Iloilo City gov’t demands P51.4 M from former power utility

Published June 21, 2021, 2:25 PM

by Tara Yap

PANAY Electric Co. (PECO), the former power utility in Iloilo City. (Tara Yap)
ILOILO CITY – The former power utility of Iloilo City allegedly owes the city government P51.4 million in franchise taxes.

In a June 16 letter, the Iloilo City Legal Office demanded Panay Electric Co. (PECO) to settle its franchise taxes that were part of its billed monthly electricity charges for the period of Jan. 1, 2019 to Dec. 31, 2020.

The letter addressed to PECO Chief Executive Officer Mariano Cacho and President Luis Miguel Cacho alleged that PECO “refused to remit/pay to the Iloilo City government ” the remaining due for the franchise tax.

PECO lost its congressional franchise to distribute electricity in Iloilo City last February 2019. The franchise was given to MORE Electric and Power Corp. (MORE Power), which is owned by billionaire Enrique Razon Jr.

While PECO lost its franchise, it continued to technically distribute electricity until last week of February 2020 when MORE Power took over its facilities.

Atty. Edgardo Gil, the city government’s chief legal officer, warned that if PECO still refuses to pay the P51.4 million in franchise tax, the city government will immediately file syndicated estafa against PECO.

In the demand letter, Gil noted that the city government could have used the money for the response against the COVID-19 pandemic since last year.

Atty. Estrella Elamparo, PECO’s chief legal counsel, said the city government cannot collect franchise taxes from PECO anymore since it no longer has a franchise.

Elamparo noted that the court also issued a preliminary injunction against the Iloilo City government pending the case that the Iloilo City government wanted to auction PECO’s assets.

“The city government cannot collect any franchise tax while the case is still pending in court,” Elamparo said.

This is the latest issue against the embattled PECO, which was distributing electricity in Iloilo since the 1920s until it lost its franchise two years ago.