PCC raises thresholds for mandatory merger review

The Philippine Competition Commission (PCC) has raised the thresholds for mergers and acquisitions that should undergo mandatory review by the antitrust watchdog.

In a statement on Friday, the PCC said beginning March 1, mergers and acquisitions that reaching the size of party (SoP) of P7.8 billion and size of transaction (SoT) of P3.2 billion must be notified to the antitrust body before the consummation of the transaction.

The new thresholds were an increase from the SoP and SoT of P7 billion and P2.9 billion, respectively, which were in effect from March 1, 2023 to February 29, 2024

The SoP refers to the aggregate value of assets or revenues in the Philippines of the ultimate parent entity of one of the parties to a transaction, while the SoT refers to the value of assets or revenues of the acquired entity and the entities it controls.

Both ceilings for SoP and SoT must be met to trigger compulsory notification to the antitrust body of a merger or acquisition.

The PCC said it adjusts its thresholds for compulsory notification annually based on nominal gross domestic product (GDP) growth “to ensure they remain relevant to the evolving economic landscape.”

The anti-trust body noted that the adjusted thresholds do not affect notifications filed before March 1, 2024 as well as mergers and acquisitions currently under review, or those already reviewed and decided upon by the PCC.

To date, the PCC said it has reviewed a total of 293 mergers transactions, collectively valued at more than P5.49 trillion.

Of the said number, 289 were notified to the body.

In 2023 alone, the PCC said it received 24 notifications of mergers and acquisitions transactions worth about P610 billion, majority of which came from the real estate, electricity and gas, and the information and communication sectors.

The PCC is mandated by the Philippine Competition Act (PCA) to review M&As and prohibit transactions that will substantially lessen competition in the relevant market. 

Even if a transaction does not breach the thresholds, the anti-trust body said a merger review mandate may be exercised “motu proprio” or by its own initiative, “if it finds reasonable grounds that the transaction is likely to result in a substantial lessening of competition or has led to such given preliminary indications.”—AOL, GMA Integrated News