ADB grants PCC $23.3-M loan to boost capability
THE Asian Development Bank (ADB) has approved a $23.3million loan to support the Philippine Competition Commission (PCC) in its effort to invest in better investigation strategies and competition education.
In a joint ADB and PCC briefing on Wednesday, ADB Principal Country Specialist for the Philippines Cristina Lozano said after the first phase of the project, the bank could extend another $23.3 million to continue the project.
The concessional loan has a grace period of nine years and will be payable in 28 years. The interest rate to be used is the London interbank offered rate (Libor).
“From the perspective of ADB, the current government has had a very proactive reform program both in economic and social policy. But the next big reform in the Philippines is really about effective implementation of competition law and a national competition policy,” ADB Country Director for the Philippines Kelly Bird said. “That’s important if the Philippines is to maintain that economic growth rate above 6 percent for the medium to long term.”
PCC Chairman Arsenio M. Balisacan said apart from maintaining high economic growth, better competition will also help sustain the gains in poverty reduction.
The preliminary data released by Philippine Statistics Authority (PSA) revealed poverty incidence nationwide was pegged at 16.6 percent in 2018, only 2.6 percentage points away from the 14 percent target by 2022.
This translates to 17.6 million Filipinos who lived below the poverty threshold estimated at P10,727, on average, for a family of five per month in 2018.
“Poverty has a lot to do with not just incomes but also with the prices of consumers pay for goods and services, and sectors that are so crucial, so critical for the poor are food and food, as you know, has been quite high in this country,” Balisacan said.
The Socioeconomic Planning secretary turned PCC chairman explained without an effective competition policy, anticompetitive practices will continue in the country.
This now affects the price of goods and services, as well as the quality of these products. Balisacan said the lack of competition in the market “inhibits [market] innovation.”
The six-year project has three key components which are: strengthening institutional capacity of the PCC; developing a government staff development program for competition; and the establishment of an academic Center of Excellence (COE) in Competition Law and Policy.
The first component on strengthening the PCC involves improving investigation techniques, formulating enforcement guidelines, providing economic analyses to support investigations, and the conduct of market studies, among others.
Under the second component, the PCC will be granting shortterm and degree programs for government workers, not just for the antitrust body’s own staff. These programs may be local or foreign in nature.
It can be noted that other state agencies with competition-related mandates include the National Economic and Development Authority, Department of Justice, and the Office of the Solicitor General.
The third component aims to establish a COE at the University of the Philippines College of Law on Competition law and policies. The center is already up and running since the PCC signed a memorandum of agreement with UP in August.
The Philippines has substantially improved its enforcement of the competition law. In 2018, the Philippines climbed three notches to fifth place out of the 10 most active countries in Asia and the Pacific in antitrust enforcement and policy.
This was according to the findings of the 2019 Global Trends Monitor published by the global competition news and analysis company PaRR.