Romulo Moreno Villamin Managing Director, Institute of Co-operative Studies i
Everyone following co-operative developments in the Philippines, especially those relating to failure of co-operative organizations, programs and policies, must have heard of this conclusion before: lack of education lies at the root, if not one of the causes, of the problem. This was particularly true in the early stages of promotion and development of co-operatives in the country, when government and a host of public agencies were at the forefront of every development effort and co-operative education was no more than an information campaign. Since the 1950s, however, with the passage of Republic Act 2023 and the emergence of the voluntary sector that put emphasis on member education, co-operative education has become institutionalized. The pre-membership education seminar (PMES) 1 became a practice of the voluntary sector early on, and the Philippines may be the only country in the world now where the PMES is mandated by law as a requirement for membership in any type of co-operative. Co- operatives are also mandated to set aside 10% of their net surplus for the Co-operative Education and Training Fund (CETF), half of which is intended for their own co-operative education activities, the other half for use by the union or federation of which it is a member. Nowadays, when analysis of problems associated with co-operatives identifies lack of education as a cause, it is not the absence but rather the failure of education that is the issue.
1 The Southern Philippines Educational Cooperative Center (SPECC), organized in 1966, developed and introduced the PMES and made it an essential component of its coop organizing activities in Mindanao and some parts of the Visayas. This refers to the inadequacy of education, either in terms of substance or quality. This may help explain the poor performance of individual co-operatives. But can it adequately explain the inadequacy of co-operatives taken together as a whole? Discerning Present Realities Lets first take a good look at co-operatives in the Philippines as a sector, however tenuous that grouping might be right now, and see whats happening. Some critical events stand out upon closer analysis. These realities are highlighted below. First, co-operatives are still very much at the stage of underdevelopment. The world is celebrating the International Year of Co-operatives in 2012 and the United Nations report to the General Assembly 2 to support the IYC declaration cites impressive gains achieved by the co- operative sector in both developing and developed countries. Co-operatives have established presence in almost all sectors of national economies across the world and have become dominant players in certain sectors, particularly in agriculture where co-operatives enjoy over 50% to 90% market share. Unfortunately, the Philippines does not figure in this report: Co-operatives here cannot be found in the co-operative map after over a century of continuous promotion and development. The data of the Cooperative Development Authority as of December 2011 show that over ninety-one percent (91.7%) of registered co-operatives are micro and small. Only 1.6% are considered large (defined as those with P100 million in assets and above) and most of these are into financial services and working independently of one another. These numbers seem to profile the state of co-operatives in the country, which have gone through boom and bust cycles at different stages of development over the years. This has been
2 Report of the Secretary General to the United Nations General Assembly on the status and role of co-operatives, 6 August 1996; and Background Paper on Co-operatives. the reality for more than hundred years now 3 . As a matter of fact, we seem to have acquiesced to the preponderance of small co-operatives as a fact of life and see this as real development. Seen from a historical perspective, however, these numbers suggest only one thing and it is that co- operatives in this part of the world are permanently stuck in the stage of underdevelopment. Co- operatives are underdeveloped when they remain small precisely because they depend on their own limited resources or are dependent on outside resources. As a sector, co-operatives remain underdeveloped when their resources are diffused and not optimized for growth, thereby limiting their potential to develop and contribute to national development. Second, bigger co-operatives are growing individually rather than as a system. It has to be pointed out that the success of co-operatives in many countries in achieving significant market shares and continuous growth was never achieved by one co-operative acting alone in the marketplace but by co-operatives working together within and across industries. They have secured their position in the national economy precisely by practicing the 6 th Co-operative Principle of Cooperation Among Co-operatives. The same cannot be said of the Philippines, where the prevailing mindset is that co-operatives can succeed alone and where there is very little synergy, if any, among co-operatives. As a result, co-operatives in the country have largely remained individual players and nowadays we are witnessing here a very unusual phenomenon of competition among co-operatives. There are also no support systems that have been put in place or have prospered when one was started. Without such support systems as a liquidity fund or stabilization fund, for instance, savings and
3 See also Prof. Jorge V. Sibals detailed account of the development of cooperatives in the country in his published article, A Century of the Philippine Cooperative Movement. credit co-operatives are increasingly exposed to systemic risk. Such risk is real and the fact that even bigger ones ignore it means co-operatives are a long way to maturing into a viable system. Third, there is no unifying center that provides leadership and direction. If the picture drawn above of the state of co-operatives in the country is one of random development, one major reason for this is the lack of effective regulation. But the other important reason is the absence of a unifying center that can guide the co-operative movement towards a common direction and one that can provide an effective system of support. In the more developed and mature movements around the world, this role is usually played by a strong federation or union providing leadership, guidance and direction. Here, the federations and unions are not only weak; there are just too many of them and, worse, they are acting at cross purposes with one another. Moreover, there is very little intelligent discussion as well as concerted effort at defining a real agenda for action at all levels. From a systems standpoint, co-operatives in the country have very little chance to move up the ladder of development without a unifying center. Role of Co-operative Education Has co-operative education something to do with this state of affairs? Can those who profess to advance knowledge in co-operatives ignore these realities? In looking forward, can education contribute effectively to moving co-operatives from underdevelopment to real development? This paper takes the position that we cannot dissociate co-operative education from these realities. Ignoring them means that education becomes an aimless propagation of knowledge; therefore, it cannot contribute to real development. Herbert Spencer (1820 1903), the English philosopher, once said: the great aim of education is not knowledge but action. This is an important reminder because it means education should not only be seen as a process but ultimately its value should be seen in the outcome. Past efforts at co-operative education obviously fell short of this measure. But the challenge of real development remains. If Philippine co-operatives are to move up the ladder of development, then present as well as future efforts at co-operative education have to be equal to this challenge, Content As Message Co-operative education has to address squarely the issue of underdevelopment of co-operatives in the country. Cooperation is an active word signifying individual contribution to a collective undertaking and towards achieving a common purpose, which is higher or greater than the purpose of any one individual in the group. In organized cooperation like the co-operative, the strength of the undertaking lies precisely in members contributing to the common good in order to meet their individual needs, not the other way around. This is why the Statement on the Co- operative Identity is also the statement of the Co-operative Values and Principles. Co-operatives around the world have succeeded precisely because they worked together to achieve the higher purpose of contributing to national development, not just to realize their own individual ends. Something must have been lost in the translation of co-operative thought and practice through co-operative education if the realities described above are all we can show for our efforts over the years. Co-operative education must have failed because it has not nurtured the real essence of cooperation and has not elevated the meaning of organized cooperation to a higher purpose. Something must be done to correct this and new initiatives have to be advocated. Co-operative education, after all, is advocacy and advocating for change has become more urgent now that the social relevance of co-operatives is being questioned by other sectors of Philippine society. It is for this reason that MASS SPECC in Mindanao has taken an active advocacy role through its education and training activities, carrying the following messages in the conversation it has started with co-operative officers, managers and staff: a) Consolidation. It is now time for co-operatives, as an economic sector, to move up the ladder of development. This can be achieved through consolidation, merger and integration. This has been the experience of developed and mature co-operative movements around the world. Co-operatives here have to take this route if they are to establish significant presence and visibility in the national economy. b) Systems thinking. Again, as demonstrated by successful co-operative movements in many countries, co-operatives cannot succeed alone; they can only succeed as part of a bigger whole. They work together in establishing support systems and structures in order to protect themselves better from systemic risk and achieve sustainable growth. A strong federation and union system is essential to the success of co-operative movements. This is sadly missing in the Philippines. Here, federations and unions, aside from being mostly weak, act more like service providers rather than self-regulating systems that they should be. c) Movement building. Co-operatives cannot work together effectively when they are not guided by a higher purpose and when they are not bound by a common cause. Right now, there is no co-operative movement to speak of in this country. What we are witnessing instead are loose alliances and temporary relationships that are driven more by individual interests rather than the pursuit of the common good. Indeed, there is a need to articulate again that purpose and that cause that have made co-operatives the one great social innovation known to mankind. d) Nation building. Co-operatives have clearly to be part of the solution to the socio-economic problems of the country, particularly in tackling poverty. This includes greater contribution to production, particularly agricultural production because majority of poor Filipinos still depend on agriculture. Right now, there is too much concentration in savings and credit (over 78% of registered co-operatives) where there is very little innovation and contribution to economic output is very marginal. There is a need to venture into new co-operative undertakings that can secure real benefits particularly for the marginalized sectors of the population. Otherwise, co-operatives claim to social relevance remains hollow. Rule 7 of the Implementing Rules and Regulations of RA 9520 now requires all officers of the co-operative to undergo necessary training specified by the Cooperative Development Authority. 4 This may be the opportune time to drive home the message to co-operatives across the country. It will indeed be a missed opportunity if the required co-operative education becomes a matter of compliance and becomes yet again a propagation of knowledge for its own sake. Which brings us to the issue of delivery, particularly the question of who is delivering the message. Delivery As System Rule 7 provides opportunity for co-operative education to help bring about change and contribute to real development. But the sad reality is we do not have the system and the structure in place to deliver the required training to all co-operatives. Neither is there a common agenda among all the
4 RULES and REGULATIONS Implementing Certain Provisions Of The Philippine Cooperative Code Of 2008 ( Republic Act No. 9520). See also CDA Memorandum Circular 2011-14 and CDA Memorandum Circular 2011-27.
training providers on what to accomplish. This is a major concern and one that should be addressed by government and the co-operative sector. First, there is a big number of co-op officers that need to qualify according to the CDA memo circular and undergo the required training throughout the country. Roughly, this number should be at least 227,000 5 individuals who have to finish four to ten different specified courses in a period of two years, depending on their position in the co-operative. Considering that these co-op officers are spread across the archipelago, there is the question of access to these courses, let alone their affordability especially to the many small co-operatives. There is also the question of flexibility of these courses to the specific circumstances of the trainees. Second, there are not enough qualified institutions or organizations on the supply side that can adequately respond to that demand and that can deliver the right kind of message consistently. Co-operative unions and federations are supposed to carry that message but because most lack capability and exist only in name, the CDA has opened up the role of training provider to even those without co-operative credentials and experience. It has not helped that those who claim to have those credentials and experience are pursuing their own separate agendas. This has led to the free-for-all situation that promotes competition rather than collaboration, and one that easily lends itself to opportunism and training for the sake of compliance. The real losers here are the co-operatives, which will once again miss the opportunity for change and the chance to move up the ladder of development.
5 This number is estimated from the 20,792 registered co-operatives as of December 31, 2011 (CDA data) and the 22 officers per co-operative on the average that are required to undergo training. It is safe to say that at least two- thirds of the micro co-operatives (they make up 75.5% of total registered co-operatives or 15,694) will either not survive or wont bother with training anyway, so they are discounted from the total number of target population for training. This is a major challenge that cannot be met by co-operatives individually making effort to meet the training requirements and get value out of the training. It cannot be adequately met by training providers pursuing their own individual interests and without consciousness of the greater demands of co-operative development. Neither can this challenge be sufficiently addressed by the co-operative sector or the government acting within the narrow confines of organizational plans and program priorities. This is a challenge that requires key stakeholders in particular, co-operative organizations, educational institutions, specialized training organizations, and government to find common ground and a new sense of purpose in the task of developing not just individual co-operatives but co-operatives together as a sector with the capability to make significant contributions to the national economy. What is needed is a system of training that is collaborative and one that can harness the capabilities of these stakeholders in ensuring that standards are set and quality education is delivered to co-operatives nationwide. Such a system has to be responsive to the real needs of co-operatives at the ground level as well as to their requirements for growth as a sector. Such a system has to be progressive, allowing learners to move up the ladder of learning in stages and allowing them to apply learning at work as part of the process. Such a system has to be permanent, allowing co-operatives to plan and calendar training events around their specific needs and circumstances. Such a system has to lend itself to innovation, including use and application of new technology that can enhance the learning experience. If this sounds like a wish list, it actually is because it speaks to the confusion and dysfunction that characterize the many conflicting co-operative structures in the country today. It speaks to the need for unity of purpose among co-operative institutions and organizations that purport to promote co-operative development. It also speaks to the need for effective regulation by government as well as informed and consistent application of rules and regulations in all regions of the country. It speaks to the need for consensus among various stakeholders on the way forward in moving co-operatives to the next stage of development.
i ICS is the training unit of the MASS-SPECC Cooperative Development Center, a regional federation of cooperatives based in Cagayan de Oro City. A merger of the Mindanao Alliance of Self-Help Societies and the Southern Philippines Educational Cooperative Center, MASS-SPECC is the countrys strongest cooperative federation serving some 390 affiliate cooperatives throughout Mindanao.