PHILIPPINE ASSOCIATION OF LEGITIMATE SERVICE CONTRACTORS, INC.

(PALSCON)

BOARD RESOLUTION NO. 06 , Series of 2021

WHEREAS, on March 18, 2013, PALSCON approved its current Code of Ethics through Resolution No.
2, Series of 2013;

WHEREAS, Article I, Section 1, of the Code of Ethics of PALSCON states that: “Members shall uphold
the Constitution, obey all the laws of the land, and promote and respect the law and legal processes.”

WHEREAS, Article II, Section 2, of the said Code of Ethics states that: “A members shall endeavor to
promote an environment of healthy competition among industry players through the observance of fair
and honest business competition practices, and the sharing of best business practices among industry
players."

WHEREAS, Article II, Section 3, of the said Code of Ethics states that: “A member shall not, directly or
indirectly, encroach upon the existing business relationship of another PALSCON member and the
latter’s clients as well as the existing employment relationship of another PALSCON member and the
latter’s employees. In no instance shall a PALSCON member commit any act that will disrupt such
relationships.”

WHEREAS, on July 21, 2015, Republic Act No. 10667 (otherwise known as the Philippine Competition
Act) was approved and became law.

WHEREAS, Section 2 of RA 10667 states in part that:

“Pursuant to the constitutional goals for the national economy to attain a more equitable distribution
of opportunities, income, and wealth; a sustained increase in the amount of goods and services
produced by the nation for the benefit of the people; and an expanding productivity as the key to
raising the quality of life for all, especially the underprivileged and the constitutional mandate that the
State shall regulate or prohibit monopolies when the public interest so requires and that no
combinations in restraint of trade or unfair competition shall be allowed, the State shall:

(a) Enhance economic efficiency and promote free and fair competition in trade, industry and all
commercial economic activities, as well as establish a National Competition Policy to be implemented
by the Government of the Republic of the Philippines and all of its political agencies as a whole;

(b) Prevent economic concentration which will control the production, distribution, trade, or industry
that will unduly stifle competition, lessen, manipulate or constrict the discipline of free markets; and

(c) Penalize all forms of anti-competitive agreements, abuse of dominant position and anti-competitive
mergers and acquisitions, with the objective of protecting consumer welfare and advancing domestic
and international trade and economic development.”

WHEREAS, Section 5 of RA 10667 created the Philippine Competition Commission (PCC) to

implement the National Competition Policy and attain the objectives and purposes of said law.
WHEREAS, starting on or about May 10, 2021, the PCC has formally called the attention of PALSCON
and its members regarding the above-quoted Article II, Section 3, of the PALSCON Code of Ethics for
possibly being violative of Section 14 of RA 10667.

WHEREAS, Section 14 of RA 10667 provides that:

“Anti-Competitive Agreements. –

(a) The following agreements, between or among competitors, are per se prohibited:

(1) Restricting competition as to price, or components thereof, or other terms of trade;

(2) Fixing price at an auction or in any form of bidding including cover bidding, bid
suppression, bid rotation and market allocation and other analogous practices of bid
manipulation;

(b) The following agreements, between or among competitors which have the object or effect of
substantially preventing, restricting or lessening competition shall be prohibited:

(1) Setting, limiting, or controlling production, markets, technical development, or investment;

(2) Dividing or sharing the market, whether by volume of sales or purchases, territory, type of
goods or services, buyers or sellers or any other means;

(c) Agreements other than those specified in (a) and (b) of this section which have the object or effect
of substantially preventing, restricting or lessening competition shall also be prohibited: Provided,
Those which contribute to improving the production or distribution of goods and services or to
promoting technical or economic progress, while allowing consumers a fair share of the resulting
benefits, may not necessarily be deemed a violation of this Act.

An entity that controls, is controlled by, or is under common control with another entity or entities,
have common economic interests, and are not otherwise able to decide or act independently of each
other, shall not be considered competitors for purposes of this section.”

WHEREAS, although the PALSCON Code of Ethics predates RA 10667 by about 2 years, it is crystal
clear from Section II, Article 2, of the same Code of Ethics that PALSCON and it members promote “an
environment of healthy competition among industry players through the observance of fair and honest
business competition practices.”

WHEREAS, to avoid misinterpretation, and to assure the PCC that PALSCON and its members are
committed to “uphold the Constitution, obey all the laws of the land, and promote and respect the law
and legal processes” pursuant to Article I, Section 1 of its Code of Ethics, it is only proper to revisit,
review and revise Article II, Section 3 of the PALSCON Code of Ethics to make sure it adheres to the
National Competition Policy and does not violate RA 10667.

WHEREAS, Section 48 of RA 10667 allows the private sector to form and join trade associations, and
states that:

“Nothing contained in this Act shall be construed to prohibit the existence and operation of trade
associations organized to promote quality standards and safety issues: Provided, That, these
associations shall not in any way be used to justify any violation of this Act: Provided, however, That it
shall not be illegal to use the association as a forum to discuss or promote quality standards, efficiency,
safety, security, productivity, competitiveness and other matters of common interest involving the
industry: Provided, further, That such is done without any anti-competitive intent or effect.”

NOW, THEREFORE, RESOLVED as it is hereby RESOLVED that Article II, Section 3 of the CODE OF
ETHICS of PALSCON shall be revised and amended as follows:

“SUBJECT TO THE IMMEDIATELY PRECEDING SECTIONS, a member shall not, directly or

indirectly, encroach upon the existing business relationship of another PALSCON member and the
latter’s clients as well as the existing employment relationship of another PALSCON member and
the latter’s employees. In no instance shall THIS CODE OF ETHICS BE USED TO JUSTIFY ANY
VIOLATION OF EXISTING PHILIPPINE COMPETITION LAWS AND REGULATIONS.
COURTESY, FAIRNESS, AND CANDOR AMONG MEMBERS SHALL BE PROMOTED
WITHOUT ANY ANTI-COMPETITIVE INTENT OR EFFECT.”

IN WITNESS WHEREOF, the undersigned have approved and executed this Certificate this _____ day
of May, 2021, at Manila, Philippines.

Jay-ar D. Sta. Ana

Corporate Secretary

Attested by:

Rhoda Castro Caliwara

President

Armand Gutierrez Agnes Escalona

Vice President Treasurer

Soraya Barsaga Froilan Florendo

Board Member Board Member

Lea Soriano Alexander Chichioco

Board Member Board Member

Vivian Fuentes Alfonso Cruz

Board Member Board Member
Jerry Arenas Wowie Dictado
Board Member Board Member

Grace Ilagan Joey Maniquis

Board Member Board Member

SUBSCRIBED AND SWORN to before me this _______ day of ________________2021 at

Manila, Philippines. Affiant exhibiting to me his PRC No. __________________issued on the
__________________________________, by the Philippine Regulation Commission for personal
identification.

Doc No. _______________;

Page No. ______________;
Book No. ______________;
Series of 2021