PHILIPPINES Law and Practice Contributed by: Raoul Angangco, Sylvette Y Tankiang, Kristin Charisse C Siao and Ma Carla Mapalo, Villaraza & Angangco
2.8 Foreign-to-Foreign Transactions The PCA covers entities engaged in trade or industry in the Philippines or in international transactions that have direct, substantial and reasonably foreseeable effects on trade in the Philippines. Thus, even if the transaction occurs offshore or involves an entity not based in the Philippines, it may be subject to noti - fication to and review by the PCC if the notification thresholds are met. For purposes of calculating the notification thresholds, the assets or revenues gener - ated by the acquired or acquiring entity in the Philip - pines, including any entities it controls, are material. 2.9 Market Share Jurisdictional Threshold There is no market share jurisdictional threshold. Notably, however, restrictions on market share may be imposed by special laws. As discussed above, the EPIRA, for example, imposes restrictions on the per - centage of the installed generating capacity of a grid and/or the national installed generating capacity that an entity, singly or in combination with others, may • incorporating a joint venture company; • entering into a contractual joint venture; or • acquiring shares in an existing company (if joint control exists between or among the existing joint venture partners). Joint ventures are subject to compulsory notification if the notification thresholds for party size and trans - action size are met. For the purposes of calculating the size of the party, the contributing entities will be deemed to be the acquiring entity and the joint venture will be deemed to be the acquired entity. own, operate or control. 2.10 Joint Ventures Joint ventures may be formed by: The size of the transaction is based on the aggregate value of the assets that will be combined in the Phil - ippines or contributed to the joint venture or on the gross revenues generated in the Philippines by such assets, each of which exceeds PHP3.8 billion.
• any amount of credit or any obligations of the joint venture that any of the joint venture parties agreed to extend or guarantee to the joint venture. The aggregate value of assets or revenues in the Phil - ippines will be the amount stated in the most recent audited financial statements or, if the entity is not required to prepare audited financial statements, the last regularly prepared balance sheet in which those assets are recorded. The value of the assets or revenues in the Philippines of an entity must be expressed in Philippine pesos. If the financial statements are denominated in a foreign currency, the asset values must be converted to Phil - ippine peso using the average foreign exchange rate quoted by the Bangko Sentral ng Pilipinas over the relevant 12-month financial period. 2.7 Businesses/Corporate Entities Relevant for the Calculation of Jurisdictional Thresholds To satisfy the Size of the Party Test, at least one of the notifying UPEs, including all the entities it controls, directly or indirectly (the UPE and all entities it con - trols, directly or indirectly, collectively comprise the “notifying group”), must have either aggregate annual gross revenues in, into or from the Philippines or have assets “in” the Philippines exceeding PHP9.1 billion. The annual gross revenues from sales in, into or from the Philippines of the notifying group will be that stat - ed in the UPE’s consolidated financial statements, in accordance with the general principles discussed above. If, based on the accounting principles adopted by the UPE, it does not prepare consolidated financial statements, the annual gross revenues will be deter - mined by aggregating the gross revenues from sales in, into or from the Philippines of the entities within the notifying group, as booked or reflected in their separate statements of income and expenses. Note that the gross revenues from sales in, into or from the Philippines of an entity within the notifying group that is jointly controlled with a different entity shall be proportionate to its ownership interest. Changes in the business are reflected in the financial statements in accordance with accounting principles.
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