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Friday, March 29, 2024

House opens debate on fair trade measure

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The House of Representatives has opened its plenary debates on the proposed anti-trust or fair competition measure with a member of the Independent Bloc seeking  to delete a provision on “good faith” after it was inserted in the Senate version and carried over to the lower chamber.

In his interpellation Tuesday night,  Rep. Jonathan de la Cruz, a member of the Bloc headed by Leyte Rep. Ferdinand Martin Romualdez, said the “good faith” provision in the proposed Philippine Fair Competition Act of 2015 provides an “escape clause” for big companies should they abuse their dominant position by running to the ground their smaller competitors in the guise of “acting in good faith.”

Romualdez

De la Cruz of Abakada party  list,  said that the good faith provision “has no place in an anti-competition act, just like what we are discussing right now.”

“The alternative, Mr. Speaker, will be to strike out the phrase ‘in good faith’, because in almost all  competition  laws, whether  in ASEAN or  in  Europe  or  in  the  US,  the  well-established  general presumption  is  that  prices  held  average  of  variable cost applied  for  an undertaking  in  a  dominant  position  are  regarded as  abusive  in  themselves without the necessity of accepting them by way of good faith because the good faith  is  an escape clause,” de la Cruz said in his interpellation.

“Because dominant players can always claim good faith, and it will be very, very hard for any competitor, Your Honor, to even claim that such good faith is not available to the dominant player. And that is the reason why I am suggesting that perhaps, in the opportune time, we can discuss properly and strike this out as part of our efforts to make sure that this particular act will be undertaken in pursuance of the public interest and not in the interest of any dominant player,” de la Cruz added.

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De la Cruz was referring to the ‘good faith’ clause that was said to have been inserted in the proposed “Fair Competition Act of 2015” under Abuse of Dominant Position, which prohibits companies and other business entities from selling goods or services at below cost or at super discount prices just to eliminate their competition and also prevent the entry of new players in the market.

The original anti-trust or competition bills filed in the Senate, three of which were authored by Senators Miriam Defensor-Santiago, Teofisto Guingona and Sergio Osmena did not contain the “good faith” provision.

Senators Bam Aquino, sponsor of the measure, likewise did not include the “good faith” clause in his committee report after holding extensive deliberation and getting inputs from business and competition experts.

The controversial clause was inserted as the bill underwent Senate plenary deliberations, de la Cruz said.

Earlier, Winston and Camel maker Japan Tobacco International Philippines Inc (JTIP) had written legislators to express its concern on the “good faith” clause in the proposed measure, which allows unscrupulous companies to resort to predatory pricing in the guise of “good faith.”

JTIP said the “good faith” clause is not found in similar legislation or fiat in other countries, including those from the ASEAN and European Union (EU).

“We believe in fair competition and in the approval of a genuine anti-trust measure,” JTIP general manager Manos Koukourakis said in a letter to the legislators read by de la Cruz.

In response to de la Cruz, Davao del Norte Rep. Antonio Rafael del Rosario, one of bill’s authors and defenders, initially rejected the proposal of de la Cruz to delete the said provision as this would “change the meaning of the bill.”  Nevertheless, del Rosario agreed to have it stricken out during the amendment period.

But Del Rosario reminded de la Cruz the period of amendment will open next week with no major changes to the measure, which aims to protect smaller businesses from unfair competition, monopolies and cartels.

 “The period of amendment for the bill is next week because we still need to finalize the amendments this week. However, no major amendments in the measure,” del Rosario, vice chair of the House committee on trade and industry, was quoted as saying.

 The House concluded its period of interpellation on the measure Tuesday night.  The decision to end the period of interpellation came even as sponsors and authors of the measure led by House economic affairs chair, Tarlac Rep. Enrique Cojuangco.

The government is  rushing the approval of a competition law or anti-trust legislation ahead of its participation in the ASEAN Economic Integration.

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