This Rule gives the PCC the teeth to make it a government regulatory agency to be feared of, similar to the Anti-Money Laundering Council, which can apply for freeze orders and bank inquiry orders before the Court of Appeals.

White-collar crime-busting will get a boost with the effectivity tomorrow Saturday, 16 November 2019, of the Supreme Court’s Rule on Administrative Search and Inspection under the Philippine Competition Act (PCA), or AM 19-08-06-SC, promulgated on 10 September 2019. This means that beginning on Monday, the Philippine Competition Commission (PCC) can start applying for inspection orders before Special Commercial Courts all over the Philippines. These inspection orders shall function as search warrants against businesses suspected to be engaged in anti-competitive activities. Once an inspection order is issued by the court, officials and agents of the PCC will have the ability to conduct “dawn raids,” search and seize evidence kept or hidden in offices around the country.

This rule gives life to Section 12(g) of the PCA, which states that the PCC shall exercise the following: “Upon order of the court, undertake inspections of business premises and other offices, land and vehicles, as used by the entity, where it reasonably suspects that relevant books, tax records, or other documents which relate to any matter relevant to the investigation are kept, in order to prevent the removal, concealment, tampering with, or destruction of the books, records, or other documents.”

An inspection order is an order in writing issued in the name of the Republic, signed by a judge, upon application by the PCC. Applications for an inspection order shall be acted upon within 24 hours from its filing, and issued if the court finds that there is a reasonable ground to suspect: that the information is kept, found, stored, or accessible at the premises indicated in the application; the information relates to any matter relevant to the investigation; and the issuance of the order is necessary to prevent the removal, concealment, tampering with, or destruction of the books, records, or other documents to be inspected.

This is a significant legal development since our Supreme Court is not quick in issuing guidelines for new forms and iterations of court processes, much less those that involve intrusion into one’s private property, out of due deference to the Bill of Rights enshrined in our Constitution. To recall, the last significant issuance was the SC Rule on Cybercrime Warrants promulgated in August 2018, which gave birth to four types of warrants (e.g., Warrant to Disclose Computer Data; Warrant to Intercept Computer Data; Warrant to Seize, Search and Examine Computer Data; and Warrant to Examine Computer Data).

The general public can benefit from this Rule by filing a verified complaint before the PCC against business entities engaged in anti-competitive activities, such as cartels and those that abuse their dominant positions. The target of the inspection orders will, more often than not, be big businesses, and to be subjected to one must be very humiliating and scandalous — imagine having several PCC officials going through your office and its records. In Section 10 thereof, even electronic evidence may be seized by PCC officers by copying, photographing or recording.

Lawyers can make use of this new piece of ammunition to show-off to their clients. However, the PCC must be wary of scrupulous lawyers who are trigger-happy in filing flimsy and baseless actions. In any case, a complaint filed before the PCC will undergo the scrutiny of its officials, and if it warrants the need for an inspection order, a judge will first conduct an examination in the form of searching questions and answers. In other words, a witness must be produced by the PCC who must testify to the satisfaction of the judge. Notably, the PCC may apply for an inspection order based on a case it initiated motu proprio, pursuant to Section 31 of the PCA.

This Rule gives the PCC the teeth to make it a government regulatory agency to be feared of, similar to the Anti-Money Laundering Council, which can apply for freeze orders and bank inquiry orders before the Court of Appeals. Here, the PCC does not issue the inspection order by itself; instead, it applies for the order before Special Commercial Courts in Quezon City, Manila, Makati, Pasig, Cebu City, Iloilo City, Davao City and Cagayan de Oro City. I can just imagine PCC officers itching to file the first application on Monday.

I am definitely excited for this new Rule, and I expect this to be part of the Bar exam coverage in the near future. I am most curious which company will be the first “victim” of this Rule. I am also secretly hoping that a lawyer tests the constitutionality of this Rule by filing a petition before the SC, just to see if it will be affirmed or modified and enrich our jurisprudence in the process.

Though if someone does question it, my bet is that it will be affirmed in toto. Why? Because the chairperson of the Committee that drafted this Rule is none other than CJ Diosdado Peralta.