PCC chief sees 33% decline in notifications for mergers and acquisitions this year  

The country’s antitrust regulator is expecting notifications for mergers and acquisitions (M&A)  to go down by at least 33 percent this year with the adjusted thresholds for such transactions.

Arsenio M. Balisacan, chairman of the Philippine Competition Commission, said the PCC is anticipating lesser notifications for M&A this year in light of the higher thresholds bound for regulation. He believes this will benefit the nascent agency, given its limited resources and logistics.

“Assuming more or less the same profile of mergers and acquisitions this year, the commission expects a 33-percent reduction in the intake of notifications with the new thresholds. In turn, this will allow the commission to deploy resources toward the effective implementation of a holistic merger control policy,” Balisacan said at a news briefing on Wednesday.

The PCC on Monday raised the thresholds for  M&A to P5 billion for size of person and P2 billion for size of transaction from P1 billion. With the recalibration, the antitrust agency is now mandated to adjust the thresholds annually beginning March next year to reflect movements and developments in the country’s economy.


Balisacan said the PCC’s decision to recalibrate the thresholds was an outcome of the regulator’s “careful study and measured deliberations after engaging in dialogue with members of the business community, receiving and reviewing numerous merger and acquisition transactions, as well as observing recent developments in the Philippine economy.”

“Perhaps, it is worth emphasizing that the PCC has adjusted the thresholds in recognition that onerous rules can stifle business activity and impede the entry of competition. Indeed, guided by the commission planning exercise in November of last year, the commission is working to establish frameworks, the threshold adjustment included, to ensure speedy and transparent processing of transactions that, from the onset, do not appear to pose any risk on healthy market competition,” Balisacan said.

He added  M&A with a size of transaction below P2 billion and size of parties less than P5 billion “are characteristically less likely to raise competition concerns.” Size of transaction is the value of the assets or revenues of the acquired entity, while the size of party, otherwise known as size of person, refers to the assets or revenues of the ultimate parent entity.

In Policy Statement 18-01, the PCC claimed it assessed 46 proposed mergers and acquisitions last year. Of these, 15 proposed transactions had a size of transaction below P2 billion or a size of person less than P5 billion.

With the adjusted thresholds and anticipated lesser notifications for  M&A, the PCC chief believes the agency can now focus its attention on its other functions, such as market monitoring, policy advocacy, competition enforcement and the conduct of market studies.

Balisacan, however, warned firms not to test the regulator’s patience by eluding its processes on mergers and acquisitions. He said the PCC can, and will, exercise its motu propio powers against those who will try to violate the antitrust law or evade the mandatory competition review.

“We remain watchful of the developments and shifts in the market. The commission remains sharply aware of, and will continue to examine, other equally effective predictors of harm to market competition,” Balisacan said.

The PCC has received a total of 152 notifications, of which 41 are global deals, amounting to as much as P2.25 trillion. A hefty chunk of those mergers and acquisitions were registered by the manufacturing sector with a transaction value of P1.22 trillion, followed by financial and insurance activities at P279.27 billion; electricity, gas, steam and air-conditioning supply at P248.47 billion; real-estate activities at P58.61 billion; and transportation and storage at P44.75 billion.



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