SC junks PDEx monopoly suit

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The Supreme Court has junked the case accusing the Philippine Dealing and Exchange Corp., (PDEx) of monopoly in the fixed-income market, filed nine years ago.

Apart from PDEx, the case named PDEx parent company Philippine Dealing System Holdings Corp. (PDS), Philippine Deposit and Trust Corp., Philippine Securities Settlement Corp., PDS chair Vicente Castillo and the Bankers Association of the Philippines as the private sector respondents, together with the Bangko Sentral ng Pilipinas, Department of Finance, Securities and Exchange Commission, the secretary of finance and the national treasurer as public respondents.

The 19-page decision penned by Associate Justice Ramon Paul Hernando cited the lack of legal personality to pursue the case filed by former congressman Luis Villafuerte, and Caridad Valdehuesa and Norma Lasala. At the time of the filing of the case, current Finance Secretary Benjamin Diokno also forms part of the petitioners.

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The petitioners alleged that the Securities and Exchange Commission, Bangko Sentral ng Pilipinas, Department of Finance, and the National Treasurer allowed the PDS Group to establish a monopoly and impose unlawful restraint of trade in the securities market through various government rules, orders, issuances, and acts.

The High Tribunal in junking the case said the respondents failed to show ‘‘a personal and substantial interest in the case such that they have sustained or will sustain direct injury as a result of the governmental act that is being challenged.”

“However, petitioners, who were former legislators, former national treasurers, and a former budget secretary and economics professor, failed to show any sufficient and specific denial of their rights or any burden caused to them by the assailed acts and issuances,” the decision promulgated on March 29, 2022 reads. It was only made public on August 19.

The SC said the petitioner also failed to present proof or evidence to show a clear disregard of the relevant constitutional provision on monopoly which would have required its immediate action.

“Monopoly is not prohibited per se but is only regulated or disallowed when public interest so requires. Further, we have already recognized that securities markets may regulate their own operations by requiring membership in a Self-Regulatory Organization (SRO) under the principle of self-regulation, consistent with the State policy to ‘establish a socially conscious, free market that regulates itself. Thus, the membership requirement in an SRO does not necessarily violate the constitutional provision on monopoly,” the SC added.

The SC also questioned the petitioners’ direct approach to the High Tribunal for the case when the proper course would have been to go to the trial courts first, disregarding the hierarchy of courts.

“As the petitioners assailed the supposed subsisting monopoly of the PDS Group, the Court held that it is necessary to determine first whether there actually is a monopoly “• which is clearly factual in nature; thus, it is imperative that it be threshed out before a court that is a trier of facts,” the SC added.

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