Chapter 3: Competition Policy in APEC Economies | 111
3.
Future challenges and lessons learned in creating an effective competition policy regime
The Philippines believes that an uncompetitive economic environment should not diminish the benefits of liberalization in trade and investment. Studies show that present laws have proven inadequate or ineffective to prevent anticompetitive structures and behavior in the market due to lack of enforcement. Despite their considerable number of laws and their varied nature, competition has neither been fully established in all sectors of the economy nor has existing competition been enhanced in other sectors. Since each law is meant to address specific situations, there runs the risk of one law negating the positive effects of another. It is observed that these laws have been hardly used or implemented as may be seen in the lack of cases litigated in court against anticompetitive behavior. Since most punishments are penal in nature, guilt must be proven beyond reasonable doubt and hence, the amount of evidence required so that the case may prosper is tremendous. Fines imposable for breaches of the laws are minimal. For instance, under Article 186, fines range from two hundred pesos (P200) to six thousand pesos (P6,000) only. Moreover, there is a lack of jurisprudence and judicial experience in hearing competition cases. In addition, the handful of jurisprudence in competition-related cases raises the question whether there is sufficient awareness in the domestic market on the remedies available to address unfair competition and uncompetitive behavior and if existing laws effectively prevent market failure leading to uncompetitive behavior and unfair competition. The added challenge of cross-border competition brought on by increasing globalization also brings to fore the question whether existing laws and capabilities of the agencies and bodies enforcing competition are sufficient to address market failures that result in uncompetitive behavior. Another reason cited is the lack of a central enforcement agency. Currently, enforcement is spread through several agencies tasked with both the regulation and promotion of competition in different economic sectors. With so many enforcement agencies, responsibility is too diffused and accountability for the implementation of the laws is difficult to locate or fix. The danger of “regulatory capture� is seen as inevitable. There is also a lack of expertise in the appreciation and implementation of competition laws. Realizing the deficiencies of the existing legal and regulatory systems for enforcing competition, the Philippine Government through the legislature has been attempting to pass new anti-trust or competition legislation since the early 1980s. It may also be mentioned that the Medium-Term Philippine Development Plan for 2004−10 provides for the adoption of a competition law/policy as a way to create a competitive environment conducive to the development of micro, small and medium enterprises. The numerous draft bills have been quite varied, having been adopted from various existing anti-trust and competition laws around the world. So far, eight bills have been filed in the Lower House and three bills in the Senate during the 13th Congress. Bills seeking to increase the penalties under the Revised Penal Code; and penalize monopolies, cartels, unfair trade practices, and combinations or conspiracies in restraint of trade and all forms of artificial machinations that will injure, destroy or prevent free market competition; have been filed in the Senate and in the Lower House recently. As the economy continues to be dominated by groups and businesses with substantial market power and political influences, an effective competition policy framework would be needed.