PCC exempts public-private JV from merger notification

The Philippine Competition Commission (PCC) has issued rules to exempt joint venture (JV) projects between government agencies and private entities pursued under the framework of the National Economic and Development Authority (NEDA) guidelines from compulsory merger notification.

In PCC Memorandum Circular (MC) 20-001, the competition authority provided the process for the exemption from compulsory notification of a JV entered into by a private entity and government agency for a project pursuant to the NEDA’s JV guidelines.

Under the circular, agencies may seek exemption from compulsory notification on behalf of their prospective bidders or proponents by filing an application for a certificate of project exemption with the PCC.

To qualify for the exemption, the application should be made prior to the issuance of invitation to apply for eligibility and to submit proposals for projects under the competitive selection process.

For negotiated JV projects, the application should be given to PCC before the certificate of successful negotiation or conferment of original proponent status.

The PCC will then review the application and the project documents.

In its review, the PCC would provide inputs on the project documents and assess how the JV project may affect competition in the relevant markets.

Should there be competition concerns in the review, PCC may require the prospective bidders to undertake specific commitments to address them.

If the implementing agency adopts PCC’s inputs in the final project documents, a certificate of project exemption in favor of the prospective winning private sector participant would then be issued by the PCC.

Failure to follow the requirements under the circular would mean the government agency and the winning private sector firm would have to file notifications under the regular merger review process.

The MC will take effect starting July 11.

“The PCC has been continuously streamlining its processes in support of the government’s push to ease doing business. Significantly, PCC’s issuance of these rules is aligned with the government’s relief, recovery and resiliency efforts, which direct the speedy roll-out of critical infrastructure projects in response to the current crisis,” PCC chairman Arsenio Balisacan said.