A.

The Philippine Competition Act

What is Philippine Competition Act all about?
The Philippine competition act is all about competition policy that
promotes and protects competitive market. This act defines, prohibits and
penalizes three types of anti-competitive conduct such as the anti-competitive
agreements, abuse of dominant position, and anti-competitive mergers and
acquisitions.
What is the Philippine Competition Commission?
The Philippine competition commission is an independent quasi-judicial
body, meaning it functions similarly to a court like it gathers facts, has hearings,
weighs evidence, and draws findings based on the facts and evidence given.
Also, it is the one in charge in implementing the policy provided in the Philippine
Competition Act and also in charge in making sure that the objective and
purposes are being met and attained.
What are the powers and functions of the Philippine Competition Commission?

The Philippine Competition Commission have its own primary jurisdiction over the
execution of the provisions of this Act, and it’s implementing rules and regulations. Its
powers and functions to be exercised are the following:

(a) To perform an inquiry, inspect, hear and determine cases involving any breach of this
Act or other existing competition laws motu proprio or upon submission of a verified
complaint from an interested party or upon recommendation by the responsible
regulatory agency, and bring suitable civil or criminal proceedings.

(b) To assess proposed mergers and acquisitions, define notification thresholds,

establish the requirements and steps for notification, and upon make use of its powers
to asses, forbid mergers and acquisitions that will significantly prevent, limit, or reduce
the competition in the relevant market.

(c) To monitor and undertake consultation with stakeholders and affected agencies for
the purpose of understanding market behavior.

(d) Upon finding, based on substantial evidence, that an entity has entered into an anti-
competitive agreement or has abused its dominant position after due notice and
hearing, stop or redress the same, by applying remedies, such as, but not limited to,
issuance of injunctions, requirement of divestment, and disgorgement of excess profits
under such reasonable parameters that shall be prescribed by the rules and regulations
implementing this Act.

(e) To conduct administrative proceedings, impose sanctions, fines or penalties for any
noncompliance with or breach of this Act and its implementing rules and regulations
(IRR) and punish for contempt.

(f) Issue subpoena duces tecum and subpoena ad testificandum to require the
production of books, records, or other documents or data which relate to any matter
relevant to the investigation and personal appearance before the Commission, summon
witnesses, administer oaths, and issue interim orders such as show cause orders and
cease and desist orders after due notice and hearing in accordance with the rules and
regulations implementing this Act.

(g) Upon order of the court, undertake inspections of business premises and other
offices, land and vehicles, as used by the entity, where it reasonably suspects that
relevant books, tax records, or other documents which relate to any matter relevant to
the investigation are kept, in order to prevent the removal, concealment, tampering with,
or destruction of the books, records, or other documents;.

(h) Issue adjustment or divestiture orders including orders for corporate reorganization
or divestment in the manner and under such terms and conditions as may be prescribed
in the rules and regulations implementing this Act. Adjustment or divestiture orders,
which are structural remedies, should only be imposed:

(1) Where there is no equally effective behavioral remedy; or

(2) Where any equally effective behavioral remedy would be more burdensome
for the enterprise concerned than the structural remedy. Changes to the structure
of an enterprise as it existed before the infringement was committed would only
be proportionate to the substantial risk of a lasting or repeated infringement that
derives from the very structure of the enterprise;

(i) Deputize any and all enforcement agencies of the government or enlist the aid and
support of any private institution, corporation, entity or association, in the
implementation of its powers and functions.

(j) To monitor compliance by the person or entities concerned with the cease and desist
order or consent judgment.

(k) Issue advisory opinions and guidelines on competition matters for the effective
enforcement of this Act and submit annual and special reports to Congress, including
proposed legislation for the regulation of commerce, trade, or industry.

(l) To monitor and analyze the practice of competition in markets that affect the
Philippine economy; implement and oversee measures to promote transparency and
accountability; and ensure that prohibitions and requirements of competition laws are
adhered to.

(m) To conduct, publish, and disseminate studies and reports on anti-competitive

conduct and agreements to inform and guide the industry and consumers.

(n) To intervene or participate in administrative and regulatory proceedings requiring

consideration of the provisions of this Act that are initiated by government agencies
such as the Securities and Exchange Commission, the Energy Regulatory Commission
and the National Telecommunications Commission.

(o) To assist the National Economic and Development Authority, in consultation with
relevant agencies and sectors, in the preparation and formulation of a national
competition policy.

(p) Act as the official representative of the Philippine government in international

competition matters.

(q) Promote capacity building and the sharing of best practices with other competition-
related bodies.

(r) Promote the government’s pro-competitive policies by:

(1) Assessing economic and administrative ordinance, upon demand, and guide
the related agencies against such ordinance; and

(2) Guiding the Executive Brach on the government action, policies and
programs’ competitive indications.

(s) To impose logical fees to settle the administrative cost of the service rendered.

Enumerate the prohibited acts under the law.

a) Anti-Competitive Agreements – the law prohibits agreements between or
among the competitors like restricting competition on price, or other terms of
trade, it can also be the fixing of a price at an auction or through any other type of
bidding are banned in this act. It also includes such agreement that the object of
effect of substantially prevent, restrict, or lessen the competition. Such as setting,
directing, or controlling production, markets, technical development, or
investment, also the dividing or sharing of market and such other agreements
that is in contrary in improving the production or distribution of goods and
services, or fostering technical or economic growth, while allowing consumers a
fair share of the benefits associated.
 b) Abuse of Dominant Positions – the law prohibits entities by engaging in
conduct that would substantially prevent, restrict or lessen competition by
abusing their dominant position. This dominant position refers to an economic
strength that an entity holds, the have the capability of controlling the relevant
market since it shares 50% or more. Some conducts are by selling goods or
services below cost with the object of driving competition out of the relevant
market, asserting anti-competitive entrance barriers or taking actions that hinder
competitors from growing in the business, or making a transaction subject to
acceptance by the other parties of other obligations which, have no connection
with the transaction. This also includes such conduct that sets the price, terms or
conditions that would prejudice unfairly the consumers or sellers of the same
products or services in the case where they concurrently trading on comparable
terms and conditions, and with that the result is significantly lessening
competition. And such other conducts that is intended to eliminate or discipline a
competitor or to deter future entry by new competitors, with the result that
competition is prevented or lessened substantially.
c.) Merger and acquisitions – the law prohibits this merger or acquisition
agreements that would result into a substantial prevention, restriction or lessen
the competition in the market as assessed by the Commission
Define and explain "forbearance" and "nolo contendere"?
Forbearance
It refers to the act of postponing the enforcement of the provision of a law
or an act. Like for example in the Philippine competition act there is a
forbearance applied in a limited time, in whole or in part, in all or specific cases,
to an entity or group of entities as determined by the commission. The factors
that forbearance applied is that the achievement of this Act's policy objectives
does not require its enforcement, the forbearance will not hinder competition in
the market in which the business or group of entities asking exemption operates,
nor will it affect competition in connected markets, and lastly it is in the public
interest, as well as for the benefit and welfare of consumers.
Nolo Contendere
It is a plea also known as plea of no contest, this means that the person
charged or known as the defendant, is neither admitting nor denying guilt. They
basically do not intend to contest with the charges but agrees to accept
punishment. This nolo contendere in this act may be enter to by an entity who is
charge in a criminal proceeding in accordance to the act that is prohibited in this
law which is the agreements, between or among competitors and agreements,
between or among competitors which have the object or effect of substantially
preventing, restricting or lessening competition. The plea only be entered at the
time of charge together with the permission of the court. Therefore, the plea
cannot be used against the defendant entity to prove liability in a civil suit
resulting from the criminal action or in any other cause of action.
What is the statute of limitation for violation of the law?
The statute of limitation for violation of any provision of the Philippine
competition act will be forever barred unless begun within five (5) years from the
time the violation is discovered by the offended party, the authorities or their
agents in terms of criminal actions. On the other hand, in terms of administrative
and civil actions is from the time the cause of action accrues. However, there is
no statute of limitation, as long as you are compliant in this act therefore no
violation of the law.

B. The Government Procurement Reform Act

What is competitive bidding?
The competitive bidding is a method used by the government in all
procurement or obtaining of goods or services needed for infrastructure projects
or consulting purposes by which enables interested party to participate and
allows them to get the most qualified sellers of products and services while
keeping costs low. This competitive bidding consist processes from
advertisement or posting, pre-bid conference, eligibility screening of potential
bidders, receipt and opening of bids, bid evaluation, post-qualification, and
contract award. The lowest calculated bid is the winner of the bid and where the
contract is awarded to in terms of goods and infrastructure procurement, while
with the procurement of consulting services the one with highest rated bid is
where the contract is awarded to.
What is procurement by electronic means?
The procurement by electronic means is also known as the Philippine
Government Electronic Procurement System (PhilGEPS) this serves as the
Government of the Philippines' principal gateway for all procurement information
and activities. Through this procurement by electronic means it has automate the
process of procuring goods, infrastructure project, and even the consulting
services. Also it helps avoid confusion from the procuring entity and the bidder as
well as ensure transparency with the government contracts. This portal enables
the public and the interested party to access information since it supports the
distribution of information specifically related to the requirements of procurement.
What is stages in the bidding process?
Bidding Process for Goods and Infrastructure Projects
Bidding Process for Consulting Services

Pre-Procurement Conference – in this stage the bids and awards committee

are having their conference regarding the procurement.
Advertisement and/or Posting – in this stage the invitation for the bid is being
advertised or posted, notice to the public and all interested parties of the
procurement and bidding opportunities of the government.
Pre – Bid Conference – in this stage the interested party known as the bidders
are having their conference together with the representatives of the procuring
entity. It is the initial forum in which they discuss the different aspects of the
procurement at hand.
Bid Submission – in this stage the bidders must submit their bids through their
duly authorized representatives using the forms specified in the Bidding
Documents.
Opening of Technical Proposal
– in this stage it also includes the
eligibility check to determine
if a prospective bidder is
eligible to participate in the
bidding at hand.
Opening of Financial proposal
– in this stage the financial
proposal will be open and
determine if the budget proposed is in accordance to the budget imposed or
anticipated by the procuring entity.
 Bid Evaluation – in this stage the bids are being evaluated to determine the
lowest calculated bid.
Post Qualification – in this stage is the process of verifying, validating, and
ascertaining all of the bidder's statements and documents submitted to the lowest
calculated bid.
Contract Award – in this stage the contract will be awarded to the bidder with
the lowest calculated responsive bid or single calculate responsive bid.
What is post qualification procedure/activities?
 Within five (5) calendar days from receipt by the bidder of the notice from the
BAC that the bidder has the Lowest Calculated Bid, the bidder will submit to the
BAC its latest income and business tax returns and other appropriate licenses
and permits required by law and stated in the Bidding Documents.
 The BAC verifies, validates, and ascertains the genuineness, validity and
accuracy of the legal, technical and financial documents submitted by the bidder
with the LCB, using the non-discretionary criteria.
In verifying the information contained in such documents, the BAC may
make inquiries with appropriate government agencies and examine the original
documents kept in the bidder’s place of business. The use of other means for
verification and validation of such documents may be resorted to by the BAC,
such as the Internet and other research methods that yield the same results.
 The BAC conducts a site inspection of the bidder’s place of business and/or plant
or factory. They also tests samples for compliance with specifications and
performance levels, if appropriate.
 The BAC inquire about the bidder’s performance in relation with other contracts
or transactions as indicated in its eligibility statement.
 If the technical working group conducts the post-qualification, it prepares a Post-
qualification Report to be submitted to the BAC. The Report shall contain, among
others, the activities undertaken with regard to the post-qualification process,
feedback from inquiries conducted, and the results of any tests conducted by the
TWG or an accredited government testing center, where applicable.
 The BAC reviews the Post-qualification Report submitted by the TWG.
 The BAC determines whether the bidder with the LCB passes all the criteria for
post-qualification. If the LCB passes the post-qualification, the BAC declares it as
the Lowest Calculated Responsive Bid.
 After the BAC has determined the LCRB, the Secretariat, with the assistance of
the technical working group, if necessary, prepares the BAC Resolution declaring
the LCRB and the corresponding Notice to the said bidder informing it of its post-
qualification.

When is there failure of the bidding?
There is a failure of the bidding when there is no bids are received, all the
prospective bidders are declared ineligible, all bids fail to comply with all the bid
requirements or fail post-qualification, or, in the case of Consulting Services,
there is no successful negotiation, and/or the bidder with the lowest Calculated
responsive bid, HRRB, SCRB or SRRB refuses, without justifiable cause, to
accept the award of contract, and no award is made in accordance with the
failure to enter into contract and post-performance security mentioned in the
Procurement Reform act.
Enumerate and discuss the alternative method of procurement.

a. Limited Source Bidding also known as the selective bidding, is a method of

procurement of goods and consulting services that involves direct invitation to
bid by the concerned entity of all pre-selected suppliers or consultants with
known experience or proven capability on the requirements of the particular
contract.

This method is applied in the case where there is only a few suppliers of
the goods to be procured or in the case of consulting services there are only a
few consultants known to be available wherein executing a competitive method is
unlikely to result in any more suppliers engaging in the bidding. Like for example
is the procurement of highly specialized goods such as advanced defensive
equipment – battleships, coal, fighter planes, or complex air navigation system.

b. Direct Contracting or single source procurement is a method

of procurement of goods that does not require an intricate bidding documents.
The supplier is simply asked to submit a price quotation or a pro-forma invoice
together with the conditions of sale. The offer may be accepted immediately or
after some negotiations.

This method is applied in the case where the LGU intends to procure a
Patrol service vehicle. The TOYOTA dealers will be asked for the price quotations
 of the car model indicated in the request together with the conditions of sale.
Then, in accordance to the small value procurement, the price quotation
submitted will be analyze and choose to whichever has the lowest price from
those dealers who submitted.

c. Repeat Order is a method of procurement of goods from the previous winning

bidder, whenever there is a need to replenish goods procured under a contract
previously awarded through Competitive Bidding.

Like for example the health center has reached its reorder point and
therefore required to replenish their vaccines. The vaccines supply were
previously from the ABC drug manufacturing and to replenish the supply of the
vaccine the repeat order method is to be used since the prices is lower than in
the original contract.

d. Shopping is a method of procurement of goods whereby the Procuring Entity

simply requests for the submission of price quotations for readily available off-
the-shelf goods or ordinary/regular equipment to be procured directly from
suppliers of known qualifications.

e. Negotiated procurement is a method of procurement of goods,

infrastructure projects and consulting services, whereby the Procuring Entity
directly negotiates a contract with a technically, legally and financially capable
supplier, contractor, and consultant or, where allowed, an individual consultant,
only in the cases provided for in this act.

2.2 Disccusion on the Government Procurement Reform Act

1. Discuss the advantage and disadvantages of bidding.

As we talk about bidding it pertains to a method of procurement known as the
competitive bidding since all procurement is done with this method.
The advantages of competitive bidding is that first it gives fair opportunity for the
interested party to join without discrimination as long as they possess the requirements
of the goods or services that the procuring entity is seeking of. Second, with the
processes provided by this competitive bidding it gives guarantee to a procuring entity in
obtaining a low cost yet quality and effective goods or services. Since the processes is
very intricate from the announcement, documents, and to contract awarding, it enables
the procuring entity to have an eligibility check from technical to financial, evaluate its
cost effectivity and qualifications just to determine what really fits in the certain goods or
services needed to obtain. Lastly, this unbiased characteristic of bidding not only takes
side of the interested party but also to the both parties since they get the best price and
contract terms for their proposals at the same time having most qualified provider of
products and services while keeping costs low. Also they get to agree, discuss, and
understand things to consider in terms of acquiring at the same time in providing a
quality, specialized services yet complementary advantages arising from this kind of
opportunity.
However, above all the advantages mentioned the contrary side is inevitable and
so the disadvantages of the competitive bidding is somehow forcing suppliers to
compete with the imposed bidding of a procuring entity, in reality the suppliers with
leading history of achievements that are qualified to deliver specialized services rarely
joins in this kind of event for a reason that it involves an amount of effort and difficulty
that is oppressively burdensome with the terms and conditions provided by the
procuring entity and aside from that is mainly because of the cost. With that being said
on the part of the procuring entity they tend to end up in acquiring a substandard
services or inferior quality of goods, since there's pressure to keep costs down at the
same time ensuring that the supplier gets a satisfactory profit margin. Supplier may end
up considering the use of cheaper labor and/or materials for it will effectively lower the
cost. Another thing is where suppliers may be tempted to lower costs is safety
standards. Safety costs can run away with a contract. Cutting down on safety costs is a
sure way to keep the bidding price low. The lack of communication arises with the open
for all interested party concept of bidding, a disadvantage since communication is only
made available to those who have its lowest calculated responsive bid or highest rated
bid for such reason that chances of revealing the unique approach of the supplier
towards the goods or service to be procured would be known to every bidder. The
process of bidding is really doing its purpose to elaborately check and determine which
of which suppliers undergo post qualifications and its a no joke to take several years to
choose a successful bidder and award the contract. In a worst case scenario is that the
successful bidder would be unable to meet the requirement that they have contracted
for and so rework will be the last resort.

2. In your opinion what should be deleted or added to the bidding process?

In my opinion the bidding process is already fine with the probable concerns that
the procuring entity or the bidders I could think of, it indeed has taken into account
already with the Government Procurement Act provided for the process of bidding.
However, the disadvantages resulting in the conduct of the competitive bidding should
have been taken into account. Like the evaluation procedure is time-consuming, and
there is a lot of documentation, such as bidding documents by which is tedious.
Contract awarding can be delayed for extremely long periods of time for goods and
infrastructure or consulting services that may be required quickly.
 If only possible, I would suggest that the quality should have been the main
priority in procuring since this bidding is usually done by the government to acquire
goods or services by which these are used in a projects that is offered to its citizen and
so people deserve a guaranteed quality for a reason that common disadvantage of
procuring through bidding is an inferior goods or a substandard services acquired due to
the keeping the costs low. They tend to thrift the budget for these kinds of project yet
there’s so many anomalies and corruption behind.
2. What is the purpose of Philippine Competition Act and its effect in the society?
The purpose of Philippine Competition Act is to promote and protect
competitive market. It aims to prohibit and penalizes the anti-competitive conduct
such as the anti-competitive agreements, abuse of dominant position, and anti-
competitive mergers and acquisitions.
In my understanding with the effect of this act in the society is that it
promoted fair market competition between trade businesses or industry. It
improves the consumer protection and welfare, help accelerate investments
since the market is being controlled and so the supply and demand is in the
margin being that said the prices are being competitive that invites investment.
Lastly, it would help accelerate job creation in the country, that would lessen
unemployment rate.