Module 7: Non-State

Institution
CHARIES NAZARENO MORENO-ABING
At the end of the module, you should be able to: 1.
Identify the different types of non-state institutions;
2. Explain the purpose and functions of organizing
cooperatives and trade unions; &
3. Acknowledge the benefits of non-state institutions
in our social life.
 Questions:
1. What are non-state institutions?
2. How do non-state institutions such as banks and
corporations affect society?
3. Are there ways to improve the predicament of many
low-income individuals who continually struggle to
meet their daily needs?
 Non-state
Institutions these are
establishments which
are not owned and
controlled by the
government.
 Activity 1: Graphic Organizer
Directions: Fill-in the diagram with the different
types of non-state institutions that are familiar to
you.
Institutions Banks
Non-State

Trade unions and

cooperatives
Financial institutions
Non-state institutions refer
to institutions that are
organized by private
individuals or groups for the
purpose of providing
services to the members of
society.
 Non-state However, a corresponding price or
institutions-play payment is needed in exchange for
vital roles in the their services.
economy because
they are the ones
providing the needs
of the people that the
government cannot
provide.
Institutions Banks
Non-State

Trade unions and

cooperatives
Financial institutions
 TRADE UNIONS AND COOPERATIVES
-have the primary role of promoting labour welfare and
good industrial relations.

Trade unions and cooperatives are organizations

comprising workers and labourers with common goals,
purposes, and interests. They mostly concern
employment relations, decency, and welfare.
 FINANCIAL INSTITUTIONS
-are organizations that serve as bridges or
intermediaries that facilitate the flow of money in
various transactions. This means that financial
institutions serve as links between the source of
funds, the depositor, the fund user, and the
borrower.
 BANKS

-receive savings
and deposits of
their clients. These
may be loaned out
to borrowers.
 EXAMPLE:
Juan dela Cruz has PhP 10,000.00, which he has saved from his salary as a manager. He
deposits it at Maharlika Bank, which offers a 2% interest per annum. This would mean that
if he does not withdraw any of his savings, he will get 10,000.00 + 2% = 10,200.00 after
one year.

Now, Mr. Entrepreneur needs PhP 7,000.00 because he wants to put up a sari-sari store. He
borrows PhP 7,000.00 form Maharlika Bank.

Can you see the flow of money? Juan gets more than PhP 10,000.00 after a year. At the
same time, he is able to help Mr. Entrepreneur put up a business. These would not have
happened without the help of Maharlika Bank since Juan and Mr. Entrepreneur do not know
each other.
 BANKS

 Banks started during the Renaissance period

in Italy. The word 'bank' traces its origin from
the Old Italian word banca which means
'table' or 'bench,' and is where transactions
occurred at that time.
 BANKS

 The role of a financial institution as a

link in the transfer of money from the
source to the borrower is very important
to our economy.
 BANKS

 Banks provide safe-keeping place for

money and valuables of individuals. They
also perform a role in settling payments
and credit intermediation.
 BANKING INSTITUTIONS

 The Bangko Sentral ng Pilipinas is known

as the banks of all banks in the Philippines. It
is the bank responsible for the regulation,
creation, and management of monetary
supply in the country.
 These are the different types of banks:

Thrift banks are categorized into

Commercial banks stock savings and loan Rural banks cater
accept savings deposits, associations, savings and
check deposits, and mortgage banks, and private primarily to
time deposits. development banks. They
consolidate the savings deposits
farmers and small
Examples of Philippine of their members into a fund from
which their members can draw
business people,
commercial banks are loans with interest. They also mostly in rural
Bank of the Philippine accept deposits from the public
Islands and Metrobank. and provide loans for small- and areas
medium-scale enterprises.
 CORPORATIONS
 A corporation is an
organization of people
legally bound by a
charter to conduct some
type of business. It has a
legal entity separate
from its owners.
 CORPORATIONS
 Articles of incorporation are written
applications to the government requesting
permission to form a corporation. This will
give the name, address, and type of business
for the corporation; the names of the officers,
and the initial amount of money being put
into the business.
 CORPORATIONS
 The following are the advantages of corporations
as business organizations in the economy:
• easy to raise funds–since the corporate form is the most
effective for raising money
• limited liability–the concept that owners of the business are
only responsible for its debts up to the amount they invest in
the business
 CORPORATIONS
 The following are the advantages of corporations
as business organizations in the economy:
• unlimited life–not ceasing to exist if a major
stockholder dies
• specialized management–affording to have
specialized managers to run the business
• shared risks–spreading business risks among many
owners
 CORPORATIONS
 The following are the disadvantages of corporations as
business organizations in the economy:
• difficult to start–needs government approval before
starting the business
• less direct control–owners that are usually far from
the day-to-day operation of the business
 CORPORATIONS
 The following are the disadvantages of corporations as
business organizations in the economy:
• double taxation–corporate taxes that need to be
paid by the corporation and the owner who received
dividends from the profit
• limited activities–limited activities by the article of
incorporation
 COOPERATIVES AND TRADE UNIONS
A cooperative is a voluntary organization of people
who have agreed to pool their resources together to
undertake an economic enterprise to meet their
everyday needs. A cooperative is something that they
democratically manage, control, and share the
economic benefits by participation and patronage
(Cooperative Development Authority, CDA).
 COOPERATIVES AND TRADE UNIONS

Trade unions or labour unions are voluntary

associations of either employees, employers, or
independent workers to protect their interest and
become an instrument of defense against
exploitation and maltreatment.
 COOPERATIVES AND TRADE UNIONS

The commonalities of these two non-state institutions

are the following:
• organized and formed by a group of people to
protect their interest,
• promotes the common good among members, and
• voluntary in nature.
THE DIFFERENCES BETWEEN COOPERATIVES
AND TRADE UNIONS
As to the Purpose:
Cooperatives
Republic Act 6938: Cooperative Code of
the Philippines Trade Unions
To encourage thrift and savings To maintain or improve the conditions of
mobilization among members, employment at the workplace, such as
ensuring safety standards, right to be
To produce funds and extend credit to protected from unfair termination of
constituents for productive and provident employment, right to paid leave, and right
purposes, to equality,
THE DIFFERENCES BETWEEN COOPERATIVES
AND TRADE UNIONS
As to the Purpose:
Cooperatives
Republic Act 6938: Cooperative Code of the
Philippines Trade Unions
To encourage systematic production and To bargain with the
marketing among members,
employer on behalf of the
To provide goods, services, and some union members and
requirements to members, To develop expertise negotiate labor contracts,
and skills among members,
and
THE DIFFERENCES BETWEEN COOPERATIVES
AND TRADE UNIONS
As to the Purpose:
Cooperatives
Republic Act 6938: Cooperative Code of
the Philippines Trade Unions
To acquire lands and provide housing To protect the economic,
benefits or support to members,
political, and social interests of
To insure against losses of the members, its members
To promote or advance the educational,
social, and economic status of members,
THE DIFFERENCES BETWEEN COOPERATIVES
AND TRADE UNIONS
As to the Purpose:
Cooperatives
Republic Act 6938: Cooperative Code of the Philippines
Trade Unions
To establish, own, or lease cooperative banks,
cooperative wholesale and retail complexes,
insurance, agricultural, or industrial processing
enterprises, and public markets, and

To coordinate and facilitate various activities of the

union.
THE DIFFERENCES BETWEEN COOPERATIVES
AND TRADE UNIONS
As to Function:
Cooperatives Trade Unions
 Provide maximum economic benefits to its  Negotiate or discuss with the
members management the issues that affect the
 Teach people efficient and effective ways of organization’s workers
doing things in a cooperative manner  Represent individual members when
 Propagate cooperative practices and new they have a problem at work
ideas in business and management, and  Provide information and advice to its
allow lower income groups to expand their members about work-issues and
ownership of wealth concerns
OOPERATIVES AND TRADE UNIONS AS MEANS OF PROMOTING
SELF-HELP TOWARDS ECONOMIC DEVELOPMENT

Cooperatives are self-help organizations presently utilized by the government

as more efficient tools for economic development. These are also business
enterprises which affiliates own, manage, and control following accepted
democratic principles. Members are not organized primarily for profit nor to
serve other persons, but to address the needs of their members. Memberships
in cooperatives are voluntary and open to all those who need their services.
Members share economic benefits from unions in proportion to the individual
member's patronage of the business or enterprise
OOPERATIVES AND TRADE UNIONS AS MEANS OF PROMOTING
SELF-HELP TOWARDS ECONOMIC DEVELOPMENT

Trade unions are always fighting for

better wages by improving employees
pay and other benefits such as holiday
entitlements.
OOPERATIVES AND TRADE UNIONS AS MEANS OF PROMOTING
SELF-HELP TOWARDS ECONOMIC DEVELOPMENT

Functions:
• Secure improvements in employees' working conditions, including
hours of work, health or safety at work, improving pensions, and
industry injury benefits.
• Provide improved standards of living.
• Safeguard the interest of workers by encouraging firms to increase
employee participation in decision-making.
• Prevent employees from exploitation