Rafael A Morales, Managing Partner, SyCip Salazar Hernandez & Gatmaitan: Interview

Interview: Rafael A Morales

What are some of the key components of the Philippine Competition Act (PCA)?

RAFAEL A MORALES: The PCA is in keeping with the ASEAN Regional Guidelines on Competition Policy. The PCA prohibits business practices that curb market competition through anti-competitive agreements and the abuse of dominant positions, and requires notification of mergers and acquisitions whose value exceeds P1bn ($22.2m) The Philippine Competition Commission is the regulator in charge of implementing the national competition policy as outlined by the PCA.

The PCA aims to level the playing field for all market players; this is good for business. Consumer welfare will hopefully be enhanced to the extent that the PCA is able to redress the imbalance between the market power of consumers and that of producers. This should translate to more choice and lower prices for consumers. The purpose of the PCA, just like any competition policy, is to foster and maintain competition in the marketplace. As anti-competitive practices are prevented and the abuse of market power is restricted, more and more businessmen should be encouraged to do business in the country, which in turn will foster economic growth and development.

In what ways can the legislative framework for infrastructure development be modified to encourage more companies to undertake projects?

MORALES: What is needed is not a new law but consistent implementation of existing legislation and regulation, as well as a determined effort to roll out projects still in the pipeline. Sourcing funds appears to be less of a problem, as local banks have cash that can fund projects independently of commercial foreign banks and multilateral financial institutions. However, right-of-way issues must be addressed and resolved upfront with deliberate speed, rather than while a project is in progress. Courts must also be reminded that Presidential Decree No. 1818 prohibits them from issuing restraining orders or injunctions to stop or delay infrastructure projects.

What legislative framework can strengthen the peace process in Mindanao?

MORALES: Any legislative framework for lasting and enduring peace in Mindanao must not only include the Moro Islamic Liberation Front, but also other the parties involved, such as the Moro National Liberation Front, Christian communities and indigenous peoples within the so-called Bangsamoro. If the mechanism is not all-inclusive, any peace initiative in Mindanao will be less than successful.

How will the Philippine legal market evolve given regional integration and increased competition?

MORALES: The Philippine legal profession will open itself up to foreign lawyers in the foreseeable future, on account of the General Agreement on Trade in Services. The country will definitely have to make this move, given that other ASEAN members have already opened up to foreign law firms. If this materialises, it is inevitable that there will be increased competition in the legal market. However, this will be manageable because, under the expected rules of entry, foreign law firms will only advise in matters concerning the laws of their respective jurisdictions. This means that Philippine lawyers will continue to advise clients on Philippine laws and regulations.

What additional changes to legislation can we expect as a result of ASEAN integration?

MORALES: Legal harmonisation within ASEAN is easier said than done because of the different legal systems of the member states. Malaysia, Singapore and Brunei have common law systems in contrast to Indonesia’s civil law system. On the other hand, Thailand and the Philippines have hybrids of both systems. Harmonisation is difficult, but the process has begun.