Antitrust body raises threshold for compulsory mergers, acquisition notification


Posted at Feb 21 2019 01:22 PM

MANILA - The Philippine Competition Commission on Thursday raised the threshold for compulsory notification of mergers and acquisitions in a bid to ensure that transactions would not "lessen competition."

In a commission resolution released Thursday, the PCC raised the threshold for the Size of Person (SoP) to P5.6 billion from P5 billion and for the Size of Transaction (SoT) to P2.2 billion from P2 billion.

This marks the second adjustment since the Philippine Competition Act was enacted in 2015, which started with a base threshold of P1 billion for both, the statement said. 
"The rationale for setting a notification threshold is to ensure that mergers and acquisitions that are more likely to substantially lessen competition are subject to compulsory notification and review, and to exclude those that are less likely to pose competition concerns,” said PCC chairman Arsenio Balisacan.

A 2018 memorandum circular mandated the "automatic annual adjustment" of thresholds based on the nominal gross domestic product (GDP) growth the previous year rounded up to the nearest millions, the agency said. 

“The PCC observes that the appetite for mergers and acquisitions within a rapidly growing economy remains high. The adjustment based on nominal GDP growth ensures that the thresholds maintain their real value over time and relative to the size of the economy,” it said. 

The revised thresholds will take effect on March 1, the PCC said. 

As of February, the antitrust body has received 177 transactions. It has approved 161 deals worth P2.83 trillion.