PHILIPPINES Law and Practice Contributed by: Raoul Angangco, Sylvette Y Tankiang, Kristin Charisse C Siao and Ma Carla Mapalo, Villaraza & Angangco
rules and regulations governing foreign investment in the Philippines are the SEC and the Department of Justice (DOJ). Republic Act No 11647 established the new Inter-Agency Investment Promotion Coor - dination Committee (IIPCC), intended to integrate all promotional and facilitation efforts to encourage foreign investment in the Philippines. The IIPCC has representatives from various government agencies, including: • the Department of Trade and Industry; • the Department of Finance; • the Board of Investments; • the Philippine Economic Zone Authority; • the National Economic Development Authority; and • the Department of Information and Communica - tions Technology. Meanwhile, the PCC has original and primary juris - diction to review proposed mergers, acquisitions and joint ventures. Other government authorities may assist in enforcing and reviewing compliance with the relevant foreign investment regulation, depending on the industry in which the entity operates and the incentives it receives. Notification is compulsory if a transaction exceeds the mandatory notification thresholds – ie, if the aggregate annual gross revenues in, into or from the Philippines or the value of the assets in the Philippines of the ulti - mate parent entity (UPE) of at least one of the acquir - ing or acquired entities, including that of all entities that the UPE controls, directly or indirectly, exceeds PHP9.1 billion (“Size of the Party Test”); and the value of the transaction exceeds PHP3.8 billion (“Size of the Transaction Test”). These new thresholds took effect on 1 March 2026. The new thresholds represent an increase over the Size of the Party Test and Size of the Transaction Test thresholds of PHP8.5 billion and PHP3.5 billion, respectively, which were in effect from 1 March 2025 to 28 February 2026. The revised thresholds, however, do not apply to transactions that were notified to the PCC before 1 March 2026 and 2. Jurisdiction 2.1 Notification
transactions that have already been the subject of a decision by the PCC. Calculating the value of the transaction depends on the type of transaction. Notably, parties to a merger or acquisition with trans - action values falling below the above thresholds may nonetheless voluntarily notify the PCC and the PCC may, in its discretion, give due course to the same. Voluntary notification to the PCC may be made based on an executed, binding preliminary agreement or a A transaction that met the notification thresholds but was not notified to the PCC and was completed prior to the expiration of the waiting period is considered void and will subject the parties and their UPEs to an administrative fine of 1% to 5% of the value of the transaction. Pursuant to Memorandum Circular No 21-001, which implemented adjustments to the fines imposable under the PCA, parties that fail to notify the PCC with - in the period for notification but have yet to complete the transaction will be fined in the amount of 0.05% of the value of the transaction for the first 30 days of delay or a fraction thereof. The fine will be increased by 0.01% of the transaction value for each additional 30 days of delay or fraction thereof, provided that the total amount of the fine imposed does not exceed PHP2.2 million. The decisions imposing the penalties are made public. 2.3 Types of Transactions Joint ventures, mergers and acquisitions of shares and assets and issuances of new company shares have been found by the PCC to have failed to comply with the compulsory notification requirements. definitive agreement. 2.2 Failure to Notify “Joint venture” refers to a business arrangement where two or more entities or group(s) of entities con - tribute capital, services, assets or a combination of these towards undertaking an investment activity or a specific project, where each entity will have the right to direct and govern the policies of the joint venture
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