Remaining a widower, Arnaldo Panizo contracted a second marriage the following year with Benjamina Vargas O'Dowling, a Peruvian woman from Iquique.

With Benjamina Vargas, Panizo Abasolo had six other children: Aníbal, Arnaldo, Gonzalo, Rebeca, Elena and Doloritas, the last one dying at the age of four.

On March 26 of the same year, he was appointed midshipman on the Peruvian frigate Amazonas which was commanded by captain José Boterín [es].

Reorganized the corps of the Weapon with the title of Mountain Artillery Regiment, he remained as 2nd chief of the 1st Battalion, under the command of Colonel Federico de la Puente.

[2] He fought in them on February 27, 1880, with the ironclad Huáscar against the Magallanes as General Commander of the Field Artillery and appointed Chief of the Plaza for that day.

The fire from the batteries forced the enemy ships to withdraw, sparing the Peruvian corvette from the attacks they attempted, which saved her from further damage.

[2] After the disaster of the battle, he was able to save 2 pieces of artillery, 1 machine gun, the remaining ammunition and 36 artillerymen, with whom he accompanied the remnants of the army in their retreat to Tacna and later to Puno where he handed over, by Supreme Order, the personnel, livestock and material to Colonel José la Torre, Chief of the General Staff of the Second Army of the South.

He was imprisoned for almost a month, being released unconditionally but watched by the Chileans until August when, taking advantage of a cockfight in Ancón, he managed to escape and march to the mountains to continue the war under the orders of President Nicolás de Piérola.

[2] Colonel Panizo and General Cáceres firmly opposed the government of García Calderón, whom they described as a Chilean puppet and vowed to not abide by his administration's orders.