The Philippine Cooperative Code

of 2008
(Republic Act No. 9520)
Salient Features
4th NATIONAL TRIPARTITE CONFERENCE
Background
 Amended the Coop Code promulgated in 1990;
 Discussed in four (4) Congresses (starting the
11th Congress up to the 14th) spanning over ten
(10) years;
 Approved by the Bicameral Committee on
November 18,2008;
 Signed into law last February 17,2009
The Republic Act No. 6938

 The Cooperative Code of the Philippines

 Enacted into law on March 10, 1990
The Republic Act No. 9520

 The Philippine Cooperative Code of 2008

(Article1)
 Signed on February 17, 2009
 Published on March 7, 2009
 Effective March 22, 2009
 State Policy (Article 2)

 Foster creation and growth of cooperatives as a

practical vehicle for self-reliance and harnessing
people power for the attainment of economic
development and social justice
 Encourage private sector to undertake actual
formation and organization;
 Create an atmosphere conducive to the growth and
development of cooperatives
State Policy

 Ensure technical guidance, financial assistance

and other services

 Recognizes the principle of subsidiarity wherein

the sector will initiate the promotion and
organization, training and research, audit and
support services with government assistance
where necessary
Cooperatives defined (Article 3)

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 universally accepted cooperative
principles.
 Cooperative Principles (Article 4)

• Patterned after the Principles as formulated by the

International Co-operative Alliance (ICA)
– Voluntary and Open Membership
– Democratic Member Control
– Member Economic Participation
– Autonomy and Independence
– Education, Training and Information
– Cooperation Among Cooperatives
– Concern for Community
Additional Definitions (Article 5)

 Representative assembly – full membership elected

by sectors, chapter or district to exercise powers
delegated to them by the general assembly
 Officers – members of board of directors, different
committees created by the GA, general manager or
CEO, secretary, treasurer and members holding
other positions as provided for in their bylaws
Additional Definitions

 Social Audit – a procedure wherein the

cooperative assesses its social impact and
ethical performance vis-à-vis its stated mission,
vision, goals and code of social responsibility
for coops…
 Performance Audit – refer to an audit on the
efficiency and effectiveness of the cooperative
as a whole, its management and officers, and its
various responsibility centers…
 Additional Definitions

 Subsidiary cooperative – any organization all or

majority of whose membership comes from a
cooperative, organized for any other purpose
different from that of, and receives technical,
managerial and financial assistance from, a
cooperative
 Federation of cooperatives– three or more primary
cooperatives, doing the same line of business
 Purposes of Cooperatives (Article 6)

 Encourage thrift and savings mobilization;

 Generate funds and extend credit;
 Encourage systematic production and marketing;
 Provide goods and services and other requirements;
 Develop expertise and skills among members;
 Acquire land and provide housing benefits
Purposes of Cooperatives

 Insure against losses of members;

 Establish, own, lease or operate cooperative banks,
wholesale and retail complexes, insurance and
agricultural/ industrial processing enterprises and
public markets;
 Coordinate and facilitate activities of cooperatives;
 Advocate for the cause of the cooperative movement
 Purposes of Cooperatives

 Ensure viability of cooperatives through utilization

of new technologies;
 Encourage and promote self-help or self-
employment as an engine for economic growth and
poverty alleviation; and
 Undertake any and all activities for the efficient and
effective implementation of the provisions.
 Powers and Capacities (Article 9)

 Exclusive use of registered names, to sue and be

sued;
 Of succession;
 To amend its articles;
 To adopt its bylaws not contrary to law, morals or
public policy
 Deal with real and personal property
 Enter into division, merger or consolidation
Powers and Capacities

 Form subsidiary cooperatives and join

federations and unions;
 Avail of loans, credits, grants, donations from
domestic and foreign sources;
 Avail of preferential rights under RA7160;
 Organize and operate schools in accordance with
RA 9155
 Requirements for Registration
(Articles 10,11,14,15,)

 Pre-membership Education Seminar required

 Newly organized primary may be registered as MPC after
compliance with requirements set by CDA; SPC may transform
into an MPC or create subsidiaries after two (2) years
 Economic Survey including staffing pattern which includes at
least a bookkeeper
 Articles of Cooperation
 At least 15 members
 Minimum Capitalization of PhP 15,000; reviewed every 5 years
 By-laws
 Bonds of accountable officers
Amendments (Article 18)

 Amendments need 2/3 vote of members with

voting rights

 Merger, consolidation and division of

cooperatives require 3/4 of all members with
voting rights present and constituting a quorum
Types (Article 23)

 Credit – promotes and undertakes savings and

lending services to its members;
 Consumers – to procure and distribute
commodities to members and non-members;
 Producers – undertakes joint production
whether agricultural or industrial
 Types

 Marketing – supply of production inputs and

markets their products;
 Service – engages in medical and dental care,
hospitalization, transportation, insurance, housing,
labor, electric light and power, communication,
professional and other services;
 Multi-purpose – combines 2 or more business
activities
 Additional Types of
Cooperatives

 Advocacy – promotes and advocates cooperativism among

its members and the public;
 Agrarian Reform – organized by marginal farmers majority
of whom are agrarian reform beneficiaries;
 Cooperative Bank – providing a wide range of financial
services to cooperatives and their members;
 Dairy – production of fresh milk which may be processed
and/or marketed as dairy products;
 Additional Types

 Education – owning and operating licensed

educational institutions;
 Electric – undertaking power generation,
acquisition and operation of subtransmission or
distribution to its household members;
 Financial service – engaging in savings and credit
services and other financial services;
Additional Types
 Fishermen – marginalized fishermen where
their products are marketed either as fresh
or processed products;
 Health Services – providing medical, dental
and other health services;
 Housing – assist or provide access to
housing for members who participate in the
savings program for housing;
 Insurance – business of insuring life and
property of cooperatives and members
 Additional Types

 Transport – services including land and sea

transportation;
 Water Service – own, operate and manage water
systems for the provision and distribution of
potable water to its members;
 Workers – organized by workers, including self-
employed, to provide employment and business
opportunities
 Other types as maybe determined by the Authority
Functions of a Coop Federation
( Article 24)

 Functions should complement, augment or

supplement but does not conflict , compete with,
nor supplant the business or economic activities of
its members.
Membership (Chapter 3, Art.26)

 Kinds of Membership
1. Regular member one who has complied
with all the membership requirements and
entitled to all rights and privileges of
membership.
2. Associate member one who has no right to
vote or be voted upon and shall be
entitled only to such rights and privileges
as the by laws may provide.
Membership
 Legal age, Filipino citizens
 Capable and willing to perform the
responsibilities of a member
 Allows associate members but needs to qualify
for regular membership within (2) years
 All elective officials are ineligible to be officers
or directors of cooperatives except party-list
representatives
 General Assembly (Chapter 4,)

 Shall be the highest policy making body of the

cooperative
 3/4 vote of members required to delegate some
powers to a representative assembly
 Quorum is at least 25% of all members entitled to
vote
 Voting in primary cooperatives is strictly one-
member, one vote and no proxies allowed except for
representative assembly
Board of Directors (Articles 37,38, 39)

 Responsible for strategic planning, direction, setting

and policy formulation
 Term shall be fixed in the coop bylaws. A term is 2
years
 Prohibition against holding any other position
involved in the day-to-day operations and
management
 Disqualification of persons engaged in business
similar to the cooperative
 Committees and Officers (Art.43)

 Additional committees
 Mediation and Conciliation
 Ethics
 All officers and committee members required to undergo
trainings conducted by accredited institutions by the
CDA
 No compensation except for per diems. If cooperative
reports a net loss for the preceding year, officers are not
entitled to per diems
 Removal of officers may be done by a majority vote of
the members
 Functions, Responsibilities and
Training Requirements (Article 44)
 The functions and responsibilities of the
directors, officers and committee
members, AS WELL AS THEIR TRAINING
REQUIREMENTS, shall be IN
ACCRODANCE WITH THE RULES AND
REGULATIONS ISSUED BY THE
AUTHORITY.
 Responsibilities of Cooperatives

 Accountant or bookkeeper is responsible for

maintenance and safekeeping of books of accounts
 Audit committee responsible for continuous and
periodic review of books of accounts; monitor
adequacy and effectiveness of management’s control
system and audit the performance of the cooperative
 Audited financial statements required to be posted in
principal office
 Annual Reports (Article 53)

 Filed within 120 days from close of calendar year

 Regular activities including socio-civic undertakings
 Must show their progress and achievements
 The form and contents of the report shall be prescribed by
the rules of the Authority
 Liability for non-submission is fines and other penalties
imposable until the cooperative has complied with the
requirements
Tax Treatment of Cooperatives
(Article 60, 61)

 Not subject to taxes and fees imposed under NIRC

and other tax laws for cooperatives transacting
business with members only
 Transactions with members are not subject to taxes
and fees, including final tax on members’ deposits
and documentary tax
Tax Exemptions

 Non-members will pay VAT; coop will collect

and remit to BIR
 Provided, finally that at least 25% of net
surplus of coop is returned to members as
interest and patronage refund
 Cooperative is responsible for collection and
remittance of individual withholding taxes
(proper recording)
Additional Privileges

 Faculty cooperatives have right of first refusal in

management of canteen and other services related
to the operations of educational institutions
 Housing agencies and financial institutions shall
create a window for financing housing projects
 Capital

 Subsidies, donations, legacies, grants, and aids shall

not be divided into individual share capital holdings
anytime but subject to escheat proceedings upon
dissolution
 Limitation on share capital held by one member
reduced from 20% to 10%
 Reasonable and realistic member capital build-up
program to allow the continuing growth f the
members’ investment in the coop
 Audit

 Financial audit conducted by external auditor in

good standing with PICPA and accredited by Board
of Accountancy and CDA
 Social and performance audits may be conducted by
an independent social auditor accredited by CDA
 Social Auditing

 Based on the 7th Cooperative Principle – Concern

for Community
 Defined as the systematic review and appraisal of
the cooperative in relation to the development of its
most essential building blocks-its members, its
people, and its distinctive contribution to the
development of its community and society as a
whole.
 Distribution of Net Surplus

 At least10% of net surplus; however, in first 5 years

after registration, this is not less than 50% of the net
surplus
 Not for than 10% for CETF; half to be used by the
cooperative; other half is remitted to the
federation/union chosen by the cooperative
 Federation/ union should submit: (a) list of contributing
cooperatives; business consultancy assistance with
nature and cost; and (c) training activities specifying the
nature, participants, and cost
Distribution of Net Surplus

 Not less than 3% for community development

fund for projects/activities for the benefit of the
community where the cooperative operates
 Not more than 7% for optional fund, land and
building, and other funds
 Other Provisions
 Additional Special Provisions
 Transportation Cooperatives
 Electric Cooperatives
 Cooperative Banks
 Credit Cooperatives
 Financial Service Cooperatives
 Housing Cooperatives
 Conciliation and Mediation Committee (ADR)
 Additional Penal Provisions
 CDA allowed to formulate rules on the Cooperative Code
on certain provisions
 Other Provisions

 Congressional Oversight Committee to review and

approve the implementing rules and regulations
 Re-registration of all cooperatives to confirm their
status by submitting: (a) Certificate of
Registration/Confirmation; (b) articles of cooperation;
(c) bylaws; and (d) latest audited financial statement
 Must secure tax exemption certificate from BIR
 Changes in the New
Coop Code are not
threats, they are
opportunities that can
be pursued.
THANK YOU &
MAY GOD BLESS
YOU…

LECIRA V. JUAREZ
Chairperson
Cooperative Development Authority