Competition policy: Making it work for recovery in 2021 and beyond

In last week’s column, I discussed how, despite the tumultuous year that was 2020, the Philippine Competition Commission (PCC) has remained steadfast in its commitment to protect fair competition in our markets and advance the welfare of Filipino consumers. Mindful of anti-competitive forces that threaten to exacerbate the significant economic losses due to the pandemic, we were prepared to f lex our enforcement muscle and step up advocacy efforts to ensure pro-competitive solutions to the crisis.

This year, as we tread the uncertain and uneven path to recovery, the Commission’s topmost priority remains unchanged: effectively investigate and enforce prohibitions on anti-competitive agreements and conduct. having adjusted to the new normal and gleaning from the past years’ lessons, we stand ready to exercise our full enforcement powers.

here are our main thrust and plans for 2021.

Competition analysis and enforcement this year will focus on e-commerce, health and pharmaceuticals, insurance, logistics and shipping, energy and electricity, water supply and distribution, real estate, and food—essential sectors that have become even more relevant due to the ongoing pandemic.

On enforcement, to boost investigation and case-building, we will establish a digital forensics laboratory and develop an in-house bid-rigging screening system through BRIGADE (Bid Rigging Intelligence Gathering and Detection for enforcement) project, an undertaking with support from the Korean government. We will revitalize our investigation of possible bid-rigging in public procurement and anti-competitive issues in the priority sectors by working with task forces involving other government agencies.

The Bayanihan to Recover as One Act, also known as Bayanihan II, has suspended the review of mergers and acquisitions (M&AS) until September 2021. In the interim, we will be monitoring priority markets for possible M&AS that substantially lessen competition. To gear up for the return of our motu proprio review powers, we will improve PCC staff capacity and streamline internal processes. Noting the gains from effective policy communication, we will also continue to encourage the private sector to voluntarily notify and consult with the Commission.

Cognizant that much cannot be achieved without mainstreaming competition policy, we will amplify our advocacy efforts this year. In particular, we will engage the Legislative-executive Development Advisory Council to include pro-competitive legislation in the Common Legislative Agenda and to require the review of priority legislation using the competition lens.

Following the success of similar efforts last year, we will continue to monitor court cases that may affect competition in important sectors and provide valuable inputs to the courts. We will also launch a second capacity-building workshop for Senate legislative staff and a seminar series for local government units in Metro Manila.

This year, we will broaden our enforcement networks by establishing and reinforcing ties with other competition authorities, particularly those of Singapore, Japan, Korea, Australia, and Mexico. Locally, we aim to strengthen and formalize ties with local sector regulators such as the Department of health, Department of Information and Communications Technology, Governance Commission for GOCCS, Food and Drug Administration, and National Telecommunications Commission.

In terms of research, we will continue producing quality studies to support our enforcement and advocacy efforts. In particular, we will study the impact of subsidies and subsidy-like measures relative to Covid-19 relief and recovery efforts such as the Bayanihan I and II Acts.

Moreover, we will conduct an expost impact assessment of the Commission’s enforcement and merger decisions over the past years. Our aim here is to improve the effectiveness of PCC’S decision-making practices and obtain evidence of the benefits of competition policy. In the same vein, we will tap the assistance of the Organization for economic Cooperation and Development for a third-party peer review of PCC’S enforcement rules, processes, and policy outcomes after five years of operations. Such review will allow us to benchmark against more mature antitrust authorities.

Finally, as we expand our enforcement and advocacy work, we will continue to strengthen our institutional capacity to increase PCC’S productivity and effectiveness, especially in view of plans to establish regional offices in Cebu and Davao by 2022.

The pandemic-induced economic crisis last year has sidetracked the country’s growth trajectory. And the path to recovery looks daunting, requiring a huge undertaking from both the private and public sector. The same is expected for the postrecovery development, or even more, depending on our current policy choices. however it may be, competition policy is a key pillar to achieving economic development that is both sustainable and pro-poor.

Indeed, 2020 had been a tough year, more so than any other in our lifetime. Yet, I am proud to say that the PCC has emerged stronger and wiser from it. Just as we have done since the PCC came into being almost five years ago, let me assure the Filipino people that, whether in a crisis or not, its Competition Commission will work tirelessly for the protection of competition in our markets and the advancement of consumer welfare and inclusive development.

Dr. Arsenio M. Balisacan is the chairman of the Philippine Competition Commission. Prior to his appointment to the Commission, he served as socioeconomic planning secretary and, concurrently, director general of the National Economic and Development Authority. He also served as dean of the School of Economics in UP Diliman and directorchief executive of SEARCA.