Introduction

The Philippine Competition Act (PCA) was signed into law in 2015 and
establishedthePhilippinesfirstcomprehensivecompetitionlaw.PriortothePCA,the
Philippinesreliedonscatteredprovisionsoflawforredressonunfairtradepractices.
ThesecompetitionlawprovisionsarefoundintheConstitution,theRevisedPenalCode,
theCivilCode,andotherspeciallawsgoverningvarioussectorsoftheindustry.The
existence of many fragmented laws pertaining to competition made its enforcement
challengingifnotfutile.ThePCAcreatedthePhilippineCompetitionCommission(PCC)
tobeanindependentquasijudicialbodytoimplementthenationalcompetitionpolicy
andenforcethePCA.1Withrespecttosectorregulators,thePCCmaintainsoriginaland
primaryjurisdictiontoresolveissuesthatinvolvebothcompetitionandnoncompetition
matters.2
Lessthanayearsincethelawtookeffect,thepowersofthePCCwasputtotest.
Twosectorregulators,theSecuritiesandExchangeCommission(SEC)andtheNational
Telecommunications Commission (NTC) ruled on issues concerning their respective
sectorsthatmayhaveanimpactoncompetitionthuswithinthejurisdictionofthePCC.
In the first test case, SEC turned down the exemptive relief sought by the
PhilippineStockExchange(PSE)toincreaseitsstakeinthePhilippineDealingSystem
(PDS)to67percent.3ThePSEPDSdealwouldhavecreatedaunifiedtradingplatformin
thecountryinlinewithglobalbestpractices. 4 TheSEC, exercising itspowersunder
Section33.2oftheSecuritiesRegulationCode,turneddownthedealonthegroundthat
PSEfailedtosubstantiateitsclaimandthatthedealwillcreateadefactomonopoly.The
PSEPDSdealdidgetthebenefitofathoroughreviewprocessbythePCCbecausethe
SECstoppeditatitsinception.
Inthesecondtestcase,NTCreallocated700megahertzoffrequencyownedby
VegaTelecom,Inc.(VTI),SanMiguelCorporationsholdingcompanyofitstelecom
assets,toPhilippineLongDistanceCompany(PLDT)andGlobeTelecom,Inc.ona50
50basis.NTCspowertoallocatefrequenciesisfoundinSection4(c)ofthePublic
Telecommunications PolicyActofthePhilippines.SMCdecidedtogiveupthesaid
frequencywhenitsdealwithTelstradidnotmaterialize.Thereallocationoffrequency
cementedtheduopolyinthetelecommunicationsectorandcompletelyshutdownthe
opportunityofhavingathirdpartyplayer.Tosolidifytheirrightsoverthereallocated
frequencies,PLDTandGlobe,purchasedSMCsstakeinVTIsimilarlyona5050basis.
Both PLDT and Globe blocked PCCs attempt to review the acquisition by filing a
PetitionforCertiorari,ProhibitionandMandamuswithInjunctionbeforetheCourtof
Appeals.PLDTandGlobeclaimedthattheacquisitionisdeemedapprovedunderPCCs
transitoryruleshencenolongersubjecttoreview.Similarly,PLDTandGlobeargued
that the NTC has exclusive jurisdiction over transactions involving allocation of
1 Sec. 5, PCA.
2 Section 32, PCA.
3 Verify with Atty. Refran
4 http://business.inquirer.net/205859/pse-pds-merger-engagement-onthe-rocks

frequencies including the determination of whether the allocation is anticompetitive

underSections4(c),5(d),5(f)ofthePublicTelecommunicationsPolicyAct. 5Todate,
theCourtofAppealsdeniedtheinjunctionbutconsolidatedthepetitionsofPLDTand
Globe for resolution. Pending final resolution of the deal, both parties continue to
experiencedeclineintheirrespectiveshareprices.6
Thetwotestcasesshowtheimportanceofclearlydelineatingthejurisdictionof
betweenthePCCandthesectorregulators. Untiltheroleoftheseagenciesarefinally
settled,dealsthatmaybeforthegreaterbenefitofconsumerswillnotseethelightofday
becauseofregulatoryhurdles.Inthesamevein,dealsthatwilleventuallybedetrimental
toconsumersmaypassthroughthestandardsofsectorregulatorsandescapereviewfrom
the PCC. A thorough and accurate review of acquisitions from a competition law
perspectiveisofforemostimportance.[restateyourlegalissue,inonesentence]

Recommendation
The proponent suggests the amendment of Section 32 of the PCA to clearly
delineate the relationship between sector regulators and the PCC hence avoiding
conflictingdecisions.Section32shouldberewordedasfollows:
Section32.RelationshipwithSectorRegulators.TheCommissionshall
haveoriginalandprimaryjurisdictionintheenforcementandregulationof
allcompetitionrelatedissues.
TheCommissionmaintainsitsoriginalandprimaryjurisdictionifthe
issue involves both competition and noncompetition issues, but the
concerned sector regulator shall be consulted and afforded reasonable
opportunity to submit its own opinion and recommendation on the
noncompetitionissue beforetheCommissionmakesadecisiononany
case. Opinions and recommendations shall be considered by the
Commission no weight?.[ im not sure ha, but you might consider not
putting no weight. Instead youcould say, remain persuasive, and
subjecttoapproval,adoptionorreversalofthePCC]
Whereappropriate,theCommissionandthesectorregulatorsshallwork
together to issue rules and regulations to promote competition, protect
consumers, and prevent abuse of market power by dominant players
5 Petition G.R. No. 146538
6 http://www.rappler.com/business/industries/172-telecommunicationsmedia/136274-pldt-globe-shares-down-pcc

within their respective sectors. [ how?, cite concrete and workable

examples,ingatkalangditto,rememberCharlescomment]
Further,theThe definitionoftermsshould likewise beamendedtoclarifythe
meaningofthetermscompetitionissueandnoncompetitionissue.
Section4.DefinitionofTerms.AsusedinthisAct:

(e) Competitionissue referstomatterscoveredbytheprovisionsofthis

Act;
(l) Noncompetitionissue referstocommercial,technicalandregulatory
matterscoveredbythetechnicalexpertiseofsectorregulators

[statepreciselyandaccuratelythedifferencebetweenyoursandtheoldones,
noneedtocopytheoldonesverbatim,justexplainthemsiguro]
ToincorporatethefindingsinthisstudythattheNTCandERChavecompetition
mandates[findabetterword,authoritytoruleoncompetitionmatters],which
arerecognizedunderthebylaw,Section17ofthePCAshouldbeamendedasfollows:
Section17.CompulsoryNotification.Partiestoamergeroracquisition
agreement
A favorable recommendation by a government agency with a
competition mandate such as the NTC and ERC shall give rise to a
disputable resumption that the proposed merger or acquisition is not
violativeofthisAct.
Recommendationsandopinionsofothergovernmentagencies
withnocompetitionmandateshallbegovernedbySection32ofthis
Act.
BelowisadraftsupplementtotheIRRofthePCAprovidingtheguidelinesand
stepswhichthattheagenciesmustfollow,towitundertake:(goodIRR)
SUPPLEMENTTOTHERULESANDREGULATIONSTO
IMPLEMENT
SECTION45OFREPUBLICACTNO.10667
ToeffectivelycarryoutSection45ofRepublicActNo.10667,orthe
Philippine Competition Act (Act), the Philippine Competition
CommissionpursuanttothepowersvestedinitundersaidAct,hereby
issues, adopts and promulgates the following guidelines, rules and
regulations.

TheCommissionmayreviseandsupplementtheserulesandregulations
andissuerelatedguidelines,circularsandothersubsidiaryissuancesasit
deems necessary for the effective implementation of the various
provisions(namethemunlessyoumeantthewholelaw)ofthisAct.

Section 1. Title. These rules and regulations shall be referred to as

Supplementing Rules Implementing Section 45 of Republic Act No.
106667(SupplementingRule).
Section2.Scope. (explain thisinyourspeech thiswilldefinitelybe
asked)
a. These Supplementing Rules shall apply to any entity
engagedintrade,industryorcommerceintheRepublicof
the Philippines or in international trade, industry or
commerce having direct, substantial and reasonably
foreseeableeffectsinthePhilippines,includingthosethat
result from acts done outside the territory of the
Philippines.
b. These Supplementing Rules shall not apply to the
combinationsoractivitiesofworkersoremployeesnor
to agreements or arrangements with their employers
when such combinations, activities, agreements, or
arrangementsaredesignedsolelytofacilitatecollective
bargaininginrespectofconditionsofemployment.
Section 3. General Principles on the Relationship with Sector
Regulators.
a. The Philippine Competition Commission and sector regulators
should at all times strive to work together and avoid taking
conflictingpositions.
b. TheCommissionshallhaveoriginalandexclusivejurisdictionin
theenforcementandregulationofallcompetitionrelatedissues.
(good)
c. TheCommissionshall still havejurisdiction ifthe on issuesthat
involvesbothcompetitionandnoncompetitionmattersissues,but
theconcernedsectorregulatorshallbeconsultedandafforded
reasonable opportunity to submit its own opinion and
recommendationonthematterbeforetheCommissionmakes
adecisiononanycase(reword,butthisisgood).

d. The sector regulator shall have exclusive jurisdiction over

regulationissues(combinethiswith[b]).
e. Whereappropriate,theCommissionandthesectorregulators
shallworktogethertoissuerulesandregulationstopromote
competition,protectconsumers,andpreventabuseofmarket
powerbydominantplayerswithintheirrespectivesectors(put
thisin[a]).
Section 4. Relationship with the NTC. The NTC cannot exercise its
powers under Section 5 (d) and (f) of the Public Telecommunications
PolicyActofthePhilippineswithouttheinvolvement(reword) ofthe
PCC.Anyactionaffectingunfairtradepracticesanduseofmonopolistic
powers of telecommunication carriers should be submitted to the
PhilippineCompetitionCommission.(good)
Upon submission of these matters to the Philippine Competition
Commission, a Joint Committee shall be created comprised of two
representativesfromtheNTCandtworepresentativesfromthePCCto
reviewthetransaction.TheCommitteeshallsubmittheirrecommendation
withinten(10)workingdaystothePhilippineCompetitionCommission.
TheirrecommendationisnotbindingonthePhilippineCompetition
Commissionwhichshallmakeafinaldecisionwithinfive(5)working
daysfromsubmissionoftherecommendation.(reword,beconsciousof
Charlescomments)

Section 5. Relationship with the ERC. The ERC cannot exercise its
powers under Section 45 of the Electric Power Industry Reform Act
without the involvement of the PCC. Any action affecting cross
ownership,marketpowerabuseandanticompetitivebehaviorofelectric
powerindustryplayersshouldbesubmittedtothePhilippineCompetition
Commission.
Upon submission of these matters to the Philippine Competition
Commission, a Joint Committee shall be created comprised of two
representativesfromtheERCandtworepresentativesfromthePCCto
reviewthetransaction.TheCommitteeshallsubmittheirrecommendation
withinten(10)workingdaystothePhilippineCompetitionCommission.
Their recommendation is not binding on the Philippine Competition
Commissionwhichshallmakeafinaldecisionwithinfive(5)working
daysfromsubmissionoftherecommendation.

Section6.RevisionsoftheseRules. TheCommissionmayrevisethese
Supplementing Rules whenever it deems necessary and after due
consultationwithaffectedstakeholders.
Section 7. Separability clause. Should any provision herein be
subsequently declared unconstitutional, the same shall not affect the
validityorlegalityoftheotherprovisions.
Section8.Effectivity.TheseSupplementingRulesshalltakeeffectwithin
fifteen(15)daysafterthedateofitspublicationinatleasttwo(2)
newspapersofgeneralcirculation.
Approved,this15thdayofAugust2016.