The Philippine Cooperative Code of

2008 (Republic Act No. 9520)

The Philippine
Cooperative Code of
2008 (Republic Act
No. 9520)
 Signed by the President into law on
February 17, 2009 and effective fifteen
(15) days after its publication in the Official
Gazette or in a newspaper of general
circulation
Cooperative
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
 Patterned after the Principles as
formulated by the International
Cooperative Alliance (ICA)
Voluntary and Open Membership
Democratic Member Control
Member Economic Participation
Autonomy and Independence
Education, Training and Information
Cooperation Among Cooperatives
Concern for Community
 New Terms in the Code

 Representative Assembly

 Subsidiary Cooperatives

 Social Audit

 Performance Audit
 Organization and Registration
 Completed a Pre-Membership Education
Seminar (PMES)
 Newly organized primary coop may only be
registered as an MPC after compliance with the
minimum requirements for MPCs to be set by
the CDA
 Submission of Economic Survey with staffing
pattern which includes at least a bookkeeper
 Articles of Cooperation
At least 15 members of legal age
Minimum Capitalization of PhP 15,000
 Organization and Registration
 CDA to periodically assess the required paid-up
capital of coops and may increase it every five
(5) yrs when necessary upon consultation with
the coop sector and National Economic
Development Authority (NEDA) (Guidelines to
be drafted)
 Any merger, consolidation and division of
cooperatives require 3/4 affirmative votes of all
members with voting rights present and
constituting a quorum
Additional Types of
Cooperatives
 Advocacy
 Dairy
 Education and Training
 Fishermen
 Financial Service
 Health Service
 Housing
 Water Service
 Workers
 Federation

 To carry on coop enterprise that

complements, augments or supplements but
does not conflict, compete with, nor supplant
the business or economic activities of its
members.
 Registered cooperatives may organize a
federation according to the type of business
activity which they are engaged in
 Membership
 Legal age, Filipino citizen
 An associate member who meets the minimum
requirements of regular membership, continues
to patronize the cooperative for two (2) years,
and signifies to remain a member shall be
considered a regular member
 All elective officials are ineligible to be officers
or directors of a cooperative except a party-list
representative being an officer of a cooperative
he/she represents
Membership
 The general assembly may opt to create an
appeal or grievance committee to serve for
one (1) year to decide on appeals on
membership application; and if they fail to
decide within thirty (30) days upon receipt
thereof, the appeal is deemed approved in
favor of the applicant
 Administration
 The general assembly may by 3/4 votes of all its
members with voting rights present and
constituting a quorum, delegate some powers to
a representative assembly
 Written notices to regular meetings shall be sent
in writing, by posting or publication or through
other electronic means to all members of record
 Notice to special meetings to be sent 1 week
prior to the meeting to all members entitled to
vote
Administration
 Voting in primary cooperatives is strictly
one-member - one vote no proxies allowed
except for representative assembly
 Quorum shall consist of 25% of all the
members entitled to vote. However in case of
coop banks, quorum shall be as provided in
Art. 99 of the Code; In electric coops,
5% of all members entitled to vote unless
otherwise provided in the by-laws
Board of Directors
 The BOD are responsible for strategic planning,
direction-setting and policy- formulation
 Their term still not to exceed two (2) years but
no limitation as to number of consecutive terms
to hold office
 Prohibition against holding any other position
involved in day-to-day operations and
management
 Disqualification of persons engaged in business
similar to the cooperative
 Committees and Officers
 Additional committees
Mediation and Conciliation
Ethics
 Members of Audit and Election Committees
shall be elected by the general assembly, and the
rest shall be appointed by the board
 Audit Committee shall be directly accountable
to the general assembly and shall have the
power and duty to monitor the adequacy and
effectiveness of the coop’s management control
system
Committees and Officers
 All coop officers and committee members
required to undergo trainings conducted by
accredited institutions by the CDA
 No compensation except for per diems, but if
cooperative reports a net loss for the
preceding year, officers are not entitled to per
diems
 Removal of officers may now be done by 3/4
votes of the regular members present and
constituting a quorum in a regular or special
assembly meeting
 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

 Filed within 120 days from the close of the

calendar year
 Should include regular activities including
socio-civic undertakings
 Must show their progress and achievements
 Liability for non-submission are
commensurate fines and penalties imposable
until the cooperative has complied
 Tax Privileges
 Coops transacting with both members
and non members shall not be subject to
taxes and fees imposed under NIRC and
other tax laws on their transactions with
their members
 Transactions of members with the coop
shall not be subject to taxes and fees,
including final tax on members’ deposits
and documentary stamp tax
Tax Exemptions
 Non-members will pay VAT; coop will
collect and remit to BIR
 25% of net surplus is returned to
members as interest and patronage
refund
 Cooperative is responsible for collection
and remittance of individual
withholding taxes (interest on share
capital)
 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%
 By-laws to provide reasonable and realistic
member capital build-up program
 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 internally by audit committee,
paid staff, volunteer members, or by
qualified external auditors
 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
 Provide at least ten (10%) for the reserve fund.
Provided that, in the first five (5) years after
registration, the reserve fund shall not be less
than fifty percent (50%) of the net surplus

 Provide not more than 10% for CETF; half may

be spent by the coop for education and training
while other half may be remitted to the
federation/union chosen by the cooperative;
Distribution of Net Surplus
The federation/union chosen shall submit
to the CDA:

(a) list of contributing cooperatives;

(b) business consultancy assistance with

its nature and cost; and

(c) training activities specifying the

nature, participants, and cost of each
activity
Distribution of Net Surplus

 Not less than 3% for community

development fund for projects/activities
that will benefit the community where
the cooperative operates
 Not more than 7% for optional fund,
land and building, and other funds
 Other Provisions
 Special Provisions for:
Transportation Cooperatives
Electric Cooperatives
Cooperative Banks
Credit Cooperatives
Financial Service Cooperatives
Housing Cooperatives

 CDA allowed to formulate rules on certain

provisions of the Code
Other Provisions
 Mediation and Conciliation Committee to
facilitate settlement of intra-coop disputes &
among members, officers etc. before
submitting the case to CDA for voluntary
arbitration (procedure in accordance with
ADR Act of 2004)
 Joint Congressional Oversight Committee on
Cooperatives to review and approve the
implementing rules and regulations of the
Code and monitor proper implementation
Other Provisions
 Additional Penal Provisions:
Liability of public officials or employees of
any government agency who deprive,
diminish, hinder or restrict coops from the
full employment of their privilege under
Article 60 & 61 of the Code
The CDA may motu proprio, initiate
complaints against person(s), organizations
using the word “cooperative” not duly
registered as a coop under the Code
Other Provisions
The coop or any of its members can file a
case against any officer or employee of the
Bureau of Internal Revenue (BIR) or of any
other government agency with the
Ombudsman, Civil Service Commission,
other appropriate government agency or
the courts of law
Other Provisions
Offenses punishable by a penalty of
imprisonment of not less than 1 year nor
more than 5 years or a fine not more than
P50,000 or both:
 Providing information, reports or other
documents to the CDA that are required
under this Code which the person knows
to be false or misleading
 Omission or refusal to furnish any
information, report or other document
that is required under the Code
Other Provisions
 Making an entry required under the Code
in a book or register, which the person
knows to be false or misleading
 Hindering an authorized person from
making an inspection, audit, examination
or investigation required under the Code
 Failureto comply with an order or
written instructions issued or given by the
CDA
Other Provisions
Re-registration of all cooperatives within one
(1) year from effectivity of this Code to
confirm their status by submitting: (a)
Certificate of Registration/Confirmation; (b)
Articles of Cooperation; (c) by-laws; and (d)
latest audited financial statement
Must secure Certificate of Tax Exemption
from BIR (valid for 5 years from issue)
following the issuance of the new Certificate
of Registration
 Status of Amendments

The amended provisions shall be applicable

only after the confirmation of the coops’
status thru their re-registration
under the New Code.
THANK YOU