PCC to resume review of M&As

MANILA, Philippines — The Philippine Competition Commission (PCC) will resume the review of “potentially problematic” merger and acquisition (M&A) deals as the moratorium under the Bayanihan to Recover as One Act (Bayanihan 2) expired yesterday.

“With the year-long suspension lifted, and based on its increased market monitoring efforts, the PCC can now launch motu proprio reviews and flag M&As which may have potentially anti-competitive effects regardless of any transaction value,” PCC chairperson Arsenio Balisacan said.

The one-year moratorium on the PCC’s authority to conduct motu proprio review of M&A transactions under the Bayanihan 2 expired yesterday.

“We are hopeful that the return of PCC’s motu proprio review powers would discourage deals that are potentially anti-competitive. We continue to encourage firms to voluntarily notify the Commission to avoid the taxing possibility of unwinding their transactions after,” Balisacan said.

A motu proprio review allows the PCC to investigate any M&A transaction seen to likely reduce market competition even if it does not meet compulsory notification thresholds.

Under the Bayanihan 2, M&As with transaction value below P50 billion are exempt from compulsory notification with the PCC within two years from the effectivity of the law.

Before the Bayanihan 2 took effect, M&As that meet the P2.4 billion threshold for the size of transaction and P6 billion for the size of party, have to be disclosed to the PCC.

Since the Bayanihan 2’s effectivity in September last year, only four M&A deals breached the P50 billion threshold.

The PCC said it has seen a decline in M&A notifications during the COVID-19 pandemic.

In particular, PCC received 26 notifications last year compared to 46 in 2019.

For this year, there are only four M&A notifications.

“Keeping watch over M&As in the post-COVID-19 economic environment is critical to ensure that consolidation does not remain unchecked and is not allowed to lead to highly concentrated markets,” Balisacan said.