Competition Reforms in Key Markets for Enhancing Social & Economic Welfare PHILIPPINES

1. 1st Meeting of National Reference Group Competition Reforms in Key Markets for Enhancing Social & Economic Welfare PHILIPPINES CREW Project Briefing Rafaelita M. Aldaba, PIDS 30 July 2013, PIDS, Makati City

2. Presentation Outline • Background: Competition, parameters used in analysis of impact of competition reforms on consumer welfare, producer welfare • Project Description • CREW Project: Goal, objectives, outputs & outcome • Scope & Implementation: 3 Phases • Structure & Organization • Competition Analysis: Rice, Passenger transport • Project Status & Planned Activities till Oct-Nov 2013 • Role of NRG Members

3. 1. Background & some definitions • Competition: rivalry as firms independently strive for buyers’ patronage to achieve a particular business objective (profit, sales, market share) • Forces firms to become efficient & offer a wider selection of goods & services at lower prices • Competition can be lessened by • Behavioral restraints such as collusive agreements to restrict prices or outputs & other anticompetitive business practices that negatively affect welfare • Government policies & regulations: barriers to entry such as permits, licenses; restrictions that are not equally applied to new entrants & incumbents; tariffs, quotas & other NTBs • Competition Analysis • Consumer welfare, producer welfare (benefits)

4. Consumer Welfare Analysis

5. Producer Welfare (Benefit) Analysis

6. Indicators of Producer Welfare (Benefits)

7. 2. CREW Project Goal & Objectives • Goal • To better demonstrate measurable benefits from effective competition reforms in DCs for ensuring long-term support for competition • Objectives • Enhance understanding of benefits from competition reforms in DCs (consumers & producers) • Develop & test a methodology to assess effectiveness of competition reforms in benefitting consumers & producers in specific markets • Advocate to key actors (national & international) for greater support to competition reforms in key markets • Sustain momentum on competition reforms & take it forward

8. Outputs & Outcome • OUTPUTS • Documented evidence of benefits from competition reforms in key markets • Dialogues involving multiple stakeholders on benefits of competition reforms in DCs • Strategy for capacity building of DC competition agencies and sector regulators • Framework (Tool) for monitoring and evaluating the process of competition reforms in DCs • Demand from elsewhere (other sectors and/or countries) for similar exercise • OUTCOME • Greater attention and impetus for competition reforms in key DC markets resulting in consumer and producer benefits

9. Project Implementation: 3 Phases

10. Sector-specific Consumer & Producer Welfare

11. Project Structure & Organization CUTS International • Implementation Team: CUTS International • Project Advisory Committee (PAC): Country Level • Country Partner Organizations (PH: PIDS & AER) • National Reference Group (NRG) • National Entities • Competition Agency • Sector Regulators • Private sector groups • Research Institutes & Think Tanks • Academe • Civil Society groups • Media

12. 3. Project Status & Planned Activities • Inception Meeting: Countries & Sector selection • Review of literature & Fact Finding in project countries • Opening Meeting in project countries: April to May, 2013 (PH: May 7, 2013) • Outline of Diagnostic Country Report (DCR) • DCR Research Methodology- Nathan Associates • Review of DCR Methodology by PAC members

13. DCR Activities • Finalize the DCR Methodology (in countries) • Research /Fieldwork to identify the following • competition reforms undertaken in markets • relevant stakeholders/respondents • benefits of reforms on consumers and producers • existing concerns, reform possibilities and estimated benefits from them • Research Methodologies: Perception/Feedback Survey, Case Studies, Quantitative Analysis, Qualitative Analysis • Conduct in-depth interview, perception surveys of relevant stakeholders/respondents • Data Collation & Analysis • Preparation of the draft DCR: impact of competition reform on consumer & producer welfare indicators; benefits from specific elements of competition reforms • Presentation of the draft DCR in NRG-2 meeting to get feedback

14. 4. National Reference Group: Role NRG • Multi-stakeholder group: experts & practitioners, competition scholars, sectoral stakeholders • 15 members in each country • Meet periodically to discuss project progress & issues Role of Members • Guidance & support in project implementation • Inputs in designing components of research • Review important project documents - Diagnostic Country Report, Framework for Competition Promotion (FCP), etc. • Access to country-specific network of institutions for data (literature, statistics, market environment, etc.) &project application tools • Participate in project meetings • CREW findings would help them in their own work agenda

15. NRG Meetings & Timelines • Duration: May 2013-October 2015 • Diagnostic Country Report (DCR) will gather evidence to understand the impact of competition reforms on consumers & producers; indicators of these impacts

16. NRG Meetings & Timelines • FCP: Framework for Competition (to be developed by CUTS) to guide the process of competition reforms in key markets & measure the impacts of such reforms

17. Thank you for your attention. www.pids.gov.phwww.aer.orgwww.cuts-ccier.org/CREW