3rd International Conference on Cooperatives, 15-16 November 2018, DAP, Tagaytay City

Concern for Community: Case

of Cooperatives in the
Cordillera region, Philippines

CHERYLL C. LAUNIO and MARY CRIS B. SOTELO

Benguet State University
 RATIONALE

• 7th cooperative principle: concern for community

• Cooperatives are mandated in principle and by law to allot funds from their
annual net income for projects that serve the community where they operate

• Not much information on the status of observance or actual implementation

of this cooperative principle among cooperatives in the CAR

• Information on areas of development work where cooperatives in the CAR

have or are engaged in is useful for policymakers such as the provincial and
development councils, CDA and other training agencies.
 OBJECTIVES

Specific Objectives:
1. Describe the profile of CAR cooperatives
2. Determine how much fund is allocated; actually used by
cooperatives for community development;
3. Determine how CDF are being used; and which specific areas
of development work;
4. Determine views of cooperatives on concern for community
and corporate social responsibility;
5. Determine the relationship of selected cooperative
characteristics on allocation and CDF usage; and
6. Determine constraints and barriers for cooperatives in
implementing CD projects
 CONCEPTUAL FRAMEWORK

Cooperative Community
Laws/Cooperative Needs
By-Laws
Community
Development
Cooperative Community
Characteristics/ Development
Projects
Performance Funds (CDF) - Actual fund use
- No. of project/
beneficiaries
CSR - Successful projects
Understanding/ CDA
Perceptions Monitoring
METHODOLOGY
• Quantitative-Descriptive/Correlational
• Mailed Survey
• 223 small, medium and large CDA-
registered cooperatives
• 56 cooperatives (25%) participated in
the survey
• Data gathered
o Cooperative profile
o Financial condition
o Community development projects
o Qualitative statements to account for
understanding of CSR.
• Secondary data from the Cooperative
Annual Performance (CAPR) – 219 coops
reporting in 2016
• Key informant interviews
 RESULTS AND DISCUSSION

STATUS OF COOPERATIVES IN THE CORDILLERA REGION

• 496 total active registered cooperatives as of 2015 • Total assets of Php13.96 B as of 2015
• Majority are micro; only 6% are large • Share of large cooperatives comprise more
• 642 total active registered cooperatives as of 2017 than 72% of total cooperative assets
 RESULTS AND DISCUSSION

Type of cooperatives, 2017 (n=642)

Union Advocacy
Service Transport
1.4%
0.8% 0.2% Location of
3.1%
ARB
Agriculture
Cooperative (%)
Producers 0.9% Abra 7.0
5.8%
1.9%
Consumers
Apayao 5.3
MPC-N-
6.4% Baguio city 22.6
Agriculture Credit Benguet 35.0
26.6% 20.2% Ifugao 8.4
Kalinga 13.4
MPC- Federation Mt. Province 8.3
Agriculture 0.9%
28.5%
MPC Marketing Housing
0.8% 2.2% 0.3%
 RESULTS AND DISCUSSION

PROFILE OF RESPONDENT COOPERATIVES (n=56)

 Majority are small, multipurpose cooperatives who
operate in Baguio city and Benguet.
 96% provide credit services; 70% offer savings deposit;
30% time deposit; 34% have consumer/grocery services.
 86% are members of organizations or unions most of
which are provincial or regional organizations.
 Most were established from 1990 to 1999 and have 100
to 500 members and 0 to 9 employees.
 RESULTS AND DISCUSSION

FINANCIAL PROFILE (n=56)

Cooperative Average Total Average Net Average number
Category Assets (PhpM) surplus (Php) of members
Large 419.5 18.2 5,885
Medium 33.9 1.6 563
Small 7.8 0.4 443
TOTAL 103.5 4.6 1,643
 RESULTS AND DISCUSSION

% ALLOCATION TO COMMUNITY DEVELOPMENT FUND (CDF)

Type of Fund Large Medium Small All
(n=12) (n=16) (n=28) (n=56)
3% 91.67 87.5 75.00 83.9
5% 6.25 14.28 8.9
7% 8.33 6.25 3.57 5.4
10% 3.57 1.8
 RESULTS AND DISCUSSION

ACTUAL COMMUNITY DEVELOPMENT FUND (CDF) AND CDF-

SPENT IN THE LAST FIVE YEARS, BY CATEGORY
Mean no. of CD Mean CDF as of Mean Actual
Cooperative projects* in the last December, 2016 CDF spent
Category 5 years (Php) (Php/year)
Large 7 669,937 206,167
Medium 4 131,136 14,345
Small 2 63,421 7,100
Total 4 217,012 51,827
 RESULTS AND DISCUSSION

• ESTIMATED UTILIZATION RATE OF CDF, BY CATEGORY, 56 COOPERATIVES, CAR

Figure 5. Rough estimate of mean utilization rate Utilization

of CDF, 56 cooperatives, 2016, CAR rate %
0 14.3%
40%
1% to 10% 21.4%
% utilization rate

29% 11% to 20% 10.7%

30% 27% 25%
22% 21% to 30% 10.7%
20% 31% to 40% 8.9%
41% to 50% 5.4%
10%
51% to 60% 5.4%
0% 61% to 70% 3.6%
Large Medium Small ALL 71% to 80% 1.8%
Cooperative category 81% to 90% 1.8%
90% to 100% 3.6%
Note: Utilization rate is significantly different between large and small
 RESULTS AND DISCUSSION

• ACTUAL COMMUNITY DEVELOPMENT PROJECTS IMPLEMENTED, 56 COOPS, CAR

School-related Donation to
Tree planting Medical indigents/ PWDs
infra/facilities
(10%) assistance (9%) humanitarian
(11%) assistance (9%)

Celebration/ Brigada Livelihood

Scholarship
events/festivals eskwela/Back to trainings/forum/
programs/Student
school donations seminar (4%)
Financial aid (7%) (6%) (4%)

Clean and Clean-up

Sports/Sports-
green/environ- drive/Barangay Feeding program
related
mental program clean-up drive (3%)
programs (3%)
(3%) (3%)
 RESULTS AND DISCUSSION
BENEFICIARIES OF COMMUNITY DEVELOPMENT PROJECTS (n=56)
Beneficiaries % Beneficiaries %
Barangay/Community 16.9 Youth 1.7
Cooperative members 14.0 Benguet community 1.1
Daycare/Elementary School 12.9 Children/Babies 1.1
Pupils/Students 10.1 Farmers 1.1
High School Students 5.1 LGU 1.1
Tertiary students/school 4.5 Senior citizen 1.1
Church 3.9 Street children/Indigents 1.1
Families 3.4 Business employees 0.6
Individual 3.4 Coop member children 0.6
Faculty/Teachers 2.8 Mothers 0.6
Members/community 2.8 Old Market 0.6
Calamity victims 2.2 Patients 0.6
Cooperative Union 2.2 Police 0.6
Government employees 1.7 Prisoners 0.6
Schools 1.7
 RESULTS AND DISCUSSION

• COOPERATING AGENCIES FOR CD PROJECTS, 56 COOPERATIVES, CAR

Cooperating Agency/ies % Cooperating Agency/ies %
Line Agency/ies 10.0 Cooperative 0.9
BLGU 9.5 Provincial Cooperative Council 0.9
Cooperative Union/Federation 4.1 Individual 0.5
Church/Cathedral 3.6 KPH 0.5
Private organization/Foundation/Company 3.6 LGU 0.5
PTA 2.7 MLGU 0.5
University/College 2.7 Parents 0.5
City Cooperative Development Office 2.3 PNP 0.5
Schools 1.8 Politician 0.5
None 1.8 Pre-school 0.5
Hangar Market 1.4 Public elementary/high school 0.5
PhilHealth 1.4 No response 47.7
PLGU 1.4 Grand Total 100.0
 RESULTS AND DISCUSSION
• SELF-ASSESSMENT OF SUPPORT/SERVICES TO COMMUNITY WHERE IT OPERATES
1 2 3 4 5
A. Manager's/Chairman's Self-Assessment of Support/Services to
Strongly Somewhat Strongly
Community Where it Operates Disagree Agree
disagree agree agree
1. We incorporate the interests of the communities where we
0% 2% 6% 38% 55%
operate, in our business decisions.
2. We financially support education programs in the communities
2% 2% 25% 31% 40%
where we operate.
3. We financially support health programs/projects in the
6% 2% 13% 38% 40%
communities where we operate.
4. We give donations during calamities/disasters in the
4% 0% 6% 37% 54%
communities where we operate.
5. We financially support cultural/sports/arts/tourism activities in
2% 0% 23% 37% 38%
the communities where we operate.
6. We financially support youth and values improvement programs
4% 0% 18% 41% 37%
in the communities where we operate.
7. We financially support environmental initiatives (protection/
2% 0% 14% 37% 47%
development) in the communities where we operate.
8. We financially support peace and order/security initiatives in the
2% 0% 20% 37% 41%
communities where we operate.
9. We stimulate livelihood opportunities/economic development in
4% 0% 4% 27% 65%
the communities where we operate.
 RESULTS AND DISCUSSION
UNDERSTANDING OF CORPORATE SOCIAL RESPONSIBILITY (N=53)
1 2 3 4 5
B. Understanding of Corporate Social Responsibility Strongly Somewhat Strongly
Disagree Agree
disagree agree agree
1. We protect members’ interests for the sake of their long-term
4% 0% 4% 17% 75%
economic security and welfare.
2. We ensure that quality and safe services are provided to clients. 4% 0% 4% 19% 74%
3. Our employees are treated fairly, and have flexible work hours. 4% 0% 6% 21% 70%
4. Our employees undergo continuous employee training. 4% 0% 9% 25% 62%
5. We make efforts to reduce environmental degradation in our
operations such as by segregating wastes, recycling waste 2% 0% 6% 32% 60%
materials, and others.
6. We incorporate environmental concerns of the community
2% 2% 8% 32% 57%
(beyond membership) in our business decisions and operations.
7. We participate in providing social welfare services, such as support
4% 2% 9% 38% 47%
to education, health and cultural undertakings.
8. The economic situation of the cooperative can enable or not the
4% 6% 16% 25% 49%
social responsibility initiatives of the cooperative.
9. The leaders’ (BODs and manager) perspective greatly affect the
5% 0% 10% 24% 62%
social responsibility initiatives of the cooperative.
 Net surplus by Actual CDF used 900000 CDF allotment and Actual CDF used
80000000 800000 y = 0.1959x + 19546

70000000
r=0.91 700000 r=0.63 R² = 0.3915

60000000 y = 25.847x + 26594 600000

R² = 0.8613
Net surplus
50000000 500000
40000000 400000
30000000 300000
20000000
200000
10000000
100000
0
0
0 500000 1000000 1500000 2000000 2500000
0 1000000 2000000 3000000 4000000
Actual CDF used

No. of years of existence and No. of members and Actual CDF

Actual CDF used used
900000
800000
900000
800000
r=0.92 y = 29.718x + 7741.8
R² = 0.8384
y = 2222.6x + 22088
700000 700000
R² = 0.0143
600000 600000
500000
400000
r=0.12 500000
400000
300000 300000
200000 200000
100000 100000
0 0
0 10 20 30 40 50 60 0 5000 10000 15000 20000 25000 30000
 RESULTS AND DISCUSSION
• PROBLEMS AND CONSTRAINTS IN ENGAGING IN COMMUNITY DEVELOPMENT
PROJECTS
Problems or Constraints n %
Limited Funds allotted for CDF 18 32%
Lack of Participation 11 20%
Poor Coordination with Partner Agencies 8 14%
Lack of Manpower 7 13%
Lack of Time 7 13%
No plan for utilizing CDF or conducting community development projects 4 7%
Coop Members are busy 3 5%
Lack of Communication 2 4%
Projects planned are not feasible 2 4%
Few medical practitioners 1 2%
Financial Constraints 1 2%
GA does not approve the project 1 2%
High cost of supplies and services for the conduct of certain community development activities 1 2%
Lack of Awareness 1 2%
Lack of knowledge on the conduct of community development projects 1 2%
Lack of Linkages 1 2%
Lack of Medicine 1 2%
Lack of Prompt Action 1 2%
Lack of Transportation 1 2%
Low Net Surplus 1 2%
Seedlings are limited for conducting tree planting activity 1 2%
No response 17 30%
 RESULTS AND DISCUSSION
• PROBLEMS AND CONSTRAINTS IN ENGAGING IN COMMUNITY DEVELOPMENT
PROJECTS
Problems or Constraints n %
Limited Funds allotted for CDF 18 32%
Lack of Participation 11 20%
Poor Coordination with Partner Agencies 8 14%
Lack of Manpower 7 13%
Lack of Time 7 13%
No plan for utilizing CDF or conducting community development projects 4 7%
Coop Members are busy 3 5%
Lack of Communication 2 4%
Projects planned are not feasible 2 4%
Few medical practitioners 1 2%
Financial Constraints 1 2%
GA does not approve the project 1 2%
High cost of supplies and services for the conduct of certain community development activities 1 2%
Lack of Awareness 1 2%
Lack of knowledge on the conduct of community development projects 1 2%
Lack of Linkages 1 2%
Lack of Medicine 1 2%
Lack of Prompt Action 1 2%
Lack of Transportation 1 2%
Low Net Surplus 1 2%
Seedlings are limited for conducting tree planting activity 1 2%
No response 17 30%
 CONCLUSIONS

1. 220 CDA-reporting small, medium and large cooperatives in the CAR had aggregate
total assets of around Php16B and total membership of more or less 400,000. Most
are multi-purpose and located in Baguio city and Benguet province.
2. Findings indicate high compliance in terms of allocating 3% of annual net surplus for
CDF. The aggregate CDF of small, medium and large cooperatives in the CAR as of
2016 is substantial at almost Php40 million.
3. Actual utilization rate is roughly estimated at around 25% of estimated CDF. Large
cooperatives have higher absolute amount spent for community development
projects, but % utilization rate is not significantly different only with small
cooperatives.
 CONCLUSIONS

4. Most commonly implemented development projects/activities are: school-related

minor infrastructure and facility provision; tree planting; medical assistance
including Philhealth sponsorship; scholarship programs or student financial aid; and
donations to community and school celebrations, events and activities.
5. Managers’ and other respondents’ self-assessment and understanding of
corporate social responsibility are high in the likert scale.
6. Actual CDF-usage is highly positively associated with net surplus and number of
cooperative members, but not necessarily with the number of years of existence of
the cooperative.
7. Perceived challenges include limited CDF; lack of manpower, time and participation
among members; poor coordination with partner agencies; and lack of plan for
using CDF.
 IMPLICATIONS AND RECOMMENDATIONS

1. CAR cooperative profile imply the high potential of cooperatives to impact various
type of communities and indigenous peoples’ groups and to contribute to the
attainment of the sustainable development goals.
2. Consider more proactive planning and collaboration among cooperatives and with
partner agencies in order to increase CDF utilization rate.
3. Consider enhancing information dissemination on the principle of concern for
community beyond its members; and enhancing opportunities and policy support to
foster linkages and partnerships among cooperatives for community development.
4. Further study and analysis of potential determinants of CDF usage to include
manager’s values, competencies and activities; organizational characteristics;
provincial and municipal council characteristics; CDA monitor characteristics.
 Thank you!
CONCLUSIONS AND RECOMMENDATIONS