Advent of Cooperatives in the Philippines


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Cooperative Development Authority
Dagupan Extension Office
Region I

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Advent of Cooperatives in the Philippines

  1. 1. Advent ofCooperatives inthe Philippines
  2. 2. The Cooperative Movement, as aformal vehicle by which thepeople may improve their welfarearrived in the Philippines at thebeginning of the American regime.It played a part in the missionaryactivities of civic and religiousgroups and programs ofgovernment agencies designed tohelp the people especially in therural areas.
  3. 3. 1. Beginnings 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”.
  4. 4. 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.
  5. 5. (2) Early Sponsorship of theMovement – The Movement did not beginspontaneously. Originally, the Movementenjoyed the sponsorship of Private Filipinoand foreign individuals who had gainedknowledge of, and exposure to, cooperativesabroad and who sought to share the benefitsof the idea with the people by organizingcooperatives among them.
  6. 6. The civic and religious groupssponsored the movement apparently for thereason that the cooperatives constitute themost pragmatic and practical expression oftheir philosophies and beliefs. Theycorrectly perceived cooperatives as effectconstitutional agencies in attaining theircivic or religious objectives, as the casemay be, with active popular participation atthe least possible cost.
  7. 7. The government enacted two (2) special laws whichushered in a strong government role in the Movementin the fields of agricultural credit and agriculturalmarketing. These are: (a) Agriculture Credit Association Act (Act No.2508). This law enabled the creation of agriculturalcredit associations and provided for their regulation. Itrequired these associations to register under theCooperation Law. These associations had for theirpurposes the accumulation of funds by means ofcooperation in order to extend credit to, and developthe habit of thrift among their members. The law tookeffect on February 5, 1915 and was repealed in 1957by R.A. No. 2023.
  8. 8. (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. Itset forth the terms of references for theorganizations, management, and operation of suchassociations, and tasked the Director of Commerceand Industry, with the implementation of the law.Said law took effect on December 9, 1927, andremained effective until repealed on April 14, 1973by P.D. No. 175, as amended.
  9. 9. By virtue of the basic laws mentioned above, themain reasons for the government sponsorship of theMovement may be identified as follows:Corporation Law – general economic and socialdevelopment;Agricultural Credit Associations Act – extension ofagricultural credit;Cooperative Marketing Law – marketing ofagricultural products and farms supply distribution.
  10. 10. (3) Growth and Expansion –Originally, under the Corporation Law, therewas no government sponsorship of theMovement. Cooperatives were registeredunder the Corporation Law to enable thepeople to organize themselves for economicand social objectives. Only the interestedprivate civic and religious groups sponsoredcooperatives and the few early cooperativeswere of the credit type organized both in therural and urban settings.
  11. 11. (i) Government Sponsorship –Government sponsorship of the Movement wasinitiated in the agricultural credit and marketingsectors of the economy. The expanding activitiescooperatives which were then growing in numberand resources rendered the Corporation Lawinadequate to meet the increasing specialdemands of Cooperatives. Thus, on June 7, 1940,the government enacted Commonwealth Act No.565 (General Basic Cooperative Law) as the organiclaw for all types of cooperatives
  12. 12. During the last war (1941-1945) the JapaneseMilitary Administration organized an estimated5,000 cooperatives to serve as distribution outletsfor consumer goods and as means of promotingneighborhood food production, but all of thesecooperatives were destroyed during the war ofliberation. During the post-war period(1945-1950), the government organized 1,500cooperatives to distribute relief goods but they allcollapsed when the government relief programended.
  13. 13. (ii) Reconstruction – As part of itsreconstruction and rehabilitation program, thegovernment enacted on August 14, 1952, RepublicAct No. 821 (Agricultural Credit and CooperativeFinancing Administration Act [ACCFA]).Complementarily, the government enacted R.A. No.2023 (Philippine Non-Agricultural Cooperative Act)to help people in the non-agricultural sector todevelop their enterprises on a cooperative basisauthorizing the organization of a cooperativebanking system and a cooperative wholesalesystem.
  14. 14. Various other laws were later on enacted to involvecooperatives in government programs and the significantones 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).
  15. 15. (iii) Redevelopment - The advent of MartialLaw brought many changes on the cooperative laws andthe foregoing ones. In addition, new ones were enactedas the government looked upon cooperatives asinstrument to increase incomes and purchasing power ofthe low-income sector and promote a more equitabledistribution of wealth. New laws in the form ofpresidential 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).
  16. 16. (iv) Current SituationThis 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 DecemberLIRIO-REYES (Sgd.) MARILYN B. BARUA-YAP Secretary General Secretary of Senate 2008. (Sgd.) EMMA 16, House of Representatives (Sgd.) MARILYN B. BARUA-YAP (Sgd.) EMMA LIRIO-REYES Secretary General Secretary of Senate House of Representatives
  17. 17. (iv) Current Situation The Philippine Code of 2008 was signed by the President Gloria Macapagal Arroyo into law on February 17, 2009
  18. 18. ART. 23. Type and Categories of Cooperatives. – (1) Types of Cooperatives – Cooperatives may fall under any of the following types: "(a) Credit Cooperative is oneTubao CreditCooperative 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;
  19. 19. "(b) Consumers Cooperative isone of the primary purpose ofwhich is to procure and distributecommodities to members andnon-members
  20. 20. "(c) Producers Cooperative is one thatundertakes joint production whetheragricultural or industrial. It is formed andoperated by its members to undertake theproduction and processing of rawmaterials or goods produced by itsmembers into finished or processedproducts for sale by the cooperative to itsmembers and non-members. Any endproduct or its derivative arising from theraw materials produced by its members,sold in the name and for the account ofthe cooperative, shall be deemed aproduct of the cooperative and itsmembers;cralaw
  21. 21. d) MarketingCooperative is onewhich engages in thesupply of productioninputs to membersand markets theirproducts
  22. 22. "(e) Service Cooperative isone which engages in medicaland dental care, hospitalization,transportation, insurance,housing, labor, electric light andpower, communication,professional and other services; Community Health & Development Cooperative Hospital (CHDCH) |
  23. 23. "(f) Multipurpose Cooperativeis one which combines two (2)or more of the businessactivities of these different typesof cooperatives;
  24. 24. "(g) Advocacy Cooperative isa primary cooperative whichpromotes and advocatescooperativism among itsmembers and the public throughsocially-oriented projects,education and training, researchand communication, and othersimilar activities to reach out toits intended beneficiaries;
  25. 25. Agrarian ReformCooperative is oneorganized by marginal farmers majority ofwhich are agrarian reform beneficiaries forthe purpose of developing an appropriatesystem of land tenure, land development,land consolidation or land management inareas covered by agrarian reform
  26. 26. i) Cooperative Bank is oneorganized for the primarypurpose of providing a widerange of financial servicesto cooperatives and theirmembers;
  27. 27. j) Dairy Cooperative is onewhose members areengaged in the productionof fresh milk which may beprocessed and/or marketed produced by the Federation of Davao Dairyas dairy products;
  28. 28. "(k) Education Cooperative is one organized for theprimary purpose of owning and operating licensededucational institutions notwithstanding theprovisions of Republic Act No. 9155, otherwiseknown as the Governance of Basic Education Act of2001;
  29. 29. "(l) Electric Cooperative is oneorganized for the primarypurposed of undertaking powergenerations, utilizing renewableenergy sources, including hybridsystems, acquisition andoperation of subtransmission ordistribution to its householdmembers;
  30. 30. Financial Service"(m)Cooperative is one organizedfor the primary purpose of engaging insavings and credit services and otherfinancial services;
  31. 31. Fishermen"(n)Cooperative is oneorganized by marginalized fishermen inlocalities whose products are marketedeither as fresh or processed products;
  32. 32. Health Services"(o)Cooperative is oneorganized for the primary purpose ofproviding medical, dental and other healthservices;
  33. 33. Housing"(p)Cooperative is oneorganized to assist or provide access tohousing for the benefit of its regularmembers who actively participate in thesavings program for housing. It is co-owned and controlled by its members;
  34. 34. Insurance"(q)Cooperative is one engaged inthe business of insuring life and poverty ofcooperatives and their members;
  35. 35. Transport"(r) Biliran Philippines TransportCooperative is one which Cooperativeincludes land and sea transportation,limited to small vessels, as defined orclassified under the Philippine maritimelaws, organized under the provisions of thisCode; Negros Air Transport Cooperative Transport Workers Alliance The Caticlan Boracay Services Cooperative Transport Multi-Purpose Cooperative
  36. 36. Water Service"(s)Cooperative is oneorganized to own, operate and managewaters systems for the provision anddistribution of potable water for itsmembers and their households;
  37. 37. Workers"(t)Cooperative is one organizedby workers, including the self-employed,who are at same time the members andowners of the enterprise. Its principalpurpose is to provide employment andbusiness opportunities to its members andmanage it in accordance with cooperativeprinciples
  38. 38. Other types of"(u)cooperative as may bedetermined by the Authority.
  39. 39. of pres nd entae tion
  40. 40. Reference:The Philippine Cooperative Law,Annotated: Judge Manuel F.Verzosa, 1991Adriana PrintingCompany, Inc. Quezon City RA 9520