ICA Coop

    • 9.432

    226.400

    7.647.800

    Philippines

    Key figures

    Number of cooperatives per sector

    Research overview

     

    Responding to challenges and existing knowledge gaps facing the cooperative movement, this mapping research seeks to provide exhaustive information on cooperatives around the world.

    This is achieved through a process jointly conducted by the ICA and its four regional offices – Cooperatives of the Americas, Cooperatives Europe, ICA Africa, and ICA Asia-Pacific – using a common methodology, designed with the support of external experts from the European Research Institute on Cooperative and Social Enterprises (Euricse).

    Each office collected the input of ICA members present in the countries within its geographic area, by using a common questionnaire, and completing it with relevant national statistics, in order to obtain a picture of the national situation. As a result, the data above is collected following two strategies: 1) a survey targeting ICA cooperative members 2) collecting national statistics already available in the country. The numbers above provide aggregated data from ICA members on the number of cooperatives, as well as the number of cooperative employees and memberships in the country. More methodological information is available in the full report. In Philippines, the data is collected for the reference year 2016.

    Mapping out cooperatives in each country provides a more precise picture of the cooperative context at national and regional levels, enhances the movement's visibility, networking, partnerships opportunities, as well as advocacy, and empowers cooperators by providing tools for positive change.

    This webpage presents a snapshot of the research results for Philippines. For more information and the full research results, you can download the highlights and the report by clicking on the links above.

     

    History

     

    Cooperatives have been seen for a long time as important economic actors in the Philippines. They are well recognised in law; their promotion by a State agency was written into the constitution in 1987, and they have their own up to date Cooperative Code, amended in 2008. They have been the ‘policy instrument of the government in promoting social justice and economic development’ which means they that have had favoured status in economic and social policy. 

     

    Overview

     

    ICA has eleven members from the Philippines. 

    In Philippines, the research questionnaire was distributed to and completed by 5 ICA member organisations in the country. The data collected was for the reference year 2016.

     

    Summary

     

    ICA members represent over 9,432 cooperatives in the country, with a total number of memberships of 7,647,800, and a total number of 226,400 employees.

    Consumer cooperatives, producer cooperatives, worker cooperatives and multi-stakeholder cooperatives are all present in Philippines.

    Its member organisations are active in the several sectors, including Credit, Banking, Transport, Agriculture, etc. The graphics above provide more information. 

     

    Legal framework

    Philippines Legal Framework Analysis Key Highlights.pdf (223 KB)
    Legal framework
    Philippines Legal Framework Analysis National Report.pdf (980.95 KB)
    Legal framework

    Legal research overview

     

    The legal framework analysis aims to provide general knowledge of the national cooperative legislation and of its main characteristics and contents, with particular regard to those aspects of regulation regarding the identity of cooperatives and its distinction from other types of business organisations, notably the for-profit shareholder corporation.

    It aims to evaluate whether the national legislation in place supports or hampers the development of cooperatives, and is, therefore “cooperative friendly” or not, and the degree to which it may be considered so, also in comparison to the legislation in force in other countries of the ICA region, or at the supranational level.

    In addition, the research aims to provide recommendations for eventual renewal of the legal frameworks in place in order to understand what changes in the current legislation would be necessary to improve its degree of “cooperative friendliness”, which is to say, to make the legislation more favourable to cooperatives, also in consideration of their specific identity. This webpage presents a snapshot of the legal framework analysis results for the Philippines.

     

    General overview

     

    This legal framework analysis examines the current cooperative laws that have a direct impact on the cooperative movement of the Philippines.

    The Republic Act No. 9520, otherwise known as the "Philippine Code of 2008," has been selected for the legal framework research. Likewise, the place of national cooperative legislation in the hierarchy of legal forms rests on this national cooperative law. The 1987 Philippine Constitution recognizes the legitimacy of cooperatives and the cooperative movement in the Philippines. The 1987 Philippine Constitution provides the enactment of cooperative legislation. The Constitution mentions cooperatives five times. Article 12 on National Economic & Patrimony, which states that all sectors of the economy and all country regions shall be given optimum opportunity to develop. Cooperatives and similar collective organizations shall be encouraged to broaden the base of their ownership. The Constitution mandates Congress to allow small-scale utilization of natural resources by cooperative fish farming, prioritizing subsistence fishers and fish workers in rivers, lakes, bays, and lagoons. In Article 12, cooperatives are encouraged to own and operate economic enterprises to promote distributive justice. The Constitution mandates Congress explicitly to create an agency to encourage cooperatives' viability and growth as instruments for social justice and economic development.

    There are no special laws on types of cooperatives in the Philippines. And, there is no consensus within the cooperative sector for particular laws, except for the sector of the agricultural cooperatives who lobbied for a separate law on agricultural cooperatives. In the Philippine Cooperative Code of 2008, agricultural cooperatives are not mentioned as one type of cooperatives. However, the Cooperative Development Authority (CDA) has issued the Guidelines for the Registration of Agriculture Cooperative dated September 16, 2015

     

    Main laws relevant to cooperatives in the Philippines

    Two main existing laws directly regulate the Philippine’s cooperatives, namely:

    1) The Republic Act No. 9520, otherwise known as the "Philippine Cooperative Code of 2008"

    2) The Republic Act No. 11364, or the Cooperative Development Authority Charter of 2019.

    However, provided below is the exhaustive list of laws & regulations affecting cooperatives:

    Regulation

    Particular type or sector

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

    All types except electric cooperatives registered with National Electrification Administration (NEA), and cooperatives doing banking, insurance, housing, & public utilities which are regulated to the extent of their functions.

    Republic Act No. 11364
    (Cooperative Development Authority of 2019)

    All types except electric cooperatives registered with National Electrification Administration (NEA), and cooperatives doing banking, insurance, housing, & public utilities which are regulated to the extent of their functions.

    Republic Act No. 10744
    (Credit Surety Fund Cooperative Act of 2015)

    Credit Surety Fund Cooperative

    Republic Act No. 9510 (Credit Information System Act)

    Cooperatives that have the authority to lend and/or perform micro-finance activities both to individuals and coop-borrowers

    The Labor Code of the Philippines

    (via  Supreme Court Decision on the case of SSS v. ASIAPRO Cooperative)

    Labor and service-oriented cooperatives

    Revenue Memorandum Order 7-2020

    All types of cooperatives

    Tariff Commission, Executive Order 376 – Annex A

    Agricultural cooperatives and fisheries’ cooperatives

    The 1987 Philippine Constitution provides the enactment of cooperative legislation. The Constitution mentions cooperatives five times. What is significant is Article 12 on National Economic & Patrimony, which states that all sectors of the economy and all country regions shall be given optimum opportunity to develop. Cooperatives and similar collective organizations shall be encouraged to broaden the base of their ownership. The Constitution mandates Congress to allow small-scale utilization of natural resources by cooperative fish farming, prioritizing subsistence fishers and fish workers in rivers, lakes, bays, and lagoons. In Article 12, cooperatives are encouraged to own and operate economic enterprises to promote distributive justice. The Constitution mandates Congress explicitly to create an agency to encourage cooperatives' viability and growth as instruments for social justice and economic development.

    Cooperative Friendliness

    In general, the present cooperative legislation in the Philippines can be termed as ‘quite cooperative friendly’. However, as there are also weaknesses in the Philippine Cooperative Laws, there is a need to continue improving the present versions to ensure that cooperative legislation will be more or excellently friendly to accelerate cooperative societies' development and enhance their competitiveness.  

    Key recommendations for improvement

    There is a compelling need to revisit the dual roles of CDA as a regulator and developer. The CDA has to focus its regulatory role to be more effective and to avoid conflicting roles. The developmental role should be the cooperative sector's function, particularly giving the task of capacity building to the federations. The government may provide funding support to federations for education, training, and technical assistance through its General Appropriations Act. The provisions in the Code on consolidation and merger of cooperatives should be strengthened. Cooperatives that have failed to grow and remain micro and small and cannot meet and comply with the performance standards set by the CDA after a certain number of years should be compelled to consolidate or merge. Otherwise, these cooperatives will be delisted. The government will provide very attractive incentives to support such mergers and consolidations of weak cooperatives.

    Conclusions

    The present law is generally 'cooperative friendly.' Many cooperatives' challenges are in governance, professionalization, business development, and internal capitalization, which are common problems faced by the micro and small cooperatives. While the Cooperative Law is generally supportive of cooperatives' growth and development, the bureaucratic red tape in government's execution of policies, and the lack of budget support from the National Economic Development Authority (NEDA) and the Department of Budget and Management (DBM), to capacitate CDA to fulfill its mandated functions as provided in the law is still hampering the cooperatives' long-term sustainability, particularly the 77.3% micro and small cooperatives.

     

     

     

    The legal frameworks analysis is a tool developed under the ICA-EU Partnership #coops4dev. It is an overview of the national legal frameworks at the time of writing. The views expressed within are not necessarily those of the ICA, nor does a reference to any specific content constitute an explicit endorsement or recommendation by the ICA. 

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