PRINCIPLES AND PHILOSOPHIES OF COOPERATIVISM

BUSINESS PRACTICES OF COOPERATIVES

(Different Types of Cooperatives; Categories of Cooperatives;

Models of Successful Local and Foreign Coops)

Submitted by:

BSC 1-4: GROUP 4

Demonteverde, Flora Mae A.

Bustamante, Al-Jay L.

Dela Cruz, Havid B.

Tugade, Chie Jane O.

Madridano, Neil M.

Submitted to:

Prof. Angelita S. Villaruel

Course Adviser
INTRODUCTION

Cooperatives are people-centered enterprises owned, controlled and operated for the
benefit of their members. In the Cooperatives it brings people together in a democratic and equal
way. It also allows people to take control of their economic future and social benefits in the
cooperatives.

As you begin to create a cooperative, it is important to decide what form of cooperative

you are trying to establish. The form of the cooperative will depend greatly on which problem it
is primarily trying to solve. Cooperatives will start at a small pace mainly focusing on funds and
starting businesses or services it will provide. Given below are the different types and categories
of cooperatives that are widely accepted and acknowledge by the Cooperative Development
Authority. This report also includes the models of successful local and foreign Coops and how
they differ from each other. The reporters also included videos/documentaries for other visual
aids.

DIFFERENT TYPES OF COOPERATIVES

1) Credit Cooperative
Is one that promotes and undertakes savings and lendings services among its members. It
generates a common pool of funds in order to provide financial assistance and other
related financial services to its members for productive and provident purposes.

Example: Barangka Credit Cooperative (Main Office)

Address: 170 Chorillo St. 1800 Marikina City

Phone: (02) 941 2117
Website: http://www.barangkacoop.com/

Years in Coop: 34 years

Brief History:

Twenty-five (25) employees in a section of the U/Tex Weaving Department were

usually cash-strapped. Thus, they decided to establish an informal organization called
C&K Savings Association, which lasted for more than 13 years (1972 to 1985).
 The association was turned into a cooperative by Dec 16, 1985 and named the
organization C&K Barangka Community Credit Cooperative, Inc. Its first settlement
office was in Boni Avenue, Baranka, Marikina, where the coop stayed for a month due to
lack of funds to pay for rent. When the coop transferred to chorillo Street in Barangka,
Marikina. With this move came the amendment of the coop’s name to U/Tex Employees
Credit Cooperatove, Inc. or UECCI.

On September 15, 1995, the coop adopted the name Barangka Credit Cooperative
(BCC).

2) Consumer Cooperative

Is one the primary purpose of which is to procure and distribute commodities to members
and non-members;

Example: UP Los Baños College Consumers' Cooperative (College Coop)

Address: Andres P. Aglibut Ave, Los Baños,

Laguna

Years in Coop: 103 years

Brief History:
The Coop was the very first consumers' coop founded in the Philippines. The
date: 20 October 1916.
The College Coop was born just 2 years after Act 2508 was passed by the Second
Philippine Legislature on 11 February 1914, sponsored by Representative Rafael Corpuz
of Zambales embodying the ideas of Bulacan Governor Teodoro Sandiko, who thereby
earned the title "Father of Cooperation" in the Philippines.
The College Coop was first known as the Agricultural Cooperative Company and
started with a paid-up capital of P4,000. It changed name along the way, first renamed the
College Cooperative Company Inc., then College Cooperative Association Inc., and
finally the College Consumers' Cooperative.

3) Producers Cooperative

Is one that undertakes joint production whether agricultural or industrial. It is formed and
operated by its members to undertake the production and processing of raw materials or
goods produced by its members into finished or processed products for sale by the
cooperative to its members and non-members. Any end product or its derivative arising
from the raw materials produced by its members, sold in the name of and for the account
of the cooperative, shall be deemed a product of the cooperative and its members;

Example: Ang Gawad Pinoy Consumers Cooperative

Gawad Pinoy Consumers Welfare Advocacy

Council

Address: 77 Anahaw St., Veterans Village

(Project 7), Quezon City

Phone: +632 371 3873 • +632 399 0862

Email: contact@gawadpinoy.org

About:

We often provide services to the communities that are not readily available from
for-profit businesses. Members control the business and provide capital for a strong and
efficient operation. And, members receive all net savings left after money is set aside for
operations and improvements. Consumer cooperatives provide most important products.

Services to the members include continuous enhancement of knowledge about improving

their livelihood and teaching them the latest technology in the market. The Core
 Members and Officers are experienced in trading, marketing, advertising, production,
sales and other talents that needed to impart to members.

4) Marketing Cooperative

Is one which engages in the supply of production inputs to members and markets their
products;

Example: Caring Group Marketing Cooperative

Address: #9 Malvar St. Bgy. San Antonio,

Pasig City

Province: Metro Manila

Region: NCR

About:

The Caring Group Marketing Cooperative (CGM Coop) provides sales, marketing,
advertising, events management and public relations, IT management, business
development and graphic design solutions at competitive costs.

Through all of these activities, CGM Coop stands in the middle, seamlessly weaving
strong ties and relationships to reach these targets in the most efficient way and to
produce profit while contributing to a stronger, more empowered and healthier nation.

5) Service Cooperative

Is one which engages in medical and dental care, hospitalization, transportation,

insurance, housing, labor, electric light and power, communication, professional and
other services;

Example: ZC Kings Manpower and Janitorial Services Cooperative

Address: Bonifacio Global, 10-1, Fort Legend Tower, 31st Street, corner 3rd Avenue, City,
Taguig, 1634 Metro Manila

Phone: (02) 224 2032

Website: zckings.ph

About:

Bound to advance in the realms of manpower outsourcing, the Z.C. KINGS

MANPOWER & JANITORIAL SERVICES COOPERATIVE (KINGS), is a fast rising
cooperative in the Philippines, duly registered with the Cooperative Development
Authority (CDA) and organized pursuant to the provisions of the law and existing rules
and regulations, with an ever-growing list of satisfied clients.

All owner-members enjoy additional benefits such as Interest on Capital Contribution,

Insurance, and Surplus Sharing. KINGS also provides members with facilities such as the
Savings Program, Livelihood Program and Loan Program.

6) Multi-Purpose Cooperative

It combines two (2) or more of the business activities of these different types of
cooperatives;

Example: ACDI MULTIPURPOSE COOPERATIVE

Trunkline: +63 (02) 843 2234

connecting all departments

Telefax: +63 (02) 887 2164

Website: www.acdicoop.com

Brief History:
 This cooperative was born in an era when financial services and assistance
available to the men and women in uniform were controlled by few big players. But even
if there were already a number of established financial institutions service in the military,
only few, if not at all, are owned by soldiers. This is what inspired a group of 26
Philippine Air Force (PAF) pilots, who were all products of the PAF Flying School, to
create the ACES Credit Cooperative Development, Inc. (ACCDI) on October 20, 1981.

With an initial capital of 200,000 pesos, they started the cooperative operation on
May 11, 1982 at a small shared office space in Nichols Air Base (now known as Colonel
Jesus Villamor Air Base) in Pasay City.

ACCDI was later renamed to ACDI Credit Cooperative in 1991.

After three decades in operation, they have fully transitioned from a small credit
cooperative into a large multipurpose cooperative and that was happened in year 2011.
The cooperative is offering more product lines, from savings and lendi ng to aviation
training, consumer services, agribusiness and insurance. In 2014, ACDI became the
largest cooperative in the Philippines in terms of assets.

7) Advocacy Cooperative

Is a primary cooperative which promotes and advocates cooperativism among its

members and the public through socially-oriented projects, education and training,
research and communication, and other similar activities to reach out to its intended
beneficiaries;

Example: ALICIA LOCAL GOVERNMENT EMPLOYEES COOPERATIVE (ALGEC)

Address: Municipal Hall

compound, magsaysay, alicia, isabela (3306)

Tel: (078)-323-0137

Cp: 09173244171

Contributions to the community:

1. 4K Program - a yearly activity which stands for “Kapwa Ko Kalinga Ko”. Among the
activities that were conducted in line with the 4K program includes;
 Feeding Program – a 120 days feeding program given to malnourished children
from Barangay San Antonio with eleven (11) beneficiaries and Calaocan with six
(6) beneficiaries in partnership with the office of the DSWD and the Local
Government Unit of Alicia.
 Christmas Gift Giving – distribution of Noche Buena Package and Relief Goods
to unfortunate families.

2. Free Medical and Dental Mission

3. Medical Aid

4. Mortuary Aid

5. Support to the Housing Program of the Cagayan Valley Habitat for Humanities

6. ALGEC also grants Educational Assistance in the form of soft loan, payable in one
year without any charges.

7. ALGEC also spearheads Livelihood Trainings and Seminars

8. LGUlympics

8) Agrarian Reform Cooperative

Is one organized by marginal farmers majority of which are agrarian reform beneficiaries
for the purpose of developing an appropriate system of land tenure, land development,
land consolidation or land management in areas covered by agrarian reform;

Example: The Foundation for Agrarian Reform Cooperatives in Mindanao

(FARMCOOP)

Address: Garcia Compound Km. 4 J.P.

Laurel Avenue & Bajada St, Buhangin,
Davao City, 8000 Davao del Sur

Phone: (082) 222 6038

Years in Coop: 24 years

About:

FARMCOOP is a grassroots not-for-profit organization providing services to

farmers’ cooperatives. It was founded in 1995 by leaders of agrarian reform cooperatives
and development oriented individuals to address the call of the government for NGOs to
assist in the implementation of the agrarian reform law designed to emancipate farm
workers from poverty and uplift their quality of life.

The complexities of issues in the indigenous communities, compel us to support

their various projects which include infrastructure, agro-forestry, cultural regeneration
and preservation, community health and parent education, youth capacity building, and
peace building.

In line with our holistic concept of development, we are as well moving towards
developing medium and small scale industries to produce processed organic products
from bananas, coconuts, cacao, and coffee to give added value to their farm products.

9) Cooperative Bank

Is one organized for the primary purpose of providing a wide range of financial services
to cooperatives and their members;

Example: Coopbank of Quezon Province

Address: Granja corner Leon Guinto Street,

Lucena City, Quezon Province

Phone: (042) 373 5103

Year in Coop: 28 years

Brief History:
 On November 18, 1991, the Cooperative Bank of Quezon Province, under R.A.
6938 known as the Cooperative Code of the Philippines, was issued a “Certificate of
Authority” by the Central Bank of the Philippines per Monetary Board Resolution No.
QC-Q12-FCB dated November 14, 1991.

The bank’s day-to-day operation was managed by its four (4) pioneer employees
headed by Ms. Cecilia A. de Guzman, together with her subordinates – Ms. Melinda T.
Ladines, Mr. Renato L. Obeňa, and Ms. Milagros O. Almira.

The Bangko Sentral ng Pilipinas, thru its special committee following-up the
growth of all 40 cooperative banks existing in the country, has COOPERATIVE BANK
OF QUEZON PROVINCE in First Rank in Luzon and Rank 2 in the country, along with
the Coopbank of Davao, Tagum in Mindanao and Coopbank of Aklan in the Visayas.

10) Dairy Cooperative

Is one whose members are engaged in the production of fresh milk which may be
processed and/or marketed as dairy products;

Example: Dairy Confederation of the Philippines (Dairycon)

Address: 3/F National Dairy Authority

Bldg., BAI Compound, Visayas Ave 1100

Years in Coop: 26 years

Brief History:
 The Dairy Confederation of the Philippines (Dairycon) was founded on 25 January
1993 and registered with the Cooperative Development Authority on 25 November 1995.

As the apex organization of all dairy cooperatives, associations and processors in the
Philippines, it serves as an avenue for dairy farmers in the discussion of common
interests affecting the dairy sector in particular, and the dairy industry in general.

11) Education Cooperative

Is one organized for the primary purpose of owning and operating licensed educational
institutions, notwithstanding the provisions of Republic Act No.9155, otherwise known
as the Governance of Basic Education Act of 2001;

Example: The Learning Library

Address: 41 Esteban Abada St, Quezon

City, Metro Manila

Phone: 0917 828 2669

About:

THE LEARNING LIBRARY aims to develop the love of reading and

appreciation of the Filipino language among children, which will make them independent
and successful learners. We offer English and Filipino programs that help improve
comprehension and make learning enjoyable. By developing fundamental skills through
enjoyable and accessible literature, we advance independent learning critical to long-term
academic success.

12) Electric Cooperative

Is one organized for the primary purpose of undertaking power generation, utilizing
renewable sources, including hybrid systems, acquisition and operation of sub
transmission or distribution to its household members;

Example: Philippine Rural Electric Cooperatives Association Inc.

Office Address:

2F PNB Building, Brgy PHILAM

#92 West Avenue, Quezon City

E-mail: core@philreca.org

Brief History:

Organized in July 1979, Philreca is a non-stock, non-profit national organization,

which is comprised of 121 electric cooperatives operating in the country. Its member-ECs
have provided electricity service for more than 12 million power consumers throughout
the country.

13) Financial Service Cooperative

Is one organized for the primary purpose of engaging in savings and credit services and
other financial services;

Example: Mutual Savings And Credit Cooperative of The Philippines

Address: Tirona Hwy, Bacoor, 4102

Cavite

Phone: (046) 481 5551

Brief History:

It was founded in March 2001

under the name SIKAP Philippines Foundation, later accelerated to Federation of
MSCCP (Mutual Savings and Credit Cooperatives of the Philippines) and now being
called Mutual Savings and Credit Cooperative of the Philippines by merging all the
primary cooperatives of MSCCP. It is supported by CICM (Centre International du
Credit Mutuel), an international non-profit organization dedicated to promote economic
and social development in developing countries by giving everyone access to financial
services, especially people excluded from the traditional banking sector.

CICM is MSCCP's sustainer and partner in order to develop a financially autonomous

and independent credit cooperative with productive, democratic and self-reliant
communities based on the principles of solidarity.

14) Fishermen Cooperative

Is one organized by marginalized fishermen in localities whose products are marketed

either as fresh or processed products;
Example: Fishery cooperative role in resource management: the Bayawan Fishermen's
Cooperative

History:

The Bayawan Fishermen's Marketing Cooperative, Inc., in Negros Oriental in the

Visayas [Philippines], a project with a multilateral and bilateral assistance, was
established in 1982. The Cooperative kept a daily record of catch and sale value, but did
not include any reliable measure of fishing effort and biological data. Since the Philippine
government is seriously considering, through bills filed in Congress and the Local
Autonomy Code, the concept and practice of community-based management of coastal
fishery resources, fishery cooperatives, in addition to various fishermen's associations,
can be instrumental in resource management and conservation. However, members of
such fishery cooperative and fishermen's associations should first received the
appropriate training in resource monitoring to enable them to determine whether the state
of exploited fish stocks are in imminent or progressive depletion before they can
implement regulatory measures as managers of fishery resources.

15) Health Services Cooperative

Is one organized for the primary purpose of providing medical, dental, and other
health services;

Example: Environmental-Health Laboratory Service Cooperative

Address: EK Building, 50 Holy Spirit Dr, Quezon

City, 1127 Metro Manila

Phone: (02) 931 0838

About:

Environmental-Health Laboratory Service Cooperative is a duly registered

cooperative at the Cooperative Development Authority (CDA) whose bond of
membership is professional-chemists and other allied professions. Sixty (60) percent of
its members are chemists with forty (40) percent belonging to the medical,
pharmaceutical, biological and molecular biological profession. Expertise of its members
includes water, food, pharmaceutical, petroleum, agrochemical and other related analysis.
It started its operation on July 6, 1999.

Environmental-Health Laboratory Service Cooperative is accredited by the

Department of Health to provide four types of services : bacteriological, physical,
chemical and biological services. It is one of the few laboratories accredited to do the
biological testing.

Products: Water Analytical Testing

16) Housing Cooperative

Is one organized to assist or provide access to housing for the benefit of its regular
members who actively participate in the savings program for housing. It is co-owned and
controlled by its members;

Example: Kapatiran Sa Kapitbahayan Multi-Purpose Cooperative

Address: Maria Clara Street, Sta. Ana, Taytay, 1920

Phone: 0906 267 5755

About:

It was originally organized by the Lidcombe Family Support Group in 1995. It

was designed to provide low-cost housing for newly arrived migrants. 15 couples started
the cooperative who received training from an agency connected with the Department of
Housing. They applied for government funding after they have formed the structure of
the organization, electing Ruben Amores as the coordinator then later the President. The
group is composed of a Secretary, Treasurer, Property Maintenance Officer, Internal
Auditor and committees such as conflict resolution, etc. Board members are elected
yearly and all tenants are qualified to run for office.

17) Insurance Cooperative

Is one engaged in the business of insuring life and property of cooperatives and their
members;

Example: 1 Cooperative Insurance System of the Philippines Life and General Insurance

Address: CISP Bldg, #80 Malakas St, Diliman,

Quezon City, 1100 Metro Manila

Phone: (02) 924 0471

Years in Coop: 45 years

Brief History:

The Cooperative Insurance System of the Philippines was founded on January 25,
1974. It was organized to promote and engage in the service of life insurance as a
cooperative. It was issued a Certificate of Authority by the Insurance Commission on
September 30, 1974. It was registered on April 5, 1975 with the Department of Local
Government and Community Development under P.D. 175. It is operating nationwide
with 8 area offices, insuring mostly the underprivileged and farmers of the country. It is
being regulated by two Government Agencies; the Insurance Commission (IC) and the
Cooperative Development Authority(CDA). To date, CISP has more than 2,000
cooperative members and insuring over 700,000 individuals annually.

18) Transport Cooperative

Is one which includes land and sea transportation, limited to small vessels, as defined or
classified under the Philippine maritime laws, organized under the provisions of RA
9520;

Example: ATiLuz Transport Service Cooperative

 Address: #31 Pan-Philippine Hwy, San Ildefonso,
3010 Bulacan

Phone: 0942 080 8248

About:

A land transport provider that is registered, accredited, franchised and insured with
reliable and efficient service to any point within the Philippines.

Founding Date: May 10, 2017

19) Water Service Cooperative

Is one organized to own, operate and manage waters systems for the provision and
distribution of potable water for its members and their households;

Example: Bulihan Rural Waterworks Service Cooperative

Founded on April 1, 1982

ADDITIONAL CONTACT INFO

brwcas@gmail.com

20) Workers Cooperative

Is one organized by workers, including the self-employed, who are at the same time the
members and owners of the enterprise. Its principal purpose is to provide employment
and business opportunities to its members and manage it in accordance with cooperative
principles; and

Examples: Wercher Solutions And Resources Workers Cooperative (Wercher Coop)

Address: # 82 Circumferential Road, Brgy. San Jose

Antipolo, Rizal

Email: m.me/WercherCooperative2011

Call (02) 650 5152

About:

WERCHER Coop services personnel contracting and project contracting

viability,membership and area of operation is nationwide to cover wide market potential

The idea of establishing a workers’ cooperative began as a spin – off to one of the
Strategic Business Unit of TAGBAC MPC, which is the Project Contracting. On March
26, 2011 during the Annual General Assembly of TAGBAC MPC, the proposal to
establish a subsidiary was approved.

Wercher Solutions and Resources Cooperative (WERCHER COOP) is a workers

cooperative type of organization which engages in manpower providing services but not
in contrary to labor only contracting. It is also engaged in Project Contracting in the
nature of Civil, Electrical, Sanitary and Mechanical Works. WERCHER COOP has for
its reputable and highly esteemed clientele, three major industry players, i.e., Solid
Cement Corporation and APO Cement Corporation of the CEMEX Group and Eagle
Cement Corporation.

Products: Manpower Service Provider

21) Other types of Cooperatives

As may be determined by the Authority.

CATEGORIES OF COOPERATIVES

Cooperatives shall be categorized according to membership and territorial considerations as

follows:

A. In terms of membership, cooperative shall be categorized into:

(i) Primary – The members of which are natural persons;

(ii) Secondary – The members of which are primaries; formed when two or more
primary co-operatives come together because they are involved in similar
activities and want to promote their services in the sector in which they are active.

(iii) Tertiary – The members of which are secondary cooperatives which come
together to promote the interests of their members to government bodies, the
private sector and other stakeholders.

B. In terms of territory, cooperatives shall be categorized according to areas of operations

which may or may not coincide with the political subdivisions of the country.

Article VIII
Primary Cooperatives

Section 1. Number of members required for Registration.

Fifteen (15) or more natural persons who are Filipino citizens, having a common bond of interest
and are residing or working in the intended area of operations are required for registration.

Section 2. Capital Requirements.

2.1. All primary cooperatives shall be organized with share capital. The authorized share capital
of a cooperative shall be provided for in its Articles of Cooperation. At least twenty five percent
(25%) of the authorized share capital shall be subscribed by the members and at least twenty five
percent (25%) of the subscribed share capital shall be paid by the members prior to registration.

2.2. The paid up capitalization requirement for primary cooperatives shall not be less than
Fifteen Thousand Pesos (P15,000.00) except for multipurpose cooperative which should have at
least One Hundred Thousand (P100,000.00) or as required by the feasibility study whichever is
higher.

Section 3. Cooperative Name and Prohibition.

3.1. The word "Cooperative" “Kooperatiba” or “Cooperativa” shall be included in the name of
the cooperative, which name shall likewise specify the type of cooperative in accordance with
Article 23 of RA 9520.

3.2. No cooperative name shall be allowed by the Authority if the proposed name is identical or
deceptively or confusingly similar to that of any existing cooperative, contrary to public policy,
moral and existing laws.

The use of the words “development” and “integrated” in the cooperative name shall be
discouraged.

3.3. The use of “Incorporated”, “corporation”, “company”, “incorporation”, partnership, or other

similar connotation and abbreviation shall not be allowed. In addition, the use of the word
“federation” and “union” in the name of the proposed primary cooperative is likewise prohibited
except if it is part of the registered name of association or institution where the members of the
proposed cooperative come from.

3.4. Name shall not be written in all capital letters except if it is an acronym.

Section 4. Registration Requirements.

4.1. Cooperative Name Reservation Notice (CNRN)

4.2. Economic Survey;
4.3. Articles of Cooperation and the approved By-laws;
4.3.1. All original;
4.3.2. The Articles of Cooperation shall be signed by all the cooperators on each and every page;
4.3.3. The By-Laws shall be signed all the members on the adoption page.

4.4. Treasurer's Affidavit;

4.5. Surety Bonds of accountable officers;
4.6. Certificate of Pre-Membership Seminar (PMES) signed by the cooperative Interim
Chairman, as validated by the Authority;
4.7. Undertaking to change name;
4.8. Undertaking to comply with the auditing and accounting standards prescribed by the
Authority;
4.9. Undertaking to comply with other requirements prescribed by the other regulatory agency,
when applicable;
4.10. Favorable endorsement/written verification/authority/pre-feasibility study, if applicable;
and
4.11. Registration fee.

Section 5. Submission of Documents.

The documents required for registration shall be printed in an 8.5” x 13” or 8.5” x 14” and may
be written in English or in Filipino or other local dialect with appropriate English translation. As
far as practicable, the text should use bookman old style 12. In case of confusion in the
interpretation of the provisions, the English translation shall prevail.
Section 6. Common and Preferred Share.

6.1. The share capital of a cooperative may consist of common share capital and preferred share
capital if the latter is provided for under the cooperatives’ articles of cooperation and by laws.
Should the cooperative wish to have common and preferred shares, statements to that effect
should appear in the Articles of Cooperation specifying the amount of shares to be offered for
common shares and for preferred share. However, it is recommended that only the common
share be offered.

6.2. Should preferred share capital be offered, the rights and privileges of holders of preferred
shares shall be provided for in the By-laws of the cooperative.

6.3. Preferred share capital shall not exceed Twenty Five (25%) percent or one-fourth (1/4) of
the total authorized share capital of the cooperative.

6.4. The paid up and subscription of the common share capital contribution should strictly adhere
to the twenty-five percent (25%) requirement based on the authorized capital share.

6.5. No member shall own more than Ten (10%) percent of the subscribed share capital of the
cooperative.

Section 7. Bond of Membership.

The bond of membership is categorized into four (4). Only one common bond or field of
membership will be adopted by the cooperative. The categories are the following:

7.1. Residential - members working and/or actually and physically residing in the same place.

7.2. Institutional - members consist of employees, workers and/or officers of a particular

institution.

7.3. Associational - members come from a registered and/or recognized association, group, club,
fraternity, religious group, cultural and other similar aggrupation.

Recognized association means legitimate aggrupation of persons which is validated to be

publicly known in a particular community and is able to present certification from applicable
government entity or substantial proof of visible activity in the community; and

7.4. Occupational - members come from same or allied profession or actual occupation.

Section 8. Dual Membership.

A prospective cooperative may include in its by-laws a provision not allowing members of
existing cooperatives of the same type within the same area of operation to be a member of the
proposed cooperative unless they resign from the former.
Section 9. Bonding Requirements of Accountable Officers / Employees of the Cooperative.
In order to meet any contingency that may arise in the operations of the cooperative accountable
officers/employees of cooperatives shall submit a surety bond for the faithful performance of
their functions in accordance with Articles 14(5) and (56) of the Code and in accordance with the
following sub-sections:

9.1. The following persons shall be bonded:

9.1.1. Chairperson
9.1.2. Treasurer and Cashier;
9.1.3. Manager;
9.1.4. Warehouseman;
9.1.5. Loan/deposit Collectors;
9.1.6. Signatories of checks and other financial instruments; and
9.1.7. Such other persons as may be authorized by the cooperative to act as a custodian of funds
merchandise, inventories, securities and other assets of the cooperative.
9.2. The board of directors shall determine the adequacy of such bonds. For this purpose, the
Board of Directors shall be guided based on the initial networth of the cooperative which shall
include the paid-up capital, the membership fees and the other assets of the cooperative at the
time of registration.

Section 10. Required Period for Approval of Registration.

10.1. An application for registration shall be finally disposed by the Authority within the period
of Sixty (60) days from the filing of complete documentary requirements. Otherwise, the
application is deemed approved unless the cause of the delay is attributable to the applicant.

10.2. In the case of denial by the Authority, appeal of such denial may be sent to the Office of
the President within ninety (90) days from receipt of the notice of denial.

10.3 The failure of the Office of the President to act on the appeal within ninety (90) days from
the filing thereof shall mean the approval of said application.

Article IX
Registration of Secondary and Tertiary cooperatives

Section 1. Requirements for Registration.

1.1. Membership – The minimum number of members in a federation or union pursuant to BOA
instruction dated May 23, 2011 is recommended, as follows:

Category Federation Union

1.1.1 Secondary 10 primary Coops 15 primary coops
1.1.1 Tertiary 10 secondary coops 15 secondary coops

1.2. Paid-up Capital – The minimum paid-up share capital for any proposed federation/union
shall be, as follows:
 Category Federation Union
1.2.1 Secondary Php 500,000.00 Notapplicable
1.2.2 Tertiary Php 5,000,000.00 or Not applicable
feasibility study
requirement whichever
is higher

However, for purposes of registration of a federation, the capital requirement stated in the
feasibility study may also be followed but in no case shall the paid-up share capital of a
federation be less than the amounts stated above.

1.3. Area of Coverage - A federation/union may be organized at the municipal/city, district,

provincial, regional or national levels.

1.4. Business Activity – the federation can engage in any cooperative enterprise authorized under
Article 6 of RA 9520 that compliments, augments, or supplements but does not conflict, compete
with, nor supplant the business or economic activities of its members.

1.5. Bonding Requirement – Accountable officer/s of the proposed federation shall be covered
by sufficient Surety Bond. The amount of the bond shall depend primarily on the amount of
accountabilities the officer/s are handling as determined by the Board of Directors.

1.6. Registration Fee – The registration fee to be paid by the proposed federation shall be one
tenth (1/10) of one (1%) percent of the authorized share capital or the amounts prescribed in the
CDA schedule of fees, whichever is higher. Payment of the registration fee shall be collected on
or before the issuance of the Certificate of Registration.

1.7. Feasibility Study - Four (4) copies of the Feasibility Study containing the following items
shall be submitted to the Authority:

1.7.1 Organizational Structure

1.7.2 Purposes/Objectives
1.7.3 Area of Operation
1.7.4 Number of Member and Potential Members
1.7.5 Feasibility
1.7.5.1 technical aspect of federation operation
1.7.5.2 management aspect
1.7.5.3 financial aspect, 3 years projection, contribution, subsidies
1.7.5.4 shall incorporate provision specifying cooperative education and training programs

1.8. Articles of Cooperation and By-laws – Four (4) copies each of the Articles of Cooperation
and the By-laws shall be submitted to the Authority.
1.9. Treasurer’s Affidavit – A duly notarized document attached to the Articles of Cooperation
stating the total amount received from members share capital contribution, membership fee,
donations or subsidies.

1.10. General Assembly Resolution – duly notarized resolution stating that the general assembly
has approved the membership and the exact amount of share capital/dues to be contributed to the
proposed federation/union it wishes to be affiliated with.

1.11. Other documentary requirements:

1.11.1 BOD Resolution on authorized representative;
1.11.2 Certification of the chairperson of member primaries stating the following:
1.11.3 Line of business activity to be engaged in;
1.11.4 Compliance/Adherence to the accounting and auditing standards as prescribed by the
authority;
1.11.2 Other documents as may be prescribed by the Authority

Section 2. Place of Registration.

(a) The Extension Offices of the Authority shall register all federations/unions. In cases where
the proposed federation/union shall operate with inter-regional coverage, it shall be registered in
the Extension Office where the principal office is located.

(b) The Central Office of the Authority shall register tertiary cooperatives with national
coverage.

Section 3. Miscellaneous. – The following policies shall be followed by any federation/union:

a. A federation shall engage in economic activity. A union shall actively advocate for the benefit
and welfare of its members and regularly implement plans and programs for the advancement of
member's interest.

b. No federation/union shall be registered without complying with the minimum membership

requirement stated herein.

c. Federations/Unions are prohibited from conducting audit service to their members.

Section 4. Registration Procedures.

The procedures for registration of cooperative federations/unions shall follow the same
procedures outlined for the registration of primary cooperatives, as approved by the Board of
Administrators.

MODEL OF SUCCESSFUL LOCAL AND FOREIGN COOPERATIVES

Successful Local Cooperatives

  SUBASPA Multi-Purpose Cooperative – the cooperative was registered with CDA in
March 1993. It started with 16 members and paid up capital amounting to 6, 250.00 php
only. The cooperative is involved in the following operations:
 Lending Projects
 Livelihood loans for coop members
 Longanissa and tocino production
 Bakeshop and Snacks Salon
 Subsidiary Projects: Consumer Store and Mini Agrivet
 Scholarship Program

 Manuel Guianga and Sirib Growers and Employees (MAGSIGE) Multipurpose

Cooperative – was registered with CDA in 2008. It started with 56 members and a paid
up capital of 33, 600.00 php. Its main purpose was to provide services for the production
of banana, cacao, rice and livestock and to market the same. It was founded by Mr.
Agripino L. Torres and the MAGSIGE MPC demonstrates labor service cooperative is
better than labor union.

Benefits MAGSIGE MPC LABOR UNIONS

Membership Employees are member- Employees are members

owners
Dividends Members receive interest on None
share capital
Food and Nutrition Participated in feeding None
program for school children
Health Conducted medical mission None
in far-flung communities
Water & Sanitation Donated water supply None
assisted water system project
for the community

Successful Foreign Cooperatives

 Anand Milk Union Limited or Amul - Amul cooperative registered on 14 December
1946 as a response to the exploitation of marginal milk producers by traders or agents of
the only existing dairy, the Polson dairy, in the small city distances to deliver milk, often
went sour in summer, to Polson. The prices of milk were arbitrarily determined.

This co-operative began with just two village dairy co-operative societies and 247 litres
of milk and is today better known as Amul Dairy. The farmers owned the dairy, their
elected representatives managed the village societies and the district union, they
employed professionals to operate the dairy and manage its business. Most importantly,
the co-operatives were sensitive to the needs of farmers and responsive to their demands.

 The Amul Model - The Amul Model of dairy development is a three-tiered

structure with the dairy cooperative societies at the village level federated under a
milk union at the district level and a federation of member unions at the state
level.
 The Amul Model has helped India to emerge as the largest milk producer in the world.
More than 16 million milk producers pour their milk in 185903 dairy cooperative societies across
the country. Their milk is processed in 218 District Co-operative Milk Unions and marketed by
28 State Marketing Federations, ensuring a better life for millions.

 Kibbutz and Moshav – During the first three decades of the 20th century a multileveled
cooperative structure was established by the Jewish agricultural community in Palestine
and later – Israel. This structure remained stable up until the financial crisis of the 1980’s
(the current structure will be discussed later):
 First order agricultural cooperatives – Kibbutzim and Moshavim
  Second order regional agricultural cooperatives – regional
enterprises and purchase cooperatives
 Second order national agricultural cooperatives – Tnuva
 Third order agricultural cooperatives – Kibbutz and Moshav
movements

 First order agricultural cooperatives: The Kibbutz and the Moshav are two
forms of Jewish settlements. The Kibbutz is a unique, worker-controlled,
agricultural production cooperative and the Moshav is a service cooperative in
which the members are the individual farmers which reside within the settlement.
These cooperative settlements were strategically spread across Palestine,
essentailly creating the future borders of the Jewish state.

The main structural difference between Kibbutzim and Moshavim was that
Kibbutzim functioned as communes in every sense of the word – in Kibbutzim,
all members were workers in all agricultural and service branches within the
settlement, taking on different roles in the Kibbutz (managing a specific farm in
the Kibbutz for instance) on rotation. They split responsibilities equally, receiving
no salary, but rather implementing an egalitarian system of distribution of limited
resources which provided each of them a stipend in accordance with their living
needs.
 Second order regional agricultural cooperatives: These cooperatives included
purchase cooperatives used to obtain supplies for agricultural activity in bulk and
regional enterprises dealing primarily with post harvest treatment. They enabled
their owners, to jointly purchase and process produce at a lower cost than they
would have done separately.

Owned by either Kibbutzim and Moshavim, the regional parent cooperative had
several subsidiaries providing production related services to members. Regional
purchase cooperatives bought agricultural input and food; they received payment
from Kibbutz/Moshav members and paid suppliers. The purchase cooperatives
also served as financial mediators in both the case of the Kibbutzim and the
 Moshavim, using private equity to improve credit conditions for members. Equity
was accumulated by the second order cooperatives thanks to the commission
received from transactions with suppliers or from the sale of agricultural products
processed for the first order cooperatives.

 Second order national agricultural cooperatives: These were second order

cooperatives which operated on a national level and offered mainly marketing
services. By far the largest second order national cooperative in Israel was Tnuva,
a marketing cooperative which was founded in 1926. Farmers transferred all
produce to Tnuva on consignment, with Kibbutzim/Moshavim receiving payment
after produce sold and a commission for Tnuva was deducted. Ineffective decision
making did not pose a problem until the mid 80’s, since Tnuva enjoyed a soft
budget, as did all agricultural cooperatives in Israel, thanks to the mutual
guarantee system.

 Third order agriculture cooperative: During the 1920's and 30's a main Moshav
movement, established, each grouping together dozens of cooperative settlements
under a single leadership organization. The decision to unite under leadership
organizations was a matter of necessity: Individual settlements faced financial and
social difficulties and were interested on political representation to promotes their
ideas and develop their settlements. The movements gave their member access to
various services, providing financial mediation for members with the banks and
accumulating political power witch was used to lobby on behalf of members.

The movements established guidelines for their Kibbutzim/Moshavim, instructing

them on various issues (how to create a business plan, for example). They also
served as representatives for member interests when facing the government (IRS,
The Ministry of Agriculture, the Ministry of Trade and Industry, and more). Since
they began operation, the movements took responsibility for building and
developing new Kibbutzim/Moshavim in order to grow in size and power.
Employees in the movements were themselves members of the Kibbutzim and
Moshavim, occupying various positions within the organization on a rotation
basis.
The Kibbutz movements:

1 Social political and guidance services - These included political representation,

guidance services on issues relating to developing and managing a Kibbutz and
social services such as nursing, education, planning and zoning and cultural
events. These services were paid for through membership fees.

2 Financial mediation - This included a financial fund and a purchase

cooperative. The purchase cooperative (which is similar to a consumer
cooperative in general western terminology) focused on providing goods such as
low-prices clothing and furniture to members. A movement's financial fund took
out loans from the banks and distributed those funds to members (the Kibbutzim)
under better loan conditions, essentially providing banking services to members.
The national movements also received monetary deposits from individual
Kibbutzim and accumulated funds. The funds accumulated from deposits were
also used to finance loans to other members in need.

The Moshav movement's structure was not as elaborate as that of the Kibbutz
movements. It provided similar social, political and guidance services to the
Kibbutz movements, albeit on a smaller scale and it did not partake in financial
mediation.