HOW CAN WE UPGRADE THE PHILIPPINE COOPERATIVE CODE?

HOW CAN WE UPGRADE THE PHILIPPINE COOPERATIVE CODE?

Seventeen years have passed since the enactment of the Philippine Cooperative Code of 2008, otherwise known as Republic Act No. 9520. Signed in 2009 by former President Gloria Macapagal Arroyo, the law was itself an upgrade of the earlier Cooperative Code of the Philippines (RA 6938) enacted in 1990 under Corazon Aquino.

Today, many leaders in the cooperative movement believe that the time has come for another major upgrade.

One of the voices calling for reform is cooperative leader Edwin Bustillos, who recently urged cooperatives nationwide to support the ongoing discussions in the Senate regarding Senate Bill 1431 Philippines. His appeal highlights three important principles that deserve attention.

First, the preservation of the cooperative principle of “one coop, one vote.” This rule protects the democratic character of cooperatives. Unlike corporations, where voting power depends on how many shares an investor owns, cooperatives follow the principle of one member, one vote. In theory, this keeps power in the hands of members rather than big investors.

Second, the proposal that individual members should not be required to obtain a Taxpayer Identification Number (TIN) when applying for or renewing a cooperative’s certificate of tax exemption. Many cooperatives argue that this requirement only adds bureaucracy and discourages participation.

Third, the appeal that the Cooperative Education and Training Fund (CETF) should remain under the discretion of the primary cooperative, rather than being controlled elsewhere. Education has always been one of the pillars of the cooperative movement.

These proposals are a good starting point. But the bigger question remains: how can cooperatives become as strong as corporations?

Consider the numbers. According to data from the Cooperative Development Authority (CDA), the Philippines has about 20,000 cooperatives with more than 11 million members and total assets exceeding ₱600 billion. That is already a significant economic force.

However, the Securities and Exchange Commission Philippines reports that the country has over 580,000 registered corporations. The difference is striking.

Why do entrepreneurs prefer corporations instead of cooperatives? Is it because corporations are more profitable? Or is it because the legal and regulatory framework favors them?

One major area for reform is digital transformation. The proposed upgrade to the Cooperative Code includes the legalization of virtual general assemblies, online voting, and electronic record-keeping. In today’s digital economy, a cooperative that still depends on paper records will inevitably fall behind.

Another proposal is FinTech integration, allowing credit cooperatives to connect with digital payment systems and e-wallets. If cooperatives want to compete with banks and financial technology firms, they must operate at the same technological level.

There are also suggestions to strengthen the institutional support for the sector, including proposals to elevate the CDA into a full Department of Cooperatives, giving the sector stronger representation in the Cabinet and national budget discussions.

Financial sustainability is another concern. Many small cooperatives collapse within their first few years. Reforms being discussed include stronger capitalization requirements, expanded credit surety funds, and disaster resilience funds to protect cooperatives during climate-related emergencies.

But beyond laws and regulations, the real challenge may be cultural. Cooperatives are not just businesses; they are people-centered enterprises built on trust, participation, and shared ownership.

If we truly want cooperatives to flourish, we must ask deeper questions.
How can we make cooperatives more attractive to young entrepreneurs?
How can technology help members participate more actively?
How can cooperatives compete in global markets while staying true to their democratic principles?

The three proposals raised by Mr. Bustillos are an excellent starting point. But the national conversation should not stop there.

If you have ideas on how to upgrade the Philippine cooperative movement, perhaps now is the time to speak up. After all, the strength of cooperatives has always come from the same place:

the collective voice of their members.

RAMON IKE V. SENERES

www.facebook.com/ike.seneres iseneres@yahoo.com senseneres.blogspot.com 09088877282/04-27-2027

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