Presented during the coop month celebration at Alaminos City

1. “What is cooperative? Role of
Cooperative in Socio and Economic
Development
Jo B. Bitonio
Regional Director
Presented at Alaminos City CMC
Oct. 21, 2017

2. What is Cooperative?
• Autonomous
• Duly registered association of persons
• With a common bond of interest
• Voluntarily joined together to achieve their
social, economic and cultural needs and
aspirations
• Making equitable contributions to the capital
required
• Patronizing their products and services
• Accepting a fair share of the risks and benefits of
the undertaking in accordance with universally
accepted cooperative principles.
Art 3. RA 9520

3. Cooperatives are formed
to meet peoples’ mutual
needs. They are based on the
powerful idea that together, a
group of people can achieve
goals that none of them could
achieve alone

4. CDA Mandate
• Promote the viability and growth of
cooperatives as instruments of equity,
social justice and economic
development in fulfillment of the
mandate in section 15, Article XII of the
Constitution.
equity
Social
Justice
Eco
Devt

5. Role of Cooperative
in Social
Development?

6. Understanding Social Development
Social means relating to society or its
organization
to grow into fuller or mature
condition
Develop
Ment defined as a result, condition,
process or is defined as of doing
something
Social Development refers to the
progressive improvements in the living conditions
of quality of life enjoyed by society and shared by
its members

7. According to Bilance, 1997
“Social Development is the
promotion of a sustainable society
that is worthy of human dignity by
empowering marginalized groups,
women and men, to undertake their
own development, to improve their
social and economic position and to
acquire their rightful place in
society.”

8. • The Copenhagen
Social Summit,
1995 defined Social
Development in
terms of three basic
criteria:
 Poverty Eradication
 Employment
Generation
 Social Harmony
According to
Amartya Sen,
1995 “Social
Development is
equality of
social
opportunities”

9. According to M.S Gore, the
concept of social development
is inclusive of economic
development but it emphasizes
the development of the society
in totality that is, in its economic,
political, social and cultural
aspects

10. • In a narrower sense, it would be used
with reference to the human welfare
aspects of development, that is
improving the quality of life and more
equitable distribution of material and
cultural goods.
• In the broadest sense “it signifies all
aspects of development that are of
collective nature pertaining to the
society as a whole.

11. Social development may
be used in connection with
structural transformation in
society seeking changes in
the system of stratification
and in degree of mobility.

12. Elite
Population
Middle Population
Poverty Threshold
Social development may be used in
connection with structural transformation in
society seeking changes in the system of
stratification and in degree of mobility.

13. Agenda 2030
• The Sustainable Development
Goals (SDGs), otherwise known
as the Global Goals, are a
universal call to action to end
poverty, protect the planet and
ensure that all people enjoy
peace and prosperity.

14. These 17 Goals build on the successes of the
Millennium Development Goals, while including new areas
such as climate change, economic inequality, innovation,
sustainable consumption, peace and justice, among other
priorities. The goals are interconnected – often the key to
success on one will involve tackling issues more
commonly associated with another.

15. Cooperatives can engage in a broad
range of activities, the most common being in
(i) education, training, and human resource
development;
(ii) community development;
iii) enterprise development and employment
generation
(iv) health and nutrition;
(v)law, advocacy, and politics; and
(vi) sustainable development

16. The community
development fund shall be
used for projects or activities
that will benefit the community
where the cooperative
operates.

17. Social Development
• Social Justice (Panlipunang
katarungan)
• Social Responsibilities

18. • Cooperatives are based on principles and values that speak
directly to the issue of social justice. Most traditional
cooperatives follow the seven principles of cooperative
identity, promoted by the International Cooperative
Alliance (ICA),
• These principles call for the practice of democracy,
equality, equity and solidarity. Cooperatives also embrace
the ethical values of honesty, openness, social
responsibility and caring for others.
• With these principles and values at the core of cooperative
operations, the poor, excluded and marginalized sectors of
society are usually served well by cooperatives
Social Justice

19. Social Justice
• Social justice which could be seen as
equal opportunity treatment of all persons
in society. It focuses on the dignity of each
individual.
• Social justice promotes the participation
each individual in the development of their
society and to enjoy the rewards of that
development.
• Cooperatives have the responsibility to
ensure this happens

20. Social Audit
• The process whereby a cooperative can
account for its social performance,
report on and improve that performance.
It assesses the social impact and ethical
performance of the cooperative in
relation to its vision, mission, goals, and
Code of Social Responsibility

21. It is also process to assess the
cooperative’s contribution for the upliftment of
the status not only to its members’ economic
needs but also social needs and the
community where it operates. The
cooperative’s actual performance and
accomplishment are compared its vision,
goals, and social responsibility as it relates to
the impact not only to the community but to
its regular members as the immediate
beneficiary of the decisions and actions it
promulgated, passed and implemented.

22. Social Audit will serve as control
mechanism to account for its social
performance and evaluate its impact
in the community taking into account
the community development fund
which shall be used for projects or
activities that will benefit the
community where the cooperative
operates.

23. Social Audit validates the support of
the cooperative to the 7th cooperative
principles, i.e. the “Concern for
Community” and determines whether the
cooperative work for the community’s
sustainable development through policies
approved by their members. The audit
focuses not only to the economic side of
the cooperative but also the social aspect
of the organization and appraises

24. Component of the Social Audit
ToolSocial Audit for cooperative shall look into the
following components with their corresponding
points:
I. Organization This is a measurement of cooperative's
fulfilment of its vision, mission and goals, feedback
mechanisms, code of good governance and ethical
standards.
II. Membership Measurement on how the cooperative
responded to the need of members, observed
governance practices, considered provision for
benefits of members, and involved members in the
affairs of the cooperative. its collaborative programs

25. Component of the Social
Audit Tool
III. Staff/Employees Assessment of the cooperative's
fulfilment of the needs and welfare of the employees in terms
of safety workplace and sanitation, including the provision for
compensation and benefits.
IV. Cooperation among Cooperatives Measurement of the
cooperative's affiliation/s and linkages to federations/unions
and other cooperatives.
V. Community and Nation Determines the involvement of the
cooperative and its contributions to the community and nation,
in general.
VI. Network Alliance and Linkages Assessment on how the
cooperative relates to other organization and its collaborative
programs

26. Cooperatives accord
members opportunity,
protection and empowerment -
essential elements in uplifting
them from degradation and
poverty

28. Role of Cooperative in
Economic
Development?

29. • Financial cooperatives are some
of the largest providers of
microfinance services to the poor.
• Financial cooperatives thus play a
central role in the achievement of
an inclusive financial sector that
encompasses the poor.

30. Through their commitment to
servicing the poor and underserved,
financial cooperatives are helping to
lessen the burden of poverty.
Financial cooperatives, by
providing savings products, help to
reduce members’ vulnerabilities to
shocks such as medical
emergencies.

31. Cooperatives have also been
instrumental in promoting
inclusive development in rural
areas, helping to both
strengthen and diversify rural
economies.

32. Financial cooperatives provide
access to credit for members who might
not typically have access to the larger
savings and commercial banks. This is
significant in markets where financial
providers are absent owing to poor
revenue prospects, high risks, or high
transaction costs. This access to
financial services often supports the
formation of small and micro
businesses.

33. Cooperatives have also been able to
strengthen agricultural production and
improve access of poor farmers, especially
through engaging in fair trade
arrangements. Small farmers who struggle
to create and sustain businesses of their
own are able to increase farm revenues,
lower marketing and information-gathering
costs, as well as enter into high-value
supply chains that they would not be able
to do on their own.

34. Conclusion
• As governments around the world cut
services and withdraw from regulating
markets, cooperatives are being
considered useful mechanisms to manage
risk for members in agricultural or other
similar cooperatives
• Strengthen the communities in which they
operate
• Cooperatives generally provide an
economic boost to the community as well.

35. In an era when many
people feel powerless to
change their lives,
cooperatives represent a
strong, vibrant, and viable
economic alternative.

36. • Cooperatives are specifically seen
as significant tools for the creation
of decent jobs and for the
mobilization of resources for
income generation.
• They contribute to sustainable
human development and have an
important role to play in combating
social exclusion.

37. • Achieving economy of size,
• Improving bargaining power when dealing with
other businesses providing them, among others
benefits, higher income and social protection
• Purchasing in bulk to achieve lower prices,
• Obtaining products or services otherwise
unavailable
• Access or broadening market opportunities
• Improving product or service quality,
• Securing credit from financial institutions
• Increasing income
• Regardless of the type, size, geographical location
or purpose, cooperatives provide a unique tool for
achieving one or more economic goals in an
increasingly competitive global economy.

38.  The need to promote the business
potential of cooperatives so they can
contribute to sustainable development
and decent employment, in the context
of the urgent need for social justice.
 Empowering cooperatives to leverage
their capacity to contribute to social
justice requires a sound policy and
legislative framework
How?

39. Raise awareness of
the cooperative enterprise
model and its potential
contributions to social
development.

40. The sound governance of cooperatives
depends upon a well-informed and active
membership base, dedicated to cooperative
values and principles. To sustain the drive of
cooperatives for social justice, a strong
membership base, bound by the democratic
one-member-one-vote principle, is essential
to addressing weak or unethical management,
or other conflicts of interests which could
divert cooperatives from addressing social
justice issues.

41. To be effective it need to be comprised of nine
principles. These nine principles are:
1. Need to have a multi-faceted and comprehensive strategy
2. Need to strengthen community ownership
3. Need to secure access to credit for local businesses
4. Need to build human resources (leadership development,
literacy development, employment supports, etc.)
5. Need to build local capacity
6. Need to integrate social and economic goals
7. Need to empower a broad range of the community
8. Need to have sound financial management
9. The process needs to be guided by strategic planning and
analysis
Bruce (2000)

42. ICA Vision 2020
These critical themes are:
1 Elevate participation within membership and
governance to a new level
2 Position co-operatives as builders of
sustainability
3 Build the co-operative message and secure the
co-operative identity
4 Ensure supportive legal frameworks for co-
operative growth
5 Secure reliable co-operative capital while
guaranteeing member control

43. Performance Audit Report
• PESOS (Credit coop)
• PISO (all)
Article 53 of R.A. 9520, otherwise known as the
Philippine Cooperative Code of 2008, to wit:
“Every cooperative shall draw up regular reports of
its program of activities, including those in
pursuance of their socio-civic undertakings,
showing their progress & achievements at the end
of every fiscal year.

44. Governance and Audit Report for
Cooperatives
• MEMORANDUM CIRCULAR NO. 2017-05
Series of 2017
Governance and Management Audit Working Paper – refers
to the working paper to be used by the Audit Committee or
Internal Auditor in analyzing/assessing the performance of
the cooperative in a form to be prescribed by the Authority.
Governance and Management Audit Report – refers to the
summary report of analysis/assessment to be undertaken
by the cooperative based on the result of the audit using the
tool prescribed by the Authority

45. Section 8. Period of Submission
and Sanctions
• The Governance and Management Audit
Report (see Annex B – Sample Report) shall be
submitted by the cooperative to the CDA not
later than 120 days from the end of each
Calendar Year as attachment to the CAPR.
• The cooperative who failed to submit the
report shall not be issued Certificate of
Compliance (COC) or may also be subjected to
a procedural process of cancellation

46. Section 11. Effectivity
• This Memorandum Circular shall take
effect upon approval of the CDA Board of
Administrators and fifteen (15) days after
its publication in the Office of National
Administrative Register (ONAR).
Approved by the CDA Board of
Administrators on August 15, 2017 per
BOA Resolution No. 213 Series of 2017

47. By virtue of the principles of co-
operatives, there is an integral
relationship between a cooperative at
its community. Often not, cooperatives
are acknowledged as playing a role in
community economic development,
cooperatives are essentially a
response to community development
opportunities or challenges.

48. Cooperatives are
already playing a
strong role in the
economies of local
communities.

49. Reference
• https://uncoopsyear.wordpress.com/category
/cooperatives-in-social-development/