Rajah & Tann Regional Round-Up
your snapshot of key legal developments in Asia
Issue 3 - Jul/Aug/Sep 2021

PCC Resumes Motu Proprio Review of M&As After 1-year Moratorium

Before the COVID-19 pandemic hit the Philippines, parties to mergers and acquisitions ("M&As") had to notify the Philippine Competition Commission ("PCC") of such M&A when these two thresholds are met: (i) the aggregate annual gross revenues in, into or from the Philippines, or value of the assets in the Philippines, of the ultimate parent entity ("UPE") of at least one of the acquiring or acquired entities (including that of all entities that the UPE controls, directly or indirectly) exceed PhP6 billion, and (ii) when the value of the transaction exceeds PhP2.4 billion.  PCC also had the power to review, motu proprio, any M&A – including those that did not meet the foregoing thresholds – having a direct, substantial, and reasonably foreseeable effect on trade, industry, or commerce in the Philippines, based on factors deemed relevant by PCC.

To promote business continuity and capacity building during the pandemic, Philippine Congress passed the "Bayanihan to Recover as One Act". This increased the thresholds for compulsory merger notification to PhP50 billion for a period of two years from the effectivity of the law on 15 September 2020, and suspended PCC's power to review, motu proprio, any M&A for a period of one year, also from the effectivity of the law.

With the relaxation of the foregoing rules, merger notifications in 2020 decreased to 26 from the 46 notifications PCC received in 2019.  In 2021, PCC has thus far received only four notifications.

With the recent expiration of the one-year moratorium on motu proprio merger review on 15 September 2021, PCC is hopeful that parties to M&As will be discouraged to enter into M&As that are potentially anti-competitive.  PCC stressed that regulating M&As in the post-COVID-19 economic environment is critical to ensure that consolidation is not allowed to lead to highly concentrated markets.

Indeed, PCC's motu proprio review powers (as well as the compulsory notification requirement) allows it to predict and prevent anti-competitive practices before these materialise.  The early determination of the merger's impact provides PCC the opportunity to intervene and remedy or prohibit a merger when anti-competitive effects are determined to occur.

As of 14 September 2021, PCC has received a total of 225 M&A transactions with a combined transaction value of PhP 4.56 trillion. The top five sectors based on frequency of M&A notifications are manufacturing (50), financial and insurance (37), real estate (33), electricity and gas (27), and transportation and storage (18).

Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice.


Gatmaytan Yap Patacsil Gutierrez
& Protacio (C&G Law)
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Ben Dominic R Yap
Managing Partner
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Jaime Renato B Gatmaytan
D +632 8894 0377
F +632 8552 1978

Norma Margarita B Patacsil
D +632 8894 0377
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Anthony Mark A Gutierrez
D +632 8894 0377
F +632 8552 1978

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