PCC Merger Notification Thresholds in the Philippines (2026): SOP, SOT & M&A Compliance Checklist

Since 1 March 2026, every M&A deal team active in the Philippines must screen transactions against higher mandatory filing thresholds following the Philippine Competition Commission’s adoption of Commission Resolution No. 02‑2026. The new rules governing PCC merger notification Philippines 2026 set the Size of Party (SOP) threshold at PHP 9.1 billion and the Size of Transaction (SOT) threshold at PHP 3.8 billion, both of which must be met before a compulsory filing is triggered. This guide walks in‑house counsel, private equity teams and transaction lawyers through the computation methodology, exemptions, timing rules and a step‑by‑step PCC filing checklist designed to keep deals on track and fully compliant with Philippine merger control requirements.

Quick Answer, Must I Notify the PCC in 2026?

If your transaction meets both of the following tests, a mandatory PCC merger notification is required:

• Size of Party (SOP) ≥ PHP 9.1 billion. At least one of the acquiring or acquired entities (together with its ultimate parent entity and all entities it controls) must have total assets or gross revenues in, into, or from the Philippines of at least PHP 9.1 billion.
• Size of Transaction (SOT) ≥ PHP 3.8 billion. The aggregate value of the assets or revenues being acquired, or the value of the consideration, must be at least PHP 3.8 billion.

Both conditions are cumulative. If only one threshold is met, mandatory notification is not triggered, although the PCC retains jurisdiction to review a transaction on its own initiative, and parties may choose to file voluntarily. Parties to a notifiable transaction are required to notify the PCC within 30 days of the execution of the definitive agreement and prior to consummation of the deal. Filing before the definitive agreement is signed is not permitted, and closing before PCC clearance (or expiry of the applicable waiting period) is prohibited.

What Changed on 1 March 2026, Commission Resolution No. 02‑2026 and the PCC Thresholds 2026

The Philippine Competition Commission periodically adjusts its notification thresholds to reflect changes in the consumer price index and gross national income, as mandated by the Philippine Competition Act (Republic Act No. 10667). Commission Resolution No. 02‑2026, published in early 2026, raised both thresholds effective 1 March 2026. The adjustment means that a number of transactions that would previously have required mandatory notification will now fall below the new floors, reducing the filing burden on smaller and mid‑market deals while allowing the PCC to concentrate enforcement resources on transactions with a greater competitive impact in the Philippine market.

The PCC announced the revised thresholds via its official resource page and the revised notification form (dated 9 March 2026) was uploaded to the PCC website shortly after. Industry observers expect the increase to remove a meaningful volume of mid‑cap deals from the mandatory pipeline, though any transaction that raises competition concerns may still be caught through the PCC’s power to initiate a motu proprio review.

How the PCC Tests Work, SOP and SOT Explained

Understanding the mechanics of the two tests is essential for accurate deal screening under the 2026 merger control regime in the Philippines. The PCC’s official Computing Merger Thresholds guidance sets out the methodology for both calculations.

Size of Party (SOP), Definition and Components

The Size of Party test looks at the overall economic footprint of the parties. For each party to the transaction, SOP is measured as the higher of:

• Total assets in the Philippines, book value of assets as reported in the most recent audited financial statements.
• Gross revenues derived in, into, or from the Philippines, the total top‑line revenues attributable to Philippine operations or customers during the most recent fiscal year.

Critically, the SOP calculation must be performed on a group basis. This means aggregating the assets or revenues of the relevant entity together with its ultimate parent entity and all entities it controls. Control is typically assessed as holding more than 50 % of equity or voting rights, or the ability to direct business decisions. At least one party to the transaction must meet or exceed the PHP 9.1 billion SOP threshold for the first leg of the test to be satisfied.

Size of Transaction (SOT), Definition and Valuation

The Size of Transaction test focuses on the value of what is actually being acquired. Depending on the transaction structure, the SOT is measured as:

• Asset acquisitions: the aggregate value of the assets being acquired in the Philippines (based on book value from the most recent audited financial statements).
• Share acquisitions: the aggregate value of the assets of the target entity (or the business unit being acquired), or the value of the shares/consideration, whichever is higher, per PCC guidance.
• Mergers and consolidations: the combined assets or revenues of the absorbed entity.

The SOT calculation also uses a group lens, where only part of an entity is being acquired, the relevant assets or revenues must still be attributed based on the PCC’s aggregation methodology.

A key practical point: the measurement date for financial data is the most recently completed and audited fiscal year. Parties should not use interim or unaudited figures unless PCC guidance expressly permits it in a specific context. Using the wrong base period is one of the most common errors practitioners encounter during the merger notification process.

Exemptions, Voluntary Filings and Common Pitfalls

Not every transaction that crosses the threshold values necessarily requires a filing. The PCC recognises certain categories of exempt transactions, including:

• Intra‑group restructurings, mergers or transfers between entities under common ownership or control, where there is no change in the ultimate controlling person or entity.
• Transactions involving entities specifically exempted by subsequent PCC issuances or the Philippine Competition Act’s implementing rules.
• Certain acquisitions of less than a controlling interest that do not confer the ability to materially influence the competitive behaviour of the target, subject to PCC assessment.

Even where a transaction falls below the mandatory thresholds, parties may choose to make a voluntary notification. This can be strategically valuable when the deal might attract PCC scrutiny post‑closing or where certainty of clearance supports deal financing or contractual conditions precedent.

Common pitfalls that deal teams should guard against include:

• Incorrect aggregation: Failing to include the revenues or assets of the ultimate parent’s full group can cause a party to understate the SOP and miss the notification obligation.
• Valuation timing errors: Using preliminary or interim financials rather than the last audited year‑end figures.
• Foreign entity revenue attribution: For cross‑border acquirers, revenues “into” the Philippines from offshore entities must be counted in the SOP computation, this is often overlooked.
• Double‑counting of assets: Where overlapping entities appear in both the acquirer and target group structures, care is needed to avoid inflating the SOT.

Practical M&A Compliance Checklist, PCC Filing Checklist and Timing

The following step‑by‑step PCC filing checklist is designed to guide deal teams from initial screening through to clearance. Each step should be documented and assigned to a responsible party within the transaction workstream.

1. Pre‑deal screening: As early as the letter of intent stage, run preliminary SOP and SOT calculations using the target’s and acquirer’s most recent audited financial statements. Flag potential notification obligations in the internal deal memo.
2. Engage Philippine competition counsel: Confirm threshold calculations, review deal structure for potential exemptions and prepare an initial competition risk assessment.
3. Compile data room items: Gather audited financial statements (acquirer group and target group), corporate structure charts showing the ultimate parent entity and all controlled subsidiaries, and deal documentation (SPA, shareholders’ agreements, term sheets).
4. Complete the PCC Notification Form: The revised form (dated 9 March 2026) is available on the PCC website. Prepare supporting exhibits, including the computation of SOP and SOT, market share data and a competition assessment narrative.
5. Prepare the Affidavit of Accurate Computation: The notification form requires a sworn statement certifying the accuracy of the threshold computations. This must be signed by an authorised officer of each notifying party.
6. Consider a pre‑filing meeting: The PCC offers pre‑notification consultations. These are particularly useful for complex transactions or novel structures, and can reduce the risk of a deficiency notice.
7. File within the 30‑day window: Parties are required to notify the PCC within 30 days of the execution of the definitive agreement and before consummation of the transaction.
8. Pay applicable filing fees: Fees are payable upon submission. Verify the current schedule on the PCC website, as amounts are updated periodically.
9. Track the Phase I review period: The PCC has a statutory initial review period during which it assesses whether the transaction raises competition concerns. If the PCC takes no action within this period, clearance is deemed granted.
10. Handle confidentiality requests: If any filed information is commercially sensitive, submit a confidentiality request simultaneously with the notification, identifying the specific documents or data and the basis for the request.

Timing, Filing Windows and What Constitutes “Consummation”

The 30‑day filing window begins on the date the definitive agreement is executed, not the date of a non‑binding term sheet or memorandum of understanding. “Consummation” refers to the closing or completion of the transaction (transfer of shares, payment of consideration, or assumption of control). Closing before PCC clearance is a violation of the standstill obligation. Where a transaction involves conditions precedent (such as sectoral approvals), deal teams typically structure the PCC notification to run in parallel with other regulatory workstreams to minimise overall timeline risk.

Key Forms and Where to Get Them

The PCC’s revised Notification Form (version dated 9 March 2026) and the official computation guidelines are available for download on the PCC’s Mergers and Acquisitions page. The PCC also publishes guidance notes on its “Computing Merger Thresholds” page, which sets out the methodology and worked examples for SOP and SOT calculations.

Sectoral Approvals and Parallel Filings, Sectoral Clearances Philippines

PCC clearance is rarely the only regulatory hurdle in a Philippine M&A transaction. Depending on the industry, parallel sectoral approvals may be required, and coordination of timelines is critical to avoid delays at closing. The practical effect of the PCC merger notification Philippines 2026 regime change is that deal teams must plan these workstreams together from the outset.

• Telecommunications (NTC): Acquisitions involving telecommunications entities may require prior approval from the National Telecommunications Commission. Foreign ownership limits apply (40 % cap for public utilities under the Constitution and the Public Service Act, as amended). Timing can be unpredictable, engage NTC counsel early.
• Banking and Financial Services (BSP): The Bangko Sentral ng Pilipinas must approve changes in control of banks and quasi‑banks. BSP review involves fit‑and‑proper assessments and financial soundness reviews, which can run to several months.
• Gaming (PAGCOR): Transactions involving gaming licensees or operators require PAGCOR approval. Foreign ownership limits and licensing conditions add an additional layer of regulatory complexity.
• Energy (DOE / ERC): Acquisitions in the energy sector, particularly involving generation, transmission or distribution assets, may need clearance from the Department of Energy or the Energy Regulatory Commission. Market concentration reviews in energy may overlap with the PCC’s own competitive assessment.

A practical tip: build a consolidated regulatory approval timeline at the term sheet stage. Identify the longest‑lead‑time approval (often BSP or NTC) and structure the PCC filing and any other approvals to run concurrently where possible. Foreign ownership limits in the Philippines remain a live issue across multiple sectors and should be factored into deal structuring from the earliest stage.

Penalties, Sanctions and Post‑Merger Obligations

Failure to file a mandatory PCC merger notification, or consummating a transaction before receiving clearance, exposes parties to significant enforcement risk. The Philippine Competition Act empowers the PCC to:

• Impose administrative fines for non‑notification or gun‑jumping (closing before clearance).
• Order the unwinding or divestiture of a completed transaction if it is found to substantially lessen competition.
• Impose behavioural or structural remedies as conditions of a retrospective approval.

The PCC has publicly signalled its intent to enforce the notification regime rigorously. Industry observers expect the Commission to continue pursuing gun‑jumping and non‑notification cases as part of its broader effort to build a credible enforcement track record. The practical mitigation strategy is straightforward: when in doubt, file voluntarily. The cost and time of a voluntary notification are modest compared to the potential penalties and deal disruption of a retrospective enforcement action.

Worked Examples, Three Mini Calculator Scenarios

The following worked examples illustrate how to apply the SOP and SOT tests in common deal scenarios under the PCC merger notification Philippines 2026 regime.

Scenario 1: Domestic Private Company Acquisition (Control Transfer)

Result: SOP ≥ PHP 9.1 bn (acquirer) AND SOT ≥ PHP 3.8 bn → mandatory PCC notification required.

Scenario 2: Cross‑Border Acquirer With Philippine Revenue

Result: SOP ≥ PHP 9.1 bn (foreign acquirer’s revenues into the Philippines count) AND SOT ≥ PHP 3.8 bn → mandatory notification required.

Scenario 3: Minority Share Purchase (Below 30 %)

Result: SOP is met, but SOT falls below PHP 3.8 bn → mandatory notification not required. Consider voluntary filing if the stake confers material influence.

PCC Merger Notification Obligations by Entity Type

Conclusion

The 2026 increase in PCC merger notification thresholds reflects the Philippine Competition Commission’s ongoing calibration of its merger control regime to focus enforcement resources on economically significant transactions. For deal teams, the practical takeaway is clear: accurate and timely threshold screening is the first step in every Philippine M&A transaction. Mastering the SOP and SOT computation methodology, assembling the required documentation early and coordinating PCC notification with sectoral clearances will protect against enforcement risk and keep deal timelines on track. Any practitioner navigating PCC merger notification Philippines 2026 requirements should engage experienced local competition counsel at the earliest opportunity to ensure full compliance and a smooth path to closing.

Sources

1. Philippine Competition Commission, PCC Adjusts the Merger Notification Thresholds Effective March 2026
2. PCC, Computing Merger Thresholds
3. PCC, Notification Form (Revised 9 March 2026)
4. Baker McKenzie, Philippines: PCC Adjusts Thresholds for Mandatory Notification (M&A)
5. SyCipLaw, Competition & M&A March Briefing 2026
6. ASEAN Competition, Philippines Regulatory Framework (30‑Day Filing Requirement)
7. Chambers, Philippines Increases Thresholds for Mandatory Merger Notification
8. Inquirer Business, PCC Raises M&A Deal Size Thresholds
9. GMA Network, PCC Eases Rules for Mandatory Merger/Acquisition Notifications
10. ConventusLaw, Philippines Increases Thresholds for Mandatory Merger Notification
11. DivinaLaw, PCC Adjusts the Merger Notification Thresholds Effective March 2026
12. CruzMarcelo, PCC Raises Merger Notification Thresholds Effective 1 March 2026