Business Mirror - - FRONT PAGE - By David Ca­ga­has­tian

SANS im­ple­ment­ing rules and reg­u­la­tions ( IRR) for its op­er­a­tions, the newly or­ga­nized Philip­pine Com­pe­ti­tion Com­mis­sion ( PCC) or­dered com­pa­nies to re­port merg­ers and ac­qui­si­tion ( M& A) deals amount­ing to at least P1 bil­lion.

The or­der con­tained in Mem­o­ran­dum Cir­cu­lar 16- 002 by PCC Chair­man Arse­nio M. Bal­isacan also re­quires dis­clo­sure of M& A deals if one or both firms in­volved is listed at the Philip­pine Stock Ex­change (PSE).

This re­port­ing re­quire­ment will be im­posed dur­ing the in­terim pe­riod un­til the PCC is able to come up with its IRR, which is ex­pected to be com­pleted be­fore the end of the year. The mem­bers of the newly con­sti­tuted PCC, a quasi- ju­di­cial body that will look into an­ti­com­pet­i­tive prac­tices, will not be af­fected by the end of the Aquino ad­min­is­tra­tion be­cause they were ap­pointed with fixed terms.

Oth­er­wise, such cov­ered deal, which would af­fect the merger or ac­qui­si­tion, shall be con­sid­ered void. Also, this will sub­ject the par­ties to an ad­min­is­tra­tive fine of 1 per­cent to 5 per­cent of the value of the trans­ac­tion.

Even those trans­ac­tions that were not pre­vi­ously re­quired to be re­ported to the PSE or the Se­cu­ri­ties and Ex­change Com­mis­sion (SEC) would now have to be re­ported to the PCC within one work­ing day af­ter the trans­ac­tion oc­curred.

“Par­ties to a cov­ered trans­ac­tion, which is not re­quired to be dis­closed or no­ti­fied to the PSE prior to be­ing con­sum­mated un­der the Se­cu­ri­ties Regulation Code and its im­ple­ment­ing rules and reg­u­la­tions, and is to be con­sum­mated within the cov­ered pe­riod shall no­tify the PCC be­fore the close of busi­ness of the first work­ing day af­ter that in which the cov­ered trans­ac­tion oc­curred through a let­ter ad­dressed to the PCC,” Bal­isacan’s cir­cu­lar said in Para­graph 2.

The cir­cu­lar said the trans­ac­tions over, which the PCC had been no­ti­fied, would be “deemed ap­proved” and, thus, shall en­joy a dis­putable pre­sump­tion that those trans­ac­tions were not vi­o­lat­ing Re­pub­lic Act 10667, or the new com­pe­ti­tion law. Pre­vi­ously, listed cor­po­ra­tions are re­quired only to

dis­close such cov­ered trans­ac­tions to the PSE and the SEC. But with the new com­pe­ti­tion law in place, the PCC is re­quired to be no­ti­fied of those cov­ered trans­ac­tions to en­sure that no an­ti­com­pet­i­tive merg­ers and ac­qui­si­tions will be con­sum­mated.

Some prac­tices that the PCC seeks to pre­vent are the cre­ation of mo­nop­o­lies, duopolies and car­tels. Th­ese en­ti­ties will ul­ti­mately prej­u­dice con­sumers in terms of ped­dling poor qual­ity of goods or ser­vices, like In­ter­net ac­cess, as well as high prices on th­ese goods and ser­vices.

The PCC also seeks to stop, upon a ver­i­fied pe­ti­tion, other an­ti­com­pet­i­tive prac­tices. Some of th­ese prac­tices in­clude a cor­po­ra­tion’s abuse of dom­i­nant po­si­tion in the mar­ket, bid ma­nip­u­la­tions, un­der­min­ing com­peti­tors by ar­ti­fi­cially set­ting prices below the pro­duc­tion cost and im­pos­ing low pur­chase prices over goods of­fered by marginal­ized agri­cul­tural pro­duc­ers and+ mi­cro-, small-, and medium-scale en­ter­prises.

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