The Philippines has experienced one of Southeast Asia's fastest growth rates. Between 2010 and 2015, the Philippines experienced an average GDP growth rate of more than 6 per cent, its highest since the 1970s. The GDP growth in 2017 was 6.69 per cent, more than Indonesia, Malaysia and Thailand, and only marginally behind China and Vietnam. The hope is that the Philippines can sustain this growth rate for the foreseeable future in a way that is inclusive.
The introduction of competition law and policy into the Philippines is believed to be a necessary step towards achieving sustained and inclusive growth. In September 2016, the Chairman of the then newly established Philippines Competition Commission (PCC), Arsenio Balisacan, called the Competition Act a “game-changer for the economy” and “one of the key components of the overall strategy to make economic growth more enduring and more inclusive”.
Whether competition law does in fact contribute to enduring and inclusive growth will depend on a number of outcomes being achieved. The law must be applied in a way that benefits the nation's poor as this is the only way it will achieve inclusive growth. The key to this will be levelling the playing fields so entrepreneurs and micro, small and medium-sized enterprises (MSMEs) can prosper on a national and international scale. The country is dominated by oligarchs and oligopolies, which prevent—or, at the very least, deter—new entrants. The Filipino business and wider communities must understand and accept the benefits of competition law and policy to enable a “culture of compliance”. This will, in turn, lead to sustained growth as Filipino businesses are able to operate in a truly globally competitive way and enable the Philippines to continue to attract foreign direct investment (FDI). Existing government policies which—perhaps inadvertently—impede competition need to be addressed. The actual and perceived success of the regulator, the PCC—in enforcing competition law provisions—will underpin all these outcomes.
OVERVIEW OF PHILIPPINES’ COMPETITION LAW AND POLICY
Having been introduced into Congress more than twenty-five years before, the Philippine Competition Act (the Act) was finally passed on 21 July 2015. Although the law came into force on 8 August 2015, the two-year transitional period (section 53) gave businesses time to review and revise agreements and practices to avoid sanctions. The merger regime has been operative since 2016.