PHILIPPINE COMPETITION BULLETIN - Philippine Competition ...
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Issue 19 | april - september 2020
PHILIPPINE
COMPETITION
BULLETIN
What’s Inside
2 PCC LAUNCHES DIGITAL SUPPORT PLATFORMS AMID COVID-19 PANDEMIC
3 ADAPTING TO THE NEW NORMAL: BRINGING PCC’S ADVOCACY PROGRAM ONLINE
4 PCA NOW PART OF PHILIPPINE BAR EXAMINATIONS
7 NEW NOTIFICATION RULES FOR PUBLIC-PRIVATE VENTURES,
UNSOLICITED PPP PROJECTS
PCC LAUNCHES DIGITAL SUPPORT PLATFORMS
AMID COVID-19 PANDEMIC
by Leanne Croisette Gorosin
The Philippine Competition
Commission (PCC) has
accelerated its adoption of
digital platforms to ensure
continued provision of services
despite the community
quarantines imposed by
government to control the
spread of COVID-19 in the
country.
Foremost of these was the
launch last July of PCC’s
Enforcement Resource Page,
a one-stop public information
hub highlighting the agency’s
uninterrupted enforcement
of the Philippine Competition
Act (PCA) amid the COVID-19
pandemic. distancing guidelines. Online Similarly, PCC’s support offices
consultations and webinars resumed operations using
This microsite informs how have been offered to minimize online technology. In so doing,
consumers and businesses unnecessary in-person frontline units are assured of
can report to the Competition interactions among personnel continued back-end assistance
Enforcement Office any and stakeholders (see Adapting in addressing stakeholder
anti-competitive practice, to the New Normal: Bringing concerns. The PCC Bids and
especially involving basic PCC’s Advocacy Program Awards Committee (PBAC)
goods and services, medical Online, page 3). Similarly, the is an example. Guided by the
supplies, personal protective Information, Communications Government Procurement and
equipment, and other essential and Technology Division Policy Board’s recent issuances
commodities. launched the PCC Client on the conduct of procurement
Appointment System (PCAS) activities during the quarantine,
It provides reference materials in June to enable the public to the PBAC has been using a
on different types of conduct send requests for appointments hybrid of online and on-site
that violate the PCA. The and office visits through the meetings to ensure timely
webpage also features PCC website. This system processing of procurement
enforcement advisories, rationalizes office visits so that requests.
news, and updates to equip the number of persons in the
stakeholders with information office at any given time is kept
they can use to help keep in to a maximum that is consistent
check unfair competition. with government’s social
distancing guidelines.
To appeal to a broader audience,
the PCC introduced a series With the government relaxing
of online comic strips, titled quarantine restrictions of
Pandemic and Competition late, the Commission issued
Comics. The comic strips guidelines for the resumption
feature vignettes of anti- of its regular merger review
competitive business practices operations through digital and
involving products that alternative arrangements. The
figured prominently during the guidelines give notifying parties
pandemic. the opportunity to request
extensions and waivers so they
With the quarantine restricting have sufficient time to comply
mobility and physical contact, with requirements, given the
the PCC has introduced also Pandemic & Competition Comics series as
mobility and administrative seen at the PCC’s Facebook page.
stakeholder touchpoints that challenges brought about by the
abide by government’s social pandemic.
2
ADAPTING TO THE NEW NORMAL:
BRINGING PCC’S ADVOCACY PROGRAM ONLINE
by Paul Jeffrey M. Ballentos
As governments both here Ferdinand Redulla, Competition
and abroad have imposed Enforcement Office assistant
lockdowns to control the spread director, served as resource
of COVID-19, the Philippine persons.
Competition Commission
(PCC) was not spared from the Redulla discussed business
forced suspension of in-person practices of MSMEs that may
advocacy activities planned for fall under the scope of the PCA.
the year, leaving many budgets One example is members of
unused. a particular business building
an association or competitors
The Philippine government’s in a similar trade constituting
passage of the Bayanihan to a trade association. “The rules
Heal as One Act laid the ground of such trade guilds that bind
for a government-wide effort members may also be an
to economize on unnecessary ‘agreement’ under the Philippine
expenditures in a bid to shift Competition Act. This includes
resources toward the battle even settlement agreements
against the pandemic and its ill in these associations,” Redulla
effects. explained.
Even as it heeded the call to Following this forum,
give up part of its budget for CBAD held a PCA 101 for
the year, the PCC recognized Consumers webinar. Speaking
the high risk of anti-competitive during the event, Executive
conduct rearing its ugly head, as Director Kenneth V. Tanate
unscrupulous businesses take emphasized the importance
advantage of supply restrictions of mainstreaming competition
brought about by the lockdown. concepts. “The public should be
As the quarantine increased the made aware of the important
demand for online channels provisions of the PCA to ensure
of communication, the PCC that businesses will not engage
adapted to the “new normal” in any anti-competitive practices
by taking its advocacy program or agreements, or gravely abuse
online. their dominance,” he said.
Reaching out to small businesses, Raising awareness in priority
consumers sectors
Micro, small and medium The PCC also brought its
enterprises (MSMEs), advocacy to industries crucial
cooperatives, and consumers during the pandemic, starting
are among the most vulnerable with a webinar on the PCA
to unfair market practices, for the Pharmaceutical and
been increasing, and medicine
especially in a situation where Healthcare Association of
prices have been declining over
lack of mobility and resource the Philippines (PHAP).
time, for many Filipinos, these
challenges hamper choice. Pharmaceuticals, a major
basic social services with their
frontline industry in the fight
accompanying products remain
In August, the Communications against the pandemic, is one of
inaccessible and unaffordable,”
and Knowledge Management PCC’s priority sectors for the
PCC Chairperson Arsenio
Office-Capacity Building and year.
Balisacan told members of
Advocacy Division (CKMO-
PHAP.
CBAD) of the PCC held an Out-of-pocket expenditures,
online forum on the Philippine largely for medicines, remain a
PCC’s resource persons from
Competition Act (PCA) for huge portion of health spending
the Commission’s various units
MSMEs and cooperatives. in the country. “While the
Mr. Arnold Roy Tenorio, availability, prescription, and continued on page 6
CKMO director, and Atty. use of generics have generally
3
Advocacy roundup
PCC CHAIR WARNS OF UNCHECKED CONSOLIDATION
PCC Chairperson Arsenio
Balisacan highlighted the need
to apply a competition lens to
government policy responses to
the ongoing COVID-19 crisis,
during a keynote speech before
business leaders and managers
in the country.
The occasion was the 2nd Online
General Membership Meeting of
the Management Association of
the Philippines’ (MAP) held last
May 20.
“History has proven, time and
time again, that unchecked
consolidation leads to
coordinated conduct and a rise
in market power. As this crisis is
hoped to be temporary, a sharp
rise in concentration within
industries may create greater
harm to consumers in the
long run,” Balisacan explained.
Noting the expected increase
in the consolidation of firms, he
said the PCC is maintaining a
proactive stance with respect to
merger control.
strictly enforce the Philippine The online forum was a project
As anti-competitive behaviors Competition Act and remains of the MAP Ease of Doing
are more likely during times of vigilant in market monitoring, Business (EODB) Committee.
crisis, he assured his audience enforcement, and evidence- - C. Daquis
that the PCC continues to based advocacy.
PCA NOW PART OF PHILIPPINE BAR EXAMINATIONS
The Philippine Competition Act The Bar Bulletin issued by relevant market, determining
(PCA) is now part of the Bar the SC for the 2020 Bar control or dominance of market,
Examinations administered by Examinations* indicates that determining existence of
the Supreme Court (SC). This the PCA is included in the anti-competitive conduct, and
is a welcome development coverage of the Commercial forbearance by the PCC.
toward the mainstreaming of Law examination. PCA coverage
competition law in the country. includes definition and scope Those preparing to take the bar
Passing the bar examinations of application, powers and may visit PCC’s official website,
is a prerequisite to admission functions of the Philippine www.phcc.gov.ph, for various
to the bar, which in turn is a Competition Commission resources on the PCA.
requirement for legal practice in (PCC), prohibited acts, covered – P. Ballentos
the Philippines. transactions, determining the
* The 2020 Bar Examinations were postponed by the SC due to COVID-19. Per Bar Bulletin No. 13 s 2020, the next Bar Examinations will be
in November 2021.
4
COMPETITION POLICY AN IMPORTANT TOOL FOR INCLUSIVE RECOVERY FROM PANDEMIC
Philippine Competition enforcement toward an inclusive in building a resilient economy.
Commission (PCC) Chairperson economic recovery amid the He also pointed out that the
Arsenio Balisacan joined pandemic. He emphasized the design of policy responses to
colleagues at the Ateneo de dangers of clipping competition the crisis—mitigation, stimulus,
Manila University Department policy enforcement amid the resiliency—needs to be mindful
of Economics in a wide-ranging public health crisis, given its of risks and pro-competitive
online discussion last July 8 on effects on consumers, the solutions.
the impact of the pandemic on poor, and small and medium
entrenched inequalities and how enterprises (SMEs). The Ateneo Economics
competition should be among Department, through a series
government’s tools to address Moreover, Balisacan stressed of webinars, engages scholars,
these. that competition policy experts, and key government
enforcement remains relevant officials to shed light on
He shared his perspective on during the pandemic, especially issues affecting the Philippine
the role of competition policy for the country’s recovery and economy. - L. Gorosin
NEW INDUSTRY STUDIES OUT: PHARMACEUTICALS AND DIGITAL COMMERCE
The PCC recently released the current policy and regulatory
results of two commissioned environment,” Reyes and Tabuga
industry studies: one on the said in their policy note. POLICY NOTE
pharmaceutical sector and the No. 2, Series of 2020
Identifying Chall
other on the digital commerce The issues paper on digital Pharmaceutical
enges in the Ph
ilippine
Industry
market. commerce was published Celia M. Reyes and
Aubrey D. Tabug
a 1
in July. It was written by
Ensuring a reliable
supply of good
medicines is a highly quality, safe, and
salient policy issue effective generics have the
role in the promo due to its crucial same molecule as
tion of healthcare is Kathrex by New the originator. An
is achieved with of the population. example
In June, the PCC published the Ramonette B. Serafica, Marie
the improvement This Myrex. Unbranded
industry’s capaci of the pharmaceutic that carry the name generics are those
ty for al of the molecule
and efficient regulat production and distribution, effectiv Instead, the name
of the
but without a brand.
policies. Based on
ion, and the develo
pment of respon
e packaging. An examp manufacturer acts as the brand
a full report2 on sive le is RiteMed’s Cotrim in the
this Policy Note the pharmaceutic 2007 and 2016, oxazole. Betwee
al industry, the share of generi n
results of a scoping study of Antoinette L. Rosete, Peter Jeff
provides a brief generics) expand cs (branded and
gaps and challen profile and summa ed from 71.2 to unbranded
ges that beset the rizes the 76.1
industry with an country’s pharm total sales (Figure percent of the sector’
emphasis on the aceutical 1). Similarly, the s
dimensions of compe from 32.4 to 43.5 role of
prices, and regulat
ion, to draw insight tition, percent of the overall local firms expanded
and for policym s for immediate market.
aking. action
the pharmaceutical industry by C. Camaro, and Arjan Paulo S.
Figure 1. Distrib
ution of pharmaceutic
al sales by license
The Industry at a Glanc type
e
The pharmaceutic
Celia M. Reyes and Audrey D. Salvanera, all from PIDS. Apart
al industry is robust
2017 data from
IQVIA, the Philipp ly growing. Based
ine pharmaceutic on
is valued at P176 al market
billion. It is a fast-gro
at an average of wing market, expand
8.3 percent per ing
Gross Domestic year—faster than
the country’s
Tabuga, both from the Philippine from presenting the policy,
Product. The rapidly
amidst a vibrant increasing popula
Philippine econom tion
market outlook for y offers an even
the Philippines’ brighter
pharmaceutical
sector.
The industry is charac Source of raw data:
Institute of Development regulatory, and institutional
terized by increas IQVIA Philippine
and an improving ing share of generi s
share of local compa cs
The Philippines’ nies in the market
pharmaceutical . Amidst the increas
three license types market is segme ing role of the generi
- 1) nted into expanding particip cs sector and the
3) unbranded generi originators, 2) branded generics, ation of the Filipino
cs. IQVIA defines and market presence -owned companies,
Studies (PIDS). This issues paper framework for the development
drugs that are first originators as those of multi-national the
to launch within national companies firms remains large.
molecule. An examp a single or combin still capture the Multi-
le ed 56.5 percent based majorit
drug Cotrimoxazole of originator drug for the anti-bio on 2016 data (Figure y of the market at
is Bactrim by Roche. tic because multi-n 2). This is probab
ational companies
Meanwhile, brande
d through the years maintain their portfol ly
and its accompanying policy of e-commerce in the country,
- concentrating mostly io
Policy Notes are on importation of
briefers or streaml
additional inputs ined/condensed
and/or analysis when versions
authored by someon of discussion papers, market studies,
e other than the
The analyses and
conclusions set original paper author,and issues papers. These may
contain
note tackled challenges in the the paper also identified key
reflect the views forth in this Policy or in collaboration
of the Commission Note and any of with other authors
functions under itself. The views its source materia .
the reflected in this l(s) are those of
and circumstances. Philippine Competition Act. PCC Policy the author(s) and
shall independently Note shall not in any way restrict do not necessarily
evaluate each matter PCC’s exercise of
before it based on its powers and
This work is protecte the specific and
industry, with emphasis on the players and possible bottlenecks
d by copyright and relevant facts
should be cited
accordingly.
1 President and Research
Associate, respectively
the Regulation of Prices , Philippine Institute
in the Retail of Drugs for Development Studies
2 The industry scoping and Medicines in February (PIDS). This policy
study from which 2020. note was prepared
dimensions of competition, or constraints to competition in
this Policy Note was before the issuance
drawn from was commission of Executive Order
No. 104 on Improving
ed by the Philippine Access to Healthcare
Competition Commission through
(PCC).
prices, and regulation. The the market. It noted important
1PCC Issues Paper
No. 03, Series of
2020
study showed evidence of issues for further analysis and
ISSUES
PAPER
concentration, consolidation action by the PCC.
and integration in the industry.
PCC Issues Papers aim to
“The presence of concentration, examine the structure, conduct,
consolidation, and integration and performance of select
in the industry suggests that industries to better inform
Issues Paper on
there is a need to examine and guide PCC’s advocacy the Philippine
more deeply any policy, and enforcement initiatives. Digital Commer
ce Market
process, or phenomenon that These papers, along with
inhibits greater competition. other information, education, Ramonette B. Sera
Marie Antoinette fica
L. Rosete
Furthermore, the significant and communication materials
Peter Jeff C. Cam
aro
Arjan Paulo S. Salva
nera
reduction in the number of on competition may be
local manufacturers indicates downloaded from the resources
the inability of some companies section at www.phcc.gov.ph.
to compete under the - C. Daquis
5
Adapting to the New Normal...
continued from page 3 “Mainstreaming sound
In the News discussed with the sector’s key
competition principles has taken
on a greater sense of urgency
players the core competition in a COVID-19-disrupted
Pandemic risks ‘distorting’ market concepts -- enforcement, world, where the economy’s
competition: antitrust watchdog advocacy, merger review, and swift recovery matters more
The Philippine Competition comprehensive economic than ever,” said Balisacan. He
Commission said that the research. added that the PCC, through
COVID-19 pandemic highlighted
the LLO, continues to actively
the need for policies that protect
PHAP expressed its support communicate its position
small businesses.
(ABS-CBN News, 28 May 2020) to the PCC as the country’s and inputs on the effects on
primary competition watchdog. competition of various bills
Value of M&A deals doubled in It noted the importance or legislation affecting trade,
2019 of government support in industry, and commerce.
The Philippine Competition fostering development of the
Commission (PCC) received a total industry. “Moving toward a Commissioners Johannes
of P812 billion worth of merger sustainable future, we hope Benjamin Bernabe, Amabelle
and acquisition transactions last the government, through the Asuncion, and Macario De Claro,
year, doubling the value of M&As PCC, can help the research- Jr., former PCC commissioner
filed with the antitrust body from based pharmaceutical industry and now Representative Stella
2018. with a business environment Luz A. Quimbo, as well as World
(Elijah Felice Rosales, Business
conducive to innovation. Bank senior economist Graciela
Mirror, 2 July 2020)
Building capabilities for Miralles Murciego served as
Justice department issues rules advanced research and resource speakers.
on criminal prosecutions for development, formulating
Competition Act violators policies that support and Likewise, the PCC has continued
The Department of Justice incentivize innovation, forging to provide in-depth seminars to
(DOJ) issued a circular approving public-private partnerships for government agencies. In August,
the rules implementing the pharmaceutical security, and CBAD organized a five-session
criminal provisions of Republic improving access to medicines symposium on Merger Review
Act No. 10667 or the Philippine are necessary steps to achieve for the Governance Commission
Competition Act (PCA). this,” PHAP president Beaver for GOCCs and a three-session
(Vann Marlo M. Villegas, Business Tamesis said. symposium also on merger
World, 2 July 2020) review for the Philippine
Enjoining the public sector in Reclamation Authority (PRA).
PCC to unlock ‘protected’ sectors
mainstreaming competition Representatives of PCC’s
The Philippine Competition
Commission (PCC) is focusing its
principles Mergers and Acquisitions Office
work on seven sectors to unlock (MAO) took the online podium
their full potential long protected The public sector is a key to discuss PCC’s merger control
by regulation. stakeholder of the PCC, regime.
(Malaya Business Insight, 3 July especially the legislative branch
2020) and government-owned Upcoming webinars
and controlled corporations
PCC flags anti-competition (GOCCs), whose laws, policies, As the government continues
provisions in stimulus bills and operations influence the to impose social restrictions
Philippine Competition state of competition in the to safeguard public health,
Commission (PCC) Chairman market. the PCC carries on with its
Arsenio Balisacan has identified advocacy program by reaching
some provisions in the stimulus
In May, the PCC through its out to its stakeholders
package bills that may restrict the
Legislative Liaison Office (LLO) online, empowering them to
enforcement of the Philippine
Competition Act (PCA) to held a Capacity Improvement understand, comply, and help
preserve fair and healthy market on Competition Advocacy in identifying possible anti-
competition. for Legislative Staff (CICALS) competitive conduct in today’s
(Kris Crismundo, Philippine News webinar for the House of markets.
Agency, 8 July 2020) Representatives. CICALS is
a series of capacity-building Those interested in joining
and advocacy seminars for PCC’s webinars may check
the legislative branch, aimed its Facebook page for event
at mainstreaming competition announcements or inquire from
principles in economic the CBAD team (trainings@
legislation. Its first leg was held phcc.gov.ph).
continued on page 7 for the Senate in December
2019.
6
In the News...
continued from page 6
NEW NOTIFICATION RULES FOR PUBLIC-PRIVATE
Report anti-competitive firms
benefiting from crisis — PCC
The Philippine Competition
VENTURES, UNSOLICITED PPP PROJECTS
Commission (PCC) is urging the
public to report companies’ anti- Joint ventures (JVs) between private entities and the government, and
competitive behavior to reduce unsolicited public-private partnership (PPP) projects may be exempted
the risk of businesses taking from compulsory notification, following the PCC’s issuance of two
advantage of the crisis through memorandum circulars last June.
price fixing.
(Jenina P. Ibañez, Business World, PCC Memorandum Circular (MC) No. 2020-001 provides the guidelines
22 July 2020) on the process for exemption from compulsory notification of JV
agreements, pursuant to the National Economic and Development
Antitrust body to ‘carefully’ watch Authority (NEDA) guidelines on JVs between government and private
competition concerns after ABS-
entities. Under the process, the implementing government agencies may
CBN shutdown
The Philippine Competition
file for project exemption from compulsory notification in behalf of the
Commission said it would project proponents or prospective bidders.
“carefully” watch the development
in the free TV industry following For projects under the competitive selection process, the application for
the government shutdown of ABS- project exemption should be filed prior to the issuance of the Invitation
CBN and Congress’ rejection of its to Apply for Eligibility and to Submit a Proposal. For negotiated JVs,
bid for a fresh 25-year franchise. it should be prior to the issuance of the Certification of Successful
(ABS-CBN News, 21 July 2020) Negotiation or Conferment of Original Proponent Status.
M&A transactions to proceed Subsequently, the PCC issued MC No. 2020-002, which provides the
quickly with Bayanihan 2 bill guidelines on the process for exemption from compulsory notification
provision of unsolicited PPP projects, pursuant to the Build-Operate-Transfer
A provision in the Bayanihan
(BOT) Law. Applications for exemptions may be filed by implementing
2 bill, which exempts mergers
government agencies in behalf of the original proponent and prospective
and acquisitions (M&As) worth
below P50 billion from review bidders, any time from the commencement of the negotiations with the
by the Philippine Competition original proponent but before the issuance of a Certificate of Successful
Commission (PCC), is expected to Negotiation under Section 10.8 of the BOT Implementing Rules and
enable transactions to proceed Regulations.
quickly.
(Louella Desiderio, The Philippine Under the two new rules, the PCC will review the application and, if
Star, 31 August 2020) needed, shall render an advisory opinion and require an undertaking to
address any identified competition
PCC pushes transition period concern.
for lower capital requirement for
foreign retail investors These efforts form part of
M&A
The competition regulation body
PCC’s continued streamlining
is proposing a grace period for
of its merger review processes,
the lowering of the capitalization
requirement for foreign retail in line with the government’s
investors. goal of improving ease of doing
(Jenina P. Ibañez, Business World, business in the country. In 2019,
11 September 2020) the PCC launched an expedited
review process for mergers and DASHBOARD
SC decision levels playing field for acquisitions, and issued rules
contractors – PCC for exemption from compulsory Notifications received from
The Philippine Competition notification for solicited PPP January to September 2020:
Commission (PCC) has lauded the projects.
decision of the Supreme Court
(SC) to declare as unconstitutional For more information on these
17
the nationality requirement in processes, the MCs can be Notifications received since
licensing rules for contractors, February 2016:
accessed at www.phcc.gov.ph/
saying this would level the playing
field for local and foreign firms in
category/resources/memorandum-
237
construction projects. circulars/.
(Louella Desiderio, The Philippine
Star, 16 September 2020)
7
other publications
PRIMER
HANDBOOK
How the Philippine Competition Act affects consumers
An overview of
the
FAQs
GU
Philippine Compe
tition Act
IDE
on the Phil
ippine Com
petition
Act
Why com
petiti
on is goo
d for yo
ur bu
siness
Handbook 1
Primer 1
FAQs 1
Guide
for Busin
ess 1
Electronic publications are
available at the PCC website.
www.phcc.gov.ph
Ciara R. Daquis
Editorial Coordinator
Michael Lew C. Madrid
Layout Artist
www.facebook.com/CompetitionPH
www.twitter.com/CompetitionPH
www.phcc.gov.ph
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