Competition law needed

For years the government has tried to enact a comprehensive competition or antitrust law not only to level the playing field for investors but also to protect consumers by giving them access to the best products and services at the most reasonable cost. The issue is again in the news because the Aquino administration has to craft a competition framework to be implemented by a single agency as part of the Philippines’ commitment to the economic integration of Asean (Association of Southeast Asian Nations) in 2015.

As it is, we have more than 30 laws related to competition and antitrust. The 1987 Constitution prohibits monopolies and restraints of trade. The Revised Penal Code states that monopolies and combinations in restraint of trade are punishable acts. And then there are Republic Act No. 3247 (the Act to Prohibit Monopolies and Combinations in Restraint of Trade); RA 165 (Patent Law) and RA 166 (Trademark Law); Presidential Decree No. 49 (Copyright Law); RA 386 (the Civil Code of the Philippines, which stipulates the collection of damages arising from unfair competition);

RA 7581 (the Price Act, which protects consumers by making price manipulation—hoarding, profiteering and cartels—illegal for certain commodities during times of national emergency); and RA 7394 (the Consumer Act of the Philippines, which imposes penalties for deceptive, unfair and unconscionable sales practices in both goods and credit transactions).

The Asean economic integration will result in a region where goods and services, investments and skilled labor can move freely. This was the reason Asean countries set up their own competition policy based on the bloc’s regional guidelines on competition policy. However, a

paper submitted to the 2014 Global Competition Review (reputed to be the world’s leading antitrust and competition law journal) points out that the Philippine legal framework for a competition law has not been fully compliant with Asean guidelines. “Throughout the years, the Philippines has enacted fragmented legal provisions (usually part of general statutes) and sector-specific

issuances prohibiting certain anti-competitive acts. The Philippines has yet to promulgate a comprehensive antitrust statute to fully cover the anti-competitive acts mentioned in the guidelines,” the paper says.

It adds: “Given Congress’ lack of success in passing

antitrust legislation, the Philippines’ historical and social circumstances (which have largely concentrated economic power in the hands of a few who lobbied against competition), and the general lack of awareness or enforcement of existing competition laws, it will be interesting to see if the Philippines can comply with the 2015 Asean deadline for the enactment of a comprehensive competition law.”

With lobbying by big business opposed to the entry of competitors in the local market, all competition and

antitrust bills languished at the committee levels in Congress or were passed as watered-down versions of the original. The Ramos administration saw the liberalization of many sectors, but only to a limited extent because of the intense lobbying. The banking industry was opened up to help bring down the cost of borrowed funds, but the law restricted the entry of foreign banks to only 10. The telecom sector was also liberalized to break the monopoly of PLDT, but the entry of new players did not bring down costs as much. Worse, the regulatory agency for the telecom sector has been unable to protect consumers and has often sided with the telecom firms.

Last week, the Philippine Chamber of Commerce and Industry (PCCI), the Philippines’ biggest business organization, again warned of dire results if Congress once more failed to pass a competition law. “If we give our neighbors a difficult time to do business here [due to the absence of a competition law], they will also give us a hard time accessing the Asean market of 600 million consumers,” PCCI president Alfredo M. Yao pointed out.

Congress should pass a competition law if it truly wants to help the economy and the Filipino consumer. How can we benefit from such services as affordable world-class air or sea travel when the law restricts the entry of competitors with more efficient processes and lower costs? How can we expect fair prices for essential commodities if their production or importation is restricted to a privileged few, who charge more than what is necessary due to the absence of competitors?