BSP Mandates Full Adoption of QR Ph Codes for all QR-code Enabled Payments
The Bangko Sentral ng Pilipinas (“BSP“) has approved guidelines that will facilitate the transition to the use of the National Quick Response (“QR“) Code Standard (“QR Ph“) for all QR code-enabled payment services. QR Ph was developed by the Philippine Payments Management, Inc., the payment system management body accredited by BSP in accordance with BSP Circular No. 1055.
Under the BSP’s guidelines, all BSP-supervised financial institutions acting as payment service providers (“PSPs“) and which offer QR-enabled payment services, as well as PSPs that participate in the InstaPay automated clearing house, are required to use and display their QR Ph on their internet and mobile channels starting 1 July 2023. Following this date, non-QR Ph codes or proprietary QR codes shall be disabled and shall not be made available to the public. These covered institutions are required to submit the status of their compliance within 30 days from 23 February 2023 or the date of the memorandum and are reminded to provide appropriate training and guidance on the QR code system to their employees, including store cashiers and managers.
By adopting QR Ph, BSP aims to encourage greater use of digital payments by eliminating the need for merchants and customers to maintain several accounts, each with its own QR code. The use of QR Ph is intended to provide a solitary and more consistent payment mode for electronic transactions.
Philippines Seeks to Adopt ASEAN Sustainable and Responsible Fund Standards, Establish Rules on Related Investment Companies and Schemes
The Securities and Exchange Commission (“SEC“) has completed the draft memorandum circular on:
- the Adoption of the ASEAN Sustainable and Responsible Fund Standards (“ASEAN SRFS“); and
- establishment of rules on (i) Qualification of a Local Investment Company under the ASEAN SRFS; and (ii) Recognition of a Foreign Collective Investment Scheme (“CIS“) qualified under the ASEAN SRFS that seeks to offer in the Philippines under the ASEAN CIS Framework.
The draft memorandum circular was open for comments from the public from 7 to 17 March 2023.
Under the draft memorandum circular, SEC will adopt the ASEAN SRFS to apply to investment companies, including sub-funds of umbrella funds, that seek to offer locally or on a cross-border basis as an ASEAN Sustainable and Responsible Fund (“ASEAN SRF“). For an investment company to qualify as an ASEAN SRF, the investment company must: (i) be registered in the Philippines in accordance with the Investment Company Act and the Securities Regulation Code; (ii) comply with SEC Memorandum Circular No. 11 series of 2022 on the Sustainable and Responsible Investment Funds and any amendment thereto; and (iii) comply with the ASEAN SRFS. An application may be filed with SEC by submitting the SEC ASEAN SRF Form which must be signed by a majority of the board of directors of the investment company and the fund manager, together with the application fee of Php10,000 plus a 1% legal research fee.
A local investment company qualified under the ASEAN SRFS, or one which is applying to qualify as such, may also offer its shares under the ASEAN CIS Framework by additionally complying with SEC Memorandum Circular No. 9, series of 2021 (“Memorandum Circular No. 9“) on the Rules on Authorisation of an Investment Company as a Qualifying CIS and Recognition of a Foreign CIS under the ASEAN CIS Framework.
On the other hand, foreign SRFs may be offered in the Philippines after it has shown: (i) compliance with Memorandum Circular No. 9; (ii) proof of qualification as an ASEAN SRF; (iii) submission of a duly accomplished SEC ASEAN SRF Form; and (iv) payment of the application fee. In addition, the name of the foreign SRF must accurately and fairly reflect the sustainability of the environmental, social and governance (ESG) factors set out in its investment objective and/or strategy. The foreign SRF must also incorporate in its prospectus (i) a notification to the public of its qualification as an ASEAN SRF, (ii) the asset allocation, (iii) a sustainable investment strategy, (iv) risks associated with its sustainable investment objectives, and (v) policies and procedures to divest existing investments that were initially compliant but subsequently became ineligible.
PCC Sets New Compulsory Merger Notification Thresholds
The Philippine Competition Commission (“PCC“) issued Commission Resolution No. 04-2023 (“Resolution“) adjusting the compulsory notification threshold for mergers and acquisitions effective 1 March 2023. Pursuant to the Resolution, the adjusted thresholds are as follows:
- Size of Party (“SoP”), namely the aggregate value of assets or revenues in the Philippines of the ultimate parent entity of one of the parties to a transaction – from Php6.1 billion starting 16 September 2022 to Php7 billion; and
- Size of Transaction (“SoT”), namely the value of assets or revenues of the acquired entity and the entities it controls – from Php2.5 billion starting 16 September 2022 to Php2.9 billion.
To trigger the compulsory notification of a merger or acquisition with the PCC, both thresholds must be satisfied. For transactions with high public interest which do not meet the thresholds, however, the PCC may nonetheless launch a motu proprio review in the interest of consumers.
The PCC adjusts its thresholds annually based on the official estimate of the nominal Gross Domestic Product (“GDP“) growth of the previous year. According to the official estimates of the Philippine Statistics Authority, the nominal GDP growth in 2022 was 13.5%.
From September 2020 to September 2022, the PCC notification threshold was set by the Bayanihan to Recover as One Act at Php50 Billion. PCC has since resumed its annual threshold adjustment since it started with a baseline threshold of Php1 billion under the Philippine Competition Act.
The set thresholds will remain effective until PCC approves a new set of thresholds for compulsory notification.
Green Lanes for Strategic Investments Established to Facilitate Ease of Doing Business in the Philippines
On 23 February 2023, Executive Secretary Lucas P. Bersamin, on behalf of the President, signed Executive Order No. 18 (“EO No. 18“), titled “Constituting Green Lanes for Strategic Investments”. EO No. 18 aims to expedite the process of securing necessary licences and permits for Strategic Investments through the creation of Green Lanes.
Under EO No. 18, Strategic Investments are defined as those which are aligned with the Philippine Development Plan or any similar national development plan, and can be characterised by (i) significant capital or investment to the country; (ii) consequential economic impact; (iii) positive impact on the environment; (iv) significant contribution to the country’s balance of payments; (v) with complex technical processes and engineering designs; and (vi) will bring about improvement in the country’s infrastructure capabilities. These Strategic Investments are classified into three categories:
- Highly Desirable Projects;
- Foreign Direct Investments; and
- Projects or Activities under the Strategic Investment Priority Plan (SIPP).
EO 18 mandates all national government agencies and their regional and provincial offices, government-owned-or-controlled corporations, government instrumentalities, and local government units involved in the issuance of permits, licences, certifications, or authorisations covering Strategic Investments to establish Green Lanes to expedite the processes and streamline the requirements for the issuance of permits and licences. It also mandates the establishment of a One-Stop-Action-Center for Strategic Investments (“OSAC-SI“), which shall serve as the single point of entry for all projects qualified as strategic investments. OSAC-SI shall identify and endorse Strategic Investments to the appropriate Green Lanes, and shall include aftercare or post-investment assistance as part of its services.
Should a government agency fail to process an application within the prescribed periods, the application shall be deemed approved under Section 10 of the Anti-Red Tape Act of 2007. The Department of Trade and Industry or the Board of Investments may likewise endorse unresolved applications for permits and licences to the Anti-Red Tape Authority upon the lapse of the original or extended period for processing.
IPOPHL Promulgates New Trademark Rules for Non-traditional Marks
The Intellectual Property Office of the Philippines (“IPOPHL“) issued Memorandum Circular No. 2023-001 (“MC 2023-001“) or the Revised Rules and Regulations on Trademarks, Service Marks, Trade Names and Marked or Stamped Containers, which took effect on 14 February 2023. MC 2023-001 replaced the Revised Trademark Regulations of 2017 and institutionalised protection for non-traditional visual works.
MC 2023-001 lists down acceptable representations of non-traditional marks. It also clarifies that colour marks, motion marks, position marks, and hologram marks are acceptable subjects of trademark registration as long as the marks portray an acquired distinctiveness as defined under the Intellectual Property Code.
Under MC 2023-001, the Bureau of Trademarks (“Bureau“) is also able to formally process fully digitalised transactions. Although mandatory online filing has been in place since September 2020, the Bureau still accepted — and in certain situations, required — the submission of physical, original documents to the office while also providing physical copies of official activities and correspondence. Under MC 2023-001, all communications shall now be transmitted via online platforms.
NPC Launches Online Registration Database
On 3 February 2023, the National Privacy Commission (“NPC“) launched the NPC Registration System (“NPCRS“). The NPCRS is an online portal for registration with NPC of the data processing systems (“DPS“) of both the government and the private sector.
The NPCRS is intended to ease compliance with Republic Act No. 10173 or the Data Privacy Act (“DPA“) by allowing both the government and private organisations, considered as Personal Information Controllers (“PIC“) and Personal Information Processors (“PIP“) under the DPA, to register their respective DPS digitally.
A PIC or PIP that employs at least 250 persons, processes sensitive information of at least 1,000 individuals, or processes data likely to pose a risk to the rights and freedoms of data subjects shall register its newly implemented DPS or inaugural Data Protection Officer (“DPO“) through the NPCRS within 20 days from the commencement of such DPS or from the effective date of the appointment of its inaugural DPO.
A PIC or a PIP that processes personal or sensitive personal information involving automated decision-making or profiling must also register its DPS. Other entities may register their DPS voluntarily.
Upon registration, NPC shall issue a Seal of Registration simultaneously with the Certificate of Registration. The Seal of Registration and the Certificate of Registration shall be valid for one year from its issuance. The Seal of Registration must be displayed at the main entrance of the place of business, office, or at the most conspicuous place to ensure visibility to all data subjects.
Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice
