COMPETITION is essential in both traditional businesses and even in cooperatives. I’d like to dive into this subject with a special focus on the country’s landmark legislation, the Philippine Competition Act (PCA).
Imagine the world of business as a dynamic ecosystem, where various players compete to survive and thrive. Just like in nature, competition in the business world is crucial for multiple reasons, and the PCA recognizes this fact.
Here’s why competition matters, even in cooperatives:
Competition encourages organizations — whether they’re traditional businesses or cooperatives — to innovate. When you’re competing with others, you’re pushed to think outside the box, develop new products or services, and find more efficient ways to operate. This innovation benefits consumers by providing them with better choices and often lower prices.
Likewise, competition forces businesses and cooperatives to become more efficient. When you’re striving to be the best in the market, you need to streamline your operations, cut waste, and optimize resources. This drive for efficiency benefits both the organization and its customers.
Similarly, competition ensures that consumers have a variety of options to choose from. It prevents monopolies or oligopolies from dominating a market, which can lead to price gouging and limited choices.
The PCA in the Philippines specifically aims to protect consumers from anti-competitive behavior, promoting fair pricing and diverse product offerings.
Apart from those I mentioned above, healthy competition stimulates economic growth. When businesses and cooperatives thrive, they create jobs, invest in infrastructure, and contribute to the overall economic development of a country. The PCA recognizes the role of competition in boosting the Philippine economy.
More than anything else, competition encourages organizations to maintain high-quality standards. They need to consistently meet or exceed customer expectations to stay competitive. This commitment to quality benefits consumers, as they can trust the products and services they receive.
Now, you might wonder how the Philippine Competition Act (PCA) fits into all of this. The PCA, which was enacted in 2015, is a game-changer in the Philippines’ business landscape. It promotes and protects competition by preventing anti-competitive practices, such as price-fixing, bid-rigging, and abuse of market power.
The PCA has empowered the Philippine Competition Commission (PCC) to investigate and penalize companies engaging in anti-competitive behavior. By doing so, it ensures a level playing field for businesses and cooperatives alike. This legislation sends a clear message that fair competition is not just encouraged but legally required in the Philippines.
Can competition help the poor?
Adequate competition in markets has a direct positive impact on the less privileged. To begin with, a competitive market has the capacity to furnish goods and services at the most affordable rates, presenting a diverse range of options and fostering an environment conducive to innovation.
This implies that individuals with lower incomes can stretch their financial resources further. Even in cases where their earnings remain stagnant, their overall quality of life can still see enhancements.
This distinction can mean the disparity between a family experiencing hunger due to exorbitant food prices or achieving food security because prices are economical, steady, and predictable.
Furthermore, small-scale entrepreneurs, such as farmers and proprietors of retail stores, are safeguarded against the unjust or exploitative practices of larger corporations. For instance, a farmer can acquire essential inputs like fertilizer and equipment at equitable prices, enabling them to market their products under equitable conditions.
Last but not least, a significant portion of the underprivileged population benefits from government-funded initiatives. Manipulating bids for government-provided infrastructure and services curtails what governments can offer to their citizens. This may result in the construction of four schools instead of the intended five or the creation of substandard roads and bridges, among other examples. The presence of competition serves as a deterrent to such practices, ensuring that these issues are averted.
TAKE AWAY
Competition isn’t just a concept; it’s a driving force that shapes the business world, whether in traditional enterprises or cooperatives. It fosters innovation, efficiency, consumer choice, economic growth, and quality assurance. The Philippine Competition Act (PCA) reinforces these principles, safeguarding the interests of consumers and businesses in the Philippines.
Embracing competition, even within cooperatives, ultimately leads to a stronger, more vibrant, and fairer marketplace.
