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PASCN DP 2000-08: Issues in Competition Policy and Elements of a Rational Competition Policy for the Philippines

This paper provides the overview of the current PASCN studies on competition policies. The concepts set forth are not meant to be novel, as indeed, the economic grounds for competition policies and the major factors affecting barriers to entry have long been well established. Rather, this paper merely aims to clarify the issues in competition policy and identify the elements of a rational competition policy for the Philippines. As such, the paper suggests four major elements. First, there should be an effective anti-trust law of general application that would prevent restrictive business practices that results in abuse of dominant position, but at the same time allow for limitation in competition on grounds of efficiency (arising from market failures discussed in the paper) or clear public interests. It should also have adequate provisions for due process. The second element is the review of government regulations and policies with significant impact on competition. Third is advocacy for competition policy to facilitate and implement the necessary reforms. And the fourth element is information and education campaign. With such a comprehensive competition policy framework, the major issue is whether or not to create a central competition body, especially considering the severe lack of capable manpower and institutions. Nonetheless, given the huge benefits that could be derived from a working competition policy, the government should actively seek ways to bring about its development. The paper suggests that its judicial application could perhaps focus on a specific provision or action at a time. For example, it could concentrate its initial efforts on one particular industry well known for anti-competitive practices. This would provide valuable demonstration effects as well as a much needed experience and jurisprudence.

Philippine APEC Study Center Network
Authors Keywords
Medalla, Erlinda M.; competition; anti-trust policy; market failure;
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