PHILIPPINE COMPETITION ACT

WHAT IS THE PHILIPPINE COMPETITION WHO AND WHAT ARE COVERED?

ACT?
Any person or entity engaged in trade,
It is the primary law in the Philippines industry, and commerce in the
enacted to promote and protect market Philippines. Also applies to international
competition. The law defines, prohibits, and trade that may impact trade, industry, and
penalizes, with the aim of enhancing commerce in the country. It does not apply
economic efficiency and promoting free and to collective bargaining agreements or
fair competition in trade, industry, and all arrangements between workers and
commercial economic activities. Its key employers and activities to facilitate
prohibitions include entering into anti- collective bargaining agreements in respect
competitive agreements, abusing a dominant of conditions of employment.
market position, and forming anti-competitive
mergers and acquisitions.
PROHIBITED ACTS
Anti-competitive agreements include
PHILIPPINE COMPETITION COMMISSION
arrangements between or among
(PCC)
competitors that substantially prevent,
Is an independent quasi-judicial agency restrict, or lessen competition.
mandated to implement the national
competition body and enforce the PCA. (a
quasi-judicial body can interpret law and has PER SE VIOLATIONS
been given powers and procedures
resembling those of a court of law or judge) These are anti-competitive agreements that
are inherently illegal and require no further
The OFC under the Department of Justice inquiry into their actual effect on the market
(DOJ-OFC) shall only conduct preliminary or the intentions of the parties who engaged
investigation and undertake prosecution of in the illegal act or agreement. Example,
all criminal offenses arising under the PCA price fixing, bid rigging.
and other competition-related laws.

NOT PER SE VIOLATIONS

POWERS OF PCC
Are other anti-competitive agreements
• Conduct inquiry, investigate, and prohibited by the law which have the object
hear and decide on cases involving or effect of substantially preventing,
any violation of this Act and other restricting, or lessening competition. PCC
existing competition laws: needs to inquire whether they restrict
a. Motu proprio competition since they are not per se illegal.
b. Upon receipt of a verified
complaint from an interested Example is supply restriction
party
c. Upon referral by the concerned
regulatory agency, and institute
the appropriate civil or criminal
proceedings.
MERGERS
Refers to the joining of two or more entities
into an existing entity or to form a new entity
ACQUISITION
Refers to the purchase of securities or
assets, through contract or other means, for
the purpose of obtaining control.
HOW TO DETERMINE CONTROL OR
DOMINANCE OF MARKET?
Control is presumed to exist when the parent
owns directly or indirectly, through
subsidiaries, more than ½ of the voting
power of an entity, unless exceptional
circumstances, it can be clearly
demonstrated that such ownership does not
constitute control.
WHAT IS A DOMINANT POSITION?
A dominant position refers to a position of
economic strength that an entity or entities
hold which make sit capable of controlling the
relevant market independently from any or a
combination of the following: competitors,
customers, suppliers, or consumers.
PROHIBITED MERGERS AND
ACQUISITIONS
Anti-competitive mergers and acquisitions
(M&As) refer to transactions that
substantially lessen, restrict, or prevent
competition in the relevant market as
determined by the PCC in the exercise of its
power to review such transactions.
THRESHOLDS FOR COMPULSORY
NOTIFICATION OF MERGERS AND
ACQUISITIONS
Parties to a merger or acquisition agreement
where the size of transaction and size of
person/party exceed the threshold set
annually by the PCC are required to notify
the Commission of such agreement before
consummating the transaction.
7 billion based on the size of the party
2.9 billion based on the size of
transaction.
THE NOTIFYING ENTITY/ENTITIES
The acquiring and acquired parties to the
notifiable M&A and their ultimate parent
entities.
In the formation of a joint venture (other than
in connection with a merger or
consolidation), the contributing entities shall
be deemed the acquiring entities, and the
joint venture shall be deemed as the
acquired entities.
CAN THE PCC REVIEW A TRANSACTION
NOT SUBJECT TO COMPUSLORY
NOTIFICATION?
The PCC has the authority to review or
investigate, moto proprio or on its own
initiative, any transaction that may result in
substantial lessening or restriction of
competition in a market. Moto proprio means
that, even without notification, the PCC may
commence a review of the proposed
transaction. A violation equals to a fine of 1%
to 5% of the value of the transaction.
RECOURSE IF A PROPOSED M&A IS
FOUND ANTI-COMPETITIVE
The PCC can prohibit the transaction or
impose conditions before the transaction can
be consummated. Alternatively, the merging
parties can propose voluntary commitments
meant to curtail the anti-competitive effects
of the transaction. If the PCC accepts, the
transaction can proceed.
EXCEPTIONS TO COMPULSORY
NOTIFICATION
Joint ventures or private entities and
unsolicited public-private partnership
(PPP) projects may be exempted. The PCC
however can modify or rescind, among
others, the transaction value threshold and
other criteria subject to compulsory
notification and the exceptions or
exemptions from the notification
requirement.
WHAT IS A RELEVANT MARKET?
It refers to the market in which particular
goods or services is sold and which
comprises two dimensions: the relevant
product market and the relevant geographic
market.
Relevant product market comprises all
those goods and/or services which are
regarded as interchangeable or substitutable
by the consumer or the customer, by reason
of the goods and/or services’ characteristics,
their prices and their intended use.
Relevant geographic market comprises the
area in which the entity concerned is involved
in the supply and demand of goods and
services, in which the conditions of
competition are sufficiently homogenous and
which can be distinguished from neighboring
areas because the conditions of
competitions are different in those areas.
HOW DOES PCC DETERMINE IF A
BUSINESS CONDUCT IS ANTI-
COMPETITIVE?
• As defined by the law
• There is actual or potential adverse
impact on competition caused by the
alleged agreement or conduct
• Adopt a broad perspective,
recognizing future market, overriding
need to make the goods and services
available to customers while also
taking into account the past behavior
of the parties involved.
• Balance the need to ensure that
competition is not prevented, or
restricted.
• Assess the totality of evidence
whether or not the entity has engaged
an anti-competitive agreement or
conduct.
ANTI MONEY LAUNDERING ACT
QUESTIONS:
WHAT IS RA 9160 KNOWN AS?
RA 9160: An act defining the crime of money
laundering, providing penalties therefor and
for other purposes.
Section 1: This Act shall be known as Anti-
money Laundering Act of 2001.
WHAT IS RA 9160 ALL ABOUT AND ITS
POLICY
It is hereby declared the policy of the state to
protect and preserve the integrity and
confidentiality of bank accounts and to
ensure that the Philippines shall not be used
as a money laundering site for the proceeds
of any unlawful activity. Consistent with its
foreign policy, the Sate shall extend
cooperation in transnational investigations
and prosecutions of person involved in
money laundering activities.
WHY DO YOU THINK MONEY
LAUNDERING IS A GLOBAL PROBLEM?
Basically the source of the money is illegal in
nature and that makes this subject a global
problem. Money laundering also undermines
the integrity of financial institutions and it
makes it easier for criminals to move illicit
funds across borders, making it a more
complex problem.
2. A transaction with or involving jewelry
dealers, dealers in precious metals
and dealers in precious stones in
cash or other equivalent money
instrument exceeding 1,000,000.
3. A casino cash transaction exceeding
5,000,000 or its equivalent in other
currency.
4. A cash transaction with or involving
real estate developers or brokers
exceeding 7,500,000 or its equivalent
in other currency.
WHAT ARE THE UNLAWFUL ACTIVITIES
LISTED BY THE LAW?

Unlawful activity” refers to any act or

omission or series or combination thereof
WHAT ARE THE COVERED
involving or having relation to the following:
INSTITUTIONS?
Refers to: (1) Kidnapping for ransom under Article
267 of Act No. 3815, otherwise known as the
• Banks, non-banks, quasi-banks, trust Revised Penal Code, as amended;
entities, and all other institutions and
their subsidiaries and affiliates
supervised by the BSP. (2) Sections 3, 4, 5, 7, 8 and 9 of Article Two
• Insurance companies and all other of Republic Act No. 6425, as amended,
institutions supervised by the otherwise known as the Dangerous Drugs
Insurance Commission Act of 1972;
• Securities dealers, brokers,
(3) Section 3 paragraphs B, C, E, G, H and I
salesmen, investment houses.
of Republic Act No. 3019, as amended;
WHAT ENTITIES SUPERVISE THESE otherwise known as the Anti-Graft and
INSTITUTIONS? Corrupt Practices Act;

• Bangko Sental ng Pilipinas (BSP) (4) Plunder under Republic Act No. 7080, as
• Insurance Commission amended;
• Securities and Exchange
Commission (5) Robbery and extortion under Articles
• Anti Money Laundering Council 294, 295, 296, 299, 300, 301 and 302 of the
Revised Penal Code, as amended;

WHAT ARE THE COVERED (6) Jueteng and Masiao punished as illegal
TRANSACTIONS? gambling under Presidential Decree No.
1602;
1. Any transaction in cash or other
equivalent monetary instrument
exceeding 500,000 pesos.
(7) Piracy on the high seas under the
Revised Penal Code, as amended and
Presidential Decree No. 532;
(8) Qualified theft under Article 310 of the
Revised Penal Code, as amended;
(9) Swindling under Article 315 of the
Revised Penal Code, as amended;
(10) Smuggling under Republic Act Nos.
455 and 1937;
(11) Violations under Republic Act No.
8792, otherwise known as the Electronic
Commerce Act of 2000;
(12) Hijacking and other violations under
Republic Act No. 6235; destructive arson
and murder, as defined under the Revised
Penal Code, as amended, including those
perpetrated by terrorists against non-
combatant persons and similar targets;
(13) Fraudulent practices and other
violations under Republic Act No. 8799,
otherwise known as the Securities
Regulation Code of 2000;
(14) Felonies or offenses of a similar
nature that are punishable under the penal
laws of other countries
HOW IS MONEY LAUNDERING
COMMITTED?
Money laundering is a crime whereby the
proceeds of an unlawful activity are
transacted, thereby making them appear to
have originated from legitimate sources. It is
committed by the following:
(a) Any person knowing that any monetary
instrument or property represents, involves,
or relates to, the proceeds of any unlawful
activity, transacts or attempts to transact said
monetary instrument or property.
(b) Any person knowing that any monetary
instrument or property involves the proceeds
of any unlawful activity, performs or fails to
perform any act as a result of which he
facilitates the offense of money laundering
referred to in paragraph (a) above.
(c) Any person knowing that any monetary
instrument or property is required under this
Act to be disclosed and filed with the Anti-
Money Laundering Council (AMLC), fails to
do so.
IN WHAT WAY DOES AMLA BECOME AN
EXCEPTION TO THE SECRECY LAW?
The AMLA provides exceptions to the Bank
Secrecy Act. Under Section 11, the AMLC
may inquire into a bank account upon order
of any competent court in cases of violation
of the AMLA, it having been established that
there is probable cause that the deposits or
investments are related to unlawful activities
as defined in Section 3(i) of the law, or a
money laundering offense under Section 4
thereof. Further, in instances where there is
probable cause that the deposits or
investments are related to kidnapping for
ransom, certain violations of the
Comprehensive Dangerous Drugs Act of
2002, hijacking and other violations under
R.A. No. 6235, destructive arson and
murder, then there is no need for the AMLC
to obtain a court order before it could inquire
into such accounts.’
WHAT ARE THE GOVERNING
PRINCIPLES OF AMLA?
The anti-money laundering/counter-terrorism
financing (AML/CTF) regime of the
Philippines shall be governed by the
following principles:
(a) The AMLC, as the country’s financial
intelligence unit, is vested by law with
independence to perform its mandate. It
upholds the continuous development of a
team of highly ethical and professional
personnel and implements efficient
processes in the delivery of its mandate.
(b) The AML/CTF laws, rules and regulations
and other relevant issuances are
implemented using a risk-based approach in
a way that responds to the need to bring the
financially excluded into the regulated
financial sector, while at the same time
maintaining effective safeguards and
effective controls against money
laundering/terrorism financing risks.
(c) A strong compliance culture, good
governance and observance of high ethical
standards in the conduct of business are
good foundations for an effective AML/CTF
regime. It will be developed and sustained
through capacity building and deterrence of
violations through imposition of appropriate,
proportionate and dissuasive sanctions.
(d) A sound risk management system to
identify, assess, mitigate, monitor, and
control risks associated with money
laundering/terrorism financing is essential.
(e) Timely and effective domestic and
international cooperation and established
coordination mechanism are critical in the
investigation and prosecution of money
laundering/terrorism financing and
associated unlawful activities.
(f) The implementation of AML laws, rules
and regulations shall conform to international
AML/CTF standards and best practices.
(j) The observance of the constitutional
requirements on due process, and injunction
against ex post facto laws and bills of
attainder.
COVERED TRANSACTIONS BEING
REFERRED TO
Any transaction involving the movement of
funds exceeding 500,000 within a single
banking day.
THE TYPES OF TRANSACTIONS
• Cash transactions that exceeds
500,000 within a single banking day
whether conducted in a single
operation or several operation.
• Casino transaction that exceeds
5,000,000
• Transactions with dealers that
exceeds 1,000,000
• Electronic Transfers
• Investment-Related Transactions
WHAT IS CUSTOMER DUE DILIGENCE?
This refers to the procedure of identifying and
verifying the true identity of customers, and
their agents and beneficial owners, including
understanding and monitoring their
transactions and activities.
CDD is required when:
a. Establishing business or professional
relationship
b. Carrying out occasional transactions
above 100,000 or any other threshold
as may be determined by the SA
(supervising authority).
c. Carrying out occasional wire
transfers under the rule 19, section 6
hereof.
d. There is suspicion of ML/TF,
regardless of any exemptions or
thresholds that are referred to
elsewhere under this IRR.
e. The covered person has doubts
about the veracity or adequacy of
 previously obtained identification
information and/or data.
THE MONETARY INSTRUMENTS BEING
REFERRED TO
• Coins or currency of legal tender of
the Philippines, or any other country
• Drafts, checks, and notes
• Securities or negotiable instruments,
bonds, commercial papers, deposit
certificates, trust certificates,
custodial receipts or deposit
substitute instruments, trading
orders, transaction tickets and
confirmations of sale or investments
and money market instruments
• Other similar instruments where title
thereto passes to another by
endorsement, assignment or
delivery; and
• Contracts or policies of insurance, life
or non-life, and contracts of
suretyship.
SUSPICIOUSCIRCUMSTANCE
Refers to any of the following circumstances,
the existence of which makes a transaction
suspicious:
(1) there is no underlying legal or trade
obligation, purpose or economic justification;
(2) the client is not properly identified;
(3) the amount involved is not commensurate
with the business or financial capacity of the
client;
(4) taking into account all known
circumstances, it may be perceived that
the client’s transaction is structured in
order to avoid being the subject of
reporting requirements under the AMLA;
(5) any circumstance relating to the
transaction which is observed to deviate
from the profile of the client and/or the client’s
past transactions with the covered person;
(6) the transaction is in any way related
to ML/TF or related unlawful activity that
is about to be committed, is being or has
been committed; or
(7) any transaction that is similar,
analogous or identical to any of the
foregoing, such as the relevant transactions
in related and materially linked accounts, as
herein defined.
Any unsuccessful attempt to transact
with a covered person, the denial of
which is based on any of the foregoing
circumstances, shall likewise be considered
as suspicious transaction.
SUSPICIOUS TRANSACTIONS
Refers to a transaction, regardless of
amount, where any of the suspicious
circumstances, as herein defined, is
determined, based on suspicion or, if
available, reasonable grounds to be existing.
WHAT’S TERRORISM FINANCING?
Sec. 2 of RA 10168: It is the policy of the
State to protect life, liberty, and property from
acts of terrorism and to condemn terrorism
and those who support and finance it and to
recognize it as inimical and dangerous to
national security and the welfare of the
people, and to make the financing of
terrorism a crime against the Filipino people,
against humanity, and against the law of
nations.
The State, likewise, recognizes and adheres
to international commitments to combat the
financing of terrorism, specifically to the
International Convention for the Suppression
of the Financing of Terrorism, as well as
other binding terrorism-related resolutions of
the United Nations Security Council pursuant correspondence, shall be preserved and
to Chapter 7 of the Charter of the United safely stored for at least 5 years from the
Nations (UN). date they were closed.

Toward this end, the State shall reinforce its

fight against terrorism by criminalizing the
HOW MANY DAYS TO REPORT AMLA ON
financing of terrorism and related offenses,
A COVERED OR SUSPICIOUS
and by preventing and suppressing the
commission of said offenses through TRANSACTION
freezing and forfeiture of properties or funds Covered institutions shall report to AMLC all
while protecting human rights. covered transactions within 5 working days
from occurrence thereof, unless the
Supervising Authority concerned prescribes
WHAT’S ASSET FORFEITURE? a longer period not exceeding 10 working
days.
Asset forfeiture is a form of confiscation of
assets by the authorities.
Section 1. General Rules on Asset BENEFICIAL OWNER
Forfeiture.
Beneficial Owner refers to any natural person
The following rules shall be observed in who:
asset forfeiture proceedings:
(1) Ultimately owns or controls the customer
(a) No prior criminal charge, pendency of and/or on whose behalf a transaction or
a case, or conviction for an unlawful activity is being conducted;
activity or ML offense is necessary for the
(2) Has ultimate effective control over a
commencement or the resolution of a petition
juridical person or legal arrangement; or
for civil forfeiture.
(3) Owns, at least, twenty percent (20%)
(b) No asset shall be attached or forfeited to
shares, contributions or equity interest in a
the prejudice of a candidate for an electoral
juridical person or legal arrangement.
office during an election period.
(c) No court shall issue a temporary
restraining order or a writ of injunction LEGAL OWNER
against any provisional asset preservation
order or asset preservation order, except the
Court of Appeals or the Supreme Court.

THE RECORD KEEPING REQUIREMENT

UNDER THE LAW
All records of all transactions of covered
institutions shall be maintained and safely
stored for 5 years from the dates of
transactions. With respect to closed
accounts, the records of customer
identification, account files and business