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Economy

Philippines raises threshold for M&A review

Businesses call for higher level as regulator prepares for adjustment

The competition regulator, the PCC, said the threshold would be adjusted every year from March 2019.   © Reuters

MANILA -- The Philippine antitrust watchdog on Monday doubled the threshold to trigger a review of mergers and acquisitions, in a move seen partly as appeasing big businesses who have complained about how the country's new competition policy is enforced.

The Philippine Competition Commission said it had recalibrated the threshold for the size of a transaction to 2 billion pesos, and to 5 billion in either annual gross revenue or assets for parties involved in a deal. Under rules put in place in 2016, a default threshold of 1 billion pesos for either category was enough to activate a review.

The regulator said the threshold would be adjusted every year from March 2019, based on the growth of country's gross domestic product the previous year "rounded up to the nearest hundred million."

"The adjustment stems from various considerations, including the size of actual notifications to date, the country's economic growth, overall inflation, and efficient use of the commission's limited resources," PCC Chairman Arsenio Balisacan said.

An executive of a local conglomerate, who declined to be identified, described the move as "excellent" in its direction, but said the new threshold remained "too low." The official deemed a 5 billion pesos threshold for the size of a transaction as more appropriate.

Meanwhile, an official at a local brokerage also said the new threshold "could still go higher" and added that other companies wanted more than a new threshold.

The Philippines legislated for its first competition law in 2015, ending two decades of lobbying from business against the policy. Since its establishment the following year, the PCC has had some friction with businesses, who complained about the low threshold, extensive review process and demanding paperwork involved.

The regulator has also been embroiled in a legal battle with the country's telecoms duopoly, PLDT and Globe Telecom, over their acquisition of the telecoms assets of San Miguel in 2016.

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