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Court Overturns Permit Revocation for Villar’s SIPCOR Power Firm

By Rajiv Menon
2 min read
Court Overturns Permit Revocation for Villar’s SIPCOR Power Firm
Court Overturns Permit Revocation for Villar’s SIPCOR Power Firm
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The Philippine Court of Appeals has reversed the Energy Regulatory Commission’s (ERC) 2025 decision that revoked the operating permits of S.I. Power Corporation (SIPCOR). The court found that the ERC denied SIPCOR procedural due process when it ordered the power generator to halt its operations on Siquijor island.

However, the appellate court’s July 24 ruling does not absolve SIPCOR of responsibility for the operational failures that caused Siquijor’s power crisis. It also does not automatically authorize the company to resume operations. The court stated that while the power situation in Siquijor required swift action, due process cannot be sacrificed for expediency.

Procedural Flaws Cited

The Court of Appeals found that the ERC used a fact-finding investigation to revoke SIPCOR’s operating authorities without formally notifying the company that its permits were at risk. The court noted that the ERC never issued the required show-cause order, which should have specified the alleged violations, their legal basis, and potential penalties.

The ERC’s proceedings, which included a public hearing in July 2025 following prolonged outages in Siquijor that disrupted businesses and tourism, were consistently framed as fact-finding. The court also highlighted that the ERC relied on documents submitted after the July hearing, such as a letter from the energy secretary and an audit report, without giving SIPCOR an opportunity to contest them.

The appellate court questioned the implementation of the shutdown. The ERC had already issued provisional operating authorities to a replacement generator before its decision against SIPCOR was promulgated. SIPCOR was then ordered to cease operations on August 29, 2025, just hours after being served the decision, despite ERC rules typically allowing 15 days before a decision becomes final.

Uncertainty For SIPCOR’s Future Operations

The Court of Appeals decision essentially voids the ERC’s permit revocation, but it does not guarantee SIPCOR’s immediate return to Siquijor’s power grid. The ERC may still pursue further legal action, including seeking reconsideration from the appellate court or elevating the case to the Supreme Court.

SIPCOR itself acknowledged this uncertainty in a disclosure to the Philippine Stock Exchange (PSE) by Premiere Island Power REIT (PREIT). PREIT, which owns and leases assets to SIPCOR, stated that SIPCOR is awaiting further developments before attempting to resume operations. Trading in PREIT shares was subsequently halted following the disclosure. SIPCOR is wholly owned by Prime Asset Ventures Inc., the infrastructure arm of the Villar family, and was a significant source of rental income for PREIT before its operations were suspended.

Questions & Answers

Q.

What was the primary reason the Court of Appeals overturned the ERC's decision against SIPCOR?

A.

The court found the Energy Regulatory Commission denied SIPCOR procedural due process by revoking its permits without proper notification or issuing a required show-cause order. The proceedings were always framed as fact-finding, not disciplinary.

Q.

Does this court ruling mean SIPCOR can immediately resume power generation on Siquijor island?

A.

No, the ruling does not automatically authorise SIPCOR to resume operations. The Court of Appeals decision voids the permit revocation but does not guarantee an immediate return to the power grid.

Q.

What is the relationship between SIPCOR and PREIT, and how has this situation affected PREIT?

A.

PREIT owns and leases assets to SIPCOR, which was a significant source of its rental income. Trading in PREIT shares was halted following SIPCOR's disclosure about the ongoing uncertainty.

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