, 
SIXTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
SENATE 
S.B. No.--A24 
Introduced by SENATOR FERDINAND R. MARCOS, JR. 
Explanatory Note 
'n JUL -3 P6 :53 
Article XII, Section 15 of the Constitution provides that "the Congress shall 
create an agency to promote the viability and growth of cooperatives as 
instruments for social justice and economic development." Pursuant to this 
mandate, Congress has enacted Republic Act 6939 which, created the 
Cooperative Development Authority. This law is designed to foster the creation 
and growth of cooperatives in the country but has so far failed to attain the 
purpose of its creation due to institutional weaknesses. 
The principle of cooperatives is primarily aimed to promote people 
empowerment. Its practical application and benefits is most desired in ;the rural 
areas where less privileged individuals with common bond of interest may 
organize themselves towards the attainment of economic development! 
While many cooperatives had sprung and organized with great hope for 
economic development under the ideals of cooperativism, many had ended up 
in vain or with dismal growth. The failures are attributed to inadequate 
assistance, supervision and regulation by the Cooperative Development 
Authority (CDAl. 
The proposed measure seeks to strengthen the powers, duties and 
functions of the CDA to become an effective vehicle for the development of 
cooperatives in the country and to usher the eventual recognition of 
cooperatives as one of the potent forces for national development. 
Thus, the early passage of this bill is eamestly requested. 
FERDINA D R. MARCOS, JR 


SIXTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
SENATE 42" 
SENATE BILL NO._'_':l 
Introduced by Senator FERDINAND R. MARCOS, JR. 
"AN ACT 
~l'nJ:1:t~ 
Il}lf,:, of 11,_ ~)!.m..t'.11 
'13 
JUL -3 P6 :52 
REORGANIZING THE COOPERATIVE DEVELOPMENT AUTHORITY. REPEALING FOR 
THE PURPOSE REPUBLIC ACT NO. 6939, CREATING THE COOPERATIVE 
DEVELOPMENT AUTHORITY" 
Be it enacted by the Senate and the House of Representatives of the 
Philippines in Congress assembled: 
SECTION 1. 
Short Tille. - This Act shall be known as the "Cooperative 
Development Authority Charter Act." 
SEC. 2. 
Declaration of Policy. - It is hereby declared the policy of the 
State to promote the viability and growth of cooperatives as instruments of 
equity. social justice and economic development and to create an agency. in 
fulfillment of the mandate in Section 15. Article XII of the 1987 Constitution. 
Toward this end. the State shall recognize cooperatives as associations 
organized for the economic and social betterment of their members. operating 
business enterprises based on mutual aid, and founded upon intemationally 
accepted cooperative principles and practices. The State recognizes the 
Cooperative Development Authority as primarily responsible for the institutional 
development of cooperatives. Accordingly. the State recognizes the rights of 
the cooperatives to initiate and foster within their own ranks cooperative 
promotion. organization. training. information gathering. audit and support 
services. with govemment assistance where necessary. 
In furtherance of this 
policy. the National Economic and Development Authority shall include the 
promotion of growth and expansion of cooperatives as major and indispensable 
components of national development plans. 
, 
I 
The government and all its branches. subdivisions. instrumentalities and 
agencies shall ensure the provision of technical guidance. financial assistance 
and other services to enable the cooperatives to develop into viable and 
responsive economic enterprises towards a strong cooperative movement free 
from any condition which infringes upon the objectives and character of 
cooperatives. The State shall. except as provided in this Act. maintain the policy 
of non-interference in the management and operation of cooperatives. 
SEC. 3. 
Cooperative Development Authority. -
The Cooperative 
Development Authority created under Republic Act No. 6939. hereinafter 
referred to as the Authority. is hereby reorganized to carry out the provisions of 
this Act and those of Republic Act No. 9520. otherwise known as the "Philippine 
Cooperative Code of 2008". 
The Authority shall have its principal place of 
business in Metro Manila. and shall maintain offices and branches in such other 


places as the proper conduct of its business shall require. The Authority shall be 
an agency attached to the Office of the President for policy and program 
coordination. 
SEC. 4. Powers, Functions and Responsibilities. - The Authority shall have 
the following powers and functions: 
a) 
b) 
c) 
d) 
e) 
f) 
g) 
h) 
i) 
j) 
Exercise supervision and jurisdiction over all types and categories of 
cooperatives registered with the Authority; 
Register all types of cooperatives including amendments to its by-
laws; division. merger, consolidation, dissolution and liquidation of 
cooperatives as well as the transfer of all or substantially all of their 
assets and liabilities; 
Order the cancellation or revocation of the Certificate of 
Registration after due notice and hearing pursuant to Articles 67 & 
68 of the Philippine Cooperative Code of 2008 and -the by-laws of 
the cooperative; 
Formulate, adopt, and implement integrated plans and programs 
on cooperative development consistent with the national policy on 
cooperatives, 
and 
establish 
an 
integrated 
framework 
on 
cooperative development for all government agencies; 
Develop and formulate, in consultation with the cooperative 
sector, and issue appropriate regulations, standards, rules, orders, 
guidelines and/or circulars to implement the Cooperative Code to 
ensure the sound operation of cooperatives; 
Establish a conSUltative mechanism in order to provide the 
cooperative sector a system for maximum participation on matters 
of government plans, projects and policies related to cooperatives. 
The 
cooperative 
sector 
shall 
undertake 
the 
organization/streamlining or rationalization of an apex body, 
representing all types and categories of cooperatives under the 
Philippine Cooperative Code of 2008, which shall function as the 
overall consultative and coordinating body with the Authority. 
The Authority, in conSUltation with the cooperative sector, 
shall promulgate the guidelines for the implementation of the 
conSUltative mechanism; 
Establish and maintain a continuing educational and capability-
building program for the Authority; 
Require the submission of annual reports, audited financial 
statements, and such reports in compliance with the Philippine 
Cooperative Code of 2008, in such forms as may be prescribed by 
the Authority; 
Conduct regular inspection or examination of a cooperative in 
accordance with rules and regUlations promulgated by the 
Authority and when deemed necessary, conduct a special 
inspection and investigation to protect the interest and welfare of 
the members of cooperatives. However, the Authority may 
delegate this power to accredited federations and unions in 
accordance with the Philippine Cooperative Code of 2008 and the 
implementing rules and regulations issued for this purpose; 
Compel the cooperative to call a General Assembly under the 
supervision of the Authority, subject to the criteria or condition/s to 
be defined in the implementing rules and regulations issued for this 
purpose; 
In case a cooperative fails to call and conduct a General 
Assembly, the Authority shall. on its own, call a general assembly 
meeting to address and settle the issues. The Authority may enlist 
the aid and support of and/or deputize any and all enforcement 


agencies of the govemment and federations and unions for the 
implementation of its orders; 
(k) 
Impose sanctions for non-compliance with lawful orders, rules and 
regulations of the Authority, including the Articles of Cooperation 
and the By-Laws of the cooperative subject to conditions as 
defined in the implementing rules and regulations of this Act; 
I) 
Collect reasonable fees, fines or charges in the performance of its 
registration and regulatory functions. 
(m) 
Establish and strengthen extension offices in all political and 
administrative regions in the country and such other places as may 
be determined by the Authority; 
(n) 
Hear, decide and settle disputes between and among members, 
officers, and directors of cooperatives, and between and among 
cooperatives in accordance with Article 137 of the Philippine 
Cooperative Code of 2008; 
(0) 
Implement and enforce its decision with the assistance of 
deputized law enforcement agencies or the local govemment unit 
concemed as may be necessary; and 
(p) 
Exercise such other powers and functions as may be necessary to 
implement the provisions of the Philippine Cooperative Code of 
2008. 
SEC. 5. 
Organizational Structure. - The Authority shall have a Board of 
Directors and an Office of the Administrator. 
The Board of Directors, hereinafter referred to as the Board, shall be the 
collegial policy-making body of the Authority which shall be composed of the 
Chairperson and six (6) members of the Board of Directors, all of whom shall be 
chosen from among the nominees of the cooperative sector, with two (2) 
representatives each from Luzon, Visayas and Mindanao. They shall be 
appointed by the President of the Philippines and shall serve for a term of six (6) 
years without reappointment. Except for the Chairperson, the Members of the 
Board shall serve on a part-time basis only: Provided, That any vacancy in the 
Board shall be filled-up by appointment of the President in accordance with the 
provisions of this section: Provided, further, That a member so appointed shall 
serve only for the unexpired term: 
Provided, finally, That the incumbent 
Chairperson and members of the Board shall continue to serve and act as 
chairperson and members of the present Board up to the end of their term under 
Republic Act No. (>939. 
Except for the Chairperson, the members of the Board shall be ehtitled to 
per diem and actual travel expenses. 
The Office of the Administrator shall be headed by the Chairperson of the 
Board who shall exercise over-all supervision on the operations of the Authority. 
SEC. 6. 
Powers and Functions of the Board. - The Board as the policy 
making body shall have the following powers and functions: 
a) 
Formulate policies, rules and regulations consistent with the 
provisions of the Philippine Cooperative Code of 2008: 
b) 
Adopt implementing rules and regulations for the conduct of the 
intemal operations of the Authority: 
c) 
Organize the operating structure and functions of the Authority. No 
changes in the approved organizational structure shall be effected 
without the approval of the Board; and 
d) 
Approve and adopt the annual budget of the Authority. 


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SEC. 7. Qualifications of Members of the Board. - The Chairperson or a 
Member of the Board who shall be appointed must possess the following 
qualifications: 
a) 
A natural born Filipino citizen; 
b) 
Must not be more than sixty (60) years old at the time of the 
appointment and must be in good health; 
c) 
A holder of at least a bachelor's degree and five (5) years of 
experience as an official or officer of a cooperative. govemment 
agency. or non-government organization engaged in cooperative 
development or, in the absence of the bachelor's degree. at least 
seven (7) years of experience in cooperatives either as an officer of 
a cooperative or a government agency or non-government 
organization engaged in cooperative development; 
d) 
Except the Chairperson who should be a resident of the Philippines. 
the other Members of the Board must be a resident of the region 
represented for at least five (5) years; and 
' 
e) 
Must be recommended and endorsed by a federation and/or 
union of cooperatives operating in good standing under the 
provisions of this Act and the Philippine Cooperative Code of 2008. 
Any person appointed as Chairperson or regular member of 
the Board shall, upon appointment, divest himself of any direct or 
indirect pecuniary interest or dealings with any cooperative. 
SEC. 8. 
Removal of Member of the Board. -
The President of the 
Philippines may remove any member of the Board for any of the following 
reasons: 
a) 
If the member is subsequently disqualified under the provisions of 
this Act; 
b) 
If the member becomes physically or mentally incapacitated to 
properly discharge the duties and responsibilities of the position 
and such incapacity has lasted more than six (6) months; and 
c) 
If the member is guilty of acts or omissions which are fraudulent or 
illegal in character or which are manifestly opposed to the aims. 
objectives and interests of the Authority and the cooperative 
sector. 
SEC. 9. 
Meetings of the Board. - The Board shall meet at least once a 
month for the transaction of its regular business. Special meetings may be called 
by the chairperson or majority of the members to consider specific matters. A 
majority vote by the entire Board of Directors shall be required for a decision. All 
regular and special meetings of the Board shall be held at the head office in 
Metro Manila. 
SEC. 10. Administrator. - The Chairperson shall be the Administrator of the 
Authority and shall have the rank and privileges of an Undersecretary. The 
Administrator shall be assisted by five (5) directors who will be assigned to the 
following specific concerns: 
a. 
Support Services; 
b. 
Institutional Development; 
c. 
Legal Affairs & Registration; 
d. 
Supervision and Examination; and 
e. 
Field Operations 


.. 
In the absence of the Administrator, the Board shall appoint from among 
the five (5) directors the Officer-In-Charge of the Authority who shall exercise the 
powers and duties of the administrator. 
SEC. 11. Powers and Functions of the Administrator. - The Administrator of 
the Authority shall have the following powers and functions: 
a) 
Preside over the meetings of the Board; 
b) 
Supervise the over-all operations of the Authority; 
c) 
Prepare, 
consolidate and submit 
periodic 
reports 
for the 
consideration of the Board; 
d) 
Implement a human resource management system consistent with 
the Civil Service Code that will promote professionalism and 
excellence in accordance with sound principles of management; 
e) 
Prepare the proposed annual and supplemental budgets of the 
Authority for the consideration and approval of the Board; 
f) 
Report to the President of the Philippines and Congress on the 
performance and accomplishment of the Authority on a periodic 
basis; 
g) 
Represent the Authority in all undertakings where its presence is 
required; and 
h) 
Perform such other functions as may be required by law. 
SEC. 12. 
Deputy Administrators, - The Board shall appoint the deputy 
administrators in accordance with the Civil Service Laws and must possess the 
following qualifications: 
a) 
A natural-born Filipino citizen; 
b) 
Must not be more than 60 years old at the time of the appointment 
and must be in good health; 
c) 
A holder of a bachelor's degree and five (5) years of experience as 
an official or officer of a cooperative, government agency, or non-
government organization engaged in cooperative deveLopment; 
and' 
d) 
A career executive service officer. 
SEC. 13. 
Power to Register Cooperatives. -
The power to register 
cooperatives shall be vested solely on the Authority pursuant to the provisions of 
the Philippine Cooperative Code of 2008. 
All cooperatives duly registered with the Authority shall present their 
Certificate of Registration to the nearest Bureau of Internal Revenue office and 
the latter shall within ten (10) days issue the Certificate of Tax Exemption. 
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 the Philippine Cooperative Code of 2008. 
Any public official or 
employee who violates or in any manner circumvents this provision shall be dealt 
with under Article 140 of Philippine Cooperative Code of 2008. 
The Authority shall cite this provision in the certificate of registration. 
SEC. 14. Prohibition, - Except as provided for under Article 130 of the 
Philippine Cooperative Code of 2008, the use of the word "cooperative" by any 
person or organization unless duly registered with the Cooperative Development 


Avthority shall be prohibited and shall be penalized under Article 140 of the 
Philippine Cooperative Code of 2008. 
SEC. 
15. 
SeHlement of Disputes. 
-
Disputes within. or between 
cooperatives, or disputes within or between federations or unions shall be 
mediated, conciliated or settled in accordance with this Act, Article 137 of the 
Philippine Cooperative Code of 2008 and its implementing rules and regulations 
or Republic Act No. 9285, otherwise known as the Alternative Dispute Resolution 
Act of 2004. 
SEC. 16. Cooperatives in the Education System. - The history, philosophy, 
concepts, valves, principles and practices of cooperatives and their role as a 
factor in the national economy shall be disseminated both in formal and non-
formal education. 
Notwithstanding existing laws, memorandum orders and directives, 
cooperatives development and administration as a field of study may be offered 
as a baccalavreate, post baccalavreate or masteral program in state 
universities and colleges (SUCs) in accordance with the standards, rules and 
regulations promulgated by their respective Board of Regents, the Commission 
on Higher Education (CHED) or the Authority in consultation with the cooperative 
sector as necessary: . Provided, That SUCs shall provide for equivalency credit 
and accreditation of work experiences and non-formal education and training 
of cooperative leaders, managers and members: Provided further, That in cases 
where the SUCs do not offer a separate academic program in cooperatives 
development and administration, the SUCs shall be encouraged to include a 3-
unit subject in the curricula of accountancy, agribusiness, agriculture, agricultural 
economics, business, community development, economics, education, forestry, 
social sciences, and other curricula that can be instrumental in the development 
of cooperatives. Special incentives including scholarships shall be formulated by 
the Authority for students taking up degree courses on cooperatives 
development and administration. 
The role of non-government organizations, not registered as cooperatives 
but duly registered under Philippine laws and engaged in cooperative 
promotion, organization, research and education, shall be recognized. The 
Authority may accredit such non-government organizations as non-academic 
training organizations. The training courses offered by them may be eligible as 
credits for the pvrposes of academic, professional and career advancements of 
their trainees. 
Existing training centers for cooperatives may qualify as non-
government organizations under this Act. 
Upon request of cooperatives, State colleges and universities shall provide 
technical assistance and guidance to cooperatives in the communities where 
they are located. 
SEC. 17. 
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 Philippine Cooperative Code of 
2008 shall be a ,major concern of the Authority which shall under1ake the 
necessary program towards this end in collaboration with the Bangko Sentral ng 
Pilipinas (BSP) and the cooperative sector concerned. 
' 
SEC. 18. Cooperatives Engaged in Services Covered by Other Laws. -
Registered cooperatives may engage in business endeavors in accordance with 
its approved articles of cooperation provided they acquire the necessary 
licenses, franchises. certificates of authority and permits from the appropriate 
agencies governing their type of cooperatives such as those providing 


manpower services, construction services, professional services, health care 
services, security services, social welfare services, research development, related 
health services, ecological and environmental services, farmers and fisherfolk 
cooperatives and services to indigenous cultural minorities. 
SEC. 19. Reorganization of the Authority. -
The Authority shall be 
reorganized within one hundred twenty (120) days from the effectivity of this Act. 
SEC. 20. 
Transitory Provisions. -
Upon the effectivity of this Act, the 
personnel of the Cooperative Development Authority shall, unless removed for 
cause and after due process, continue to perform their duties and responsibilities 
and shall receive their corresponding salaries and benefits. 
In the reorganization and staffing of the Authority, these personnel shall be 
given preference subject to civil service rules and regulation and rules of the 
Classification Compensation Bureau of the Department of Budget and 
Management (DBM); Provided, that those who shall not be absorbed by the 
organization shall be given separation pay computed at 1.5 months salary for 
every year of service. The fraction of six months shall be considered as one (1) 
year in computing years of service for severance pay and whatever applicable 
retirement benefit under existing laws. 
SEC.21. 
Appropriations. - The amount necessary for the implementation 
of this Act shall be included in the annual General Appropriations Act. 
SEC. 22. Transfer of Funds and Programs. - The Cooperative Development 
Loan Fund and the Fund for Management Training and Assistance frogram 
created under Presidential Decree No. 175, as amended, and the Cooperative 
Marketing Project created under loan agreements, all granted i to the 
Department of Agriculture, is hereby transferred to the Authority which shall be 
used for the development and strengthening of cooperatives. 
SEC. 23. 
Joint Congressional Oversight Committee on Cooperatives 
(JCOCC). - The Joint Congressional Oversight Committee created under Article 
138 of Philippine Cooperative Code of 2008 shall review and monitor the 
implementation of this Act. 
SEC. 24. 
Implementing Rules and Regulations. -
The Board shall, in 
consultation with the cooperative sector, formulate the implementing rules and 
regulations for the effective implementation of the provisions of this Act. The 
implementing rules and regulations shall take effect within fifteen (15) days after 
publication in the Official Gazette or in two (2) newspapers of general 
circulation. 
All subsequent amendments to the implementing rules and 
regulations shall also be published before taking effect. 
SEC. 25. 
Information Campaign. -
The Cooperative Development 
Authority is mandated to conduct an information campaign for six (6) months on 
the provisions of this Act from its effectivity. 
SEC. 26. 
Repealing Clause. -
Republic Act No. 6939, creating the 
Cooperative Development Authority, is hereby repealed, 
All other laws, 
decrees, executive orders, rules and regulotions or parts thereof inconsistent with 
the provisions of this Act are hereby amended or modified accordingly. 
SEC. 27. Separability Clause. - If for any cause, any part of this Act is 
declared unconstitutional, the rest of the prOVisions shall remain in force and 
effect. 


SEC. 28. Effectivity Clause. -- This Act s/lall take effect fifteen (15) days 
after its publication in the Official Gazette or in at least two (2) national 
newspapers of general circulation. 
Approved,