Effective competition policy to provide consumers best value for money

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(Source: Business Mirror | February 1, 2018)

Finance Secretary Carlos G. Dominguez III said an effective competition policy in a market economy would ensure that enterprises perform well and consumers get the best value for their money.

Such a policy is also key in helping shape fair economies where transparency in costs and pricing are encouraged and consumers are empowered in choosing wisely, which leads to more efficient production systems, Dominguez said.

He said that in an imperfect market, consumers are often vulnerable to predatory pricing because of monopolistic conditions or cartel behavior by supposedly competing businesses.

Thus, governments would have to put in place an effective and strong competition policy that will ensure that fair competition leads to fair pricing.

“Competition helps build the just economies we aspire for. These are economies where greater efficiency determines winners and losers. These are economies of empowered citizens and analytical consumers. These are economies driven by the passion to do better and to create more value for less cost,” Dominguez said in his speech read for him by Finance Undersecretary Bayani Agabin at the 2018 Manila Forum on Competition in Developing Countries held recently at the Makati Shangi-La Hotel.

Dominguez said forums, such as this event organized by the Philippine Competition Commission with the support of multilateral development institutions are necessary so that best practices and experiences can be shared among stakeholders on how competition can lead to more equitable economies.

“We all work with unique business conditions and, very often, need to devise appropriate approaches in applying competition policy. We all work with different legal frameworks to achieve the same goal,” Dominguez said. “Over time, we will have to harmonize these frameworks so that we can all work with comparable sets of tools. Doing so will make competition policy clearer to our respective publics.”

Dominguez also underscored the need to set benchmarks for competition policy that conform to global standards to prevent weak regulations and the proliferation of monopolies and cartels from inflicting harm on consumers.

“In an open market, governments cannot set prices. They have no basis for doing so. Only market forces, in an even playing field, can ensure consumers get the best value for their money. Only fair competition can ensure fair pricing,” he said.

“Competition encourages increased transparency in costs and pricing. In that way, they help us build critical consumers who could choose analytically. Competition empowers consumers and, by doing so, encourages more efficient production systems. In turn, that increased efficiency helps build strong economies with enterprises accountable to their consumers,” Dominguez said.

 

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