The Philippine Chamber of Commerce and Industry (PCCI) sees a sustained strong economy with the bicameral ratification of the Fair Competition Act as the measure is expected to curb unfair and anti-competitive trade practices and help level the playing field for all companies operating in the country.
The bill, which was ratified by Congress last week and is now awaiting the signature of President Aquino, is also deemed critical in attracting more foreign investments, making local firms more competitive amid an integrated regional economy and in improving the overall business climate in the country.
“This law will push businesses to engage in a healthy rivalry so that they will gain more consumers. It gives us the incentive to be more efficient and to offer the public better quality products and services,” PCCI president Alfredo M. Yao said. “We have long held that anti-competitive behavior is injurious to a strong economy because an uneven playing field contributes to inefficiency and the misallocation of resources. When it becomes law, the Fair Trade Act allows even small firms entry into the market with the expectation that rules will be applied equally to all.”
“When businesses engage in unfair practices just because they do not have anyone competing with them for consumers, it is really the consumer who suffers through high prices and limited choices,” Yao explained.
Foreign business groups have long stressed the importance of having a Fair Competition Act in boosting the stance of the Philippines as a highly lucrative investment destination.
The European Chamber of Commerce in the Philippines said in an advocacy paper released last month that it fully supported the passage of a national competition law, as this would “ensure a level playing field for business, protect consumer welfare and make the Philippine economy more competitive, especially in the context of satisfying high level commitments to components such as fair competition under potential free-trade agreements with the European Union and the European Free Trade Association as well as the Trans Pacific Partnership.”
European Union ambassador to the Philippines Guy Ledoux had also commented that the Fair Competition Act and the Customs Modernization and Tariff Act were two of the economic reforms seen critical in further enhancing bilateral relations between the country and the 28-member regional bloc.
Even Trade Secretary Gregory L. Domingo earlier called for a speedy passage of the proposed law in order to sustain a robust economic growth.
The Fair Competition Act provides penalties for prohibited anti-competitive agreements, mergers or acquisitions that substantially restrict competition, and abuse of dominant position. Under this act, administrative fines of up to P250 million may be imposed, with the amounts subject to adjustment every five years. Criminal penalties also include imprisonment of up to seven years.
It also seeks to create an independent Philippine Competition Commission to be composed of one Cabinet secretary-level chair and four commissioners serving for seven years without reappointment.