HOW COULD LOCAL GOVERNMENT UNITS FINANCIALLY SUPPORT LOCAL COOPERATIVES?

HOW COULD LOCAL GOVERNMENT UNITS FINANCIALLY SUPPORT LOCAL COOPERATIVES?

We often see Local Government Units (LGUs) giving cash aid to individuals as a response to poverty. That is good, of course—but I now ask: is that enough? Or are we simply treating the symptoms rather than the disease?

If we truly want lasting economic change, I believe the answer lies elsewhere—in empowering cooperatives.

Under the Local Government Code of 1991 and the Philippine Cooperative Code of 2008, LGUs are not only allowed but actually mandated to promote economic self-reliance. That includes supporting cooperatives. Yes, they are technically private enterprises—but they serve a public purpose. That is the legal bridge that allows public funds to support them.

In simple terms, when LGUs help cooperatives, they are investing in community livelihood, not giving away money.

But how exactly can this be done?

First, let us talk about direct financial support. LGUs can provide seed funding or grants, especially for start-up cooperatives in agriculture, transport, or fisheries. However, this must be backed by a Sanggunian ordinance and aligned with the Annual Investment Plan. Without that, it becomes legally questionable. With it, it becomes transformative.

Second, there is a smarter approach—credit enhancement. Instead of giving money outright, LGUs can act as guarantors for cooperative loans. Imagine a cooperative that cannot borrow from a bank due to lack of collateral. If the LGU steps in with a guarantee fund, that same cooperative suddenly becomes bankable. That is not charity—that is leverage.

Third, and perhaps the most sustainable, is market support. Why not require LGUs to buy from cooperatives? School uniforms, food for feeding programs, construction materials—these could all be sourced locally. A cooperative does not need endless subsidies if it has a guaranteed market.

Fourth, LGUs can invest in shared service facilities—rice mills, cold storage, solar dryers, even digital tools. Instead of handing out cash that can be misused, they provide the means of production. The cooperative then operates these assets, generates income, and creates jobs.

Fifth, let us not forget incentives. LGUs can grant local tax exemptions, reduced rental rates in public markets, and even free office space. These may seem small, but for a struggling cooperative, they can mean survival.

And then there is what I would call a new model: Public-Private-Cooperative Partnerships. Why not let cooperatives manage eco-tourism sites, waste collection systems, or even local utilities? In return, they earn income while delivering services to the community. Everyone wins.

But let me raise a concern.

While all these mechanisms are legally possible, they are often underutilized. Why? Again, I go back to the same issue: political will.

We have the laws. We have the frameworks. We even have the Cooperative Development Authority to guide and regulate the sector. What seems to be lacking is a unified strategy to bring LGUs, cooperatives, and national agencies together in a meaningful way.

I also suggest stronger planning and coordination. The Cooperative Development Council at the local level should not just exist on paper. It should actively design programs, package financing, and connect cooperatives to markets.

Let me be clear: I am not against financial aid to individuals. But if we want to reduce poverty to very low levels, we must move from consumption-based assistance to production-based empowerment.

Cooperatives create jobs. They distribute wealth more equitably. They anchor economic activity within communities.

So I end with this thought: if LGUs can spend millions on short-term relief, why not invest the same amount in cooperatives that can generate long-term prosperity?

The choice is ours. Shall we continue giving fish—or finally build the institutions that teach entire communities how to fish, process, market, and thrive together?

www.facebook.com/ike.seneres iseneres@yahoo.com senseneres.blogspot.com 09088877282/05-28-2027

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