Lawmakers want to keep ‘Bayanihan 2’ terms for M&As

Lawmakers want to let corporations merge and buy other companies without being cleared by the Philippine Competition Commission (PCC) provided the merger and acquisition (M&A) will involve not more than P50 billion.

When asked by the PCC for the basis of this position, the chair of the House committee said she took offense and then dismissed the question.

The House committee on economic affairs approved on Wednesday the committee report and substitute bill that would amend the country’s competition act, keeping the P50-billion threshold—which was 20 times the prepandemic requirement—that was first introduced without proper consultation as a temporary measure under Bayanihan to Recover As One Act, or Bayanihan 2.

During the public hearing on Wednesday, PCC Commissioner Johannes Bernabe asked the lawmakers for the basis of the P50-billion threshold, especially since, based on PCC’s data, problematic M&As hardly reach that amount. In PCC’s experience, he said the deals that raised competition concerns involved an average of only P3.5 billion, with the highest being P24 billion.

Problematic transactions

“We are wondering where the P50 billion comes from, given all of the data which would suggest the range—where problematic transactions occur—is nowhere near P50 billion,” Bernabe said in a hearing via Zoom.

In response to Bernabe, Aambis-Owa party list Rep. Sharon Garin, who chaired the committee, said their logic should not even be questioned in the first place.

“I think 75 percent of the discussion of the TWG (technical working group) was [about] the P50 billion. I will not belittle the discussion that was undertaken in the TWG. I would not even question how they have arrived at P50 billion (the proposed threshold),” she replied.

“I take offense that you question [it]. It seems like you’re implying there’s no basis. But in defense of the TWG, it was really a long [discussion]. We didn’t resolve it until … we arrived with a politically and economically correct figure,” she added, without offering any basis for their decision.

Under Bayanihan 2, the threshold was only supposed to stay for two years. For a year, the law barred the PCC from pursuing any review of any deals priced below P50 billion. When Bayanihan 2 was passed in a bicameral committee last year, the Inquirer learned that the PCC was not consulted about the provision, especially since it didn’t exist in the earlier approved versions in the House of Representatives and the Senate.

Now, lawmakers, including former PCC Commissioner Rep. Stella Luz Quimbo, want to keep this threshold for good.

Quimbo said they are not stripping the PCC of any of its powers. She said the bill explicitly states that the PCC can review any merger at its own initiative, no matter the amount, which is called a motu proprio review. She said the new threshold was actually a “compromise” to give businesses the option to volunteer to be reviewed.

Compromise

“That became the compromise because my initial proposal was to remove the threshold [in its entirety] and at the same time make everything voluntary,” she said in Filipino.

Bernabe, in a phone interview with the Inquirer on Thursday, said the substitute bill essentially added nothing new to what was already the practice in the PCC. He said they could already do motu proprio reviews, which was why the PCC managed to review Grab Philippines’ acquisition of Uber Philippines even though the latter didn’t meet the notification thresholds then.

The only new provision in the bill, he said, is the P50-billion threshold. INQ