The Philippine Competition Commission (PCC) on Thursday said it was still studying whether or not to approve the sale of tobacco firm Mighty Corp.’s assets to the local unit of Japan Tobacco.
In a press conference in Malacanang, PCC Chairman Arsenio Balisacan confirmed receipt of notices from the parties involved.
“We are evaluating their compliance to the requirements at the moment. And as you know, if there are no problems with the submission, approval can be as early as, you know, within the first 30 days upon completion of all the requirements. Otherwise, if there are issues, there are additional concerns of data that are needed from them … the total number of days required is, or given to us to evaluate the submission, is 90 days,” Balisacan told reporters.
“[I]f the Competition Commission … [does]not render its decision within that period, the transaction is deemed approved,” he added.
According to the implementing rules of the Philippine Competition Act, parties to any merger or acquisition involving transactions exceeding P1 billion must notify and seek approval from the anti-trust body.
Mighty last month offered to pay P25 billion to settle its tax liabilities, to be funded by a P45-billion asset sale to Japan Tobacco International Philippines.
An initial review will be made by the PCC upon notification, followed by a longer 30-day audit. If issues are flagged, a more comprehensive 60-day review may be ordered.
President Rodrigo Duterte, in his second State of the Nation Address, announced that he had ordered the Finance department and the Bureau of Internal Revenue (BIR) to accept the deal.
A initial tranche of P3.44 billion, representing deficiency excise taxes, will be paid if the settlement offer is accepted. The remaining P21.5 billion – covering tax from 2010 to 2016 — will be paid upon completion of the acquisition deal between the two firms.
The deal does not relieve Mighty Corp. of its three tax evasion charges involving P37.88 billion and it also does not preclude new cases.
Balisacan also said the PCC was investigating players in the manufacturing, public services, and agriculture industry for possible anti-competitive practices.
He said penalties could be imposed following the expiration of a transition period on August 8 to comply with the Philippine competition law.
“The PCA provides a two-year transitory period to allow affected parties time to renegotiate agreements or restructure their businesses to comply with the PCA. Upon expiration of the transitory period on August 8, 2017, an existing business structure, conduct, practice or any act which violates the PCA shall be subject to the administrative civil and criminal penalties,” Balisacan explained.