Monday, December 15, 2014

Senate passes fair competition act

MANILA-The Senate today passed on third and final reading a measure which aims to shield small business owners and consumers from companies engaged in unfair business practices which lead to increase in prices of basic goods and services.

Senate Bill No. 2282, otherwise known as the Fair Competition Act of 2014, was introduced by Sen. Paolo Benigno “Bam” Aquino IV, chair of the Senate Committee on Trade, Commerce and Entrepreneurship.

“A fair competition policy will level the playing field for Filipino businesses and allow more Filipinos to exercise their entrepreneurial spirit,” Aquino said.

Aquino said the measure works hand-in-hand with the recently enacted Go Negosyo Act (Republic Act 10644) which he also authored. He said SBN 2282 will allow more Filipinos to make a living “out of their own businesses,” which, in turn, will generate more employment and strengthen the purchasing power of more Filipinos.

“The bill puts in place measures that will protect the welfare of businesses and protect honest, hard-working entrepreneurs against abuse of dominance and position, and other unfair practices that put both Filipino businesses and their consumers at risk,” Aquino said.

Senate President Franklin M. Drilon concurred, saying that “having a competition law will lead to lower prices, higher quality of products and services, and more choices for consumers, as fostering a competitive economic environment spurs market efficiency and innovation.”

Drilon also said that the Fair Competition Act contributes to Congress’ goal of passing a package of priority economic measures to improve the Philippine business climate, boost investment and ensure macroeconomic and fiscal sustainability to prepare the country for the ASEAN Economic Community (AEC) in 2015.

He noted that “the Philippines remains the only member of the ASEAN-5 countries (which also includes Indonesia, Malaysia, Singapore, and Thailand) where a competition law is not already in place.”

Acts considered as unfair competition include, among others, any competitive agreement between competitors; setting, limiting, or controlling the production of goods and services to the detriment of consumers; the application of contradictory conditions to equivalent transactions with other parties, and price fixing.

To accomplish its goals, the bill mandates the establishment of a Fair Competition Commission which will ensure that industrial concentration would not limit economic power to a few.

Tasked to promote competition, ensure consumer welfare, and penalize abuses of market power, the Commission is also mandated to prohibit anti-competitive agreements and abuses of dominant position that distort, manipulate, or constrict the operation of markets in the Philippines through constant monitoring of business practices being implemented by market leaders.

The proposed measure states that those found to be engaged in unfair competition will face a fine ranging from P50 million to P200 million.

The measure also states that any competitive agreement between competitors shall be penalized by imprisonment from two to five years, or fined an amount not less than P100 million but not more than P200 million or both, with “the  penalty of imprisonment being imposed upon the officers and directors of the entity.”  

 “We believe that the Fair Competition Act is all at once pro-poor, pro-people, and pro-business. It safeguards the welfare of businesses, large and small, and protects honest, hardworking entrepreneurs,” Aquino said.

The measure was approved on third reading after the inclusion of an amendment by Acting Minority Leader Vicente “Tito” Sotto, which further empowers the proposed Commission to consider whether market entities selling their products below cost “are doing so in good faith to meet or compete with the lower price of a competitor.”

SBN 2282 is co-authored by Senators Serge Osmeña III, Teofisto “TG” Guingona III, Miriam Defensor-Santiago, Jinggoy Ejercito Estrada and Antonio Trillanes IV.  (Yvonne Almiranez)

Due to conflicting estimates, Recto calls for audit of coco levy funds

MANILA-Due to conflicting estimates on the value of the “coco levy fund”, Sen. Ralph Recto has called for an audit to determine the present worth of the multibillion-peso fund which grew out of the levy on copra sales during the Marcos period.

“There are lots of numbers being bandied about. One estimate, reportedly from the Asset Privatization Trust, puts it at P100 billion. One briefer presented by a financial institution computes it at P73 billion. Government lawyers place it at P60 billion. A Cabinet member says it’s P72 billion,” Recto said.

“Just today, we were told by the Presidential Commission on Good Government that the fund is in the neighborhood of P80 billion,” Recto said.

The latter was the figure PCCG chair Andres Bautista told a Senate hearing as his agency’s appraisal of the fund’s present value.

Recto said only an audit by the Commission on Audit “can settle the confusion and present us with a clear picture on value, status, interests, income and assets of the fund.”

He said COA has both the expertise and the mandate “to follow the money and catalogue the assets.”

“Because the levies were used to acquire a myriad of corporations and finance ventures, we need an audit to show where these are and the state of investments,” Recto said.

Among the investments are seven oil mills, as well as seven other firms engaged in a wide range of activities - from banking to insurance to chemicals - and 10 copra trading companies.

The investments were made prior to 1982 by the Coconut Industry Investment Fund which in turn was financed in whole by coco levy collections.

One of the investments, the 753.8 million shares in San Miguel Corporation worth P56 billion at the time of buy-back, has been declared by the Supreme Court as public funds. The high court’s partial entry of judgment last week paves the way for its eventual plowback to farmers.

“But for government to properly administer the fund and distribute the dividends, it must have an idea of how much money is involved,” Recto said.

“Hindi naman siguro complicated ang accounting.  Eh kung nabilang nga natin ang lahat ng puno ng niyog sa buong bansa na 338,339,638, siguro naman mas madali bilangin ang fruits ng coco levy funds,” he said.

Birthed by Republic Act 6260, the coco levy was imposed on copra sales purportedly to raise capital investment for the coconut industry.

By 1986, the total amount collected from the various coconut levies from 1971 to 1982 amounted to P9.7 billion.  In the aftermath of EDSA 1, the amount was sequestered by the PCGG, which also triggered a long legal struggle for its ownership.

On May 7, 2004, the Sandiganbayan rendered a partial summary judgment in declaring that the six CIIF-OMG companies, their 14 holding firms, and the CIIF-OMG block of SMC shares as “owned by the Government in trust for all the coconut farmers.”

The Supreme Court, in its decision dated 24 January 2012, upheld the Sandiganbayan.

On the same year, the SMC shares amounting to P57 Billion were paid for by the San Miguel Corporation and was remitted to the National Treasury.

Malacanang is presently drafting an Executive Order which will govern how the interest on the fund will be utilized to benefit the coconut farmers.

In the Senate, Recto has authored SB 455 which prescribes the mechanics of the disposition of coco levy funds and assets.

He has also filed Resolution 30 which calls for an audit on all coco levy investments.


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