NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
SENATE
S.B. No. 418
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Introduced by SENATOR IMEE R. MARCOS
AN ACT AMENDING REPUBLIC ACT NO. 6938, OTHERWISE KNOWN AS THE 
"COOPERATIVE CODE OF THE PHILIPPINES," AS AMENDED,
AND FOR OTHER PURPOSES
EXPLANATORY NOTE
Article 2, Section 20 of the 1987 Constitution provides that "the State recognizes 
the indispensable role of the private sector, encourages private enterprise, and 
provides incentives to needed investments".
Foreign investors are disturbed about the restrictiveness of the Foreign 
Investment Negative List (Negative List). As such, there is a need to open up certain 
sectors in the Negative List to foreign investment in order to improve the competitive 
position of the country with respect to its ASEAN neighbors, promote competition 
within the local economy, and address the lack of investment and Infrastructure in 
regulated industries.
Looking at the current 11th Negative List, Issued through EO 65 s. 2018, foreign 
Investment in the cooperative sector is hampered by Chapter III, Article 26 of Republic 
Act (R.A.) No, 6938, as amended by Chapter II, Article 10 of R.A. No. 9520, also known 
as the "Philippine Cooperative Code of 2008". Chapter II, Article 10 of the Philippine 
Cooperative Code limits membership of cooperatives to Filipino Citizens, while Chapter 
VIII, Article 72 limits the capital of the cooperatives to (1) member's share capital, (2) 
loans and borrowings, (3) revolving capital, and (4) donations.
There are more than 20,000 cooperatives registered in the Cooperative 
Development Authority with approximately 11 million individual members. As such, 
opening up cooperatives to foreign investments will greatly benefit our people by 
allowing cooperatives additional capital to expand their activities.


This bill seeks to facilitate foreign investments in the cooperative sector by 
relaxing the citizenship requirement for cooperative members. Foreigners shall now be 
allowed to invest up to 40% of the membership shares in the cooperatives, with the 
proviso that a majority of the members of the cooperatives shall be Filipino natural 
born citizens. This will allow foreigners to invest In cooperatives while allowing control 
of cooperatives to remain in local hands.
Given the abovementioned circumstances, the immediate passage of this bill Is 
necessary.
E R. MARCOS


NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
SENATE
S.B. No.
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*22 JUL 12 P4 58
RtCEiVtD E.V; 
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Introduced by SENATOR IMEE R. MARCOS
AN ACT AMENDING REPUBLIC ACT NO. 6938, OTHERWISE KNOWN AS THE 
"COOPERATIVE CODE OF THE PHILIPPINES," AS AMENDED,
AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled:
1 
SECTION 1. Article 10 of Republic Act (R.A.) No. 6938, as amended by R.A. No. 9520,
2 
shall be amended to read as follows:
3 
"ART. 10. Organizing a Primary Cooperative. - Fifteen (15) or more
4 
natural persons who are [Filipino citizens,] of legal age, having a common
5 
bond of interest and are actually residing or working in the Intended area
6 
of operation FOR AT LEAST SIX (6) MONTHS, may organize a primary
7 
cooperative under this Code: Provided, That a prospective member of a
8 
primary cooperative must have completed a Pre-Membership Education
9 
Seminar (PMES). PROVIDED, FURTHER THAT, MAJORITY OF SUCH
10 
SHALL BE FILIPINO CITIZENS."
11 
XX X."
12 
SEC. 2. Article 26 of R.A. No. 6938, as amended by R.A. No. 9520, shall be amended
13 
to read as follows:
14 
"ART. 26. Kinds of Membership. - A cooperative may have two (2) kinds
15 
of members, to wit: (1) regular members and (2) associate members.
16 
"A regular member is one who has complied with all the membership
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requirements and entitled to all the rights and privileges of membership.


1 
An associate member is one who has no right to vote nor be voted upon
2 
and shall be entitled only to such rights and privileges as the bylaws may
3 
provide: Provided, That an associate who meets the minimum
4 
requirements of regular membership, continues to patronize the
5 
cooperative for two (2) years, and signifies his/her intention to remain a
6 
member shall be considered a regular member. PROVIDED, FURTHER
7 
THAT, MAJORITY OF ALL MEMBERS, WHETHER REGULAR OR
8 
ASSOCIATE, SHALL BE FILIPINO CITIZENS.
9 
XX X."
10 
SEC. 3. Article 73 of R.A. No. 6938, as amended by R.A. No. 9520, shall be amended
11 
to read as follows:
12 
"ART. 73. Limitation on Share Capital Holdings. - No member of primary
13 
cooperative other than cooperative itself shall own or hold more than
14 
[ten] FORTY per centum [(10%)] (40%) of the share capital of the
15 
cooperative.
16 
"Where a member of cooperative dies, his heir shall be entitled to the
17 
shares of the decedent: Provided, That the total shareholding of the heir
18 
does not exceed [ten] FORTY per centum [(10%] (40%) of the share
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capital of the cooperative; Provided, further. That the heir qualify and is
20 
admitted as members of the cooperative: Provided finally , That where
21 
the heir fails to qualify as a member or where his total shareholding
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exceeds [ten] FORTY per centum [(10%)] (40%) of the share capital,
23 
the share or shares excess will revert to the cooperative upon payment
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to the heir of the value of such shares."
25 
SEC. 4. Repealing Clause. - All laws, decrees, executive orders, issuances or regulations
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inconsistent which the provisions of this Act are hereby revised or amended
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accordingly.
28 
SEC. 5. Separability Clause. - If any part of this Act is declared unconstitutional or
29 
invalid, such parts or provisions thereof not so declared shall remain valid and
30 
subsisting.
31 
SEC. 6. Effectivity Clause. - This Act shall take effect fifteen (15) days after its
32 
publication in at least two (2) newspapers of general circulation.
Approved,