The Philippine Competition Commission ("PCC"), through Commission Resolution No. 18-2022, has adjusted the compulsory notification threshold for mergers and acquisitions as follows: (i) from PhP 6 billion in 2020 to PhP 6.1 billion for the Size of Party ("SoP"), and (ii) from PhP 2.4 billion in 2020 to PhP 2.5 billion for the Size of the Transaction ("SoT").
The SoP refers to the aggregate value of assets or revenues in the Philippines of the ultimate parent entity of one of the parties to a transaction, while the SoT refers to the value of assets or revenues of the acquired entity and the entities it controls.
Previously, all mergers and acquisitions with SOP or SoT below PhP 50 billion were exempt from compulsory notification and review by PCC under Republic Act No. 11494, otherwise known as the Bayanihan to Recover as One Act, were subject to compulsory notification and review by PCC. With the lapse of the period set under the Bayanihan to Recover as One Act on 15 September 2022, the new threshold set by PCC is now effective beginning 16 September 2022.
PCC calculated the new thresholds to be provisionally set by updating the 2020 thresholds based on the country’s nominal gross domestic product growth in the past two years, reflecting the contraction of the economy by 8.09% in 2020 and subsequent growth of 8.13% in 2021. The set thresholds will remain effective until PCC en banc approves a new set of thresholds for compulsory notification.
