“PROCESS OF ELIMINATION” An exchange on Tuesday between Senate President Sherwin Gatchalian (left photo, standing) and the prosecution witness, Director Gerardo del Rosario of the Securities and Exchange Commission (right), delves into the companies being linked to Vice President Sara Duterte on Day 28 of her impeachment trial. —Niño Jesus Orbeta
MANILA, Philippines — Vice President Sara Duterte’s declared wealth rose sharply even as most of the corporations linked to her and her husband, lawyer Manases Carpio, reported losses and no recorded dividend payouts, raising questions at her impeachment trial about where the increase in her assets came from.
Senate President Sherwin Gatchalian pressed Securities and Exchange Commission (SEC) Director Gerardo del Rosario on Tuesday to clarify whether the corporations could have contributed to Duterte’s growing net worth despite their financial records.
Del Rosario, director of the SEC’s Company Registration and Monitoring Department, said the corporate summaries presented to the impeachment court contained no information showing that the companies declared dividends.
“That is correct. There was no information on whether dividends were declared,” Del Rosario said on Day 28 of Duterte’s impeachment trial.
Gatchalian noted that Duterte’s statements of assets, liabilities and net worth (SALNs) showed a substantial increase in her wealth over the years, but the corporate records appeared to provide little basis for attributing that increase to income from the companies.
“Is that correct? Because if by process of elimination, if we look at these corporations, we can rule out these corporations [as possible source],” Gatchalian said.
Del Rosario agreed that if the companies did not pay dividends or otherwise provide Duterte with a benefit, their operations could not have been a source of income for her.
“Based on that [summaries of corporations], if she did not receive any benefit, such as dividends, I don’t know if she would have any income from these corporations to declare,” he said.
Gatchalian then raised the possibility that the increase in Duterte’s wealth came from sources other than the companies linked to her and Carpio.
“Correct. It can be from other sources, not just from these corporations,” Gatchalian said, to which Del Rosario replied: “That is correct.”
Most firms posted losses
Gatchalian pointed out that most of the companies declared by Duterte had recorded losses rather than profits.
“Except for GenCorp Industries Inc., Davao Emerging Taipans Corp., SGT Fortune Horse Corp., and Mati City Ice Plant and Cold Storage, most of the companies recorded losses,” he said.
Del Rosario agreed, noting that the companies connected to Duterte and Carpio that made profits included Mati Ice Plant, Davao Emerging Taipans and SGT Fortune Horse.
The rest of the firms in the summary recorded losses and therefore could not declare dividends because they incurred losses.
The SEC official also said companies with deficit retained earnings could not declare dividends.
Duterte’s declared net worth rose from P7.25 million in 2007, when she entered government as Davao City vice mayor, to P98.66 million in 2025, when she was Vice President. Her net worth was P18.49 million in 2008, according to SALNs earlier presented to the impeachment court.
Del Rosario had testified on Monday that 10 of 18 companies linked to Duterte and Carpio did not declare dividends during years covering 2004 to 2025.
But during cross-examination on Tuesday, defense lawyer Justin Gular established that the absence of dividend declarations is not, by itself, prohibited under the Revised Corporation Code.
Del Rosario cited Section 42, which provides that a stock corporation’s board “may declare dividends” out of unrestricted retained earnings. He agreed that the wording means dividend declarations are not mandatory.
He also identified circumstances under which profits may be retained, including approved expansion projects, restrictions under loan agreements and the need for special reserves.
Thus, the corporate records did not establish that the companies acted illegally by not declaring dividends. Rather, the records raised the question of whether the firms could have been a source of Duterte’s reported wealth increase.
Wealth sources questioned
Del Rosario acknowledged that the SEC did not have information on other possible sources of Duterte’s assets, such as inheritances, property sales or appraised land values.
He said such information was outside the SEC’s mandate.
Senator-judge JV Ejercito meanwhile sought to clarify whether a person remains financially interested in a corporation even without receiving dividends or taking part in its day-to-day operations.
Del Rosario said a person continues to have an interest in a corporation for as long as the person owns shares, regardless of whether dividends are received.
He also described a shareholder who does not participate in management, operations or business decisions as having a form of passive participation.
Ejercito asked whether such financial interests should appear in the corporation’s General Information Sheet (GIS) or in the public official’s SALN.
Del Rosario explained that the GIS is submitted by the corporation through its corporate secretary, while the SALN is personally accomplished by the public official, who is expected to accurately disclose assets and liabilities.
The SEC official, however, acknowledged limits to his testimony. He said he was not competent to determine whether Duterte had substantial stockholdings or interests in the companies linked to her, nor did he have personal knowledge of whether her business interests conflicted with or were affected by her official duties.
Follow the law
Also on Tuesday, Malacañang said Duterte must comply with constitutional restrictions on the management of private businesses while holding public office, as questions over her business interests resurfaced at the trial.
“There is a law. The law is clear. Whatever is provided by law should be complied with and enforced,” Palace press officer Claire Castro said in a briefing.
“There is no need for a person to be above the law. Impunity should not be allowed to prevail,” she added.
The issue arose after SEC records showed that Duterte remained a director and shareholder of several private firms after assuming the vice presidency. The SEC has also testified that she remained on the board of Metro City Chow Foods Corp. from 2022 through 2025.
Malacañang declined to comment on Senator-judge Raffy Tulfo’s question about why Duterte, a lawyer surrounded by legal experts, was apparently not advised to divest from the businesses.
“We will no longer comment on that. Vice President Sara is already an adult and should no longer be given any advice. She knows what she is doing,” Castro said.
Article VII, Section 13 of the 1987 Constitution bars the President, Vice President, Cabinet members and their deputies or assistants from holding any other office or employment unless otherwise provided by the Constitution.
It also prohibits them from directly or indirectly practicing a profession, participating in any business, or having a financial interest in any contract with the government or its instrumentalities.
Davao City contracts
The SEC testimony has also established that Duterte’s business interests extended into companies that had dealings with the government.
Philippine Government Electronic Procurement System (PhilGEPS) division chief Rendell Sopeña testified on Tuesday that 49 contracts worth about P35 million were awarded to GenCorp Industries during Duterte’s vice presidency. These included 15 Davao City government contracts worth P34.2 million, one Overseas Workers Welfare Administration Region XI contract worth P330,000 and 33 Philippine Health Insurance Corp. contracts totaling P1.3 million.
Duterte had declared herself an incorporator or stockholder of GenCorp in her 2016 to 2025 SALNs, although Del Rosario said her name did not appear as a shareholder in GenCorp’s SEC records.
JTC Group of Companies, meanwhile, held 54.99 percent of GenCorp based on its 2025 GIS.
Senator-judge Francis “Kiko” Pangilinan recommended that the court subpoena JTC’s corporate records to determine its ownership structure, after Del Rosario said the SEC’s Beneficial Ownership Declaration could identify its owners but that the document was not in his department’s custody.
The prosecution is using the corporate and procurement records in its effort to establish its allegations of unexplained wealth and prohibited business interests against Duterte.
The defense, meanwhile, has emphasized that the nondeclaration of dividends is not in itself illegal and that corporate records do not necessarily establish the source of an individual’s entire wealth. —With a report from Dexter Cabalza