PCC, BSP sign cooperation agreement

THE Philippine Competition Commission (PCC) and the Bangko Sentral ng Pilipinas (BSP) on Friday signed an agreement expected to foster competition amid a changing banking industry landscape.

Both agreed to create a streamlined set of rules that will expedite mergers and acquisitions of distressed BSP-supervised financial institutions and those under the Consolidation Program for Rural Banks.

The rules will be promulgated by the anti-trust body in consultation with the central bank.

“The Consolidation Program for Rural Banks is covered under the agreement. There is a special arrangement between the BSP and PCC for that program,” Bangko Sentral Deputy Governor Chuchi Fonacier said.

PCC Chairman Aresnio Balisacan, meanwhile, said the commission would “streamline the process of consolidation or merger review of small banks to ease the proceedings when faced with the threat of a bank run or bankruptcy.”

The central bank can certify the urgency of concluding a proposed merger or acquisition and also request exemptions from requirements such as prior notification of the PCC.

“The PCC and BSP have common interests in the regulation of bank and non-bank financial institutions. In regulating banks, the PCC acknowledges that while financial institutions serve as the intermediary for money, banking and credit that businesses rely on, they themselves operate as businesses too,” Balisacan said.

“This partnership is a strong push towards efficient regulatory approach concerning the banking and financial industry. BSP’s mandate is in promoting and maintaining stability in the monetary and financial system, while PCC’s obligation is in promoting free and fair competition,” he added.

The PCC is mandated under the Philippine Competition Act to review mergers and acquisitions to ensure that these deals will not prejudice consumers.

The agreement with the BSP is the third partnership signed for the quarter following tieups with the Commission on Audit in November and with the Philippine Statistics Authority earlier this week.