LET’S INSTITUTIONALIZE GOVERNMENT GRANTS TO COOPERATIVES

LET’S INSTITUTIONALIZE GOVERNMENT GRANTS TO COOPERATIVES

Correct me if I am wrong, but there appears to be no formal and institutionalized system in the Philippines for government grants to cooperatives.

Yes, government agencies and local government units (LGUs) have been providing assistance to cooperatives for many years. However, these often come in the form of donations in cash or in kind, distributed on an ad hoc basis and sometimes dependent on available funds or changing priorities.

To me, there is a difference between a donation and a grant.

A donation is a simple transfer of resources. A grant, on the other hand, operates within a formal regulatory framework, with clear objectives, application procedures, eligibility criteria, monitoring systems, and measurable outcomes.

That is exactly what I am proposing: let us institutionalize government grants for cooperatives.

Why is this important?

First, a competitive grant system promotes transparency. If cooperatives can systematically apply for grants and compete based on project proposals and measurable impacts, it removes suspicions of arbitrary distributions, political favoritism, and dole-out mentality.

Second, grants can be aligned with national and local development priorities. These could support the Sustainable Development Goals (SDGs), the Medium-Term Philippine Development Plan, food security initiatives, environmental protection programs, climate resilience projects, and poverty reduction strategies.

The legal basis already exists.

Under the Local Government Code of 1991, particularly Sections 34 and 36, LGUs may provide financial and other forms of assistance to people's organizations and cooperatives for economic, social, environmental, and cultural projects. The Commission on Audit (COA) and the Department of the Interior and Local Government (DILG) also provide guidelines requiring accreditation, memoranda of agreement, and liquidation reports.

The authority is there. What appears to be missing is an institutionalized, nationwide grant system.

This issue is especially important because many cooperatives cannot qualify for bank loans. Traditional lending institutions often do not fully appreciate the unique structure of cooperatives. Since cooperatives cannot easily issue equity shares like corporations, many suffer from what I call "capital starvation."

This is where grants can become transformative.

Imagine agricultural cooperatives receiving competitive grants for farm mechanization, cold storage facilities, organic fertilizer production, renewable energy projects, and post-harvest processing. Imagine transport cooperatives obtaining grants for modernization and clean-energy initiatives. Imagine consumer and workers' cooperatives receiving grants to develop digital platforms and community enterprises.

Of course, safeguards must be put in place. Grants should be used primarily for capital expenditures and development projects, not for operating expenses or distribution as dividends. There must also be rigorous auditing to prevent the creation of so-called "phantom cooperatives" whose only purpose is to collect government funds.

I also see another opportunity.

Many cooperatives may not have the technical capability to prepare grant proposals. This is where business students can play a meaningful role. Students pursuing degrees in business administration, management, public administration, and even MBA programs can assist cooperatives in preparing project proposals, feasibility studies, and business plans.

To me, this could become a new form of student activism.

Instead of merely discussing social issues inside classrooms, students can participate directly in nation-building by helping cooperatives obtain resources that can create jobs, strengthen communities, and reduce poverty.

I am already talking to several schools that are willing to participate in such a program. What I am looking for now are national government agencies and local government units that are willing to give this idea a try.

Institutionalizing grants to cooperatives is not about creating a permanent subsidy. It is about creating a transparent, competitive, and accountable system that helps grassroots enterprises become self-sustaining.

After all, if we truly believe that cooperatives are instruments of inclusive growth and equitable development, then perhaps it is time to give them something more than occasional donations.

Perhaps it is time to give them a permanent place in our national development strategy.

RAMON IKE V. SENERES

www.facebook.com/ike.seneres  iseneres@yahoo.com  senseneres.blogspot.com  09088877282/07-13-2027

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