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No Free Lunch

The specter of a worse normal

“Never let a serious crisis go to waste” is a quote we hear repeated so often lately. The underlying message in current usage is that the drastic upheaval the COVID-19 crisis has brought upon us provides a great opportunity for drastic reforms otherwise difficult to pursue in more normal times. Everyone would like to see a better “new normal” emerge in the aftermath of the pandemic, and now is our best chance to make some fundamental changes to achieve it.

But change is a double-edged sword. Some would also use the upheaval to pursue less than noble ends. A dangerous example that has come to my attention is an apparently last-minute insertion into Section 12 of the House of Representatives’ approved version of the economic stimulus bill (House Bill No. 6815) dubbed ARISE (Accelerated Recovery and Investments Stimulus for the Economy). The questionable insertion, which I’m told was not in the version the Philippine Competition Commission (PCC) was able to comment on, states: “The PCC (within 6 up to 12 months from lifting of the Community Quarantine) shall desist from requiring any submission by parties to any proceedings before it, including fact-finding or preliminary inquiries, and from issuing any show cause order, cease and desist order, subpoena, statement of concern or similar statement and other similar issuances…. All mergers and acquisitions involving enterprises engaged in essential businesses entered into 30 days prior to and during the CQ, and for a period of one year thereafter shall be deemed to promote continuity and capacity building, and are hereby declared exempt from the compulsory notification and related requirements under the PCA (Philippine Competition Act).”

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In short, it stops the PCC, for a period of up to a year, from doing its job of preventing anti-competitive conduct of companies. Worse, the ill effects of the insertion could continue to torment the Filipino consuming public well beyond the recovery from the current crisis.

What does this insertion imply in practical terms? How could it affect you and me? My lawyer friend Gigo Alampay, who I worked with several years ago in helping our legislators pass the landmark Philippine Competition Act in 2015, explains it with some hypothetical but realistic examples. It means, he says, that “if PLDT and Globe merge with or acquire Converge, which looks like a strong competitor in broadband, there is nothing PCC can do. If SM buys another mall developer, there is nothing PCC can do. If Mercury Drug finds a way to acquire South Star Drug or Watsons to eliminate a competitor, there is nothing PCC can do. If Prime Water goes on a buying spree for water districts, there is nothing PCC can do. If Meralco buys as many competing generation plants as it can during this period, there is nothing PCC can do… The PCC won’t even be able to go after cartels that could fix prices of essential goods like alcohol and face masks.”

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In short, rather than end up with the desired new normal of a more inclusive and democratized economy, we could end up with an even more concentrated and monopolized one where ordinary citizens are the ultimate losers.

The pandemic was never a justification to do away with healthy competition. Quite the contrary, it makes it all the more necessary to protect the public from abusive conduct by businesses, especially big ones out to exploit their dominance in the market. It’s hard not to think that Congress has allowed itself to be used by opportunistic forces to advance a monopolistic agenda, under the guise of “continuity and capacity building.” I trust our senators to have the wisdom to see through and stop this seemingly underhanded ruse.

I’ve already written about how environmental rules are being eased elsewhere under the argument that these get in the way of business recovery. In places like the United States, Canada, India, South Africa, and Australia, moves are reportedly already underway to loosen environmental controls in the wake of COVID-19.

So if we’re aiming for a better, greener, and more inclusive world after COVID-19, it will take a lot more vigilance on everybody’s part. The enemies of positive reform are hard at work.

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TAGS: Cielito F. Habito, coronavirus pandemic, coronavirus Phiilippines, COVID-19, economic stimulus, new normal, No Free Lunch, PCC, Philippine Competition Commission, Quarantine
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