Philippine Cooperative Code of 2008 (Republic Act No. 9520) PDF

# Chapter 1: Philippine Cooperative Code of 2008 (Republic Act No. 9520) ## Introduction A cooperative is 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 aspirat...

# Chapter 1: Philippine Cooperative Code of 2008 (Republic Act No. 9520) ## Introduction A cooperative is 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. The law on cooperative is found in Republic Act No. 9520, otherwise known as the Philippine Cooperative Code of 2008, which was passed on February 17, 2009, and amended Republic Act No. 6939 (the Cooperative Code of the Philippines). ## Intended Learning Outcomes At the end of this chapter, the students will be able to know the attributes of a cooperative and describe how to organize a cooperative. Every cooperative shall conduct its affairs in accordance with Filipino culture, good values and experience, and the universally accepted principles of cooperation which include, but are not limited to: - Voluntary and open membership - Democratic member control - Member economic participation - Autonomy and independence - Education training and information - Cooperation among cooperatives - Concern for the community ## Purpose A cooperative may be organized and registered for various purposes for the benefit of its members. A cooperative encourages thrift and savings mobilization among the members, generates funds, and extends credit to such members. It encourages systematic production and marketing, and it provides goods and services. It develops expertise and skills among its members. It acquires lands and provides housing benefits for its members. It insures against the losses of its members. It promotes and advances the economic, social, and educational status of its members. It establishes, owns, leases, or operates cooperative banks, cooperative wholesale and retail complexes, insurance and agricultural/industrial processing enterprises, and public markets. It coordinates and facilitates the activities of cooperatives, advocates for the cause of the cooperative movements, and ensures the viability of cooperatives through the utilization of new technologies. It encourages and promotes self-help or self-employment, and undertakes any and all other activities for the effective and efficient implementation of the Philippine Cooperative Code. ## Powers A cooperative enjoys a lot of power. It has the power to exclusively use its registered name, to sue and be sued, and the power of succession. It has the power to amend its articles of cooperation, to adopt bylaws, which is not contrary to law, morals or public policy, and to amend and repeal the same. It has the power to deal with real and personal property, and to enter into division, merger, or consolidation. It has the power to form subsidiary cooperatives and join federations and unions. It has the power to avail of loans, credits, grants, donations from domestic and foreign sources, and to avail of preferential rights under RA 7160 (Local Government Code of 1991). It has the power to organize and operate schools in accordance with R.A. 9155 (Governance of Basic Education Act of 2001), and to exercise such other powers granted by the Philippine Cooperative Code or necessary to carry out its purpose or purposes as stated in its articles of cooperation. ## Types of Cooperatives Cooperatives are of different types: | Type of Cooperative | Description | |---|---| | Credit cooperative | Promotes and undertakes savings and lending services among its members, generating a common pool of funds to provide financial assistance and related services to its members for productive and provident purposes | | Consumer cooperative | Procures and distributes commodities to members and non-members | | Producer cooperative | Undertakes joint production, whether agricultural or industrial, and 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 | | Marketing cooperative | Engages in the supply of production inputs to members and markets their products | | Service cooperative | Engages in medical and dental care, hospitalization, transportation, insurance, housing, labor, electric light and power, communication, professional and other services | | Multipurpose cooperative | Combines two or more of the business activities of the different types of cooperatives | | Advocacy cooperative | 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 | 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 | | Cooperative bank | Organized for the primary purpose of providing a wide range of financial services to cooperatives and their members | | Dairy cooperative | Has members engaged in the production of fresh milk, which may be processed and/or marketed as dairy products | | Education cooperative | Organized for the primary purpose of owning and operating licensed educational institutions notwithstanding the provisions of Republic Act No. 9155 | | Electric cooperative | Organized for the primary purpose of undertaking power generations, utilizing renewable energy sources, including hybrid systems, acquisition, and operation of sub-transmission or distribution to its household members | | Financial service cooperative | Organized for the primary purpose of engaging in savings, credit, and other financial services | | Fisherman cooperative | Organized by marginalized fishers in localities whose products are marketed either as fresh or processed products | | Health services cooperative | Organized for the primary purpose of providing medical, dental, and other health services | | Housing cooperative | Assists or provides access to housing for the benefit of regular members who actively participate in the savings program for housing co-owned and controlled by its members | | Insurance cooperative | Engaged in the business of insuring life and property of cooperatives and their members | | Transport cooperative | Includes land and sea transportation, limited to small vessels defined or classified under the Philippine maritime laws, and organized under Republic Act No. 9520 | | Water service cooperative | Organized to own, operate, and manage water systems for the provision and distribution of potable water for its members and their households | | Workers cooperative | Organized by workers, including the self-employed who are at the same time the members and owners of the enterprise, to provide employment and business opportunities to its members and manage it in accordance with cooperative principles | ## Terms of Membership Cooperatives are categorized into: primary, secondary, and tertiary. Cooperatives enjoy certain privileges. They enjoy the privilege of depositing, free of charge, their sealed cash boxes or containers, documents, or any valuable papers in the safes of the municipal or city treasurers and other government offices. Cooperatives organized among government employees enjoy free use of an available space in their agency. Cooperatives rendering special types of service and facilities shall secure a franchise, therefore, and open their membership to all persons qualified in their areas of operation. In areas where appropriate cooperative exists, the cooperatives enjoy preferential right to supply government institutions and agencies rice, corn and other grains, fish and other marine products, meat, eggs, milk, vegetables, tobacco, and other agricultural commodities produced by their members. They enjoy preferential treatment in the allocation of fertilizers, including seeds and other agricultural inputs and implements, and in rice distribution, and also the preferential and equitable treatment in the allocation or control of bottomries of commercial shipping vessels in connection with the shipment of goods and products of cooperatives. Cooperatives and their federations which have for their primary purpose the production and/or the marketing of products from agriculture, fisheries, and small entrepreneurial industries and federations exercise preferential rights in the management of public markets and/or lease of public market facilities, stalls, or spaces. Cooperatives engaged in credit services and/or federations are entitled to loans credit lines, rediscounting of their loan notes, and other eligible papers with the Development Bank of the Philippines, the Land Bank of the Philippines, and other financial institutions. A public transport service cooperative may be entitled to financing support for the acquisition and/or maintenance of land and sea transport equipment, facilities, and parts through the program of the government financial institutions and has a preferential right to the management and operation of public terminals and ports where the cooperative operates and on securing a franchise for active or potential routes for the public transport. Cooperatives transacting business with the Government of the Philippines or any of its political subdivisions or any of its agencies or instrumentalities, including government-owned and controlled corporations shall be exempt from prequalification bidding requirements. Cooperatives enjoy the privilege of being represented by the provincial or city fiscal or the Office of the Solicitor General, free of charge, except when the adverse party is the Republic of the Philippines. Cooperatives organized by faculty members and employees of educational institutions have the preferential right in the management of the canteen and other services related to the operation of the educational institution where they are employed. The appropriate housing agencies and government financial institutions shall create a special window for financing housing projects undertaken by cooperatives, with interest rates and terms equal to, or better than those given for socialized housing projects. ## Registration of Cooperatives Fifteen or more Filipinos of legal age, having a common bond of interest and are actually residing or working in the intended area of operation, may organize a primary cooperative, the prospective members of which must have completed a Pre-Membership Education Seminar (PMES). They shall submit to CDA a general statement describing, among others the structure and purposes of the proposed cooperative, as well as an economic survey, indicating therein the area of operation, the size of membership, and other pertinent data. A cooperative shall have limited liability and shall exist for a period not exceeding 50 years from the date of registration unless sooner dissolved or unless said period is extended. All cooperatives applying for registration shall file with the CDA the notarized articles of cooperation, the bylaws, and the general statement together with the economic survey.