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Erwin Unson

on 1 January 2015

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Cooperation in Ancient Times
1946 – Tax exemption withdrawal had weakened the cooperative movement.

1947 – Cooperative Administration Office (CAO) was established to oversee the cooperative movement.
1952 - Agricultural Credit and Cooperative Financing Administration was passed under RA 821.

> Farmers Cooperative Marketing Association (FACOMA) were established.

> Credit to farmer-members of FACOMA were extended without collateral except their productive capacity.

Friday, January 2, 2015
Vol XCIII, No. 311
Importance of PMES
Headline 5
1. To create awareness & motivate the members

2. For participants to gather information that can guide them in deciding to join or not to join the cooperative

3. To know the duties & responsibilities of members,
officers, & management staff of a cooperative

4. To know the existing cooperative rules & regulations

5. To understand the importance of cooperativism

6. To know the sources of funds of a cooperatives

7. To be aware of the cooperative principles and practices

8. To know the different types of cooperatives as guide on
what type of business activities to undertake

9. To make the participants become responsible members
and effective leaders & staff of cooperative

10. It is a requirement before one is accepted as member of
a cooperative

11. It is a requirement for cooperative registration with

Eranoi (300 B.C.) – 7th-15th Century, in Greece – it was a practice to have annual contribution for funerals, illness, feasts, and those in distress

Merchants Guild – Due to danger in traveling alone, merchant joined other merchants and they traveled from town to town, armed with swords and bows. They buy and sell collectively and prorated the profits. As they grew, they hired employees and organized guild in every town.

-Their objective was to preserve a trade monopoly in town market, maintain stable prices and quality under normal conditions.

Crafts Guild (Artisans) – Weavers, bakers, butchers, showmakers, copper-beaters, etc. They contributed to the construction of roads, buildings, etc. in Europe

In the Philippines
Cooperativism has its own local version, the words such as palusong, bayanihan, paluwagan, and others, which are still in use today.

> Palusong – farmers helping other farmer in plowing his field without any invitation. A mere information from the neighbors that one will have a palusong, everybody will come on the appointed day and help in plowing his field.

> Bayanihan – when one would transfer his dwelling to another place, his neighbors will jointly help.

> Paluwagan – A more sophisticated form of cooperation, wherein a bigger number of participants are involved. This form of cooperation is economic in nature and is always resorted to by a group of people who cannot afford to buy prohibitive priced items.
Industrial Revolution (18th Century, England)

-Traditional industries of the guilds were rendered unprofitable when machineries were introduced in factories. Labor was treated as commodity at the dictate of the capitalists or factory owners.
-Unsatisfactory working conditions were the order of the day due to long working hours and low pay. Exploitation of the poor by the rich, rampant unemployment, poverty and discontentment were some of the features during those times.

The miserable conditions prevailing at that time gave birth to social reformers/socialists or people with social conscience. Their purpose was to change and improve the prevailing exploitative conditions.

Robert Owen - At the age of 10, started working as a shop boy. 20 years later (1780-1800), he became a part-time owner and manager of New Lanark Cotton Mills in Scotland. The enterprise employed 2,000 workers, 500
of them were children from 5-12 years old.

Many of the workers were women who were given very low wages. Working climate was a virtual slavery.
Owen revolted against the social and economic condition of his time. He dedicated his life and wealth to the cause of the poor. When he was the manager and master of the cotton mills
he effected change and implemented the following:

1. Replacement of old retail liquor stores in his
community with provision stores. Only the best
quality goods were sold at cost to the workers.
2. Housing units for the workers.
3. Community beautification, health and sanitation
projects were put-up.
4. Reduction of working hours
5. Adult education for factory workers and members of
the community.
6. Infant schools were organized in 1809.
7. Workers below 10 years old were not allowed to work.

-Frustrated with the opposition of his business partners, he left his place and migrated to America. He purchased 20,000 acres of land in Harmony, Indiana, and invited all industrious and well-disposed individuals to join him in his new society called “Village of Cooperation”. His experiment lasted only for 3 years. Poor and aging, he returned to England to continue his crusade for social reforms.
-He was against private property. To him, competition was war and profits were spoils of war. But his reforms made a deep impression on the working class. Unfortunately, he died without seeing the fruits of his crusade. But other reformers continued his works. He was honored as “Father of Cooperativism”.
Society of equitable pioneers

Group of 28 weaver workers who were poor and mostly uneducated, 27 men and 1 woman, discussed their problems on how to improve their lives. Charles Howarth suggested that each of them would contribute 2 pence a week to common fund and use the money to start a little store of their own. They will own the store cooperatively. Someone in the group stated that the same idea was tried before and it failed. Howarth answered that others had failed because buyers had been allowed to purchase goods on credit. He suggested that this could be avoided by making it as a rule that buyers should buy in cash and be loyal to their store. At the end of the year, profits should be divided among the members in proportion to their total capital.

They contributed and accumulated 28 pounds and put up a store in street of Toad Lane, Rochdale in 1844. They rented space for their store at 10 pounds annually. Their store was named “Rochdale Society of Equitable Pioneers”. They began selling basic commodities.

On December 21, 1844, the shutter of their store was taken down for the first time because they could not afford to operate the store the whole day. They only opened it during evening after working hours.

Before the end of 1845, their store was obviously successful. People in the community saw the Rochdale Pioneers and their families wearing clothes and shoes which were not common to workers in Rockdale at that time.

Their success resulted to:
1. Encouragement of the people in the community to join their society
2. Adoption throughout the world of their principles and practices
3. Organization of more than 100 stores, several factories, and farm plantations

According to them, the failure of early cooperativism were due to:
1. Inefficient business management
2. Dishonest officials
3. Meetings between management and members were neglected
4. Management were left entirely to few individuals

Franz Herman Schulze Delitzsch - during the famine in Germany, he established the Credit Union (People’s Bank). It was successful in the beginning but failed in the end because of their too much reliance on donation.

Friedrich Wilhelm Raiffeisen - a young German Mayor and a protestant minister. He was a witness to the oppressions of the poor by money lenders. Harvest was failure and farmers could not pay their debts. They depended to loan shark and willing to be landless and homeless. He established the Credit Union. He was the first to lend money based on the paying capacity. 6 months after, the loans would be collected. All members of the committee went on house to house collection. He is the father of credit cooperatives. His success spreads to France, then Italy, eventually throughout Europe.

Father Franccise Haech - Belgian Priest who experimented Credit Union. He was successful in the beginning but failed in the end because cooperative principles were not followed.

Luigi Lizzatti – Italian economic professor, University of Milan. He heard the news about the activities of Delitzsch and Raiffeisen. He went to Germany to study about the works of the 2 social reformers. As a result, he organized the People’s Bank of Milan with an initial capital from his own pocket. Now, the bank is one of the biggest in Italy.

Father Jacques Ferdinand Maellerts – Belgian Priest who organized the farmers. He saw the farmers as the hardest to cooperate. However, he was successful in his initiative. His techniques: 1) small group were organized with no money introduced, 2) then when the group is already prepared, he organized them into a cooperative.

Bishop Nicolai Gruntvig – Denmark. He organized the farmers and was successful. Now, 80% of export in Denmark is managed by cooperatives.

The success of cooperativism in Europe was due to their emphasis on education and training.

Alphonse Desjardins – Canadian Journalist/Report. While in hospital, he read about the works of Delitzsch and Raiffeisen. He organized in 1900 the People’s Bank of Levis with a capital of $26.40. 6 years later, his works started to succeed. He also helped in the organization of credit unions in America. In 1963, 1,263 coop people’s banks with 1,500,000 members and total assets of $44.7 million.

Edward Filene – American Jew, a multi-millionaire. He financed the drafting of cooperative laws with the help of Desjardins. In 1921-1934, there were 2,000 credit unions organized in America and 39 states passed cooperative laws on credit union. In 1950, he donated his mansion at Madison, Wisconsin, USA and inaugurated it as credit unions’ headquarter.

In America, cooperativism was started in 1780’s. In 1860, there were 400 cooperatives engaged in processing of dairy products. Irrigation cooperatives were also established. Government assisted farmers in the organization and development of their cooperatives.

-1916 – 12 Federal Land Banks were organized.
-1923 – 12 Federal Intermediate Credit Banks were organized.
-1981 - 2,000 oil wells were established and operated by cooperatives with 10 refineries and about 2 million American member-owners.

In the Philippines
1898 - Dr. Jose P. Rizal organized Marketing Cooperatives among farmers in Dapitan while he was in exile, inspired by the cooperative idea during his travels in Europe.

American Regime (1900-1934)
The cooperatives in the Philippines did not begin as people’s movement. Neither did it evolve from people’s initiatives at mutual self-help and cooperation. It was mostly organized through the initiative of the government with loan assistance to fast-track development.

1907 – bill was filed by Rep. Alberto Barreto through the efforts of Senator Teodoro Sandico. But it was
disapproved by Philippine Commission.

1914 – another bill filed in the Philippine Assembly by Rep. Rafael Corpuz (Rural Credit Law)

1915 (Feb. 5) – Rural Credit Law was passed under Act. 2508. Began the active involvement of the government in cooperative organizing and supervision.

1919 – Act No. 2818 was enacted primarily to grant loans to members of rural credit associations. It failed miserably because the members and the leaders had not adequately understood the principles of cooperativism and because government wanted to short-circuit the cooperative principle of autonomy, self-reliance and voluntarism.
1926 – Cooperative Marketing Law under Act No. 3425 was passed. Bureau of Commerce and Industry was entrusted to organize farmers into marketing Cooperatives.

1938 – 560 cooperative marketing associations were organized but it was a dismal failure due to lack of education in cooperative principles not only the members and leaders of cooperatives but also of the government which had impatiently pushed for the adoption
of cooperatives prematurely.

1938 – Rev. Allen R. Huber, American minister of the Church of Christ, organized church members in Vigan, Ilocos Sur into the country’s first privately-initiated credit union through self-help. It was successful. Subsequently, Protestant Church organized cooperatives throughout Ilocos region.

1940 – Cooperative movement made a headway when Commonwealth Act No. 56 (Cooperative Laws) was passed due to the interest of Pres. Manuel L. Quezon. Cooperative Fund was established.
1941– World War II broke out which cut short the cooperative development

Japanese Rule (1942-1945)-Cooperatives were organized under the initiative of Minister of Economic Affairs, Pedro Sabido. Intensive training of Managers were conducted, but it was cut short due to the defeat of the Japanese forces.

Liberation Period (1945)- Cooperatives were organized fast without proper orientation purposely to distribute relief goods. It became dormant after the relief goods distribution program ended.

Philippine Republic
1956-1957 – 455 FACOMAs were established. P5OO million loans were not paid. It was a failure due to low repayment and poor administration of loan. Members became loan oriented and they look upon FACOMA as credit agency and not as marketing arm.
1960-1963 – attempts were made to revitalize the cooperative movement, but it failed except for
credit cooperatives.

1960 – Catholic Church proclaimed an interest in the cooperative movement as a matter of Church teaching, in response to the call of the Second Vatican Council for direct participation in the solution of
the poverty and social injustice problem.
1960 – Philippine Credit Union League (now Philippine Federation of Credit Cooperatives) was organized, which is still existing up to the present. While the Philippine Federation of Consumers Cooperatives (popularly known as the Philippine Cooperative Wholesale Society) was a failure due to the withdrawal of tax exemption.
1973 (April 14) – PD 175 (Strengthening the Cooperative Movement). With government sponsorship, many cooperatives were organized overnight. Samahang Nayons (SNs) were organized as part of the integration process. Thus, when government required existing cooperatives to become SNs and to integrate themselves within the structures created by the government, cooperative leaders resisted. 22,000 SNs were organized, but did not last long. But the privately initiated cooperatives grew and became big which are now still existing.
1990 (March 10) – RA 6938 (Cooperative Code of the Philippines) and RA 6939 (creation of the Cooperative Development Authority) were passed defining the role of the government as a promoter and regulator to prevent abuse, and as a provider of incentives to enhance growth of cooperatives.

2009 (February 17) – RA 9520, “An Act Amending the Cooperative Code of the Philippines to be Known as the Philippine Cooperative Code of 2008”was signed into law by Pres. Gloria Macapagal-Arroyo. This Act was passed by the Senate and House of Representatives on December 16, 2008.

What is the Prevailing Situation of Our Country?
1. There is a national crisis.
2. People (many) are living in poverty.
3. Government cannot provide every need of its people
due to budget problem.
4. Private sector cannot also provide every needs of the
5. Unscrupulous segments of our society are taking
advantage of the situation

What is Man?
a) God’s creation
b) A being with dignity
c) With body and soul (to be nurtured)
d) Social being
e) Has intellect & will
f) Rational being

Man and Society (What is man in society?)
a) Man is a member of the society
b) No man is an island (no man can live alone)
c) Each man’s grief is my own (unsay kaguol sa uban,
kaguol ko usab) – problems of others also affect me.

Man and Government
a) Man makes a government
b) Government is for, by, and of the people
c) Government is an institution that will bring about
the will of the people

What are the needs of man?
a) Food, clothing, and shelter
b) Education
c) Medicine
d) Recreation

What are the Problems of Man?
a) Food, clothing, shelter, education, medicine due to:
> low income
> unemployment
> lack of technology
> high prices caused by:
1) law of supply and demand (if supply is low,
prices will go up; when supply is high, prices
will go down)
2) low productivity
3) monopoly (control by big businessmen causing price manipulation)
4) hoarding (to create artificial shortage for price increase)

Effects of Poverty
1. Exploitation of our credit needs
> Mobaylo ta sa ugangan, ginikanan, o mga igsoon, but
they have no money to lend. If they have, they will
refuse for fear that we can not pay.
> Usurer (5/6) – man-agwanta nalang sa 20-28%, sama
ra nga miingon ta sa usurer, sigi ania ko pahimusli ug
idoot kay ang akong pag-antos imo mang kalipay.
> Pawnshop – kiskisan pa ang imong singsing ug putlan
ang kwentas, gawas nga magbayad ka sa interest sa
imong nahulam.
> Banks – will not lend money to the poor, but will
accept savings deposit from them, because they are
not bankable (no collateral) and lend the money to the
Example: P100 – buying price his products (puhunan
sa iyang baligya)
10 – his profit
10 – his tax to the government
10 – his permit & licenses
10 – his operating expenses (salaries &
10 – his loan amortization to the bank
P 150 – his selling price

*In other words the poor are the one
paying the obligations of the rich.

2. Exploitation of labor – dili mohatag ug tama nga sweldo (not following the minimum wage by maintaining 2 payrolls (by some –not all), one for inspection by DOLE and the other is for owner’s use).

Deductions for SSS, Pag-Ibig, & Phil-Health are not remitted but used by employers for of appointment every 6 months, thereby depriving the workers of permanent or regular work. Employers
getting higher profits, while its workers are becoming poor and destitute.

3. Lack of development of human person – we are
supposed to be developed:
> Economically
> Socially
> Politically
> Culturally
> Spiritually

a) Internal Causes
1. Laziness, lack of initiative
2. Vices (chicks tirada, palahubog, sugal, tabako)
3. Ineffective management of time, talent, & treasure
4. Spendthrift ways (gastador: fiesta, latagaw, uban pa)
5. Fatalism – dili na maningkamot kay bisan unsaon palad may
nagbuot nga pobre siya
6. Lack of knowledge and skills
7. Bahala na system
8. Corrupt mentality (pagkalimbongan – mamaligya kulang
timbang, coloran ang suga o ang tubig para ingnon presko ang isda,
tambal pike ipamaligya, double dead baboy litsonon ug ibaligya)
9. Palakasan
10. Crab mentality (pag moasenso ang isa, tabangan ug
daut – masinahon)
11. Walay pagpakabana

b) External Causes
1. Unequal distribution of wealth. According to

Wealth (Gidaghon sa Bahandi) Tawo (Naghupot)
90% 10%

* Ang atong tumong nga ang 90% na sa mga katawhan ang manag-iya sa wealth/bahandi ug 10% nalang ang walay wealth/bahandi.

2. Unrestrained/Uncontrolled Capitalism (walay pugong
nga capitalismo)
> Products of the farmers – price is dictated by the
middlemen (comprador)
> Hoarding (resulting to artificial shortage, thereby
manipulating the prices of commodities)

> Unfair trade practices (limbong ug dili maayo nga
pakignegosyo, like: medicines sold at higher cost
by multi-national drug companies (trade
monopoly) - although in India, Pakistan and other
countries, it is sold at lesser cost; dumping of
foreign products, including okay-okay &
sometimes toxic wastes and contaminated
products, and entry of foreigners in the retail trade
making Filipinos as mere tenderas/os and laborers
due to globalization & trade liberalization which
killed our local industries; mislabeling of products;
proliferation of adulterated and fake products; &
many others)

> High tuition fee in schools (commercialize educational system). Many cannot go to school, therefore they have no chance to get better employment.
> Low salaries. Companies are reluctant to grant salary increase.
> Contractualization of employment in private companies.

3. Lack of Political Will on the part of the Government to implement laws.
4. Wrong Priorities in Government Spending:
> Bigger portion of national budget goes to repayment of foreign debts.
> Lesser allocation for infrastructure projects, health, &
> Lesser Livelihood projects.
> Unemployment & under-employment

What are the Solutions?
1. Suicide – Bahala na unsay mahitabo ang importante makakwarta
> Mag abroad – broken families, death, underpaid, rape
> Robbery (pag wala swerte – patay)
> Prostitution (magkasakit ug AIDS)
2. Revolution –
a) blood shed (killing is contrary to our Christian faith)
b) displacement of communities (evacuation of affected
areas resulting to uncultivated or abandoned farms –
food supply is affected and hardship of the evacuees)
c) anarchy (gubot) – walay na gisunod nga balaod)
d) economic stagnation and hardship

3. A Revolution from Within Ourselves (sa ato mismo nga kaugalingon ang pagbag-o) thru Cooperativismlove towards fellow men)
Our visions:
> Maturity and selflessness
> Eliminate the chances of exploitation
> Common problems, common solutions
> More freedom and responsibility
> Awareness of social responsibility
> Better position to bargain through group efforts
> Increasing the capacity of the people to control their
own environment

* All of the above can be done through the revival and
strengthening of our spirit of cooperativism as
practiced long time ago by our forefathers.


1) Article 3, RA 9520 (Philippine Cooperative Code of

Cooperative is an autonomous and duly registered
association of persons, with a common bond of interest,
who have voluntarily joined together to achieve their
social, economic, and cultural needs and aspirations, by
making equitable contributions to the capital required,
patronizing their products and services, and accepting a
fair share of the risks and benefits of the undertaking in
accordance with the universally accepted cooperative

2) International Cooperative Alliance (ICA)

A cooperative is an autonomous association of
persons united voluntarily to meet their common
economic, social, and cultural needs and aspirations
through jointly-owned and democratically-controlled

3) Other Concept of Cooperativism
Cooperative is a group of people, contributing their resources together to form a business, for them to control, manage, patronize, and share equitably the risks and benefits according to their capital and patronage, with the following objectives:

1) Short Term Objective – Economic Development
2) Long Term Objective – Total Human
Development (Economic, Social, Political, Cultural, & Spiritual)

In others words, cooperative is a business entity which has a social conscience because service above profit is the prime motive, in accordance with its original concept:

“It is not for profit, it is not for charity, but for service”

The above concept was revised by some cooperative leaders to fit the needs of the modern time:

“It is not for profit only, it is not for charity, but also for service”

This is in furtherance of its social objective of promoting the welfare of its members through its services and in furtherance of the universal cooperative philosophy: “People Helping People” or “Mutual Selp-Help”.

Underlying this idea of service is the belief that:
1. What matters most in the cooperative is the person, regardless of his status in life, not his money.
2. People occupy a primary place in society, clothed with human dignity and freedom.

3. People can only actualize their potentials in a society where there is equality, justice, democracy, and peace.

Nature and Characteristics of Cooperatives

1. Cooperatives are service oriented.
2. Cooperatives are community oriented.
3. Cooperatives are people oriented.
4. Cooperatives are owned, managed, and patronized by
their members.

5. Cooperatives are business enterprise.
6. Cooperatives develop best through self-help and mutual help.
7. Cooperatives serve best when they answer the real and felt-needs of the members.
8. Cooperatives develop best from bottom to top.
– Primary coops as the foundation.
9. Development of cooperatives is enhanced through multi-
sectoral approach.

Importance of Cooperatives

1. It is a practical vehicle in attaining economic
development and social justice.
2. It will serve as a means of helping people to grow and
mature by improving their living standard, and to
strengthen their freedom and economic independence.
3. It will bring the greater number of the neglected and
marginalized people of our society together to become a
genuine force in national economic development
through collective action that will permit mobilization of
greater quantities of their resources.
4. It is a way of overcoming individual handicap because
reliance of one’s individual resources alone is
inadequate to solve the prevailing problem of poverty.

Benefits from Membership when your Cooperative is already Capable

1. You can avail of better services, such as:
a) Buying of consumer goods from the cooperative at reasonable price;
b) Selling of your farm products to the cooperative at a fair market price and for the cooperative to market it at competitive price

c) Loans at affordable rate of interest and reasonable
repayment term – for providential and productive
* to buy farm inputs
* hospitalization
* education for children
* start-up and expansion capital requirement for
business & livelihood projects
* lot purchase/construction or renovation of a house
* emergency needs
* purchase of appliances, jewelries, cellphones,
personal and household needs
* placement fee (for members wishing to go work

2. You can receive equitable share from coop business
profits in the form of Interest on Capital (IOC) and
Patronage Refund (PR).

3. Loan sharks and other unscrupulous service providers
can no longer exploit you.
4. It will provide an opportunity to increase your income
and savings through livelihood projects and business
5. You will have lesser worries for any eventualities in life
(para kang nakasandal sa pader).

Benefits to the Community & the Government:

1. It will provide livelihood and employment to the people
thereby helping our government solve the poverty
2. Businesses will eventually become just and socially
responsible, thereby restoring the faith of our people to
our economic and political systems, because
cooperatives are putting pressure to the market thru fair
trading to reduce, if not eliminate, the chances of
3. Farm products will be bought at reasonable price that
will result to increase income and savings of the farmers
(this is if our marketing cooperatives are already strong
enough to compete).
4. Prices of other goods and services will become reasonable.

Miscellaneous Benefits:

1. Goods and services will be affordable to everyone.
2. More savings to the consuming public and increase in
their purchasing power.
3. Increase sales/income to business establishments.
4. Business expansion will be the natural consequence.
5. Hiring of additional employees.
6. Private businesses can already afford to give good
salaries and benefits.
7. Increase in purchasing power of private employees.
8. Increase revenues of the government.
9. Improve government services, such as: infrastructure,
health, education, etc.
10. Hiring of additional government employees

11. Government can afford to give good salaries and
benefits to its employees.
12. Increase in purchasing power of the government employees.
13. Lessen corruption in the government bureaucracy.
14. Opportunities will abound.
15. Brain-drain will be stopped and exploitation of Filipinos working abroad will be a thing of the past.
16. Family life will be strengthened.
17. Clean and honest election becomes a reality. Politicians can no longer engage in vote buying since people are economically affluent, educated, and politically mature.
18. There will be good governance – a government that is responsive to the needs of the people.
19. Criminality will be dramatically reduced.
20. No more economic exploitation.
21. No more discontentment and rebellion.
22. Peace and justice will prevail throughout the country.
23. Political and economic stability will reign.

Purpose of
To make profit but
neglecting the
welfare of the
To make a reasonable profit for the benefit of the members and the public.
No limit
Contribution of each member is limited to 20% of the capital
At least 5 persons
At least 15 persons
Members or
Share holders
Board but Chairmanship is given to the majority stockholder or highest investor. Board makes final decision.

Board but the Chairmanship is elected from among the Board of Directors regardless of capital contribution. General Assembly (members in assembly) makes final decision.
Limited up to the authorized capital.
Limited up to the subscribed capital.
Profit is subject to tax.
Net surplus is tax exempt, but subject to some limitations.
Net profit or surplus
Distributed to stockholders in proportion to their capital investment. No patronage refund.
Distributed to members in proportion to their capital contribution and patronage-in the form of Interest on Capital (IOC) and Patronage Refund.
Basic documents that govern the operations
Articles of Incorporation and By-Laws.
Articles of Cooperation and By-Laws.
Types of Cooperatives (Art. 23, RA 9520)
-a) promote savings
-b) grant loans to its members for productive & provident

-a) procure & distribute commodities
to members and non-members

3. Producers
-a) joint production (either agricultural or industrial)
b) processing of raw materials into finished products for sale to its members & non-members

4. Marketing
-a) supply production inputs to its members
-b) marketing of members products

5. Service
-a) medical & dental care, & hospitalization
-b) transportation
-c) insurance
-d) housing
-e) labor
-f) electric light & power
-g) communication
-h) professional & other services

6. Advocacy
a) promote and advocate cooperativism through socially oriented projects
b) education and training
c) research & communication

7. Agrarian Reform
a) organized by marginal farmers,
majority are agrarian reform beneficiaries
b) to develop appropriate system & land tenure, land development, land consolidation or land management in areas covered by agrarian reform.

8. Coop Banks
a) provide wide range of financial service to cooperatives & their members (Note: minimum paid-up capital requirement per BSP Cir. No. 682, Series of 2010))

9. Dairy -a) production of fresh milk
-b) processing & marketing of dairy products

10. Education -a) to own & operate licensed
-b) educational institutions

11. Electric -a) power generation
-b) acquisition & operation of sub-transmission or distribution to its members

12. Financial Service a) savings & credit services & other financial services (Note: minimum paid-up capital of at least P10 Million or as prescribed by BSP per Section 6, Rule 12, IRR (Certain Provisions, RA 9520)

13. Fisheries a) production & marketing of
either fresh or processed
products (Note: organized by
marginalized fishermen).

14. Health Services a) medical, dental & other health
15. Housing a) assist or provide access to
housing for its regular
members who actively
participate in the savings
program for housing.
16. Insurance a) ensuring life & property of
coops & their members (Note:
minimum paid-up capital P125
Million per Section 6, Rule III,
IRR (Special Provisions),
RA 9520)

17. Transport a) land & seatransportation.
limited to small vessels as
defined/classified under
Philippine Maritime Laws

18. Water Service a) own, operate & manage water
system for distribution of
potable water to its members

19. Workers a) provide employment &
opportunities to its
members (Note: organized by
workers, including self-

20. Other Types a) as may be determined by CDA.
21. Multi-Purpose a) combination of two or more
business activities of the
different types of coops
(Note: P100,000 paid-up
Capital requirement per
Section 3, Rule 3, IRR (Certain
Provisions, RA 9520).

Categories of Cooperatives (Art. 23, RA 9520)

1. Primary - members are natural persons
2. Secondary - members are primary coops
3. Tertiary - members are secondary coops

Federation (Art. 5, RA 9520) – 3 or more primary coops, doing the same line of business, organized at the municipal, provincial, city, special metropolitan political subdivision or economic zones created by law, to undertake business activities in support of its member-cooperatives.

Union (Art. 25, RA 9520) – composed of registered coops (primaries) and federations to represent the interest and welfare of all types of coops at the provincial, city, regional, and national levels.

Kinds of Cooperative Membership (Art. 26, RA 9520)

1. Regular - with voting right
2. Associate -no voting right, but can avail all and same benefits and privileges granted to regular member.
- if meets the minimum requirements of regular membership and continues to patronize the coop for 2 years, an
associate member shall be considered as a regular member.
- for financial service coop, minors who are
dependents of regular members can
qualify as associate members. Failure to
convert within 2 years to become regular
members shall mean automatic withdrawal
of their association membership (Art. 120,
RA 9520).

Approval of Membership (Art. 28, RA 9520) – By the Board of Directors

In case Application for Membership is Denied by the BOD (Art. 28, RA 9520) – it can be appealed to the General Assembly (GA) whose decision shall be final.

Appeal and Grievance Committee (Art. 28, RA 9520) – may be created by the GA to hear and decide member’s appeal in case membership is refused or denied by the BOD. Its members shall serve for a period of 1 year and shall decide a membership appeal within 30 days from receipt thereof, otherwise the appeal is deemed approved in favor of the applicant.

Liability of Members for the debts of the coop (Art. 29, RA 9520) – up to the extent of his contribution to the share capital of the cooperative.
Grounds for Termination of Membership (RA 30, RA 9520):
1. By withdrawal of his membership – by giving written
notice to BOD 60 days before the intended withdrawal.
He shall be entitled to a refund of his share capital plus
interest , provided that such refund shall not be made if
upon such payment the VALUE OF THE ASSETS OF
2. By death or insanity – for primary coop member
3. By insolvency or dissolution – for secondary or tertiary
member (provided that for agrarian reform beneficiary-
member, the next-of-kin may assume the duties and
responsibilities of the original member).
4. When a member has not patronized any of the services
of the coop for unreasonable period.

5. When a member has continuously failed to comply with
his obligations.
6. When a member has acted in violation of the bylaws and
the rules of the coop.
7. For any act or omission injurious or prejudicial to the
interest or the welfare of the coop.

Requisites & Effects of BOD Decision to Terminate a Member
(Art. 30, RA 9520):
1. A member should be informed by BOD in writing.
2. He should be given an opportunity to be heard before the
BOD decides.
3. The BOD decision shall be in writing and shall be
communicated in person or by registered mail.
4. The decision is appealable within 30 days from receipt
thereof to the GA.
5. Pending a decision by the GA, the membership remains in force

GA Decision on Membership Appeal (Art. 30, RA 9520):

1. GA may create an Appeal and Grievance Committee to
2. Appeal and Grievance Committee to decide within 30
days from receipt thereof.

Failure of the Appeal and Grievance Committee to Act or Decide within 30 Days (Art. 30, RA 9520) – the appeal is deemed approved in favor of the member-applicant or terminated member.

Right to Examine Coop Records (Art. 83, RA 9520) – a member has the right to examine records required to be kept by the coop under Article 52 of RA 9520 during reasonable hours or business days. Member can demand in writing copy of records without charge except the cost of production.

Books to be Kept Open (Art. 52, RA 9520):
1. Copy of the Code (RA 9520) & all other laws pertaining to coops
2. Copy of the regulation of CDA
3. Copy of the Articles of Cooperation & Bylaws
4. Register (list) of members
5. Books of the minutes of meeting of the GA, BOD, &
6. Share books, where applicable
7. Financial Statements
8. Other documents as may be prescribed by laws or the
coop bylaws

* Accountant or Bookkeeper (Art. 52, No. 2, RA 9520) -
responsible for the maintenance & safekeeping of above
books & records of account of the cooperative.
Responsible for the production of the same at the time of
audit or inspection.

* Audit Committee (Art. 52, No. 2, paragraph 2, RA 9520)
– responsible for the continuous and periodic review of
the books and records of account to ensure that these are
in accordance with the cooperative principles and
generally accepted accounting practices.

Limitation of Share Capital Holdings (Art. 73, RA 9520)– no member shall hold more than 10% of the share capital (subscribed capital) of the coop.
Shares (Art. 76, RA 9520) – the par value is not more than P1,000

Common Share Capital (Section 3a, Rule 10, IRR, RA 9520) – issued only to regular members.

Preferred Share Capital (Section 3b, Rule 10, IRR, RA 9520) – issued to regular and associate members. Preference in the payment of interest as provided for in the By-laws, and priority in the distribution of the net assets of the cooperative in case of liquidation.

In case of Death of the Member (Art. 73, par. 2., RA 9520) – the heir shall be entitled to the shares of the decedent, provided that it does not exceed 10% of the share capital of the coop.

Pre-Requisites for Assignment of Share Capital & Interest (Art. 74, RA 9520):
1. Member has held such share capital & interest not less
than 1 year.
2. Assignment is made to the coop or to a member of the
coop or to a person who falls within the field of
membership of the coop.
3. The BOD has approved such assignment.



As Owners As Customers
Rights Privileges

1. To vote 1. To receive efficient coop service
2. To be voted upon 2. To be treated well
3. To receive reports & 3. To suggest improvement
information 4. To receive Patronage Refund (PR)
4. To recommend policies
5. To receive Interest on
Capital (IOC)

Duties Obligations

1. To contribute capital 1. To patronize coop
2. To deposit regularly business
3. To serve when elected 2. To settle his/her
4. To participate in obligations
decision-making 3. To be a member in
5. To participate in coop good standing
activities (MIGS)
6. To promote the


1.Voluntary and Open Membership
-No compulsory membership
-No discrimination against any person on account of gender, social, racial, cultural, political or religious beliefs
- No artificial limitation for admission of new members
- No artificial limitation of the right to withdraw from membership
- Equal status of old and new members

2. Democratic Member Control
- One man, one vote
- No proxy voting - GA as supreme authority
- Decision-making by majority vote - Equal status of members
- Direct or indirect participation - Control through regular audit
of all members in the control
of the organization (through
election of officers)
- Accountability of the elected
officials to the membership

3. Member Economic Participation
- Members shall contribute capital
- Members shall receive dividend of his capital
- Equality of treatment regardless of one’s capital contribution
- Limitation of individual contribution to not more than 10% of total subscribed capital
- Members shall receive patronage refund
- Allocation for the reserves from net surplus
- Support services and other benefits approved by the membership

4. Autonomy and Independence
- Self-help and self-reliance
- No outside interference

5. Education, Training, and Information
- Appointment of EDCOM members
- Allocation for CETF from net surplus
- PMES before admission as member
- Ownership meeting (to take up coop policies, Articles of Cooperation, & By-Laws,
- Continuous training of members, officers, and employees

6. Cooperation Among Cooperatives
- Membership in Secondary, Tertiary, and International Organizations (Federation/
Union & ICA)
- Collaboration with other coops in development activities
- Participation in economic integration project, like:
> Central Fund
> Inter-coop trading
> Coop insurance
7. Concern for the Community
- Participation in community projects and Activities
- Allocation of 3% from the net surplus for community development fund

Cooperative Values:
1. Self-help – self-reliance (members should strive to control their own destiny through mutual action)
2. Self-responsibility – members assume responsibility for their cooperative
3. Democracy – members have the right to participate, to be informed, to be heard, and to be involved in making decisions
4. Equality – members are treated without discrimination
5. Equity – rewarded according to their economic participation to the cooperative (Patronage Refund & Interest on Capital)
6. Solidarity – collective strength or mutual responsibility

In the tradition of their founders, cooperative members believe in the Ethical Values of:

1. Honesty – honest dealings
2.Openness – open to members of the community &
commitment to assist individuals in helping themselves.
3.Social Responsibility – concerned about the health and
welfare of individuals within the community.
4. Caring for Others – contributing human and financial
resources to the community.


General Assembly
Med-Con Com.
Ethics Com.
Other Com.
Other Com.
DUTIES & FUNCTIONS (Sec. 4, Rule 7, IRR,
RA 9520)

General Assembly (Highest Policy-Making Body of the Cooperative)

1. To approved amendments to the Articles of
Cooperation and By-Laws
2. To elect or appoint the members of the board of directors, audit,
and election committees, and to remove them for cause
3. To approved development plans of the cooperative
4. To exercise final authority on all matters vitally affecting the cooperative
5. To take final decision on any change in financial policies
6. To hear and pass upon reports of the BOD and Committees
7. To delegate some of its powers to a smaller body of
the coop (3/4 votes of all members present and
constituting a quorum)

Board of Directors
1. Provide general policy director
2. Formulate the strategic development plan
3. Determine and prescribe the organizational and operational structure
4. Review the Annual Plan and Budget and recommend for the
approval of the General/Representative Assembly
5. Establish policies and procedures for the effective operation and ensure proper implementation of such
6. Evaluate the capability and qualification an recommend to the General/Representative Assembly the engagement of the services of an External Auditor
7. Appoint the members of the Mediation/Conciliation and Ethics Committees and other Officers as specified in the Code and
cooperative By-laws
8. Decide election related cases involving the Election Committee or
its members
9. Act on the recommendation of the Ethics Committee on cases involving violations of Code of Governance and Ethical Standards
10. Perform such other functions as may be prescribed in the By-laws or authorized by the General/Representative Assembly

1. Set the agenda for board meetings in coordination with the other
members of the Board of Directors
2. Preside over all meetings of the Board of Directors and of the General/Representative Assembly
3. Sign contracts, agreements, certificates and other documents on behalf of the cooperative as authorized by the Board of Directors or by the
General/Representative Assembly
4. Issue Certificate of Non-Affiliation with any Federation or Union
6. Perform such other functions as may be authorized by the Board of

Directors or by the General/Representative Assembly
1. Perform all duties and functions of the Chairperson in the absence of the latter
2. To act as ex-officio Chairperson of the Education and Training Committee
3. Perform such other duties as may be delegated to him/her by the Board of Directors

1. Ensure that all cash collections are deposited in
accordance with the policies set by the Board of Directors
2. Have custody of all funds, securities, and documentations relating to all assets, liabilities, income and expenditures
3. Monitor and review the financial management
operations of the cooperative, subject to such
limitations and control as may be prescribed by the
Board of Directors
4. Maintain full and complete records of cash
5. Maintain a Petty Cash Fund and Daily Cash Position
Report; and perform such other functions as may be
prescribed in the By-laws or authorized by the
General/Representative Assembly

1. Keep an updated and complete registry of all members
2. Record, prepare and maintain records of all minutes of meetings of the Board of Directors and the General Representative Assembly
3. Ensure that necessary Board of Directors’ actions and decisions are transmitted to the management for compliance and implementation
4. Issue and certify the list of members who are in good standing and
entitled to vote as determined by the Board of Directors
5. Prepare and issued Share Certificates
6. Serve notice of all meetings called and certify the presence of quorum of all meetings of the Board of Directors and the General/Representative Assembly
7. Keep copy of Treasurer’s reports and other reports
8. Keep and maintain the Share and Transfer Book
9. Serve as custodian of the cooperative seal
10. Perform such other functions as may be prescribed in the By-laws or authorized by the General Representative Assembly

Election Committee
1. Formulate election rules and guidelines and recommend to the General/Representative Assembly for approval
2. Implement election rules and guidelines duly approved by the General/Representative Assembly
3. Recommend necessary amendments to the election rules and guidelines, in consultation with the Board of Directors, for the General/Representative Assembly’s approval
4. Supervise the conduct, manner and procedure of election and other election related activities and act on the changes thereto
5. Canvass and certify the results of the election
6. Proclaim the winning candidates
7. Decide election and other election related cases except those involving the Election Committee or its members
7. Perform such other functions as prescribed in the By-
laws or authorized by the General/Representative

Audit Committee
1. Monitor the adequacy and effectiveness of the
cooperative’s management and control system
2. Audit the performance of the cooperative and its
various responsibility centers
3. Review continuously and periodically the books of
accounts and other financial records to ensure that
these are in accordance with the cooperative principles
and general accepted accounting procedures
4. Submit reports on the result of the internal audit and
recommend necessary changes on policies and other
related matters on operation to the Board of Directors
and General/Representative Assembly
5. Perform such other functions as may be prescribed in
the By-laws or authorized by the General/
Representative Assembly

Mediation and Conciliation Committee
1. Formulate and develop the Conciliation-Mediation
Program and ensure that it is properly implemented
2. Monitor Conciliation-Mediation programs and
2. Submit semi-annual reports of cooperative cases to
the Authority within fifteen (15) days after the end of
every semester
4. Accept and file Evaluation Reports
5. Submit recommendations for improvements to the
Board of Directors
6. Recommend to the Board of Directors any member of
the cooperative for Conciliation-Mediation Training as
Cooperative Conciliator-Mediator
7. Issued the Certificate of Non-Settlement (CNS)
8. Perform such other functions as may be prescribed in the By-laws or authorized by the General/Representative Assembly

Ethics Committee
1. Develop Code of Governance and Ethical Standards to
be observed by the members, officers and employees
of the cooperative subject to the approval of the Board
of Directors and ratification of the General/
Representative Assembly
2. Disseminate, promote and implement the approved
Code of Governance and Ethical Standards
3. Monitor compliance with the Code of Governance and
Ethical Standards and recommend to the Board of
Directors measures to address the gap, if any
4. Conduct initial investigation or inquiry upon receipt of
a complaint involving Code of Governance and Ethical
Standards and submit report to the Board of Directors
together with the appropriate sanctions
5. Recommend ethical rules and policy to the Board of
6. Perform such other functions as may be prescribed in
the By-laws or authorized by the General/
Representative Assembly

General Manager

1. Oversee the overall day to day business operations of the cooperative by providing general direction, supervision, management and administrative control over all the operating departments subject to such limitations as may be set forth by the Board of
Directors or the General/Representative Assembly
2. Formulate and recommend in coordination with the operating departments under his/her supervision, the Cooperative’s Annual and Medium Term Development Plan, programs and projects, for approval of the Board of Directors and ratification of
the General/Representative Assembly
3. Implement the duly approved plans and programs of the Cooperative and any other directive or instruction of the Board of Directors
4. Provide and submit to the Board of Directors monthly reports on the status of the Cooperative’s operation vis-à-vis its targets and recommend appropriate policy or operational changes, if necessary
5. Represent the Cooperative in any agreement, contract, business dealing, and in any other official business transaction as may be authorized by the Board of Directors
7. Ensure compliance with all administrative and other requirements of regulatory bodies
8. Perform such other functions as may be prescribed in the By-laws or authorized by the General/Representative Assembly


Internal Source
1. Members’ Share Capital:
a) Initial subscription
b) Capital Build-Up (CBU)
> Percentage from member’s income (monthly,
quarterly, semi-annually, or annually)
c) Loan retention
d) Service retention
e) Percentage on Interest On Capital (IOC) &
Patronage Refund (PR) to be retained

2. Revolving Capital – deferment of payment of PR &
IOC thru issuance of revolving capital certificate
approved by BOD as authorized by GA with serial
number, name, rate, amount & time of retirement of
such certificate

3. General Reserve Fund (10% from the net surplus)
4. Savings & Time Deposits from members
5. Borrowings from members
6. Cooperative Guarantee Fund – percentage from gross income for: social fund, common services & facilities, investment in other cooperatives (if its so provided in the By-Laws)
7. Fees, fines, etc.
8. Subsidies, grants, & donation from members


1. Loans – from banks, & other financial institutions
2. Subsidies, grants, & donation
3. Others – fund raising activities

At the end the fiscal year, if the business operation of the cooperative has Net Surplus, the following shall be deducted from the Net Surplus before distributing it to the members (as provided for in the cooperative By-Laws):

1) Reserve Fund – At least 10% of the net surplus
Note:-a) First 5 years of operation from date of registration with CDA– not less than 50% of the Net Surplus.
- b) Reserve Fund shall not be utilized for investment other than
allowed in RA 9520.
-c) Reserve Fund in excess of the Share Capital may be used at
anytime for any project for expansion of coop operations upon Resolution by the GA.

2) Education and Training Fund - Not more than 10% of Net Surplus
Note: a) 1/2 to be spent by the coop
b) 1/2 to Federation/Union chosen by the coop
or of which it is a member

3) Community Development Fund - At least 3% of Net Surplus
4) Optional Fund - Not more than 7% of Net Surplus (for land and building & other necessary fund)
5) Remaining Amount of Net Surplus - For Distribution to members
(Interest on Capital &Patronage Refund).

Note: a) Remaining amount after deducting allowable interest & PR shall
be credited to the Reserve Fund.
b) Members with paid-up share capital contribution, his proportionate amount of PR shall be paid to him unless he agrees to credited the amount to his account as additional share capital.

c) Member with unpaid share capital
contribution, his proportionate amount of
PR shall be credited to his account until his
share capital contribution has been fully

d) If within period of time as specified in in the Bylaws, any subscriber who has not fully paid his subscription or non-member does not request or agree to become a member or failed to comply, the amount credited or accumulated shall be credited to Reserve Fund or Educ. & Training Fund

NetSurplus P100,000
Less: 10% RF - P10,000.00
10% ETF - 10,000.00
3% CDF - 3,000.00
7% Optional Fund - 7,000.00 30,000
Net Amount for distribution as IOC & PR - 70,000.00

The Board may decide how many percent of the P70,000.00 shall be allocated for IOC & PR. However, the amount for PR shall not be less than 30% of total amount for distribution to members.


Organizing a Primary Coop (Art. 10, RA 9520) – 15 or more natural persons, Filipino citizens, of legal age, having common bond of interest, actually residing or working in the intended area of operation, with a minimum paid-up share capital of P15,000 (Art. 14, No. 5, RA (9520).

Term of Existence (Art. 13, RA 9520) – not to exceed 50 years from date of registration

a) May be extended for 50 years through amendment of the
Articles of Cooperation
b) No extension can be made earlier than 5 years prior to
the expiry date, unless there are justifiable reasons for
earlier extension.

Registration Requirements:

1. Economic Survey (Art. 11, RA 9520), with:
a) Organizational Structure & Staffing Pattern – shall include a Bookkeeper. (Note: Shall not be allowed to
2. Articles of Cooperation (Art. 14, RA 9520), accompanied by:
a) Bond of the Accountable Officers
b) Sworn Statement of the Treasurer or Treasurer’s
Affidavit that:
> at least 25% of the Authorized Capital has been
> at least 25% of the total subscription has been
paid; and
> not less than P15,000 paid-up share capital
3. Bylaws (Art. 15, RA 9520)

4. Certification that all members have attended and
completed the Pre-Membership Education Seminar
(PMES) from duly accredited institution or from CDA
Regional/Provincial Offices (CDA MC No. 2004-03,
S-2004 & MC No. 2011-01 dated Feb. 22, 2010)
5. Undertaking to Change Coop Name (CDA MC No.
2004-03, S-2004)
6. Undertaking to Submit Reportorial Requirements (CDA
MC No. 2004-03, S-2004)
7. Endorsement letter from other government agency, for
service type coop (CDA MC No. 2004-03, S-2004)
8. Endorsement of MCDO or CCDO, if applicable (internal

Amendments of Articles of Cooperation & Bylaws:
1. Primary, Secondary, or Tertiary (Art. 18, RA 9520) – at least 2/3 votes of all the members with voting rights. The amendments be registered with CDA and take effect upon approval.
2. Coop Banks (2nd paragraph, Art. 99, RA 9520) – ¾ vote of the members with voting rights, present and constituting a quorum. Other requirements shall be prescribed by the BSP.
Officers of the Cooperative (Art. 5, No. 11, RA 9520):
1. Board of Directors
2. Members of the different committees created by the General Assembly
3. General Manager or Chief Executive Officer
4. Secretary
5. Treasurer
6. Members holding other positions as may be provided for
in the bylaws

Prohibited to become Officers of a Cooperative (Art. 27, RA 9520):
1. Elective officials, except coop party-list representative,
being an officer of a coop he/she represents
2. CDA employees, except in coop organized among CDA
Committees of a Cooperative (Art. 43, RA 9520):
1. Executive Committee – appointed by the BOD
2. Audit Committee – elected by the GA and accountable
to the GA
3. Election – elected by the GA
4. Mediation and Conciliation Committee – to be appointed
by the BOD
5. Ethics Committee – appointed by the BOD
6. Other Committees

Vacancy in the Committees (Art. 43, par. 3, RA 9520)– BOD may call an election to fill the vacancy or appoint a person to fill the same who shall serve the unexpired portion of the term.

Vacancy in the BOD (Art. 41, 9520) – any vacancy, other than by expiration of term, may be filled by the vote of at least a majority of the remaining directors, if still constitution a quorum; otherwise, it must be filled by the GA in a regular or special meeting called for the purpose. A director so elected shall serve only the unexpired term of his predecessor.

BOD Meeting (Art. 40, RA 9520):

1. Regular meeting - in case of primary coop, it shall be
held at least once a month.

2. Special Meeting – any time upon the call of the
Chairperson or a majority members of the board,
provided that written notices shall be given to all
members of the board 1 week before the meeting.

Proxy Voting (Art. 40, No. 4, RA 9520) – not allowed in the BOD meeting

BOD Quorum (Art. 40, RA 9520) – majority members of the board unless the Bylaws provide otherwise

BOD Membership (Art. 37, RA 9520) – 5 to 15 members
BOD Term of Office (Art. 37, RA 9520) – not to exceed 2 years

Election of Officers (Art. 42, RA 9520):

1. Chairperson – elected from among the BOD
2. Vice-Chairperson – elected from among the BOD 3. Other Officers of the coop – elected or appointed by the BOD from
outside the board
* Above officers shall serve during good behavior and shall
not removed except for cause after due hearing. Loss of
confidence shall not be a valid ground for removal unless
evidenced by acts or omission casing loss of confidence
in the honesty and integrity.

Compensation of BODs & Officers (Art. 46, RA 9520) – in the absence of any provision in the Bylaws, they shall not receive any compensation, except reasonable per diems, provided that they shall not be entitled to any per diem when in the preceding calendar year, the coop reported a net loss or had a dividend rate less than the official inflation rate for the same year. Other compensation may be granted by a majority vote of the GA. For the first year of coop existence, only per diem is allowed.

Who will fixed the Compensation of the Coop Employees? (Art. 46, No. 3, RA 9520) – Board of Directors

Removal of Elected Officers (Art. 50, RA 9520) – complaints shall be filed with the BOD. Officer concerned may be placed in preventive suspension pending resolution of the investigation. If there is a prima facie evidence of guilt, the board shall recommend for removal to the GA. Concerned officer shall be given the opportunity to be heard at the GA meeting. Removal by ¾ votes of the regular members present and constituting a quorum in a regular or special GA meeting called for the purpose.

Secretary, Treasurer, & Manager – appointed by the BOD from outside the board

General Assembly (GA) (Art. 5, RA 9520) – full membership of the coop duly assembled. For coops with numerous and dispersed membership, GA may be composed of delegates elected by each sector, chapter, or district of the coop (Art. 5, No. 2, RA 9520). It is the highest policy-making body (Art. 33, RA 9520).

Powers of the General Assembly (Art. 33, RA 9520):
1. To determine and approve amendments to the Articles of
Cooperation and Bylaws
2. To elect or appoint members of the BOD and to remove
them for cause
3. To approved developmental plans of the coop
4. To delegate some of its powers to a smaller body of the
coop (by ¾ votes of all its members with voting rights,
present and constituting a quorum)

Meetings of the General Assembly (Art. 34, RA 9520):
1. Regular Meeting – any date within 90 days after the
closed of each fiscal year, if not fixed in their Bylaws,
provided that written notice is sent by posting or
publication or through electronic means to all members.

2. Special Meeting – can be called any time by the majority
vote of the BODs, provided that written notice is sent
1 week before the meeting to all members entitled to
vote. In case of request in writing from at least 10% of
the total members entitled to vote, a special GA meeting
may be called by the BOD within 1 month after receipt
of request after compliance with the required notice.

* Failure of BOD to call a regular or special GA meeting
within the given period – the Authority, upon petition of
the 10% of all the members entitled to vote of the coop
and for good cause
shown, shall issue an order to the petitioners directing
them to call a meeting of the GA by giving proper notice
as required in the Bylaws or RA 9520.
* For Newly Registered Coop – within 90 days from date of
registration, a special GA meeting shall be called to elect
new set of officers.

Quorum of GA Meeting (Art. 35, RA 9520):
1. Primary, Secondary, or Tertiary - at least 25% of the
members entitled to vote
2. Coop Banks (Art. 99, RA 9520) – ½ plus 1 of the
number of voting shares of all the members in good
3. Electric Coop – 5% of all the members entitled to vote

Voting System (Art. 36, RA 9520):

1. Primary – each member shall have only 1 vote
2. Secondary or Tertiary – each member shall have only 1
basic vote and as many incentive votes as provided in
the bylaws but not to exceed 5 votes. The votes cast by
the delegates shall be deemed as votes cast by the
members thereof.

Proxy Voting (Art. 36, RA 9520) – for coops other than primary, proxy voting may be provided. Voting by proxy means allowing a delegate of a coop to represent or vote in behalf of another delegate of the same coop.

Representative Assembly (Rule 1, RRI Certain Provisions of RA 9520) – refers to the full membership of the body of representative elected by each of the sector, chapter, or district of the cooperative duly assembled for the purpose of exercising such powers lawfully delegated unto them by the general assembly in accordance with its By-laws.
This is applicable for cooperatives with numerous and dispersed membership, the general assembly may be composed of delegates elected by each sector, chapter or district of the cooperative.

Division of Cooperatives into Sector, Chapter, or District – at least 1,000 members based on geographical location, scope of operation, cluster, work shift, or other similar conditions.

Composition of the Regular Members of Each Sector, Chaper, or District – not less than 100 members as provided in the By-laws

Quorum Requirement for Sector, Chapter, or District – at least 25% of the members entitled to vote in each sector, chapter, or district
Number of Sector, Chapter, or District Representative – not less than 10% of the total number of the regular members entitled to vote of
the sector, chapter, or district

Term of Office of the Sector, Chapter, or District Representatives – not to exceed 2 years

Election of Sector, Chapter, or District Representative or Delegate – during the GA meeting approving the adoption of the Representative Assembly, each sector, chapter, or district shall elect its Local Election Committee that will conduct the election of sector, chapter, or district Representative/Delegate to be held not later than 60 days before the scheduled date of the regular representative assembly meeting as provided for in the By-laws

The Board of Directors shall direct each sector, chapter, or district Local Election Committee to conduct the sector, chapter, or district assembly meeting to elect its
Representative/s or Delegate/s, which may be held either simultaneously or sequentially.

Quorum Requirements for Representative Assembly – at least 25% of all Representatives/Delegates

Powers of the Representative Assembly – as provided for in the By-laws

Eligibility of the Representative or Delegate to be Elected as Officer of the Cooperative – the officers of the cooperative shall come from the Representative/s or Delegate/s of the sector, chapter, or district.

Term of Office of the Officers of the Representative Assembly – not to exceed 2 years

Subsidiary Coop (Art. 5, No. 16, RA 9520) – any organization all or majority of whose membership or shareholders come from a coop organized for any other purpose different from that of and receives technical, managerial and financial assistance from a coop, in accordance with the rules and regulations of the Authority.

Travel of Government Employee or Official (Art. 27, RA 9520) – allowed to use official time for attendance to general assembly, board and committee meetings of coops, as well as coop seminars/trainings, conferences, workshops, technical meetings held locally or abroad, provided that the operations of the office concerned are not adversely affected.

Obligations of a Registered Coop:

A) Submit yearly to CDA the Statutory Reports (Sections
2, 4, & 5, Rule 8, IRR, RA 9520 within 120 days from
the end of calendar year either through personal,
registered mail, courier, or electronic means. The
reports shall be certified correct by the Chairperson and
General Manager), such as:

1) Cooperative Annual Performance Report (CAPR)
2) Audited Financial Statements (AFS) – pursuant to
Art. 53, RA 9520 (stamped “Received” by BIR per
Section 2, Rule 8, RRI of RA 9520)

* Failure to File Annual Reports (Art. 53, RA 9520)
– accountable officer/s will be subject to fines & penalties and shall be a ground for revocation of authority to operate

* Sanction for Delayed Submission – Accountable Officer shall pay a fine of P100.00 per report, per day of delay (Section 7, Rule 8, IRR, RA 9520)
3) Performance Report
4) Social Audit Report (including its program of activities in pursuance of its socio-civic undertakings showing its achievements at the end of every fiscal year)
5) List of Officers and Trainings Undertaken Completed.

Note: Penalty for delay in the submission –
P100/report/day of delay (Section 7, Rule 8, RRI
of RA 9520). If delay is due to fortuitous event,
within 30 days upon receipt of Statement of
Accounts, the Accountable Officer may request
for Reconsideration

B) Secure yearly from CDA a Certificate of Good Standing
(CGS) – pursuant to CDA BOA Res. No. 41, dated Feb.14, 2008 & CDA MC No. 2008-03 dated February 14, 2008 (Amended Guidelines Governing the Issuance of Certificate of Good Standing (CGS)

Dissolution of Coops (Art. 64-69, RA 9520):
1. Voluntary Dissolution – upon petition with CDA by the affirmative vote of at least ¾ of all the members with voting rights, present and constituting a quorum at a meeting called for that purpose.
2. Involuntary Dissolution
a) By order of a competent court on the grounds of:
1) Violation of any law, regulation, or provision of its bylaws
2) Insolvency
b) By order of CDA on the following grounds:
1) Having obtained its registration by fraud
2) Existing for an illegal purpose
3) Willful violation, despite notice by CDA of the
provisions of RA 9520 or its bylaws
4) Willful failure to operate on a cooperative basis
5) Failure to meet the required minimum number of
members in the coop

c) By deletion of its name from the CDA roster of
registered coops
1) Failure to organize and operate within 2 years
after registration with CDA
2) Failure to operate for 2 consecutive years

Transfer of Coop Address – inform CDA or amend the Articles of Cooperation

Tax Treatment of Coops (Art. 60, RA 9520) – coops which do not transact any business with non-members or the general public shall be tax exempt.

Tax and Other Exemptions (Art. 61, RA 9520):

1. Coops with Accumulated Reserves and Undivided Net
Savings of Not More than P10 Million - exempt from
all national, city, provincial, municipal or barangay
taxes of whatever name and nature, including import
taxes (provided that imported machineries shall not be
sold or transferred within 5 years).

2. Coop with Accumulated Reserves and Undivided Net
Savings of More than P10 Million - shall pay the
following taxes at full rate:

a) Income Tax – on amount allocated for interest on
capital. Provided that the same tax is not
consequently imposed on interest individually
received by members.

b) Value Added Tax – on transactions with non-
members (with some exemptions subject to
Section 109, sub-section L, M and N of RA 9337
(National Internal Revenue Code, as amended).

* Exempt transactions include processed products or
its derivative arising from the raw materials
produced by coop members sold in the name and
for the account of the coop shall be deemed a
product of the coop.

* Provided that at least 25% of the net income of the
coop is returned to the members in the form of
interest on capital and patronage refund.

c) All other taxes unless otherwise provided herein
d) Donations to charitable, research and educational institutions and reinvestment to socioeconomic projects within the area of operation of the coop may be tax deductible.

3. All Coops Regardless of the Amount of Accumulated Reserves and Undivided Net Savings -
shall be exempt from payment of local taxes and taxes on transactions with banks and insurance companies. Provided that all sales or services rendered for non-members shall be subject to applicable percentage taxes except sales made by producers, marketing or service coops.
* Examination of Books of Accounts & Other
Accounting Records of Coops – before an internal
revenue officer can examine, it must have an
authorization from the Authority.

4. In areas where there are no available notaries public, the judge shall render service free of charge to any person or group of persons requiring the administration of oath or the acknowledgment of Articles of Cooperation and instruments of loan from coops not exceeding P500,000.
5. Registered of Deeds – shall accept for registration, free of charge, any instrument relative to a loan which does not exceed P250,000 or deeds of title or any property acquired by the coop or any paper or coop documents.
6. Coop shall be exempt from payment of all court and sheriff’s fees payable to the Philippine government for enforcement of payment of obligation contracted in favor of the coop.
7. All coops shall be exempt from putting up a bond for bringing an appeal against the decision of an inferior court. Provided that a certification from the Authority showing that the net assets of the coop are in excess of the amount of the bond required by the court.
8. Any security issued by coops shall be exempt from the provisions of the Securities Act, provided such security
shall not be speculative.

Privileges of Cooperatives (Art. 62, RA 9520):

1. To deposit their sealed cash boxes or containers, documents or any valuable papers in the safes of the municipal or city treasurers and other government offices free of charge, and the custodian of such articles shall issue receipt of acknowledgment duly witnessed by another person.
2. Coops organized among government employees shall enjoy the free use of any available space in their agency, whether owned or rented by the government.
3. Coops rendering special types of services and facilities such as cold storage, ice plant, electricity, transportation, and similar services and facilities shall secure a franchise, and such coops shall open their membership to all persons qualified in their areas of operation.
4. Preferential right to supply government institutions and agencies rice, corn and other grains, fish and other marine products, meat, eggs, milk, vegetables, tobacco and other agricultural commodities produced by their members.
5. Preferential treatment in the allocation of fertilizers,
including seeds and other agricultural inputs and
implements, and in rice distribution shall granted by the appropriate government agencies

6. Preferential and equitable treatment in the allocation or
control of bottomries of commercial shipping vessels in
connection with shipment of coop goods and products.

7. Preferential rights in the management of public markets
and/or lease of public market facilities, stalls or spaces.

8. Coops engaged in credit services and/or federations shall
be entitled to loans, credit lines, rediscounting of their
loan notes, and other eligible papers with the
Development Bank of the Philippines, Land Bank of the
Philippines, and other financial institutions, except
Bangko Sentral ng Pilipinas.

* PDIC and other government agencies, government owned or controlled corporations and government financial institutions shall provide technical assistance to registered national federations and unions of coops to strengthen their own autonomous cooperative deposit insurance systems.
9. A public transport service coop may be entitled to financing support for the acquisition and/or maintenance of land and sea transport equipment, facilities and parts through the program of the government financial institutions. It shall have the preferential right to the management and operation of public terminals and ports, whether land or see transport, and on securing a franchise for active or potential routes.
10. Exempted from the prequalification bidding
11. Shall enjoy the privilege of being represented by the
provincial or city fiscal or the Office of the Solicitor
General, free of charge, except when the adverse party
is the Republic of the Philippines.

12. Preferential right in the management of the canteen and
other services related to the operations of the
educational institution (for coops organized by faculty
members and employees of educational institutions).

13. Appropriate housing agencies and government financial
institutions shall create a special window for financing
housing projects undertaken by coops, with interest
rates and terms equal to, or better than those given for
socialized housing projects. This financing shall be in
the form of blanket loans or long term wholesale loans
to qualified coops, without need for individual


1. Voluntary organization/Membership
2. Democratically Evolved and Popularly Supported Vision - Mission
3. Clearly Delineated Functions/Responsibilities
4. Timely Information Flow Between the Membership and the Coop
5. Plural, Consultative, Principled and Decisive Leadership
6. Efficient Bookkeeping System
7. Regular External Audit
8. Updated and Comprehensive Records
9. Continuous Education and Training
10. Systematic Public Education
11. Community Involvement
12. Volunteerism
13. Balanced Socio-Philosophical and Economic Objectives
14. Democratic Check Valves
15. Religious and Political Neutrality
16. Horizontal and Vertical Networking
17. Data-based and Objective Decision-Making
18. Member-oriented Staff Consciousness
19. Effective Internal Control System/Mechanisms
20. Professionalized Management Operation

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