Impeachment court questions Gencorp lawyer on Sara's P46K investment yielding P2.14M

Senator-judges quizzed Gencorp Industries Inc.’s in-house counsel about the striking discrepancy between the P2.14 million Vice President Sara Duterte received from the company as a “return of capital” and her investment of only P46,000.

Atty. Suzette Balucanag-Punay was repeatedly confronted with such questions on Day 42 of the impeachment trial on Wednesday after disclosing that Duterte received periodic monthly capital returns from Gencorp between 2022 and 2025.

The amount, she said, totaled P2.14 million, even though she claimed the VP is neither a stockholder, officer, nor director of the corporation.

Senator-judge Raffy Tulfo challenged Punay to produce corporate records substantiating her claim that the P2.14 million was a return of capital from Duterte’s “loose investment” in Jollibee Times Square, not dividends or earnings.

The Times Square branch is one of the five branches Gencorp operates in Davao City.

“There are no dividends declared, and she is not entitled to dividends because she is not a stockholder,” Punay said.

“On the other hand, explain to us why you characterized it as a return of capital. Naturally, if it is a return of capital, there must be an input, meaning she invested money into the company, which is now being returned to her as her capital,” Tulfo countered.

According to Punay, the capital returns stemmed from an investment Duterte made in Davao Bounty Foods Corp. amounting to P46,000 in 2007.

Davao Bounty was supposedly intended to run the Times Square branch, but it failed to acquire the franchise and was eventually operated by Great Jollibee Times Food Corp. before being officially transferred to Times Square Bee Foods Corp. in 2013.

Great Jolly Times Foods Corp. and Times Square Bee Foods Corp. were the former company names of Gencorp.

Punay told the Senate impeachment court that the investment was just carried over.

Investment soars 46 times than orig capital

However, senator-judges took turns pressing the witness on why a P46,000 investment grew to P2.14 million—almost 50 times—if it was not generated income.

Tulfo challenged Punay to “do the math,” arguing that the lack of relevant documentation suggests “unexplainable wealth,” and makes her testimony “flimsy.”

Punay insisted that she had not seen any contracts or financial documentation to explain the P2.14 million.

The P2.14 million was disbursed to Duterte through bank checks issued by the Times Square branch, and was divided into four tranches: P337,500 in 2022, P555,750 in 2023, P612,419 in 2024, and P636,700 in 2025.

Still, Tulfo was not convinced by Punay and accused her of “concealment,” given that she was Gencorp’s lawyer and a Certified Public Accountant with 15 years of experience.

Senator-judge Win Gatchalian and Senator-judge Joel Villanueva echoed Tulfo’s sentiments, saying the glaring increase between the investment and the capital returns indicates rather a “return on capital” or income.

Why is it important?

The Constitution bars the President, Vice President, Cabinet members, among others, from directly or indirectly participating in any business or holding a financial interest in any government contract while in office.

“It turns out that this is not a return of the capital. It is the earnings from that capital,” Gatchalian argued.

Punay said she could not confirm whether the VP made additional investments beyond the P46,000 that could justify the increase, but Villanueva insisted that, regardless, it would still constitute income.

“You already mentioned earlier that this was revenue. It has generated earnings… So, this is income. If you look at the definition of income, it is money earned [through] investment,” Villanueva pointed out.

Punay eventually retracted her earlier statement and agreed that it was indeed income.

Both Gatchalian and Villanueva raised conflict-of-interest concerns, citing constitutional prohibitions against public officials holding business interests.

“If it is indeed income, this seems problematic, because it is clearly stipulated in the Constitution,” Villanueva stressed.

Gatchalian also noted that GenCorp secured P34.2 million in contracts with the Davao City local government, headed by Duterte’s brother, Baste, from 21 July 2022 to 23 June this year—overlapping with Duterte’s tenure as VP.

Baste earlier testified in the trial that he had no knowledge of his sister's interest in the firm, claiming that the LGU’s transactional contracts were often signed by his assistant city administrator.

The VP identified herself as an incorporator and stockholder of Gencorp, as her past SALNs showed, though the corporation's records filed with the Securities and Exchange Commission do not list her as one.