EN BANC

G.R. No. 248061 - MORE ELECTRIC AND POWER CORPORATION,

petitioner, versus PANAY ELECTRIC COMPANY, INC., respondent.

G.R. No. 249406 - REPUBLIC OF THE PHILIPPINES, petitioner-

oppositor; PANAY ELECTRIC COMPANY, INC., petitioner, versus
MORE ELECTRIC AND POWER CORPORATION, respondent.

Promulgated:

September 15,
x------------------------~--------------------
SEPARATE OPINION

CAGUIOA, J.:

Assailed before the Court are Sections 10 and 17 of Republic Act No.
(R.A.) 11212, 1 which provide:

SEC. 10. Right of Eminent Domain. - Subject to the limitations and

procedures prescribed by law, the grantee is authorized to exercise the
power of eminent domain insofar as it may be reasonably necessary for the
efficient establishment, improvement, upgrading, rehabilitation,
maintenance and operation of its services. The grantee is authorized to
install and maintain its poles wires, and other facilities over, under, and
across public property, including streets, highways, parks, and other similar
property of the Government of the Philippines, its branches, or any of its
instrwnentalities. The grantee may acquire such private property as is
actually necessary for the realization of the purposes for which this
franchise is granted, including, but not limited to poles, wires, cables,
transformers, switching equipment and stations, buildings, infrastructure,
machineries and equipment previously, cunently or actually used, or
intended to be used, or have been abandoned, unused or underutilized, or
which obstructs its facilities, for the operation of a distribution system for
the conveyance of electric power to end users in its franchise
area: Provided, That proper expropriation proceedings shall have been
instituted and just compensation paid:

Provided, further, That upon the filing of the petition for

expropriation, or at any time thereafter, and after due notice to the owner of
the property to be expropriated and the deposit in a bank located in the
franchise area of the full amount of the assessed value of the property or
properties, the grantee shall be entitled to immediate possession, operation,
control, use and disposition of the properties sought to be expropriated,
including the power of demolition, if necessary, notwithstanding the

AN ACT GRANTING MORE ELECTRIC AND POWER CORPORATION A FRANCHISE TO ESTAB LISH, OPERATE,
AND MAINTAIN, FOR COMMERCIAL PURPOSES AND IN THE PUBLIC INTEREST, A DISTRIBUTION SYSTEM
FOR THE CONVEYANCE OF ELECTRIC POWER TO THE END USERS IN THE CITY OF ILOILO, PROVINCE OF
ILOILO, AND ENSURING THE CONTINUOUS AND UNINTERRUPTED SUPPLY OF ELECTRICITY IN THE
FRANCHISE AREA, February 14, 2019.
 - _ _ _ _ _ _ _;i__ --- - - -

Separate Opinion 2 G.R. Nos. 248061 & 249406

pendency of other issues before the court, including the final determination
of the amount of just compensation to be paid. The court may appoint a
representative from the ERC as a trial commissioner in determining the
· amount of just compensation. The court may consider the tax declarations,
current audited financial statements, and rate-setting applications of the
·owner or owners of the property or properties being expropriated in order
tQ. determine their assessed value.

xxxx

SEC. 17. Transition of Operations. - In the public interest and to

ensure uninterrupted supply of electricity, the current operator, Panay
Electric Company, Inc. (PECO), shall in the interim be authorized to operate
the existing distribution system within the franchise area, as well as
implement its existing power supply agreements with generation companies
that had been provisionally or finally approved by the ERC until the
establishment or acquisition by the grantee of its own distribution system
and its complete transition towards full operations as determined by the
ERC, which period shall in no case exceed two (2) years from the grant of
this legislative franchise.

Upon compliance with its rules, the ERC shall grant PECO the
necessary provisional certificate of public convenience and necessity
(CPCN) covering such interim period. The applicable generation rate shall
be the provisional or final rate approved by the ERC.

This provisional authority to operate during the transition period

shall not be construed as extending the franchise .of PECO after its
expiration on January 18, 2019, and it shall not prevent the grantee from
exercising the right of eminent domain over the distribution assets existing
at the franchise area as provided in Section 10 of this Act. During such
interim period, the ERC shall require PECO to settle the full amount which
the ERC has directed to refund to its customers in cmu1ection with all the
cases filed against it.

To reduce the length of the transition period, the ERC and all
· agencies issuing the requisite licenses shall prioritize all applications
relevant to the establishment and operation of the distribution system under
its franchise.

The grantee shall, as far as practicable and subject to required

qualifications, accord preference to hiring former employees of PECO upon
commencement of business operations.

An information dissemination campaign regarding public services and

· operations of the grantee shall be made to all end-users in the franchise area.

The grantee and PECO shall jointly ensure that employees not hired
byJhe grantee shall receive all separation and/or retirement benefits they
are\~ntitled to in accordance with c1pplicable laws.

The DOE shall, during the transition, ensure that there will be
uninterrupted supply of electricity in the existing franchise area.

Panay Electric Company, Inc. (PECO} argues 'in the main that the
power of eminent domain delegated to More Electric and Power Corporation
Separate Opinion 3 G.R. Nos. 248061 & 249406

(MORE) amounts to a confiscatory, ill-disguised takeover of its corporate

assets, and is therefore violative of PECO's constitutional rights to due
process and equal protection.

I concur with the ponencia that this argument does not hold water. I
furthermore agree with the ponencia 's holding that the aforementioned
provisions which authorize the grantee, MORE, to expropriate the existing
distribution assets of PECO at the franchise area, and provide for transition of
operations, respectively, pass constitutional muster.

The power of eminent domain, essentially legislative in nature, may be

validly delegated to local government units, other public entities, and public
utilities, such as MORE, an electric power distribution utility. The scope of
this delegated legislative power is narrower than that of the delegating
authority and may only be exercised in strict compliance with the terms of the
delegating law. 2

But for all its primacy and urgency, the power of expropriation is by no
means absolute. 3 The limitation is found in Section 9, Article III of the 1987
Constitution, which provides that: "Private property shall not be taken for
public use without just compensation." Clearly, the two essential limitations
on the power of eminent domain are that: ( 1) the purpose of taking must be
for public use; and (2) just compensation must be given to the owner of the
private property. 4 These constitutional safeguards serve as a check on the
possible abuse of this power and circumscribe the excessive encroachment on
the property rights of the individual.

For this purpose, the Court has recognized that the term "public use,"
which traditionally was limited to actual use by the public, has evolved in this
jurisdiction to include "whatever is beneficially employed for the
community. " 5 Conversely, when the taking is for a purely private purpose,
such that there is no perceptible benefit flowing to the public, the taking ought
to be struck down for being unconstitutional. It is repugnant to our laws to use
the power of eminent domain over private property predominantly for
purposes of another citizen's private gain. 6 The Court has hewed to this
principle, which was first enunciated in the old American case of Charles
River Bridge v. Warren Bridge, 7 that notwithstanding the inherent power of
the State to expropriate all property, the Constitution does not sanction the

2
See Heirs of Alberto Suguitan v. City of Mandaluyong, G.R. No. 135087, March 14, 2000, 328 SCRA
137, 145-146.
3
Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. Nos.
78742, 79310, 79744 and 79777, July 14, 1989, 175 SCRA 343, 376.
4
Apo Fruits Corporation, Inc. v. Landbank of the Philippines, G.R. No. 164195, October 12, 2010, 632
SCRA 727, 739.
5 Manosca v. Court ofAppeals, G.R. No. 106440, January 29, 1996, 252 SCRA 412,421, citing Sena v.
Manila Railroad Co., 42 Phil. 102, 105 (1921).
6
See National Power Corporation v. Posada, G.R. No. 191945, March 11, 2015, 752 SCRA 550, 579,
citing Vda. de Guano v. Republic, G.R. Nos. 168770 & 168812, February 9, 2011, 642 SCRA 384,409.
7
36 US 420 (1837) cited in Barangay Sindalan, San Fernando, Pampanga v. Court ofAppeals, G.R. No.
150640, March 22, 2007, 518 SCRA 649,665.
Separate Opinion 4 G.R. Nos. 248061 & 249406

taking of a private party for the sole purpose of transferring it to another

private party, even when there is payment of just compensation. 8

At the same time, the right to take private property for public purposes
must necessarily originate from "the necessity" and the taking must be limited to ·
such necessity. 9 The burden of proving the necessity is borne by the State, which
takes precedence before resolving any issue involving just compensation. 10 The
necessity need not be absolute but only a reasonable or practical necessity, such
as would combine the greatest benefit to the public with the least inconvenience
and expense to the condemning party and the property owner consistent with
such benefit. 11 If genuine public necessity is absent or eventually ceases, the
expropriation of the private property cannot continue. 12

In this regard, it is my view that despite the enormous power of eminent

domain, the constitutional limitations on its exercise is an explicit recognition
of the protection accorded to one's right to property. 13 The power affects an
individual's right to private property, a constitutionally-protected right
necessary for the preservation and enhancement of personal dignity and
intimately connected with the rights to life and liberty. As such, the need for
a circumspect operation of this exercise cannot be overemphasized. 14 The
Court, under its expanded power of judicial review, retains the authority to
determine whether there is grave abuse of discretion in the exercise of the
power of eminent domain. The Court's judicial function is not stymied by the
expanded definition of public use, especially when the purported public use is
merely incidental or pretextual, thereby serving as a guise to favor private
interests. 15 In other words, the elements of public purpose and genuine
necessity must be clearly shown. A bare invocation that the taking is for a
public purpose or is attended with genuine necessity should never serve as an
automatic and absolute guarantee to the Court that the taking is legal.

Taking all the foregoing limits on the exercise of the power of eminent
domain in consideration, I agree with the ponencia that the assailed provisions
ofR.A. 11212 do not suffer from constitutional infirmities.

The authority granted to MORE under

Sections 10 and 17 of R.A. 11212 is
reasonably necessary for the exercise
of its franchise

A careful examination of the limits of the power of eminent domain

under the peculiar factual circumstances of this case yields to the conclusion .

8
See Kela v. New London, 545 US 469 (2005).
9
Masikip v. City ofPasig, G.R. No. 136349, January 23, 2006, 479 SCRA 391,401.
10
National Power Corporation v. Posada, supra note 6, at 579.
11
Masikip v. City ofPasig, supra note 9, at 402.
12
National Power Corporation v. Posada, supra note 6, at 579, citing Vda. de Guano v. Republic, supra
note 6, at 409.
13
See Masikip v. City of Pasig, supra note 9, at 403.
14
See Heirs ofAlberto Suguitan v. City ojMandaluyong, supra note 2, at 145.
15
See Concurring Opinion of Justice Kennedy in Kela v. New London, 545 US 469 (2005).
 Separate Opinion 5 G.R. Nos. 248061 & 249406

that the grant to MORE of the delegated power was imperative for the urgent
and important public purpose that MORE was tasked to undertake under its
franchise. Prior to the award of the legislative franchise to MORE, PECO was
the lone electric power distribution utility in Iloilo City for 96 years, or close
to a century. This rather distinct situation, in my view, was a crucial factor in
the legislative decision to craft Sections 10 and 17 ofR.A. 11212.

From 1923 until January 18, 2019, PECO was a holder of a franchise
to establish, operate, and maintain a distribution system for the conveyance of
electric power to end-users in Iloilo City. Since its franchise was granted,
PECO established a distribution system consisting of 5 sub-transmission line
substations, 450 kilometers of electrical lines, 20,000 poles, 1,300
transformers and 64,000 electrical meters. Personnel under its employ
numbered to around 400. 16 For the longest time, the residents of Iloilo City
were exclusively 17 serviced by PECO, the sole franchise holder for the
operation of an electric power distribution utility.

Its position as the sole operator of the electric power distribution utility
in Iloilo City is typical in the industry, as the energy distribution sector has
always been a natural monopoly. Since the operation of an electric power
distribution utility involves extremely high-fixed costs, it would be more
efficient if only one producer services the community. 18 Hence, the assailed

16
Rollo (G.R. No. 248061), pp. 62-63; rollo (G.R. No. 249406), pp. 106-107.
17
R.A. 5360, AN ACT GRANTING A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND POWER SYSTEM TO
PANAY ELECTRIC Co., INC., IN THE CITY OF lLOILO, AND IN THE MUNICIPALITIES OF SANTA BARBARA
AND PAVIA, BOTH IN THE PROVINCE OF lLOILO, June 15, 1968. Section 2 reads: "In the event that the
National Power Corporation shall have established its line in the areas adjacent to or over the territory
covered by this franchise, the National Power Corporation may make available its power and heat only
after negotiations with and through or with the authority and consent of the grantee, which shall be the
exclusive distributor of whatever power the aforenamed corporation may make available adjacent to or
within the territory covered by this franchise."
18
[MR. GREG L. OFALSA (Director, Legal Service, Energy Regulatory Commission):]
We go now to scenario number three where PECO['s] franchise is renewed and [MORE] is
granted a franchise covering the same :franchise area as that of PECO. A DU is a natural monopoly.
Allowing more than one DU within the same geographical area will result to a higher electricity rates
(sic) for consumers within that geographical area.
A natural monopoly is a monopoly in an industry in which high infrastructural cost and other
barriers to entry relative to the size of the market gives the largest suppliers in an industry[,] often the
first supplier in the market[,] an overwhelming advantage over potential competitors. x x x
Let's assume that we have two distribution utilities, namely: Blue DU and Red DU. Blue DU
is the old distribution utility while Red is the new distribution utility. Both DUs are operating [in] Color
Cloud Town[.] Color Cloud Town has 50 electric consumers. All 50 electric consumers are originally
consumers of Blue DU. Blue DU has a capital investment of 100. Blue's distribution charge is
determined by dividing its capital with the number of its consumers as follows: 100 divided by 50 is
equivalent to two. Number two represents the distribution charge for all 50 consumers of Blue at that
time [as] the sole DU in Color Cloud Town. After some time, Red entered the electric distribution market
and began building [its] own distribution facility. Red's initial capital is 30 and was able to convince 10
electric consumers in Color Cloud Town to change its electric distribution's service [provider]. Similar
to Blue, Red['s] distribution [charge] is determined by dividing its capital with the number of its
consumers as follows: 30[,] the investment[,] divided by 1O[,] the number of consumers[,] is equivalent
to three. Three represents the distribution charge for the first 10 electric consumers of Red. On the other
hand, as Blue's consumers decrease, its distribution charge is recomputed xx x by dividing its capital
with the number of its consumers x x x [which] is equivalent to 2.5, the 2.5 represents the distribution
charge for the remaining electric conswners xx x of Blue.
As provided in the above illustration, an increase in the number of DUs operating in the market,
will ultimately result to higher distribution rates chargeable not only by the new DU but also by th
Separate Opinion 6 G.R. Nos. 248061 & 249406

prov1s10ns, which purportedly granted MORE "unwarranted benefits" and

"discriminate" against PECO, 19 should be appreciated in light of these unique
factual circumstances. MORE, as a new player in the electric power
distribution sector, naturally needs to establish, as opposed to merely
maintain, its services.

In this regard, it is inaccurate to compare the franchise of MORE with

other electric power distribution utilities, as Associate Justice Marvic Leonen
would have it, 20 because these comparisons stand on unequal footing. The
other electric power distribution utilities cited in the Dissenting Opinion of
Justice Leonen have :franchises which were renewed, extended, or granted due
to their having previously operated in the area covered by their new
franchises. Thus:

1. Mactan Electric Company, Inc. started its initial operations in

1967. Per its website, it was issued a franchise to operate an
electric light and power for 25 years from 1973 until 1991. 21 It
obtained a congressional franchise in 2016 through R.A.
10890. 22

2. The franchise subject of R.A. 10795 23 clearly states in its title

that it is an extension of the franchise of Tarlac Electric, Inc., ·
previously covered by R.A. 7606. 24

3. R.A. 93 81 25 also clearly states in its title that it is an extension of

the franchise of Angeles Electric Corporation issued under R.A.
2341. 26

previously existing DU because of the reduction in the number of consumers sharing the capital cost."
(House of Representatives, Committee on Legislative Franchises, September 26, 2018 Hearing, pp. 14-15).
19
Dissenting Opinion of Justice Marvic M.V.F. Leonen, p. 1.
20
Id. at 5-6.
21
Mactan Electric Company, Inc. About Us, Historical Profile, at <http://www.mecomactan.com/about/>
(last accessed on September 25, 2020).
22
AN ACT GRANTING THE MACTAN ELECTRIC COMPANY, INC. (MECO) A FRANCHISE TO CONSTRUCT,
INSTALL, ESTABLISH, OPERATE AND MAINTAIN A DISTRIBUTION SYSTEM FOR THE CONVEYANCE OF
ELECTRIC POWER TO THE END USERS IN THE CITY OF LAPU-LAPU AND THE MUNICIPALITY OF CORDOVA,
PROVINCEOFCEBU, July 17, 2016.
23
AN ACT EXTENDING FOR A PERIOD OF TwENTY-FIVE (25) YEARS THE TERM OF THE FRANCHISE GRANTED
TO TARLAC ELECTRIC, INC. (FORMERLY KNOWN AS TARLAC ENTERPRISES, INC.) TO CONSTRUCT,
OPERATE, AND MAINTAIN AN ELECTRIC LIGHT, HEAT AND POWER SYSTEM IN THE CITY OF TARLAC,
PROVINCE OF TARLAC, PROVIDED UNDER REPUBLIC ACT No. 7606, May 10, 2016.
24
AN ACT GRANTING T ARLAC ENTERPRISES, INC. A FRANCHISE TO CONSTRUCT, OPERATE AND MAINTAIN
AN ELECTRIC LIGHT, HEAT AND POWER SYSTEM IN THE MUNICIPALITY OF TARLAC, PROVINCE OF
T ARLAC, FOR A PERIOD OF TwENTY-FIVE (25) YEARS, AND FOR OTHER PURPOSES, June 4, 1992.
25
AN ACT FURTHER AMENDING THE FRANCHISE OF ANGELES ELECTRIC CORPORATION GRANTED UNDER
REPUBLIC ACT No. 2341, AS AMENDED, To CONSTRUCT, OPERATE AND MAINTAIN A DISTRIBUTION
SYSTEM FOR THE CONVEYANCE OF ELECTRIC POWER TO THE END-USERS IN THE CITY OF ANGELES,
PROVINCE OF PAMPANGA AND RENEWING/EXTENDING THE TERM OF THE FRANCHISE TO ANOTHER
TWENTY-FIVE (25) YEARS FROM THE DATE OF APPROVAL OF THIS ACT, March 9, 2007.
26
AN ACT GRANTING THE ANGELES ELECTRIC CORPORATION A FRANCHISE FOR AN ELECTRIC LIGHT,
HEAT AND POWER SYSTEM IN THE MUNICIPALITY OF ANGE~ES, PROVINCE OF P AMP ANG A, June 0, 1
 Separate Opinion 7 G.R. Nos. 248061 & 249406

4. While COTELCO-PPALMA operates under a new franchise

(i.e., R.A. 1132227), it appears from its website that it was
operating under ·COTELCO' s franchise even before it was
granted its own franchise in 2019. 28

To be sure, Congress should not be deprived of the authority to grant

new franchise holders with the power to expropriate necessary assets. To hold
otherwise would effectively constrain Congress to continuously renew the
existing franchise of the current operator despite its sub-par service, until
another prospective operator has built its own capital assets. However, given
the high-fixed costs and other barriers to entry, few players, if any, will even
attempt to enter the industry without first securing a franchise.

Neither is MORE given unwarranted benefits when Section 10 ofR.A.

11212 granted it the authority to take possession of expropriated properties
after the payment of a provisional amount based on their assessed value. 29
True, had the government proceeded to expropriate PECO's assets pursuant
to its legislative franchise under R.A. 5360, the government is obliged to pay
the fair market value of PECO's properties. 30 But textually, Section 4 ofR.A.
5360 reveals that the provision contemplates a government takeover during
the lifetime of PECO's franchise. By virtue of this provision, the government
is granted the option to operate the electric power distribution system itself,
cutting short PECO' s franchise without requiring the prior deposit or payment
of any provisional value before the government enters the property
expropriated. Thus, the fair market value on which the payment of just
compensation is based pertains to the final amount that the government would
have paid had it proceeded to take over PECO's operations. In contrast, the
assessed value referred to in Section 10 of R.A. 11212 is the provisional
amount that MORE should deposit in order to immediately possess the
property being expropriated. 31 It is not the final amount of compensation
contemplated in Section 4 ofR.A. 5360.·

The payment of a provisional amount less than the fair market value, in
order to possess the property expropriated, is also not a unique requirement
applicable to MORE alone. The payment of the assessed value of the property

27 AN ACT GRANTING A LEGISLATIVE FRANCHISE TO COT ABATO ELECTRIC COOPERATIVE, lNC.-PPALMA

(COTELCO-PPALMA) TO CONSTRUCT, INSTALL, ESTABLISH, OPERATE AND MAINTAIN A
DISTRIBUTION SYSTEM FOR THE CONVEYANCE OF ELECTRIC POWER TO THE END USERS IN THE
MUNICIPALITIES OF PIKIT, PIGCAWAYAN, ALEOSAN, LIBUNGAN, MIDSAYAP AND ALAMADA, PROVINCE
OF COTABAT0, AND ITS NEIGHBORING SUBURBS, April 17, 2019.
28
Cotabato Electric Cooperative, Inc.-PPALMA, About, at <https://www.ppalmacotelco.com> (last
accessed on September 25, 2020).
29 Dissenting Opinion of Justice Marvic M.V.F. Leonen, pp. 4-5.
30
R.A. 5360, Sec. 4, reads: "It is expressly provided that in the event the Government should desire to
operate and maintain for itself the system and enterprise herein authorized, the grantee shall surrender
its franchise and wiH tum over to the government all equipment therein at fair market value."
31
In detennining the assessed value, Section 10 provides that the court "may consider tax declarations,
current audited financial statements, aiid rate-setting applications of the owner or owners of the pr erty
or properties being expropriated."
 "
Separate Opinion 8 G.R. Nos. 248061 & 249406

is likewise provided in Section 2, 32 Rule 67 of the Rules of Court. 33 Upon the

deposit of this provisional amount, the issuance of the writ of possession is a
ministerial duty on the part of the trial court. 34 Also, under R.A. 7160 35 or the
Local Government Code, the LGU may enter the property expropriated upon
the deposit of 15% of the fair market value based on the current tax declaration
of the property to be expropriated. 36 Clearly, MORE was not granted
unwarranted economic benefits by Section I 0.

At any rate, Section IO does not, by any means, foreclose or limit the
payment of just compensation on the basis of the assessed value as this is,
again, merely a provisional amount. MORE is still liable for the full amount
of just compensation to be determined during the expropriation proceedings
on the basis of, among other things, the market value of the property.

Certainly, after MORE takes possession of the expropriated property

belonging to PECO, PECO is entitled to the payment of the full amount of
just compensation, which is the full and fair equivalent of the loss incurred by
the affected owner. 37 In determining the amount of just compensation, the trial
court is bound to consider the market value of the property and the current
value of like property, among other things. In addition, interest would be
awarded as an indispensable part of just compensation, in order "to ensure that
the owner is fully placed in a position as whole as he was before the taking
occurred. " 38 In other words, in compliance with the constitutional mandate on
eminent domain and as a basic measure of faimess, 39 the State would be
required to pay interest to compensate PECO for the opportunity cost of
immediately losing its property without receiving immediate full payment
therefor. 40 As such, PECO would be entitled to receive the real, substantial,
full and ample equivalent of the properties lost. 41

In this light, Section 10 of R.A. 11212 does not serve to narrow the
court's parameters in determining just compensation by limiting it to the

32
SEC. 2. Entry of plaintiff upon depositing value with authorized government depositary. - Upon the
filing of the complaint or at any time thereafter and after due notice to the defendant, the plaintiff shall
have the right to take or enter upon the possession of the real property involved ifhe deposits with the
authorized government depositary an amount equivalent to the assessed value of the property for
purposes of taxation to be held by such bank subject to the orders of the court. Such deposit shall be in
money, unless in lieu thereof the court authorizes the deposit of a certificate of deposit of a government
bank of the Republic of the Philippines payable on demand to the authorized government depositary.
xxxx
33
N.B. For national government infrastructure projects, Section 6 ofR.A. 10752 (The Right-of-Way Act
[March 7, 2016]) requires the implementing agency to immediately deposit 100% of the zonal value of
the property.
34
Biglang-Awa v. Baca/la, G.R. Nos. 139927 and 139936, November 22, 2000, 345 SCRA 562,577.
35
AN ACT PROVIDING FOR A LOCAL GOVERNMENT CODE OF 1991, October I 0, 1991.
36
R.A. 7160, Book I, Title 1, Chapter I, Sec. 19 ..
37
See Republic v. Spouses Bunsay, G.R. No. 205473, December 10, 2019, p. 8.
38
See J. Caguioa, Separate Opinion in National Power Corporation v. Serra Serra, G.R. No. 224324,
January 22, 2020, p. 3, citing Republic v. Decena, G.R. No. 212786, July 30, 2018, 874 SCRA 408, 431.
Emphasis omitted.
39
See Secretary of the Department of Public Works and Highways v. Spouses Tecson, G.R. No. 179334,
April 21, 2015, 756 SCRA 389,422.
40
See J. Caguioa, Separate Opinion in National Power Corporation v. Serra Serra, supra note 38, at 2.
" See Republ;c v. Spou,e, Bunsoy, sup,a note 37, at 9. ~

~
 Separate Opinion 9 G.R. Nos. 248061 & 249406

assessed value only. It is therefore erroneous to compare the assessed value in

Section 10 of R.A. 11212 on the one hand, and the fair market value in Section
4 of R.A. 5360 on the other, in order to arrive at a conclusion that MORE
received an unusual economic benefit by virtue of its franchise. 42 Ultimately,
the determination of just compensation in expropriation cases always factors
in the fair market value of the property.

Given that proper expropriation proceedings would still be, as they

have in fact already been, instituted, 43 as provided for under Section 10,
there is likewise no merit to the observation of Associate Justice Amy
Lazaro-Javier that the provision has effectively rendered judicial
proceedings for the expropriation of PECO's properties as a mere
ceremonial procedure. 44 Section 10 is a provision of delegation by Congress
to the grantee, which merely gives it the authority to exercise the power of
eminent domain. Section 10 relevantly and explicitly provides that the
exercise would be subject to the limitations and procedures prescribed by
law, that proper expropriation proceedings shall be instituted, and that just
compensation shall be paid therefor.

As constructed, nothing in Section 10 shows that judicial proceedings

for expropriation would be but an empty exercise. In fact, it sets out a
restriction against expropriation to what may be reasonably necessary for the
general purposes of the services of PECO. This includes the "efficient
establishment, improvement, upgrading, rehabilitation, maintenance and
operation of its services." For the specific purpose of "acquiring private
property, such as poles, wires, cables, transformers, and other machinery and
equipment," the language of the provision even shifts significantly from a
mere reasonable necessity to one of being "actually necessary for the
realization of the purpose for which [R.A. 11212] is granted." This, to my
mind, provides a guide to and a standard for the court to follow during the trial
for the expropriation proceedings that have been instituted. With this
language, the safeguard afforded by the legislature against any abuse of the
delegated right of eminent domain to MORE is, at once, evident.

In sum, while the exercise of the power of eminent domain over the
electric power distribution facilities of PECO may garner benefits in favor
ofMORE, this would be but incidental. Notably, its duties as a public utility
would nonetheless remain regulated by the government. At the end of the
day, at the proper expropriation proceedings instituted for the purpose, the
abiding reality would be for the court to be satisfied with evidence
proffered by MORE - that its intended taking would invariably be for the
good of the public, is actually necessary, and that there is just compensation
therefor.

42
Dissenting Opinion of Associate Justice Marvic M.V. F. Leonen, pp. 4-5.
43
Rollo (G.R. No. 248061), pp. 6,288 and 331.
44
Dissenting Opinion of Associate Justice Amy C. Lazaro-Javier, p. 19.
Separate Opinion 10 G.R. Nos. 248061 & 249406

The authority grantee( to MOKE under

Sections 10 and 17 is· not meant to
punish PECO without a judicial trial

It must be borne in mind that this case involves the expiration of the
exclusive franchise of a previous grantee and the subsequent act of Congress
of granting a franchise to another applicant which has satisfactorily shown its
capacity to carry the work, not only for commercial purposes, but for the
public interest of ensuring the continuous and uninterrupted supply of
electricity in the franchise area. 45 This is the proper context by which this case
should only be viewed. As it stands, as well, the petition itself does not
challenge either the legislative act of granting the franchise to MORE or the
denial of PECO's application for extension.

Accordingly, R.A. 11212, particularly Sections 10 and 17, cannot be

validly characterized as a bill of attainder, as Justice Lazaro-Javier advances
in her Dissenting Opinion. 46 A bill of attainder is a legislative act which
inflicts punishment on individuals or members of a particular group without
judicial trial. For a law to be considered a bill of attainder, it must be shown
to contain all of the following: (a) a specification of certain individuals or a
group of individuals; (b) the imposition of a punishment, penal or otherwise,
and (c) the lack of judicial trial. 47 For the second element, Justice Lazaro-
Javier cites American jurisprudence in laying down the three factors in
determining whether the statute was punitive: (a) whether it fell within the
historical meaning of legislative punishment; (b) whether, viewed in terms of
the type and severity of burdens imposed, it could reasonably be said to further
non-punitive legislative purposes; and (c) whether it evinced an intent to
punish. 48 None of these factors are evident here.

R.A. 11212 cannot be classified as a bill of attainder simply because

Sections 10 and 11 do not constitute "punishments" in the sense of the bill of
attainder clause as it has been interpreted. To suggest that R.A. 11212 was
enacted for the purpose of punishing PECO is, to say the least, an overstretch

45
Parenthetically, a new applicant for franchise application has to submit the following documentary
requirements to the Committee on Legislative Franchises in Congress:
a. Copy of the House Bill for the grant of franchise.
b. Certificate of Registration from the Securities and Exchange Commission or Department
of Trade and Industry.
c. Articles oflncorporation and By-Laws of the applicant corporation.
d. Articles of Incorporation and By-Laws of a holding company which owns the applicant, if
any.
e. Articles oflncorporation and By-Laws of the corporate stockholder of the applicant, ifany.
f. Latest General Information Sheet of the applicant and the corporate stockholder/holding
company of the applicant, if any.
g. Resume of major stockholders/officers of the applicant, including their income tax returns
for the last three (3) years.
h. Market feasibility study, five-year development plan, and plans and designs for the project.
There is no showing, much less any specific allegation, that MORE failed in the fulfillment of these
requirements.
46
Dissenting Opinion of Associate Justice Amy C. Lazaro-Javier, p. I.
47
Fuertes v. The Senate of the Philippines, G.R. No. 208162, January 7, 2020, pp. 29-30.
48
Dissenting Opinion of Associate Justice Amy C. Lazaro-Javier, pp. 6-10.
 Separate Opinion 11 G.R. Nos. 248061 & 249406

and a diminution of the legitimate purpose and intent of Congress behind the
enactment of the law. R.A. 11212 involves a grant of a franchise to MORE
and nothing else. It bears stressing that the grant of a franchise is not a right
but a mere privilege, and to construe the non-renewal of PECO's franchise as
a punishment is wholly baseless and completely unwarranted.

Moreover, a review of the deliberations, as cited by Justice Lazaro-

Javier, shows that Congress was not motivated by an intent to punish PECO.
The explanatory note of House Bill No. (HB) 8132, the precursor bill to the
legislative franchise of MORE, stated that the quality of service of PECO had
been wanting over the years. Among the complaints against it were:
overbilling or overcharging, poor customer relations, distributor-related
power outages, inadequately maintained lines, inadequate investment in
distribution facilities, and inordinate delay in the restoration of power
services. The explanatory note stated further that PECO' s historical abuse and
inefficiency pose as obstructions to the economic growth oflloilo City and to
its people's welfare, health, and well-being. These findings were confirmed
by a representative from the Energy Regulatory Commission during the
legislative hearing for HB 8132, in addition to the findings on the dismal
financial condition of PEC0. 49 It has been repeatedly stated in these
deliberations that the legislature's primary concern has been to secure the
continuous and efficient supply of electricity in Iloilo City.

Consequently, the identification of PECO's shortcomings, which

eventually led to the non-renewal of its franchise, was not meant to inflict any
punishment against PECO so as to consider R.A. 11212 as a bill of attainder.
Contrary to Justice Lazaro-Javier's claim, PECO was not being "singled out"
for being "expressly identified as the wrongdoer." 50 Rather, it was simply part
and parcel of the whole legislative process in the grant or renewal of
franchises. Necessarily, as PECO was the previous franchise holder for close
to a century and the issue concerned the renewal or grant of said franchise,
there was a need to examine the performance of PECO. This was not done to
punish PECO but to determine whether its franchise should be renewed. It
was but natural and reasonable to· expect that an evaluation of PECO's
performance as the existing franchise holder would come into play.

Thus, given PECO's track record of inefficiency and shortcomings in

providing public service to the residents oflloilo City, the legislature found it
wise to discontinue its franchise and to grant the authority instead to MORE.
The expiration then of PECO's franchise, coupled with its distinct position as
the only existing electric power distribution utility in Iloilo City, demonstrates
that legitimate reasons impelled Congress to bestow on MORE the authority
to expropriate distribution facilities existing in the franchise area and to
provide for a smooth transition of PECO's operations.

49
Congressional Records, Committee on Legislative Fr;mchises, September 18, 2018.
50
Dissenting Opinion of Associate Justice Amy C. Lazaro-Javier, p. I.
Separate Opinion 12 G.R. Nos. 248061 & 249406

In the same manner, the fact that MORE is a new player in the industry
and that there is no guarantee that it will be able to serve the public better than
the former owner is not enough reason to invalidate Section 10. 51 The
Constitution does not require, for a valid exercise of the power of eminent
domain, that the public is served in an "ideal" way. It suffices that the power
is exercised for public use which, to reiterate, covers "whatever is beneficially
employed for the community."

In fine, I remain convinced that Sections 10 and 17, viewed as integral

parts of the grant of franchise in R.A. 11212, are constitutional. The rationale
of these provisions cannot be overturned by potential unconstitutional effects
r~sulting from a distrustful reading. It must be underscored that the grant of a
franchise is constitutionally committed to the Legislative department. This has
to be considered with the presumption of constitutionality "rooted in the
doctrine of separation of powers which enjoins upon the three coordinate
departments of the Government a becoming courtesy for each other's acts.
The theory is that every law, being the joint act of the Legislature and the
Executive, has passed careful scrutiny to ensure that it is in accord with the
fundamental law." 52 The Court can go no further than to inquire whether
Congress had the power to enact a law. It cannot delve into the wisdom of
policies Congress adopts or into the adequacy under existing conditions of
measures it enacts. The equal protection clause is not a license for the courts
"to judge the wisdom, fairness, or logic of legislative choices." 53

Consonant with this principle is another deep-rooted doctrine that on

the side of every law lays the presumption of constitutionality. 54 This strong
predilection for constitutionality takes its bearings on the idea that it is
forbidden for one branch of the government to encroach upon the duties and
powers of another. If there is any reasonable basis upon which the legislation
may firmly rest, the courts must assume that the legislature is ever conscious
of the borders and edges of its plenary powers, and has passed the law with
full knowledge of the facts and for the purpose of promoting what is right and
advancing the welfare of the majority. 55

The presumption of constitutionality may, of course, be challenged.

Challenges, however, shall only be sustained upon a clear and unequivocal
showing of the bases for invalidating a law and not merely a doubtful,
speculative, or argumentative one. 56 In other words, the grounds for nullity
must be beyond reasonable doubt, for to doubt is to sustain. 57 In this regard, I
find no invalidity or unreasonableness that appears on the face of the assailed

51
Dissenting Opinion of Associate Justice Marvic F. Leonen, p. 11.
52
Cawaling, Jr. v. Commission on Elections, G.R. Nos. 146319 & 146342, October 26, 2001, 368 SCRA
453, 456-457.
53
J. Panganiban, Dissenting Opinion in Central Bank Employees Association, Inc. v. Bangko Sentral ng
Pilipinas, G.R. No. 148208, December 15, 2004, 446 SCRA 299,445.
54
Alvarezv. Guingona, Jr., G.R. No. 118303, January 31, 1996, 252 SCRA 695,706.
55
Estrada v. Sandiganbayan, G.R. No. 148560, November 19, 2001, 369 SCRA 394, 430-431.
56
See Barangay Association for National Advancement and Transparency (BANAT) Party-List v.
COMELEC, G.R. No. 177508, August 7, 2009, 595 SCRA 477,487.
57
Cawaling, Jr. V. Commission on Elections, supra note 52, at 457.
Separate Opinion 13 G.R. Nos. 248061 & 249406

prov1s10ns, or 1s established by proper evidence which could rebut the

presumption.

Finally, the wisdom of the grant of franchise to MORE should not be

determinative of the constitutionality of Sections 10 and 17. 58 The Court
cannot look into allegations that R.A. 11212, specifically its Sections 10 and
17, was enacted solely to benefit MORE to the prejudice of PECO. The
delegated power of eminent domain under Section 10 is authorized by Section
23 59 of the EPIRA. 60 It is also not limited for the sole purpose of expropriating
PECO' s properties, and like any other franchise holder delegated with the
power of eminent domain, its exercise is subject to constitutional and statutory
requirements. On the other hand, Section 17 on the transition of operations
between MORE and PECO can reasonably be read as impelled by public
interest in preventing interruptions in the distribution of electric power in
Iloilo City, and as a measure of social justice in favor of the displaced PECO
employees. Both of these reasons are within the Legislative department's
power to provide. Beyond these expressed purposes are speculations that the
Court should not consider.

WHEREFORE, I concur with the majority decision to GRANT the

petitions and to declare Sections 10 and 17 of Republic Act No. 11212 as
NOT UNCONSTITUTIONAL.

58 See Lim v. Pacquing, G.R. Nos. 115044 & 117263, January 27, 1995, 240 SCRA 649. The Court held
in this case:
ADC questions the motive for the issuance of PD No. 771. Clearly, however, this
Court cannot look into allegations that PD No. 771 was enacted to benefit a select group
which was later given authority to operate the jai-alai under PD No. 810. The examination
of legislative motivation is generally prohibited. (Palmer v. Thompson, 403 U.S. 217, 29
L. Ed. 2d 438 [1971], per Black, J.) There is, in the first place, absolute lack ofevidence to
support ADC 's allegation of improper motivation in the issuance of PD No. 771. In the
second place, as already averred, this Court cannot go behind the expressed and
proclaimed purposes ofPD No. 771, which are reasonable and even laudable.
It should also be remembered that PD No. 771 provides that the national
government can subsequently grant franchises "upon proper application and verification of
the qualifications of the applicant." ADC has not alleged that it filed an application for a
franchise with the national government subsequent to the enactment of PD No. 771; thus,
the allegations abovementioned (of preference to a select group) are based on conjectures,
speculations and imagined biases which do not warrant the consideration of this Court. (Id.
at 677-678.)
59 SEC. 23. Functions of Distribution Utilities. - x x x
xxxx
Distribution utilities may exercise the power of eminent domain subject to the requirements of
the Constitution and existing laws.
60
R.A. 9136, AN ACT ORDAINING REFORMS IN THE ELECTRIC POWER INDUSTRY, AMENDING FOR THE
PURPOSE CERTAIN LAWS AND FOR OTHER PURPOSES or the "Electr\s[fl1f'fi'i11PBs%.WoE1ot\} of
2001," June 8, 2001.

Clerk of Com:t En Banc

Supreme Court