This country-specific Q&A provides an overview to competition litigation laws and regulations that may occur in The Philippines.
This Q&A is part of the global guide to Competition Litigation. For a full list of jurisdictional Q&As visit http://www.inhouselawyer.co.uk/practice-areas/competition-litigation/
What types of conduct and causes of action can be relied upon as the basis of a competition damages claim?
In the Philippines, a private claim for damages is available under section 45 of the Philippine Competition Act (PCA).
Section 45 provides that any person, who suffers direct injury by reason of any violation of the PCA, may file a separate and independent civil action for damages. Under Philippine law and procedure, a civil action for damages is the primary remedy by an aggrieved party to obtain compensation for loss or injury arising from a violation of the PCA.
What is required (e.g. in terms of procedural formalities and standard of pleading) in order to commence a competition damages claim?
A civil action for damages for any violation of the PCA may only be filed after the Philippine Competition Commission (PCC) has completed its preliminary inquiry on the violation. This is because the PCC has original and primary jurisdiction to enforce the PCA and investigate violations of the same. Under Philippine law, a case which falls under the specialized expertise of an administrative agency must first be filed with such administrative agency before the courts can take jurisdiction.
A preliminary inquiry can result in: (i) a resolution of closure, if the PCC finds that the PCA has not been violated; (ii) a resolution of closure without prejudice, if the PCC finds that the facts or information are insufficient to proceed, but without prejudice to another preliminary inquiry; or (iii) a resolution to proceed, if the PCC finds reasonable ground to conduct a full administrative investigation.
After completion of a preliminary inquiry by the PCC, a party commencing a competition damages claim must file a complaint with the Regional Trial Court (RTC) setting out (a) the facts constituting the violation of the PCA; (b) the fact that a preliminary inquiry has been completed by the PCA finding that the violation was indeed committed; and (c) the injury / damages arising out of the violation. These allegations will have to be proven by the complaining party during the proceedings.
 - PCA, section 12.
 - Euro-Med Laboratories v. Batangas, GR No. 148106, 17 July 2006.
 - PCA, section 31; PCC Rules of Procedure, Rule II, section 2.6.
What remedies are available to claimants in competition damages claims?
Aside from the private action for damages, pursuant to the Rules of Court, a court hearing a civil action under Section 45 of the PCA may issue interim and final injunctive relief. For interim relief, the following essential requisites must be present:
(a) the right of the complainant is clear and unmistakable;
(b) the infringement of right sought to be protected is material and substantial; and
(c) there is an urgent and paramount necessity for the injunction to prevent serious damage.
Pursuant to the Rules of Court, a court hearing a civil action under section 45 has the power to issue other interim relief such as (i) preliminary attachment and (ii) receivership, if warranted.
In addition, claimants may seek administrative remedies under the PCA. These remedies may be availed of by filing an administrative complaint with the PCC.
Upon receipt of the complaint, the PCC, through its Enforcement Office, will conduct an investigation. During the investigation, the Enforcement Office may require the submission of testimony and documents through subpoenas. The PCC may also issue interim measures during the investigation to prevent the entity being investigated from performing certain acts that may have a material and adverse effect on consumers and competition.
At the end of the investigation, the PCC may impose (a) administrative fines of up to Php 250 Million, depending on factors such as frequency of violation, relevant turnover and other aggravating or mitigating factors (e.g., voluntary desistance from the anti-competitive act); and (b) behavioral and structural remedies, such as an injunction ordering an entity to refrain from doing an act or continuing a particular course of action, disgorgement of excess profits or divestiture of shareholdings.
 - Rules of Court, Rule 58.
 - Pedro Lukang v. Pagbilao Development Corporation, G.R. No. 195374, 10 March 2014.
 - Rules of Court, Rules 57 and 59.
 - PCC Rules of Procedure, Rule XII, section 12.1.
What is the measure of damages? To what extent is joint and several liability recognised in competition damages claims? Are there any exceptions (e.g. for leniency applicants)?
Measure of damages
The PCA does not set out specific guidelines on the quantification of damages. Thus, following the Philippine Civil Code, actual and compensatory damages are recoverable, and awarded based on “pecuniary loss suffered [as] duly proved;” they cover the value of the loss suffered, as well as lost profits. If the cause of action constitutes a tort action, the infringer may be liable for all damages that are the “natural and probable consequences” of the act or omission complained of.
In addition, the injured party may recover:
(a) "Moral" damages, if it can show that it suffered "physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury." The amount of the moral damages is determined by the court, which has the power to reduce claims for excessive moral damages.
(b) Exemplary (or punitive) damages , which are awarded to serve as a deterrent to future parties from committing a similar offense. However, these cannot be recovered in all cases, and may be awarded only if the act was tainted with bad faith.
(c) Attorney’s fees and legal costs. However, these are awarded only under certain circumstances (see item 21 below). Moreover, awards of attorney's fees and legal costs by Philippine courts are generally minimal.
Joint and several liability
The PCA does not expressly provide for joint and several liability (i.e., solidary) for violations of the PCA.
However, depending on the circumstances, violators may arguably be considered as joint tortfeasors under Philippine law. Joint tortfeasors are persons who "command, instigate, promote, encourage, advise, countenance, cooperate in, aid or abet the commission of a tort, or who approve of it after it is done, if done for their benefit." By way of example, acts committed by the cartel participants may arguably be considered tortious, considering that they would result in damage to another person.
Under the Philippine Civil Code, the liability of joint tortfeasors is joint and several. It has yet to be seen whether a Philippine court will treat, as tortious, causes of action arising from violations of the PCA.
 - Civil Code, Article 2199.
 - Civil Code, Article 2217.
 - Yuchengco v. Manila Chronicle Publishing Corporation, GR No. 184315, 28 November 2011
 - Civil Code, Article 2229.
 - Civil Code, Article 2233.
 - People v. Velasco, GR No. 195668, 25 July 2014.
 - Civil Code, Article 2194.
What are the relevant limitation periods for competition damages claims? How can they be suspended or interrupted?
Which local courts and/or tribunals deal with competition damages claims?
Civil actions under section 45 are brought before the RTC where the entity or any of the entities whose business, act or conduct constitutes the subject matter of a case conducts its principal place of business. A corporation's principal place of business is the place of business stated in the corporation's Articles of Incorporation.
 - PCA, section 44.
 - RA 11232, Revised Corporation Code, Section 13.
How does the court determine whether it has jurisdiction over a competition damages claim?
Under Philippine laws, jurisdiction is conferred by statute. The PCA provides that the RTC has jurisdiction over all criminal and civil cases involving violations of the PCA.
 - Foronda-Crystal v. Son, GR No. 221815, 29 November 2017
How does the court determine what law will apply to the competition damages claim? What is the applicable standard of proof?
Actions brought under Section 45 of PCA will be decided based on the relevant provisions of the PCA and the general procedural law (i.e., the Rules of Court). The relevant provisions of the Civil Code on damages would also apply.
The burden of proof for Section 45 civil actions is the same as in civil actions — the claimant bears the burden of proving his case by a preponderance of evidence. Section 45 of the PCA implies that a claimant must show that there was an infringement of the applicable provisions of the PCA, and that he suffered actual loss as a result of the infringement.
In determining where the preponderance or superior weight of evidence on the issues involved lies, the court may consider all the facts and circumstances of the case, the witnesses’ manner of testifying, their intelligence, their means and opportunity of knowing the facts to which they are testifying, the nature of the facts to which they testify, the probability or improbability of their testimony, their interest or want of interest, and also their personal credibility as far as the same may legitimately impact upon the trial. The court may also consider the number of witnesses, though the preponderance is not necessarily with the greater number.
 - Id., Rule 133, section 1.
To what extent are local courts bound by the infringement decisions of (domestic or foreign) competition authorities?
The PCC is primarily tasked with the original and primary jurisdiction to enforce and implement the PCA, and its rules and regulations. Thus, its factual findings, as the administrative body charged with this specific field of expertise, will be afforded great weight by the courts. Based on jurisprudence, unless it is shown that such findings by an administrative body are not supported by substantial evidence (i.e., such amount of relevant evidence that a reasonable person might accept as adequate to justify a conclusion), they are conclusive and will not be disturbed.
Under Philippine jurisprudence, when a statute has been adopted from another State and such statute has previously been construed by the courts of such State or country, this statute is deemed to have been adopted with the construction so given it. Thus, the decisions of competition authorities in those jurisdiction whose competition laws served as models for the PCA (i.e. the United States and the European Union) may have persuasive weight.
 - Miro v. Mendoza, et al, GR No. 172532, 20 November 2013
 - Carolina Industries, Inc v. CMS Stock Brokerage, GR No L-46908, 17 May 1980
To what extent can a private damages action proceed while related public enforcement action is pending? Is there a procedure permitting enforcers to stay a private action while the public enforcement action is pending?
Section 45 of the PCA provides that a private action for competition damages is a separate and independent civil action which may be instituted after the completion of the preliminary inquiry by the PCC. A separate civil action proceeds independently of the criminal proceedings instituted in relation to such action.
While enforcers may try to obtain a stay of the private action, enforcers will have to establish the requisites for the issuance of an injunction (discussed above). This may be difficult due to the clear language of Section 45, which expressly allows a private claim for damages to proceed separately and independently.
 - People v. Lipata, GR No. 200302, 20 April 2016
What, if any, mechanisms are available to aggregate competition damages claims (e.g. class actions, assignment/claims vehicles, or consolidation)? What, if any, threshold criteria have to be met?
The Rules of Court allow class actions when the subject matter of the controversy is one of common or general interest to many persons so numerous that it is impracticable to join all as parties. In a class action, a number of persons with common or general interest, which the court finds to be sufficiently numerous and representative as to fully protect the interests of all concerned, may sue or defend for the benefit of all.
While class actions are a viable approach under Philippine law, they are not commonly filed in the Philippines (especially when compared to other jurisdictions such as the United States). Moreover, in a number of cases, the Philippine Supreme Court has dismissed class suits for failure of the plaintiffs to show that they adequately represent the class sought to be represented.
The Rules of Court also allow consolidation of actions involving a common question of law or fact. Consolidation is proper whenever the subject matter involved and the relief demanded in the different suits make it expedient for the court to determine all of the issues involved and adjudicate the rights of the parties by hearing the suits together.
To date, there have been no private actions, much less class actions or consolidated damages actions in the Philippines involving violations of the PCA.
 - Id.
 - Rules of Court, Rule 31, Section 1.
 - Deutsche Bank AG v. CA and Steel Corporation of the Philippines, GR No. 193065, 27 February 2012
Are there any defences (e.g. pass on) which are unique to competition damages cases? Which party bears the burden of proof?
The following defences may be invoked against competition damages claims:
(a) Leniency. Under Section 35 of the PCA, the PCC may grant leniency to former or current cartel participants, in exchange for voluntary disclosure of information regarding the cartel. Leniency can be in the form of immunity from suit (which covers immunity from criminal and administrative liability under the PCA and from civil actions for damages) or reduction of administrative fines.
(b) Prescription. Under Section 46 of the PCA, a civil action for damages must be filed within five years from the time the cause of action accrues, i.e., when the PCC has completed its preliminary inquiry on the violation of the PCA that would be subject of the civil action.
The burden of proving the existence of a defence is on the person invoking the same. Considering that enforcement of Philippine competition law is still in the nascent stage, Philippine case law has not provided any further guidance on defences that may be unique to competition damages cases (such as pass on defences) or how these will be applied and appreciated.
 - Rules of the Leniency Program of the Philippine Competition Commission ("Leniency Rules"), Section 3
 - Leniency Rules, Section 1.
 - Leniency Rules, Section 4
 - PCA, Section 45.
Is expert evidence permitted in competition litigation, and, if so, how is it used? Is the expert appointed by the court or the parties and what duties do they owe?
The Rules of Court (which would apply in a competition damages claim) allow the presentation of expert witnesses in Court. Expert witnesses may express their opinion on matters requiring special knowledge, skill, experience, or training. These expert witnesses are appointed by the parties.
 - Rules of Court, Rule 140, Section 49.
Describe the trial process. Who is the decision-maker at trial? How is evidence dealt with? Is it written or oral, and what are the rules on cross-examination?
Considering the early stages of enforcement of the PCA, there has not been any trial involving its violation.
Based on general rules of procedure for civil cases, trial will commence with the plaintiff / complainant presenting evidence to prove the allegations in the complaint. The evidence may be purely oral testimony, or documents or objects to be identified by a witness. The defendant / respondent will have the chance to cross-examine witnesses presented by the plaintiff / complaint.
After the presentation of its evidence, the plaintiff / complainant will then submit such evidence for its admission by the court. The court will then rule on whether the evidence is admissible in accordance with the Philippine rules of evidence.
Thereafter, the defendant / respondent will have the opportunity to present its own evidence. The same process as described above will apply.
At all times during the trial, the decision-maker is the presiding judge of the court.
How long does it typically take from commencing proceedings to get to trial? Is there an appeal process? How many levels of appeal are possible?
As noted above, a civil action for damages may only be filed after the PCC has completed its preliminary inquiry. Under PCC Rules of Procedure, there is a 90-day period for the PCC Enforcement Office to complete a preliminary inquiry from its commencement. 
Once the civil proceedings are commenced, it may take around 4 to 6 months to get to trial.
On the other hand, the length of time from commencing proceedings to judgment varies greatly depending on the factual circumstances and complexities of a specific case, as well as interlocutory issues. Since competition law proceedings, by nature, tend to be complex, and the Philippines has yet to see civil proceedings in relation to the PCA, it will probably take a significant period of time to obtain a final judgment.
The Rules of Court provide for appeal on grounds of fact, mixed law and fact, and law, from all final decisions of the RTC. If the appeal raises questions of fact or mixed law/fact, the appeal is taken to the Court of Appeals. The decision of the Court of Appeals may be appealed to the Supreme Court.
If the appeal is based solely on questions of law, the appeal is taken directly to the Supreme Court.
The Supreme Court’s review, whether in appeals directly from the Regional Trial Court (on pure questions of law) or from the Court of Appeals (acting in its appellate jurisdiction), is discretionary. The appeal will proceed only if justified by special and important reasons, such as when the lower court (i) has decided a question of substance not decided before; (ii) has decided a question of substance in a way not in accord with law or authority; or (iii) has departed from the usual course of judicial proceedings, or sanctioned such departure by a lower court, as to call for the Supreme Court’s exercise of its power of supervision.
The duration of the appeal process varies depending on the nature of the appeal and the appellate courts involved, but is typically from 3 to 5 years.
 - PCC Rules of Procedure, Rule II, Article I, Section 2.6
 - Rules of Court, Rule 45, Section 6.
Do leniency recipients receive any benefit in the damages litigation context?
Under Section 35 of the PCA and Section 1 of the Leniency Rules, the PCC may confer immunity from private suit by affected parties as part of its Leniency Program for participants in prohibited anti-competitive agreements.
How does the court approach the assessment of loss in competition damages cases? Are “umbrella effects” recognised? Is any particular economic methodology favoured by the court? How is interest calculated?
The PCA does not set out specific guidelines on the quantification and assessment of loss and damages in competition cases. There is also no case law to provide guidance at this time.
Following the general provisions of the Philippine Civil Code, compensatory damages are recoverable, and awarded based on “pecuniary loss suffered [as] duly proved;” they cover the value of the loss suffered, as well as lost profits.
The PCA and Philippine case law do not provide any guidance on "umbrella effects", which are damages that may have been incurred by purchasers of the competitors of the entity charged with violations of the PCA.
In the absence of case law involving the PCA at this time, we have yet to see whether courts will favour any particular economic methodology for civil actions for violations of the PCA. In general, under Philippine law, actual losses or damages will have to be proven with reasonable certainty through the best evidence available (e.g., receipts, invoices, vouchers).
In addition, the PCC and the courts are allowed to award treble fines for violation involving trade or movement of basic necessities and prime commodities (e.g., rice, corn, bread, dried and canned fish and other marine products, fresh pork, beef and poultry meal, eggs, processed milk, fresh vegetables, coffee, sugar).
Interest may be imposed on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum, from the date of final judgment until full payment.
 - Civil Code, Article 2199.
 - Oceaneering Contractors (Phils.), Inc. v. Nestor N. Barretto, G.R. No. 184215, 9 February 2011.
 - PCA, Section 41.
 - Federal Builders v. Foundation Specialists, Inc. GR No. 194507, 8 September 2014.
Can a defendant seek contribution or indemnity from other defendants? On what basis is liability allocated between defendants?
In the absence of case law at this time, and based on general civil cases in the Philippines, cartel participants may arguably be treated as joint tortfeasors, whose liability may be considered joint and several. Each of the defendants will be liable for the entire obligation, and each of the plaintiffs is entitled to demand the satisfaction of the whole obligation from any or all of the defendants. The defendant who paid the entire claim may claim from his co-defendants the share which corresponds to each. The entire claim will be divided equally among the co-defendants for purposes of computing each co-defendant's share.
 - Civil Code, Article 2194.
 - AFPRSBS v. Sanvictores, GR No. 207586, 17 August 2016.
 - Article 1217, Civil Code.
 - Article 1208, Civil Code.
In what circumstances, if any, can a competition damages claim be disposed of (in whole or in part) without a full trial?
Based on general rules involving civil cases, a competition damages claim may be disposed of without a full trial in the following circumstances:
(a) If the defendant does not file an answer to the complaint, the plaintiff may move that he be declared in default. The court will proceed to render judgment granting the claimant such relief as his pleading may warrant, unless the court in its discretion requires the plaintiff to submit evidence.
(b) A plaintiff may file a motion for judgment on the pleadings, if the answer fails to tender an issue, or otherwise admits the material allegations of the complaint.
(c) A plaintiff may file a motion for summary judgment. Summary judgment is appropriate when there are no genuine issues of fact which call for the presentation of evidence in a full-blown trial. A "genuine issue" is an issue of fact which requires the presentation of evidence as distinguished from a sham, fictitious, contrived or false claim. When the facts as pleaded appear uncontested or undisputed, then there is no real or genuine issue or question as to the facts, and summary judgment is called for."
A mandatory mediation procedure, consisting of mediation and judicial dispute resolution, is incorporated into civil actions before the RTC, and in the course of the pre-trial stage. This may help the parties arrive at an amicable settlement even before trial commences.
 - Rules of Court, Rule 9, Section 3.
 - Rules of Court, Rule 34.
 - Philippine Bank of Communications v. Sps. Go, GR No. 175514, 14 February 2011
 - Administrative Matter No. 11-1-6-SC-PHILJA.
What, if any, mechanism is available for the collective settlement of competition damages claims? Can such settlements include parties outside of the jurisdiction?
The PCA does not expressly provide for such a mechanism. In the absence of case law at this time, under Philippine law, parties are generally free to settle any claim they may have against any other party, as long as the settlement is not contrary to law, morals, good customs or public policy. Consequently, a settlement agreement may encompass competition damages claims, including as against those parties outside the Philippines.
What procedures, if any, are available to protect confidential or proprietary information disclosed during the court process? What are the rules for disclosure of documents (including documents from the competition authority file or from other third parties)? Are there any exceptions (e.g. on grounds of privilege or confidentiality, or in respect of leniency or settlement materials)?
Confidentiality or Proprietary Information
The PCA and the PCC Rules of Procedure provide for confidentiality of “business information” received during investigations before the PCC. However, the PCC may disclose this confidential information “when disclosure is required by a valid order of a court of competent jurisdiction.” This ability of the PCC to disclose confidential information is also available in respect of leniency. Thus, a Regional Trial Court hearing a Section 45 civil action can, theoretically, require the disclosure of confidential business information.
An affected party may attempt to seek a order to protect confidential or proprietary information disclosure. However, this remedy has yet to be tested in an actual case.
Discovery is available in RTC proceedings. Discovery extends to material and relevant matters that are not privileged. This includes information on the existence, description, nature, custody, condition, and location of any books, documents, or other tangible things and the identity and location of persons having knowledge of relevant facts.
Parties can also seek information and documents from third parties by requesting the court to issue subpoenas. A subpoena can be quashed if it is unreasonable or oppressive, or if the relevance of the documents is not shown. Privilege may be raised as justification to excuse compliance with a subpoena.
 - PCA, section 34; PCC Rules of Procedure, Rule XI.
 - PCC Leniency Rules, Section 10.
 - Rules of Court, Rules 23 and 25-29.
Can litigation costs (e.g. legal, expert and court fees) be recovered from the other party? If so, how are costs calculated, and are there any circumstances in which costs recovery can be limited?
Philippine courts rarely award the actual costs of litigation. At most, what Philippine courts award is attorney's fees in the concept of damages.
Attorney's fees are only awarded in specific circumstances listed in Article 2208, Civil Code. This is premised on the policy that no premium should be placed on the right to litigate. They are not to be awarded every time a party wins a suit.
With respect to calculating the attorney's fees, there is no specific formula for doing so. The court is given the discretion to arrive at the amount, as long as the same is reasonable.
 - Article 2208. In the absence of stipulation, attorney's fees and expenses of litigation, other than judicial costs, cannot be recovered, except:
- When exemplary damages are awarded;
- When the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest;
- In criminal cases of malicious prosecution against the plaintiff;
- In case of a clearly unfounded civil action or proceeding against the plaintiff;
- Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff's plainly valid, just and demandable claim;
- In actions for legal support;
- In actions for the recovery of wages of household helpers, laborers and skilled workers;
- In actions for indemnity under workmen's compensation and employer's liability laws;
- In a separate civil action to recover civil liability arising from a crime;
- When at least double judicial costs are awarded;
- In any other case where the court deems it just and equitable that attorney's fees and expenses of litigation should be recovered.
In all cases, the attorney's fees and expenses of litigation must be reasonable.
 - Sps Mamerto and Timado v. Rural Bank of San Jose, et al., G.R. No. 204136, 11 July 2016; also Padillo v. CA and Averia, G.R. No. 119707, 29 November 2001
Are third parties permitted to fund competition litigation? If so, are there any restrictions on this, and can third party funders be made liable for the other party’s costs? Are lawyers permitted to act on a contingency or conditional fee basis?
There is no specific Philippine law that allows or disallows third-party/alternative funding for competition litigation in the Philippines.
Philippine rules on legal ethics prohibit “champertous” agreements between lawyers and clients, where the lawyer contracts with his client for part of the matter in litigation in exchange for conducting the case wholly at the lawyer’s expense. This is designed to prevent the lawyer from acquiring “additional stake in the outcome of the action which might lead him to consider his own recovery rather than that of his client or to accept a settlement which might take care of his interest in the verdict to the sacrifice of that of his client in violation of his duty of undivided fidelity to his client’s cause.”
This should be distinguished from a contingent fee arrangement, where the client still pays for litigation expenses. Contingent fee arrangements are permitted in the Philippines.
 - Nocom v. Camerino, et.al., G.R. No. 182984, 10 February 2009.
 - The Conjugal Partnership of the Spouses Vicente Cadavedo, et.al. v. Victorino Lacaya, G.R. No. 173188, 15 January 2014.
What, in your opinion, are the main obstacles to litigating competition damages claims?
At this point, the main obstacle in litigating competition damages claims is the fact that Philippine competition law is still in relative infancy. As such, there is a lack of precedents and jurisprudential guidelines, which may provide guidance to judges hearing claims for competition damages. There is also a need for capacity building and training of judges that will handle competition cases.
Another obstacle is the inefficiency of litigation in the Philippines, generally. As discussed above, it may take several years before a litigation can be finally resolved, and thus may be costly and discouraging on the part of the litigants.
What, in your opinion, are likely to be the most significant developments affecting competition litigation in the next five years?
Competition law enforcement, more so private enforcement actions, are an emerging field of law in the Philippines. Practitioners certainly look forward to the first Section 45 civil action, as it will clarify several outstanding procedural and substantive issues, among others as to the nature of the action (ie, can it be based on tort?); the powers of the court vis-à-vis the PCC, particularly on the scope of disclosure; applicable defenses (such as passing-on); and available remedies and recoverable damages.
Practitioners are likewise looking forward to the first administrative and criminal cases involving cartels and how the PCC / the courts would deal with such cases The PCC is also expected to release its rule on inspections / dawn raids, which will surely have a significant impact on competition law enforcement in the Philippines.