|, The Cooperative Movement in the Philippines. In contrast with the European and North American experience, the frst ‘cooperative in the Phuippines were the product of a series of legislative ‘moasures except that of Dr. Jose Rizal's agricultural marketing cooperate in Dapitan which fet no much record having assumed to have died with his execution in 1898. From 1915-1927, four laws were passed to focus on the organization and provision of francial susistance to oredit and marketing cooperatives such as fro. Rurat Credit’ Act, Act No. 2818, Cooperative Marketing Law and Commonweatth Act 116 However, with the madequate inculcation of the Drncipls of cooperation, valuntariam and selereiance, tho cooperatives failed ‘and the loans remained unpaid “The organization of church-based cooperatives In 1838 supported by an internally itisted savings from among the members begun in Vigan, locos Sur in'1938 tough Row. Alen R. Huber of the Church of Christ. Their success, inspired the Protestant Church in llecos Region to organize other types of Cooperative and the government as wall in strengthening cooperatives by: a) Stpporting the organization of ether types of cooperatives Including the non- Sgrcuttural, 6) establishing te National Cooperativa Fund: ¢) "exempting Cooperabves. from government taxes and foes for the frst fWve years of Speration, and d)_ereating 2 regulatory body to administer the cooperative ‘operations and funds, hon World War Il broke out in December of 1941, the developments of cooperatives ‘were grey affected so that_more coaperatives were ‘Segmnicedireorganizes to help in the sistribution of retof goods. However, the ‘hors folded up when thore wore no mace goods to disbibule. As such other ‘monsures were employed in 1947 to consobGate the government's hold on the ‘Cooperative movement ike the: a) creation ofthe Cooperative Adminstration ‘Office (CAO) to take charge of cooperative concerns: ¢) provision of non ‘Collatorl and large seale government financing to farmers with counterpart funding from the USAID through the Agricul! Credit and Cooperative Financing. Administration (ACGFA) "and. Farmers Cooporative “Marketing (FACOMA), Impressive ast was, by the end of five yours, #55 FACOMAS were Srgsnized representing 259,029" farmors in about 40,700 barangays in 80 provinces. Surprisingly, low repayment of loans occurred resulting from #S oor adminisraion. Thus, the experiment ended ingloriously leaving behind an {inpatd P00 Miion worth of FACOMA loans. ‘The FACOMA debacle taught the cooperators of the need to amend the laws on non-agricultural cooperatives and to adopt a new law that would define more Choary the thrust of government Involvement im cooperabves In general. In ‘1657, the Phiippine Non-Agrieutural Cooperative Law was passed separating the administration of agricultural cooperative (farming, fishing and forestry) om dhe Or amieule, Seat Ri FF Bipiie Natonal Bank was {elablished to provige credit to non-agricultural cooperatives however, it was ‘Slosed ater ten (10) years of operation due to mismanagement In 1960, the catholic church responded to the call of the Second Vatican ‘council in ihe solution of poverty and social injustice problems through the Srganization ‘of cooperatives in the parishes.” The efforts resulted in the Srganization of twousnds of primary cpoperatves of various fypes, which wore linked up with one another to form secondary level federations. in turn, they wore integrates to tortiary level organizations to form te national cooperative hetworks. In 1969, te Code of Agrarian Reform (RA 6389) was passed mandating the aszation of cooperatives as primary Conduits for credit, supply and marking Senices to agrarian reform beneficiaries However by the start of te fllowing Year (1870) dark clouds loomed the horizon of cooperatives because various {Groups would like to block the passage of objectionable bills and to enact an Stomatve cooperativetrendly law instead. They found a ready ally in the person of Senator Pelaez who was credited wit tho passage of the Rural Frectcation Law. On Soptomber 1972, martial law was imposed by then President Marcos, wha wanted. the cooperatives as instruments for the Propagation of his New Society or Bagong Lipunan During the martial lat rogime, President Marcos issuod several decregs that ealt with cooperatives. The dacree abolished CAO ané organized the Bureau {t ‘Cooperative ‘Development (BCOD) under the Department of Local Government and Community Development (OLGCD). A month tater, the ‘ovarian Reform Decree (PO 27) wee lseued declaring the entire country 26 an ‘grarian reform area, PD 175 and Letter of Implementation No. 23 were fsued Insupport of te agrarian reform program. With government sponsorships, cooperatives wore organized overnight. At tne barrie love, pro-cooperatives called Samahang_ Nayons were organized land grouped in ens to form Kilusang Bayans (Ks) or full-pledged cooperatives. Marketing and. financial serves were proved by the Aroa_Markellng (Cooperatives and the Cooperative Rural Banks respectively in support of the ‘Ske and KBs. "Tho Cooperate Development Loan Fund was also created. However, te cooperatives did mot int. OF te 22,000 SN, only 5% remained Sotive ae of 1996. The failures ware atirbuted from the heightaned conficts Between the cooperative movement and the government and the forcible Investment of oops savings called guarantee loans funds in baling out various {GRBs without Ue members’ consent. APparentiy, the external threats to Cooperatives survival led to ther consolidation into national networks. Onesuch network fe the National Confederation of Cooperatives (NATCCO) whieh hhas five regional development centers spread throughout te country. at the recreation of democratic space in 1986, the cooperate leaders lobbied aggressively for the adoption of a cooperative fenalylogisaton. They ‘ot all out support of Senators Aquilno Pemente!, Jr and Agapito Adu In Raving the Bll passed and signed as law (R-A. No. 6038) by Prosicent Corazon {G- Aquino on March 10, 1950. A companion law (RA 6538) was also passed creating the Cooperative Development Authority (CDA) which provided the {bolton of the Bureau of Agricultural Cooperatives (BACOD). With the passage tf the Cade, a powortl instrument for economic progress and development has ‘Been placed in the hands ofthe people, on February 17, 2009, an Act amending the Cooperative Code of the Philippines was signed by President Gloria Macapagal Arroyo to Be known a ‘he "Philippine Cooperative Code of 2008" Il General Concepts of a Cooperative 1A cooperative is an autonomous and duly registered association of persens, with a common bond of interest, who have voluntanly joined togathor Roachieve tei social, economic and cutural needs and aspirations by making equitable contributions to the capital requred, patronising ther products and ‘Services and aceepting a fair share of risks and benefits ofthe undertaking in ‘Secordance with the universally accepted cooperative principles. Il, Objectives and Goats of a Cooperative ‘The primary objective of every cooperative i to help improve the quality of lie ofits members, Towards this end, the cooperative shall alm to (a) Provide goods and services to its members to enable ther to attain increased income, savings, Investments, productiviy, and purchasing power, and promote ‘among Uemselves equitable Gistnbution ‘ot net "surplus through maxim utlizaton of fconomies of scale, cost-sharing and isk-sharing (&) Provide optimum social and economic benefits to its members: {c) Teach them efficent ways of doing things in a cooperative (@) Propagate cooperative practices and new ideas in ‘business and managoment: w. (6) Allow the lower Income and less prkileged groups to Increase thei ownership inthe wealth of the nation: ae (Cooperate with the government, other cooperatives and people-oriented organizations to further the alainment of ary ofthe Torogoing objectives. Every cooperative shall conduct its affairs in accordance with Filipina culture, good vakies and experience and Une universally ‘accepted principles of cooperation, which include, but are not limited (0, the folowing: (1) Voluntary and Membership — Cooperatives are voluntary ‘ocganizations, open to al persons able to use their services and wling to. accopt the responeibilties of membership, without ‘donde, social, racial, cultural, politica, or religious diserimination (2) Democrat Member Control — Cooperatives: are ‘democratic organcations that are controlled by their members wo ‘ctvely pacicpate in setting their policies and making decisions, tian and women serving a2 elected representatives, directors oF Officers are “accountable tothe momborship. In primary Cooperatives, members have equal voling rights of enememer, ‘onewrote. Cooperatives at alher levels are organized inthe same ‘Semecrati manner. (2) Member Economic Participation — Members contribute to, ‘and democratically contrat, the capital of their cooperative. AL least Dart of that capital's the common property of te cooperative. They Shall receive limited compensation or limited interest, any, of Ccaptal cubseribed. and paid as_ a’ condlon of membership. ‘Members allocate surpluses for any or all of the folowing purposes: eveloping the cooperative by setting up reserves, part of which Should atleast be indivisible; benefing memes in proportion to tow patronage of the cooperatve’s business, and, Supporting thor aetiiios approved by the membership. (4) Autonomy and Independence — Cooperatives are ‘autonomous, selt-help orgonizalions contrlled by hair members. Ht they enter into agreement with other organizations, including {overnment, or raise capital rom extarnal sources, they shall 4022‘on terms that ensure demacralic control of their members and ‘maintain their cooperative autonomy. (6) Education, Training, and information — Cooperatives shal provide edveation and training for tyoir mombers, olected and Sppointed representatives, managers, and employees, so Ut they ‘can contribute effectively nd efficienly to the development of thlt cooperatives (©) Cooperation Among Cooperatives — Cooperatives serve tneir membere most effectwoly and strengthan the cooperative movement by working together through local, national, regional, (7) Concern for Communty — Cooperatives work for the sustainablo development of their communities through policies ‘approved by their mombers V. Cooperative Practices Cooperatives follow certain operational guidelines and practice that helps them reepond to local needs, Some are adopted! from stander International practices “and ‘others from local innovations tke. the following? > Capital Formation - Starting a new cooperative can create a need ‘for substantial capital. A problem develops when tying t operate ‘with limited membership equity capil. The task of nancing a now Sooperative with member equity alone is usually impossible Therefore, the best source of atkitonal funds needed ts from ‘members in the form of. a) membership fee or purchase of stock, 5) agreement to withhold poruon of net earnings profits: and c) By _ascodsmont based on units of products old or purchased. > Cash Trading - This is business done on a cash and carry basis, ‘The customer enjoys at last Ove use of te goods and services for the cash payment halshe gives. Ccash trading promotes equality since anybody with cash can SBE" REWER SR Btinced” Epsaalie, Aoelnamnre, te ‘Cooperative would be able to avoid bed debts and stabilize business ‘perations. Finally, Ais away of mereasing growth. ‘Solin at market price - Cooperatives offer goods and services at provaling market prices, This promotes stabil. tean cope with ‘Sperational expences and cover up the negative effects of ‘Shrinkage. depreciation and losses. Whelps mointain the prices of ‘goods. Cooperative can avoid destructive competition — Fostering Constructive competition amang cooperatives wil safeguard the imorest of consumers. Cooperatives are’ encouraged to ‘Cooperative in unison and bring thelr joint power inthe market up to the lovel achieved by entorprises that are operated for the benefit of tther stakeholders. They. cooperative in order to gel a fair deal from the large, scale buyers of their products” Consumers Cooperate to get a better deal from manufacturers and suppliers Gretit cooperatives are formed to counter the power olarge scale Financial inetiutions. Price fsung agreements and cartel methods sre proventee constant expansion - As organizations, cooperatives have to grow for communty services. Cxpansion isa must. tis done intonawvely land extensively. New members should be recruited to accumulate ‘more capital ahd savings to support operation of the expanded Business’ and servicse which in tne tong run will provide more Benefits for them. Howaver, members. in ths regards should Cnderge continuous education "and training. to learn” various management practicesfechniques and. effective financial Supervision Quality standardized goods - Cooperatives are intended to develop ‘communitios through the. producton of high quality goods and provision “of ‘baller services. Cooperabves could help by patronizing only standardized products and vervices of high quality. Hence, different types of cooperatives wil ive to improve the goods’ and services to stand competition with business elabiishments. Ths in turn wil be instrumental in improving ea the countryv. > Cooperative wholesale business or intertonding - Cooperatives can RESBST ES cotnneaty” Rocks aise fen there kre people the expansion of membership may result in wholesale business. Infact {to be effectve, wholesale business, interning could be done by primary soeletiea. Defect rom retail business could be avoided, ‘The benefits from the wholesale are considerable. Members ccanmarket and acquire the goods and services at the night rive, and quality. “They ean even lower and raise savings. They ‘Cansloo Influence ie production "of badly needed goods and > Minimize expenditures - A significant factor favoring the growth of ‘cooperative Re boing @ community project. Is eficers do not Feoaive remuneration. W thay get compensation, its onl in the form of reasonable por dioms. When aucit “shows that the Cooperative Is not capable or can afford the minimum wage, oniy fomployess get paid regularly. Furthormore. laws, may allow ‘cxemption tom income and sales taxes.” Minimizing expenses ‘Shouts not be taken as a remedy to coverup the weaknesses ofthe System, It isnot to be concawed as form of dole-out, bu rather, I should be considered se motivation to make the movement stand on fe own ana soon attain i objectives. Once ts objectives are Senieved, the movement can take its rightful place inthe Sevelopment ofthe county. TYPES OF COOPERATIVES ‘common pool of funds in order to provide financial assistance Sand other related financial services to its members. for Droduetwe and provident purposes: 2) Consumers Cogporativeis one the primary purpose of which is to procure and distribute commodities to members and non members, 9) Producers Cooperatives one that undertakes joint production whether egreuitural er industrial. Ite formes anc operates by ts members to undertake the production and processing of raw BOSSES pe BRUSE, NEP SATS Ey he eoporaive To HS ambos End nonmembers. Any ent product or ft derhative areng from te raw materials produoes by tt memioers, told tn the ame of andor the account ofthe cooperative, shal be deemed '8 producto the cooperative and its members, 4) Marketing Cooperative is one which engages in the supply of production inputs to members and markets their products, 5) Service Cooperative & one which engages in medical and ental care, hapitalizaton, wansportaton, inaurance, housing, labor, electric light and power, communication, professional and oiher services: 6) Muttrparpose Cooperative 's one which combines two (2) or more of the business actives of these dlterant types of 7) Aavocscy Cooperative is a primary cooperative which promotes and aevecatos cooparatiiam among ils members and {he public through sociliyoriented. projects, education and training, research and. communication, and other similar activities to reach out tots intended beneficiaries; £8) Agrarian Reform Cooporativo's one organized by margin farmers majority of which are agrarian reform beneficiaries for the’ purpose of daveloping an appropriate system of land tenure, land. development. land consolidation of land ‘management in areas covered by agearian reform: 19) Cooperative Bank's one organizes forthe primary purpose of providing a wide range of trancial services to cooper abves ard {heir members: 10) Dairy Cooperatives one whose members ore engaged in the 11) Education Cooperative 's one organized for tne primary ‘purpose of owning and porating oonsed educational Ittutions, notaitatanding the provisions of Repubte Act No.‘9155, otnerwise known as the Governance of Basic Education ‘etof 2004 12) Elecire Cooperative is one organized for the primary purpose ‘of undrtaking power generation, utlzing renewable sources, including hybrid. systems, acquisition and operation of Sub {Wansmnission or cisrioution tts household members; 18) Financial Service Cooperative is one organized for the primary purpose of engaging in savings and credit services Sd other financial services, 14) Fishermen 's one organized by marginalized fishermen in localities whose products are markotod other [as fresh or processed products: 415) Heath Services Cooperative is one organized for te rimary purpose of providing madical, dental, and otYor heats srvices; 18) Housing Cooperative is one organizes to assist or provide ‘aece0s to housing for the benef of ts regular membors who ‘etwaly participate in the savings program for housing. Wis ‘co-owned and controlled by ts members: 17), Insurance Cooperative is one engaged in the business of imauring We" and property of cooperatives and. their members: 18) Transport Cooperative s one which Includes land and sea transportation, limited to. small vessels, ae. dofined oF ‘lassiied under the Philippine mariime laws, organized “under the provisions of RA 8520; 19) Mater Service Cooperative is. one organized to own, ‘operate and menage waters systems for Ue provision and ‘station of polable water for is members and. tet households; 20) Workore Cooperative |e one organized by workers, Inctucing the eattamployed, who are at the same time tne members and owners of the enterprise. ts. principal purpose is to provide employment and) business ‘opportunities toits members and manage tin accordance ‘ths cooperative principles; and (21) Other types of cooperatives as may be determined by the Buthorty, VII. CATEGORIES OF COOPERATIVES. Cooperatives shal be categorized according to membership ‘and territorial considerations as follows: (a) interme of membership, a cooperative shall be categorized Primary — The members of which are natural persons (i) Seconctary— The members of which are primaries; ona (i) Tertiary — The mombors of which are secondary ‘ooporatives; and (&) In terms of teritory, cooperatives shall be categorized according to areas of operations which may or may not ‘coincide withthe politcal sudivitone ofthe country. IIL. Privileges of Cooperatives: Cooperatives registered under RA 9620 shal, notwithstanding the provisions of any law to the contrary, be also ‘ecorded the following prvieges: (1) Cooperatives shall enjoy the priiloge of depositing their ‘sealed cash boxes oF containers, documents or any Watiable papers in the safes of the minicipal or oy resaurers and other government ofices trea of charge, land the custodian of such artes shal Issue a receipt Acknowledging the articles received duly witwessed by ‘another person:(2) Cooperatives organized among government employees, Shai Soy tethee use of anyPavaiabie space UNE ‘gency, whether owned or rented by the Government, (©) Cooperatives rendering special types of services and Tacitios such a Cold storage, tee plant, alecticty ‘Wansportation, and similar services. and Tacilies shall Secure a franchise therefore, and such cooperatives ‘shall open thelr membership to all persons qualified In thei areas of operation; (@) Ir areas where appropriate cooperatives exist, the preferential right to supply government institutions and Sgenciea rice, com and other grain, hah and otner ‘marine products, meat, eggs, milk, vegetables, tobacco land otner agricultural commodities produced by their ‘mombers shall be. granted to the cooperatives, ‘concerned: (©) Profecentist treatment in the allocation of fertiizers, Inetuding ‘seeds. "ané other agricultural inputs and Implemants, and i vice aistibution shall be granted to cooperatives by the appropriate government agencies; (6) Preferential and equitable treatment in the allocation or ‘contrat of bottomes of commercial shipping vessels in ‘connection with the shipment of goods and products of Seoperatives, (7) Cooperatives and their federations, such as farm and ‘ichery producers and suppliers, market vendors and such other cooperatives, which have for thelr primary Purpose the production andlor the marketing of products ‘fom agriculture, fisheries “and small entrepreneurial industries ond federations thereof, shal have preferential Fights in tho managament of pubic markets ancor lease ie market facies, stalis or spaces: Provided, That ‘hese rights shall only be wtilzed exclusively by cooperatives: Provided, further, That he cooperative forming a joint venture, partnership, or any other sitar arrangement with & noncooperative entity can ublize ‘these rights: (8) Cooperatives engaged in credit services andlor federations shall be eatitlod to loans, credit ines, rediacounling of their loan notes, and’ other eligible oer he Dvtpment Ban he tein ne ae eens he, Sa ee "he Pippin pet ures Crprton (PO) ana Sh wee ag Sovran on, sins tyres erent Tats ‘SE worse nica enmence te ee Tend terse and one, reas sen hate Gehan nagar Sete a ean “robe a ter for tene SOM, ad ts eeubih ae, eogeen Sort aindncatCectrtne Sopot ance aon (9) mpm warspor sore cooper maybe ted ‘ing Ser ict sar eran Sass ae vec score alto arp Sicha srogee coe gowanes. Towel Pent nA ve te pre ht ee sgt at opean open raps Siegy"on aS trae ober be copes ae, sy secur s tenoiee es Se Sn Sn es fcbarapre (10) Cooperatives transacting business with the Government ‘ofthe Philippines or any ofits political subdivisions oF Gry of ils agencies or instrumentalties, Including ‘government-owned and controlled corporations shall be Skempt from pre-qualifeaton lading requirements, oturthetanding the provisions of Republic Act No S14, otherwive know athe Government Procurement et (11) Cooperatives shall enjoy te privisge of ‘being ‘represented by the provinla or city fiscal or the Office fle Solicitor General, Fee of charge, excopt whan the ‘Soverse party isthe Republic ofthe Philpines: (12) Cooperatives. organized by faculty members anc joes of ecucational institutions shall have the preferential right in the management of the canteen She otter services related to the operation of Uo Sducational Inettution where they are. employed Provided, That such services are operated witin the remives ofthe anid askucatonal ineutution: ama (13) The appropriate housing agencies and government Financial meUtuions shall ereste a special window for financing,” housing projects undertaken bycooperatives, wth interest rates and terms equal to, oF alinnaaneatsh’Se Iie tara or ane Teak or tong torm wholesale loans to qualfed cooperatives, trout need tor indicat processing IX, Powers and Capacities of Cooperative ‘A cooperative registered under RA 9520 shall have the following powers and capacities: snd be sued: (1) To the exclusive use ofits registered name, to su (2) ot succession; (@) To amend its articles of cooperation in accordance with the Provisions of RA 9520 (4) Te adopt bylaws not contrary to law, moral o public patey, and teamend and repeal the same in accordance with RAS520, Dersonal property as the iranoaction of the awful afairs of he eoparative may reasonably and necessary require, subject 1 {ho limitations prescribed bylaw and the Constitution, (6) To enter into division, merger or consolidation; (2) To form sussisiary cooperatives and join federations oF unions, a8 provided in RA 9520, () To avai of toans, be ented to credit and to accept ane receive ‘gras, donations and assistance from foreign and domestic Sources, subject othe conations of sai loans, crodts, grant, Sonations or assistance that wil not undermine the autonomy of the cooperative. The COA, upon writion request, shall Provide "necsbsary "sesitance in’ the “documentary Foquirements for the loans, rei, grants, donations and other ‘nancial support, (9) To aval of preferential rights granted to cooperatives under Republic "AL No. 7460, ofherwiss known ae tho Local Government Codo, and other laws, particularly those in the (rant of franchises to establish, construct, operate and maintain forties, wharves, markets or slaughterhouses, and to FOERPP SS MNGE ae ISENALES Parts NS agri ane fenery acts; (10) To organize and operate school in accordance with Republic, [act No, 2185, Governance of Basic Education Act of 2001 and ‘ter pertinent laws; and (11) To exercise such other powers granted by RA 9520 oF neceseary to carry outs purpose oF purposes as stated ints [lcles of cooperation, Benefits Derived from the Cooperatives Cooperative members derive several benefits from the operation of thelr cooperative. The main benef ls seenomie since Imembere get a share of the cooparatwe's net surplus by atronizing its services. A certain percentage of the cooperative’s Fel surplus is returned to the members after a period of one year {ually ‘during their annual goneral assembly. It called patronage refund, Pstronage refund shall be distributed to the members in proportion to thelr patronage to the services of the cooperative. ‘The distribution shall be in accordance with tel" cooperative polices based on RA 9520. Through the patronage refund, members sre. actually savings while using the services the Cooperative, Cooperative members recsive economic benefits according to tne degree of toir contrition to the growth ot tha cooperative By ‘way of patronizing ts products and services. “Those who do net patronize the services of the cooperative are rol ented to patronage refund. Thoy are only enived to interest ton toir capital invested inthe cooperative Other Benefits Derived from Cooperativexm Cooperative members develop the habit of theif and savings: Cooperative serves as the training ground for is members in simple business operation, democratic leadership and responsible citizenship: It offers opportunities to te member's potontil capabilities in ‘productive purposes which may redoune fo thelr material bones [ind progress; and ‘A cooperative teaches its members so-disipine, setreliance and ‘ther desirable aitudes which make every member a pettor Individual and.abettor member of society. Allocation and distribution of Net Surplus Not Surplus. — Notwithstanding the provisions of existing laws, tne fet surplus of cooperatives shall be determined in accoreance with Iebylaws. Every cooperative shall determine is et surplus atthe ‘lose of every focal year and al such other times a6 may be preserved by he bylaws. ‘Any provision of taw the contrary notwithstanding, the net ‘surpuis shail not be construed as proft but as an excess of payments made by the members for the loans borrowed, or the ‘goods and services availed by thom from the cooperative or the Uiference of the rightful amount due to the members for thelr products sold or services rendered to the cooperative Including thor inflows of asats resting rom ts other operating activities ‘nd which shall be deemed to have boon returned to them # the ‘mele cltrbutod ng preseribed horain. Order of Distribution, — The net surplus of every cooperative shall, De aisuibuted ae oiows: 2.4. An amount for the reserve fund, which shall be atleast to”) er centim (10%) of the net surplus: Provided, Tat, in the {rst ive (5) years of operation after registrabion, this amount shall not be loss than fy per centum (50%) of the net surplus: 18) The reserve fund shall be used for the stability of the ‘Cooperative and to meet net loses In Is Sentral assomony may decrease the an ‘ie reserve tnd when Uno reerve fund already onoceds the share capita ‘Any sum recovered on tems previously charged to the reserve fund shall be credited to such fn. 1) The reserve fund shal not be ullized for investment, other than those allowed inthis Code. Such sum ofthe rosorve fund im excess of the share capital may be used. at “anytime for any project that would expand the operations of the cooperative upon the resolution of the general ‘sembly, ©) Upon the dissolution of the cooperative, the reserve fund ‘hall not be distributed among tre members. The general ‘assembly may resolve: (0 To estabish a usutructury trust fund for tho bonefit ‘of ary federation or union to which the cooperative ‘sted: and (i) To donate, contribute, or otherwise dispose of the amount for the benefit of the community where the ‘Sooperative eperatos. # te mambers cannot decks ‘Gpon the sigposa! of the reserve fund, the same shall {go to tne federation or union to which the cooperative ‘Saffilates 2.2 An amount forthe edlication and training fd, shall be not more than Yen par centum (70%) of te net surplus. The bylaws may provide that certain foes ors portion thereof Be eroitad to such find, Tho find shall provide for the Waining, development and Similar other cooperative activities geared towards tho growth of the cooperative movement (a) Hott oF the amounts transferred to the eduestion and training ‘king annually under this subsection shall be epent by th ‘cooperative for scucation and training purposes; wie the ‘tor half may be remitted to 3 union or federation chosen by the cooperative of of which itis a member. The said union of federation shal submit to the Authorty and to ite contributing ‘Cooperatives te folowing schedules (0) Listof cooperatives which nave remitod their respective ‘Cooperative Education and Training Funds (CETF).23. 25. (i) Business consultancy assistance to include the nature and ‘cost and (i Other training actwities undertaken epecttying therein the ature, parucipants and cost of each activity. (©) Upon the dissolution of the cooperative, the unexnended balance ofthe education and training fund appertaining to the ‘eoparative shall be erected to the cooperative education ‘nd training fund ofthe chosen union or feseration. ‘An amount for the community devolopmant fan, which shall not tbo less than three ner cantam (3%) of tho not surplus. The ‘community evelopment fund. shall be used for projects or ‘selves that wil bone the community where the cooperative [An oplonal fund, a land and building, ane any other necessary ‘und the total of which shall nt exceea seven per eontumn (7%). ‘The remaining net eurplis shall be made available to the membors Inthe form of interest on share capata nat to exceed the normal rate of roturn on investments and patronage refunds: Provided, [That any amount remaining afer the allowable interest and the patronage rafund have been deducted shall be creed to the Feserve tun ‘The sum allocated for patronage refunds shall be made: ‘avaliable at the same fate to all patrons of the cooperative in ‘proportion to thelr individual patronage: Provided, That (a) In the case of a member patron with paid-up share capital ‘contrition, his proportionate. “amount of patronage Fefund shall be pid to him unless ho agrees to crodit tre famount to. hi account. se adltional share capital Contribution (©) In the case of a member patron with unpaid share capital ‘contribution, hie. proportonste” amount of pavonage Fofund shall be credited to his account until his share epital contribution has been fully paid; (0) In the case of @ non-member patron, hie proportionate: ‘mount of patronage refund shall be sat ase iva general {ind for such patrons and shall be slloceted to inaivicual ommember patrons only upon request and presentation Gt evidence of te amount of his patronage. The amount so located shal be crecited to such patron toward payment {tthe minimum capital cntrioubon for membership. When ‘stm equ to thir amount has accumulated at any Ue within «period specified in the bylaws, such patron shall SS speeirrdcesaremeat aa epee the bylaws or edmission to membership; and (4) W within any period of time specified in the bylaws, any ‘siborber whe has not fully paid his subscribed share Capital or any non-member patron who has accumulated {he sum nocessary for membership bul who coos, not Fequest nor agree to become a mombor or fais to comply th the. provisions of the bylaws for admission to Tmombersivp, the amount So accumulatod or crected to {her account together with any part of tre genera und for hhommember patrons ehal be edit to the reserve fund Oro the education and training fund of te cooperative, at the option of the cooperative Xill, Tax Treatment of Cooperatives Duly registored cooperatives under RA 9520 which do not transact any business with non-members oF the general pubic shall not be subject to fay taxes and Tove Impoved under th internal revenue ows and other tx iw XIV. Tax and Other Exemptions Cooperatives transacting business with both members and non members shall not be subject to tax on thelr transactions wth members, Inrolation to this, the transactions of members with the cooperative shall rot be subject to any tres and fees, nolucing but tinted to final taxes On members’ deposits and. documentary” tax.” Notwithstanding the provisions of any law or regulation to the conivary, such cooperatives Seating with non-members shal enjoy the following lx exemptions: (@) Cooperatives with accumulated raserves and undivided net ‘Savings of not more than Ten Mion Pesos (P10,000,000.00) ‘hall Be exormpt from all national, ely, provincial, municipal oF barangay taxes of ‘whatever’ name and nature. Such ‘cooperatives shall be exempt from customs cules, advance Shes or compensating taxes on their importation of imachineries, eauipment and spare parts used by ther ane ‘which are not availabe localy as certiied by the Department ot ‘Fhaae and industry (OT) All tactree importations shall not be° ‘sold nor the beneiclal ownership thereof is transferred to any ec teantarceSt ibe Sa Se SSSA BATTS pay bales ‘the amount ofthe imposed tax andlor dies, cooperatives with accumulated reserves. and undivided net ‘savings of more than Ten Mion Peoos (P10,000,000.00) shall pay tho following txas tte ul ate (2) Income Tax — On the amount allooated for intrest on pital; Provide, That the same tax fo not consequent Imposed on interest individually reooWed by members Provided,” trther, That cooperatives, regardless of ‘lsetteation, are exempt frm the income tx trom the Sate of registration with he Author (@) Value-Added Tax —On transactions to. non-members Provided, however, Thal cooperates sly registered with ‘he Ausorty, are exomot trom Uo payment ef th valus- [added tax. subject o Soction 108, sub-oeconsL, Mand N ‘f Republic Act No. 9337, the National Internal Revenge Code, a8 amended: Provided That the exempt transaction ‘der “Sechon. 109. (shall inchude sales mado. by Cooperatives duty restored with the Authorty organized Sra operated by is mombors to undertake the production ‘nd processing of raw materials or of goods produced by ‘Remembers into nished ot processed product forsale by ‘mombpersin the form of interest andor patronage refs (6) Allotner taxes unless otherwise provided eral; and (@) Donations to charitable, research and educational Institutions and reinvestment to socio-economic projects ‘of operation ofthe cooperative may be tax reservar and undivided net savings shall be exempt fom payment of local taxes and taxes on transacteons with banks lind neurance companies: Provided, Tat all sales or services Tendered for non-members sal be subject to the applicable percentage tes except saloa made by producers, marketing Dr serice cooperaives: Provite, further, That noting mS ” ° ° ® Article shall preclude the examination ofthe books of accounts for other accounting records of the cooperative by duly Suihorized internal revenue officers for inlernal revenue ta purposes only. after previous authorization by the Author! Inareas where there are no avaiable notaries pubic, the judge ‘cxercising his ex ofits capacity as a notary public, shal Fender service, tea of charge, to any person oF group of Persons requiring the administration of an oath or the Bcknowledgment of articles of cooperation and instruments of toan trom cooperatives not exceeding Five hundred thousand [pesos (P500,000.00) [Any register of deeds shall accopt for repistration, free of ‘charge, any instrument relative to loan mado undor RA 8520 ‘which does not exceed Two hundred fy thousand pesos {© 250,000.00) or the doode of tite of any proporty acquired by {he cooperative or any paper or document drawn in connection ‘with any action brought by Ue cooperative or with any court jisdgmont rendered in ts favor oF any instrument relative to bond of any accountable officer of a cooperative for tho faithful ertormance of ts cuties and obligations ‘Cooperatives shall be exempt from the payment ofall court and Sheriffs fees payable to the Philpine Government for and In ‘connection with all actons brought under RA 9520, or wnere ‘such action ie brought by the Authority before the court, tO ‘enforce the payment of obligations contracted In faver of the cooperative Alt cooperatives shall be exempt from putting up a bond for ‘bringing an appeal againt the decision of an inferior court oF for soeking to set aside any third pary claim: Proviced, That a ‘certification ofthe Authority showing thatthe ast assets ofthe ‘Sooperative are in excess of the amount of the bond required by the court in similar cases shal be accepted by the court asa suffciont bond Any security issued by cooperatives shall be exempt from the ‘provisions of the Securities Act provided cuch security shall Rot be speculative