How PH's top antitrust official is guarding market competition
MANILA, Philippines – At first, Arsenio Balisacan wasn't sure if he should agree to be the first chairperson of the Philippine Competition Commission (PCC).
After nearly 4 years of working as the country's socioeconomic planning secretary and two years of being the dean of the University of the Philippines Diliman's School of Economics, Balisacan said all he wanted was a simple, quiet life with enough time to enjoy long-distance running.
"I've been warned that there will be some challenges along the way. I've been told that if I'm trying to change the climate, the way things are done, then certainly I will be stepping on sensitive toes and they will not take me sitting down," Balisacan said in an interview with Rappler at his office in Pasig City.
It took the country 25 years before the Philippine Competition Act hurdled the legislative mill in July 2015. It is pretty new for businesses here in the Philippines to work with a competition commission – making the chairman's duty a tough job.
Balisacan took over antitrust duties at a point in the country's economic transformation when telecommunications companies were pushing for a digital pivot and technology firms were extending their reach into transportation and other industries.
"I knew there will be lots of challenges, but I [am not] one to run away from challenges," Balisacan said, recalling how the past year has been for the one-year-old PCC.
With several corporate mergers and acquisitions on the table, independent researchers have warned that some industries are becoming too concentrated, putting consumers in danger of high prices and fewer options in key services. (READ: Monopolies, duopolies hamper PH inclusive growth)
On May 30, 2016 – just 5 days before the PCC published its implementing rules and regulations – Balisacan and the entire commission faced their biggest challenge so far: PLDT Incorporated and Globe Telecom's P69.1-billion deal to buy out San Miguel Corporation's telecommunications assets.
The deal came after Ramon Ang, chairman of San Miguel, had announced that the firm would launch a supposed 3rd player to compete against the country's two telecommunications giants – PLDT and Globe – with or without a foreign partner. (READ: San Miguel's sale of telco business: Will consumers benefit?)
Foreign business chambers see this as the test case for the PCC, which earlier said that strong public clamor for faster, cheaper internet and mobile services could be set back by a lack of competition.
Since then, PLDT and Globe have been at odds with the PCC over whether the mega deal requires the regulator's approval. (READ: Battle lines drawn over San Miguel's telco buyout deal)
The PCC argues that the deal falls within the scope of its review. But PLDT and Globe insist that the anti-trust body's transitory rules provide the deal a "deemed approved" status.
This disagreement has led to court proceedings, latest of which is the PCC's petition to the Supreme Court (SC) to lift the injunction on the transaction review and to prevent the parties from further implementing the terms of the buyout.
Balisacan declined to address the controversial deal, since the battle is already in court. "We have consulted our lawyers here. At the end of the day, we will all be guided by the decision of the court."
But he gave hints of how he might act as the Philippines' top antitrust official. "In the experiences of other countries, this is not unique, especially in the public utilities. The Supreme Court has not decided yet. Several remedies can still be explored. Of course, we are not in the position to talk right now."
Despite criticism on how he is dealing with the case, Balisacan said that through the petition before the SC, he would like to send a strong message to consumers and businesses that the PCC – as the country's primary competition authority – will not back down.
Balisacan, an economist for over 3 decades, also clarified he would not go after a company just because it was big, and would do so only if there were violations of the antitrust law. (READ: PCC's 2017 priorities: Int'l shipping, cement, power, agriculture)
Balisacan pointed out that he would not have worked hard during his time as the country's socioeconomic planning secretary if he would just burden the business community now.
"We worked very hard in the previous economic cluster to promote good business climate, [improve] the competitiveness ranking of our country, upgrade credit ratings, and entice investors. If you only know how hard we worked," Balisacan said.
"If I will be the one to burden the business community? I would rather resign. That is because it is against what I've been working for and what I believe in," he added.
In his nearly 4 years at the helm of the National Economic and Development Authority (NEDA), the full-year economic growth of the Philippines never dipped below 6%. It was also during his time, in 2015, when the unemployment rate fell to its lowest in a decade.
The PCC chief said the Philippines needs more investments to have more quality jobs. "Fostering good competition culture is what attracts investments. That is what creates quality jobs."
During his talk with William Kovacic, senior fellow at George Washington University, Balisacan said Kovacic "was quite impressed with how PCC is starting because its move is quite fast compared to other areas he has seen."
The PCC chief said Kovacic gave him advice: Invest a lot in manpower to readily face challenges as well as work closely with businesses and let them know the commission is there for the good of the community in the long haul.
Since June 2016, the PCC has received 102 notifications of mergers and acquisitions worth P1 billion and above. Most of these have already been approved, according to Balisacan.
"We are doing our best to put the competition environment here in the same environment as you've seen in places where investments are good," he said.
"In the end, an environment with good competition culture benefits consumers in terms of the prices they pay for and in terms of the quality of goods and services as well as the variety of options. That is, at the end of the day, our mandate." – Rappler.com