PCC raises M&A probe trigger amid growth
The antitrust authority adjusts M&A notification thresholds annually based on the previous year’s nominal gross domestic product growth.
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The antitrust authority adjusts M&A notification thresholds annually based on the previous year’s nominal gross domestic product growth.
The Philippine Competition Commission (PCC) increased the thresholds for mergers and acquisitions to P8.5 billion and the size of transactions to P3.5 billion, up from the previous P7.8 billion and P3.2 billion, respectively.
According to PCC, the adjustment, the eighth since the enactment of the Philippine Competition Act (PCA) in 2015, reflects the country’s economic growth and aims to streamline regulatory oversight of significant business deals.
The antitrust authority adjusts M&A notification thresholds annually based on the previous year’s nominal gross domestic product (GDP) growth. According to the Philippine Statistics Authority, nominal GDP grew by approximately 8.7 percent in 2024, justifying the roughly nine percent increase in the thresholds.
The new thresholds will apply to M&As notified on or after 1 March 2025, while ongoing reviews, notifications filed before the effective date, and transactions already decided by the PCC will remain unaffected.
Under the PCA, notification is mandatory when both the size of the party (SoP) and the size of the transaction (SoT) thresholds are met.
The SoP refers to the total value of assets or revenues of the ultimate parent entity of any party to the deal. At the same time, the SoT pertains to the value of assets or revenues of the acquired entity.
The initial threshold in 2015 was P1 billion for both metrics. Still, successive adjustments have raised the bar to focus regulatory scrutiny on more significant transactions that could impact market competition.
“The adjustment ensures that our oversight remains proportionate to the Philippines’ growing economy,” PCC chairperson Michael Aguinaldo said. “By raising the thresholds, we can focus on high-impact deals while reducing compliance burdens for smaller transactions.”
Since its establishment, the PCC has reviewed 328 M&A transactions with a combined value of P6.27 trillion.
In 2024 alone, the Commission examined 17 deals worth P784 billion. The top sectors for M&A activity include manufacturing, with 57 transactions, followed by financial and insurance (53), real estate (47), electricity and gas (45), and transportation and storage (32).
These sectors reflect the country’s priorities, including infrastructure development, digital transformation, and renewable energy.
The PCC’s mandate is to prevent M&As that could substantially lessen competition, potentially leading to higher prices or reduced consumer choice.
Notable cases include the commission’s scrutiny of energy and telecommunications deals, where concentrated markets raise concerns about monopolistic behavior.
Even transactions below the new thresholds may be reviewed if the PCC initiates a motu proprio investigation prompted by reasonable grounds to suspect anti-competitive effects.
Business groups have welcomed the threshold increase, noting that it aligns the Philippines’ M&A regulations more closely with international standards.
“The higher thresholds provide clarity and reduce regulatory hurdles for mid-sized deals, encouraging investment,” Maria Teresa Villanueva, a corporate lawyer specializing in M&As, said.
However, she cautioned that companies must remain vigilant, as the PCC’s discretionary powers allow it to probe any deal raising competition concerns.
The threshold adjustment comes amid robust M&A activity in the Philippines, driven by sectors such as financial technology, real estate, and renewable energy.
For instance, recent mergers in the financial sector have involved traditional banks acquiring digital platforms to compete in the fast-growing digital payments market.
In real estate, consolidation has been fueled by urbanization and infrastructure projects under the government’s “Build, Better, More” program.
The PCC is expected to strengthen its focus on emerging sectors, such as e-commerce and green technology.
The Commission’s ability to balance regulatory efficiency with robust antitrust enforcement will be critical to fostering a competitive market environment while supporting growth.
