UMVA has learned that the Philippine Competition Commission (PCC) is set to exempt public-private partnership (PPP) joint ventures from merger notification rules, provided they operate in disadvantaged areas or focus on building priority infrastructure such as data transmission and regional airports.
This move aims to align competition policies with national development needs, and the PCC has issued a draft memorandum circular that outlines the exemption mechanism. The circular is a significant step towards streamlining the process for issuing required licenses and permits, ultimately expediting the implementation of Infrastructure Flagship Projects.
Currently, joint ventures undertaking PPP projects are required to notify the PCC in accordance with existing regulations. However, the PCC believes that this process can be improved, citing the need to balance competition policies with the country's development goals. The proposed exemption is expected to encourage more PPP projects in underserved areas.
The draft rules specify that joint ventures undertaking PPP projects in disadvantaged regions, cities, or municipalities will be exempt from compulsory notification. A region, city, or municipality is considered disadvantaged if its gross domestic product per capita is below or equal to 75% of the national average.
PPP projects in specific sectors, such as data transmission, tourism, agriculture, research and development, and innovation, as well as the development of regional airports and maritime port infrastructure, will also be exempt from notification requirements. This exemption is expected to boost economic growth and development in these areas.
To qualify for the exemption, the implementing agency or original proponent must submit a request to the PCC's Mergers and Acquisitions Office. Concerned agencies may also consult with the office prior to filing an application for exemption, ensuring a smooth and efficient process.
The PCC's move has been welcomed by experts, who believe that the draft rules strike a balance between promoting PPPs in developed and underserved areas. A location-based approach that favors disadvantaged areas is seen as a step in the right direction, as PPPs are often concentrated in more developed areas.
The exemption will not apply if a merger or acquisition occurs between the private partner and another private sector entity after the PPP project is awarded. In such cases, the private partner will need to comply with the PCC's notification requirements, ensuring that the commission maintains its oversight role.
