.
The Governance Commission for GOCCs, the oversight body for GOCCs, has already conducted initial steps in reviewing profiles of GOCCs.
Guided by key pillars of competition, the policy will flesh out competition strategies in the country’s economic blueprint.
These pillars are pro-competitive laws and regulations and government interventions, competitive neutrality and the enforcement of the PCA and other competition-related laws and issuances.
“While the enactment of the PCA and the good work done by the PCC on implementing the law are steps in the right direction, we believe there is still a lot that needs to be done to deliver a level playing field for businesses and higher bargaining powers for consumers,” Edillon said.
In a news statement issued on Thursday, Edillon added this will also correct the dual regulatory and proprietary functions of some state entities and promote consumer welfare and public interest.
She said regulatory functions and commercial operations should not mix because of inherent conflict of interest. This principle is clearly stated in Section 2 (g) of RA 10149.
The Philippine Development Plan 2017-2022, Edillon added, also called for a review of the mandate, quality of services, and specific markets of GOCCs to ensure that their proprietary activities do not conflict with their regulatory functions and that procedures are streamlined.
“A business aims to earn profit while a regulator sets rules to protect the consumer and the public interest in general, which may negatively affect profits. So, if a state entity is a regulator, then it must not be involved in business operations in the sector or market it regulates. If it is a business, then it must not have regulatory powers or influence,” Edillon said.
“Ultimately, we would like to see more and more high-quality goods and services being made available and affordable to as many consumers as possible. Market competition and effective regulation can make this happen,” she added.
The PCC was created in February 2016 as provided for under RA 10667, passed in July 2015.
Part of its mandate is to review mergers and acquisitions (M&A) that may impede competition to the detriment of the consumers.
In just a year, the antitrust body has received 80 notifications for M&A deals, as well as eight referrals for possible anticompetitive behavior in some sectors.