Eleveted, night view of Makati, the business district of Metro Manila.

Recent developments

On 18 June 2019, the Philippine Competition Commission (PCC) published its Rules on Expedited Merger Review (Expedited Review Rules) which aims to fast-track the review of transactions deemed less likely to result in substantial lessening of competition in the Philippine markets. Under the new rules, the PCC’s review of notifiable transactions that qualify for an expedited review qualified transactions shall be conducted within 15 working days instead of 30 calendar days for the regular Phase 1 review under the Rules on Merger Procedure.[1] If no decision is made upon lapse of the expedited review period, the transaction shall be deemed approved.[2]

Parties to qualified transactions, even those who have signed their definitive agreements prior to the rules’ effectivity, may avail of the expedited review process 15 days after publication of the Expedited Review Rules or on 2 July 2019.

Implications for business in the Philippines

The Expedited Review Rules reduces the waiting period for qualified mergers and acquisitions (including joint ventures) (M&A transactions) by 6-7 calendar days. Through the expedited process, the PCC seeks to expedite the clearance of M&A transactions which are not likely to pose competition concerns and streamline their resources to focus on more pressing and urgent matters.

Who are qualified for Expedited Review

The following M&A transactions may avail of the expedited review process:

  1. No Overlaps. Transactions between parties where the buyer, including its ultimate parent entity (UPE) and entities which the UPE controls (Notifying Group), and the target and the entity it controls, do not have actual or potential horizontal or vertical (including complementary) relationships in the Philippines..
  2. Export-oriented Philippine operations. Global transactions[3] where (i) the buyer and target are foreign entities, (ii) their subsidiaries in the Philippines act merely as manufacturers or assemblers of products, (iii) at least 95% of the products of the Philippine subsidiaries are exported to foreign parents, subsidiaries, affiliates or third parties located outside the Philippines; and (iv) the remaining percentage of product sales in the Philippine market is minimal in relation to the entire Philippine product market.
  3. Negligible Philippine presence. Transactions wherein the relevant geographic market is global and the buyer and target have negligible or limited presence in the Philippines.
  4. Real Estate Joint Ventures. Incorporated or unincorporated joint ventures, formed purely for the construction and development of a residential and/ or commercial real estate development.

The above list is exclusive but the PCC may revise the same, from time to time. The PCC may, at its discretion, and despite the transaction falling under any of the above-cited categories, determine that the proposed merger or acquisition raises substantial competition concerns, and require the parties to undergo the regular review process under the Rules on Merger Procedure.

Procedures under Expedited Merger Review Rules

Once the parties to a transaction have determined that the merger or acquisition (i) meets the mandatory notification thresholds, and (ii) qualifies for expedited review, the parties must each inform the MAO, at least 2 days prior to the submission date of their respective notification forms, of their intention to avail of the expedited review process.

Each party must prepare and complete their respective Expedited Merger Review Notification Forms (Expedited Form)[4] and the required annexes. Depending on the specific ground that is invoked for the expedited review, the Expedited Form requires information on the parties’ lines of businesses, the products or services for each line of business, the relevant market share for each product or service, and information on competitors, customers, or suppliers, as applicable.

These information may not be required at the onset in the regular Notification Form under the regular merger review process, if none of the entities within each Notifying Group operate in the same line of business (i.e., there is a horizontal overlap) or have a vertical relationship with each other (i.e., buys or sells products or services to each other) within the Philippines. Nonetheless, the MAO may still ask for these information in the course of the regular review process if, based on their review of the submitted information or independent verification of the operations of the parties, they are not satisfied that there is no horizontal or vertical overlap in respective business of the Notifying Groups. From a practical perspective, the Expedited Review Process allows parties to provide the information upfront and prevent delays in addressing questions or requests for additional information that may arise in the course of the PCC’s review.

The MAO will not accept an Expedited Form if it is incomplete or fails to comply with the formal requirements. Within one day from acceptance by the PCC of the Expedited Form, the PCC will publish the abstract of the transaction in the PCC Website and issue a call for comments.

Similar to a regular Phase 1 review, the MAO, during the course of the 15-day expedited review period, may require the parties to submit additional information or documents, conduct site visits or inspection of premises, and interview customers, suppliers and competitors.

After completion of the expedited review, the PCC shall issue a short-form clearance decision which shall contain (i) the names of the parties, (ii) nature of the transaction, (iii) markets covered, and (iv) a statement that the merger is approved because it did not raise any competitive concerns and it falls within one or more grounds under the Expedited Review Rules

If the PCC finds that any information or document required under the Expedited Form, which is relevant or material to the PCC’s review was withheld, it will require the submission of the relevant information otherwise, the notification forms will be returned and as if no notification was made to the PCC. The PCC may also determine that a filing does not qualify for an expedited review and require the parties to file under the regular review process. While the penalties for non-notification will no longer apply if the Expedited Forms are subsequently returned, the parties may be subject to a fresh 30-day review period under the regular Phase I process, effectively tacking an additional review period before the parties may consummate the transaction.

Actions to consider

Parties to a notifiable merger or acquisition must assess whether they will qualify under the Expedited Review Rules, and whether availing of the Expedited Review process will dovetail with their strategy and timetable. While the new rules provide for a shorter review period, the Expedited Form may require more information and documents than the regular notification form at the onset, and entail a longer preparation time for the parties. The process attempts to minimize further delays by requiring specific and targeted information upon filing of the Expedited Form, which may reduce the need for the PCC to require additional information and documents.

Nonetheless, the PCC retains discretion to require the parties to proceed under the regular review process, and, depending on how stringently the PCC reviews an expedited filing, the same may result in a more time-consuming process for the parties.


[1] A difference of around 6-7 calendar days from regular Phase 1 review

[2] See Section 2.12 of the 2017 Rules on Merger Procedure

[3] Under PCC Clarificatory Note 16-001, a global transaction is defined as one which requires notification in multiple jurisdictions, i.e. three (3) or more jurisdictions outside the Philippines.

[4] Available for download at https://phcc.gov.ph/wp-content/uploads/2019/06/PCC_Expedited-Review-Notification-Form_Final.docx

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