Advent of Cooperatives in the Philippines

The Cooperative Movement, as a formal vehicle by which the people may improve their welfare arrived in the Philippines at the beginning of the American regime. It played a part in the missionary activities of civic and religious groups and programs of government agencies designed to help the people especially in the rural areas.

On April 1, 1906, the government enacted Public Act No. 1459, otherwise known as the Cooperation Law, providing the legal authority under which the people may organize any type of corporation that would engage in economic or none economic activities. This law underwent countless amendments culminating in its revision in to what is now known as the “Corporation Code”.

1. Beginnings 1. Beginnings

The people organized and registered their cooperatives under the Corporation Law, and even until now under the Corporation Code, s the provisions of said law cover such a broad range that they encompass Cooperation.

1. Beginnings 1. Beginnings

(2) Early Sponsorship of the Movement – The Movement did not begin spontaneously. Originally, the Movement enjoyed the sponsorship of Private Filipino and foreign individuals who had gained knowledge of, and exposure to, cooperatives abroad and who sought to share the benefits of the idea with the people by organizing cooperatives among them.

The civic and religious groups sponsored the movement apparently for the reason that the cooperatives constitute the most pragmatic and practical expression of their philosophies and beliefs. They correctly perceived cooperatives as effect constitutional agencies in attaining their civic or religious objectives, as the case may be, with active popular participation at the least possible cost.

The government enacted two (2) special laws which ushered in a strong government role in the Movement in the fields of agricultural credit and agricultural marketing. These are: (a) Agriculture Credit Association Act (Act No. 2508). This law enabled the creation of agricultural credit associations and provided for their regulation. It required these associations to register under the Cooperation Law. These associations had for their purposes the accumulation of funds by means of cooperation in order to extend credit to, and develop the habit of thrift among their members. The law took effect on February 5, 1915 and was repealed in 1957 by R.A. No. 2023.

(b) Cooperative Marketing Law (Act No. 3425). This law provided for the organizations of farmers’ cooperative marketing associations (FACOMAS) and their registration under the Corporation Law. It set forth the terms of references for the organizations, management, and operation of such associations, and tasked the Director of Commerce and Industry, with the implementation of the law. Said law took effect on December 9, 1927, and remained effective until repealed on April 14, 1973 by P.D. No. 175, as amended.

By virtue of the basic laws mentioned above, the main reasons for the government sponsorship of the Movement may be identified as follows:

Corporation Law – general economic and social development; Agricultural Credit Associations Act – extension of agricultural credit;

Cooperative Marketing Law – marketing of agricultural products and farms supply distribution.

(3) Growth and Expansion – Originally, under the Corporation Law, there was no government sponsorship of the Movement. Cooperatives were registered under the Corporation Law to enable the people to organize themselves for economic and social objectives. Only the interested private civic and religious groups sponsored cooperatives and the few early cooperatives were of the credit type organized both in the rural and urban settings.

(i) Government Sponsorship – Government sponsorship of the Movement was initiated in the agricultural credit and marketing sectors of the economy. The expanding activities cooperatives which were then growing in number and resources rendered the Corporation Law inadequate to meet the increasing special demands of Cooperatives. Thus, on June 7, 1940, the government enacted Commonwealth Act No. 565 (General Basic Cooperative Law) as the organic law for all types of cooperatives

During the last war (1941-1945) the Japanese Military Administration organized an estimated 5,000 cooperatives to serve as distribution outlets for consumer goods and as means of promoting neighborhood food production, but all of these cooperatives were destroyed during the war of liberation. During the post-war period (1945-1950), the government organized 1,500 cooperatives to distribute relief goods but they all collapsed when the government relief program ended.

(ii) Reconstruction – As part of its reconstruction and rehabilitation program, the government enacted on August 14, 1952, Republic Act No. 821 (Agricultural Credit and Cooperative Financing Administration Act [ACCFA]). Complementarily, the government enacted R.A. No. 2023 (Philippine Non-Agricultural Cooperative Act) to help people in the non-agricultural sector to develop their enterprises on a cooperative basis authorizing the organization of a cooperative banking system and a cooperative wholesale system.

Various other laws were later on enacted to involve cooperatives in government programs and the significant ones are the following:

• R.A. No. 3844 (Land Reform Law); • R.A. No. 6038 (National Electrification Program); and• R.A. No. 3470 (National Cottage Industry Development Act).

(iii) Redevelopment - The advent of Martial Law brought many changes on the cooperative laws and the foregoing ones. In addition, new ones were enacted as the government looked upon cooperatives as instrument to increase incomes and purchasing power of the low-income sector and promote a more equitable distribution of wealth. New laws in the form of presidential issuances were decreed and these were:

• P.D. No. 175 (General Law) ;• P.D. No. 269 (Electric Cooperatives Law) ;• P.D. No. 775 (Sugar Cooperatives Law) ; and• P.D. No. 898 (Transport Cooperative Law).

(Sgd.) MARILYN B. BARUA-YAPSecretary General

House of Representatives

(Sgd.) EMMA LIRIO-REYESSecretary of Senate

This Act which is a consolidation of Senate Bill No. 2264 and House Bill No. 4312 was finally

passed by the Senate and the House of Representatives on December 16, 2008.

(Sgd.) MARILYN B. BARUA-YAPSecretary General

House of Representatives

(Sgd.) EMMA LIRIO-REYESSecretary of Senate

(iv) Current Situation

(iv) Current Situation

The Philippine Code of 2008 was signed by the President Gloria Macapagal Arroyo into law on February 17, 2009

ART. 23. Type and Categories of Cooperatives. – (1) Types of Cooperatives – Cooperatives may fall under any of the following types:

"(a) Credit Cooperative is 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 to its

members for productive and provident purposes;

Tubao Credit Cooperative

"(b) Consumers Cooperative is one of the primary purpose of which is to procure and distribute commodities to members and non-members

"(c) Producers Cooperative is one that undertakes joint production whether agricultural or industrial. It is formed and operated by its members to undertake the production and processing of raw materials or goods produced by its members into finished or processed products for sale by the cooperative to its members and non-members. Any end product or its derivative arising from the raw materials produced by its members, sold in the name and for the account of the cooperative, shall be deemed a product of the cooperative and its members;cralaw

d) Marketing Cooperative is one which engages in the supply of production inputs to members and markets their products

"(e) Service Cooperative is one which engages in medical and dental care, hospitalization, transportation, insurance, housing, labor, electric light and power, communication, professional and other services;

Community Health & Development Cooperative Hospital (CHDCH) |

"(f) Multipurpose Cooperative is one which combines two (2) or more of the business activities of these different types of cooperatives;

"(g) Advocacy Cooperative is a primary cooperative which promotes and advocates cooperativism among its members and the public through socially-oriented projects, education and training, research and communication, and other similar activities to reach out to its intended beneficiaries;

Agrarian Reform Cooperative is one

organized by marginal farmers majority of which are agrarian reform beneficiaries for the purpose of developing an appropriate system of land tenure, land development, land consolidation or land management in areas covered by agrarian reform

i) Cooperative Bank is one organized for the primary purpose of providing a wide range of financial services to cooperatives and their members;

j) Dairy Cooperative is one whose members are engaged in the production of fresh milk which may be processed and/or marketed as dairy products;

produced by the Federation of Davao Dairy

"(k) Education Cooperative is one organized for the primary purpose of owning and operating licensed educational institutions notwithstanding the provisions of Republic Act No. 9155, otherwise known as the Governance of Basic Education Act of 2001;

"(l) Electric Cooperative is one organized for the primary purposed of undertaking power generations, utilizing renewable energy sources, including hybrid systems, acquisition and operation of subtransmission or distribution to its household members;

"(m) Financial Service Cooperative is one organized for the primary purpose of engaging in savings and credit services and other financial services;

"(n) Fishermen Cooperative is one

organized by marginalized fishermen in localities whose products are marketed either as fresh or processed products;

"(o) Health Services Cooperative is one

organized for the primary purpose of providing medical, dental and other health services;

"(p) Housing Cooperative is one

organized to assist or provide access to housing for the benefit of its regular members who actively participate in the savings program for housing. It is co-owned and controlled by its members;

"(q) Insurance Cooperative is one engaged in the business of insuring life and poverty of cooperatives and their members;

"(r) Transport Cooperative is one which

includes land and sea transportation, limited to small vessels, as defined or classified under the Philippine maritime laws, organized under the provisions of this Code;

The Caticlan Boracay Transport Multi-Purpose Cooperative

Negros Air Transport Cooperative

Biliran Philippines

Transport Cooperative

Transport Workers Alliance Services Cooperative

"(s) Water Service Cooperative is one

organized to own, operate and manage waters systems for the provision and distribution of potable water for its members and their households;

"(t) Workers Cooperative is one organized

by workers, including the self-employed, who are at same time the members and owners of the enterprise. Its principal purpose is to provide employment and business opportunities to its members and manage it in accordance with cooperative principles

"(u) Other types of cooperative as may be

determined by the Authority.

endof presentation

Reference:

The Philippine Cooperative Law, Annotated: Judge Manuel F. Verzosa, 1991Adriana Printing Company, Inc. Quezon City

www.cda.gov.ph

RA 9520