Metro Manila (CNN Philippines, August 3) — Philippine Competition Commission (PCC) chair Arsenio Balisacan said that starting August 9, the government will go after companies that manipulate markets.
In an August 3 Palace briefing, Balisacan said the two-year transition period provided by Republic Act 10067, also known as the Philippine Competition Act, ends on August 8.
“What does the Philippine Competition Act provide? In all the prohibited acts, we just need to remember one concept: fairness,” he said. “Dapat patas ang laban ng mga negosyo sa merkado [The playing field in the market has to be fair].
The law — which former President Benigno Aquino III signed into law on July 21, 2015 — prohibits companies from doing the following:
– entering into anti-competitive agreements, such as price-fixing and colluding with other companies to control the market
– abusing a dominant position, such as a company setting the prices of their goods below the market value in order to drive competing companies out
– entering into mergers and acquisitions that would restrict or lessen competition in the market
Companies found in violation of this law will be fined up to ₱100 million for the first offense and up to ₱250 million for the second offense. In addition, the company’s directors and officials may face up to seven years in prison.
Balisacan said the PCC has received 26 complaints for anti-competitive conduct in various industries, including the manufacturing, agricultural and public services sectors.
“Three of which have advanced to preliminary inquiry and subsequently progressed to full administrative investigation,” he said. “To preserve the integrity of the investigation, we cannot mention more specific details.”
Balisacan added that the PCC has 90 days finish its preliminary investigation, but that there is no timeline for the administrative investigation.
He said if the company is found guilty following the latter probe, fines will be meted out.
He also said by taking down anti-competitive practices like cartels, where companies collude with each other to control the market, the prices of goods may go down.
“To the extent that we have anti-competitive practices in the sector, the implementation of the Philippine Competition Act in that sector should lead to lower prices and more choices of — insofar as agricultural goods and services are concerned — and more variety and better quality of products,” he said.
Garlic price hike
On July 13, the Department of Agriculture suspended the import clearances for 43 companies for creating a cartel that caused the spike in garlic prices in the past months.
Read: DA suspends import clearance of 43 companies in garlic cartel
The day before, Agriculture Secretary Manny Piñol said the companies created a shortage in supply because only imported a small amount of garlic or none at all, despite being issued a permit allowing them to import in large quantities.
Read: Garlic cartel caused supply shortage to jack up market price – Agriculture Secretary
“We would not allow them to import [garlic] anymore because at a time we needed them to import, they did not import. This is the first indication na may [that there is a] cartel,” Piñol said during a media briefing.
This follows a Senate hearing on Monday where Committee on Food and Agriculture chair Cynthia Villar slammed Bureau of Plant Industry director Vivencio Mamaril on why garlic price in the market reaches P200 per kilo, when the landed cost of imported garlic is only ₱17.
A similar shortage of garlic was seen in 2014 that also resulted in higher prices.
The Agriculture Department said the best way to fight the garlic cartel is to raise local production to up to 50 percent of total consumption.
To do this, they are planning to provide loans to garlic farmers, buy cold storage facilities, and look for areas to grow more garlic.
CNN Philippines Correspondent Joyce Ilas contributed to this report.
