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An Overview of the Cooperative

Movement in Cordillera Administrative


Region, Republic of Philippines
By | Shamsiah Syamsudin
Cooperative College of Malaysia, Sabah Branch

Introduction
The Cordillera Administrative Region
(CAR) is a region in the Philippines
composed of the provinces of Abra,
Apayao, Benguet, Ifugao, Kalinga,
Mountain Province, and Baguio
City. Baguio City is the regional
center of this province with the
population of 1,709,601 people.
Cordillera Administrative Region (CAR) is one of the
prime tourist destinations in the Philippines. Tourist
attractions in the region include the world-famous
Banaue Rice Terraces in the province of Ifugao and
being considered as Eighth Wonder of the World.
It is also declare as the UNESCO World Heritage
Site. This region has many spectacular scenic views
and enchanting cool places. It is also rich in historical
and cultural heritage. Cordillera Administrative
Region (CAR) is rich in natural resources and is
abundant in mineral reserves. Metallic ores that can
be found in this region are gold, copper, silver, zinc,
and non-metallic minerals like sand, gravel and
sulfur. Mineral reserves are found in the provinces of
Abra, Apayao, Benguet, Ifugao, Kalinga, Mountain
Province and Baguio City. However, mining activities
is concentrated in Benguet.
The great majority of Cordilleras population are
below the poverty line that are engaged in farming
and small-scale production. These majority are
composed of closely-related indigenous people

Source: 2010 Annual Report of Cooperative Development


Authority, Cordillera Extension Office

popularly known as Igorots. They are grouped


into ethnic or ethno-linguistic identities, such
as Apayao or Isneg, Tinggian, Kalinga, Bontoc,
Kankanaey, Ibaloy, Ifugao, and Bago. Nowadays,
Cordillera Administrative Region (CAR) is mixture
of indigenous, non-indigenous, and migrant people.
Bigger and more diverse populations are found
in Cordilleras melting pot areas, such as those in
urban (or rapidly urbanizing) Baguio-Benguet and in
the foothills and valleys adjoining the great lowlands
of Luzon.

Cooperative Movement in
Cordillera Administrative
Region
In 2008, the total number of registered cooperative
in CAR were 2,220. However, after the New
Philippines Cooperative Code of 2008 being

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introduced, Cooperative Development Authority


(CDA) of Philippines (a counterpart of Suruhanjaya
Koperasi Malaysia) has ordered all cooperatives
in Philippines to re-register their cooperatives for
the availment of new registration under RA9520
otherwise known as the New Philippines Cooperative
Code of 2008. Another reason for CDA of doing so
is because they want to identify active cooperatives
that still in operation so that CDA will be able to
focus on for governance. Out of 2,220 cooperatives
in CAR, there were only 561 cooperatives availed of
new registration and the rest opted not to avail of
the new registration. Meaning to say for 2008 there
were only 561 cooperatives recognize as an active
or still in operation by CDA of CAR.
In 2009 and 2010, there were 30 and 50 cooperatives
respectively registered as new cooperative in CAR.
And until 2010, there were 641 number of registered
cooperatives in CAR. Out of the total registered
cooperatives, the province of Benguet had the most
number of registered cooperatives with total of 226
cooperatives, follow by Baguio, 126 cooperatives,
Abra, 68 cooperatives, Kalinga, 67 cooperatives and
Ifugao, 57 cooperatives. The province of Mountain
Province and Apayao, which are not so populated
had the least number of operating cooperatives with
51 cooperatives and 46 cooperatives respectively.
Chart 1 is about Number of Registered Cooperatives
in CAR as of the Year 2010.

250

226

100

126
68

50

57

46

67

51

0
Abra

Apayao

Baguio

Benguet

CAR Total population

1,659,800, 89%

Coops Membership

Chart 2: Coops Membership versus Total Population in CAR as of the Year

Source : 2010 Annual Report of Cooperative Development


Authority, Cordillera Extension Office

In CAR, there are 11 types of cooperatives being


identified and most of the cooperatives are registered
as the Multi Purpose Agriculture cooperative (MPA)
with the total number of cooperatives are 262.
The Multi Purpose Non-Agriculture Cooperative is
the second largest type of cooperative with 215
cooperatives. Credit, Consumer and Service type
of cooperative is in the 3rd, 4th and 5th with 85
cooperatives, 31 cooperatives and 15 cooperatives
respectively. Producer type of cooperative is in the
6th with 10 cooperatives, follow by Marketing with 9
cooperatives, Union with 6 cooperatives, Federation
with 5 cooperatives and Workers with 2 cooperatives.
The least type of cooperative in CAR is Housing with
only 1 cooperative engage in that business. Table 1
is about Types of Cooperatives Per Province of CAR.
Below are the details of cooperatives Financial
Status in CAR for the Year 2010.

200
150

208,519, 11%

Ifugao

Kalinga

Mt.
Province

Chart 1: Number of Registered Cooperatives in


CAR as of the Year 2010

Source : 2010 Annual Report of Cooperative Development


Authority, Cordillera Extension Office

Under the new Chairman of CDA of Philippines,


Dr. Emmanuel Santiaguel had pointed out the
CDA 3-POINT PROGRAM 2011 2015 and one
of the mainstream is membership expansion with
the goal of hitting 20 million Filipinos as member
of cooperatives throughout the Philippines. In
CAR, there are only 11% or 208,519 people
out of 1,659,800 total population are members
of cooperatives. Chart 2 is about Cooperatives
Membership versus Total Population in CAR as of the
Year 2010.

Table 2: Financial Status of Cooperative in CAR as of Financial


Year ended December 2010

ITEM

VALUE
(PESO)

VALUE (RM)

Assets

6,277,286,450

451,964,624

Liabilities

3,042,136,695

219,033,842

Paid Up Capital

2,705,855,404

194,821,589

Total Equity

3,261,959,042

234,861,051

Savings Deposits

955,467,495

68,793,660

Gross Revenues

855,928,809

61,626,874

Net Surplus

353,123,002

25,424,856

(**100 PESO = RM7.20)


Source: 2010 Annual Report of Cooperative Development
Authority, Cordillera Extension Office

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Types of
Cooperative

Abra

Apayao

Baguio City

Benguet

Hugao

Kalinga

Mt. Prov.

Total

Credit

25

15

12

10

12

85

Consumer

12

31
10

Producer

Marketing

Service

MPA

43

20

119

21

32

21

262

MPN

14

15

78

66

16

16

10

215

Federation
Union

Housing

Workers
Total

2
68

46

9
15

126

226

57

67

51

641

Source: 2010 Annual Report of Cooperative Development Authority CAR

From the 641 registered cooperatives, there were


193 cooperatives with the status of Millionaire
Cooperative with total net worth of P3,193,370,835
(RM229,922,700). Cooperative is recognized as
Millionaire Cooperative if the cooperative achieve One
Million Pesos in total assets. From the chart 3 below,
Province of Benguet is ranked first in the number of
Millionaire cooperative with total of 63 cooperatives
consist of P650,853,854 (RM46,861,477) total
net worth. Second largest number of Millionaire
cooperatives was the Province of Baguio City
with 54 cooperatives consist of P1,504,831,079
(RM108,347,838) total net worth. However compare
with Province of Benguet, Province of Baguio city had
the highest total net worth in the region. Mountain
Province is ranked third with 28 cooperatives and
total net worth of P421,624,637 (RM30,356,974).
With 16 numbers of millionaire cooperatives and
total net worth of P309,238,466 (RM22,265,170),
Province of Ifugao was in the fourth place, follow
by the Province of Kalinga with 15 cooperatives and
total net worth of P281,395,185(RM20,260,453),
Province of Abra with 10 cooperatives and total net
worth of P104,319,850 (RM7,511,029) and lastly
Province of Apayao with 7 cooperatives and total net
worth of P25,427,614 (RM1,830,788).

Source: 2010 Annual Report of Cooperative Development


Authority, Cordillera Extension Office

The positive impact of Cooperative Movement in


Cordillera Administrative Region (CAR)
The finding on the positive impact of cooperative
movement to the society of CAR is written based
on 441 cooperatives in CAR that submitted their
Cooperative Annual Performance Report (CAPR)
and Audited Financial Statements (AFS) to the
Cooperative Development Authority (CDA) of
Cordillera Extension Office in 2010.
1. Job Creation and Generation of Income

The New Philippine Cooperative Code of 2008


requires that a existing or new cooperative must
have a manager, a bookkeeper, and an accountant
as these are accountable and necessary officers
in the operation of a cooperative. Aside from
the required positions, as the cooperative
grows and become complex in its operation, it
can hire purchasing officer, loan officer, clerks,
compliance officer, finance officer, and/or human
resource officer, depending on the operation and
the need of cooperative.
In the region of Cordillera, the cooperative
have contributed to the creation of jobs that
provides salaries or wages that following the
daily minimum wage which is being regulate in
Labor Code by National Wages and Productivity
Commission. The daily minimum wage for NonAgriculture Cooperatives is P235.00 (RM16.92)
per day and P222.00 (RM15.98) per day for
cooperatives that involve in Agriculture industry.
The 441 reporting cooperatives that submit their
Cooperative Annual Performance Report (CAPR)
and Audited Financial Statements (AFS) to the

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Cooperative Development Authority (CDA) of


Cordillera Extension Office in 2010, have a total
of 1,485 regular employees whose salary and
wages total of P85,490,239 (RM6,155,297).

4. Capital Inflow Contributions


Table 3: Number of Employees Per Province in CAR

PROVINCE/
CITY

REPORTING
COOPS

NO. OF
EMPLOYEES

VOLUNTEER

Abra

48

148

17

Apayao

26

83

Baguio City

91

376

118

Benguet

181

583

28

5. Financial Benefits of The Members

Ifugao

30

149

Kalinga

30

59

34

Mountain
Province

35

87

23

TOTAL

441

1485

230

Source: 2010 Annual Report of Cooperative Development


Authority, Cordillera Extension Office

2. Number of Membership

The net capital inflow of cooperatives in the


regional economy included the loan releases
it granted to the members and the loan
receivables which amounts to P2,792,127,634
(RM201,033,190). Hence, the impact of the
loan releases totalling to P1,502,925,564
(RM108,210,641) is to the lower bracket of the
economy as most members of cooperatives are
those people whose live in below the poverty
line.

The growth of membership indicates that the


people are realize the existence of cooperatives
as an alternative source of financial assistance
in funding their business. Most of these are self
employed entrepreneur doing their own family
business. The increase of membership has direct
impact on increase in services or loan releases
and thus indirectly contribute to the growth
of regional economy, as it is a job generating
cycle. The total number of regular and associate
members is only 208,519 out of 1,659,800 total
population in CAR. The challenge for the region
is how to saturate membership in cooperative for
those people who have yet to see the benefits of
becoming a cooperative member.

Aside from the ready cash that is provides to


members for their economic activity, cooperative
return whatever surpluses it derives in the course
of its operation every year. For the region, the
members of cooperatives totalling to 217,625
(based on reporting cooperative) enjoyed
P247,179,096
(RM17,796,895)
distributed
financial benefits when joining cooperatives.
(* 100 Peso = RM7.20)

Challenges Faced by The


Cooperatives in Cordillera
and Philippines
The Philippines is a developing country just like
Malaysia and is trying its best to fully provide the
needs of its people, as well as facilities for their
economic, education, health, social and cultural
needs. However government itself cannot 100%
guarantees that they are able to fulfil the needs.
That is why government trying very hard to promote
cooperative in the life of Filipinos. However in order
to become successful cooperative in the nation,
there are some challenges faced by the cooperatives
which are:-

3. Members Stake in the Cooperative

1. Internal Challenges:-


a. Management issues, values and competence
Fundamentally, the failure of cooperative
enterprises are due to the improper
understanding on cooperatives real principles,
purposes, as well as the value that all cooperators must have and non-adherence to
their operating policies.

Based on the reporting cooperatives in CAR,


the total stake of members in the cooperative
is at P3,576,098,022 (RM257,479,058). It is
composed of their savings deposits and their
share capital. In the case of credit cooperative,
the share capital from among the members is
being used for re-lending and therefore generate
income to the cooperative.

In Philippines, co-operators education before


admittance and other continuous education
after membership is a must in the development

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of cooperative, however in reality it reveals


that not all co-operators especially the
smaller and struggling cooperatives sustain
their continuous education program. Thus, in
order to overcome this major problem, the
thrust of government of cooperative sector
towards the training for the leaders and staffs
of cooperative. CDA also introducing the new
policy of professionalize the cooperative
officers and staffs whereby they must have
certificates in various basic, special and skills
training or equivalent before possessing any
sit in cooperative. To increase the access
of cooperatives training and education,
Advocacy and Education cooperatives,
Cooperatives Federations and Cooperatives
Unions are being given an authority to
conduct training for cooperative officers and
members.

b. Conflicts within the cooperative
In the past, most unsolved disputes involving
cooperatives are brought to the CDA, some
to the proper courts, barangy (village) or
municipal officials depending on the gravity
of those problems. Nowadays, all inter and
intra-cooperatives disputes shall be settled
within the cooperative in accordance with
the pertinent Guidelines issued by the
Cooperative Development Authority (CDA).
Therefore, Board of Director must appoint the
Conciliation and Mediation Committee to take
charge of any disputes within the cooperative.
2. External Challenges

a. Effects of Natural Disaster, Calamities and


Typhoons

The Philippine archipelago is located in


the ring of fire where active volcanoes and
earthquakes regularly occur. It is also visited
by about 26 typhoons annually. Naturally,
these occurrences give impact on the farms
and livelihood of farmers and the masses who
are mostly members of cooperatives. However,
as a self help organization, cooperatives with
little help from the government has been
excellent in providing assistance like food,
shelter, credit and others basic facilities to
their members and the communities they
operate.

b. Global and National Economic Downturns

Economic downturn has less impact on


cooperative in Philippines. It was proven
during the 2009 global crisis that cooperatives
were able to withstand the economic
interconnected crisis and helped the local
people and government in sustaining the
economy since there was no capital flight.
No Capital flight means pooling of financial
resources are done within the cooperatives
sector itself. In the Philippines, the people
have problems in establishing their own
business because of economic crisis and
or course competition. Thru cooperatives,
they were able to gain necessary capital to
establish their own businesses and after that
return back the capital they had borrowed to
the cooperatives. Meaning to say the capital
has circular within the cooperative sectors
and thus economic downturn has less impact
on cooperatives. In fact, poverty reduction
and job generation were able to be sustained
by cooperative sector.

c. Small Number of Member

In reality there are only 7 million cooperative


members of the estimated 91,983,000
population of the Philippines. The cooperatives
voice and votes is still very little. Most of the
cooperatives member are senior citizens and
only few youth joining them. One factor could
be because they are not well educated about
cooperative models and benefits since there
are only few colleges or universities offering
cooperative courses.
In order to overcome this major challenge,
CDA through their 3-Point Program has
pointed out that membership expansion is a
priority. This can be done by: Promote to all cooperatives to expand their
membership;
Encourage the conversion of public
utilities like electric and water utilities
and also the transport groups to become
cooperatives (In Philippines there are
several cooperatives that control public
utilities but did not register under CDA);
Encourage
association,
land
reform
communities and other society to register
as cooperatives; and

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Use the mass media and other means like


publications and e-newsletters to get the
attention of the masses and the youth.

Conclusion
In conclusion, even though Cordillera cooperative
movement is slow in its growth in terms of its
economic activity and community involvement
(although there are some exemptions to this case
like some of the millionaire cooperatives of the

region), the primary objective of cooperatives in


helping to improve the quality of life of its members
is achieved. Basically, cooperatives are able to
provide products and services to its members to
enable them to attain increased in income, savings,
investments, productivity and purchasing power,
and also promotes among themselves the equitable
distribution of net surplus through maximum
utilization economies of scale, cost-sharing and risksharing.

References
Sen. Juan Miguel F. Zubiri, Philippines Cooperative Code of 2008.
Annual Report of Cooperative Developmet Authority, Cordillera Extension Office 2010.

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