The Philippine Cooperative

Code of 2008
(Republic Act No. 9520)
Salient Features
Background
 Amended the Coop Code promulgated
in 1990;
 Discussed in four (4) Congresses
(starting the 11th Congress up to the
14th) spanning over ten (10) years;
 Approved by the Bicameral
Committee on November 18,2008;
 Signed into law last February 17,2009
The Republic Act No. 6938

 The Cooperative Code of the

Philippines
 Enacted into law on March 10,
1990
The Republic Act No. 9520

 The Philippine Cooperative Code

of 2008 (Article1)
 Signed on February 17, 2009
 Published on March 7, 2009
 Effective March 22, 2009
 State Policy (Article 2)

 Foster creation and growth of

cooperatives as a practical vehicle for
self-reliance and harnessing people
power for the attainment of economic
development and social justice
 Encourage private sector to undertake
actual formation and organization;
 Create an atmosphere conducive to the
growth and development of cooperatives
State Policy

 Ensure technical guidance, financial

assistance and other services

 Recognizes the principle of subsidiarity

wherein the sector will initiate the
promotion and organization, training
and research, audit and support
services with government assistance
where necessary
Cooperatives defined (Article 3)

An autonomous and duly registered

association of persons, with a common bond
of interest, who have voluntarily joined
together to achieve their social, economic
and cultural needs and aspirations by
making equitable contributions to the capital
required, patronizing their products and
services, and accepting a fair share of the
risks and benefits of the undertaking in
accordance with universally accepted
cooperative principles.
Cooperative Principles (Article 4)

• Patterned after the Principles as

formulated by the International Co-
operative Alliance (ICA)
– Voluntary and Open Membership
– Democratic Member Control
– Member Economic Participation
– Autonomy and Independence
– Education, Training and Information
– Cooperation Among Cooperatives
– Concern for Community
 Additional Definitions (Article 5)

 Representative assembly – full

membership elected by sectors, chapter
or district to exercise powers delegated
to them by the general assembly
 Officers – members of board of directors,
different committees created by the GA,
general manager or CEO, secretary,
treasurer and members holding other
positions as provided for in their bylaws
Additional Definitions

 Social Audit – a procedure wherein the

cooperative assesses its social impact and
ethical performance vis-à-vis its stated
mission, vision, goals and code of social
responsibility for coops…
 Performance Audit – refer to an audit on
the efficiency and effectiveness of the
cooperative as a whole, its management
and officers, and its various responsibility
centers…
 Additional Definitions

 Subsidiary cooperative – any organization

all or majority of whose membership
comes from a cooperative, organized for
any other purpose different from that of,
and receives technical, managerial and
financial assistance from, a cooperative
 Federation of cooperatives– three or more
primary cooperatives, doing the same line
of business
 Purposes of Cooperatives (Article 6)

 Encourage thrift and savings mobilization;

 Generate funds and extend credit;
 Encourage systematic production and
marketing;
 Provide goods and services and other
requirements;
 Develop expertise and skills among
members;
 Acquire land and provide housing benefits
Purposes of Cooperatives

 Insure against losses of members;

 Establish, own, lease or operate cooperative
banks, wholesale and retail complexes,
insurance and agricultural/ industrial
processing enterprises and public markets;
 Coordinate and facilitate activities of
cooperatives;
 Advocate for the cause of the cooperative
movement
 Purposes of Cooperatives

 Ensure viability of cooperatives through

utilization of new technologies;
 Encourage and promote self-help or self-
employment as an engine for economic
growth and poverty alleviation; and
 Undertake any and all activities for the
efficient and effective implementation of
the provisions.
 Powers and Capacities (Article 9)

 Exclusive use of registered names, to

sue and be sued;
 Of succession;
 To amend its articles;
 To adopt its bylaws not contrary to law,
morals or public policy
 Deal with real and personal property
 Enter into division, merger or
consolidation
Powers and Capacities

 Form subsidiary cooperatives and join

federations and unions;
 Avail of loans, credits, grants, donations
from domestic and foreign sources;
 Avail of preferential rights under
RA7160;
 Organize and operate schools in
accordance with RA 9155
Requirements for Registration
(Articles 10,11,14,15,)

 Pre-membership Education Seminar required

 Newly organized primary may be registered as MPC
after compliance with requirements set by CDA;
SPC may transform into an MPC or create
subsidiaries after two (2) years
 Economic Survey including staffing pattern which
includes at least a bookkeeper
 Articles of Cooperation
At least 15 members
Minimum Capitalization of PhP 15,000; reviewed
every 5 years
 By-laws
 Bonds of accountable officers
Amendments (Article 18)

 Amendments need 2/3 vote of

members with voting rights

 Merger, consolidation and division of

cooperatives require 3/4 of all
members with voting rights present
and constituting a quorum
Types (Article 23)

 Credit – promotes and undertakes

savings and lending services to its
members;
 Consumers – to procure and distribute
commodities to members and non-
members;
 Producers – undertakes joint
production whether agricultural or
industrial
 Types

 Marketing – supply of production inputs

and markets their products;
 Service – engages in medical and dental
care, hospitalization, transportation,
insurance, housing, labor, electric light
and power, communication, professional
and other services;
 Multi-purpose – combines 2 or more
business activities
 Additional Types of Cooperatives
 Advocacy – promotes and advocates
cooperativism among its members and the
public;
 Agrarian Reform – organized by marginal
farmers majority of whom are agrarian reform
beneficiaries;
 Cooperative Bank – providing a wide range of
financial services to cooperatives and their
members;
 Dairy – production of fresh milk which may be
processed and/or marketed as dairy products;
 Additional Types

 Education – owning and operating

licensed educational institutions;
 Electric – undertaking power generation,
acquisition and operation of
subtransmission or distribution to its
household members;
 Financial service – engaging in savings
and credit services and other financial
services;
Additional Types

 Fishermen – marginalized fishermen where

their products are marketed either as fresh
or processed products;
 Health Services – providing medical, dental
and other health services;
 Housing – assist or provide access to
housing for members who participate in the
savings program for housing;
 Insurance – business of insuring life and
property of cooperatives and members
 Additional Types
 Transport – services including land and sea
transportation;
 Water Service – own, operate and manage
water systems for the provision and
distribution of potable water to its
members;
 Workers – organized by workers, including
self-employed, to provide employment and
business opportunities
 Other types as maybe determined by the
Authority
Functions of a Coop Federation
( Article 24)

 Functions should complement, augment

or supplement but does not conflict ,
compete with, nor supplant the business
or economic activities of its members.
Membership (Chapter 3, Art.26)

 Kinds of Membership
1. Regular member one who has complied
with all the membership requirements and
entitled to all rights and privileges of
membership.
2. Associate member one who has no right to
vote or be voted upon and shall be
entitled only to such rights and privileges
as the by laws may provide.
Membership
 Legal age, Filipino citizens
 Capable and willing to perform the
responsibilities of a member
 Allows associate members but needs to
qualify for regular membership within
(2) years
 All elective officials are ineligible to be
officers or directors of cooperatives
except party-list representatives
 General Assembly (Chapter 4,)

 Shall be the highest policy making body of

the cooperative
 3/4 vote of members required to delegate
some powers to a representative assembly
 Quorum is at least 25% of all members
entitled to vote
 Voting in primary cooperatives is strictly
one-member, one vote and no proxies
allowed except for representative assembly
 Board of Directors (Articles 37,38,
39)

 Responsible for strategic planning,

direction, setting and policy formulation
 Term shall be fixed in the coop bylaws. A
term is 2 years
 Prohibition against holding any other
position involved in the day-to-day
operations and management
 Disqualification of persons engaged in
business similar to the cooperative
 Committees and Officers (Art.43)

 Additional committees
Mediation and Conciliation
Ethics
 All officers and committee members required
to undergo trainings conducted by accredited
institutions by the CDA
 No compensation except for per diems. If
cooperative reports a net loss for the
preceding year, officers are not entitled to
per diems
 Removal of officers may be done by a
majority vote of the members
 Functions, Responsibilities and
Training Requirements (Article 44)
 The functions and responsibilities of the
directors, officers and committee
members, AS WELL AS THEIR TRAINING
REQUIREMENTS, shall be IN
ACCRODANCE WITH THE RULES AND
REGULATIONS ISSUED BY THE
AUTHORITY.
 Responsibilities of Cooperatives

 Accountant or bookkeeper is responsible for

maintenance and safekeeping of books of
accounts
 Audit committee responsible for continuous
and periodic review of books of accounts;
monitor adequacy and effectiveness of
management’s control system and audit the
performance of the cooperative
 Audited financial statements required to be
posted in principal office
 Annual Reports (Article 53)

 Filed within 120 days from close of calendar

year
 Regular activities including socio-civic
undertakings
 Must show their progress and achievements
 The form and contents of the report shall be
prescribed by the rules of the Authority
 Liability for non-submission is fines and other
penalties imposable until the cooperative has
complied with the requirements
 Tax Treatment of Cooperatives
(Article 60, 61)

 Not subject to taxes and fees imposed

under NIRC and other tax laws for
cooperatives transacting business with
members only
 Transactions with members are not
subject to taxes and fees, including final
tax on members’ deposits and
documentary tax
Tax Exemptions

 Non-members will pay VAT; coop will

collect and remit to BIR
 Provided, finally that at least 25% of
net surplus of coop is returned to
members as interest and patronage
refund
 Cooperative is responsible for
collection and remittance of individual
withholding taxes (proper recording)
 Additional Privileges

 Faculty cooperatives have right of first

refusal in management of canteen and
other services related to the operations
of educational institutions
 Housing agencies and financial
institutions shall create a window for
financing housing projects
 Capital
 Subsidies, donations, legacies, grants, and
aids shall not be divided into individual
share capital holdings anytime but subject
to escheat proceedings upon dissolution
 Limitation on share capital held by one
member reduced from 20% to 10%
 Reasonable and realistic member capital
build-up program to allow the continuing
growth of the members’ investment in the
coop
 Audit

 Financial audit conducted by external

auditor in good standing with PICPA and
accredited by Board of Accountancy and
CDA
 Social and performance audits may be
conducted by an independent social
auditor accredited by CDA
 Social Auditing

 Based on the 7th Cooperative Principle –

Concern for Community
 Defined as the systematic review and
appraisal of the cooperative in relation to
the development of its most essential
building blocks-its members, its people,
and its distinctive contribution to the
development of its community and
society as a whole.
 Distribution of Net Surplus
 At least10% of net surplus; however, in first
5 years after registration, this is not less
than 50% of the net surplus
 Not more than 10% for CETF; half to be used
by the cooperative; other half is remitted to
the federation/union chosen by the
cooperative
 Federation/ union should submit: (a) list of
contributing cooperatives; business
consultancy assistance with nature and cost;
and (c) training activities specifying the
nature, participants, and cost
 Distribution of Net Surplus

 Not less than 3% for community

development fund for projects/activities
for the benefit of the community where
the cooperative operates
 Not more than 7% for optional fund,
land and building, and other funds
 Other Provisions
 Additional Special Provisions
Transportation Cooperatives
Electric Cooperatives
Cooperative Banks
Credit Cooperatives
Financial Service Cooperatives
Housing Cooperatives
 Conciliation and Mediation Committee (ADR)
 Additional Penal Provisions
 CDA allowed to formulate rules on the
Cooperative Code on certain provisions
 Other Provisions

 Congressional Oversight Committee to

review and approve the implementing rules
and regulations
 Re-registration of all cooperatives to confirm
their status by submitting: (a) Certificate of
Registration/Confirmation; (b) articles of
cooperation; (c) bylaws; and (d) latest
audited financial statement
 Must secure tax exemption certificate from
BIR
Changes in the New
Coop Code are not
threats, they are
opportunities that can
be pursued.
THANK YOU &
MAY GOD BLESS
YOU…