Press Release
September 7, 2008

Zubiri urges House of Representatives to pass Cooperative Code amendments
Cooperatives will shield people as RP economy slows

"The amendments to the Cooperative Code that we approved in the Senate on Third Reading will shield the people from hardships brought about by a slowing economy," Senator Juan Miguel Zubiri, chair of the Committee on Cooperatives, said as economic managers reported only 4.6 % gross domestic product growth in the first half of this year down from the 8.3% GDP growth in the same period last year.

"This measure will modernize and reform almost at least 74,809 operational cooperatives with millions of members," Senator Zubiri said.

"This was the first time that the Senate beat the House of Representatives in approving the proposed amendments to the Cooperative Code since the same has been tackled for the past four Congresses," Zubiri stressed as he urged his counterparts in the House of Representatives to immediately pass the measure.

"In many areas, cooperatives provide the services that government is unable to address. These coops are really the catalyst for growth in many of the depressed and marginalized areas in the country."

"Many credit coops fulfill the financial needs of the poor without voluminous documentation and collateral that banks and other financial institutions require. The borrowers being members and owners themselves actually get a higher rate of return because they get patronage refunds and dividends," Zubiri underscored.

"Cooperatives will also carry the heavier burden to deliver livelihood opportunities and secure jobs for their members with P42 Billion in assets at their disposal. We now have a shrinking job market as growth of consumer spending is down 3.4 percent from 5.6 percent a year ago and growth in government spending also halved to 5.1 % from 11.9 % last year. The entire cooperative sector has generated 1.636 million jobs in 2006, 1.563 million jobs in 2005 and 1.498 million jobs in 2004. The century cooperatives or those with at least P100 million in assets have great power to work for their members' economic welfare."

"If we lay down a red carpet of incentives for giant foreign investors, this Code does the equivalent for Filipinos who invest in their future through self-help. We owe it to them to reduce their risks and give them a wider room to achieve their objectives."

The tax incentives being enjoyed by cooperatives were retained and additional privileges were given as follows:

1. preferential treatment on the allocation of fertilizers, including seeds and other agricultural inputs and implements, and in rice distribution;

2. management of public markets and/or lease of public market facilities, stalls or spaces to those whose primary purpose is production and/or the marketing of products from agriculture, fisheries and small entrepreneurial industries and federations thereof;

3. financing support for public transport service cooperative;

4. creation of a special window for financing housing projects undertaken by cooperatives;

5. preferential right for faculty members and employees in the management of canteens and other services related to the operations of educational institutions;

6. recognition of other types of coops such as education, housing, health services, advocacy, fishermen, and others;

"We also strengthened provisions on the institution of a social audit to ensure that the coops are socially responsible, implement livelihood programs and environment-friendly project."

"Far-flung communities that hardly feel the consistent presence of government most often have at least one association trying to meet their basic needs. We empower the existing 74,809 cooperatives nationwide and encourage loose organizations to convert into full-fledged cooperatives enjoying incentives as well as the protection of the law."

According to Zubiri, the amendments will "make it easier for people with similar needs or 'common bonds of interest' to form cooperatives while it makes it harder for the unscrupulous to subvert the cooperative concept for selfish interests. Although, two-thirds of registered cooperatives continue to be operational, we still want to see more achieving the status that they desire."

"We want to eliminate the casualty list of cooperatives as well as victims of pseudo-cooperatives by giving greater powers to the Cooperative Development Authority (CDA) and handing back power to the member through the General Assembly."

The CDA reports 74,809 cooperatives have been registered since 1990, as follows: 4,812 savings and credit cooperatives; 1,369 consumer cooperatives, mostly in public and private offices and schools;1,409 producers cooperatives: 911 marketing cooperatives; 1,806 service cooperatives, providing power distribution, potable water and irrigation system, public and private transportation service; and, 60,000 registered multi-purpose cooperatives, which are divided into Agricultural and Non-Agricultural Cooperatives.

"Today, because of this proposed amendatory law, the cooperative movement has new resonance in the face of the economic difficulties we confront collectively," Zubiri emphasized.

To complement the new Cooperative Code, the Senate Committee on Cooperatives is now in the process of amending the Cooperative Development Authority (CDA) Charter.

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