A Securities and Exchange Commission official said that corporations are not automatically required by law to declare dividends even if they have unrestricted retained earnings.
Lawyer Gerardo del Rosario, director of the SEC Company Registration and Monitoring Department, made the statement during cross-examination by the defense in Vice President Sara Duterte’s impeachment trial.
This came after the prosecution flagged the lack of dividends by 10 corporations linked to Duterte, alleging that the firms could not have provided her a legitimate source of income that would help explain the rise in her net worth.
During questioning by defense counsel Justin Gular, Del Rosario said it is not prohibited for corporations not to declare dividends.
“So kapag walang dineklara, hindi naman po illegal yung ginagawa ng corporation, tama po ba?” Gular asked.
Del Rosario replied, “Hindi naman po.”
He said what is prohibited is retaining surplus profits in excess of 100 percent of their paid-in capital stock, but there are exceptions to this.
The exceptions are when this is justified by corporate expansion projects, when the corporation is prohibited from doing so under any loan agreement with financial institutions, and when it can be shown that there are special circumstances requiring the retention, such as the need for a special reserve.
Del Rosario testified on Monday that if there were no dividends declared, the corporation could not increase the assets of the shareholder.
Upon questioning by Gular on Tuesday, he said the SEC has no information or records about other sources of income of Duterte and her husband Manases Carpio, such as inheritance or sales of property.
He confirmed that all the SEC has, relative to Duterte and Carpio’s income, are declarations or non-declarations of dividends in its records.
Duterte is accused of amassing unexplained wealth.
The prosecution had cited the increase in her net worth, which stood at P7.25 million in 2007 and rose to P98.66 million in 2025.