Governance and Poverty Alleviation: The Pangasinan Experience


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A Masteral Thesis at Pangasinan State University, Urdaneta City, Pangasinan
March 2010

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Governance and Poverty Alleviation: The Pangasinan Experience

  1. 1. GOVERNANCE AND POVERTY ALLEVIATION: THE PANGASINAN EXPERIENCE Edwin Badu Rawlings Gbargaye Name of Researcher Compiled by: Jacqueline L. De Leon Acting Chief RIT 2010 CDA Dagupan Extension Office Philippines
  2. 2. ACKNOWLEDGEMENT With profound thanks and gratitude, the researcher acknowledges the assistance ofthose who in one way or another contributed to the completion of this study. DR. ZENAIDA U. SUYAT, Dean Gradute School, Pangasinan State University; for beingthe Chairman of his panel whose suggestion and comments greatly improved the study; DR. JOSEFINA B. BITONIO, her adviser and at the same time the MDM ProgramAdviser, Assistant Regional Director of the Cooperative Development Authority for herunwavering support, sacrifice, patience and understanding and for gladly sharing her valuabletime and expertise in the conduct of this research; DR. FLORITA G. LOPEZ for her suggestions and recommendations have greatlyimproved the study; DR. RODRIGO JAVIER, for his professional guidance, valuable suggestions haveenriched the study; DR. LETICIA B. URSUA, his critique reader for the valuable observation, commentsand suggestions, which helped improved the quality and relevance of his study; DR. FE SORIANO, for taking notes during the defense and for her technical advisewhich have contributed to the completion of this study; DR PAULO CENAS, his statistician, for sharing his expertise in the improvement of thestudy DR. VIRGINIA A. TEODOSIO for her unwavering and unflinching struggle and advocacyfor the cooperative movement in the Philippines and World over. DR. CAESAR M. MERCADO, Chief Executive Officer, and founder of DCAAP for hisadvice and encouragement during the course of the study. ROGER B.GBARGAYE for his kind words of encouragement accorded the researcherduring the period of this study.
  3. 3. JULIET C. CAROLINO for her assistance in editing and recommending valuableinformation to this study, for being kind and her unconditional support. The Cooperative Development Office of San Carlos City, Alaminos, and DagupanCity for assisting the researcher in gathering pertinent data needed for his study and all thecooperative respondents for their warm welcome and reception Cooperative Development Officers and staff for sharing their valuable time andsharing their resources available for the gathering of data and information NCPAG Librarian and staff for giving their assistance, support and help theresearcher access to references All MDM classmates with special thanks to Art, Maricris, Mely, Mercy and my friendsfor their understanding, motivation, encouragement and warm friendship that the researcher willkeep aflame in his heart His beloved family Peace, RB, Edwin Jr., Rose, Danforth and Edmund whose loveserved as an inspiration to move on with my goal, my father and siblings who dream with meabout the realization of my educational objective in the Philippines; Above all, to the LordAlmighty, for providing him the needed strength, courage, wisdom, determination in pursuingthis study. Edwin B.R. Gbargaye
  4. 4. DEDICATIONThis humble piece of work is dedicated to all cooperators and practitioners may your be more strengthened and benefit from the advancements of cooperative good governance practices
  5. 5. ABSTRACTTitle: GOVERNANCE AND POVERTY ALLEVIATION: THE PANGASINAN EXPERIENCEResearcher: Edwin Badu Rawlings GbargayeDegree/Specialization: Master in Development Management/Public ManagementAdviser: Dr. Josefina B. BitonioInstitution: Pangasinan State University Graduate School Urdaneta CityDate of Graduation: March 2010______________________________________________________________________ Cooperative governance has not been a well illuminated topic in the evolvingpublic discussions on good governance in the Philippines and developing nations. Theemergent framework of governance now provides a new understanding of the currentstructures and dynamics in the cooperative sector. While admittedly, there have beenexemplary cases of cooperatives; the great majority are struggling, whose performanceand viability hang in the balance. Those who have excelled may also step into thepitfalls of leadership changes, which is a volatile feature of the cooperative system. Overall, Cooperative is an instrument for poverty reduction but it must first of allascribe to the tenets of good governance as a mechanism, practice, and medium inwhich cooperatives help their members to better themselves. The integration of goodgovernance into cooperatives intends to improve its service delivery methods. The study covered the organizational profile of cooperatives, the model ofgovernance practiced by each of these cooperatives, the level of governance along
  6. 6. accountability, transparency, predictability, and participation It particularly examinesthe services provided by cooperatives in the four cities of Pangasinan in alleviatingpoverty among its members as well as the problems on cooperative governance. The data and information were generated using questionnaire, groupdiscussions, interviews, field visits and observations, official documents, and othersecondary sources. The respondents were officers and members of the fifteencooperatives of the four cities in Pangasinan.Statement of the Problem Generally, this study posed the question: What framework of good cooperativegovernance improves the policy decisions and delivery of services to the membershipand the public as well? Thus, it seeks to answer the following specific questions: 1. What is the organizational profile of cooperatives in terms of : a. date registered; b. articles of cooperation and by-laws; c. number of employees; d. membership; e. assets; f. deposits; g. trainings conducted ; h. services rendered; i. Linkages; and j. Core management team?
  7. 7. 2. What governance model strengthens confidence in cooperatives as an instrument to reducing poverty? a. traditional; b. corporate; c. democratic; and d. eclectic? 3. What is the level of governance being practiced by the cooperative officers interms of a. accountability; b. transparency; c. predictability; and d. participation? 4 . What are the services provided by cooperatives in alleviating poverty of themembers in terms of: a. provision of credit; b. employment; c. educational assistance; d. mutual aid fund; e. health benefits; f. Member’s benefit; and e. community involvement? 5. What are the problems in cooperative governance along the following: a. accountability;
  8. 8. b. transparency; c. predictability; and d. participation? 6. Is there a significant relationship in level of governance practiced andgovernance models applied by cooperatives? 7. Is there a relationship of the level of governance practiced and the level ofGovernance Model predominantly applied by cooperatives? 8. Is there a significant relationship in the level of governance across theirorganizational profile variables? Fourteen cooperatives (93.33%) were reregistered under RA 9520 and onecooperative (6.66%) was registered under RA 6938. The 15 cooperatives have 123employees with 5,948 membership, total assets is P 250,228,180.33, with savingsdeposits of P 87,220,422.50, conducted 22 trainings, with services rendered namely:lending, consumers, trading, service, training and consultancy There are 11 cooperatives (73.33 %) practicing the democratic model while fourcooperatives (26.67 %) are practicing corporate model. None of the cooperativerespondents is practicing the traditional model of governance. The level of governance practiced by the Cooperative Officers along theaccountability, transparency, predictability and participation have a weighted means of4.29, 4.28, 4.03, and 3.75 respectively with a descriptive rating of much for all theelement of governance. The overall weighted mean is 4.08 with a much descriptiverating.
  9. 9. The services provided by cooperatives in alleviating poverty are (a) provision ofcredit, employment, educational assistance, mutual aid fund, health benefits, members’benefit and community involvement. For the provision of credit, the total of volume ofloan transaction is P 296,014,502.30 with 11,592. total member borrowers (b) onemployment generation, the cooperative has assisted 3,723 self employed members,assisted 310 members to work abroad and for the hired staff of the cooperative, a totalof 104 were employed by the cooperatives in various capacities, (c) educationalassistance, total beneficiaries of the scholarship program totaled to 36. Amount spentfor the scholarship program has a total of P 277,500.00 (d) Mutual Aid, total amount ofP734,763.50 was given to 77 families (e) Members benefit total Interest on share capitalreleased by cooperatives P4,253,779.00 and for patronage refund a totalsP1,531,487.00 and (f) for community involvement, the cooperatives have variety ofprograms to include environmental concerns, orientation on sanitation, mangroveplanting, tree planting, vegetable, compost, fertilizer subsidy, donation to church,training sponsored, fingerlings distribution, piglet distribution, donation to flood andtyphoon victims, feeding, donation of medicine, donation of toilet bowl and sportsponsorship. All in all a total of 28 funded projects on community projects with abudget of P320,527.00. The cooperatives manifested problems along accountability, predictability,transparency and participation with a weighted means of 1.99, 1.62, 1.76 and 1.61respectively with a descriptive rating of sometimes. The over – all rating is “somewhat”with a weighted mean of 1.75.
  10. 10. Relationship of Level of Governance and Governance Model. (1) The level ofpractice of the governance model was not significantly correlated with the level ofgovernance in terms of accountability as can be realized on the r values of 0.21, 0.25,-0.10 with associated p-values of 0.44, 0.38, and 0.73 respectively. All these p-valuesexceed the alpha level of 5% thus the reason for the insignificant relationship (2) Thelinear relationship tested between level of practice of the predominantly practiced modeland the level of accountability of the cooperatives is substantial (3) The relationships ofthe level of governance with each of the cooperatives’ organizational profile variablessuch as date of membership, number of employees, number of members, assets,deposits, and article of cooperation and by laws resulted to no significant relationshipswere observed. Based on the findings of the study, the following conclusions are arrived at: 1. Majority of the millionaire cooperatives of the four cities in Pangasinan are olderand have re registered under the Philippine Cooperative Code of 2008 or Republic Act9520. They have regular training program for officers, staff and membership, largemembership base and owning and managing small to large cooperatives in terms ofassets. 2. Democratic model is most predominantly practiced by cooperatives. 3. The elements of governance namely: accountability, transparency, predictability,participation is “much practiced” and its integration of good governance in cooperativemanagement intends to improve its delivery of services 4. Cooperatives have contributed significantly to poverty reduction through theirprovision of services, and direct investments on community projects and programs.
  11. 11. 5. There exist problems in cooperative governance particularly on members’participation which show low rating on majority of the cooperatives in the four cities. 6. Program design and implementation strategies based on the working frameworkof cooperative governance will only be considered successful if the long-term results willeffectively and consistently show the graduation of impoverished beneficiaries out of thepoverty bracket. On the basis of the foregoing findings and conclusions, the followingrecommendations are forwarded: 1. All officers should undergo training on good governance before they assume their positions. 2. On the governance problems, there is an ardent need to establish reforms inweak areas of cooperative governance along accountability, transparency, predictabilityand participation 3. Members should elect officers with strong leadership as cooperative successlargely depends on good leadership of its officers. 4. The adoption and application of the cooperative governance by all cooperatives isindeed an effective means for poverty alleviation. 5. Good governance must be intervening in all the aspects of cooperatives in orderto achieve confidence and trust. Cooperatives must ascribe to the tenets of goodgovernance as a mechanism, practice, and media in which they help improve theircooperative’s performance and stability.