PHILIPPINES Law and Practice Contributed by: Raoul Angangco, Sylvette Y Tankiang, Kristin Charisse C Siao and Ma Carla Mapalo, Villaraza & Angangco
2.13 Penalties for the Implementation of a Transaction Before Clearance A transaction that meets the thresholds but does not comply with the waiting periods for PCC review prior to consummation will be considered void and will sub - ject the parties and their UPEs to an administrative fine of 1% to 5% of the transaction value. 2.14 Exceptions to Suspensive Effect Transactions that meet the notification threshold are required to comply with the mandatory notification to the PCC, except those transactions that are express - ly exempted from the notification requirements as provided in 2.3 Types of Transactions . There are no exceptions to the waiting periods for transactions subject to compulsory notification. Even if the transaction is not among the exempt trans - actions, parties may consider applying for a Letter of Non-Coverage to confirm that the transaction is not subject to compulsory notification, such as when the notification thresholds are not met or the transaction does not involve any change in control of the entity. Further, as discussed above, voluntary notification may likewise be resorted to if the parties intend to obtain an assessment from the PCC on whether the transaction poses competition concerns. The Merger Rules do not expressly provide a specific period for voluntary notification. 2.15 Circumstances Where Implementation Before Clearance Is Permitted Parties may consummate a notified transaction with - out PCC clearance if the PCC fails to issue a decision within the period provided by law. The PCA provides that the PCC has 30 days from the commencement of the Phase 1 review to complete its review of the transaction. Within those 30 days, the PCC shall, if necessary, inform the parties of the need for a more comprehensive and detailed analysis of the transac - tion under a Phase 2 review and request other infor - mation and/or documents relevant to its review. The issuance of such a request extends the period within which the agreement may not be completed by an additional 60 days. The additional 60-day period shall begin on the day after the request for information is received by the parties. The parties shall provide
Calculating Asset Value For purposes of calculating the aggregate value of the assets to determine the size of the transaction, the following will be included: • the value of all assets that are not owned by any of the joint venture parties for which agreements have been secured by any of the joint venture parties for the joint venture to obtain at any time, whether or not such joint venture entity is subject to the requirements of the PCA; • 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, at any time; and • the value of the assets owned by any of the joint venture parties that will be combined in the Philip - pines or contributed to the proposed joint venture. In the case of a joint venture formed through the acquisition of shares in an existing corporation, the assets to be combined will include the assets or rev - enues generated by the existing corporation. 2.11 Power of Authorities to Investigate a Transaction The PCC, on its own or upon notification, has the power to review mergers and acquisitions that have a direct, substantial and reasonably foreseeable effect on trade or industry in the Philippines. The statute of limitations for any action arising from a violation of any provision of the PCA or its implement - ing rules and regulations is five years, calculated from: • the time the violation is discovered, in the case of criminal violations; and • the time the cause of action accrues, in the case of administrative and civil actions. 2.12 Requirement for Clearance Before Implementation The parties to a transaction subject to compulsory notification may not consummate the transaction before either the transaction is approved or the rel - evant period of review expires.
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