RA 9520


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The Philippine Cooperative Code of 2008

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  • mam i need an explanation about the strict adherence to the basic cooperative principles, can you help me?
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  • Mam our coop just had our election of new set of BOD's last January 7, 2015 in spite of my strong objection/protest against some or most of the incumbent officers who filed again for their candidacy. All of the old BOD's including the chairman who is in his 4th consecutive term ran again, I protested before the election committee the term limits for an officer defined in the code reiterating that the chairman is disqualified to ran. The BODs argued and invoked what is stated in our poorly revised, not even amended Constitution and By-Laws (and yet certified by CDA Dagupan branch thru madam Butay) by these ignorance confined officers, that an officer is allowed to run without term limits as long as the members votes for him. These is why our coop is being long abused by these officers and I strongly believe that the term limits for an officer is included in the Code to prevent circumstantial abuse. We are farmer members of a multipurpose farmers’ Cooperative in a 3rd class municipality that the uninformed, deliberately misinformed, illiterately poor, yet most honest labourer farmers are deprived of a well-deserved institution to welfare our livelihood and wellbeing are always utilized and manipulated by the corrupt people in the society in acquiring for their personal gains. We can’t expect the poor farmers speak their rights that they don’t know nor understand. All of the flocked together officers ran again and won because only 2 new faces were included in the selection list to be voted upon. 5 of the 7 newly voted officer are disqualified including the chairman, not only that the chairman is disqualified in violation of the codes term limits but is also not conformant to our coop policies and procedures regarding Leadership Policies –Disqualification of an officer (appointive or elective)- Facing as respondents or dependants on administrative proceedings or civil/criminal suits involving financial and/or property accountability. These five BOD’s including the chairman are the respondents of the Illegal Dismissal complaint that I filed before the NLRC Dagupan . I, the General Manager our coop of 2013-2014 was terminated without due process and told of any reasons for their course of action. Do I have a right to protest? What action will I take to make an active protest against the validity of their position/ proclamation, where can I file?--- Ted Odilio Nazareno( SPAMPC) San Pedro Aparatado Multipurpose Cooperative, Alacala Pangasinan. I also have notified CDA Dagupan regarding Dummy Coops here in our place which the Dagupan branch certified. Thak you. my e mail odilioangelo@yahoo.com
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RA 9520

  1. 1. The Philippine Cooperative Code of 2008
  2. 2. Signed by the President into law on February 17, 2009 and effective fifteen (15) days after its publication in the Official Gazette or in a newspaper of general circulation (March 7, 2009)
  3. 3. Cooperative 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.
  4. 4. Cooperative Principles Patterned after the Principles as formulated by the International Cooperative Alliance (ICA)  Voluntary and Open Membership  Democratic Member Control  Member Economic Participation  Autonomy and Independence  Education, Training and Information  Cooperation Among Cooperatives  Concern for Community
  5. 5. 1. Voluntary and Open Membership  open to all persons able to use their services and willing to accept the responsibilities of membership without gender, social, racial, cultural, political and religious discrimination
  6. 6. 2. Democratic Member Control  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
  7. 7. 3. Member Economic Participation Members contribute to, and democratically control, the capital of their cooperative. 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; benefiting members in proportion to their patronage of the cooperative’s business, and, supporting other activities approved by the membership.
  8. 8. 4. Autonomy and Independence Cooperatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, including government, or raise capital from external sources, they shall do so on terms that ensure democratic control of their members and maintain their cooperative autonomy.
  9. 9. 5. Education, Training and Information Cooperatives shall provide education and training for their members, elected and appointed representatives, managers, and employees, so that they can contribute effectively and efficiently to the development of their cooperative
  10. 10. MC 2013-02 | Supplemental Rules on the Training Requirements of Cooperative Directors, Officers and Committee Members MC 2012-07 | Addendum to Memorandum Circular No. 2011-27 on the Implementation of the Training Requirements for Cooperative Officers MC 2011-27 | Implementation of Training Requirements for Coop Officers
  11. 11. MC 2011-26 | Guidelines on the Submission of Cooperative List of Officers and Training Undertaken MC 2011-14 | Standard Training Curricula for Cooperative Officers
  12. 12. 6. Cooperation Among Cooperatives Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional, and international structures.
  13. 13. 7. Concern for Community Cooperatives work for the sustainable development of their communities through policies approved by their members.
  14. 14. New Terms in the Code Representative Assembly means the full membership of a body of representatives elected by each of the sectors, chapters or district of that cooperative duly assembled for the purpose of exercising such powers lawfully delegated unto them by the general assembly in accordance with its bylaws;
  15. 15. MC 2011-12 | Members of the Local Election Committee Under the Representative Assembly Termed as Election Deputies
  16. 16. Officers of the Cooperatives shall include the members of the board of directors, members of the different committees created by the general assembly, manager or chief executive officer, secretary, treasurer, and members holding other positions as may be provided for in their cooperative
  17. 17. MC 2011-04 | Legal Interpretation of Article 42 of the RA9520 A. Officers of the Cooperative as provided under Art. 5 (11) of RA9520: B. Officers elected by the General Assembly: C,Officers appointed by the Board of Directors:
  18. 18. Relationship by Consanguinity First Degree - Parent to Child Second Degree - Grandparent to Grandchild, Brother to Sister Third Degree - Uncle to child, aunt to child, Greatgrandparents to Greatgrandchild
  19. 19. Relationship by Affinity First Degree - Parent-in-Law to Daughter/Son-in-Iaw Second Degree - Brother-in-Law to Sister-in- Law Third Degree - Great-Grandparent-in-Iaw to Great, Granddaughter/Great Grandson-in-Law,Uncle/Aunt in- law to Niece/Nephew in- law
  20. 20.  Social Audit is a procedure wherein the cooperative assesses its social impact and ethical performance vis-a-viz its stated mission, vision, goals and code of social responsibility for cooperatives to be established by the Authority in consultation with the cooperative sector • Enables the cooperatives to develop a process whereby it can account for its social performance and evaluate its impact in the community and be accountable for its decisions and actions to the regular members;
  21. 21. MC 2013-16 | Guidelines on Social Audit of Cooperatives |Social Audit Tools
  22. 22. Performance Audit shall refer to an audit on the efficiency and effectivity of the cooperative as a whole; its management and officers; and its various responsibility centers as basis for improving individual, team or overall performance and for objectively informing the general membership on such performance
  23. 23. MC 2013-15 | Performance Report Standards for Cooperatives MC 2013-18 | Submission of Performance and Social Audit Reports
  24. 24. Subsidiary Cooperatives refers to any organization all or majority of whose membership or shareholders come from a cooperative, organized for any other purpose different from that of, and receives technical, managerial and financial assistance, from a cooperative, in accordance with the rules and regulations of the Authority
  25. 25. MC 2013-09 | Policy on Networth Requirement for the Organization of a Subsidiary Cooperative Pursuant to Section 2 (2), Rule II of Rules and Regulations Implementing Certain Provisions of R.A. 9520
  26. 26. Organization and Registration  Completed a Pre-Membership Education Seminar (PMES)  Newly organized primary coop may only be registered as an MPC after compliance with the minimum requirements for MPCs to be set by the CDA  Submission of Economic Survey with staffing pattern which includes at least a bookkeeper  Articles of Cooperation At least 15 members of legal age Minimum Capitalization of PhP 15,000
  27. 27. Organization and Registration  CDA to periodically assess the required paid- up capital of coops and may increase it every five (5) yrs when necessary upon consultation with the coop sector and National Economic Development Authority (NEDA) (Guidelines to be drafted)  Any merger, consolidation and division of cooperatives require 3/4 affirmative votes of all members with voting rights present and constituting a quorum
  28. 28. MC 2011-07 | Organizational Structure of Cooperatives under RA 9520
  29. 29. MC 2010-05 | Policy Guidelines in the Mandatory Amendments of Articles of Cooperation and By-Laws of Cooperatives and Prescribing the Registration Thereof to Conform with RA 9520 MC 2009-02 | Guidelines in the Issuance of New Certificate of Registration Under the Philippine Cooperative code of 2008 (RA9520) MC 2009-01 | Guidelines for the Re- Registration of Cooperatives
  30. 30.  From RA 6938 six (6) types: Credit, Consumers, Marketing, Producer, Service, and Multi Purpose  To RA 9520 types namely: Credit, Consumers, Marketing, Producer, Service, Multi Purpose, Advocacy Cooperative, Agrarian Reform Cooperative, Cooperative Bank, Dairy Cooperative, Education Cooperative, Electric Cooperative, Financial Service Cooperative, Fishermen Cooperative, Health Services Cooperative, Housing Cooperative, Transport Cooperative, Water Service Cooperative Workers Cooperative, and others
  31. 31. • MC 2011-15 | Revised Guideline for the Registration of Primary Cooperatives • MC 2011-18 | Revised Guidelines in the Registration of Cooperative Federation and Union • MC 2011-17 | Policy and Guidelines on the Establishment of Cooperative Branch • MC 2012-17 | Policy Guidelines for the Establishment of Cooperative's Satellite Office
  32. 32. MC 2012-14 | Guidelines for the Registration of Small-Scale Mining Cooperative MC 2012-13 | Guidelines for the Registration of Health Service Cooperatives MC 2012-12 | Revised Guidelines in the Registration of Labor Service and Workers Cooperatives
  33. 33. MC 2011-25 | Policy Guidelines on Job Contracting Worker Service Cooperative MC 2011-24 | Policy Guidelines on Workers Cooperatives
  34. 34. Membership Legal age, Filipino citizen An associate member who meets the minimum requirements of regular membership, continues to patronize the cooperative for two (2) years, and signifies to remain a member shall be considered a regular member
  35. 35. MC 2012-16 | Policy Guidelines Prescribing the Minimum Information in the Membership Registry of Cooperatives
  36. 36. Ineligible to be Officers All elective officials are ineligible to be officers or directors of a cooperative except a party-list representative being an officer of a cooperative he/she represents
  37. 37. MC 2012-19 | Prohibition on the Election and Appointment of Elective Officials as Officers of the Cooperative
  38. 38. Federation  To carry on coop enterprise that complements, augments or supplements but does not conflict, compete with, nor supplant the business or economic activities of its members.  Registered cooperatives may organize a federation according to the type of business activity which they are engaged in
  39. 39. Grievance Committee  The general assembly may opt to create an appeal or grievance committee to serve for one (1) year to decide on appeals on membership application; and if they fail to decide within thirty (30) days upon receipt thereof, the appeal is deemed approved in favor of the applicant
  40. 40. Administration  The general assembly may by 3/4 votes of all its members with voting rights present and constituting a quorum, delegate some powers to a representative assembly  Written notices to regular meetings shall be sent in writing, by posting or publication or through other electronic means to all members of record  Notice to special meetings to be sent 1 week prior to the meeting to all members entitled to vote
  41. 41. Voting in primary cooperatives is strictly one-member - one vote no proxies allowed except for representative assembly Quorum shall consist of 25% of all the members entitled to vote. However in case of coop banks, quorum shall be as provided in Art. 99 of the Code; In electric coops, 5% of all members entitled to vote unless otherwise provided in the by-laws
  42. 42. Board of Directors  The BOD are responsible for strategic planning, direction-setting and policy- formulation  Their term still not to exceed two (2) years but no limitation as to number of consecutive terms to hold office  Prohibition against holding any other position involved in day-to-day operations and management  Disqualification of persons engaged in business similar to the cooperative
  43. 43. Committees and Officers  Additional committees  Mediation and Conciliation  Ethics  Gender and Development Members of Audit and Election Committees shall be elected by the general assembly, and the rest shall be appointed by the board
  44. 44. Audit Committee shall be directly accountable to the general assembly and shall have the power and duty to monitor the adequacy and effectiveness of the coop’s management control system
  45. 45. Committees and Officers All coop officers and committee members required to undergo trainings conducted by accredited institutions by the CDA No compensation except for per diems, but if cooperative reports a net loss for the preceding year, officers are not entitled to per diems Removal of officers may now be done by 3/4 votes of the regular members present and constituting a quorum in a regular or special assembly meeting
  46. 46. MC 2013-22 | Guidelines on Mainstreaming Gender and Development (GAD) in Cooperatives
  47. 47. Responsibilities Accountant or bookkeeper is responsible for maintenance and safekeeping of books of accounts Audit committee responsible for continuous and periodic review of books of accounts; monitor adequacy and effectiveness of management’s control system and audit the performance of the cooperative Audited financial statements required to be posted in principal office
  48. 48. MC 2012-09 | Policy Clarification Re-Accountable Officers
  49. 49. Annual Reports Filed within 120 days from the close of the calendar year Should include regular activities including socio-civic undertakings Must show their progress and achievements Liability for non-submission are commensurate fines and penalties imposable until the cooperative has complied
  50. 50. Tax Privileges Coops transacting with both members and non members shall not be subject to taxes and fees imposed under NIRC and other tax laws on their transactions with their members Transactions of members with the coop shall not be subject to taxes and fees, including final tax on members’ deposits and documentary stamp tax
  51. 51. Capital Subsidies, donations, legacies, grants, and aids shall not be divided into individual share capital holdings anytime but subject to escheat proceedings upon dissolution Limitation on share capital held by one member reduced from 20% to 10% By-laws to provide reasonable and realistic member capital build-up program
  52. 52. MC 2013-04 | Clarificatory Policy on Share Capital MC 2011-05 | Limitation on Share Capital Holdings
  53. 53. Tax Exemptions Non-members will pay VAT; coop will collect and remit to BIR 25% of net surplus is returned to members as interest and patronage refund Cooperative is responsible for collection and remittance of individual withholding taxes (interest on share capital)
  54. 54. Additional Privileges Faculty cooperatives have right of first refusal in management of canteen and other services related to the operations of educational institutions Housing agencies and financial institutions shall create a window for financing housing projects
  55. 55. Audit  Financial audit conducted by external auditor in good standing with PICPA and accredited by Board of Accountancy and CDA  Social and performance audits may be conducted internally by audit committee, paid staff, volunteer members, or by qualified external auditors
  56. 56. Social Auditing Based on the 7th Cooperative Principle – Concern for Community Defined as “the systematic review and appraisal of the cooperative in relation to the development of its most essential building blocks-its members, its people, and its distinctive contribution to the development of its community and society as a whole”.
  57. 57. Distribution of Net Surplus  Provide at least ten (10%) for the reserve fund. Provided that, in the first five (5) years after registration, the reserve fund shall not be less than fifty percent (50%) of the net surplus  Provide not more than 10% for CETF; half may be spent by the coop for education and training while other half may be remitted to the federation/union chosen by the cooperative;
  58. 58. The federation/union chosen shall submit to the CDA: (a) list of contributing cooperatives; (b) business consultancy assistance with its nature and cost; and (c) training activities specifying the nature, participants, and cost of each activity Distribution of Net Surplus
  59. 59. Distribution of Net Surplus Not less than 3% for community development fund for projects/activities that will benefit the community where the cooperative operates Not more than 7% for optional fund, land and building, and other funds
  60. 60. Other Provisions Special Provisions for:  Transportation Cooperatives  Electric Cooperatives  Cooperative Banks  Credit Cooperatives  Financial Service Cooperatives  Housing Cooperatives CDA allowed to formulate rules on certain provisions of the Code
  61. 61. Other Provisions Mediation and Conciliation Committee to facilitate settlement of intra-coop disputes & among members, officers etc. before submitting the case to CDA for voluntary arbitration (procedure in accordance with ADR Act of 2004) Joint Congressional Oversight Committee on Cooperatives to review and approve the implementing rules and regulations of the Code and monitor proper implementation
  62. 62. MC 2010-07 | Guidelines on the Procedure for Voluntary Arbitration in the Cooperative Development Authority (CDA) MC 2013-21 | Revised Guidelines Governing the Conduct of Conciliation-Mediation Proceedings Before The Cooperative Development Authority (CDA) MC 2013-20 | Revised Guidelines Governing The Conduct of Conciliation-Mediation Proceedings At The Primary and Union/Federation Level
  63. 63. Other Provisions Additional Penal Provisions: Liability of public officials or employees of any government agency who deprive, diminish, hinder or restrict coops from the full employment of their privilege under Article 60 & 61 of the Code  The CDA may motu proprio, initiate complaints against person(s), organizations using the word “cooperative” not duly registered as a coop under the Code
  64. 64. Other Provisions  The coop or any of its members can file a case against any officer or employee of the Bureau of Internal Revenue (BIR) or of any other government agency with the Ombudsman, Civil Service Commission, other appropriate government agency or the courts of law
  65. 65. Other Provisions  Offenses punishable by a penalty of imprisonment of not less than 1 year nor more than 5 years or a fine not more than P50,000 or both: Providing information, reports or other documents to the CDA that are required under this Code which the person knows to be false or misleading Omission or refusal to furnish any information, report or other document that is required under the Code
  66. 66. Other Provisions Making an entry required under the Code in a book or register, which the person knows to be false or misleading Hindering an authorized person from making an inspection, audit, examination or investigation required under the Code Failure to comply with an order or written instructions issued or given by the CDA
  67. 67. Other Provisions  Re-registration of all cooperatives within one (1) year from effectivity of this Code to confirm their status by submitting: (a) Certificate of Registration/Confirmation; (b) Articles of Cooperation; (c) by-laws; and (d) latest audited financial statement  Must secure Certificate of Tax Exemption from BIR (valid for 5 years from issue) following the issuance of the new Certificate of Registration
  68. 68. Status of Amendments The amended provisions shall be applicable only after the confirmation of the coops’ status thru their re-registration under the New Code.
  69. 69. MC 2011-20 | Guidelines on the Registration of Amendment of Articles of Cooperation and By-laws By Substitution
  70. 70. Joint Congressional Oversight Committee on Cooperatives to review and approve the implementing rules and regulations of the Code and monitor proper implementation