PCC set to start reviewing M&A deals again
The country’s antitrust body can finally start probing again potentially problematic mergers and acquisitions (M&As), about a year after lawmakers barred it from doing so in light of the pandemic.
The Philippine Competition Commission (PCC) said in a statement on Wednesday that it could now go over M&A deals, regardless of size, motu proprio as the year-long moratorium under the Bayanihan 2 Law expired on Sept. 15.
The moratorium was inserted by the bicameral committee that reconciled the two versions of the bill that later became the Bayanihan to Recover As One Act.
Moreover, the Bayanihan 2 also raised the threshold for notification of deals for PCC clearance to P50 billion from the prepandemic level of only about P2.4 billion. Previously, all deals involving P2.4 billion and above had to pass through PCC for clearance.
However, the Bayanihan 2 law provided that only deals involving P50 billion or more were subject to PCC scrutiny. Even with the expiration of the Bayanihan 2 law, this provision remains. Businesses are still not required to submit their M&A plans for scrutiny if the amount involved is less than P50 billion, but the PCC can opt to launch an investigation of a deal regardless of size if it deems it necessary.
PCC chair Arsenio Balisacan is still hopeful that the return of their motu proprio review powers can serve as a deterrent to deals that can harm consumers and smaller businesses. “We are hopeful that the return of PCC’s motu proprio review powers would discourage deals that are potentially anticompetitive. We continue to encourage firms to voluntarily notify the Commission to avoid the taxing possibility of unwinding their transactions after,” Balisacan said.
Since the effectivity of Bayanihan 2 in September last year, there have been only four transactions that breached the P50-billion threshold. This is a stark contrast to the previous years when, at a threshold of P2.4 billion, the PCC had been receiving 26 to 46 M&A notifications. There is a move in the Lower House to keep the P50 billion threshold for good. The House Committee on Economic Affairs—which included former PCC Commissioner and now representative Stella Quimbo—approved last July the committee report and substitute bill amending the Philippine Competition Act to raise the threshold.
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