MANILA, Philippines — Senators raised possible conflict-of-interest concerns during Wednesday’s impeachment trial after a defense witness confirmed that Vice President Sara Duterte received P2.14 million in payments from GenCorp Industries Inc. between 2022 and 2025, while the company secured P34.22 million worth of contracts from the Davao City government, headed by her brother, Mayor Sebastian “Baste” Duterte.
The issue arose during the questioning of Suzette Balucanag-Punay, in-house counsel for GenCorp and Metro City Chow Foods Corp. and a defense witness, who confirmed that Duterte had a “loose investment” in a business that was later transferred to GenCorp.
Senator-judge Risa Hontiveros pressed Punay to clarify the nature of Duterte’s financial interest and the payments she received from the company.
Punay confirmed that the Vice President received P2.14 million between 2022 and 2025, which GenCorp characterized as a “return of capital.”
“So she did earn money from it, correct?” Hontiveros asked.
“Yes,” Punay replied.
Hontiveros then questioned whether Duterte’s continuing financial interest violated the constitutional prohibition against the vice president and other executive officials participating in private businesses while in office.
“Even I, although I am not a lawyer, am certain that the provision in our Constitution is clear. It states that the Vice President shall not, during her tenure, directly or indirectly participate in any business. Am I correct? I am asking you again as a lawyer,” Hontiveros said.
Punay subsequently acknowledged that the Constitution prohibits the vice president and other executive officials from participating in private business during their tenure.
Senator-judge Sherwin Gatchalian separately questioned whether GenCorp’s payments to Duterte could constitute a conflict of interest, considering the company’s business dealings with the Davao City government headed by her brother.
“GenCorp is paying Vice President Sara for her loose investment. On the other hand, the company is also supplying goods to the Davao local government unit. Don’t you think this constitutes a conflict of interest?” Gatchalian asked Punay.
The witness maintained that GenCorp’s contracts with the Davao City government were fulfilled through its Jollibee Bolton branch near City Hall, while Duterte’s payouts supposedly came from the earnings of its Times Square branch.
However, Gatchalian’s subsequent questions established that both branches were owned by GenCorp, although they maintained separate bank accounts.
“Who owns the Bolton branch?” Gatchalian asked.
“GenCorp as well,” Punay replied.
“And GenCorp is the company paying Vice President Sara?” Gatchalian pressed.
“Yes, from the Times Square earnings,” Punay answered.
Gatchalian then sought to establish whether the payments to Duterte still came from GenCorp, regardless of the branches’ separate bank accounts.
“But which corporation is paying Vice President Sara?” he asked.
“It is still GenCorp,” Punay conceded.
Asked which company transacted with the Davao City government, Punay again identified GenCorp.
“So it appears there is a conflict of interest,” Gatchalian said, pointing out that the same corporation was paying Duterte for her investment while also supplying food to the local government headed by her brother.
Punay maintained that there was no conflict of interest because the vice president was not part of the Davao City government.
Gatchalian rejected the explanation, pointing out that “her brother is the mayor of the Davao City local government.”
Senator-judge Raffy Tulfo also scrutinized GenCorp’s financial performance, particularly the sharp increase in its sales following Duterte’s election as vice president in 2022.
“It seems like a coincidence that when Sara Duterte became vice president, GenCorp’s sales suddenly soared to P300 million,” Tulfo said.
He questioned what products or transactions accounted for the company’s rapid growth, noting that its sales reportedly reached P1 billion between 2022 and 2024.
“What miracle or what products did the company sell that caused its sales to suddenly surge, reaching P1 billion from 2022 to 2024?” he asked.
“Why did its sales suddenly balloon starting in 2022, when she became vice president? Isn't there a possible conflict of interest here?” Tulfo added.
He also questioned the company’s reported profit margins, noting that despite cumulative sales reaching P1 billion, GenCorp declared net income of only P2.7 million in 2023 and P3.3 million in 2024.
Official procurement summaries presented before the impeachment court showed that contracts with the Davao City government accounted for P34,216,900 of GenCorp’s P35,878,188 in authenticated public awards between July 2022 and June 2026.
This represented approximately 95.4 percent of the company’s total authenticated public awards during the period.
Mayor Sebastian Duterte confirmed that the city government had awarded 19 contracts to GenCorp. He added that he would have disallowed the contracts had he known about his sister’s financial stake in the company.
The vice president herself declared an interest in GenCorp in her Statement of Assets, Liabilities, and Net Worth (SALN), although her name did not appear among the company’s shareholders in the corporate documents presented before the impeachment court.
Her alleged involvement in GenCorp is among the issues raised under Article II of the Articles of Impeachment, which accuses her of having undeclared assets and unexplained wealth. Forensic financial analyst Atty. Alexander Cabrera has estimated the alleged unexplained wealth at at least P817.87 million.
