READ: Aquino set to sign Philippine Competition Act

Aquino also signed an act allowing foreign vessels to transport and co-load foreign cargoes for domestic transshipment, which amends the Cabotage Law.

READ: Reforms in shipping industry to bring down prices of goods, says Sen. Aquino

The signing was witnessed by Senate President Franklin Drilon, House Speaker Feliciano Belmonte, Jr., Executive Secretary Paquito Ochoa, Jr., Trade Secretary Gregory Domingo, and Economic Planning Secretary Arsenio Balisacan.

Also present were Senators Vicente Sotto III, Paolo Benigno “Bam” Aquino IV, and Cynthia Villar, Representatives Neptali Gonzales II, Mark Villar, and Dakila Carlo Cua.

Around 250 government officials and businessmen attended the event.

Game-changing

The Philippine Competition Act, which has been described as “game-changing,” prohibits anti-competitive mergers and acquisitions, the fixing of prices during auctions or biddings, and agreements that limit or control production, markets and investments.

READ: A new competition law at last!

The law aims to level the playing field and improve efficiency in the economy.

“Ngayon, sa wakas, maliit man o malaki ang negosyo, ang labanan ay nasa paglalabas ng de-kalidad na produkto sa pinakamakatwirang presyo, imbes na under the table o ang paramihan ng kuneksiyon,” Aquino said in his speech.

(Now, at last, regardless if it is a small or big business, the competition involves releasing quality products at reasonable prices, instead of under the table practices or the use of connections.)

Belmonte said the new law would also encourage innovation and the production of more goods and services.

Another prohibited action, under the Competition Act, is the “abuse of dominant position” which refers to the selling of goods or services below cost to drive competitors out of the market or imposing barriers that prevent competitors from growing.

Penalties for violating the law may reach P100 million (first offense) or P250 million (second offense). Those engaged in anti-competitive agreements may also be imprisoned.

Aquino said that at the time when the country still didn’t have a competition law, “tsambahan ang naging pagtiyak ng patas na kalakaran sa merkado (it was only by chance that we could ensure that the market situation was fair).”

Cheaper cargo shipments

He said the amendment to the Cabotage law, on the other hand, will allow foreign ships to freely trade with their chosen port of destination. He said this will result in lower prices for both businessmen and consumers.

As an example, Aquino said a cargo container from Cagayan de Oro would no longer be required to pass through the port of Manila and pay $1,120. Instead, it could go straight to Hong Kong and pay only $500 instead of $1,264 ($1,120 plus $144 from Manila to Hong Kong).

Aquino called it absurd that the Philippines, which is among the largest manufacturers of ships and the largest supplier of seafarers has among the highest prices of shipments.

Because the Philippines is an archipelago, the the transfer of goods from island to island is indeed difficult, he admitted. He said allowing the current system to go on would only benefit a few people.

Belmonte, at the same time, described the shipping industry as “nearly cartelized” and that the amendment would address high shipping costs. He said effective implementation of the law will result in its success.

“Naniniwala tayong kalayaan ang haligi ng matibay na estado; nagbubunsod ito ng kompetisyon, na nagpapalago ng ekonomiya at nagpapalawak ng oportunidad,” Aquino said.

(We believe that freedom is the pillar of a strong state; it spurs competition and the growth of the economy and expands opportunities).

He said the two legislation pieces will result in positive changes that the next generations would benefit from.

Drilon also called it a milestone, saying that the Philippines “is now better equipped to face the challenges of the future.”

Originally posted: 11:08 AM July 21st, 2015

Source: http://business.inquirer.net/195649/aquino-signs-ph-competition-act#ixzz43QHZE2mG