THE P1-billion minimum value for mergers and acquisitions (M&A) is “too small” to be placed under a transaction review, according to the Philippine Competition Commission (PCC) and National Competitiveness Council of the Philippines (NCC).
“We’re a P13-trillion economy. The P1 billion [threshold]is quite small,” Arsenio Balisacan, PCC chairman, said during a forum by the Economic Journalist Association of the Philippines (EJAP) on Monday.
NCC Co-Chairman Guillermo Luz noted at the same forum that the business community shares the same view.
“The general perception of the business community is that the P1-billion figure is too small. We should have a higher threshold,” Luz said.
The PCC has mandated that M&As of more than P1 billion must share vital information so the commission can review the transaction in terms of compliance with competitive criteria.
Under Republic Act 10667 or the Philippine Competition Act, the PCC has the power to amend and update the threshold as necessary, Balisacan said.
For now, he said the PCC is focused on implementing the current threshold under the law.
“Out priority is to implement the law, given the current threshold. But, in the future, we will review the implementation experience and, based on the outcome of the review, will update the threshold, if necessary,” Balisacan said in a separate text message.
The PCC is a quasi-judicial body tasked to ensure an efficient market competition by leveling the playing field among businesses in trade, industry, and all commercial economic activities. Its mandate is to protect consumer welfare, and advance domestic and international trade and economic development.
As an independent organization, the commission has judicial powers to sanction and undo transactions found to have breached the law.
The PCC is now crafting the implementing rules and regulations (IRR) outlining the measures and processes in enforcing the law. The commission expects the IRR to be completed in June.
The commission is also working on a study to identify sectors with “inefficiencies” that affect competitiveness.
Balisacan said 10 sectors have so far been identified, including the telecommunications sector, in which competitive measures must be enforced.
The PCC was given P300 million of initial working budget. Balisacan said the commission must go through Congress for next year’s appropriations.