Filipinos still have low awareness of the importance of competition in the market, two years after the ratification of the Philippine Competition Act or Republic Act 10667.
Commissioner Stella Quimbo of the Philippine Competition Commission (PCC) made the statement in a recent forum on regulation and governance organized by the Philippine Institute for Development Studies and the Australian National University.
Quimbo said very few people have an appreciation for competition concerns.
In a 2017 awareness survey conducted by the PCC among 1,200 respondents, Quimbo said “76 percent agreed that price fixing is unfavorable while 74 percent wrongly believed that when competitors divide the market into territories, consumers benefit.”
Also, 68 percent “cannot say for sure if they prefer to have more choices in the market,” which according to her is a clear indication that the Filipino consumer does not feel empowered.
Quimbo also cited a survey conducted by the Asian Institute of Management that showed that only 11 percent of firms have heard of the Commission, adding that people still mistake the PCC for other agencies such as the Philippine Sports Commission and the National Competitiveness Council.
This lack of familiarity, she said, shows that small and medium enterprises might be unknowingly engaging in anti- competitive agreements or conducts, which are serious violations of the Act.
Citing a separate survey funded by the Asia-Pacific Economic Cooperation, Quimbo said SMEs cannot exactly identify how big businesses are anti-competitive, adding that that they don’t know how to report possible abuses that might be committed by bigger and dominant firms.
“The challenge is to make consumers become more familiar of the competition law because they can be important triggers for opening cases,” she said.
Quimbo also emphasized the need to work on strengthening the country’s institutions.
In the 2017 Executive Opinion Survey, businessmen in the Philippines identified inefficient government bureaucracy, inadequate supply of infrastructures, corruption, ineffective tax regulations, disproportionate tax rates, and political instability as factors affecting ease of doing business in the country, which, according to Quimbo, are related to weaknesses in institutions.
She said in countries where institutions are weak, competition policy is important because it plays a more meaningful role at least vis-a-vis regulations.
The existence of private players, for one, can help competition agencies monitor abuse of market power, she said.
The Act, which Quimbo described as a “game-changing legislation,” protects the welfare of the consumers.
She said that the penalties it can impose on errant firms are among the largest defined in any Philippine law.
Specifically, the law prohibits anticompetitive agreements, abuse of dominant position among firms, and transactions that are found to substantially lessen competition in the market.
Other violations, according to PCC, include price-fixing or when competitors collude to fix prices of goods and services and bid rigging or when parties coordinate their bids, rather than submit independent bid prices.
To increase the awareness of Filipinos on the country’s competition policy, Quimbo said the PCC should strengthen its partnership with agencies, organizations, academe, and the media.
She added that the PCC also needs to work with the government to address policies that cause anticompetitive behavior among private firms.
