Phlippine Competition Act

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PHILIPPINE
COMPETITION ACT
UP LAW CENTER PARALEGAL TRAINING PROGRAM
PHILIPPINE COMPETITION ACT
(REPUBLIC ACT NO. 10667)
ARTICLE XII, Sec. 19, 1987 Constitution

SECTION 19. The State shall regulate or
prohibit monopolies when the public
interest so requires. No combinations in
restraint of trade or unfair competition
shall be allowed.
SCOPE AND APPLICATION

• APPLIES TO:
1. Any person and commerce or entity*
a. engaged in any trade or industry in the Republic of the Philippines (RP)
b. Engaged in international trade having direct, substantial, and reasonably foreseeable effects in
trade, industry, or commerce in the RP. Including those that result from acts done outside the
RP.
• DOES NOT APPLY TO:

1. Combinations or activities of workers or employees
2. Arrangements with employers when designed solely to facilitate collective
bargaining in respect of conditions of employment
*includes both domestic and foreign entities as well as GOCCs (Sec. 4 (h))
WHY COMPETITION MATTERS

•Competition leads to both economic growth and
reduced poverty. It will help to encourage wider
domestic and foreign direct investments.
•Competition provides an improved enabling
environment for small and medium enterprises that
are critical to more inclusive economic growth and
development in the country.
•Consumers win because free and fair competition
leads to more choices, lower prices, and higher quality
of goods.
PHILIPPINE COMPETITION COMMISSION

(PCC)
•Replaced DOJ’s Competition Authority under E.O
45
•Independent quasi-judicial body; attached agency
to the OP
•1 Chairman, 4 commissioners
•7-year term without reappointment
•Decision making and other act(s) requires the
affirmative vote of 3 members
PCC Powers and Functions:
1. Initiate fact-finding or preliminary inquiry on violations
of competition law, motu proprio, upon receipt of a
verified complaint from an interested party, or upon
referral by the concerned regulatory agency; institute
proceedings
2. Review proposed mergers and acquisitions (based on
factors it deems relevant)
3. Stop or redress prohibited acts via issuance of injunctions,
among other remedies
4. Conduct administrative proceedings, impose sanctions,
fines and penalties,
5. Issue subpoenas, show cause orders, desist orders
6. Conduct inspection of businesses upon order of a court
7. Issue advisory opinions and guidelines
PROHIBITED ANTI-COMPETITIVE
CONDUCTS
Section 14. Anti-Competitive Agreements
Section 15. Abuse of Dominant Position
Section 20. Prohibited Mergers and
Acquisitions
SECTION 14. Anti-Competitive Agreements
• Agreements between competitors that are:
1. Per se prohibited
a) Restrict competition as to price, or components thereof, or
other terms of trade; or
b) Fix the price at an auction or in any form of biding including
cover bidding, bid suppression, bid rotation, and market
allocation and other analogous practices of bid manipulation;
2. Are shown to have the object or effect of substantially

preventing, restricting or lessening competition by:
a) Setting, limiting, or controlling production, markets,
technical development, or investment; or
b) Dividing or sharing the market, whether by volume of sales
or purchases, territory, type of goods or services, buyers or
sellers or any other means
NOTE: “competitor” does not include entities under common
control, have common economic interests, and are not otherwise
able to decide or act independently of each other.
SECTION 14. Anti-Competitive Agreements (CONTINUED)
• Agreements between competitors that are:
3. All other agreements which have the object or effect of
substantially preventing, restricting or lessening competition
examples:
§ exclusive dealing,
§ refusal to deal,
§ resale price fixing/maintenance
Except:
a) Those which contribute to improving the production or
distribution of G/S or
b) Those which contribute to promoting technical or economic
progress while allowing consumers a fair share of the
resulting benefits
SECTION 15. Abuse of Dominant Position

•Mere dominance is not prohibited but the abuse
thereof (i.e. engaging in conduct that would
substantially prevent, restrict or lessen
competition)
•Rebuttable presumption of dominant position –

when the share of such entity in the relevant
market is at least 50% unless the PCC determines
a new market share threshold for a particular
sector
SECTION 20. Prohibited Mergers and Acquisitions

• Merger or acquisition agreements that substantially prevent,
restrict, or lessen competition in the relevant market or in
the market for goods or services as may be determined by the
PCC shall be prohibited.
• *Exceptions (i.e. may be allowed by PCC):

1. Concentration is likely to bring about gains in efficiencies that
are greater than the effects of any limitation on competition
2. A party to the merger or acquisition is faced with actual or
imminent financial failure (under certain conditions).
On Mergers and Acquisitions
The PCC has the power to review mergers and acquisitions based on
factors it deems relevant. Under Section 17 of the PCA, upon
fulfillment of certain conditions, parties to mergers and acquisitions
are also required to notify the PCC within a definite period, failing
which, the parties could be subjected to penalties.
Threshold for mandatory review of mergers and acquisitions as of

2020:
6.1 Billion Pesos for Size of Party (Ultimate Parent Entity); AND
2.5 Billion Pesos for Size of Transaction
Prior to the enactment of the Bayanihan 2 (R.A. 11494), all merger and acquisition
transactions meeting the threshold under Section 17 had to be notified to the PCC prior to
consummation and had to await approval before proceeding. The passing of Bayanihan 2
provided a relief to businesses planning consolidations, mergers, and acquisitions since
the government wanted to encourage business activities post-COVID. This relief came in
the form of Section 4 of said law, where a 2-year period of moratorium on mandatory
notification and a 1-year period of exemption from PCC’s motu proprio review were
provided for deals below Php 50 Billion.
Since the expiration of the 2 year period, the new thresholds are now at 7 Billion Pesos
for Size of Party and 2.9 Billion Pesos for Size of Transaction. (recent update, effective 01
March 2023)
• Section 4. COVID-19 Response and Recovery Interventions. Pursuant to Article VI, Section 23(2) of the Constitution,
the President is hereby authorized to exercise powers that are necessary and proper to undertake and implement the
following COVID-19 response and recovery interventions:
• xxx
• (eee) Issuance of a directive that all government agencies and LGUs shall act on all pending and new applications for
permit, license, certificate, clearance, authorization and resolutions within a non-extendible period of seven (7) working
days, in order to support business continuity and encourage resumption of all business activities: xxx Provided, finally,
that the Philippine Competition Commission (PCC) shall promote business continuity and capacity building, as such all
mergers and acquisitions with transaction values below Fifty Billion Pesos shall be exempt from compulsory notification
under Section 17 of the PCA if entered into within a period of two (2) years from the effectivity of this Act, and further,
shall be exempt from the PCC’s power to review mergers and acquisitions motu proprio provided in Section 12 of the PCA
for a period of one (1) year from the effectivity of this Act.
THANK YOU!
*Please note update on thresholds for notifiable mergers, as updated by the Philippine
Competition Commission effective 01 March 2023: 7 Billion Pesos and 2.9 Billion Pesos. (in
previous slide). Video lecture was recorded earlier (before the change/adjustment in
thresholds).

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Copyright Notice ©

Unauthorized use, copying, reproduction, sharing, distribution or alteration

Copyright © 2023. University of the Philippines Law Center.

ARTICLE XII, Sec. 19, 1987 Constitution

SCOPE AND APPLICATION

• DOES NOT APPLY TO:

WHY COMPETITION MATTERS

PHILIPPINE COMPETITION COMMISSION

2. Are shown to have the object or effect of substantially

SECTION 15. Abuse of Dominant Position

•Rebuttable presumption of dominant position –

SECTION 20. Prohibited Mergers and Acquisitions

• *Exceptions (i.e. may be allowed by PCC):

Threshold for mandatory review of mergers and acquisitions as of

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