Wake Up, Philippines!


Posted in CDA, Cooperatives by Erineus on February 20, 2009

IT is the good fortune of the cooperative industry that its significant role in the propping up of our country’s economy, especially in these hard times, has finally been acknowledged. Last Tuesday, Malacañang signed into law the Philippine Cooperative Code of 2008 that will grant cooperatives banking powers without losing their tax privileges.

It has long been overdue. Recently, while reading a 2004 report by the Cooperatives Development Authority, I discovered that in 2003 alone, the national average savings generated and mobilized by this little-known sector amounted to a staggering R113 billion, 10 percent of the national budget at that time.

In 2006, data showed that the sector generated 1,636 million jobs, 1.56 million in 2005 and 1.498 million in 2004. Would you believe that its growth rate is higher than that of rural banks? The paper predicted that this will balloon to over R140B this year.

These figures speak volumes about the vibrancy of local cooperatives industry. Significantly contributing to keep it in the pink of health is R.A. 6938, the Cooperative Code of the Philippines. Incidentally, this important piece of legislation was authored by former Senator Butz Aquino who has remained as the moving spirit behind the continued surge of cooperatives around the country today.

If there is one thing that can be said about Aquino, it is the fact he did not abandon his “baby” even after his congressional stint. Acknowledged as the father of modern cooperatives, Aquino, in coordination with other self-help advocates, has been going around the country evangelizing on the big returns and rewards of the coops business. With missionary zeal, he also conducts workshops and seminars to keep stakeholders attuned and responsive to the needs of a fast changing business milieu.

Concurrently chairman emeritus of the National Cooperatives Movement, umbrella organization for local cooperatives, Aquino is one of the brains and prime movers behind the Cooperative Insurance Deposit System Federation Cooperatives. Established last year, CODIS spurs the vigorous growth of this burgeoning industry.

CODIS is the industry’s counterpart of Philippine Deposit Insurance Corporation which ensures the return of bank deposits up to R250,000 should host banks encounter liquidity problems. With this insurance mechanism in place, the small depositors’ multi-million-peso deposits held by cooperatives, are now safe from scammers who abscond the hard-earned money of unsuspecting members.

Updated data shows 75,000 various cooperatives nationwide of which 4,812 are credit coops; 1,369 consumer’s; 33,352 multi-purpose agri-based and 24,623 non-agri-based coops. In Metro Manila alone, almost all of the more than 3,500 coops are into money lending and savings activity. And the number of “kooperatibas” is still growing, thanks to the dedication and commitment of people like Butz Aquino and those of his kind.

By Elinando B. Cinco

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Arroyo signs cooperative law

Posted in CDA, Cooperatives by Erineus on February 17, 2009

MANILA, Philippines – (UPDATE) President Gloria Macapagal-Arroyo signed into law on Tuesday Republic Act 9520 or the Philippine Cooperative Code of 2008 which will strengthen the cooperative system in the country.

The new law amends Republic Act 6938 or the Cooperative Code of 1990.

Among those present during the signing at Malacañang’s Rizal Hall were the sponsors of the measure, Senator Juan Miguel Zubiri and Congressman Ernesto Pablo, Senate President Juan Ponce Enrile, Speaker Prospero Nograles, Executive Secretary Eduardo Ermita, Finance Secretary Margarito Teves, and Energy Secretary Angelo Reyes.

“The new cooperative legislation gives cooperatives greater opportunities to serve their members, not only in terms of financial assistance, but also in undertaking more productive activities geared towards the upliftment of their members,” the Palace said in a statement.

“The new cooperative code outlines in greater detail the requirements in professionalizing the management and operation of cooperatives, while providing a monitoring and evaluation tool for the cooperatives to conduct self-assessments in terms of its managerial, financial, and social objectives,” it said.

Amendments to the cooperative code were sponsored by the late COOP-NATCCO Representative Guillermo Cua.

Among the most significant changes in the new code is the section allowing the conversion of Credit Cooperatives into Financial Service Cooperatives.

“When members of a credit cooperative deposit their money and their pool gets bigger, they will naturally want more sophisticated services. With this amendment, credit cooperatives can evolve into a Financial Service Cooperative,” Congressman Jose Ping-ay, newly appointed COOP-NATCCO representative who replaced Cua, said in a statement.

A Credit Cooperative is a financial organization owned and operated by its members that creates a pool of savings from which loans for productive and provident purposes are drawn – all for the benefit of members.

A Financial Service Cooperative is an outgrowth of credit cooperatives, and is defined in the Code as a “financial organization owned and operated by its members and authorized to provide the same services as credit cooperatives plus other financial services subject to regulation by the Bangko Sentral ng Pilipinas (BSP).”

This means that Financial Service Cooperatives will be providing more than just savings and loans services, which cooperatives have been known to offer.

The Code does not list down the particular services Financial Services Cooperatives can provide although the minimum capital requirements prescribed in the General Banking Act will determine what services a Financial Services Cooperative can offer.

Depending on the capitalization, a Financial Services Cooperative can provide services like opening current or checking accounts, act as depositary of municipal, city or provincial funds where the cooperative is located, act as collection agent for government entities like the Social Security System (SSS) and Government Service Insurance System (GSIS), or even buying or selling foreign exchange.

The Code also stipulates that if a credit cooperative decides to “exercise enhanced functions,” it must first notify the Cooperative Development Authority (CDA) and the BSP and “satisfy the requirements for conversion to Financial Service Cooperative.” The CDA and BSP will soon be issuing rules governing the conversion.

Cua, along with Representatives Rozzano Biazon, Nicanor Briones, Ma. Isabelle Climaco, Eufrocino Codilla, Mauricio Domogan, Eduardo Gullas, Ernesto Pablo, Candido Pancrudo, Rufus Rodriguez, Judy Syjuco, Edgar Valdez, and Eduardo Zialcita, introduced the bill in the Lower House, which passed the measure on Oct. 8, 2008.

The Senate version of the bill was approved on Aug. 12, 2008, with Zubiri, chairman of the Senate committee on cooperatives, presenting the legislation to the plenary. Originally posted at 10:30 am

Source: Inquirer
February 17, 2009 2:27 PM