Iloilo City seeks refund of P51 million power franchise tax from PECO

MANILA, Philippines — The Iloilo City government is seeking the refund of P51 million in franchise tax collected from power consumers for the past two years by the city’s former electricity distributor.

Iloilo City chief legal officer Edgardo Gil has written Panay Electric Co. (PECO) chairman Mariano Cacho to remit the franchise tax collected from January 2019 to December 2020 in order to boost the city’s COVID-19 pandemic response program.

Gil said any further delay in the payment of the franchise tax despite the tax directive that the utility received from the city government would cause “grave, irreparable damage.”

PECO lost its 95-year monopoly on electricity distribution in Iloilo City to a new utility, Razon-led MORE Electric and Power Corp., in December 2018 but continued to operate for two years and collected monthly electricity bills from Ilonggos, including the franchise tax that is supposed to be the city’s share.

Gil told Cacho to coordinate with the City Treasurer’s Office so that PECO could pay the remaining P51.42-million franchise tax as it had already settled the first quarter 2019 collections.

PECO had secured a preliminary injunction against the sale of its remaining properties in the city to pay off the remaining franchise tax it already collected in prior years.

But Gil said that non-remittance to the city government of the tax PECO collected from residents could be considered syndicated estafa, a criminal case punishable by imprisonment.