Experts believe competition is a potential driver of Philippine economic recovery, following the disruptions caused by the coronavirus disease 2019 (Covid-19) pandemic.
Chairman Arsenio Balisacan of the Philippine Competition Commission (PCC) said in a virtual forum on Friday that with the health crisis still ongoing and no end in sight, the risks to competition issues are expected to escalate through a variety of channels.
He believes that supply and demand shocks induced by the Covid-19 pandemic, for example, may push businesses to engage in anti-competitive behavior to pay for losses or maintain profit margins.
“Competition policy is a useful complimentary policy lever for a recovering economy. It must be yielded. A recovery that is anchored in competitive processes will build a robust foundation for sustained and inclusive growth,” according to Balisacan.
He said the PCC is keeping an eye on key strategic industries and focusing its enforcement and resources on them.
E-commerce, health/pharmaceuticals, insurance, logistics/shipping, food, energy/electricity, water, and real estate and property management are among the critical industries that have grown even more important as a result of the pandemic.
Lastly, he said that enforcing competition policies during the pandemic, and much more so after the crisis has passed, is critical as the government strives to rebuild and construct a resilient and inclusive economy.
“An equal playing field, during and post pandemic, will ensure a faster and more stable economic recovery.”
Balisacan’s viewpoint was reinforced by Ruben Maximiano, a senior competition expert and the directorate for Financial and Enterprise Affairs of the Organisation for Economic Co-operation and Development.
According to him, competition policy is an important part of the economic recovery approach. Governments must adhere to the principle of competitive neutrality when it comes to the deployment of state support.
“Traditionally, competition authorities have exercised their mandate essentially through enforcement actions and not being so involved in helping governments in designing state interventions and state support.”
“But this might need to change to ensure a better decision making by policymakers that actually lead to a reduction in long-term competition distortions in markets, which, if happened will ultimately hinder a strong economic recovery from the crisis,” he explained.