The Market Monitor Minding the Nation's Business
By Riza Lozada
President Aquino’s allies are prodding him to set aside his obsession with the controversial Bangsamoro Basic Law (BBL) and attend to measures considered urgent by the business sector, such as the Freedom of Information Act and the Philippine Competition Act, which are merely awaiting his signature to become a law.
Senate President Franklin M. Drilon said signing the Philippine Competition Act would put an end to price fixing, which he said was the most common complaint of unfair trade practice in the country.
The Philippine Competition Act would be the nearest thing to the Anti-Trust Law that is used in the United States to break up monopolies.
Other bills whose approval is eagerly awaited by the business sector are the Cabotage Law, the Tax Incentives Transparency and Management Act (Timta), the Rationalization of Fiscal Incentives, and the Customs and Tariff Modernization Act (CTMA).
“What the Philippine Competition Act aims to promote is equal opportunity in business, certainly not equality in its outcomes. And if under such healthy competition, some manage to excel over others, then let their success impel the others to greater efforts without being hampered by unfair tactics; otherwise, let them fall by the wayside. This is what fair competition is all about,” former Socioeconomic Planning Secretary Cielito Habito said.
“At present, we have a very weak antitrust law. Only the Revised Penal Code provides for monopolies in restraint of trade. We passed the Philippine Competition Act which is now now awaiting the signature of the President.”
“This act is very significant because it will now punish monopolistic behavior, unfair trade practices will be prohibited, punishable by fines as much as P250 million, imprisonment of seven years,” Drilon said at the weekly Kapihan sa Diamond Hotel, of the bill that had been languishing in Congress for over 20 years.
“You can imagine the difficulty, as unfair trade practices are very profitable. Price fixing is very profitable. You can imagine the lobbying that goes with the pressure, but we passed it. It is a very significant measure, we do hope that monopolistic practices in trade, unfair trade practices, especially price fixing, will now be a thing of the past,” Drilon said.
The bill provides for the creation of a Philippine Competition Commission to enforce a national competition policy that would prohibit anticompetitive agreements, abuse of dominant position, and anticompetitive mergers and acquisitions, Drilon said.
Among the powers and functions of the commission are:
• To investigate and decide on cases involving any violation of the Competition Act and other existing competition laws upon receipt of a verified complaint from an interested party or upon referral by the concerned regulatory agency, and institute the appropriate civil or criminal proceedings.
• To issue advisory opinions and guidelines on competition matters, and submit annual and special reports to Congress, including proposed legislation for the regulation of commerce, trade or industry.
• To monitor and analyze the practice of competition in markets that affect the economy; implement and oversee measures to promote transparency and accountability and ensure that prohibitions and requirements of competition laws are adhered to.
“After nearly three decades of attempts by Congress to pass this law, finally, we will have a competition law in place which will protect businesses and consumers,” Drilon said, noting that the Philippines was the only original member of the Association of Southeast Asian Nations (Asean) that does not have a comprehensive antitrust law.
A competition law is a commitment under the Asean Economic Blueprint, he added.
The amendment to the Cabotage Law is expected to rationalize interisland-transport cost which, at present, is one of the causes of the very high prices of basic commodities.
The Timta will inform the public about the incentives that companies receive and the benefits they provide the country in return in terms of labor generation.
The Philippine Chambers of Commerce and Industry (PCCI), the country’s largest business organization, welcomed the passage of the Philippine Competition Act, noting it will support the growth of the national economy.
“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.
“When it becomes law, the Competition Act or Fair Trade Act will allow even small firms’ entry into the market with the expectation that rules would be applied equally to all,” he added.
“When businesses engage in unfair practices just because they can, because they do not have anyone competing with them for consumers, it is really the consumer who suffers through high prices and limited choices.”
The Freedom of Information Act is languishing in Congress, although its passage has been one of the campaign promises of Mr. Aquino. He has consistently refused to certify it as urgent.