PHILIPPINES Law and Practice Contributed by: Raoul Angangco, Sylvette Y. Tankiang, Kristin Charisse C. Siao and Ma. Carla Mapalo, Villaraza & Angangco
4.7 Special Consideration for Joint Ventures An acquisition of shares in a corporation will be deemed a joint venture transaction if joint control will exist between or among the new and exist - ing joint venture partners post-transaction. In the context of joint ventures, joint control refers to the ability of the joint venture partners to substantially influence or direct the actions or decisions of the joint venture, whether by contract, by agency or otherwise. Joint control exists when an entity has the ability to determine the strategic commercial decisions of the joint venture (positive joint control) or to veto such strategic decisions (negative joint control). As discussed, for the purposes of calculating the aggregate value of the assets to determine the size of the transaction, 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 will be included. 5. Decision: Prohibitions and Remedies 5.1 Authorities’ Ability to Prohibit or Interfere With Transactions The PCC may prohibit or interfere with a trans - action if it will likely result in substantially less - ening, restricting or preventing competition in the relevant market. The PCC may prohibit the implementation of the agreement or require modifications or amendments to address com - petition concerns. It may also impose penalties on the parties and nullify transactions that were consummated in violation of the compulsory notification requirements.
behaviour or strengthen existing co-ordination in a manner that harms competition. 4.5 Economic Efficiencies Anti-competitive mergers may be exempted from prohibition by the PCC when the parties establish that the merger has brought about, or is likely to bring about, gains in efficiencies that are greater than the effects of any limitation on competition that will likely result from the trans - action. Efficiencies that increase competition in the market may also be considered. In order to be taken into account by the PCC, the efficiencies must be demonstrable, with detailed and verifiable evidence of anticipated price reductions or other benefits. Moreover, the efficiency gains must be merger-specific and consumers must not be worse off as a result of the merger. For that purpose, efficiencies should be substantial and timely, and should, in princi - ple, benefit consumers in those relevant markets where it is otherwise likely that competition con - cerns would arise. 4.6 Non-Competition Issues There is no explicit authority for the PCC to con - sider “non-competition” issues when reviewing transactions. However, as discussed above, the Merger Review Guidelines provide that the PCC assesses market definition within the context of the particular facts and circumstances of the merger under review. Rules governing foreign direct investment (spe - cifically, the limitations to this) are not governed by the PCA or other rules or issuances of the PCC. The PCC does not require special filings for foreign direct investment.
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