Iloilo City Hall calls off auction of PECO’s assets

Iloilo City Treasurer Jimmy Hermano (left in blue shirt) and City Legal Officer Edgardo Gil (in white shirt) explain the contents of the settlement agreement between PECO and the City government during the City Council’s regular session Tuesday. (Emme Rose Santiagudo)

By: Emme Rose Santiagudo

Panay Electric Co.’s (PECO) payment of its real property tax (RPT) arrears became official on Tuesday after the Sangguniang Panlungsod (SP) unanimously passed a resolution authorizing the mayor to sign the agreement between the city and the distribution firm.

The authorization came a day after PECO settled with the city government on Monday its principal RPT dues amounting to P134,927,522.63.

Under the agreement, the full and final payment of PECO represented all its past and present real property tax liability from 2006 until 2019, excluding interests and penalties under the Subject Tax Declaration.

The amount constitutes the P59,829,652.53 payment of the principal amount of the first assessment, which is the subject of Local Board of Assessment Appeals (LBAA) Case No. 2017-01; and P75,093,482.60 which constitutes the payment of real property obligations of PECO under the second LBBA docketed as LBAA Case No. 2019-01.

Since the payment excludes the propriety and the amounts computed for the interests and penalties imposed and accruing on the LBAA Case No. 2017-01 amounting to around P40 million, City Legal Officer Atty. Edgardo Gil said they will continue to litigate the issue of the propriety of the imposition of penalties relative to above-mentioned case.

The issue shall remain and be determined with finality by the LBAA.

“We will still litigate. Logic will dictate if you pay the principal why will you not pay for the interest,” he said.

PECO filed the first LBAA case questioning the Real Property Tax assessment issued by the city government in 2016.

The case has been pending since then.

May about P40 million pa to be collected so we have to be very careful about it. The city should get the amount what is due to the city because it means a lot to the city,” Councilor Atty. Eduardo. Peñaredondo added.

Following the resolution and the payment, the city government is expected to cancel the public auction of PECO’s assets which is initially scheduled on Dec 12, 2019.

“The city of Iloilo is willing to cancel the scheduled delinquency sale on December 12, 2019 upon receipt from PECO the amount of P134,927,522.63 in cheque or in cash covering the tax liabilities of PECO properties subject of LBAA Case No.2017-01 and LBAA Case No. 2019-01 exclusive of penalties,” the agreement said.

Aside from this, the agreement also directs the city to issue official receipt to PECO as proof that PECO has paid all its past and present RPT liability from 2006 until 2019 and issue all appropriate licenses and permits to PECO for the operation of its business.

Meanwhile, both PECO and LGU are also enjoined to a Joint Motion praying dismissal of Civil Case No. 18-34087 including withdrawal of the consigned amount and cancellation of the surety bond posted by PECO.

As to Civil Case No. 2019-02, PECO is also directed to file the proper motion for dismissal the full payment and satisfaction of the RPT for the properties subject of the said case assessed and collected for the period of ending in 2019.

Moreover, the agreement mandates that the city will no longer assess PECO properties for RPT collection purposes.

Peñaredondo said the payment is a big boon to the city.

“Of course, that’s a lot of money that we are collecting, P134 million that’s a big boon to the city of Iloilo especially right now that the Mayor is in full scale of implementing projects for the common people of the city of Iloilo,” he said.