Making Competition Policy Work in the Philippines

ADB support for the Philippine Competition Commission will build staff skills and support effective enforcement of new law

Nearly four years after it started operations, the Philippine Competition Commission (PCC)–the country’s antitrust authority–is still unknown to most Filipinos. Often, the agency is mistaken for overseeing more popular forms of competition that has nothing to do with their advocacy.

“When we say competition, what people have in mind is the Miss Universe, basketball, and other sports,” said Mr. Arsenio Balisacan, chair of the PCC and former socioeconomic planning secretary. “People, even those from the business community, know little about our country’s competition policy.”

Mr. Balisacan wants to change all that, and Asian Development Bank (ADB) is throwing its support.

The quasi-judicial body PCC is tasked to implement the national competition policy as embodied in the Philippine Competition Act (PCA) of 2015. The law aims to protect consumers’ well-being and ensures efficient market competition by encouraging free and open markets and challenging anticompetitive business practices, while seeking to maintain an environment where businesses compete based on service or product quality.

Under the new $23.3 million Capacity Building to Foster Competition Project, ADB will help strengthen the capacity of PCC staff to carry out the agency’s mandate, further develop the institutional capability of PCC, and help nurture an academic center of excellence in competition law and policy in the University of the Philippines (UP).

“Our approach is to develop a culture of competition in the country, starting with the government, moving to the academe, then business. And within government, you have the executive branch, judiciary and legislative. All of them are important players in the core competition landscape,” Mr. Balisacan said. “With this loan program, we cover the whole spectrum.”

Building a Center of Excellence

To build awareness and expertise on the country’s competition law and its importance in ensuring the country remains on a steady growth path, PCC will coordinate with UP to develop a curriculum in its College of Law that revolves around the PCA and its implementing rules.

“UP will serve as the nucleus. But all the other schools will also benefit from the research, and the curriculum that they will develop,” Mr. Balisacan said. “If the competition law is in their curriculum, when the students graduate and join the private sector, it will no longer be new to them.  So they should be able to help with compliance.”

UP is also expected to provide the training and capacity building for employees of the country’s various courts, and other government agencies tasked to implement the PCA. If the Philippines maintains its momentum as one of the region’s fastest growing economies with an annual average of 6.3% since 2010, the country, and UP, can become a center of excellence for competition law for the entire Southeast Asia, Mr. Balisacan said.

Through the new ADB assistance, technical skills training and further studies on competition law will be offered to further build the expertise of PCC staff. Experts in competition law from other countries will also be brought in to ensure PCC staff are up to date with latest innovation on competition enforcement.

“We know from international best practices that it is the people inside PCC that makes it successful. That is why we developed our Capacity Building to Foster Competition Project with PCC to help make the agency the best competition law enforcer in Asia-Pacific,” said ADB Philippines Country Director Mr. Kelly Bird. “What I like about this project are the innovative pathways to build PCC staff skills and capacity from on-the-job training, secondments to overseas competition bodies, scholarships for short- to long-term education, and the establishment of the Center for Excellence at UP,”  Mr. Bird said.

Gains in enforcement of competition law

In 2018, the Philippines climbed three notches to 5th place out of 10 most active Asia Pacific countries in antitrust enforcement and policy, according to the findings of the 2019 Global Trends Monitor published by the global competition news and analysis company PaRR. The country overtook Indonesia, Japan, and Hong Kong, China in the latest report.

Since 2016, PCC has received and approved mergers and acquisitions-type of transactions worth a total 3.28 trillion pesos ($64 billion). It has also handled 13 enforcement cases, of which 3 have been resolved and closed, as well as 302 queries on minor issues related to the PCA implementation.

In one recently resolved case, the PCC imposed a fine of 23.5 million pesos ($460,784) on ride-hailing firm Grab for breaching its initial price commitments, and ordered the firm to refund its customers a total of 5 million pesos for overcharges monitored from February to May 2019.

While the Philippines was the last among the five largest Southeast Asian nations to enact its Competition law, the country learned from the experiences of its neighbors when it crafted the PCA and its implementing rules. The result was a robust set of procedures that could withstand legal challenges and tough economic analysis, Mr. Balisacan said.

Crafting implementing rules with ADB support

ADB provided assistance to PCC during its early years, including manpower support via consultants and experts on competition law and policy from other countries who helped PCC in crafting the implementing rules of the competition law.

“ADB has been with us from the very start,” he said. “We were so fortunate to have access to an ADB technical assistance, and ADB did its best to provide us with the resources that we needed.”

Since the implementation of the Philippine Competition Act in early 2016, regional neighbors Thailand and Vietnam amended their competition policy, while competition commissioners from Myanmar came to the Philippines to observe and learn from PCC. Cambodia and Laos are also interested to study PCC’s experience.

From only five staff borrowed from other government agencies in 2016, the PCC has since grown with close to 200 staff and consultants now. The agency is preparing to set up extension offices in Cebu City in central Philippines and Davao City in the south in two years, with the help of ADB.

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