History of Philippine Cooperatives

History of Cooperatives in the Philippines

Source: Cooperative Development Authority

A Filipinos traveling in Europe during the later part of the 19th century must have been impressed with the success of a new economic movement in effecting a gradual metamorphosis of the economic and social life of the people ion those countries. At the turn of the century, Filipinos, in increasing number, traveled and studied abroad and brought home with them new ideas. It was this group of Filipinos who were in close in contact with the new economic movement in Europe. Two names worthy of note were Dr. Jose P. Rizal and Teodoro Sandiko.

Rizal, after his side trip to Sandakan, Borneo in 1892, requested Governor Despudol that he and some relatives and friends be permitted to move to that place and found a colony under the cooperative plan of Robert Owen. Instead, he was arrested for treason and banished to Dapitan, Zamboanga del Norte. In Dapitan, Rizal had his ideas in cooperation partially fulfilled. He put up a school for the poor community on a purely cooperative basis. He also established a cooperative store with the help of his pupils. One noteworthy group organized by Rizal was the La Sociedad de los Abacaleros (Society of Abaca Producers). This functioned for only one year. Rizal returned the members share capital without any loss.

Teodoro Sandiko, in his travels in Europe, must have had a close contact with the cooperative movement in Germany where he came across with the Raiffeisen movement. He was very much impressed by this type of cooperative and he looked forward for an opportunity to have it introduced here in the Philippines. As destiny might have its choice, Sandiko had his chance when he was appointed one of the early governors when Civil Government, under the Americans, was established.

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Rules and Regulations Implementing the Special Provisions of RA 9520

RULES AND REGULATIONS IMPLEMENTING THE SPECIAL PROVISIONS OF THE PHILIPPINE COOPERATIVE CODE OF 2008 (REPUBLIC ACT NO. 9520)

TITLE AND DEFINITIONS

Section 1. Title. These Rules shall be known as the "Rules and Regulations Implementing the Special Provisions of the Philippine Cooperative Code of 2008."

Section 2. Definition of Terms. For the purpose of these Rules and Regulations, the following terms are defined as follows:

1. Accreditation - shall refer to the act of the OTC Board of Directors recognize the Transportation Service Cooperatives and which shall take place after registration with the CDA as evidenced by a Certificate of Accreditation.

2. Agrarian Reform Area - shall refer to the area subject to the coverage of Comprehensive Agrarian Reform Program (CARP)/Comprehensive Agrarian Reform Program Extension with Reform (CARPER).

3. Agrarian Reform Beneficiaries (ARBs) - shall refer to the qualified beneficiaries of Comprehensive Agrarian Reform Program (CARP) as defined under Section 22, Chapter VII of R.A. 6657.

4. Agrarian Reform Community (ARC) - shall refer to a community composed and managed by ARBs who are willing to be organized and to undertake the integrated development of an area and/or their organizations or cooperatives as defined under RA 9700, otherwise known as the Comprehensive Agrarian Reform Program Extension with Reform (CARPER)

Rules and Regulation Implementing Certain Provisions of RA 9520

RULES AND REGULATION IMPLEMENTING CERTAIN PROVISIONS OF THE PHILIPPINE COOPERATIVE CODE OF 2008 (REPUBLIC ACT NO. 9520)

Pursuant to the provision of Art. 139 of Republic Act No. 952 otherwise known as the Philippine Cooperative Code of 2008, the Cooperative Development Authority hereby issues the following rules and regulations implementing certain provisions of the said Code.

TITLES AND DEFINITIONS

Section 1. Title. These Rules shall be known as the "Rules and Regulations Implementing Certain Provisions of the Philippine Cooperative Code of 2008."

Section 2. Definition of Terms. For the purpose of these Rules and regulations, the following terms are defined as follows:

(1) Alternative Dispute Resolution - shall refer to any process or procedure used to resolve a dispute or controversy, other than by adjudication of a presiding Judge of Court or an officer of a government agency, in which a neutral third party participates to assist in the resolution of issue, which includes arbitration, mediation, conciliation, early neutral evaluation, mini trial, or any combination thereof.

(2) Arbitrator - shall refer to the person appointed to render an Award/Decision, alone or with others, in a dispute that is the subject of an Arbitration Agreement.

(3) Area of Business Operation - shall refer to the principal place of business of a cooperative where the cooperative conducts its business as provided for in their Articles of Cooperative and By-laws.

(4) Area of Operation - shall refer to the area where the cooperative members come from as provided for in their Articles of Cooperation and By-laws.

(5) Articles of Cooperation - shall refer to the Articles of Cooperation registered under the Code, with includes a registered amendment thereto, if applicable.

(6) Associate Member - shall refer to member of a cooperative 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.

(7) Authority - shall refer to the Cooperative Development Authority (CDA).

(8) Authorized Share Capital - shall refer to the capitalization of the cooperative as prescribed in the Articles of Cooperation

(9) Award/Decision - shall refer to any partial or final decision by an Arbitrator in resolving the issue in a controversy.

(10) Board of Liquidators/Trustees - shall refer to the body appointed by the Board of Directors or elected by the General Assembly that shall cause the liquidation of the cooperative in case of voluntary dissolution or appointed by the Authority/Court in case of involuntary dissolution of a cooperative.

(11) Bond of Membership - shall refer to the conditions where members associate themselves to attain their common goals and objectives which may either be residential, occupational, associational, and institutional.

(12) By-Laws - shall refer to the By-laws registered under the Code which includes any registered amendments thereto.

(13) Capital - shall refer to the sum total of member's share capital including deposits, revolving capital, subsidies, donations, legacies, grants, aids, land structures, plants, equipment facilities, machines and other assets of a cooperative.

(14) Certificate of Merger - shall refer to the document issued by the Authority evidencing registration of merger.

(15) Code - shall refer to the Republic Acts No. 9520, otherwise known as the Philippine Cooperative Code of 2008.

(16) Conciliation - shall refer to the process whereby a neutral third party takes a vigorous and active role in assisting disputants to formulate between and among them an acceptable solution in order to reach an amicable settlement.

(17) Conservator - shall refer to any person appointed by the Authority empowered to take charge of the assets, liabilities, and the management of the cooperative, after finding that the cooperative is in the state of continuing illiquidity or unwillingness to maintain a condition of liquidity which is deemed adequate to protect the interest of members and creditors of the cooperative.

(18) Consolidation - shall refer to a union of two or more existing cooperatives belonging to the same category to a form a new cooperative called the consolidated cooperative.

(19) Constituent Cooperatives - shall refer to two or more existing cooperatives which are parties to a merger or consolidation.

(20) Credit Cooperative - shall refer to one that promotes and undertakes savings and lending services among its members. It generates a common pool of funds in order to provide financial assistance and other related financial services to its members for productive and provident purposes.

(21) Cumulative Interest - shall refer to the interest due to a member that must be added to in future interest if it is not paid when due.

(22) Delay in the submission of reports - shall refer to the failure of the cooperatives to submit a report on time.

Republic Act of 9520

Republic of the Philippines Congress of the Philippines Metro Manila

Fourteenth Congress Second Regular Session

Begun and held in Metro Manila, on Monday, the twenty-eighth day of July, two thousand eight.

Republic Act No. 9520 February 17, 2009

AN ACT AMENDING THE COOPERATIVE CODE OF THE PHILIPPINES TO BE KNOWN AS THE "PHILIPPINE COOPERATIVE CODE OF 2008"

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled::

SECTION 1. Articles 1, 2, 3, 4 and 5 of Chapter 1 on General Concepts and Principles of Republic Act No. 6938, otherwise known as the "Cooperative Code of the Philippines," are hereby amended to read as follows:

CHAPTER I GENERAL CONCEPTS AND PRINCIPLES

"ARTICLE 1. Title. - This Act shall be known as the "Philippine Cooperative Code of 2008".

"ART. 2. Declaration of Policy.- It is the declared policy of the State to foster the creation and growth of cooperatives as a practical vehicle for promoting self-reliance and harnessing people power towards the attainment of economic development and social justice. The State shall encourage the private sector to undertake the actual formation and organization of cooperatives and shall create an atmosphere that is conducive to the growth and development of these cooperatives.

"Toward this end, the Government and all its branches, subdivisions, instrumentalities and agencies shall ensure the provision of technical guidance, financial assistance and other services to enable said cooperatives to develop into viable and responsive economic enterprises and thereby bring about a strong cooperative movement that is free from any conditions that might infringe upon the autonomy or organizational integrity of cooperatives.

"Further, the State recognizes the principle of subsidiarity under which the cooperative sector will initiate and regulate within its own ranks the promotion and organization, training and reserach, audit and support services relative to cooperatives with government assistance where necessary.

"ART. 3. General Concepts. - A cooperative is 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.

"ART. 4. Cooperative Principles. - Every cooperative shall conduct its affairs in accordance with Filipino culture, good values and experience and the universally accepted principles of cooperation which include, but are not limited to, the following:

"(1) Voluntary and Open Membership - Cooperatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, cultural, political or religious discrimination.

"(2) Democrative Member Control - Cooperatives are democratic organizations that are controlled by their members who actively participate in setting their policies and making decisions. Men and women serving as elected representatives, directors or officers are accountable to the membership. In primary cooperatives, members have equal voting rights of one-member, one-vote. Cooperatives at other levels are organized in the same democratic manner.

"(3) Member Economic Participation - Members contribute equitably to, and democratically control, the capital of their cooperatives. At least part of that capital is the common property of the cooperative. They shall receive limited compensation or limited interest, if any, on capital subscribed and paid as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing the cooperative by setting up reserves, part of which should at least be indivisible; benefitting members in proportion to their partonage of the cooperative's bubsiness; and, supporting other activities approved by the membership.