MANILA, Philippines — Corporations are not legally mandated to declare dividends to stockholders under existing corporate law, an official from the Securities and Exchange Commission (SEC) clarified during the 28th day of Vice President Sara Duterte’s impeachment trial on Tuesday, September 22.
Testifying during cross-examination by defense counsel Atty. Justin Gular, SEC Company Registration and Monitoring Department Director Gerardo del Rosario cited Section 42 of the Corporation Code, noting that the board of directors of a stock corporation “may declare dividends out of the unrestricted retained earnings.”
Gular pressed whether the phrase “may declare” rendered dividend payouts optional rather than mandatory.
“Tama po,” Del Rosario replied.
Del Rosario had previously testified that 10 of the 18 commercial entities in which Vice President Duterte or her spouse, Atty. Manases “Mans” Carpio, hold financial interests failed to declare dividends across several years between 2004 and 2025. Additionally, eight of those 18 companies did not submit annual financial statements, leaving the commission without records to determine whether dividends had been disbursed.
The SEC official further outlined specific statutory exceptions under Section 42 where companies are exempt from issuing dividends, including instances where funds are allocated for board-approved corporate expansion, restricted by existing creditor loan agreements, or held in reserve for unexpected contingencies.
During the proceedings, defense counsel referenced Section 3.i of the Code of Conduct for Public Officials and Employees, arguing that a conflict of interest arises only when a public official maintains a substantial shareholding or financial stake in an enterprise.
When asked if he could confirm whether the Vice President holds a substantial interest in the 18 entities in question, Del Rosario answered in the negative.
He added that the SEC does not track external financial records—such as property sales, land appraisals, or inheritances—that could account for the Vice President’s assets beyond corporate dividend earnings, as those matters fall outside the agency’s regulatory mandate.