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Competition Reforms in Key Markets for Enhancing Social & Economic Welfare PHILIPPINES 1st Meeting of National Reference Group CREW Project Briefing Rafaelita.

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Presentation on theme: "Competition Reforms in Key Markets for Enhancing Social & Economic Welfare PHILIPPINES 1st Meeting of National Reference Group CREW Project Briefing Rafaelita."— Presentation transcript:

1 Competition Reforms in Key Markets for Enhancing Social & Economic Welfare PHILIPPINES 1st Meeting of National Reference Group 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 IndicatorAnalytical Question AccessHas reach of goods and services widened to include consumers in areas where they were not available earlier (efficiency of distribution system)? Quality/P rice Are better quality goods and services available for consumers? Have prices changed substantially for such good/services ChoiceAre new products available to consumers? Are new firms offering wider variety of products? PriceHave prices change? Time savings Do offered goods & services help save time for consumers?

5 Producer Welfare (Benefit) Analysis IndicatorAnalytical Question Access to essential services Is there easy access for firms to public service & infrastructure networks such as power, water, internet, telephone etc? Free movement of goods and services Is mobility affected by policies & practices (inputs & outputs), infrastructure constraints? Predictability of regulatory actions Are legislations enforced by autonomous yet accountable institutions? Cost savingsHave new innovation activities led to reduction in costs?

6 Indicators of Producer Welfare (Benefits) IndicatorAnalytical Question Fair market processes Are new firms able to enter market easily (low cost) & existing firms able to exit or close businesses effectively? Level-playing field Is the principle of competitive neutrality observed between private and public enterprises? Transparency in market Do market regulators have well laid out policies & predictable implementation processes?

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 PHASEMAJOR ACTIVITIES Diagnostic Phase Assess implications of competition reforms in specific markets; identify benefits and causes of existing consumer & producer concerns Design Phase Design a composite methodology to quantify (actual & potential) benefits of competition reforms Validation Phase Test the veracity of this methodology in micro-locations in project countries; and use results for advocacy Diagnostic -diagnostic country report Design -framework for competition promotion Validation -validate FCP -advocacy, public education

10 Sector-specific Consumer & Producer Welfare STAPLE FOODPASSENGER TRANSPORT CONSUMER WELFARE -Availability of good quality staple food. - Change in prices of staple food for ordinary consumers -Availability of good quality transport services to ordinary consumers within city (intra-city) to get to workplace, markets, college/university on a daily basis & also on busy inter-city routes - Change in prices PRODUCER WELFARE -Participation of private entities in procurement, storage and distribution of staple food - Change in prices of inputs and outputs -Access to road networks for a new player (operator) in a specific geographic market for providing such services - Change in bus fares

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 SectorsGhanaZambiaIndiaPH Staple foodMaize/RiceMaizeWheatRice Passenger transport Bus (inter, intra city)

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 PhaseNRGTentative Date Main Agenda INRG 1 July, 2013 Provide project orientation & update Discuss Conceptual Framework (Phase-I) Inputs on DCR Methodology (country-specific) INRG 2 October, 2013 Discuss Draft DCR Discuss DCR findings & refinements IINRG 3 January, 2014 Orientation on common findings of final DCR Discussion on development of Framework for Competition Promotion (FCP) 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 PhaseNRGTentative Schedule Main Agenda IINRG 4July, 2014 Presentation of the sector specific FCPs Discussion on the FCP for fine tuning & refinement IIINRG 5Nov, 2014 Presentation of the final FCP Planning of country-specific implementation of FCPs IIINRG 6May, 2015 Discussion on the findings of the FCP after implementation (Impact Analysis) 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.

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