In an era when many feel powerless to change their lives,

cooperatives represent a strong, vibrant and viable economic

alternative.

PHILOSOPHIES AND
PRINCIPLES PF
COOPERATIVES
GROUP 6 ⚫ It is essentially an exchangeable piece of value of a company
which can fluctuate up or down, depending on several different
FUND SOURCING, CAPITALIZATION AND ALLOCATION OF NET market factors.
SURPLUS
⚫ Companies divide capital into shares as a means of raising
capital. Shares are also known as stocks.
CAPITAL
Article 71.
SHARE CAPITAL is the money invested in a company by the
The capitalization of cooperatives and the accounting procedures shall shareholders. Share capital is a long-term source of finance.
be governed by the provisions of this Code and the regulations which
⚫ In return for their investment, shareholders gain a share of the
shall be issued.
ownership of the company.
AUTHORIZED SHARE
CAPITAL SOURCES
⚫ It is the number of stock units (shares) that a company can issue
Article 72. as stated in its memorandum of association or its articles of
incorporation. Authorized share capital is often not fully used by
Cooperatives may derived their capital from any or all of the following management in order to leave room for future issuance of
resources: additional stock in case the company needs to raise capital
-Members share capital; quickly.

-Loans and borrowings including deposits; SUBSCRIBED SHARE

-Revolving capital (deferred payment of patronage refunds of interest
on share capital; and
-Subsidies, donations, legacies, grants, aids and such other assistance
from any local or foreign institution whether public or private;
PAID-UP SHARE
SHARE, SHARE CAPITAL, BORROWINGS & REVOLVING
CAPITAL.
SHARE
⚫ A share is a single unit of ownership in a company or financial
asset.
⚫ It is that part of issued share capital for which company has
positively received subscription from the investors. In simple
words, when a company issues shares to raise fund, it may or
may not find the investors for all of its shares. Thus, the part of
issued share capital for which company has successfully found
the subscribers is known as subscribed share capital.
⚫ It is the amount of money a company has received from
shareholders in exchange for shares of stock. Paid-up capital is
created when a company sells its shares on the primary market
directly to investors. When shares are bought and sold among
investors on the secondary market, no additional paid-up capital
is created as proceeds in those transactions go to the selling
shareholders, not the issuing company.
BORROWING
⚫ To receive money from another party with the agreement that the
money will be repaid. Most borrowers borrow at interest, meaning
they pay a certain percentage of the principal amount to the lender
as compensation for borrowing. Most loans also have a maturity date
by which time the borrower must have repaid the loan. Borrowing
occurs informally from family and friends, at the retail level through a
bank, and also on a large-scale involving governments and
institutional investors.
REVOLVING CAPITAL
⚫ A revolving capital is an available loan balance that is replenished as
a borrower pays back a lender. The amount can then be drawn down
again by the borrower. The lender usually imposes a requirement
that the entire loan be paid down at least once a year. The most
common type of revolving fund is the line of credit.
⚫ A revolving capital is intended to pay for short-term needs, such as
variations in the working capital requirements of a company that is
subject to seasonal sales.
ARTICLE 85.
NETSURPLUS
Notwithstanding the provisions of existing laws, the net surplus of
cooperatives shall be determined in accordance with its bylaws. Every
cooperative shall determine its net surplus at the close of every fiscal
year and at such other times as may be prescribed by the bylaws.
"Any provision of law to the contrary notwithstanding, the net surplus
shall not be construed as profit but as an excess of payments made by
the members for the loans borrowed, or the goods and services availed
by them from the cooperative or the difference of the rightful amount
due to the members for their products sold or services rendered to the
cooperative including other inflows of assets resulting from its other
operating activities and which shall be deemed to have been returned
to them if the same is distributed as prescribed herein.”
ARTICLE 86
ORDER OF DISTRIBUTION
RESERVE FUND
⊙ Shall be at least 10% of the net surplus: Provided, That, in the first
five (5) years of operation after registration, this amount shall not
be less than fifty per centum (50%) of the net surplus
⊙ The reserve fund shall be used for the stability of the cooperative
and to meet net losses in its operations. The general assembly may
decrease the amount allocated to the reserve fund when the
reserve fund already exceeds the share capital.
⊙ The reserve fund shall not be utilized for investment, other than
those allowed in this Code. Such sum of the reserve fund in excess
of the share capital may be used at any time for any project that
would expand the operations of the cooperative upon the resolution
of the general assembly.
⊙ Upon the dissolution of the cooperative, the reserve fund shall not
be distributed among the members. The general assembly may
resolve:
◦ To establish a usufructuary trust fund for the benefit of any
federation or union to which the cooperative is affiliated
◦ To donate, contribute, or otherwise dispose of the amount for
the benefit of the community where the cooperative operates.
◦ If the members cannot decide upon the disposal of the reserve
fund, the same shall go to the federation or union to which the
cooperative is affiliated.
EDUCATION AND TRAINING FUND
⊙ An amount for the education and training fund, shall not be more
than ten per centum (10%) of the net surplus. The bylaws may
provide that certain fees or a portion thereof be credited to such
fund. The fund shall provide for the training, development and
 similar other cooperative activities geared towards the growth of the
cooperative movement
⊙ Half of the amount for the CETF shall be used by the
cooperative for its own education and training needs while the
other half may be given to a higher-level cooperative / union or
federation chosen by the cooperative or of which the
cooperative is affiliated with. The said union or federation shall
submit to the Authority and to its contributing cooperatives the
following schedules:
○ List of cooperatives which have remitted their respective
Cooperative Education and Training Funds (CETF)
○ Business consultancy assistance to include the nature
and cost
○ Other training activities undertaken specifying therein
the nature, participants and cost of each activity
⊙ Upon the dissolution of the cooperative, the unexpended
balance of the education and training fund appertaining to the
cooperative shall be credited to the cooperative education and
training fund of the chosen union or federation.
COMMUNITY DEVELOPMENT FUND
⊙ An amount for the community development fund, which shall not
be less than three per centum (3%) of the net surplus. The
community development fund shall be used for projects or
activities that will benefit the community where the cooperative
operates.
ALLOCATION AND DISTRIBUTION OF NET SURPLUS
1. OPTIONAL FUND
Not more than (7%) shall be set aside for Optional Fund for land and
Building and any other necessary fund.
2. INTEREST ON SHARE CAPITAL AND PATRONAGE REFUND
The remaining net surplus shall be made available to the members in
the form of interest on share capital not to exceed the normal rate of
return our investments and patronage refunds: Provided, that any
amount remaining after the allowable interest and the patronage refund
have been deducted shall be credited to the reserve fund.
"The sum allocated for patronage refunds shall be made available at
the same rate to all patrons of the cooperative in proportion to their
individual patronage: Provided, That:
a) In the case of a member patron with paid-up share capital
contribution, his proportionate amount of patronage refund shall
be paid to him unless he agrees to credit the amount to his
account as additional share capital contribution;
b) In the case of a member patron with unpaid share capital
contribution, his proportionate amount of patronage refund shall
be credited to his account until the share capital contribution has
been fully paid;
In the case of a non-member patron, his proportionate amount of
patronage refund shall be set aside in a general fund for such patrons
and shall be allocated to individual non-member patrons only upon
request and presentation of evidence of the amount of his patronage.
The amount so allocated shall be credited to such patron toward
payment of the minimum capital contribution for membership. When a
sum equal to this amount has accumulated at any time within a period
specified in the bylaws, such patron shall be deemed and become a
member of the cooperative if he so agrees or requests and complies
with the provisions of the bylaws for admission to membership;
If within any period of time specified in the bylaws, any subscriber who
has not fully paid his subscribed share capital or any non-member
patron who has accumulated the sum necessary for membership but
who does not request nor agree to become a member or fails to comply
with the provisions of the bylaws for admission to membership, the
amount so accumulated or credited to their account together with any
part of the general fund for nonmember patrons shall be credited to the
reserve fund or to the education and training fund of the cooperative, at
the option of the cooperative.

Group 7
The Cooperative Development Authority: Regulatory and
Developmental Functions
Republic Act No. 6939
Revised Rules and Regulations implementing certain and special
provisions of the Philippine Cooperative Code of 2008
AN ACT CREATING THE COOPERATIVE DEVELOPMENT
AUTHORITY TO PROMOTE THE VIABILITY AND GROWTH OF
COOPERATIVES AS INSTRUMENTS OF EQUITY, SOCIAL
JUSTICE AND ECONOMIC DEVELOPMENT, DEFINING ITS
POWERS, FUNCTIONS AND RESPONSIBILITIES,
RATIONALIZING GOVERNMENT POLICIES AND AGENCIES
WITH COOPERATIVE FUNCTIONS, SUPPORTING
COOPERATIVE DEVELOPMENT, TRANSFERRING THE
REGISTRATION AND REGULATION FUNCTIONS OF
EXISTING GOVERNMENT AGENCIES ON COOPERATIVES
AS SUCH AND CONSOLIDATING THE SAME WITH THE
AUTHORITY, APPROPRIATING FUNDS THEREFOR, AND
FOR OTHER PURPOSES.
Section 1. Declaration of Policy. — It is hereby declared the
policy of the State to promote the viability and growth of
cooperatives as instruments of equity, social justice and
economic development and to create an agency, in fulfillment of
the mandate in Section 15, Article XII of the Constitution. Toward
this end, the State shall recognize cooperatives as associations
organized for the economic and social betterment of their
members, operating business enterprises based on mutual aid,
and founded upon internationally accepted cooperative principles
and practices.
In furtherance of this policy, the appropriate national economic
planning agency and include the promotion of growth and
expansion of cooperatives as a major and indispensable
component of national development plans. All departments,
branches, subdivisions and instrumentalities of the Government
shall promote the formation of cooperatives under their respective
programs by providing them with appropriate and suitable
incentives.
The State recognizes the cooperative sector as primarily
responsible for the institutional development of cooperatives.
Accordingly, the State recognizes the rights of the cooperative
sector to initiate and foster within its own ranks cooperative
promotion, organization, training, information gathering, audit and
support services, with government assistance where necessary.
Government assistance to cooperatives shall be free from any
restriction and conditionality that may in any manner infringe upon
the objectives and character of cooperatives as provided in this
Act. The State shall, except as provided in this Act, maintain the
policy of noninterference in the management and operation of
cooperatives.
Section 2. Creation of the Cooperative Development
Authority. — The Cooperative Development Authority is hereby
created under the Office of the President to carry out the provision
of this Act.
Section 3. Powers, Functions and Responsibilities. — The
Authority shall have the following powers, functions and
responsibilities:
(a) Formulate, adopt and implement integrated and
comprehensive plans and programs on cooperative development
consistent with the national policy on cooperatives and the overall
socioeconomic development plans of the Government;
(b) Develop and conduct management and training programs
upon request of cooperatives that will provide members of
cooperatives with the entrepreneurial capabilities, managerial
expertise, and technical skills required for the efficient operation
of their cooperatives and inculcate in them the true spirit of
cooperativism and provide, when necessary, technical and
professional assistance to ensure the viability and growth of
cooperatives with special concern for agrarian reform, fishery and
economically depressed sectors;
(c) Support the voluntary organization and consensual
development of activities that promote cooperative movements
and provide assistance towards upgrading managerial and
technical expertise upon request of the cooperatives concerned;
(d) Coordinate the efforts of the local government units and the
private sector in promotion, organization, and development of
cooperatives;
(e) Register all cooperatives and their federations and unions,
including their division, merger, consolidation, dissolution or
liquidation. It shall also register the transfer of all or substantially
all of their assets and liabilities and such other matters as may be
required by the Authority;
(f) Require all cooperatives, their federations and unions to submit
their annual financial statements, duly audited by certified public
accountants, and general information sheets;
(g) Order the cancellation after due notice and hearing of the
cooperative's certificate of registration for non-compliance with
administrative requirements and in cases of voluntary dissolution;
(h) Assist cooperatives in arranging for financial and other forms
of assistance under such terms and conditions as are calculated
to strengthen their viability and autonomy;
(i) Establish extension offices as may be necessary and
financially viable to implement this Act. Initially, there shall be
extension offices in the Cities of Dagupan, Manila, Naga, Iloilo,
Cebu, Cagayan de Oro and Davao;
(j) Impose and collect reasonable fees and charges in connection
with the registration of cooperatives;
(k) Administer all grants and donations coursed through the
Government for cooperative development, without prejudice to
the right of cooperatives to directly receive and administer such
grants and donations upon agreement with the grantors and
donors thereof;
(l) Formulate and adopt continuing policy initiatives consultation
with the cooperative sector through public hearing;
(m) Adopt rules and regulations for the conduct of its internal
operations;
(n) Submit an annual report to the President and Congress on the
state of the cooperative movement; and
(o) Exercise such other functions as may be necessary to
implement the provisions of cooperative laws and, in the
performance thereof, the Authority may summarily punish for
direct contempt any person guilty of misconduct in the presence
of the Authority which seriously interrupts any hearing or inquiry
with a fine of not more than Five hundred pesos (P500.00) or
imprisonment of not more than ten (10) days, or both. Acts
constituting indirect contempt as defined under Rule 71 of the
Rules of Court shall be punished in accordance with the said Rule.
Section 4. Governing Body. — The Authority shall be governed
by a Board of Administrators consisting of a Chairman and six (6)
members to be appointed by the President, all of whom shall be
chosen from among the nominees of the cooperative sector with
two (2) representatives each from Luzon, Visayas and Mindanao.
They shall serve for a term of six (6) years without reappointment:
Provided, That among those first appointed, the Chairman shall
serve for a term of (6) years, three (3) members to serve for a
term of four (4) years, and three (3) members to serve for a term
of two (2) years: Provided, further, That there shall be four (4) ex
officio members, one (1) each from the: (a) Department of
Agriculture, (b) Department of Transportation and
Communications, (c) National Electrification Administration, and
(d) Sugar Regulatory Administration. Said representation status
for the agencies is on a nonvoting basis and terminates one (1)
year from the operation of the Authority, but said ex officio
members shall not be holding any other board position in any
government entity. The Chairman and members shall serve on a
full-time basis. Any vacancy in the Board shall be filled by
appointment by the President in accordance with the membership
allocation set forth in this section: Provided, That a member so
appointed shall serve only for the unexpired term.
Section 5. Qualifications of Members of the Governing
Board. — No person shall be appointed Chairman or member of
the Board of Administrators unless he possesses the following
qualifications:
(a) A natural-born Filipino citizen of legal age;
(b) A Bachelor's Degree in Cooperatives, Economics, Finance,
Agriculture, Fisheries, Veterinary Medicine, Business, Social
Science, Law, Management, or in similar fields of study and five
(5) years of experience as an official or officer of a cooperative,
government agency, or nongovernment organization engaged in
cooperative development or, in the absence of a Bachelor
Degree, at least ten (10) years of experience in cooperatives
either as an officer of a cooperative or a government agency or
nongovernment organization engaged in cooperative
development; and
(c) Must be a resident of the region he represents for at least five
(5) years.
Any person appointed as Chairman or regular member of the
Board of Administrators shall divest himself of any direct or
indirect pecuniary interest in or dealings with cooperatives upon
his appointment.
Section 6. Board of Administrators Meeting. — The Board of
Administrators shall meet at least once a month for the
transaction of its regular business. Special meetings may be
called by the Chairman or majority of the members to consider
specific matters. A majority vote by the entire Board shall be
required for a decision. All meetings of the Board shall be held at
the head office in Metro Manila or at any other place as may be
determined by the Board.
The Board of Administrators shall appoint an Executive Director
who shall be the chief operating officer of the Authority whose
compensation shall be fixed by the Board of Administrators.
Section 7. Organization of the Authority. — The Authority shall
be organized within one hundred twenty (120) days from the
effectivity of this Act.
Section 8. Mediation and Conciliation. — Upon request of either
or both parties, the Authority shall mediate and conciliate disputes
within a cooperative or between cooperatives: Provided, That if
no mediation or conciliation succeeds within three (3) months
from request thereof, a certificate of non-resolution shall be
issued by the commission prior to the filing of appropriate action
before the proper courts.
Section 9. Power to Register Cooperatives. — The power to
register cooperatives shall be vested solely on the Authority. The
functions of the following departments and agencies relating to
the registration of cooperatives as such are hereby transferred to
the Authority:
(a) The Department of Agriculture;
(b) The Bureau of Agricultural Cooperatives Development;
(c) The Department of Transportation and Communications;
(d) The Sugar Regulatory Administration;
(e) The National Electrification Administration; and
(f) Any other pertinent government agency.
The Bureau of Agricultural Cooperatives Development created
under Executive Order No. 116, Series of 1987, is hereby
abolished and its qualified employees are hereby absorbed by the
Cooperative Development Authority, in accordance with its
staffing pattern, subject to Civil Service rules and regulations and
rules of the Office of Compensation and Position Classification:
Provided, That the Regional Cooperative Development
Assistance Offices of Regions IX and XII, created under
Executive Order No. 634, are also hereby abolished and their
employees shall be given preference for employment with the
Cooperative Development Authority in accordance with its staffing
pattern, subject to Civil Service rules and regulations: Provided,
finally, That those who are not absorbed shall be given separation
pay computed at one and one-fourth (1 1/4) months salary for
every year of service. Service of six (6) months or more shall be
considered as one (1) year in computing the years of service for
severance pay and, whenever applicable, other retirement
benefits under existing laws.
Section 10. Transfer of Funds and Programs. — The Cooperative
Development Loan Fund created under Presidential Decree No.
175, as amended, is hereby transferred from the Department of
Agriculture to the Authority.
The function of the Fund for Management Training and
Assistance Program granted to the Department of Agriculture by
Presidential Decree No. 175, as amended, is likewise hereby
transferred to the Authority.
The fund provided for the Management Training and Assistance
Program under Presidential Decree No. 175, as amended, is
hereby converted into a fund for the development of cooperatives
and may be used for such purpose upon the request of the
cooperatives concerned: Provided, That duly registered
cooperatives shall have the right to establish their own private
training centers or federations for purposes of cooperative
development.
In addition, the Cooperative Marketing Project as created under
loan agreements which are now managed by the Department of
Agriculture is likewise hereby transferred to the Authority.
Section 11. Cooperatives in the Education System. — The
history, philosophy, principles and practices of cooperatives and
their role as a factor in the national economy shall be
disseminated both in formal and non-formal education.
The role of nongovernment organizations, not registered as
cooperatives but duly registered under Philippine laws and
engaged in cooperative promotion, organization, research and
education, shall be recognized. The Authority may accredit such
nongovernment organizations as non-academic training
organizations. The training courses offered by them may be
eligible as credits for the purposes of academic, professional and
career advancements of their trainees. Existing training centers
for cooperatives may qualify as nongovernment organizations
under this Act.
State colleges and universities shall provide technical assistance
and guidance to cooperatives in the communities wherein they
operate, upon request.
Section 12. Cooperatives in the Banking System. — The
promotion and development of cooperative banks as part of the
Philippine banking system shall be a major concern of the
Authority which shall undertake the necessary program towards
this end in collaboration with the Central Bank of the Philippines
and the cooperative sector concerned.
Section 13. Rule-Making Authority. — The Authority is hereby
authorized to promulgate, after due public hearing and upon
approval of the President, such rules and regulations as may be
necessary to implement the provisions of this Act. Such
implementing rules and regulations shall take effect within fifteen
(15) days after publication thereof in the Official Gazette or in two
(2) newspapers of general circulation. All subsequent
amendments to the implementing rules and regulations shall
undergo the same process.
Section 14. Prohibition. — No organization shall be allowed to
use the title "cooperative" in its name unless it follows all generally
accepted cooperative principles, applicable cooperative laws, and
is duly registered under this Act: Provided, That organizations
which have used the word "cooperative" as part of their
nomenclature but which do not qualify as cooperatives under the
provisions of this Act shall have three (3) years within which to
qualify and to register with the Authority. If at the end of the three-
year period provided herein, the said organizations still do not
qualify, it shall be unlawful for the organizations to continue using
the word "cooperative" in their names.
Section 15. Information Campaign. — The Cooperative
Development Authority is mandated to conduct a six (6) months
information campaign on the provisions of this Act, beginning
three (3) months from the effectivity of this Act.
Section 16. Appropriations. — The funds needed to carry out
the provisions of this Act shall be charged to the appropriations of
the Bureau of Agricultural Cooperatives Development and the
Regional Cooperative Development Assistance Offices of
Regions IX and XII under the current General Appropriations Act
in addition to the appropriations of other
departments/agencies/funds whose functions/programs are
transferred to the Authority: Provided, That in its initial year of
operations, an additional amount of not exceeding Sixty million
pesos (P60,000,000.00) may be requested and drawn by the
Authority from the Contingent Fund of the President. Thereafter,
such sums as may be necessary for its continued implementation
shall be included in the annual General Appropriations Act.
Section 17. Transitory Provisions. — All cooperatives
registered under Presidential Decree Nos. 175 and 775, and
Executive Order No. 898 shall be deemed registered with the
Cooperative Development Authority: Provided, however, That
they shall submit to the nearest Cooperative Development
Authority office their certificates of registration, copies of their
articles of incorporation and bylaws, and their latest duly audited
financial statements within one (1) year from effectivity of this Act,
otherwise, their registration shall be cancelled: Provided, further,
That cooperatives created under Presidential Decree No. 269, as
amended by Presidential Decree No. 1645, shall be given three
(3) years within which to qualify and register with the Authority:
Provided, finally, That after these cooperatives shall have
qualified and registered, the provisions of Sections 3 and 5 of
Presidential Decree No. 1645 shall no longer be applicable to the
said cooperatives.
Section 18. Repeals. — All acts, general orders, executive
orders, letters of implementation, letters of instruction, regulations
or circulars, or parts thereof, inconsistent with any of the
provisions of this Act are hereby repealed or modified accordingly.
In case of doubt, the same shall be resolved in favor of the
cooperatives.
Section 19. Separability. — If for any cause any part of this Act
is declared unconstitutional, the rest of the provisions shall remain
in force and effect.
Section 20. Effectivity. — This Act shall take effect fifteen (15)
days after its publication in the Official Gazette or in a newspaper
of general circulation.
Approved: March 10, 1990
REVISED RULES AND REGULATIONS IMPLEMENTING CERTAIN
AND SPECIAL PROVISIONS OF THE PHILIPPINE COOPERATIVE
CODE OF 2008
RULE 1. REPRESENTATIVE ASSEMBLY
The Legal basis for this Rule is Article 5 (2), (10) of the Code,
quoted as follows:
• "(2) General Assembly shall mean the full membership of the
cooperative duly assembled for the purpose of exercising all the
rights and performing all the obligations pertaining to cooperatives,
as provided by this Code, its articles of cooperation and by-laws.
Provided; that for cooperatives with numerous and dispersed
membership, the general assembly may be composed of delegates
elected by each sector, chapter or district of the cooperative and in
accordance with the rules and regulations of the Cooperative
Development Authority."
• “(10) Representative Assembly means the full membership of
the body of representatives elected by each of the sectors, chapter
or district of the cooperative duly assembled for the purpose of
 exercising such powers lawfully delegated unto them by the
general assembly in accordance with its by-laws."
RULE 2. SUBSIDIARY COOPERATIVE
The legal basis for this Rule is Article 5 (16) of the Code, quoted as
follows:
• "Art. 5 (16) Subsidiary Cooperative 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.”
RULE 3. MULTIPURPOSE COOPERATIVE
The legal basis for this Rule is Article 10 of the Code quoted as follows:
"Art. 10. Organizing a Primary Cooperative.
Any newly organized primary cooperative may be registered as
multipurpose cooperative only after compliance with the minimum
requirements for multi-purpose cooperatives to be set by the Authority.
A single-purpose cooperative may transform into a multipurpose or may
create subsidiaries only after at least two (2) years of operation."
RULE 4. DIVISION OF COOPERATIVES
• "Art. 20. Division of Cooperatives. - Any registered
cooperative may, by a resolution approved by a vote of three-fourths
(3/4) of all the members with voting rights, present and constituting
a quorum, resolve to divide itself into two (2) or more cooperatives.
The procedure for such division shall be prescribed in the regulations
of the Authority. The new cooperatives shall become legally
established upon registration with the Authority: Provided, that all the
requirements set forth in this
RULE 5
GUIDELINES GOVERNING THE PROCEDURE FOR MERGER OR
CONSOLIDATION
Art. 21. Merger and Consolidation of Cooperatives.
(1) Two (2) or more cooperatives may merge into a single
cooperative which shall be either one of the constituent cooperatives or
the consolidated cooperatives.
(2) No merger or consolidation shall be valid unless approved by
three-fourths (3/4) vote of all members with voting rights, present and
constituting a quorum of each of the constituent cooperatives at
separate general assembly meetings. The dissenting members shall
have the right to exercise their right to withdraw their membership
pursuant to Article 30.
(3) The Authority shall issue the guidelines governing the
procedure of merger or consolidation of cooperatives. In any case, the
merger or consolidation shall be effective upon the issuance of the
Certificate of Merger or Consolidation by the Authority.
Art. 22. Effects of Merger and Consolidation. - The merger or
consolidation of the cooperatives shall have the following
effects:
(1) The constituent cooperatives shall become a single cooperative
which, in case of merger, shall be the surviving cooperative, and, in
case of consolidation, shall be the consolidated cooperative;
(2) The separate existence of the constituent cooperatives shall
cease, except that of the surviving or the consolidated cooperative;
(3) The surviving or the consolidated cooperative shall possess all
rights, privileges, immunities and powers and shall be subject to all the
duties and liabilities of a cooperative organized under this Code;
(4) The surviving or the consolidated cooperative shall possess all
the assets, rights, privileges, immunities and franchises of each of the
constituent cooperatives; and
(5) The surviving or the consolidated cooperative shall be
responsible for all the liabilities and obligations of each of the
constituent cooperatives in the same manner as if such surviving or
consolidated cooperative had itself incurred such liabilities or
obligations. Any claim, action or proceeding pending by or against any
such constituent cooperatives may be prosecuted by or against the
surviving or consolidated cooperative, as the case may be. Neither the
rights of creditors nor any lien upon the property of any of such
constituent shall be impaired by such merger or consolidation."
RULE 6. GUIDELINES FOR LABORATORY COOPERATIVES
The legal basis for this Rule is the third paragraph of Article 26 of
the Code, quoted as follows:
"Art. 26. Kinds of Membership.
A cooperative organized by minors shall be considered a laboratory
cooperative and must be affiliated with a registered cooperative. A
laboratory cooperative shall be governed by special guidelines to be
promulgated by the Authority."
RULE 7. FUNCTIONS, RESPONSIBILITIES AND TRAINING
REQUIREMENTS OF DIRECTORS, OFFICERS AND COMMITTEE
MEMBERS
The legal basis for this Rule is Article 44 of the Code, quoted as
follows:
• "Art. 44. Functions, Responsibilities, and Training
Requirements of Directors, Officers, and Committee Members.
The functions and responsibilities of the directors, officers and
committee members, as well as their training requirements shall be in
accordance with the rules and regulations issued by the Authority."
RULE 8. REPORTS REQUIRED FOR COOPERATIVES
The legal basis for this Rule is Art. 53 of this Code, quoted as
follows:
"Art. 53. Reports.
• (1) Every cooperative shall draw up regular reports of its
program of activities, including those in pursuance of their socio-
civic undertakings, showing their progress and achievements at
the end of every fiscal year. The reports shall be made
accessible to its members, and copies thereof shall be furnished
to all its members of record. These reports shall be filed with the
Authority within one hundred twenty (120) days from the end of
the calendar year. The form and contents of the reports shall be
as prescribed by the rules of the Authority. Failure to file the
required reports shall subject the accountable officer/s to fines
and penalties as may be prescribed by the Authority, and shall
be a ground for the revocation of authority of the cooperative to
operate as such. The fiscal year of every cooperative shall be
the calendar year, except as may be otherwise provided in the
by-laws.
• (2) If a cooperative fails to make, publish and file the reports
required herein, or fails to include therein any matter required by
this Code, the Authority shall, within fifteen (15) days from the
expiration of the prescribed period, send such cooperative a
written notice, stating its non-compliance and the
commensurate fines and penalties that will be imposed until
such time that the cooperative has complied with the
requirements."
RULE 9. GUIDELINES FOR THE LIQUIDATION OF COOPERATIVES
The legal bases for the Rule are Art. 69, 70, Art. 72, par. 1,
subsection 4 and par.2, of the Code, quoted as follows:
• "Art. 69. Liquidation of a Cooperative. - Every
cooperative whose charter expires by its own limitation or whose
existence is terminated by voluntary dissolution or through an
appropriate judicial proceeding shall nevertheless continue to
exist for three (3) years after the time it is dissolved, not to
continue the business for which it was established but for the
purpose of prosecuting and defending suits by or against it;
settlement and closure of its affairs; disposition, conveyance
and distribution of its properties and assets.
• At any time during the said three (3) years, the cooperative is
authorized and empowered to convey all of its properties to
 trustees for the benefit of its members, creditors and other
persons in interest. From and after any such conveyance, all
interests which the cooperative had in the properties are
terminated.
• Upon the winding up of the cooperative affairs, any asset
distributable to any creditor, shareholder or member who is
unknown or cannot be found shall be given to the federation or
union to which the cooperative is affiliated with.
• A cooperative shall only distribute its assets or properties upon
lawful dissolution and after payment of all its debts and liabilities,
except in the case of decrease of share capital of the
cooperative and as otherwise allowed by this Code."
• "Art. 70. Rules and Regulations on Liquidation. - The
Authority shall issue the appropriate implementing guidelines for
the liquidation of cooperatives."
• "Art. 72. Capital Sources.-
• (4) Subsidies, donations, legacies, grants, aids and such other
assistance from any local or foreign institution whether public or
private: Provided, That capital coming from such subsidies,
donations, legacies, grants, aids and other assistance shall not
be divided into individual share capital holdings at any time but
shall instead from part of the donated capital or fund of the
cooperative.
• Upon dissolution, such donated capital shall be subject to
escheat."
RULE 10. CAPITALIZATION AND ACCOUNTING PROCEDURES
OF COOPERATIVES
The legal basis for this Rule is Article 71 of the Code, quoted as
follows:
• "Art. 71. Capital. - The capitalization of cooperatives and the
accounting procedures shall be governed by the provisions of this
Code and the regulations which shall be issued."
RULE 11. SOCIAL AUDIT OF COOPERATIVE
The legal basis for this Rule is Article 80, of the Code, quoted as
follows:
• "Art. 80. Annual Audit. - Cooperatives registered under this
Code shall be subject to an annual financial, performance and social
audit."
• "The social audit shall be conducted by an independent social
auditor accredited by the Authority."
• "The Authority, in consultation with the cooperative sector, shall
promulgate the rules and standards for the social audit of
cooperatives."
RULE 12. FINANCIAL SERVICE COOPERATIVE (FSC)
The legal basis for this Rule is Article 121 (1) and (14) of the Code,
quoted as follows:
• "Art. 121. Regulation and Supervision. - The Authority shall
exercise lead regulatory powers and supervision over the
operations of the financial service cooperatives, to wit:
• (1) Issue rules and regulations for the safe and sound conduct
of operations of financial service cooperatives.
• (14) Appoint a conservator or a receiver as may be necessary
subject to the rules and regulations to be promulgated by the
Authority in coordination with the BSP, taking into consideration
the grounds, powers and procedures under Sections 29 and 30
of Republic Act. No. 7653 as may be deemed appropriate to
financial service cooperatives.
• The Authority shall include in its rules and regulation appropriate
sanctions and penalties, on the financial service cooperatives,
its members, and officers and responsible persons, for any
action that fails to adhere to sound and prudent management
practices or are inconsistent with the provisions of this Code."
RULE 13. VOLUNTARY ARBITRATION
The legal basis for this Rule is Article 137 of the Code, quoted as
follows:
• "Art. 137. Settlement of Disputes, Conciliation, and
Mediation Proceedings. - Disputes among members, officers,
directors, and committee members, and intra-cooperative, inter-
cooperative, intra-federation or inter-federation disputes shall,
as far as practicable, be settled amicably in accordance with the
conciliation or mediation mechanism embodied in the By-laws
of cooperatives and in such other applicable laws.
• The conciliation and mediation committee of the cooperative
shall facilitate the amicable settlement of intra-cooperative
disputes and disputes among members, officers, directors, and
committee members.
• Should such conciliation or mediation proceedings fail, the
matter shall be settled through voluntary arbitration: Provided,
however, That before any party can validly file a complaint with
the Authority for voluntary arbitration, it must first secure a
certification from its conciliation and mediation committee and
from the cooperative union or federation to which it belongs that
despite all efforts to settle the issues, the same have failed.
• The jurisdiction of the voluntary arbitrators shall be exclusive
and original and their decisions shall be appealable to the Office
of the President. The Authority shall issue and adopt the proper
rules of procedure governing arbitration as the primary and
exclusive mode for dispute resolution in accordance with the
Alternative Dispute Resolution Act of 2004.
• For this purpose, the Authority shall constitute a list of Qualified
Voluntary Arbitrators."
PART II. SPECIAL PROVISIONS
RULE I. HOUSING COOPERATIVES
• Pursuant to the provisions of Art. 62(13) (par.2) under
Chapter V of Republic Act No. 9520, otherwise known as the
Philippine Cooperative Code of 2008, the Cooperative
Development Authority, in consultation with NHA, HDMF, HLURB,
HUDCC, SSS, LBP, SHFC, DBP, HGC, DILG, DENR and the
concerned cooperative sector, hereby promulgates these rules
and regulations for Housing Cooperatives.
RULE II. AGRARIAN REFORM COOPERATIVES
• Pursuant to the provisions of Art.93 (6) and Art.94 (par. 2)
under Chapter XI of Republic Act. No. 9520, otherwise known as
the Philippine Cooperative Code of 2008, the Authority, in
consultation with the DAR, BSP, LBP, and the concerned
cooperative sector, hereby promulgates these rules and
regulations for Agrarian Reform Cooperatives.
RULE III. INSURANCE COOPERATIVES
• Pursuant to the provisions of Art.108 under Chapter XIII of
Republic Act. No. 9520, otherwise known as the Philippine
Cooperative Code of 2008, the Authority, in consultation with the
Insurance Commission and the concerned cooperative sector
hereby promulgate these rules and regulations for Insurance
Cooperatives.
RULE IV. WATER SERVICE COOPERATIVES
• Pursuant to the provisions of Art.111 (3) under Chapter XIV
of Republic Act. No. 9520, otherwise known as the Philippine
Cooperative Code of 2008, the Authority, in consultation with the
NWRB, the LWUA, and the concerned cooperative sector, hereby
promulgates these rules and regulations for the Water Service
Cooperative.
RULE V. TRANSPORTATION SERVICE COOPERATIVES
• Pursuant to the provisions of Art.113 (par. 2) under Chapter
XIV of Republic Act. No. 9520, otherwise known as the Philippine
Cooperative Code of 2008, the Authority, in consultation with the
DOTC, LTO, LTFRB, MARINA, OTC and the concerned
cooperative sector, hereby promulgates these rules and
regulations for Transportation Service Cooperatives.
RULE VI. ELECTRIC COOPERATIVES
 • Pursuant to the provisions of Art. 134 (par.2) under Chapter
XVII of Republic Act No. 9520, otherwise known as the Philippine
Cooperative Code of 2008, the Authority, in consultation with the
concerned cooperative sector hereby promulgates these rules and
regulations for Electric Cooperatives.
RULE VII. DAIRY COOPERATIVES
• Pursuant to the provisions of Republic Act. No. 9520,
otherwise known as the Philippine Cooperative Code of 2008, the
Authority in consultation with the National Dairy Authority hereby
promulgates these rules and regulations for Dairy Cooperatives.
RULE VIII. LABOR SERVICE COOPERATIVE AND WORKERS
COOPERATIVE
The legal basis for this Rule are as follows:
• "ART. 23. Type and Categories of Cooperatives. – (1) Types
of Cooperatives – Cooperatives may fall under any of the
following types:
• (e) Service Cooperative is one which engages in medical and
dental care, hospitalization, transportation, insurance, housing,
labor, electric light and power, communication, professional and
other services;
• "(t) Workers Cooperative is one organized by workers, including
the self-employed, who are at same time the members and
owners of the enterprise. Its principal purpose is to provide
employment and business opportunities to its members and
manage it in accordance with cooperative principles.”
GROUP 8
COOPERATIVES AND SOCIAL TRANSFORMATION
July 6th is declared by the United Nations as the International Day of
Cooperatives with this year's theme: Cooperatives for Decent Work.
(PNA).
FACTORS OR HINDER FOR SOCIAL TRANSFORMATION
1. Unemployment
Without a job, or without decent and stable conditions of employment,
it is impossible for the most vulnerable to lift themselves out of poverty.
2. Climate Change
Extreme weather events will, most likely, affect the poorer communities.
Therefore, strategies to mitigate the adverse effects of climate change
are needed, and also in this case, co-operatives can have a role to play.
3. Inequalities
The most vulnerable groups, such as women, youth, minorities,
indigenous people, among others, are also the most affected by rising
inequality. It is important that co-operatives, when working in their local
communities, be agents of positive discrimination by establishing
policies and activities that actively counter inequality.
In all these, co-operatives have a very strong record of action by
providing stable and decent employment, protecting the environment,
caring for the communities where they operate, and by serving as
centers of democracy and equal opportunity for people, without
discrimination. It is evident that the challenge of fully eradicating poverty
still looms large. While governments have the primary responsibility for
this effort, co-operatives can contribute to it by implementing effective
strategies, share knowledge and establish partnerships with other
agents of change.
Fighting poverty has been identified by the International Co-operative
Alliance as one of the working areas where co-operatives can make a
big difference in the implementation of the Sustainable Development
Goals (SDGs).
BACKGROUND OF THE DECENT WORK
➢ ILO mission to intervene for better and humane conditions in
the world of work.
 ➢ Concerned with all workers, formal / informal economics; wage 2. Rights at work
/ own account employment in the fields , factories an offices, in
their homes or in the community. Any form of employment must observe the fundamental principles and
rights at work.
The mandate of the ILO to promote decent work is based on the
3. Social Protection
fundamental and values enshrined in:
1. The ILO Constitution and reaffirmed by the Philadelphia Declaration. Basic social protection is indispensable to secure employment and
income.
2. Declaration on fundamental rights and rights at work.
4. Social Dialogue
3. The Declaration on Social Justice for a fair Globalization.
Workers, Employment and government must work together in shaping
The ILO defines Decent Work “as full and productive employment economic and social policies.
exercised in conditions of freedom, equity, security, and dignity”
All four strategic objectives are recognized by the ILO as inseparable,
interrelated and mutually supportive. Failure to promote any one of
them would harm progress towards the other.
THE CONCEPT OF DECENT WORK
➢ The term was first introduced by the ILO in 1999.
10 Substantive Elements of the Four Pillars of Decent Work
➢ Decent work is a globally accepted goal and instrument for Agenda
improving the lives of people.
1. Employment Opportunities
➢ Decent work approach requires countries not to create jobs but
to create jobs with acceptable quality. 2. Adequate earnings and productive work
That the decent work entails that the work is not only a source of 3. Decent Work time
personal dignity, family stability, peace in community and economic
4. Combining work, family and personal life
growth that expands opportunities for productive jobs and enterprise
development. 5. Work that should be abolished
➢ It also refers to work that is rewarding, work that gives added 6. Stability and Security of work
value to the worker’s life.
7. Equal opportunity and treatment in employment
➢ It also refers to jobs that allow for the protection of fundamental
rights, the right of a decent wage and a secure job. 8. Safe work environment

➢ It means also that the decent work is relevant for all workers. 9. Social Security
10. Social Dialogue

4 PILLARS OF DECENT WORK

1. Employment Creation
The principal route out of poverty is produce work and income.
MANIFESTATIONS OF DECENT WORK DEFICITS
A decent work deficit is said to occur when:
1. There is involuntary employment and poverty
2. Poor quality and unproductive jobs
3. Discrimination and gender inequality
4. Unsafe Work
5. Pay differentials between women and men
6. Child Labor
7. Lack or representation and voice
8. Rights that are denied at work
Cooperatives, Local Development and the Global Community
We view cooperatives as important vehicles for mobilization of local
resources into a critical mass. However, what we do not have is a
framework that can be used to bring the cooperative approach to the
fore among community development strategies. There is need to
develop a conceptual framework illustrating how cooperatives build
trust, promote participation, and foster the creation of networks and
economic benefits that help people transition from poverty to better well-
being.
In developing our model, we assume that individuals can achieve
significant economic benefits from participation in cooperative
business; that cooperatives need to be adequately capitalized and
functionally successful as businesses; and that cooperatives have
unique processes through which they foster the creation of social
capital. We build on the social-capital and poverty transition framework
Social Development refers to the progressive improvements in the
living conditions of quality of life enjoyed by society shared by its
members. It would be used with reference with to the human welfare
aspects of development, that is improving the quality of life and more
equitable distribution of material and cultural goods
Cooperatives can engage in a broad range of activities, the most
common being in:
1. Education, Training and Human Resource Development
2. Communities Development
3. Enterprise Development and Employment
4. Law, Advocacy and Politics
5. Sustainable Development
ECONOMIC DEVELOPMENT
➢ 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.
“They also helped in lessening the burden of poverty. By providing
savings products, they help reduce members' vulnerabilities to shocks
such as medical emergencies. Cooperatives have also been able to
strengthen agricultural production and improve access of farmers.”
As governments around the world cut services and withdraw from
regulating markets, cooperatives are being considered useful
mechanisms to manage risk for members. They strengthen the
communities in which they operate.
Cooperatives generally provide an economic boost to the community
as well.
Cooperatives is significant tool for the creation of decent jobs and for
the mobilization of resources.