Fair Competition

Bam on Price Fixing and Cartels (‘Umagang Kay Ganda’ Interview)

Q: Pag pinag-uusapan ang Fair Competition, ang isip ng tao, blue market economy. Pang-karaniwang tao ito?

Sen. Bam: Well actually, ang Philippine Competition Act, pasado na ito. Hinihintay na lang iyong pirma ni Presidente. This is actually a landmark bill. Ito ang isa sa pinaka-landmark bill ng 16thCongress.

Sabi nga nila, longest-running bill in Congress. Almost 25 years na itong nakabimbim sa Kongreso. Sabi nga ng maraming eksperto, dapat after World War II pa ito naipasa. Because of vested interest, hindi ito mapasa-pasa.

Finally, napasa natin ito. So we’re very proud of this bill. We’re hoping mapirmahan na ito ng Presidente. Ang lalabanan ito, mga kartel, mga abuses of dominant players. Pabor talaga ito sa ating taumbayan, especially iyong mga namimili.

Q: Ano ang pakinabang ng mga sasakay sa tricycle ngayon, pupunta sa palengke diyan sa panukalang iyan?

Sen. Bam: Unang-una alam naman natin na may nagmamanipula ng presyo ng bilihin. Of course ang pinakasikat diyan ang garlic at onion. 

Mga iba’t ibang mga negosyante, mag-uusap-usap, o hindi muna tayo maglalabas ng mga produkto, pataasin natin. Pagtaas ng presyo, babanatan natin iyong merkado. That’s called price fixing.

Sa ating bansa, hindi malinaw ang batas na nilalabag nila. With this law, pag napasa na ito, malinaw na malinaw puwede mo silang kasuhan ng price fixing among competitors.

Iyong isa pa riyan, iyong tinatawag na abuses of dominant position. Iyong malalaking kumpanya hindi pinapayagan ang mga maliliit na pumasok sa merkado. Kanya-kanyang girian iyan, kanya-kanyang box out iyan.

Kaya for certain industries, kakaunti ang players diyan, kakaunti lang ang mga kumpanya. Alam natin na kapag kakaunti lang ang kumpanya, mataas ang presyo, hindi maganda ang kalidad. That’s also now prohibited.

Q: Kung ano lang ang ibigay ng negosyante, iyon lang ang tatanggapin…

Sen. Bam: Iyon ang monopolyo, wala kang choice. But if itong malalaking players naman, kung lahat sila, patas-patas ang laban, level playing field, whether malaki ka o maliit ka, puwede kang makipagsabayan sa merkado, pabor iyon sa mga tao.

Ang third, iyong tinatawag na mergers and acquisitions. Kapag may malalaking kumpanya, nagsasanib sila, the Philippine Competition Commission, na binubuo ng Philippine Competition Act, puwede silang magsabi na hindi puwedeng magsama ang mga kumpanyang iyan.

Kapag nagsama iyan, masyadong mako-concentrate ang kapangyarihan sa merkadong iyan. You cannot merge. So very powerful ang mabubuong opisina ng Philippine Competition Act, ang Philippine Competition Commission.

Sa ibang bansa, normal iyan e. Kumbaga competition policy is already normal in all the rest of the world. Tayo po, huling-huli tayo dito. Finally, kapag naipasa po ito, masasabi nating nakikipagsabayan na tayo sa buong mundo.

Q: Dito po sa Southeast Asia, pang-ilan tayo doon sa nagkaroon ng competition policy.

Sen. Bam: If I’m not mistaken, tayo ang isa sa pinakahuli. Iyong last na nagkaroon ng competition policy was Malaysia in 2012. But if you look at Europe and the US, 20s, 30s, 40s, 1940s pa iyong kanilang competition policy.  Iyong Japan actually had their competition policy after World War II.

So talagang panahon na magkaroon na ng polisiyang ito. Malabanan natin ang kartel, malabanan natin ang abuses ng mga monopolyo at masiguro nating fair ang merkado sa ating namimili.

Q: Ilang araw na lang ang hinihintay natin bago ito pirmahan ng Pangulo?

Sen. Bam: I’m hoping mapirmahan ito bago ang SONA. Because I think maganda itong i-announce during the State of the Nation. Nakakatawa nga e, itong bill na ito ang pinaka-importanteng bill na hindi alam ng mga tao.

Hindi po talaga siya napag-uusapan but we worked very hard for this bill. Iyong bicam po nito, apat na araw, over 30 hours ng deliberations.  Napakatagal po at napakahirap buuin, but we feel once this bill is passed, pabor po ito sa maliliit na negosyante at pabor sa ating namimili.

Q: Malapit sa sikmura. Maraming salamat Senador Bam Aquino.

DOJ, Private Businesses Welcome Passage of Bill Penalizing Cartels, Abuse of Dominance

Stakeholders, led by the Department of Justice (DOJ), welcomed the long-awaited approval of the Philippine Competition Act, a landmark legislation that will level the playing field for all types of businesses

In a statement, DOJ Secretary Leila de Lima lauded Sen. Bam Aquino and Rep. Dakila Carlo Cua for their energy and dedication to work for the passage of the bill, which gathered dust for almost 25 years in the legislative mill.

Sen. Bam, chairman of the Committee on Trade, Commerce and Entrepreneurship, was the main author and sponsor of the measure, which is expected be signed into law by President Aquino.

“The Department will continue to support legislation that will level the playing field and inject fairness and transparency in dealings and transactions specially those affecting small businesses and consumers,” De Lima said.

“This legislation actually rewards good business practices and goes against those who exploit markets or engage in abusive behavior,” said DOJ Assistant Secretary Geronimo Sy, head of DOJ-Office for Competition.

 “Building a competition culture across all sectors of society is key. We are happy that we finally passed it,” added Sy.

Under the proposed law, the DOJ-Office for Competition is assigned to investigate cartels that are considered criminal actions.

Meanwhile, the Philippine Chamber of Commerce and Industry (PCCI) expects a sustained strong economy with ratification of the Philippine Competition Act.

 “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 in a statement.

If enacted into law, Yao added that the Philippine Competition Act will encourage the entry of small firms into the market “with the expectation that rules will be applied equally to all.”

The European Chamber of Commerce in the Philippines, for its part, expressed full support behind the passage of a national competition law, saying it would “ensure a level playing field for business, protect consumer welfare and make the Philippine economy more competitive.”

“The passage of this landmark measure materialized through the collective efforts of the Senate and House and the full support of private stakeholders,” Sen. Bam said.

 Sen. Bam added that private stakeholders, such as the PCCI and the ECCP, were consulted in the crafting of the measure to ensure that the bill would be pro-business, pro-poor and pro-consumer.

Bam on his Year 2 Accomplishments (Transcript of Interview)

Well, ito pong mga batas po naming ito, alam ninyo po, dalawa po itong committee po natin.  Ang una sa Youth, tsaka iyong Committee on Trade, Commerce and Entrepreneurship.  Kaya kung napapansin po natin, lagi po ang ating usapin ay usaping pang-kabataan at usaping pang-negosyo. 

Kaya gusto ko po sanang ireport na hindi po nasayang ngayon sa pangalawang taon ko po dito sa Senado.

Responsive, Empowered Service-Centric Youth Act of 2015

Meron po tayong dalawang napakagandang batas na umuusad. Iyong isa po riyan, yung tinatawag nating RESCYouth.

Ito po iyong batas at napasa na po on third reading. So actually hinihintay na lang po natin iyong counterpart sa Kongreso.  Ang nakalagay po rito, na sa ating NDRRMC, iyong ating National Disaster Risk Reduction Management Council, kinakailangang may kinatawan ang mga kabataan.

Nakita po kasi namin na, sa bawat delubyong nangyayari ay mga kabataan iyong mga kauna-unahang volunteer, eh ‘di ba kabataan.  Sino ba iyong nagpupuno roon sa mga repacking stations natin, ‘di ba iyong mga kabataan?

Nakita rin naming na marami ring mga youth groups na nagbibigay ng first aid, sumasama sa red cross, nagtuturo ng mga CPR, iyong paglangoy, so marami po talagang kabataan ang involved, pero hindi sila involved sa pagpaplano ng disaster risk management.

Lahat po ng ating Disaster Management Councils, magkakaroon po ng youth representative.

Iyong kaalaman, experiences, pwedeng maibahagi ng kabataan, mapapasama na po sa National Councils, sa NDDRMC, Provincial Councils, City Councils, Municipal Councils, kahit Baranggay Councils kasi mayroon na dapat po tayong mga konseho pagdating sa pagmanage ng mga delubyo sa ating bansa.

Youth Entrepreneurship Act

Itong pangalawa po, ratified na, pirma na lang po ng presidente natin ang kailangan. So we’re hoping, bago po mag SONA, pirmado na po ito.

Ito po iyong Youth Entrepreneurship Act.  Ang kapartner po namin dito ay si Br. Armin Luistro at Deptartment of Education.

Napapansin po kasi namin na, pagdating po sa mga kabataan, mahalaga po talaga, iyong financial literacy o kaalaman sa paghawak ng pera at mga kaalaman sa pagnenegosyo.

Sa ngayon, sama-sama po iyan sa financial literacy, savings, investments, kaalaman sa pagtatayo ng sariling negosyo.  Maituturo na po finally sa ating educational system kasi po ‘di ba laging batikos sa ating educational system ay tinuturuan ka naman maging empleyado, kumbaga hindi tinuturuan para magtayo ng negosyo.

Maisasama na po iyan sa K to 12 at kadikit po niyan, magkakaroon po tayo ng fund para yung mga gustong magnegosyo na mga kabataan especially yung nasa K to 12 pwede pong mabigyan ng DepEd nang kaunting start up capital.  Hindi teorya lang yung kanilang pagtuto tapos magkakaroon pa po sila ng praktikal na kaalaman sa pagtatayo ng negosyo.

   

Sa mga Umuutang

Sanay na tayo na “ay umuutang lang iyan,” kahit iyong mga pinakamalalaking kumpanya umuutang, kahit po itong bansa natin, umuutang rin yan. Hindi po masama ang umutang, ang masama po ang umuutang ka ng hindi mo kayang bayaran.

O masama iyong umutang ka, na hindi mo naaral yung mga terms o laki ng interest.  Kahit 5-6, pero kung umuutang ka sa maayos na institusyon, hindi ho masama iyon, so iyong mga kaalaman ay mahalagang malaman ng ating mga kabataan.

We’re hoping na makatulong ito para bumaba ang bilang ng mga kabataang walang trabaho.

Foreign Ships Co-Loading Act

Mayroon po tayong batas noon na nagsasaad na kapag ikaw ay isang foreign ship, hindi ka puwedeng dumaong sa lahat ng ports ng Pilipinas.

Noon po, pag foreign vessel ka, mayroon kang i-import. Usually pipili ka lang ng isang puwedeng pagdaungan, usually Metro Manila iyan. Although international ang Davao at Cagayan de Oro, pero usually dito lang po iyan sa Metro Manila.

Kaya karamihan ng ships nasa Metro Manila kaya noon nagkaroon ng port congestion kung saan nagtaasan ang presyo ng bilihin dahil sobrang inefficient ng ating sistema.

Ngayon po, puwede nang dumaong ang ships sa multiple ports basta’t hindi siya kumukuha ng domestic goods. Kumbaga po, meron kang imported na goods, kunwari mayroon kang imported na mani, puwede kang mag-drop off sa Manila, puwede kang mag-drop off sa Cebu at sa Cagayan de Oro, hindi na lang sa iisa.

Kung kukuha ka naman, kailangang i-export mo ito patungong foreign port. Hindi ka puwedeng kumuha ng produkto sa Cagayan de Oro patungong Maynila. Para mabago po iyan, kailangang mabago ang Constitution dahil mayroon po tayong proteksiyon.

Pero pagdating sa importation at pag-e-export, puwede na po kayong kumuha kung foreign vessel ka.

Magmumura iyong cost natin ng pag-import at pag-export kasi hindi ka na kailangang mag-drop-off. Wala nang double handling. Now, bababa po niyan ang cost ng ating logistics.

Now, kahit naman po iyong local products natin, may mga imported raw materials iyan so makikita natin may mga porsiyento diyan dapat bumaba ang presyo at magsimula ang pagbaba ng presyo ng bilihin o di kaya’y makakatulong po iyan sa para hindi tumaas ang presyo ng bilihin.

To quote Venus Raj, “Major! Major!” po ang batas na ito kasi matagal na po itong gustong itulak pero hindi maipasa-pasa. Naipasa po namin lahat ng cargo lahat ng foreign ships.

Isipin niyo po, nag-e-export po tayo. We try to be competitive pero iyong cost ng pagdala ng produkto palabas, napakamahal. At the end of the day, iyon po ang hinahabol natin dito, ang magmura ang bilihin.

Philippine Competition Act

Eto po, for the second year ko po makakaa-apat po tayo. Ito po ang pangako natin na ito pong Philippine Competition Act, masabi ko na isa ito sa major, kung hindi man pinaka-major sa 16th Congress.

24 years na po ito sa Kamara, 24 years na hindi maipasa-pasa and dapat po 80 years na noong nakapasa tayo ng Philippine Competition Act.

Iyong mga ibang bansa po, marami po sa kanila, after World War 2 nagkaroon ng competition.  Ang Japan after World War II, devastated sila, doon nila binuo ang competition act para maging patas-patas ang pag-angat ng mga negosyo sa kanilang bansa.

Ito pong Philippine Competition Act, nakalagay po na walang anti-competitive agreements o agreements between companies na makakasama sa kompetisyon sa ating merkado o iipitin ang ibang players, especially ang maliliit.

Iyong pagiging monopolyo mismo, hindi po iyan pinagbabawal. Ang bawal ay naging monopolyo ka dahil nang-aabuso ka. Mahalaga po na mayroon po ang batas na ito.

Isa pang nilalabanan nito ang cartel. Halimbawa, negosyante ng garlic mag-uusap-usap na huwag munang maglabas ng produkto. Hintayin natin itong tumaas ang presyo, doon natin banatan ang merkado.

Ang tawag po diyan, price fixing. Iyan po very clear na pinagbabawal ng batas na ito. Pag ginagawa mo iyan, hindi iyan fair sa consumers. Hindi rin fair sa ibang traders o ibang businesses na nasa merkado mo.

Bawal na po ang cartel, iyong competitive agreement, ang pang-aabuso ng malalaking kompanya o abuse of dominant.

Bubuo tayo ng Philippine Competition Commission na quasi-judicial. Ibig sabihin po may mga kaso na puwedeng ilapit sa komisyon na iyon, at sasabihin nila, may bawal dito, puwede mong multahan iyong mga kompanya.

Puwede mong multahan kung kriminal na iyan. Kung cartel, puwede mong ilapit sa DOJ, may prison time na iyan. Ito’y karaniwan sa iba’t ibang bansa mundo.

Kakaunti na lang po ang walang competition law. Ito po’y hindi bago sa mundo pero bago po sa ating bansa, na ngayon lang tayo nagkaroon ng batas tungkol dito.

Ano po ang analogy natin dito? Kasi usong-uso ang NBA Finals, kumbaga po noon, sa barangay covered courts lang tayo naglalaro.

Kasi ang ekonomiya natin simple lang noon kaya pambarangay lang tayo. E ngayon po, gumaganda na ang ekonomiya ng Pilipinas, nag-PBA at NBA level na tayo.

Pag sa barangay lang naglalaro, walang referee, kayo-kayo lang iyon. Hindi malinaw ang rules, kanya-kanya kayo.

Pero kung gumaganda na ang ekonomiya niyo, kung nasa PBA ka na, o nasa NBA ka na, kailangan na ng referee.

Ang referee po dito, ang Philippine Competition Commission. Hindi po siya nandiyan para ipitin ang mga naglalaro. Nandiyan siya para masiguro na maayos ang pakikitungo ng bawat grupo at patas ang laban.

Kunwari, isa kang Cleveland Cavaliers at mayroon kang LeBron James ay sobrang galing mo. Hindi ka puwedeng mambalya, hindi ka puwedeng maniko, tatawagan ka ng foul. Ooppss bawal iyan. Puwede kayong mag-compete pero sa tamang patakaran.

Usually po ang bicam dalawang oras, ito po apat na araw, 30 hours ang bicam pero alam niyo po, I’m proud of this bill.

Nagtulungan po diyan ang Congress, ang Senate, DTI, DOJ at NEDA. Tulung-tulong po kami para maipasa ang batas na ito. Ito po ang handog namin sa maliliit na negosyante.

Our small players na usually binu-bully ng mga malalaking kompanya, iyong ating consumers na kapag may cartel, usually mataas ang bilihin. Ito po iyong handog namin sa inyo na magkaroon ng patas-patas na presyo ng bilihin, patas-patas na rules at hindi ho tayo namamanipula ng ilang grupo sa binabayaran nating produkto.

Towards fair competition, healthier economy

In a competitive market, businesses gain success by creating quality products, managing expenses, achieving operational efficiency, and effectively communicating and catering to their market.

 

Nations around the world recognize the need to create a business environment that best reflects this through competition policies that guard against bad business behavior.

Back in 1890, the US enacted the US Sherman Act, the first set of national laws to deal with monopolies and restraints of trade.

 

Australia followed suit in 1906 with the Australian Industries Preservation Act. After World War II, Japan passed its Monopolies and Restrictive Practices (Inquiry and Control) Act.

 

More recently, our neighbors in Southeast Asia have also passed their respective competition laws: Indonesia and Thailand in 1999, Singapore in 2004, Vietnam in 2005, and Malaysia in 2012.

 

Finally, after two decades worth of attempts, the Philippines is on its way to enacting its first comprehensive competition law – a legislation aimed at protecting local businesses and building a vibrant, more competitive economy by putting an end to anti-competitive agreements, cartels, collusions, unfair & abusive practices.

 

At its core, the competition law is about maintaining opportunities for all to compete so that present market leaders cannot exclude up and coming challengers who might be able to lower prices, improve product quality, offer consumers more choices, or spark the next wave of innovation in the market.

 

The Fair Competition Act of 2014 has successfully passed through the Senate and the House of Representatives just recently approved the bill on its third reading – a big win for the Philippine economy, for local businesses, and for every Filipino consumer.

 

Reaping benefits

 

The benefits of healthy competition in industry, in developing countries in particular, have long been acknowledged. The Organisation for Economic Co-operation and Development (OECD) Global Forum on International Investment (2008) hailed the positive impact of promoting market competition in a number of developing economies, and among them is attracting foreign investments.

 

The OECD paper, “Competition Policy Enforcement: Experiences from Developing Countries and Implications for Investment,” stated that an effective competition policy will eliminate barriers to entry and exit of new business entities, curb anti-competitive practices, and lead to increased competition and, inevitably, greater investment into the country.

 

In our recent history, there are actual, observable examples of how increased competition has improved industry, spurred innovation, and resulted in better and cheaper choices for consumers.

 

In fact, we reap the benefits of healthy competition every time we flip through TV channels, struggle to decide which new restaurant to try, or marvel at the new upgrades on our latest smartphone.

Try and recall the first mobile phones introduced to the market in the early 1990s. Who would have guessed that in just two decades, those bulky analogs would transform into light, touch-screen devices of the future?

 

In just a few years, cellphones of all shapes and sizes were introduced, each one trying to one-up the other. The antenna became obsolete, screens got bigger and more colorful, batteries got lighter and more compact, and a variety of new features were introduced until the cellphone morphed into an all-in-one life-hacking device with an HD camera, editing tools, a music library, Internet access, Candy Crush, world maps, GPS tracking, Twitter, and a wealth of other helpful applications.

 

In the Philippines, with more and more companies selling mobile phones, there are a variety of brands and models to choose from. With this power to choose comes the power to demand quality phones at the lowest prices.

 

In 1997, a Nokia 5110 cost over P10,000. Today, that amount can buy you a Nokia Lumia with features that move well beyond calling, texting, and playing snake. Plus, you can purchase a similar, local brand mobile phone from Cherry Mobile or MyPhone for just a fraction of that price.

 

While the mobile phone used to be a status symbol for the elite, today you see anyone from students to sari-sari store owners and taxi drivers swiping through their own touch-screen phones.

 

Competition between mobile phone manufacturers spurred innovation in targeted markets, diversifying products while driving down prices for the benefit of both the industry and the consumers.

 

We’ve seen the same pattern in the airline industry. In the 1980s, the flights zipping through our archipelago were few, far between, and expensive. Flying to Davao to visit my mother’s family was a calculated, budgeted expense.

 

But with more airline companies came more flights and more choices for us Filipinos. Companies began getting to know the market better and started targeting specific groups – like budget travelers. Opportunity was found in lower prices and today, the country is in a flurry with ever promo fare announcement.

 

Power of competition

 

Now, more Filipinos get to explore the Philippines and the world for cheap. More entrepreneurs can fly across seas quickly and at any time of day to scout for partners and make sound business deals. The local tourism sector also benefitted greatly from the intense competition in the airline industry.

 

Such is the power of healthy competition in these specific industries, which we hope can be replicated in even more industries in the country. The Fair Competition Act can spearhead this healthy, competitive environment for our local business sector.

 

The legislation’s priority is to create a fair environment for all businesses – new or old, small or large. It penalizes business behavior that is anti-competition and that hinders our markets from providing the best options and opportunities for our consumers.

 

Businesses can no longer make moves to create barriers to entry for new players nor can they bully smaller enterprises by selling below cost or restricting market opportunities.

 

Colluding with other dominant players to fix prices, divide territories, or refuse deals with particular vendors will also be penalized and, in fact, criminalized.

 

But while this law is vigilant against exercise of market power, it is not against bigness. It respects dominance gained by competing on merits.

 

The Act seeks to establish a Fair Competition Commission (FCC) to look into the cases filed and objectively determine whether there have been abuses. The FCC is tasked to promote competition, enhance economic efficiency, and prohibit anti-competitive acts and abuse of power.

 

It will be supported by the existing Office for Competition (OFC) of the Department of Justice (DOJ). It will serve as the prosecutor in criminal cases filed and have exclusive authority over the criminal enforcement of this Act.

 

The FCC, OFC and other government agencies will work hand in hand to build a better business environment that the consumers desire and deserve.

 

For too long, the lack of a competition policy has crippled new businesses and left micro, small and medium enterprises (MSMEs) vulnerable to abuse. At the end of the day, it is our consumers that are robbed of better quality, more choices, and lower prices for products and services.

 

The Fair Competition Act is pro-poor, pro-people, and pro-business. It safeguards the welfare of businesses, large and small, and protects honest, hard-working entrepreneurs against abuse of dominance and other unfair practices that put them and their consumers at risk.

 

With four years of sustained economic growth, it is now time to work on strengthening our local industries, promoting a culture of competition and innovation, and boosting our potential to serve the global market with outstanding products and services.

 

While we acknowledge that the Fair Competition Act is not the miracle cure that will sustain our thriving economy, we believe that this is the necessary step, the significant leap towards a culture of healthy competition that promotes efficiency, and inspires ingenuity, creativity, and innovation in the Philippines.

More importantly, this culture of healthy competition is a fundamental building block in our transition to a sustainable and inclusive middle-income country – a dream for many of us Filipinos that now has a chance of becoming a reality.

 

First published on Rappler.com

 

 

Bam’s Response during the Fair Competition Forum (Excerpts)

Good afternoon everyone. I’m not going to go into detail of the bill. We have our experts here. I’d rather talk about political context of this bill.

One, I’m quite optimistic that if we get this passed, we’re hoping it can be one of the main SONA pronouncement come 2015. 

Hopefully some good news for this last SONA of the President.

If not, we still have another year to get it done. I am hoping though that we can get this done before the end of July.

Now, if you look at the bill itself, there are some groups who were trying to package the bill as anti-business. We’ve heard already some groups mobilizing, trying to paint this as anti-business.

If you look at my track record in the Senate, you’ll see that I’m the most pro-business of all of the senators, being the chairman of the Trade, Commerce and Entrepreneurship.

Where does the balance lie in trying to push for this bill, and at the same trying to promote our industries for the Philippines to really get to that level where we will be a middle income economy?

If you look at original versions of this bill, you’ll find one very sticky provision, which I wouldn’t have passed and that provision said that once you reach a certain market share, the government can step in and break you up.

In a lot of old competition policies in other parts of the world, there is that provision where government can make a determination based on your market share, that they can break you up.

That’s the first thing I said to them that I want to make sure it is not a part of this bill.

In fact, this version came from the Philippine Chamber of Commerce and Industry.  In some ways, this version actually came from the business community itself. 

What does the bill basically penalize? It doesn’t penalize size. It doesn’t penalize status.  It penalizes abuse of dominant position and anti-competitive agreements.

We just want to be very clear about that. This is not a bill against being big. In fact, if you’re large and you’re huge and you got there because you’re fair and because you gave the best to the consumers, then the best of luck to you and we hope you grow even more.

But what it does outlaw is basically a dominant player using their position to block out the rest of the market. 

I think even the large dominant players would appreciate that because you may be large in one industry but the second or the third in another industry.

Definitely, a player who is big enough but is feeling that anti-competitive system would appreciate a bill like this.

Second, it also prohibits anti-competitive agreements. And we’re very clear to lay down what these anti-competitive agreements are. And again, going back to what most Prof. Joy’s lecture earlier was that term rule of reason.

We really push this so that we will have that leeway to be able to decide on what activities, what actions really lessen competition in the market, as opposed to coming out with prohibitions and start meting out penalties to different corporations and individuals.

That rule of reason is very important because admittedly, this is the first time we’re having a competition policy.

Most developed countries had theirs in the 1930s or after the World War II. Japan, for example, had a very bold competition law passed after World War II and that was a perfect time for them because they were basically in ruins so they had the opportunity to actually lay down the law for how they want to proceed.

Other countries in Europe, for example, had theirs in the 1920s.  We’re actually very late in the game.

If you look where we are as a country, we’re leaving the developing country status, entering a middle-income economy.

For me and for a lot of other people, this seems to be one of those seeming requirement to get to that next level where we can compete with the rest of the world, where countries will look at us and don’t look at us as a banana republic but as a country where rules are in place, where regulations are and where we use these regulations to move forward.

This law, probably, the most difficult one we’ve tackled, or at least our Office has tackled. The interpellations for this bill lasted three to four hours on many occasions.

In the Senate, most of the time, out of courtesy, people would just let you do your own thing.

I mean, if your advocacy, in my case, small and medium enterprise, we passed the Go Negosyo Law without much debate and all sides voted for it.

For this bill, we actually went through a lot of interpellations. Three to four hours at a time. Both minority and majority interpellating us.

In the end, I’d like to think that were able to come up with a version that sticks to the spirit of the bill and still allows for certain exemptions. Of course, all these exemptions are within the rule of reason.

I think that’s really why our consultants and experts eventually allowed these exemptions to come into this version the bill. At the end of the day, nothing is carved out for a particular sector.

Everything still has to go through a rule of reason through the commission. I think that’s really crucial and really important. Of course, Congress version will be different but I’m hoping that if when we get to the bicameral session, that we will be able to prevail upon colleagues in Congress and push for a bill which really has the parameter set but within a rule of reason.

We’ve experienced a lot of lobbying for this bill. In fact, practically every day there was a different set of individuals and lawyers at our office. People ask me about that a lot also, how was the lobbying? The lobbying was tremendous but the good thing is, 95 percent of what lobbyists are lobbying for are okay.

One, they did help us clarify the exemptions.

Two, they also raised the flag, and I guess what you might raise also, which is what if the competition commission is a corrupt commission. I think that’s basically the main concern for a lot of companies and even myself, still a large concern.

So the 95 percent that they were lobbying for were really safeguards and really ways to create these exemptions still within the rule of reason to make sure that legitimate companies will not be harassed by a corrupt competition commission.

In the same way, if you talk about a corrupt competition commission, it’s the same if it’s a corrupt executive department or a corrupt legislative department.

Those who want to squeeze money from the private sector, will find a way to do it, whether it’s a competition commission, a senator, a congressman or a national agency.

Creating this, I think, you will put the safeguards in and at the same time, be realistic about it, make sure that the people appointed to the competition commission should be people who can be trusted and won’t be selling their decisions left and right.

So I think that’s the caveat probably that I would like to put out there. I have experienced most of the concerns aren’t really on specific words in the provision although the legislators and the academics and the professors will worry about the commas, the terms where we lifted it from the EU, from the US.

I think one of the concerns is really what if a.) they appoint people who are corrupt and b.) or its within a framework where the president or the executive agencies are against business.

But that’s something that we need to face as a people and not just for this particular bill. That being said, we did put in a number of safeguards to make sure that no one will be, can be harassed and individuals who might be harassed will have enough legal basis to fight for these exemptions.

That being said, the best way forward is after this bill is passed, is to make enough noise about it and make sure that we appoint reputable, honorable and good people on the commission – unbiased, neutral and very independent people to the commission because they will outlive the president.

The president is out by next year, the commissioner is either five or seven years, depending on the version that we’re talking about. So we’re talking about five to seven years with the commission and we have to make sure that people appointed to these posts are all honorable and decent people and who know the policy to be able to make decisions properly.

The intention of the bill is not to fine corporations or to fine people. In fact the Congress version has a two-year reprieve on any penalty.

You may be wondering why? Of course people will say, they don’t want to decide on anything. But there is some wisdom to that. This is a new policy.

We are creating a totally new paradigm and the commission in those two years can start creating the awareness and start talking to different industries to try and manage their current setup to be able to convert to what more competitive and in tuned with the law.

We do two years where corporations do have that space to be able to fix themselves. As politicians, we do understand that it’s not easy that on day one, everybody has to change. There is that time set.

Hopefully in that two years, the corporations will listen to the commission. Again, we’re assuming that it is a reputable and honest commission. After two years, if there are still aberrations, then the fines and penalties will be imposed and court cases can be filed properly.

One thing that wasn’t mentioned is that majority of cases filed by the competition commission will be administrative in nature. It won’t be criminal in nature. The criminal part is left to abuse of dominant position and anti-competitive agreements done among competitors.

That one is blatantly illegal already. In any regime, whether the US, Japan or the EU. But if this done by a single entity in a market, largely its fines. And even the fines themselves have a wide range, could be x-million or could be one peso.

So again, the idea of having a commission there is really less about penalties and more about trying to police or trying to create a paradigm or regime where our corporations and our people interact with each other in a better way.

What’s my fearless forecast? My fearless forecast is we’ll be able to pass Congress by June 3. The session goes from May 3 to June 3.

Hopefully, we’ll be able to pass that in Congress by June 3. We’ll go over the bicam in July and hopefully have this signed before the SONA.

By the way, a competition policy is also a requirement for entering trade agreements with other countries.

The ASEAN integration, joining the PPP, having bilateral with different countries. It can hopefully open our markets even more.

Sen. Bam lauds Malacanang for Including Measures for Small Businesses in Priority Legislation

Senator Bam Aquino has lauded Malacanang for including his two priority measures that will further help in the development of the micro, small and medium enterprises (MSMEs) in the country in its legislative agenda.

 “We thank Malacanang for including the Cabotage Law and the Fair Competition Act in its legislative agenda,” said Aquino, chairman of the Senate Committee on Trade, Commerce and Entrepreneurship.

 “Through this, I expect the swift passage of these measures that I see as crucial to our economic growth, job generation and level playing field for all businesses,” the senator stressed, adding that he is committed to work for the passage of the two measures.

“These measures have been in the legislative pipeline for a long time. Finally, some political will to get difficult reforms passed which are pro-poor, pro-business and will lower cost of goods,” he added.

Passed by the Senate on third and final reading, Senate Bill No. 2282 or the Fair Competition Act of 2014 aims to shield small business owners and consumers from companies engaged in unfair business practices, which usually lead to increase in prices of basic goods and services.

Aquino said a fair competition policy will level the playing field for Filipino businesses and allow more Filipinos to exercise their entrepreneurial spirit.

 “The bill puts in place measures that will protect the welfare of businesses and protect honest, hard-working entrepreneurs against abuse of dominance and position, and other unfair practices that put both Filipino businesses and their consumers at risk,” Aquino said.

If passed into law, the senator said Filipinos will enjoy a wider range of high-quality products and services at reasonable prices.

Aquino also filed Senate Bill No. 2364, which seeks to amend Section 1009 of the Presidential Decree No. 1464, otherwise known as the Tariff and Customs Code of 1978, to lower local shipping cost in the country.

If enacted into law, foreign ships will be allowed to call in multiple ports provided that their cargoes are intended for import or export and duly cleared by the Commissioner of Customs, leading to lower cost.

The senator has filed the bill in response to President Aquino’s call to relax the country’s policies on cabotage.

It was discovered that it is cheaper to send products from other countries to the Philippines than to ship goods within the country.

For example, the cost of shipping a 20-foot equivalent unit (TEU) from Kaoshiung, China to Cagayan de Oro is $360 or P16,000 only.

However, the cost of shipping the same cargo from Manila to Cagayan de Oro will take $1,120 or almost P50,000.

“We’d like to put these policies in place this year to sustain the momentum of our growth we’ve experienced the past few years,” Aquino added.

Secure Competition Policy First, Cha-Cha Later – Sen. Bam

Pass the Fair Competition Act first before changing the economic provisions of the 1987 Constitution.

Senator Bam Aquino made this pronouncement, emphasizing that a competition law will provide Filipino businesses with the needed protection if economic provisions of the Charter are relaxed.

“We need to pass the competition law first. If you’re opening up the economic provisions of the Constitution at wala kang competition policy, then we’re opening up a lot of uncertainty,” Aquino said in a television interview.

“You’re opening up the gate pero hindi mo alam na ang papasok diyan will act fairly with the rest of the people in the house,” added Aquino, chairman of the Senate Committee on Trade, Commerce and Entrepreneurship.

The senator stressed that amending the economic provisions of the 1987 Constitution is needed to entice foreign direct investments and push the country to the next level of development.

Aquino recently sponsored Senate Bill No. 2282 or the Fair Competition Act of 2014. Senate Bill No. 2282 is a consolidation of several measures, including Aquino’s Senate Bill No. 1027 or the Philippine Fair Competition Act of 2013.

Aquino said the passage of the Fair Competition Act is long overdue because the Philippines is one of the few remaining countries without a competition policy that will protect consumers and businesses, whether big or small.

 Aside from this, the passage of a strong competition policy is crucial with the 2015 ASEAN Economic Integration fast approaching.

 

Fair Competition Act to Eliminate Cartels, Monopolies – Sen. Bam

The passage of the Fair Competition Act into law will eliminate monopolies, cartels and other unfair business practices that lead to high prices of goods and services.

Senator Bam Aquino, chairman of the Senate Committee on Trade, Commerce and Entrepreneurship, made this pronouncement during his sponsorship speech for Senate Bill No. 2282 or the Fair Competition Act of 2014.

“If this bill will be enacted into law, rice cartels that caused the sudden rice of prices will cease to exist,” the senator said, adding that President Aquino himself called for the elimination of this illegal practice to drive down prices of goods and other products.

Aquino said the bill safeguards the welfare of businesses, large and small, and protects honest, hard-working entrepreneurs against abuse of dominance and position, and other unfair practices that put both Filipino businesses and their consumers at risk.

“The Fair Competition Act, moreover, promotes a culture of healthy competition that inspires ingenuity, creativity, and innovation in addressing market needs,” added Aquino, whose Senate Bill No. 1027 or the Philippine Fair Competition Act of 2013 was among the measures consolidated under Senate Bill No. 2282.

In his speech, Aquino said the Fair Competition Act of 2014 will, among other things, promote and enhance economic efficiency and competition and ensure that industrial concentration would not limit economic power to a few.

“It will also prohibit anti-competitive agreements and abuses of dominant position that distort, manipulate, or constrict the operations of markets in the Philippines,” the senator stressed.

Aquino added that the push for inclusive growth would be much easier with a help of a competition policy that gives entrepreneurs and small businesses the capability to compete against big businesses.

“I’m hoping this competition policy, if passed, can support our micro, small and medium enterprises, let them grow into larger enterprises and provide more jobs to our countrymen,” Aquino emphasized.

At the same time, Aquino allayed fears that big businesses with high market share will be affected by the competition policy.

“This is not against companies that have high market share. It’s against companies with high market share and who are using that position to abuse their powers or abuse smaller players in the market,” he explained.

The Philippines is one of few developing countries that do not have a valid competition policy.

In the past two decades, Congress tackled several competition bills but lawmakers failed to find common ground on key provisions, hampering their passage into law.

“The Fair Competition Act is both pro-poor and pro-business.”

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