RA 10667 — Philippine Competition Act
Signed: July 21, 2015 Effective: August 5, 2015 (15 days after publication)
RA 10667 is the Philippines’ framework competition law. It creates the Philippine Competition Commission (PCC) as the independent quasi-judicial body with original and primary jurisdiction over all competition matters. In the energy sector, the PCC has authority over anti-competitive agreements (including fuel price-fixing), abuse of dominant position in energy markets, and major mergers and acquisitions. The PCC may intervene in ERC proceedings (§12(n)) and modified ERC’s anti-monopoly function under EPIRA §43(u) to be consistent with this Act. See Philippine Competition Commission (PCC) .
Repeals and Amendments (§55): RPC Art. 186 (monopolies and restraint of trade); CA 138 §4; EPIRA §43(u) (ERC anti-monopoly function — insofar as inconsistent with PCA); RA 9502 §§24–25 (medicine price manipulation); EO 45 s.2011 (DOJ Competition Authority).
§2–3 — Policy and Scope
Policy (§2): Enhance economic efficiency and promote free and fair competition; prevent economic concentration controlling production/distribution/trade/industry that stifles competition; penalize anti-competitive agreements, abuse of dominant position, and anti-competitive M&A — to protect consumer welfare and advance development. [RA 10667, §2, 2015]
Scope (§3): All persons/entities engaged in any trade, industry and commerce in the Philippines. Applicable to international trade with direct, substantial, and reasonably foreseeable effects in Philippine commerce, including acts done outside the Philippines. Excludes labor collective bargaining activities. [RA 10667, §3, 2015]
§4 — Key Definitions
| Term | Definition |
|---|---|
| Acquisition | Purchase of securities or assets to obtain control over another entity |
| Agreement | Any type or form of contract, arrangement, understanding, collective recommendation, or concerted action — whether formal/informal, explicit/tacit, written/oral |
| Control | Ability to substantially influence or direct the actions or decisions of an entity, whether by contract, agency, or otherwise |
| Dominant position | Position of economic strength enabling an entity to control the relevant market independently from competitors, customers, suppliers, or consumers |
| Entity | Any person (natural or juridical), sole proprietorship, partnership, combination or association — including government-owned or controlled entities — engaged directly or indirectly in any economic activity |
| Market | Group of sufficiently interchangeable/substitutable goods or services that are the object of competition, and the geographic area where they are offered |
| Relevant market | Combination of relevant product market + relevant geographic market; defined by consumer substitutability |
[RA 10667, §4, 2015]
§5–13 — Philippine Competition Commission (PCC)
Establishment (§5)
An independent quasi-judicial body attached to the Office of the President. Upon establishment, EO 45 (DOJ as Competition Authority) is amended. The DOJ-Office for Competition (OFC) is retained but limited to criminal preliminary investigation and prosecution only. [RA 10667, §5, 2015]
Composition (§6)
| Position | Qualifications |
|---|---|
| Chairperson | Citizen; resident; good moral character; 10+ years active practice in economics, law, finance, commerce, or engineering; rank = Cabinet Secretary |
| 4 Commissioners | Same qualifications; rank = Undersecretary; at least 1 Philippine Bar member (10yr experience); at least 1 economist |
Appointed by the President. [RA 10667, §6, 2015]
Terms (§7): 7 years without reappointment; security of tenure (removed only for just cause). Staggered initial appointments. [RA 10667, §7, 2015]
Prohibitions (§8): Cannot hold any other office or employment during tenure; no practice of any profession (except teaching); no financial interest in government contracts/franchises; no elective office immediately after tenure; 2-year cooling-off period before appearing before PCC as counsel or agent; 4th-degree relatives cannot appear or transact before PCC during incumbency and 2 years after. [RA 10667, §8, 2015]
Quorum (§10): 3 members constitute a quorum; 3 affirmative votes needed for any rule, ruling, order, resolution, or decision. [RA 10667, §10, 2015]
Powers and Functions (§12)
Key powers relevant to the energy sector:
| Power | Detail |
|---|---|
| Original/primary jurisdiction | Enforce and implement all competition laws; conduct inquiries motu proprio or on complaint |
| M&A review | Review mergers/acquisitions; determine notification thresholds; prohibit substantially anti-competitive M&A |
| Structural remedies | Apply injunctions, divestment orders, disgorgement of excess profits for anti-competitive agreements or dominant position abuse |
| Subpoena powers | Issue subpoena duces tecum and ad testificandum; summon witnesses; punish for contempt |
| Business premises inspection | With court order, inspect premises to prevent destruction of documents |
| Intervene in ERC/SEC/NTC | Intervene or participate in administrative and regulatory proceedings of ERC, SEC, NTC when consideration of competition provisions is required |
| Advocate pro-competitive policies | Review government regulations motu proprio for adverse competition effects; advise Executive Branch |
| Issue advisory opinions and guidelines | On competition matters; submit annual/special reports to Congress |
| Leniency program | Grant immunity from suit or fine reduction for voluntary early disclosure of anti-competitive activity |
[RA 10667, §12, 2015]
§14–15 — Prohibited Acts
Anti-Competitive Agreements (§14)
Per se prohibited (§14(a)) — no need to prove market effect:
- Price-fixing — restricting competition as to price or terms of trade
- Bid manipulation — cover bidding, bid suppression, bid rotation, market allocation at auction/bidding
Substantially anti-competitive agreements (§14(b)) — prohibited when object or effect is to substantially prevent, restrict, or lessen competition:
- Setting, limiting, or controlling production, markets, technical development, or investment
- Dividing or sharing markets (by volume, territory, type, buyers/sellers, or any means)
Rule of Reason agreements (§14(c)) — other agreements substantially preventing/restricting/lessening competition are prohibited unless they contribute to improving production/distribution or promoting technical/economic progress while giving consumers a fair share of resulting benefits. [RA 10667, §14, 2015]
Note: Entities in a common control group (parent-subsidiary, common ownership) are not “competitors” for purposes of §14.
Energy application: Petroleum distribution cartels, fuel price-fixing among oil companies, bid manipulation in CSP (competitive selection process for power supply), and market allocation among generation companies are per se prohibited under §14(a). Production-limiting or market-sharing agreements among RE developers under §14(b).
Abuse of Dominant Position (§15)
Prohibited conduct by dominant entities [RA 10667, §15, 2015]:
| Prohibited Act | Detail |
|---|---|
| Predatory pricing | Selling below cost to drive out competition (not defensive pricing to match competitor) |
| Barriers to entry | Imposing barriers to prevent competitors from growing — except those from superior products/processes |
| Tying | Making transaction subject to acceptance of unconnected obligations |
| Discriminatory pricing | Unreasonably discriminatory prices among contemporaneously trading customers/sellers |
| Exclusive dealing | Restrictions on where/to whom/what form goods may be sold that prevent/restrict competition |
| Unfair prices | Imposing unfairly low purchase prices from marginalized suppliers; unfair purchase/selling prices on competitors/customers/suppliers/consumers |
| Limiting markets | Limiting production, markets, or technical development to the prejudice of consumers |
Not prohibited: Acquiring/maintaining market share through superior skills, service, product quality, business acumen, or protected intellectual property. [RA 10667, §15, 2015]
Rebuttable presumption of dominant position: ≥50% market share in the relevant market. The Commission may set different thresholds for specific sectors. [RA 10667, §27, 2015]
§16–23 — Mergers and Acquisitions
Compulsory Notification (§17)
Parties to M&A agreements where transaction value exceeds PhP 1 billion must notify the PCC and observe a 30-day standstill before consummation. [RA 10667, §17, 2015]
Timeline:
- 30-day review from notification
- +60 days if PCC requests further information (total not to exceed 90 days from initial notification)
- If no decision within 90 days → deemed approved
Failure to notify: Agreement is void; administrative fine of 1–5% of transaction value. [RA 10667, §17, 2015]
Energy applications: All energy M&A exceeding PhP 1B (power plant acquisitions, distribution utility mergers, oil company acquisitions) require PCC notification and review.
Prohibited M&A (§20)
M&A agreements that substantially prevent, restrict, or lessen competition in the relevant market are prohibited. [RA 10667, §20, 2015]
Exemptions (§21)
An otherwise prohibited M&A may be exempted if parties prove either:
- (a) Efficiency defense: Concentration brings/is likely to bring efficiency gains greater than anti-competitive effects
- (b) Failing firm defense: Party faces actual/imminent financial failure and the agreement is the least anti-competitive alternative
[RA 10667, §21, 2015]
§28 — Forbearance
The PCC may forbear from applying the PCA for a limited time (in whole or in part) if: enforcement is not necessary for policy objectives; forbearance will not impede competition; and forbearance is consistent with public interest and consumer welfare. A public hearing is required. The forbearance order is public, and conditions may be attached to protect long-term consumer interests. The order may be withdrawn if its basis ceases to be valid. [RA 10667, §28, 2015]
Energy application: PCC could issue forbearance for temporary arrangements during energy transition (e.g., coordinated capacity investments) that might otherwise appear to restrict competition.
§29–30 — Penalties
Administrative Fines (§29)
| Violation Category | Fine |
|---|---|
| Anti-competitive agreements (§14) or dominant position abuse (§15) — 1st offense | Up to PhP 100 million |
| Same — 2nd offense | PhP 100 million to PhP 250 million |
| Failure to comply with PCC order | PhP 50,000 to PhP 2 million per violation + per day (starting 45 days after order received) |
| Supply of incorrect/misleading information | Up to PhP 1 million |
| Other violations | PhP 50,000 to PhP 2 million |
| Basic necessities or prime commodities | Fines tripled (§41) |
Fines indexed every 5 years to maintain real value. [RA 10667, §29, 2015]
Energy application: Petroleum products are likely “basic necessities” under RA 7581 — making cartelization/predatory pricing fines in the downstream oil sector triple the standard amounts.
Criminal Penalties (§30)
For per se anti-competitive agreements (§14(a) and (b)): 2–7 years imprisonment + PhP 50 million to PhP 250 million fine per violation. Penalties fall on responsible officers and directors personally. [RA 10667, §30, 2015]
§31–32 — Enforcement
PCC Exclusive Investigation Authority (§31)
PCC has sole and exclusive authority to initiate and conduct fact-finding or preliminary inquiry for enforcement. No other law enforcement agency may conduct any competition-related fact-finding, inquiry, or investigation (except as deputized by PCC). Preliminary inquiry completed within 90 days. If evidence warrants, PCC files criminal complaints with DOJ-OFC for prosecution. [RA 10667, §31, 2015]
Relationship with Sector Regulators (§32)
PCC has original and primary jurisdiction over all competition-related issues. Where the issue involves both competition and non-competition issues, the concerned sector regulator (e.g., ERC for energy) shall be consulted and afforded reasonable opportunity to submit opinion and recommendation before PCC decides. PCC and sector regulators shall work together to issue joint rules promoting competition. [RA 10667, §32, 2015]
Energy application: For issues before the ERC involving potential anti-competitive conduct by generation companies, distribution utilities, or market participants — PCC has primary jurisdiction but must consult ERC.
§34–35 — Confidentiality and Leniency
Confidentiality (§34): Business information submitted in PCC proceedings is confidential; violation = PhP 1–5 million fine. PCC decisions, orders, and rulings are published on official website (§52). [RA 10667, §34, 2015]
Leniency Program (§35): Immunity from suit or fine reduction for the first entity to voluntarily disclose an anti-competitive agreement before or during fact-finding — if the entity: (a) came forward before PCC received other information; (b) took prompt action to terminate participation; (c) provides full, candid, and continuing cooperation; (d) was not the coercer or leader. Even post-investigation leniency is available if the entity is first to come forward and PCC lacks sufficient evidence. Leniency cannot be used to report false or malicious information. [RA 10667, §35, 2015]
§39, §44, §45 — Appeals and Private Action
Appeals (§39): Decisions of PCC are appealable to the Court of Appeals (not the RTC). Appeals do not stay PCC orders unless the CA directs otherwise. [RA 10667, §39, 2015]
RTC Jurisdiction (§44): RTC has original/exclusive jurisdiction over criminal and civil cases involving violations of this Act. [RA 10667, §44, 2015]
Private Action (§45): Any person suffering direct injury from a PCA violation may file a separate civil action after the PCC has completed its preliminary inquiry. [RA 10667, §45, 2015]
No TRO Against PCC (§47): No court below the CA may issue a TRO, preliminary injunction, or mandatory injunction against PCC in the exercise of its duties. [RA 10667, §47, 2015]
§46 — Statute of Limitations
Five (5) years from: time of discovery (criminal); time cause of action accrues (administrative and civil). [RA 10667, §46, 2015]
§50–53 — Implementation
IRR: PCC to promulgate within 180 days in consultation with DOJ-OFC and sector regulators. [RA 10667, §50, 2015]
Initial appropriation: PhP 300 million. All fees, fines, and penalties remitted to National Treasury (general fund). [RA 10667, §51, 2015]
Transition period (§53): Existing business structures in violation of PCA are subject to penalties only if not cured or continuing after 2 years from effectivity (~August 5, 2017). During this period, government conducted an advocacy program. [RA 10667, §53, 2015]
Full text: Cleaned copy