The Philippine Competition Commission issued a circular exempting joint venture projects between government agencies and private entities under the framework of the National Economic and Development Authority from compulsory merger notification.
The new circular will take effect on July 11. The commission is streamlining the application process for exemption of JV projects covered by the NEDA joint venture guidelines.
“The PCC has been continuously streamlining its processes in support of the government’s push to ease doing business. Significantly, PCC’s issuance of these rules is aligned with the government’s relief, recovery and resiliency efforts, which direct the speedy roll-out of critical infrastructure projects in response to the current crisis,” said PCC chairman Arsenio Balisacan.
The NEDA guidelines cover joint venture arrangements between private entities and government-owned or -controlled corporations, government corporate entities, government instrumentalities with corporate powers, government financial institutions and state universities and colleges.
Under the circular, the PCC will conduct a competitive assessment of the JV project in parallel with the approval process of the implementing agency, or NEDA’s Investment Coordination Committee.
This will expedite the rollout of key development projects that would otherwise undergo the regular merger review only after they have been awarded to the private sector proponent.
This, in effect, exempts the government agency and the private entity from notifying the PCC of the JV upon signing of a definitive agreement.
The government agency may apply for a certificate of project exemption on behalf of the prospective bidders or proponents. In its review, PCC will provide inputs on the project documents and assess how the JV project may affect competition in the relevant markets.
It said that if competition concerns arise in the review, the agency may require the prospective bidders to undertake specific commitments to address them.
The PCC will issue a certificate of project exemption in favor of the winning private sector participant only if the transaction will adopt PCC’s inputs in the final project documents. It said the failure to follow the requirements under the circular requires both parties to file their notifications under the regular merger review process.
