The controversial PHP69.1 billion (USD1.48 billion) buyout by PLDT Inc. and Globe Telecom of San Miguel Corp’s (SMC’s) telecoms assets took another turn this week with an announcement by the Court of Appeals affirming its earlier decision to prevent the comptroller, the Philippine Competition Commission (PCC), from reviewing the deal. The appeals court decision seemingly only serves to strengthen the existing telecoms duopoly at a time when outspoken president Rodrigo Duterte has talked tough on his willingness to shake up the status quo.
The two operators struck a joint deal to acquire assets from SMC last year, including precious 700MHz mobile spectrum suitable for 4G telecoms services. In August 2016 the Court of Appeals agreed to a request by PLDT, which runs cellphone operators Smart and Sun Cellular, to stop the PCC from reviewing the sale, after the comptroller alleged the deal had not followed procedure. However, the court this week ruled that the PCC’s case lacked merit and denied its bid. The PCC had argued that the telcos’ notification of the transaction ‘lacked material information, making such notification ineffective and, thus, rendering the transaction as not among those that can be considered as “deemed approved.”’ Further, the PCC contended that the buyout – which was carried out prior to implementation of new rules and regulations under the PCA – nonetheless took place ‘during the effectivity of the PCC’s Memorandum Circular (MC) 16-002, which prescribes guidelines on how parties in mergers and acquisitions should notify the PCC regarding their transactions, which are worth PHP1 billion and above’. The comptroller’s office could not comment on the court of appeal ruling due to a gag order the court had enforced.