SEC Doesn't Flag Public Officials' Prohibited Business Roles, Witness Says

MANILA, Philippines — The Securities and Exchange Commission (SEC) has no mechanism to proactively flag public officials who continue to hold corporate positions that may create constitutional conflict-of-interest questions, an agency official told the Senate impeachment court on Monday. During interpellation by presiding officer Francis Escudero, SEC Company Registration and Monitoring Department Director Gerardo del Rosario stated, "We have no directive requiring us to report officials who should not own or participate in a company." He clarified that the agency's regulatory mandate is focused on violations of securities and corporate laws, not on investigating public officials' corporate involvement for potential constitutional violations. The exchange came after Del Rosario confirmed that SEC records continued to list Vice President Sara Duterte as a director and shareholder of Davao-based Metro City Chow Foods Corp. after she assumed the vice presidency in 2022. Records presented during the trial showed Duterte remained on the company's board from 2022 to 2025 and retained a 20% stake. Article VII, Section 13 of the Constitution prohibits the president and vice president, among other senior executive officials, from holding another office or employment or directly or indirectly participating in any business during their tenure. It also requires them to strictly avoid conflicts of interest. The extent to which Duterte's corporate position and shareholding violated those restrictions is among the issues House prosecutors are seeking to establish under Article II of the impeachment case. Senator-judge Raffy Tulfo questioned why Duterte had remained involved in the corporation despite her and her husband, lawyer Manases Carpio, having legal backgrounds. "Not one of them was able to advise her, 'VP, you need to divest because that is prohibited,'" Tulfo said. The impeachment court also examined the finances of companies in which Duterte held business interests. Documents presented by prosecutors showed that some companies had not declared dividends, which Del Rosario said should not automatically be interpreted to mean that they were losing money. He explained that a corporation may choose to retain earnings for other purposes instead of distributing them to shareholders. However, Del Rosario acknowledged that financial statements showing negative or zero earnings could establish that a company recorded a loss for a particular year. Records presented by the prosecution showed Metro City Chow Foods posting net losses beginning in 2020. Its 2024 audited financial statement showed about P35.1 million in revenue but a net loss of P309,860. Monday's proceedings formed part of the prosecution's presentation under Article II of the impeachment complaint against Duterte. The article covers allegations that Duterte accumulated wealth disproportionate to her lawful income, failed to truthfully disclose assets in her Statements of Assets, Liabilities and Net Worth from 2022 to 2024, and failed to divest from or continued to participate in private business interests while serving as vice president.