Independent federal competition authority eyed in new Constitution

A CONSTITUTIONALLY mandated federal competition authority with national powers is being eyed in the new Charter being drafted by the Consultative Committee (Concom) tasked by President Rodrigo Duterte to review the 1987 Constitution.

Concom member Arthur Aguilar, chairperson of the subcommittee on economic reforms, said this competition authority will have powers strong enough to ensure fair and healthy competition and go after monopolies, oligopolies, and cartels.

These are among the practices that restrain trade and commerce, deny competition, upset free-market structures, impose market domination or perpetrate rentseeking behavior.

Aguilar said this competition authority can also prevent economic domination in any of the proposed federated regions.

“If we liberalize the economy, we want to make sure that no anticompetetive behavior emerges, especially

Continued from page 1 when we create federated regions and they will have their own economic powers. They cannot be allowed to have their own monopoly,” Aguilar said.

This competition authority, he said, will have powers to intervene in the regions and prevent the capture of a region by one or two business groups, as well as anticompetitive behavior and practices.

Under the proposed federal government, Aguilar said that federated regions are given economic powers and will become strong drivers of economic development. However, big business may go down to the regions and dominate from there.

“One business group could go down the region and say…we will dominate there…and that cannot be allowed. (The federated regions) won't have power to enact anything that would be anti-competitive; they don’t have the power to create their own competition authority, they cannot create their own rules on how to regulate monopoly, they should follow the federal (competition authority),” Aguilar said.

“It’s to make sure that the consumers enjoy an economic market where there is no abuse of market power and they don’t end up buying one piece of good that’s higher than their counterpart in Ma- laysia or Thailand because the guy who’s making it has monopoly,” he added.

According to Aguilar, this competition authority will also send out a message to investors that the future being envisioned is “an economy that takes great effort to ensure that there is always free market competition.”

At present, there is only one section under Article XII on National Economy and Patrimony in the 1987 Constitution on monopolies and competition. The section reads: “The State shall regulate or prohibit monopolies when the public interest so requires. No combination in restraint of trade or unfair competition shall be allowed.”

Aguilar pointed out that there already is the Philippine Competition Commission (PCC) created by law. However, there is a need to clothe it with powers under a federal set up.

By giving competition authority the federal powers, it will strengthen provisions against monopolies and unfair and/ or inefficient market structures as a prerequisite to economic liberalization.

Independent Aside from having federal powers, the competition authority, will also be “clothed with independence” to insulate it from political pressure and influence. Right now, the PCC is under the executive branch of government, Concom Senior Technical Assistant and spokesman Ding Generoso said.

“What is the Concom looking at when it says that there should be a constitutional body that will enforce policies on competition? It simply means that that agency of government will have to be in the nature of being independent of the other branches of government,” Generoso said.

He explained that this proposed competition authority will be in the same mold as the other constitutional bodies -the Commission on Audit (COA), Commission on Elections, Civil Service Commission (CSC), and the Office of the Ombudsman, but not necessarily the same powers.

"These constitutional bodies are independent of the other three branches of government, meaning the three branches do not interfere directly in their operations,” Generoso said.

Aguilar said the Comcom will use the current structure of the PCC as a guide in determining the structure and powers of the federal competition authority. The subcommittee on constitutional bodies will be determining whether it would be a full constitutional body like the others or slightly different.

“You know, we have constitutional bodies now with fiscal autonomy. You cannot remove the officers there except by impeachment and security of tenure. What we have envisioned is definitely to ensure independence and security of tenure within a fixed term similar to our bodies right now,” he said.

“The institutional design will be studied and deliberated on in the subcommitee on constitutional bodies. But what is clear is that we want to clothe it with clearer and more powers, including powers in the federated regions.”

Aguilar, meanwhile, said the PCC has already submitted its position paper and proposals on how the provision can be enhanced and what will be the Commission’s role under a federal set-up.