PPP joint ventures in ‘disadvantaged areas’ exempt from PCC notification requirements

THE PHILIPPINE Competition Commission (PCC) said it will exempt public-private partnership (PPP) joint ventures from merger notification rules if they operate in disadvantaged areas or are building priority infrastructure items like data transmission and regional airports.

Citing the need to better align competition policies with national development needs, the PCC said it issued a draft memorandum circular (MC) on Tuesday that will serve as the basis for the exemption mechanism.

Joint ventures undertaking PPP projects are currently required to notify the PCC in accordance with Republic Act (RA) No. 11966 or the PPP Code.

“There is a need to streamline the process for the issuance of required licenses, clearances, permits, certifications or authorizations to expedite the implementation of Infrastructure Flagship Projects, consistent with RA 9485 or the Anti-Red Tape Act of 2007,” it said in the draft MC.

The PCC invited government agencies and private firms involved in development, approval, and implementation of PPP projects to submit their comments on the draft circular on or before June 19.

Under the draft rules, joint ventures undertaking PPP projects in disadvantaged regions, cities or municipalities are exempt from compulsory notification.

A region, city or municipality is considered disadvantaged if it has a gross domestic product per capita below or equal to 75% of the national average as reported by the Philippine Statistics Authority.

“Joint ventures in relation to such PPP projects in a disadvantaged region, city or municipality shall be exempted from the compulsory notification requirement,” provided that the project involves investment that will generate new economic activity, the PCC said.

Also exempt from notification requirements are PPP projects in data transmission, tourism, agriculture, research and development and innovation, as well as the development of regional airports and maritime port infrastructure.

To qualify for the exemption, the implementing agency or original proponent must submit a request for exemption to the PCC’s Mergers and Acquisitions Office (MAO) through the MAO E-Notification System.

Concerned agencies may also consult with the MAO prior to filing an application for exemption, the PCC said.

“In the event that a merger or acquisition occurs between the private partner and another private sector entity after the PPP Project is awarded, this circular shall no longer apply,” the PCC said, noting that the private partner would need to comply with the agency’s notification requirements.

Nigel Paul C. Villarete, senior adviser on PPPs at Libra Konsult, said the draft rules balance the development of PPPs in developed and underserved areas.

“A location-based approach which may favor disadvantageous areas is definitely (a step) in the right direction. PPPs are good mechanisms to boost public infrastructure investments, but are oftentimes concentrated in more developed areas already,” he said via Viber. — Beatriz Marie D. Cruz