NATIONAL TEACHERS COLLEGE MANILA

A WRITTEN REPORT

IN PATIAL FULFILLMENT OF

THE REQUIREMENTS

IN COOPERATIVE MANAGEMENT

BY:

ARRIANE PATRICIA ALMEDORA

CRISTINE DELICANA

SUBMITTED TO:

ENG. BERNARD EVAN VALEN JAMON,MBA.

FEB. 20, 2020

 The Third Stage Of Cooperative Movement

The third stage of the evolution of the Philippine coop movement is from 1986 to the

present. This stage shows the emergence of the coop movement as a potent political

force as it allies with the NGO and trade union movements in pursuing the goals of

people empowerment and the strengthening the country's civil society sector.

Cory Aquino Presidency (1986-1992)

The 21-years of Marcos leadership ended up suddenly with a bloodless people-

powered revolution in February 1986 which gives way to the revolutionary government

of President Corazon C. Aquino. The destruction of the Marcos administration was

caused by several factors. Among them were the massive graft and corruption in the

government due to business cronyism and a very serious debt crisis, widespread

human rights abuses, suppression of labor rights and the failure of the land reform and

cooperative programs in solving the widespread poverty of the people. Also included in

the cause of the ouster of the Marcos administration are the numerous NGO's in

addition to the cause-oriented organizations and the Reform Armed Forces Movement

(RAM) within the military establishment which tried to launch an aborted coup.

On 1987, a new constitution was framed under the Aquino administration. This new

constitution, which was a product of the people power uprising, was cooperative-friendly

but the mistake of the past in organizing state-initiated cooperatives for political and

anti-insurgency purposes was avoided.

Article XII, Section 15 of the 1987 Constitution provided for the promotion of growth and

viability of cooperatives as instruments of equity, social justice and economic

development under the principles of subsidiarity and self-help. Under the said principles,

the government recognized that cooperatives are self-governing entities which shall

initiate and regulate their own affairs to include education, training, research and other

support services with the government giving assistance when necessary.

The Constitutional provisions on cooperatives were operationalized on March 10, 1990

with the enactment of RA No. 6938 (Cooperative Code of the Philippines) and RA No.

6939 (Cooperative Development Authority Act). The CDA took over the functions of the

BCOD of the Department of Agriculture. It was placed under the Office of the President

and is headed by a chairman and 6 administrators. As the lead agency, the CDA was

tasked to coordinate the efforts of other government branches, subdivisions,

instrumentalities and agencies in providing technical guidance, financial assistance and

other services to cooperatives.

President Aquino's cooperative development program learned from the past failures of

excessive government loans or credit support to cooperatives as in the FACOMAs and

the SNs. Through the KABISIG programs, government agencies which were prevented

from organizing coops, channelled their development programs through the network of

coops, NGOs and POs especially in food distribution, family planning, barrio facilities

and livelihood projects. A coop, for example, was an effective instrument in bringing to

more constituents the services of government as least cost.

“Ramos People Empowerment Goals” Fidel Ramos Presidency (1992-1998)

He continued the cooperative development program of the Aquino's administration.

On June 8, 1993, Executive Order Nos. 95 and 96 were issued by President Ramos,

respectively, to improve the coordination efforts in creating a good and helpful

environment in cooperative development among all government agencies including the

local government units (LGUs) and the establishment of cooperative development

councils in national, regional, city or municipal levels.

Under the Local Government Code of 1991 (RA No. 7160), the local development

councils at levels of LGUs were operationalized which gave the cooperatives, NGOs

and POs the opportunity to actively participate in local governance. This gave rise to the

new concept of the partnership of the government, private and civil society sectors in

the development efforts of society. It was observed that the cooperative movement,

together with the NGOs and POs emerged as the country's third sector (civil society),

the government and the private enterprises being the first two. The coop movement is

the "largest socio-economic institution in the country. It has a total membership of 3.2

million and 19.2 million family beneficiaries.

On August 31, 1993 - there were a total of 25,125 registered cooperatives which

signified a tremendous increase of 7.5 times from 1985.

The total number of cooperatives confirmed was 4,495 or 17.8% of the total registered.

This means that there were still a large number (more than 80%) of failed or unviable

cooperatives. However, the confirmed cooperatives which were viable cooperatives

grew rapidly since the total assets of the cooperative movement leaped from a measly

1.05 billion peso in 1985 to 118.4 billion peso in 1995.

The Administrations of President Estrada (1999-2000) and President Arroyo

(2000-2009

Under the short-lived Estrada administration, the National Anti-Poverty Commission

(NAPC) was created under RA 8425 (Social Reform and Poverty Alleviation Act). NAPC

took over the functions of the Presidential Commission to Fight Poverty, the Social

Reform Council and the Presidential Council for Countryside Development. NAPC’s

task is to prepare and implement an action plan to ensure the provision of houses, jobs

and health assistance to the poor with the help of related government agencies. The

main vehicle of the NAPC is expected to be the cooperative movement and the civil

society sector.

In 2003, Dr. Mannie Santiaguel (2011) reported that the coop sector has contributed

P517 Billion or 12.5 percent of the country’s GDP and has provided direct and indirect

jobs to at least 1.5 million people. The CDA and the Department of Finance in 2007

gave another data on the contribution of the cooperatives movement to GDP estimated

at 5.14 percent. The CDA estimated the total assets of 23,836 cooperatives in 2009

amounted to P176.02 Billion.

Another significant development is the success of the microfinance program which

started in 1997 as a national government strategy. The Philippines is now the second

best worldwide in the microfinance business, and the leader in the Asia Pacific region.

This was based on a study conducted by the Economist Intelligence Unit (EIU), the

business information arm of The Economist Group that publishes The Economist.
Among the factors of the country’s success in micro financing are:

1. The Bangko Sentral ng Pilipinas (BSP) allowed rural and thrift banks to sell

authorized micro-insurance products and issued a circular for accrediting rating

agencies for microfinance, which, according to the EIU, is a move to encourage local

microfinance institutions to be externally rated.

2. The BSP also issued rules on the extension of housing microfinance and eased

requirements for agricultural microfinance. The entry of major commercial banks and

telecommunications companies into microfinance is also seen as a contributory factor

towards the advancement of the sector.

3. The signing into law of the Credit Information Systems Act (CISA) and the

subsequent approval of its implementing rules and regulations (IRR) are also positive

developments.

The DOF-National Credit Council (DOF-NCC) sought to improve the state of local

cooperatives by developing a supervision and examination manual, launched

advocacies for cooperatives, and pushed for the RA 9520 of 2008. A standardized

national strategy for micro insurance and the provisions of grants and technical

assistance were formulated.

RA 9520 (Cooperative Code of 2008) amended RA 6938.

Present President PNoy Aquino and the Coop Movement (2010-2016)

RA 9520 provides that electric cooperatives can convert themselves into stock

cooperatives provided that these cooperatives register with the CDA. Out of 119 electric

cooperatives, about 12 electric cooperatives have registered with the CDA while the

remaining coops stayed with the NEA.

The country’s biggest federation National Confederation of Cooperatives (NATCCO)

and the second largestMindanaoAllianceSelf-HelpSocieties–

SouthernPhilippinesEducationalCooperativeCenter(MASS-SPECC) have agreed to

merge or consolidate by 2012. MASS-SPECC has more than 150 members and more

than P350 Million assets. NATCCO has 450 members in 75 provinces and 99 cities

nationwide and P1.8 Billion in assets.

NATCCO has successfully engaged in a micro financing program called Microfinance

Innovations in Cooperatives (MICOOP). It is composed of 452 member cooperatives

nationwide with 1.6 million individual members. The program has opened 75 branches

all over the country since it began in 2007. The partner cooperative has the option to

buy out NATCCO of its shares. The MICOOP program now co-manages 51 branches,

providing consultancy, monitoring, and mentoring to the branch staff..

One of MICOOP partners is the Department of Agrarian Reform (DAR) which offered

multi-financial services such as loans for farm inputs, housing (repair), savings,

educational and health needs. Started in 2008, the project’s aim is to transform 20

targeted cooperatives into viable intermediaries providing microfinance and bank-like

financial services. A loan fund of P10 million was released to each cooperative to set up
and operate the MICOOP credit facilities, while DAR released P900,000 additional fund

for technical assistance to trainings and researches to hone farmers’ knowledge, skills

and competencies. The provinces covered by the DAR-assisted MICOOP are in

Zamboanga del Norte, Quezon, Negros Oriental, Isabela, Bohol, Occidental Mindoro,

Bicol, Iloilo, Ilocos Norte, Benguet, Surigao del Sur, Agusan del Sur, Bukidnon,

Romblon, Palawanand Batangas.

Bangko Sentral ng Pilipinas (BSP) issued Circular 694 on October 14, 2010 which

expanded microfinancing to include “micro-credit” (providing loans), “micro-deposits”

(accepting deposits)), and micro-insurance (providing “services that meet the needs of

the low-income sector for risk protection and relief against distress, misfortune and

other contingent events”).

The PNoy Aquino administration’s development agenda promised more region-based

anti-poverty programs that include food subsidies for the poor, more support for micro

enterprises and private-public partnership in infrastructure projects.

Cayetano encouraged the coop movement to expand to microfinance which started in

1997 as a national government strategy.

Another program resulting from RA 9520 in 2009 is the creation of an environment for

efficient operations of cooperatives. Cayetano observed that the lack of effective legal

framework and supervisory oversight among coops has led to the fragmentation of

development efforts and a poor database on the actual performance and contribution of

the cooperative sector. This was confirmed by Cooperatives Philippines (2011): “…

those who prepared the PDP had no data, had no access to data on the entities who
comprise some 18 percent of the total assets of the financial system and 17 percent of

the economic output in 2010”.

In this context, the PDP proposes the strengthening of the regulatory functions by the

CDA, particularly in setting the parameters of regulations for transparent participation

and decision making in governance and operation of cooperatives. In line with the PDP,

the CDA’s Thrusts and Priorities in 2010 are as follows:

1. Efficient Registration and Effective Regulation of Coops

* Registration of cooperatives and amendments to Articles of and By-Laws

* Rationalization/purging of cooperative registry

* Formulations of guidelines, rules and regulations, etc.

* Evaluation of financial statements and Cooperative Annual Performance Reports

* Conduct of investigation and hearing of cases involving cooperatives and adoption

of ADR mechanisms

* Formulation and implementation of rules and regulations, policies, guidelines,

standards and the conduct of supervision and examination of cooperatives’

performance per RA 9520.

2. Promotion and development of cooperatives

* Standards, plans and programs on cooperative research and information

* Development of materials and conduct of trainings on cooperative development

 * Development of special projects on cooperative development

* Linkaging with local/international bodies and institutions on coop development

* Establishment and enhancement of library and research facilities

* Crafting of 2011-2015 Philippine Cooperative Medium-Term Plan (PCMTDP)

* Establishment of an awards, incentives and recognition program for cooperatives

* Continue adoption of quality management system (ISO 9001) for cooperative

registration process

* Continuing renovation of Central office bldg.

The Problem and Prospect of Cooperative Movement in the Philippines

PROBLEMS:

● Large number of cooperatives remain unviable as shown in the statistics that only

4,494 or 17.8% of the 25,125 registered coops in 1993 have been confirmed by the

CDA. The confirmed coops were those that have complied with the reporting

requirements of the CDA and have submitted audited financial statements. There is a

need to further strengthen coop education and training through the NACE, coop

federations, councils and unions, NGO training centers, state colleges and universities,

etc.

● Globalization and liberalization have resulted to more competitive business

environments. Several small, medium and big coops like those in the electric, producers
(or manufacturing), multi-purpose (both agricultural and non-agricultural), coop banking,

consumers and trading industries are exposed to strong competition. Electric coops are

threatened by private electric utility distributors for possible buy-ins or joint venture.

Coop foods (Delimpex Coop) has reduced its manufacturing operations to the minimum

level because of the adverse effects of the Asian financial crisis whereby Coop foods

developed serious difficulties in amortizing its dollar denominated loans from

Netherlands creditors. Coop banks have not grown in numbers and have not coped up

with the trends in the banking industry where consolidation, mergers and international

tie-ups are the call of the times. Consumer coops which are mostly university-based are

caught in a competitive squeeze since their markets are being siphoned by the big

franchise operators like Jollibee, Chowking, McDonalds, etc. on the one hand and by

the family-owned canteens and restaurants whose organizational structures are much

leaner and informal than the coops.

● Unionization and threats in unionization in some medium and big size coops continue

despite the Supreme Court ruling that employee-coop members are not allowed to join

trade unions. This implies that the coop management practices in some cooperatives

are still very reactive and less participative. This is very true in electric coops in some

regions particularly in the Bicol and Samar provinces and in large producer coops like

Lincoma in Lipa City in Batangas.

● Agri-based cooperatives, particularly those in the agrarian reform communities and in

plantations are not showing improvement in productivity and some are encountering

mismanagement and failures. Strong support services in these coops have to be in

place in order to preserve the gains of the coop movement under the Comprehensive
Agrarian Reform Law (CARL). These coops are asset-based or land-based coops and

their low productivity or state of uncompetitiveness would be a big dent to the

cooperative movement.

● The mentality of relying too much on state protectionism, parochialism and close-

doorism is still prevalent among many cooperatives. They feel that coops should be

continuously protected and subsidized by the government. However, the present

policies of the state have changed and government subsidies are being done away with

by the government especially during these times of government fiscal deficits and Asian

financial crisis. Those that will be affected are the electric, transport and irrigation

coops. Another wrong concept is parochialism or the idea that coops do business only

with their members. They are turning their backs on the potential markets among the

non-members, the larger community and the international markets. By catering to the

larger markets in addition to members, the coop is able to achieve economies of scale

and more viable operations. Another wrong concept is that coops are non-political and

not part of the civil society movement. What is correct is that a coop is non-government

or non-private business enterprise and it is not part of the political parties of the

traditional political elites in the country. The coop movement is represented by its own

political parties or coalitions which come from the marginalized sectors of the Philippine

society.

PROSPECTS:
● The Estrada administration is cooperative friendly considering that some key players

in the said administration are known advocates of cooperativism. Among them are

Horacio Morales of DAR, Edificio de la Torre of TESDA, Princess Nemenzo of the

National Anti-poverty Commission, and to a certain extent House Speaker Manuel Villar

whose personal advocacy is entrepreneurism which includes cooperatives and other

labor enterprises.

●The number of viable coops increased by 4 times or from 1,142 coops in 1985 to

4,494 in 1993. A significant feature in this increase is that those coops which were

engaged in higher value added operations increased higher compared to credit coops.

These high value added coops include multi-purpose coops at 81 times (from 27 coops

to 2,189) and service coops by 5 times (from 35 to 180). Marketing and producers

coops matched the percentage increase in the number of credit coops at 18 times.

What is outstanding and inspiring in this performance is the increase in the total assets

of the coop movement by 113 times over a 10-year period from P 1.05 billion in 1985 to

P 118.4 billion in 1995. It is hoped that this trend continue and be further enhanced by

researches and documentation of the best cooperative success stories or "best

practices". These documented researches should be disseminated to other coops for

their guidance and inspiration.

● Coop membership has grown by almost 10 times from 337,000 in 1985 to 3.2 million

in 1993. It is estimated that the family beneficiaries of the coop movement are around

19.2 million. These numbers, aside from being an economic and socio-cultural power

center, can also be transformed into a political power center. During the first party list

elections of 1998, 6 out 13 sectoral seats in Congress were won by coop or coop-based
parties. The Association of Philippine Electric Cooperatives (APEC) was topnotcher and

won two seats. One seat each was won by COOP NATCCO, ABA, BUTIL and NFSCO.

Considering that the coop movement has barely flexed its muscles and still fettered by

the "non-political" myth, the coop movement is still capable of a stronger showing in

future political exercises.

● The coop group within the party list bloc in Congress should know how to play its

cards well. Although in the minority bloc, the coop legislators are actually

representatives of the marginalized sectors of society which comprise the majority of the

country’s population. 
 ACTIVITIES (Q & A)

UNIT IV – A CENTURY OF PHILIPPINE COOPERATIVE MOVEMENT

1. When did the third cooperative movement started/began?

2. What is the new constitution that was framed under Aquino Administration on 1987?

3-4. On August 31, 1993, there were a total of ________ registered cooperatives

and the total number of confirmed cooperatives are just _____ .

5. Its task is to prepare and implement an action plan to ensure the provision of

houses, jobs and health assistance to the poor with the help of related government

agencies.

6. Give at least one PNoy Aquino administration’s development promised agenda.

7-10. Give at least four causes of cooperative movements failures.

 REFERENCES
UNIT IV – A CENTURY OF PHILIPPINE COOPERATIVE MOVEMENT

Toti Patrimonio. (n.d.). “A Century of the Philippine Cooperative Movement”.

https://philippinecooperative.blogspot.com/2008/09/century-of-philippine-cooperative.html?m=1

Sibal, Jorge 2011. “The Philippine Cooperative Movement: Problems and Prospects”.

http://nepa1934.org/articles-and-statements/papers/the-philippine-cooperative-movement