SC affirms ruling on constitutionality of Peco asset expropriation | Inquirer News

SC affirms ruling on constitutionality of Peco asset expropriation

/ 08:16 PM March 17, 2021

ILOILO CITY—The Supreme Court, voting 9-6, affirmed an earlier ruling upholding the constitutionality of the franchise of the Razon-owned More Power Electric Corp. (More Power) which allowed the takeover of distribution assets of rival Panay Electric Company (Peco).

The high court denied the motion for reconsideration filed by Peco which sought the reversal of the court’s Sept. 15, 2020 decision, according to a statement posted on the court’s website.

The ruling was promulgated on March 9 but the full text has not been posted as of March 17.


On Sept. 15, 2020, the Supreme Court reversed a July 1, 2019 decision of the Mandaluyong Regional Trial Court declaring that Sections 10 and 17 of Republic Act (RA) No. 11212 as unconstitutional.


RA 11212 granted a 25-year franchise to More Power to distribute electricity in Iloilo City and the power to expropriate Peco’s distribution assets.

In its Sept. 15, 2020 decision, the high court ruled that Peco’s distribution assets are “susceptible to expropriation for the same public purpose of power and electricity distribution” and that the expropriation of its distribution system by More Power satisfies the “constitutional requirements of due process and equal protection.”

It cited Peco’s legislative franchises which provided that the government can expropriate its distribution system for public use on or before franchise expiration.

The high court also ruled that the expropriation by More Power of Peco’s distribution system “serves both the general public interest of conveying power and electricity in Iloilo City and the peculiar public interest and security of ensuring the uninterrupted supply of electricity.”

Peco had argued, among others, that only the government, not a private entity, has the right to expropriate its assets if the government decided to operate and maintain the electric distribution system.

The Iloilo Regional Trial Court is still determining the amount for the just compensation for Peco’s assets which had been estimated to be worth at least P481,842,450.


Peco operated for 97 years but its franchise expired on Jan. 18, 2019 and was not renewed by Congress.

Justice Rosmari Carandang penned the ruling denying Peco’s motion for reconsideration which was affirmed by Chief Justice Diosdado Peralta and Associate Justices Estela Perlas-Bernabe, Alfredo Benjamin Caguioa, Alexander Gesmundo, Ramon Paul Hernando, Henri Jean Paul Inting, Ricardo R. Rosario and Jhosep Lopez.

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Those who dissented included Associate Justices Marvic Leonen, Amy Lazaro-Javier, Rodil Zalameda, Mario Lopez, Edgardo De Los Santos and Samuel Gaerlan, according to the statement.

Edited by TSB
TAGS: Iloilo City, More, Peco, power, Regions, Supreme Court, utility

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