Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGTEENTH CONGRESS
First Regular Session

House Bill No.__1577

Introduced by Hon. PABLO JOHN F. GARCIA.

EXPLANATORY NOTE

RA No. 9520, or the Philippine Cooperative Code of 2008 is a landmark piece of
legislation and constitutes a monumental triumph of the cooperative movement in the
country. This is because: first, it is the enabling legal embodiment of a constitutionally
declared state policy on cooperatives, and second, it is the clear recognition and
adherence by our country to the time-honored and universally accepted principles on
cooperatives. These principles are now part of the law of the land. More particularly,
these are:

1. Government assistance ‘to bring about a strong cooperative movement that is free
from any conditions that might infringe upon the autonomy or organizational integrity
of cooperatives.

2. State recognition of the principle of subsidiarity under which the cooperative sector
will initiate and regulate within its own ranks, the promotion and organization,
training and research audit and support services relative to cooperatives with
government where necessary.

3. Democratic and member contro! in setting their policies and in making decisions.

4. Autonomy and independence from outside interference in the conduct and
management of its internal affairs.

So vital or even so crucial are the above core policy and principles, so that now the
following act is already considered a CRIME under Art. 140 (Penal Provision) of the
Cooperative Code:

(4) Direct or indirect interference or intervention by any public official or employee
into the internal affairs of a cooperative of which he is not a member, such as
requiring prior clearance for any policy or decision within the cooperatives or any
other acts inimical or adverse to the autonomy and independence of cooperative
(Sec.4,Art.140)

The provisions of the present Charter of the Cooperative Development Authority or CDA
or R.A No. 9369 are already in consonance with the above core policy and principles of
the Cooperative Code.

Thus, under Sec. 1 of R.A. No. 6939, Declaration of Policy — it is provided among others,
that:

“Toward this end, the Government and all its branches, ‘subdivisions,
instrumentalities and agencies shall ensure the provision of technical guidance,
financial assistance and other services to enable said cooperatives to develop


into viable and responsive economic enterprises and thereby bring about a
strong cooperative movement that is free from any conditions that might infringe
upon the autonomy or organizational integrity of cooperatives.

Further, the State recognizes the principle of subsidiarity under which the cooperative
sector will initiate and regulate within its own ranks the promotion and organization,
training and research, audit and support services relating to cooperatives with
government assistance where necessary.”

However, while in the main, the present Charter of CDA is good enough to insure the
effective implementation of the provisions of the Cooperative Code of 2008 (this Code
was crafted and later adopted taking into consideration the present charter of CDA or
R.A No. 9369), it will be convenient and desirable that some provisions of R.A No. 9369,
be updated and amended to conform with the new provisions of R.A.No. 9520, that
were not found in the old Cooperative Code or R.A. No 9368.

But in making the amendments, it must always be remembered that under the
Cooperative Code of 2008, the CDA is mandated to implement its provisions and
not to circumvent or even destroy them. The CDA exists to give force and effect
to the provisions of the Cooperative Code 2008 and not the other way around.

This point has to be emphasized and underscored because past experience has shown
that the CDA had incessantly and tirelessly tried to usurp and exercise powers beyond
what are authorized under its Charter or R.A. No. 6969 and in clear violation of the old
Cooperative Code or R.A. No. 9368. In one bold, rash and reckless gamble in 2007, the
CDA, without any legal authority whatsoever, issued the so-called Manual of Rules and
Regulations for Cooperatives with Saving or Credit services or the MORR. The CDA
issued MORR knowing fully well that it was in blatant and ruthless disregard of Sec.123
of R.A No. 9368 or the Cooperative Code of 1990 and, therefore, ILLEGAL, NULL and
VOID from the beginning.

This MORR would have surreptitiously overhauled and emasculated the provisions of
the Cooperative Code because, with respect to cooperatives with savings and credit
services, the CDA would have arrogated unto itself ultra vires powers similar to if not
greater than that of the powers of the BSP (Bangko Sentral ng Pilipinas) over banks.
And what is worst is that CDA had inveigled the Secretary of Finance and even
President GMA into signing this patently illegal, NULL and VOID document. Fortunately,
CDA apparently realizing its horrendous blunder, voluntarily and unceremoniously
withdrew this document from circulation, and, in effect, “killed” it

However, even with the self-inflicted and unlamented “death” of the MORR and in spite
of the passage of the Cooperative Code of 2008, there are “signs” that CDA is still
hungering and lobbying for more powers than what are granted by the Coop Code of
2008 and by its present charter (R.A. No. 9369), in the guise of proposing the
enactment of a new Charter for the CDA. In this way, CDA can, in effect, amend the
Coop Code of 2008 not frontally but surreptitiously through the backdoor Very clever but
very foul.

Be that as it may, there is a constant and never-ending need for those who
profess to be true Coop leaders of the country or for those who claim to
represent the great and noble cause of cooperatives, to be always watchful and
vigilant in preserving and protecting the rights and privileges of cooperatives, as
enshrined and held sacrosanct in the Cooperative Code of 2008 which according
to some Coop leaders can justly be called as the Philippine Bible of Cooperatives.

The amendments to the Charter of CDA or R.A. No. 9369 proposed in this Bill are
clearly in consonance with the provisions of the Cooperative Code of 2008 and are
intended to enable the CDA to implement said provisions in an orderly and efficient


manner. More importantly, these amendments are intended to promote, preserve and
Protect the autonomy and independence of cooperatives from outside
interference in the conduct and management of their internal affairs.

Hence, 4 passage of the Bill is earnestly requested.
/

Y
Cy
PABLO JOHN F. GARCIA



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGTEENTH CONGRESS.
First Regular Session

House Bill No._1577

Introduced by Hon. PABLO JOHN F. GARCIA.

AN ACT

AMENDING R.A. NO. 9369, OTHERWISE KNOWN AS THE CHARTER OF THE
COOPERATIVE DEVELOPMENT AUTHORITY (CDA) FOR THE ORDERLY AND
EFFICIENT IMPLEMENTATION OF THE COOPERATIVE CODE OF 2008 AND FOR
OTHER PURPOSES.

Be it enacted by the Senate and the House of Representatives of the Philippines in
Congress assembled:

Section. 1. Section 3 of the Cooperative Code of 2008 is hereby amended to

read as follows.

SEC. 3. Powers, Functions and Responsibilities. The Authority shall have the
following powers functions and responsibilities:

200000

(g) Order of cancellation after due notice and hearing of the cooperative's
certificate of registration PURSUANT TO THE PROVISIONS OF ARTICLES 64,
65, 66, 67 AND 68 OF THE COOPERATIVE CODE OF 2008

30000

(0) Exercise such other functions as may be necessary to implement the
provisions of THE COOPERATIVE CODE OF 2008 and in the performance
thereof the Authority may summarily punish for direct contempt any person
guilty of misconduct in the presence of the Authority which seriously
interrupts any hearing or inquiry with a fine of not more than five hundred
pesos (P500.00) or imprisonment for not more than ten (10) days or both

200000
Sec. 2. SEC. 8 is hereby amended to read as follows:

Sec. 8. Mediation Conciliation AND SETTLEMENT OF DISPUTES
Disputes within cooperatives or between cooperatives, or DISPUTES WITHIN
OR BETWEEN FEDERATIONS OR UNIONS SHALL BE MEDIATED.
CONCILIATED OR SETTLED IN ACCORDANCE WITH ART. 137 OF THE
COOPERATIVE CODE OF 2008.

SEC. 3. Sec. 9 is hereby amended to read as follows:


“SEC. 9. Power to Register Cooperatives shall be vested solely on the
Authority PURSUANT TO THE PROVISIONS OF THE COOPERATIVE CODE
OF 2008.”

ANY PROVISION OF LAW, EXECUTIVE ORDER, RULE OR
REGULATION TO THE CONTRARY NOTWITHSTANDING, THE CERTIFICATE
OF REGISTRATION ISSUED BY THE AUTHORITY TO A DULY REGISTERED
COOPERATIVE SHALL IPSO FACTO CONSTITUTE AS THE SOLE LEGAL
BASIS OR REQUIREMENT FOR THE FULL ENJOYMENT OF THE TAX
EXEMPTION GRANTED UNDER ARTICLES 60 AND 61 OF REPUBLIC ACT
NO. 9520. ANY PUBLIC OFFICIAL OR EMPLOYEE WHO VIOLATES OR IN
ANY MANNER CIRCUMVENTS THIS PROVISION SHALL BE DEALT WITH
UNDER ARTICLE 140 (PENAL PROVISION) OF R.A. NO. 9520.

THE AUTHORITY SHALL CITE THIS PROVISION IN THE CERTIFICATE
OF REGISTRATION. THE AUTHORITY SHALL FURNISH THE REGIONAL
OFFICES OF THE BIR WITH THE LIST OF DULY REGISTERED
COOPERATIVES IN THE REGION.

SEC. 4. Section 12 is hereby amended to read as follows:

SEC. 12. Cooperatives in the Banking System. The promotion and
development of cooperative banks as part of the banking system AND OF
FINANCIAL SERVICE COOPERATIVES AS DEFINED IN THE COOPERATIVE
CODE OF 2008 shall be a major concern of the Authority which shall undertake
the necessary program towards this end in collaboration with the BANGKO
SENTRAL NG PILIPINAS (BSP) and the cooperative sector concerned

SEC.5. REPEALING CLAUSE. THE SECOND PARAGRAPH OF ART
144 OF R.A. NO. 9520, AND ALL LAWS, DECREES, EXECUTIVE ORDERS.
RULES AND REGULATIONS OR PARTS THEREOF INCONSISTENT WITH
THE PROVISIONS OF THIS ACT ARE HEREBY REPEALED. AMENDED OR
MODIFIED ACCORDINGLY.

SEC. 6. Effectivity. This act shall take effect fifteen (15) days after its
Publication in the Official Gazette or in a newspaper of general publication

Approved,