PHILIPPINES Law and Practice Contributed by: Raoul Angangco, Sylvette Y. Tankiang, Kristin Charisse C. Siao and Ma. Carla Mapalo, Villaraza & Angangco
2.5 Jurisdictional Thresholds See 2.1 Notification . There are no special juris - dictional thresholds applicable to specific sec - tors. 2.6 Calculations of Jurisdictional Thresholds The Size of the Party Test is calculated based on the value of the assets and revenues in the Philippines of the UPE, including all the entities it controls. The Size of the Transaction Test is calculated based on the value of the assets being acquired and/or gross revenues generated by the assets being acquired, or of the acquired entity and entities it controls, depending on the type of transaction. In determining the value of the assets being con - tributed for joint venture transactions, the follow - ing will be included: • all assets that the joint venture partners agreed to transfer, or for which agreements have been secured for the joint venture to obtain at any time; and • any amount of credit or any obligations of the joint venture that any of the joint venture par - ties agreed to extend or guarantee to the joint venture. The aggregate value of assets or revenues in the Philippines will be that stated on the most recent audited financial statements, or, if the entity is not required to prepare audited financial state - ments, the last regularly prepared balance sheet in which those assets are recorded. The value of the assets or revenues in the Phil - ippines of an entity must be expressed in Phil - ippine peso. If the financial statements were
presented in a foreign currency, the value of the assets must be converted to Philippine peso according to the average, over the 12 months of that financial year, of the foreign exchange rate quoted by the Bangko Sentral ng Pilipinas. 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 controls, directly or indirectly, col - lectively comprise the “Notifying Group”), must have either aggregate annual gross revenues in, into or from the Philippines or have assets ”in” the Philippines exceeding PHP8.5 billion. The annual gross revenues from sales in, into or from the Philippines of the Notifying Group will be that stated 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 determined 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 accord - ance with accounting principles.
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