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

selfreliance 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 Cooperative

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 selfemployment 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

 By-laws  Bonds of accountable officers

 At least 15 members  Minimum Capitalization of PhP 15,000; reviewed every 5

years
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 nonmembers; 
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
39)

(Articles 37,38,

 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
 Additional committees
 Mediation and Conciliation  Ethics

(Art.43)

 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