National

National Policy on
Cooperatives and Policy on
Cooperative as a
Business Form
Cooperative

State Policies on To foster the creation and growth of cooperatives as a

Cooperatives
Five policies declared by the
Republic of the Philippines
through Republic Act No. 6938,
or the Cooperative Code of the
Philippines
a.
practical vehicle for promoting self-reliance and
harnessing people power towards the attainment of
economic development and social justice (Art. 2)
b. To encourage the private sector to undertake the actual
formation and organization of cooperatives (Art.2)
c. To create an atmosphere that is conducive to the growth
and development of cooperatives (Art.2)
d. To ensure from Government, its branches, subdivisions,
agencies, or instrumentalities the provision of technical
guidance, financial assistance, and services to unable
cooperatives to develop into viable and responsive Self-reliance
economic enterprises to bring about a strong cooperative
• Cooperative have an equity in them
movement that is free from any conditions that might
infringe upon the autonomy or organizational integrity of • For people who have not gone to
cooperatives. (Art.2) higher education, the cooperative is
the best vehicle to foster ethical
e. To recognize the principle of subsidiary under which the business education towards equity.
cooperative sector will initiate and regulate within its own
ranks the promotion and organization, training and
research, audit and support services relating to
cooperatives with government assistance where
necessary. (Art.2)

• The workings of equity is at once apparent when people

Thrift Habit of Saving
who are excluded from the mainstream economic
activities in daily life are given an opportunity through • Cooperatives teach the value of
thrift and the value of saving.
cooperatives to co-own a business enterprise.
• Savings leads to capital formation,
and savings capitalized create
micro – finance enterprises.
 PRINCIPLE OF
Cooperatives allow members to stand on their own two
•
CONTINUOUS EDUCATION
feet and face them from relying on doles from
government. • Continuous education in a
cooperative uplifts the intellect of a
• Self-reliance is an offshoot of the principle of subsidiary member.
where lower bodies are allowed by higher bodies to seek
solutions to problems based on their own accord, with help
from the higher body only when needed.

SOCIAL JUSTICE COMPONENT OF COOPERATIVES: CRITICISM OF CAPITALISM

COOPERATIVES
• Cooperatives developed criticism of capitalism. Capital will
• Successful cooperatives no doubt are economic not be able to transform any output of more value than itself.
indicators of development. It is not capital the creates profit but labor. The profit is
appropriated by capital and labor is treated as an expense
• What needs more explanation is the social justice account or instrument in wealth creation.
component of cooperatives.
 CAPITAL IS MERE TOOL IN SOCIAL ENCYCLICALS LABOREM EXERCENS
WEALTH CREATION
• Social encyclicals - have extensively elaborated on this noble
• the inherent injustice in except:
capitalism is that capital, which
is not the creator or profit or • Atmosphere that is conducive to co-op Growth and
wealth which is actually the Development - is the duty of the state to promote an
one responsible for wealth environment that is conducive to the development and
creation growth of cooperatives

BY: ARCENA BY: ARCENA

• It is also tax exemption for new and budding to help Private Sector Initiatives
create an environment favorable to the formation of
cooperatives ● The initiative of forming a cooperative should
come from the private sector, with the least
• BIR rules and regulations should support this policy governmental interference.

● Although, it is hard to convince some urban

poor communities that there is no seed
money forth coming when co-ops are
organized

BY: ARCENA
BY: REMOROSA
 • Seed money refers to a start-up financing livelihood Subsidiary
projects or cooperative formation that is shelled out
(as doles) by well meaning individuals or a group/NGO ● Subsidiarity presupposes and operates
or the government helping to alleviate the wretched best under a regime of freedom and
economic conditions of the poor. self determination or self reliance
directed towards the attainment of the
common good.

BY: REMOROSA
BY: REMOROSA

Basic Differences between Cooperative and

Corporation
Cooperative FACTORS
Capital
CORPORATION COOPERATIVE
Paid-up capital is 25% of Paid-up capital is 25% of

as a Business
subscribed capital subscribed capital, a
P2,000 paid-up capital is
enough to register a
coop.

Form
Policy Maker Board is highest policy Board lays down policies,
making body but the General Assembly
is the highest
policy-making body, with
exclusive jurisdiction over
certain matters

BY: REMOROSA
BY: REMOROSA
 FACTORS CORPORATION COOPERATIVE
Basis of co-existence with Competition Cooperation among FACTORS CORPORATION COOPERATIVE
other Firms cooperatives
Manner of voting Cumulative voting One member-one vote
People participation Generally, very few owners All persons involve become
Control of firm Basis: capital primacy Basis: Human primacy majority are just workers co-owners or members:
over persons. over capital Socialization
Value creation Value created is called Valued created is
Right to buy unlimited Maximum ownership of
profit considered surplus, not
amount of stock, and 20% of the share capital
profit
stockholder with the most of the coop, but number
Basis of entitlement to Primacy of capital over Primacy of the human
number of stocks owns or of shares owned does not
Profit/Surplus labor person over capital
controls the company control the coop since
basis for membership in Capital entitlement to Capital gets all profit, either Capital gets a “limited
the board is democratic Profit/Surplus as cash or stock dividend. interest” on capital.
election based on the Labor entitlement to There is profit sharing if Labor, or persons
principle of Profit/Surplus company is socially responsible for surplus
one-member=one-vote. responsible, but labor is just revenue, get a patronage
Electoral Practice Allows proxy voting No proxy voting (in an operating cost. refund or a work
primary coops) contribution refund.

BY: REMOROSA BY: REMOROSA

Cooperative for • The Cooperative is an alternative

Economic Development business form that should be
encouraged for adoption in lieu of
● The best strategy for economic development sole proprietorship, partnership or
in the rural areas is the promotion of corporation, especially in areas
cooperatives.
that need socioeconomic
● Much of the failure of cooperatives lies on emancipation.
weak financial accounting and reporting.

● The Cooperative is ideally complementary to

the Filipino temperament of bayanihan,
pakikipag tulongan, pabuhat, and similar
BY: JAVINEZ positive traits. BY: JAVINEZ
Distinct Differences
• A cooperative is owned and operated
by its members, who pool resources for
mutual benefit. It focuses on serving the
collective interests of its members, often
in sectors like agriculture or retail.
BY: JAVINEZ
Distinct Differences
• Partnership: A partnership is owned and
operated by two or more individuals who
agree to share profits, losses, and
management responsibilities. Partners may
have equal or unequal shares in the business,
depending on the partnership agreement.
BY: JAVINEZ
Distinct Differences
• Sole Proprietorship: A sole proprietorship
is owned and operated by a single
individual. The owner has full control
over all aspects of the business,
including decision-making and
management.
BY: JAVINEZ
Distinct Differences
• Corporation: A corporation is a separate
legal entity owned by shareholders who
elect a board of directors to make major
decisions. Shareholders' control is
proportional to their ownership through
shares, but they do not typically
manage the day-to-day operations;
that responsibility falls on the board and
officers.
BY: JAVINEZ
 Accreditation on
Cooperative
• Whereas one has to come to
the Securities and Exchange
Commission (SEC) office on
Manila to register a corporation.

• One needs only to approach

the provincial and city
cooperative development
officers all over the Philippines
in order to have a cooperative
BY: JAVINEZ accredited.