PCC, BSP form partnership to foster fair competition in banking industry

The Philippine Competition Commission (PCC) and the Bangko Sentral ng Pilipinas (BSP) on Friday inked a partnership to foster competition in the banking industry. 

PCC chairman Arsenio Balisacan and BSP Governor Nestor Espenilla Jr. led the signing of the memorandum of agreement, marking the start of an active collaboration between the regulators.

“The PCC and BSP have common interests in the regulation of bank and non-bank financial institutions. In regulating banks, the PCC acknowledges that while financial institutions serve as the intermediary for money, banking and credit that businesses rely on, they themselves operate as businesses too,” Balisacan said.

“This partnership is a strong push towards efficient regulatory approach concerning the banking and financial industry. BSP’s mandate is in promoting and maintaining stability in the monetary and financial system, while PCC’s obligation is in promoting free and fair competition,” the anti-trust body's chair added.

As PCC promotes competition which keeps prices in check, this in turn directly supports BSP’s goal of keeping inflation within target.

Recognizing the importance of banks in shaping the economy, PCC and BSP agreed to create a streamlined set of rules for consolidation, which may depart from the usual period and process.

Balisacan said that the partnership can lead to faster consolidation of banks, in line with the PCC’s regulatory foothold on merger review. In particular, the antitrust commission supports the BSP’s Consolidation Program for Rural Banks which aims to strengthen small lenders.

“PCC shall streamline the process of consolidation or merger review of small banks to ease the proceedings when faced with the threat of a bank run or bankruptcy,” Balisacan said.

The BSP may certify to PCC the urgency of concluding a proposed merger or acquisition involving BSP-supervised financial institutions (BSFIs), which the PCC shall take into account in the conduct of its review of the notification.

The BSP may also recommend to PCC that a proposed merger or acquisition involving BSFIs be exempted from prior notification, released from obligation to submit review requirements, or may not be prohibited under the Philippine Competition Act.

The partnership also aims to boost the detection, investigation, and prosecution of anti-competitive conduct in the sector by setting up mechanisms for reporting potential violations.

Both regulators also agreed to provide access to information and/or documents relative to mergers, acquisitions, and other transactions involving BSFIs which may be deemed covered under the Philippine Competition Act. —KG, GMA News