TWENTIETH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
tOl'fllT of lii-’ f-'
25 JUL 14 P3:57
SENATE
r>vo
S.B. No. ° 1 -
RKCtiVLOeV:
INTRODUCED BY SENATOR RISA HONTIVEROS
AN ACT
PROVIDING FOR THE REVISED COOPERATIVE CODE OF THE PHILIPPINES
EXPLANATORY NOTE
Since the enactment of Republic Act No, 9520, or the Philippine Cooperative 
Code of 2008, cooperatives have played a vital role in fostering inclusive economic 
growth. By empowering communities, creating sustainable livelihoods, and promoting 
social justice, thousands of cooperatives have flourished under this law.
Today, they support millions of Filipino members and generate substantial 
employment nationwide. There are currently over 26,000 cooperatives across the 
country, collectively serving more than 14 million members and generating hundreds 
of thousands of jobs.
However, over the past decade, evolving social and economic challenges—such 
as the COVID-19 pandemic, geopolitical tensions, and the global economic 
slowdown—have highlighted the urgent need to amend the Cooperative Code.
The Cooperative Code must be updated to support the expansion and 
sustainability of cooperatives throughout the nation.
The proposed amendments aim to streamline and update the regulatory 
framework governing cooperatives, addressing existing barriers to their growth and 
competitiveness, and strengthening the cooperative sector as a partner in advancing 
equitable development, food security, and environmental sustainability.


The core principles of cooperatives—self-help, democratic governance, and 
active member participation—render them uniquely resilient and well-equipped to 
foster inclusive growth, particularly during economic crises, as evidenced by more than 
a century of cooperativism in the Philippines.
Recognizing the sector's immense contribution and the constitutional mandate 
to promote social justice and economic development, the immediate passage of this 
bill is earnestly sought.
RISAHONTIVEROS
Senator


TWENTIETH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
SENATE
r* M n
S.B. No.__O I ^
i0ffirr of Ii»’ f*'-' 
•
25 JUL 14 P3 :57
(?|7Tr;/F|> KV.
1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
INTRODUCED BY SENATOR RISA HONHVEROS
AN ACT
PROVIDING FOR THE REVISED COOPERATIVE CODE OF THE PHILIPPINES
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
CHAPTER I
GENERAL PROVISIONS
SECTION 1. Tide. - This Act shall be known as the "Revised Cooperative Code 
of the Philippines."
Sec. 2. Declaration of Policy. - It is the policy of the State to foster the creation 
and growth of cooperatives as a practical vehicle for promoting self-reliance and 
harnessing people power towards the attainment of economic development and social 
justice. The State shall encourage the private sector to undertake the actual formation 
and organization of cooperatives and shall create an atmosphere that is conducive to 
the growth and development of these cooperatives.
Towards this end, the State shall, through the different branches, subdivisions, 
instrumentalities, and agencies of the government, regulate the conduct of 
cooperatives and support their growth and development in partnership with the 
private sector. The State shall also ensure the provision of technical and financial 
assistance, and other services to enable the cooperatives to develop into viable and 
responsive economic enterprises towards a strong cooperative movement, free from 
conditions that infringe upon the objectives and character of cooperatives.


1 
Further, the State recognizes the principle of subsidiarity under which the cooperative
2 
sector initiates and fosters, within their own ranks, cooperative promotion,
3 
organization, training, information gathering, audit, and support services, with
4 
government assistance if necessary.
5 
Sec. 3. Cooperative, Principles, and Values. -
6 
(A) Cooperative - A cooperative is an autonomous and duly registered
7 
association of persons with a common bond of interest who have voluntarily
8 
joined together to achieve their sociai, economic, and cultural needs and
9 
aspirations by making equitable contributions to the capital required,
10 
patronizing their products and services, and accepting a fair share of the
11 
risks and benefits of the undertaking in accordance with universaliy
12 
accepted cooperative principles;
13 
{B) Cooperative principles - Every cooperative shail conduct its affairs in
14 
accordance with Filipino culture, good values and experience, and the
15 
following universally accepted principles of cooperation:
16 
(1) Voluntary and Open Membership - Cooperatives are voluntary
17 
organizations, open to all persons able to use their services and
18 
willing to accept the responsibilities of membership, without
19 
gender, sociai, racial, cultural, political or religious discrimination.
20 
(2) Democratic Member Control - Cooperatives are democratic
21 
organizations that are controlled by their members who actively
22 
participate in setting their policies and making decisions. Men and
23 
women serving as elected representatives, directors or officers
24 
are accountable to the membership. In primary cooperatives,
25 
members have equal voting rights of one member, one vote.
26 
Cooperatives at other levels are organized in the same
27 
democratic manner.
28 
(3) Member Economic Participation - Members contribute equitably
29 
to, and democratically control, the capital of their cooperative. At
30 
least part of that capital is the common property of the
31 
cooperative. They shall receive limited compensation or limited
32 
interest, if any, on capital subscribed and paid as a condition of


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
membership. Members allocate surpluses for any or all of the 
following purposes: developing the cooperative by setting up 
reserves, part of which should at least be indivisible; benefitting 
members in proportion to their patronage of the cooperative's 
business; and, supporting other activities approved by the 
membership.
{A) Autonomy and Independence - Cooperatives are autonomous, 
self-help organizations controlled by their members. If they enter 
^ into agreements with other organizations, including government, 
or raise capital from external sources, they shall do so on terms 
that ensure democratic control of their members and maintain 
their cooperative autonomy.
{S) Education, Training, and Information - Cooperatives shall 
provide education and training for their members, elected and 
appointed representatives, managers, and employees, so that 
they can contribute effectively and efficiently to the development 
of their cooperatives.
(6) Cooperation Among Cooperatives - Cooperatives serve their 
members most effectively and strengthen the cooperative 
movement by working together through local, national, regional 
and international structures.
(7) Concern for Community- Cooperatives work for the sustainable 
development of their communities through policies approved by 
their members.
(C) Cooperative Vaiues - Cooperatives are based on the values of self-help, 
self-responsibility, democracy, equality, equity, and solidarity. Cooperative 
members believe in the ethical values of honesty, openness, social 
responsibility and caring for others,
Sec. 4. Definition of Terms. - As used in this Act:
(A) Area of Operation refers to the place where the cooperative operates and 
conducts its business, as provided for in its Articles of Cooperation and 
By-laws;


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
(B) Articles of Cooperation refers to the document registered with the 
Cooperative Development Authority, including its amendments, that 
defines and regulates the relations between the cooperative and the State;
(C) Authority refers to the Cooperative Development Authority;
(D) Board of Directors refers to the collegial body responsible for the strategic 
planning, direction-setting, and policy-formulation activities of the 
cooperative;
(E) Branch-iite unitrefers to a cooperative bank that performs limited banking 
activities and records its transactions in the books of the head office or 
the branch to which it is annexed;
(F) By-laws refers to the document registered with the Authority, including its 
amendments, that defines and regulates the operations of the cooperative 
and governs the reiations between the cooperative and its members and 
among themselves;
{G)Ciusterinp- refers to the grouping together of cooperatives under finance, 
marketing, public utilities, education and advocacy, agriculture, and 
human services;
{H) Committees refer to the mandatory committees under this Code entrusted 
with specific functions and responsibilities and such other committees that 
the Board of Directors deem necessary for the governance of the business 
affairs of the cooperative;
(I) Compensation- refers to a broad term that include remuneration given for 
services rendered, like salary which is paid regularly, or is defined under 
Art. 97 of the Labor Code of the Philippines;
(J) Cooperative Union refers to a cooperative whose members are registered 
cooperatives, federations, or both, organized purposely to represent the 
interest and welfare of all types of cooperatives at the city, provincial, 
regional, national, and sectoral levels;
{^Federation of Cooperatives refers to an aggrupation of cooperatives 
registered with the Authority to undertake business activities in support of 
its primary and secondary member cooperatives to address common 
needs, engage in capacity-building activities and delegated supervision in


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
support of its member cooperatives, organized at the municipal, city, 
provincial, regional, national, special metropolitan political subdivision, or 
economic zones created by law;
(L) Genera! Assembly refers to the full membership of the cooperative duly 
assembled physically, via videoconferencing, or both, for the purpose of 
exercising all the rights and performing all the obligations pertaining to 
cooperatives, as provided by this Code, its Articles of Cooperation, and By­
laws;
(M) 
Honorarium refers to the token of appreciation granted for the expert 
service rendered in the specific field that does not receive compensation;
{H)Investment refers to equity participation in any enterprise formed, 
organized or existing under the laws of the Philippines;
{0)Interest on Share Capita! refers to the amount earned by the members on 
their investment in the cooperative. The interest on share capital and the 
patronage refund shall be determined at the end of the calendar year after 
the net surplus shall have been computed in accordance with the Articles 
of Cooperation and By-laws or by the Board of Directors;
(P) Laboratory Cooperative refers to a cooperative affiliated with and 
registered by a primary cooperative, and whose membership consists of 
minors;
iff)Member refers to a person either natural or juridical, who has been 
approved and admitted by the Board of Directors of the cooperative, 
federation, or union, after undergoing the Pre-Membership Education 
Seminar and has vowed to adhere to the Articles of Cooperation and its 
By-laws. Members shall be classified as regular or associate, as qualified 
by the cooperative;
(R) Member Entitled to Vote- refers to a regular member who has complied 
with all the requirements of the cooperative, has fulfilled all of their duties 
and obligations, and possess es none disqualifications as provided by the 
Articles of Cooperation and By-laws of the cooperative, as declared by the 
Board of Directors;


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
(S) Patronage Refund refers to the payment to the members of a percentage 
or portion of the amount availed of, the interest on loans paid, or other 
services availed from the cooperative. The amount will be determined at 
the end of the fiscal period after the computation of the net surplus. The 
percentage of the allocation will be in accordance with the provisions in 
its Articles of Cooperation, the By-laws, or by the Board of Directors. The 
formula and basis for the computation of the rate of patronage refund will 
be determined by the Authority;
(J) Per diem- refers to the allowance given as reimbursement for extra 
expenses incurred in the performance of their duties;
{U) Performance Audit refers to an audit conducted by the Authority on the 
efficiency, efficacy, and effectiveness of the cooperative's overall 
performance as a whole, its management and officers, and its various 
responsibility centers as basis for improving individual, team, or overall 
performance, and for objectively informing the general membership of the 
cooperative on such performance;
(V) Primary Cooperative refers to a cooperative, registered with the Authority, 
the members of which are natural persons;
(W) 
Registration refers to the operative act granting juridical personality to 
a proposed cooperative and is evidenced by a Certificate of Registration;
(X) Representative Assembly refers to the full membership of a body of 
representatives elected by each of the sectors, chapters, or districts of the 
cooperative duly assembled for the purpose of exercising such powers in 
accordance with its By-laws;
(Y) Reserved Fund refers to an account by the cooperative which is set aside 
to cover unexpected losses, or financial obligations. For purposes of this 
Act, the said fund can be used as stated in Sec 98 of this Act;
(Z) Samahang Nayon and Municipal Katipunan ng mga Samahang Nayon 
refers to pre-cooperative organizations established under Presidential 
Decree (PD) No. 175 entitled "Strengthening the Cooperative Movement";
(AA) 
Secondary Cooperative refers to a cooperative, the members of which 
are primary cooperatives, federations, or unions;


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
(BB) Single-Purpose Cooperative refers to a cooperative that undertakes 
only one economic activity, except one that is allowed to undertake allied 
economic activities;
(CC) Share Capital refers to the equitable contribution of a member to the 
cooperative fund, the working capital fund of the cooperative, which shall 
have a par value of at least One Hundred Pesos (PIOO.OO) and issued as 
common or preferred shares depending on the type of membership with 
the cooperative;
(DD) Social Audit refers to an audit conducted to assess the social impact of 
the cooperative and its ethical performance vis-a-vis its stated mission, 
vision, goals, and code of social responsibility. It is a mechanism whereby 
it can account for the social performance of a cooperative and evaluate its 
impact on the community, making the cooperative accountable for its 
decisions and actions to its members;
(EE) Subscription Agreement refers to the document executed by a member 
to signify the amount that the member intends to contribute to the 
cooperative fund;
(FF) Subsidiary Cooperative refers to a cooperative, all or majority of whose 
members or shareholders come from a parent cooperative, organized for 
any other purpose different from that of, and receives technical, 
managerial, and financial assistance from the latter, in accordance with 
the rules and regulations of the Authority; the board of directors for 
subsidiary cooperatives must consist of at least two-thirds (2/3) of 
members who come from the parent cooperative;
(GG) Video Conferencing- refers to a conference between two (2) or more 
participants at different physical location by using computer networks, to 
transmit audio and video data; and
(HH) Worker Beneficiary refers to a natural person who renders service for 
value as an employee or laborer in an agricultural enterprise or farm within 
an agrarian reform cooperative.
CHAPTER II


1 
PURPOSES AND ORGANIZATION
2
3 
Sec, 5. Goals and Objectives of a Cooperative. - The primary objective of
4 
every cooperative is to help improve the quality of life of its members. Towards this
5 
end, the cooperative shall, among others, aim to:
6 
(A) Increase income, savings, investments, productivity, and purchasing
7 
power of its members; and promote among themselves equitable
8 
distribution of net surplus through maximum utilization of economies of
9 
scale, cost sharing and risk-sharing;
10 
(B) Provide optimum social and economic benefits to its members;
11 
(C) Providing trainings for its members on the efficient ways of processing
12 
tasks in a cooperative manner;
13 
(D)Propagate best practices, innovative ideas in business undertakings and
14 
management through the utilization of new technologies;
15 
(E) Empower the marginalized sector to gain opportunities through education
16 
and skilis training;
17 
(F) Actively collaborate with the government, other cooperatives, and people-
18 
oriented organizations to promote cooperatives as a practical means
19 
towards sustainable socio-economic development;
20 
(G)Adopt membership expansion mechanism to ensure the growth of the
21 
cooperative movement;
22 
(H)Implement policy guidelines that will ensure transparency, accountability,
23 
and equitable access to its resources and services; and promote the
24 
interests of the members;
25 
(I) Advance the competitiveness, innovativeness, and sustainability of
26 
cooperatives in various industries;
27 
(J) Coordinate with other cooperatives through learning and information
28 
exchange to foster sustainable development;
29 
(K) Advocate legal framework and enabling policies appropriate for the
30 
development of cooperatives;
31 
(L)Be the voice and the institution of the marginalized for purposes of
32 
promoting ecological and people-centered development;
8


1 
(M) Encourage thrift and savings mobiiization among the members;
2 
(N)Generate funds and extend credit to the members for productive and
3 
provident purposes;
4 
(O)Encourage among members systematic production and marketing;
5 
(P) Provide goods and services and other requirements to the members;
6 
(Q)Develop expertise and skiils among its members;
7 
(R)Acquire lands and provide housing benefits for the members;
8 
(S) Provide insurance programs to cover the risk of financiai losses in the
9 
operations of a cooperative;
10 
(T) Promote and advance the economic, social, and educational status of the
11 
members;
12 
(U) Establish, own, lease, or operate cooperative banks, cooperative
13 
whoiesaie and retail complexes, insurance, agricuiturai and industriai
14 
processing enterprises, and public markets;
15 
(V) Coordinate and facilitate the activities of cooperatives;
16 
(W) Advocate for the cause of the cooperative movement;
17 
(X) Ensure the viabiiity of cooperatives through the utilization of new
18 
technologies;
19 
(Y) Encourage and promote self-help or self-employment as an engine for
20 
economic growth and poverty alleviation;
21 
(Z) Adopt such other pians which may help foster the welfare of the members,
22 
their families, and the community; and
23 
(AA) Undertake any activity stated in the Articles of Cooperation and By-
24 
laws of the cooperative.
25 
Sec. 6. Cooperatives Not in Restraint of Trade. - No cooperative or method
26 
or act thereof which complies with this Code shall be deemed a conspiracy or
27 
combination in restraint of trade or an illegal monopoly, or an attempt to lessen
28 
competition or fix prices arbitrarily in violation of any laws of the Philippines.
29 
This notwithstanding, fair competition between cooperatives is paramount in their
30 
coliective growth. Cooperatives shall support and foster a level playing field in their
31 
industries. Accordingly, Sections 6, 7, 21 and 111 of this Code shall be in consonance


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
with Republic Act (RA) No. 10667, otherwise known as the "Philippine Competition 
Act."
Sec. 7. Cooperative Powers and Capacities. - A cooperative registered under 
this Code shall have the following powers, rights and capacities:
(A) To the exclusive use of its registered name;
(B) To sue and be sued;
(C) Of succession;
(D) To amend its Articles of Cooperation in accordance with the provisions of 
this Code;
(E) To adopt By-laws not contrary to law, morals, or public policy, and amend 
or repeal the same in accordance with this Code;
(F) To purchase, receive, take or grant, hold, convey, sell, lease, pledge, 
mortgage, or otherwise deal with such real and personal property as the 
transaction of the lawful affairs of the cooperative may reasonably and 
necessarily require, subject to the limitations prescribed by law and the 
Constitution;
(G) To enter into joint venture agreement and partnership, or any other 
commercial activity with other cooperatives;
(H) To enter into division, merger or consolidation, as provided in this Code;
(I) To form subsidiary cooperatives and join federations, unions, or Credit 
Surety Fund Cooperatives, as provided in this Code;
(J) To avail of loans, be entitled to credit, and accept and receive grants, 
donations, and assistance from foreign and domestic sources, subject to 
the conditions of the loans, credits, grants, donations or assistance that 
must not undermine the autonomy of the cooperative;
(K) To avail of preferential rights granted to cooperatives under RA 7160, 
otherwise known as the "Local Government Code of 1991," and other 
laws, particularly the grant of franchises to establish, construct, operate 
and maintain ferries, wharves, markets or slaughterhouses and lease 
public utilities, including access to extension and on-site research services 
and facilities related to agriculture and fishery activities;
10


1 
(L)To establish, own, and operate schools in aii ieveis of the education
2 
system, subject to the ruies and reguiations of the Department of
3 
Education, Commission on Higher Education, and Technicai Education and
4 
Skiiis Deveiopment Authority;
5 
(M) To operate branch, sateiiite, and iiaison offices within its area of
6 
operation, subject to the ruies and reguiation by the Authority. The
7 
Authority and the sector shaii issue ruies regarding the creation and
8 
operation of branch, sateiiite, and iiaison offices of cooperatives;
9 
(N)To provide training for their officers and members for continued
10 
deveiopment and personai improvement. If a cooperative is unabie to
11 
provide training for its members, it may engage the services of a
12 
federation or union. Government agencies and experts from the private
13 
sector are authorized to assist in the organization, training, and
14 
deveiopment of a cooperative and its members if the cooperative wishes
15 
to do so. In this regard, cooperatives and other institutions shaii be
16 
accredited as training service providers by the authority; and
17 
(0)To exercise such other powers granted in this Code as shaii be necessary
18 
to carry out its purposes stated in its Articies of Cooperation.
19 
Sec. 8. Organizing a Primary Cooperative. - At ieast fifteen (15) naturai
20 
persons who are Fiiipino citizens, of iegai age, having a common bond of interest,
21 
and are residing or working in the intended area of operation, may organize a
22 
primary cooperative under this Code. The cooperators shaii attend and compiete a
23 
Pre-Registration Seminar (PRS) as a prerequisite for registration. The detaiis and
24 
requisites of the PRS must be inciuded in the Impiementing Ruies and Reguiations
25 
of this Code.
26 
Every group of individuais or cooperatives intending to form a cooperative under
27 
this Code shaii submit to the Authority a generai statement describing, among others
28 
the structure and purposes of the proposed cooperative: and shaii aiso submit an
29 
economic survey, indicating therein the area of operation, the size of membership,
30 
and other pertinent data in a format provided by the Authority.
31 
No primary cooperative, except agricuiturai cooperatives, shaii be organized as a
32 
muiti-purpose cooperative uniess it has been in operation for at ieast two (2) years
11


1 
and shall have complied with the minimum requirements for multi-purpose
2 
cooperatives as prescribed by the Authority.
3 
In order to encourage cooperativism among the youth, a primary cooperative may
4 
organize a laboratory cooperative as defined under this Code. A laboratory
5 
cooperative shall have all the rights, privileges, and duties of a regular cooperative,
6 
and shall be governed by special guidelines to be promulgated by the Authority, in
7 
consultation with the cooperative sector.
8 
Sec. 9. Mandatory Personnel of the Cooperative. - All cooperatives shall have
9 
a General Manager and a Bookkeeper to be authorized to operate.
10 
Sec. 10. Liability of the Cooperative. - A cooperative duly registered under
11 
this Code shall have limited liability.
12 
Sec. 11. Term of existence of cooperative. - A cooperative shall have
13 
perpetual existence from the date of registration unless voluntarily dissolved or the
14 
Certificate of Registration is cancelled for reasons provided under this Code and its
15 
Implementing Rules and Regulations.
16 
Sec. 12. Articies of Cooperation. - All primary cooperatives applying for
17 
registration shall present to the Authority the Certificate of Pre-Registration Seminar
18 
and the Articles of Cooperation, signed by all cooperators and acknowledged by
19 
them before a notary public.
20 
In case of cooperative banks, insurance cooperatives, federations, or unions, the
21 
Articles of Cooperation shall be acknowledged by its Chairpersons and Cooperative
22 
Secretaries before a notary public. The Articles of Cooperation shall contain the
23 
following provisions:
24 
(A) Name of the cooperative, which shall include the word "Cooperative",
25 
"Coop", "Koop", or "Kooperatiba" and specify the type of cooperative;
26 
(B) Purpose or purposes and the economic activities for which the cooperative
27 
is to be registered;
28 
(C) Powers and capacities;
29 
(D)Area of operation, the postal address of its principal office, and the official
30 
electronic mail address of the cooperative;
31 
(E) Names, nationality, and the postal addresses of the cooperators;
32 
(F) Common bond of membership;
12


1 
(G)List of names of the directors;
2 
(H)Amount of authorized, subscribed, and paid-up share capital, the number
3 
of shares, and the par-value of each share, and the names of the
4 
cooperators, except for cooperative unions;
5 
(I) A statement as to whether the cooperative is primary or secondary;
6 
(J) Other provisions consistent with this Code or any related law; and
7 
(K) Certificate of Authority from the appropriate government agency
8 
Sec. 13. By-laws. - Every cooperative to be registered under this Code shall
9 
adopt By-laws consistent with the provisions of this Code, which shall be filed
10 
together with the Articles of Cooperation. The By-laws of each cooperative shall
11 
provide:
12 
(A)The qualifications for admission to membership;
13 
(B)The equitable contribution or interest to be acquired as a condition
14 
precedent for the exercise of the right of membership;
15 
(C)The rights, privileges, duties, responsibilities, and liabilities of
16 
membership;
17 
(D)The circumstances under which membership is acquired, maintained, and
18 
terminated, and the procedure to be followed;
19 
(E)The conditions under which the transfer of a share or interest of the
20 
members shall be permitted;
21 
(F)The general conduct of the affairs of the cooperative relative to agenda,
22 
time, place and manner of calling, convening, and conducting meetings,
23 
quorum requirements, voting systems of the General Assembly, the Board
24 
of Directors, committees and the officers, 
including their qualifications,
25 
disqualifications, powers, duties, and responsibilities;
26 
(G)The manner in which the capital may be raised and the purposes for which
27 
it can be utilized;
28 
(H)The accounting and auditing systems;
29 
(I) The manner of contracting loans and borrowings including the limitations
30 
thereof;
31 
(J) The allocation and distribution of net surplus;
32 
(K)The manner of adopting and amending By-laws;
13


1 
(L) The institution of a conciliation or mediation mechanism for the amicable
2 
settlement of disputes among members, directors, officers and committee
3 
members of the cooperative; and
4 
(M) Other matters incident to the purposes and activities of the
5 
cooperative.
6
7 
CHAPTER III
8 
REGISTRATION
9
10 
Sec. 14. Requirements for Registration. - The proposed Articles of
11 
Cooperation, By-laws, and such other required documents shall be submitted in
12 
accordance with the rules and regulations to be prescribed by the Authority.
13 
Except for cooperative unions as described under Section 30 hereof, no cooperative
14 
shall be registered unless the Articles of Cooperation is accompanied with the bonds
15 
of the accountable officers and a sworn statement of the Treasurer showing that at
16 
least twenty-five per centum (25%) of the authorized share capital has been
17 
subscribed and at least twenty-five per centum (25%) of the total subscription has
18 
been paid.
19 
The Authority shall initially fix the minimum paid-up share capital in the
20 
Implementing Rules and Regulations of this Code, periodically assess the required
21 
paid-up share capital, and may increase or decrease it through subsequent
22 
regulation whenever necessary upon consultation with the cooperative sector.
23 
The Authority may prescribe such other registration requirements as it may deem
24 
necessary,
25 
Sec. 15. Registration. - A cooperative formed and organized under this Code
26 
acquires juridical personality from the date the Authority issues a Certificate of
27 
Registration under its official seal. All applications for registration shall be finally
28 
disposed of by the Authority within a period of fifteen (15) working days from the
29 
filing of the complete documentary requirements, both in form and in substance,
30 
otherwise the application is deemed approved, unless the cause of the delay is
31 
justified as the case may be: Provided, That in case of a denial of the application for
32 
registration, the applicant may file a Motion for Reconsideration within five (5) days
14


1 
from the receipt of such denial. The Motion for Reconsideration must be resolved
2 
within fifteen (15) days from the filing thereof. An appeal to the Board of Directors
3 
of the Authority may be filed within fifteen (15) days from receipt of notice of denial
4 
of the Motion for Reconsideration.
5 
The decision of the Board of Directors shall be final and executory but may be
6 
elevated to the Court of Appeals through a Petition for Review.
7 
The grounds for denial of the registration shall be prescribed in the Implementing
8 
Rules and Regulations of this Code.
9 
Sec. 16. Certificate of Registration. - A Certificate of Registration issued by
10 
the Authority under its official seal shall be conclusive evidence that the cooperative
11 
therein mentioned is duly registered unless it is proved that the registration thereof
12 
has been cancelled. Moreover, once the Cooperative is issued of certificate of
13 
compliance, it shall be valid for five (5) years, unless revoked by the authority after
14 
due process due to willful refusal to comply with the reportorial requirements set
15 
forth by law.
16 
Sec. 17. Amendment of Articies of Cooperation and By-laws. - Unless
17 
otherwise prescribed by this Code and for legitimate purposes, any provision or
18 
matter stated in the Articles of Cooperation and By-laws may be amended by two-
19 
thirds (%) vote of all the members entitled to vote, present and constituting a quorum,
20 
without prejudice to the right of the dissenting members to exercise their right to
21 
withdraw their membership under Section 37 of this Code.
22 
A cooperative may opt to amend its Articles of Cooperation and By-laws through a
23 
referendum by a vote of two-thirds (%) of all the members entitled to vote, present
24 
and constituting a quorum.
25 
Both the original and amended Articles of Cooperation By-laws shall contain all the
26 
provisions required by law. Amendments shall be indicated by underscoring or
27 
otherwise appropriately indicating the change or changes made. A copy of the
28 
amended Articles of Cooperation or By-laws shall be duly certified under oath by the
29 
Cooperative Secretary and majority of the directors, stating the fact that the
30 
amendment or amendments to the Articles of Cooperation and By-laws have been
31 
duly approved by the required vote of the members. All amendments to the Articles
32 
of Cooperation and By-laws shall be submitted to the Authority.
15


1 
An application for amendments shall be deemed approved by the Authority within a
2 
period of thirty (30) days from the filing thereof: Provided, That the documentary
3 
requirements are complete in form and substance, unless the cause of the delay is
4 
justified.
5 
Sec. 18. Contracts Executed Prior to Registration and Effects Thereof -
6 
Subject to the execution of a formal written contract made in the cooperative's name
7 
or on its behalf prior to its registration, all contracts executed prior to its registration
8 
between private persons and the cooperative shall remain valid and binding between
9 
the parties insofar as it redounds to the benefit of the cooperative.
10 
Sec. 19. Effects of Failure to Operate or Comply with Conditions on
11 
Registration. - The Certificate of Registration shall be deemed cancelled and the
12 
cooperative shall be delisted from the registry of cooperatives if the cooperative
13 
failed to commence its authorized business activity within five (5) years from the
14 
issuance of its Certificate of Registration.
Sec. 20. Division of Cooperatives. - A registered cooperative, through a
resolution approved by a vote of two-thirds (%) of all the members entitled to vote, 
present and constituting a quorum, may divide itself into two (2) or more 
cooperatives. Such division of the cooperative shall be valid.' Provided, That the 
purpose of the division is not to defraud the creditors.
The dissenting members shall have the right to exercise their right to withdraw their 
membership pursuant to Section 37 of this Code.
The Authority shall prescribe the rules and regulations for the division of the 
cooperative: Provided, That all the requirements set forth in this Code have been 
complied with by the newly-formed cooperatives.
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
CHAPTER IV
MERGER AND CONSOLIDATION OF COOPERATIVES
Sec. 21. Merger or Consolidation of Cooperatives. - 
(A)Two (2) or more cooperatives may merge or consolidate into a single 
cooperative;
16


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
of
(B) No merger or consolidation shaii be vaiid uniess approved by a tv\/o-thirds 
(%) vote of aii the members entitied to vote, present and constituting a 
quorum of each of the constituent cooperatives at separate Generai 
Assembiy meetings. The dissenting members shaii have the right to 
exercise their right to withdraw their membership pursuant to Section 37 
of this Code;
(C) The Authority shaii issue the guideiines governing the procedure of merger 
or consoiidation of cooperatives. The merger or consoiidation shaii be 
effective upon the issuance by the Authority of the Certificate of Merger, 
or in the case of a consoiidation of cooperatives, a new Certificate of 
Registration.
Sec. 22. Effects of Merger and Consolidation.-l\\e merger and consoiidation 
cooperatives shaii have the foiiowing effects:
(A) In case of merger of cooperatives, the constituent cooperatives shaii 
become a singie cooperative or, in the case of consoiidation of 
cooperatives, the consoiidated cooperative shaii be the new cooperative;
(B) The singie cooperative or the consoiidated cooperative shaii possess ail 
the assets, rights, privileges, immunities, and franchises and assume all 
the liabilities and obligations of each of the constituent cooperatives;
(C) Any claim, action, or proceeding instituted by or against the constituent 
cooperatives may be continued by the single or consolidated cooperative; 
and
(D) The merger or consolidation shall not impair the rights of creditors nor any 
lien upon the property of the constituent cooperatives.
CHAPTER V
TYPES AND CATEGORIES OF COOPERATIVES
Sec. 23. Types and Categories of Cooperatives. -
(A) Clusters of Cooperatives - Cooperatives may fail under any of the 
following clusters based on their business activity;
17


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
(1) Credit, Finance, Banking, and Insurance duster refers to cooperatives 
organized for the promotion of financial freedom and literacy among 
its members, and undertakes savings, lending, and other financial 
services to its members, such as:
(i) Cooperative Banks. - Cooperative banks are organized for the
primary purpose of providing a wide range of financial services 
to cooperatives and their members;
(ii) Credit Cooperatives. - Credit cooperatives are engaged solely 
in lending services;
(iii) Credit and Savings Cooperatives. - Credit and savings 
cooperatives promote and undertake savings and lending 
services among its members. They generate a common pool of 
funds in order to provide financial assistance to their members 
for productive and provident purposes;
(iv) Credit Surety Fund Cooperatives. - Credit surety fund 
cooperatives, in partnership with Local Government Units 
(LGUs), are comprised of well-capitalized and well-managed 
member-cooperatives or non-government organizations that 
meet the criteria and qualifications prescribed by the Authority, 
LGUs, Government Financial Institutions, and other 
government agencies;
(v) Insurance Cooperatives. - Insurance Cooperatives. - Insurance 
cooperatives are engaged in the business of insuring the life, 
general, property, and pre-need (life plan, education, and 
pension) of cooperatives and their members;
(vi) Savings and Deposits Cooperatives. - Savings and deposits 
cooperatives are engaged solely in promoting and encouraging 
savings among its members; and
(vii) Other cooperatives as may be determined by the Authority 
under this cluster in consultation with the cooperative sector.
(2) Consumers, Marketing, Producers, and Logistics duster refers to 
cooperatives organized for the supply, procurement, and marketing of
18


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
products of its members, industrial production, and non-agricultural 
business activity for the production and processing of raw materials or 
goods or its derivative, such as:
(i) Consumers Cooperatives. - Consumer cooperatives are engaged
primarily in procuring and distributing commodities to 
members and non-members;
(ii) Marketing Cooperatives. - Marketing cooperatives are engaged 
in the supply of production inputs to members and markets 
their products, including trading and processing;
(iii) Logistics Cooperatives. - Logistics cooperatives are engaged in 
operations involving facilities and supplies whose business is 
related to the supply chain;
(iv) Producers Cooperatives. - Producers cooperatives are engaged 
in joint production whether agricultural or industrial. They are 
formed and operated by the members to undertake the 
production and processing of raw materials or goods produced 
by the members into finished or processed products for sale by 
the cooperative. Any end product or its derivative arising from 
the raw materials produced by the members, sold in the name 
and for the account of the cooperative, shall be deemed a 
product of the cooperative and its members; and
(v) Other cooperatives as may be determined by the Authority 
under this cluster in consultation with the cooperative sector.
(3) Human Services, Health, Housing, Workers, and Labor Service Cluster 
refers to cooperatives organized for providing employment and 
business opportunities to its members, housing, and services related 
to medical, dental, health and wellness, and death care, technology, 
including digital payment services, such as:
(i) Health Services Cooperatives. - Health services cooperatives are 
organized for the primary purpose of providing medical, dental, 
paramedic, diagnostic, and other health services, including
19


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
cooperative health organizations, hospitals, clinics, 
pharmacies, and transporting of patients;
(ii) Housing Services Cooperatives. - Housing services cooperatives 
are organized to assist or provide access to socialized housing 
for the benefit of the members who actively participate in the 
savings program for housing;
(iii) Labor Services Cooperatives. - Labor services cooperatives are 
engaged in providing specific services to a principal under a 
legitimate contracting or subcontracting arrangement, as 
defined under existing laws, and in accordance with the 
cooperative principles set forth under this Code;
(iv) Technology Service Cooperatives. - Technology service 
cooperatives are organized to provide the members with 
services that are designed to facilitate the use of Information 
Technology by end-users, electronic money users licensed by 
Bangko Sentra! ng Piipinas {BSP), or provide specialized 
technology-oriented solutions by combining the processes and 
functions of software, hardware, networks, 
telecommunications, and electronics, among others;
(v) Workers Cooperatives. - Workers cooperatives are organized 
by workers, including the self-employed, who are at the same 
time the members and owners of the enterprise. The principal 
purpose of these cooperatives is to provide employment and 
business opportunities to the members and manage them in 
accordance with cooperative principles; and
(vi) Other cooperatives as may be determined by the Authority 
under this cluster in consultation with the cooperative sector.
(4) Education and Advocacy Cluster refers to cooperatives organized for 
the promotion and advocacy of cooperativism among its members and 
the public through socially-oriented projects, education and training, 
research and communication, such as:
20


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
(i) Advocacy Cooperatives. - Advocacy cooperatives promote 
cooperativism and advocate policies for the general interest 
and welfare of the members, the sector, the movement, and 
the public through socially-oriented projects, education and 
training, research and communication, campaigns, lobbying, 
and other similar activities to reach out to intended 
beneficiaries;
(ii) Education Cooperatives. - Education cooperatives are organized 
for the primary purpose of owning and operating licensed 
educational institutions, subject to existing laws, rules and 
regulations; and
(iii) Other cooperatives as may be determined by the Authority 
under this cluster in consultation with the cooperative sector.
{S) Agriculture, Agrarian, Aquaculture, Farmers, Dairy, and Fisherfoik 
Cluster refers to cooperatives engaged in the raising or culture of 
plants and animals, and the production and processing of agricultural 
produce and its derivatives, including cooperatives organized by 
agrarian reform beneficiaries and marginal farmers, for the purpose of 
developing a sustainable system of land tenure, land development, 
land consolidation, or land management, such as:
(i) Agrarian Reform Cooperatives. - Agrarian reform cooperatives
are organized by marginal farmers, majority of whom are 
agrarian reform beneficiaries, for the purpose of developing an 
appropriate system of land tenure, land development, land 
consolidation or land management areas covered by agrarian 
reform;
(ii) Agricultural Cooperatives. - Agriculture cooperatives are 
organized as agricultural-based economic enterprises 
voluntarily established through joint investment, joint 
ownership and joint management for the purpose of improving 
agricultural production capacity, agri-industry, agri-business, 
or services related to agricultural production, which shall
21


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
include agrarian reform, dairy, fishermen, community forestry, 
and aquaculture cooperatives, as well as multi-purpose 
cooperatives whose primary business activity is at least fifty 
per centum (50%) related to agricultural production, agri­
industry, agri-business, or services related to agricultural 
production;
(iii) Dairy Cooperatives. - Dairy cooperatives are engaged in the 
production and marketing of fresh milk which may be 
processed or marketed as dairy products;
(iv) Farmers Cooperatives. - Farmers cooperatives are organized 
by marginalized farmers, majority of whom are not agrarian 
reform beneficiaries, for the purpose of supporting their 
products, either fresh or processed;
(v) Fisherfolk Cooperatives. - Fisherfolk cooperatives are organized 
by marginalized fisherfolk whose products are marketed either 
as fresh or processed, for the mobilization of capital in the 
procurement of fishing boats, nets, gears, and accessories, 
production of aquatic products, and access to storage and 
agricultural facilities;
(vi) Irrigators Cooperatives. - Irrigators cooperatives are engaged 
in providing sustainable irrigation services for farmers; and
(vii) Other cooperatives as may be determined by the Authority 
under this cluster in consultation with the cooperative sector.
(6) Public Utilities Cluster reters to cooperatives organized for the purpose 
of undertaking electricity generation, utilizing renewable energy 
sources, including hybrid systems, acquisition and operation of sub­
transmission or distribution; operation and management of water 
systems; land, air, and sea transportation services; and 
communications services, including telephone and digital 
communications, which require a franchise or certificate of public 
convenience and necessity such as:
22


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
(i) Communications Cooperatives. - Communications cooperatives
are organized to own, operate, and manage communication 
structures and arrangements, such as radio, cable TV, 
newspaper, and reiated industries, for the widespread 
dissemination of information for the members and the public;
(ii) Electric Cooperatives. - Electric cooperatives are registered 
under this Code organized for the primary purpose of 
undertaking power generation, utilizing renewable energy 
sources, including hybrid systems, acquisition and operation of 
sub transmission or distribution to the household members;
(iii) 
Transport Service Cooperatives. - Transport service 
cooperatives are organized to render public land, water, or air 
transportation services for the safe conveyance of passengers 
or cargoes, or are engaged in providing related or auxiliary 
services to the transport industry;
(iv) Water Service Cooperatives. - Water service cooperatives are 
organized to own, operate, and manage water systems for the 
provision and distribution of potable water for the members 
and their households; and
(v) Other cooperatives as may be determined by the Authority 
under this cluster in consultation with the cooperative sector.
(B) Special Types of Cooperatives - A special type of federation may be 
organized and registered by primary cooperatives who may not necessarily 
be in the same line of business but who wish to offer and are able to cater 
to their members the following exclusive services:
(1) Water supply system services;
(2) Renewable Energy;
(3) Healthcare services;
(4) Deathcare and funeral services;
(5) Technology services;
(6) Digital payment services;
23


1 
(7) Deposit insurance services; and
2 
(8) Such other services as may be determined by the Authority.
3 
(C) Categories of Cooperatives. Cooperatives are categorized as follows:
4 
(1) In terms of membership, cooperatives may be categorized into:
5 
A. Primary Cooperatives; and
6 
B. Secondary Cooperatives;
7 
(2) In terms of territory, cooperatives are categorized according to areas
8 
of operations; and
9 
(3) In terms of assets, cooperatives shall follow the business size
10 
categories used by the Department of Trade and Industry (DTI).
11 
Sec. 24. Apex of Cooperatives. - The Apex of Cooperatives refers to the
12 
singular cooperative vested with a juridical personality and the mandate to represent
13 
the cooperative sector at the national and international levels, fully and voluntarily
14 
organized by the members of the cooperative sector. It shall have the mandate to
15 
engage in discussions and advise the appropriate authorities on all matters relating to
16 
cooperatives, as well as to promote the cooperative identity and culture.
17
18 
CHAPTER VI
19 
FEDERATION OF COOPERATIVES
20
21 
Sec. 25. Area of Coverage. - A federation of cooperatives may be organized
22 
at the municipal or city level, district or provincial level, regional, inter-regional or
23 
national levels.
24 
Sec. 26. Members of a Federation of Cooperatives. - Members of a federation
25 
of cooperatives shall consist of cooperatives with common needs or purposes:
26 
Provided, That a member cooperative may freely withdraw membership from the
27 
federation.
28 
The minimum number of members shall be at least ten (10) primary or secondary
29 
cooperatives for a federation of cooperatives.
30 
Sec. 27. Authorized, Subscribed, and Paid-Up Capitai of a Federation. - The
31 
authorized share capital of a cooperative shall be provided for in its Articles of
32 
Cooperation where at least twenty-five per centum (25%) of the authorized share
24


1 
capital shall be subscribed to by the members and at least twenty-five per centum
2 
(25%) of the subscribed share capital shall be paid up prior to its registration.
3 
The minimum paid-up share capital for a federation of cooperatives shall be One
4 
million pesos (PI,000,000.00).
5 
Sec. 28. Registration of Federation of Cooperatives. - A federation of
6 
cooperatives shall be registered with the Authority.
7 
Sec. 29. Functions of a Federation of Cooperatives. - A federation of
8 
cooperatives shall undertake the following functions:
9 
(A)To carry on any cooperative enterprise authorized under Section 5 that
10 
complements, augments, or supplements but does not conflict, compete
11 
with, nor supplant the business or economic activities of its members;
12 
(B)To carry on, encourage, and assist educational and advisory work
13 
relating to the business activities of its members;
14 
(C)To render services designed to encourage simplicity, efficiency, and
15 
economy in the conduct of the business of its member cooperatives and
16 
to facilitate the implementation of their bookkeeping, accounting, and
17 
other systems and procedures;
18 
(D)To print, publish, and circulate any newspaper or other publication in the
19 
interest of its member-cooperatives and enterprises;
20 
(E)To coordinate and facilitate the activities of its member-cooperatives;
21 
(F) To enter into joint ventures with local or international cooperatives in the
22 
manufacture and sale of products in the Philippines and abroad;
23 
(G)To mandatorily act as conciliator-mediator in inter-intra cooperative
24 
disputes among and between the members and officers of primary
25 
cooperatives;
26 
(H)To assist members in the submission of the required reports and other
27 
compliances to the Authority and other government or regulatory bodies;
28 
(I) To assist in the liquidation of the remaining assets of dissolved or
29 
cancelled primary cooperative members;
30 
(J) To develop programs on education, training, monitoring, coaching,
31 
research, and advocacy that complement, augment, or supplement the
32 
businesses of their members; and
25


1 
(K)To assist the Authority in ensuring the compliance of its member-
2 
cooperatives with the laws, regulations, policies, and inspection or
3 
examination findings of government regulatory agencies.
4
5 
CHAPTER VII
6 
COOPERATIVE UNIONS
7
8 
Sec. 30. Organization and Duties. - All registered cooperatives may organize
9 
or join cooperative unions to protect the interest and promote the welfare of all types
10 
of cooperatives: Provided, That a member cooperative may freely withdraw
11 
membership from the union. The cooperative unions shall represent the constituent
12 
cooperatives at the appropriate level-and exercise the following duties and functions:
13 
(A)To represent its member organizations;
14 
(B)To acquire, analyze, and disseminate economic, statistical, and other
15 
information relating to its members and to all types of cooperatives within
16 
its area of operation;
17 
(C)To sponsor studies in the economic, legal, financial, social and other
18 
phases of cooperation, and publish the results thereof;
19 
(D)To conduct trainings to member-cooperatives as an accredited training
20 
provider;
21 
(E)To promote the knowledge of cooperative principles and practices;
22 
(F) To develop the cooperative movement in their respective jurisdictions;
23 
(G)To assist the national and local government units in cooperative
24 
development activities within their respective jurisdiction;
25 
(H)To assist in the dissemination and monitoring of the Philippine Cooperative
26 
Medium Term Plan;
27 
(I) To assist the members in the submission of the required reports and other
28 
compliances to the Authority and other government or regulatory bodies;
29 
(J) To assist the Authority, upon written request, in the performance of its
30 
power of inspection or examination;
31 
(K)To advise the appropriate authorities on all questions relating to
32 
cooperatives at the municipal, city, district, provincial or regional levels;
26


1 
(L)To act as liquidators or rendering assistance in the liquidation of the
2 
remaining assets of dissolved primary cooperative members; and
3 
(M) To do and perform such other non-business activities as may be
4 
necessary to attain the foregoing objectives.
5 
Sec. 31. Sources of Funds for Cooperative Unions. - The funds of a
6 
cooperative union shall be sourced from the membership fees, dues and
7 
contributions, remitted cooperative education and training fund (CETF) from
8 
member-cooperatives, training fees, fundraising activities, donations, grants, or
9 
subsidies from local and foreign sources, whether private or public.
10
11 
CHAPTER VIII
12 
MEMBERSHIP
13
14 
Sec. 32. Membership. - A cooperative shall have regular members or
15 
associate members.
16 
A regular member is one who has complied with all the membership requirements,
17 
including the Pre-Membership Seminar, and entitled to all the rights and privileges
18 
of membership. An associate member is one who has no right to vote nor be voted
19 
upon and shall be entitled only to such rights and privileges as the bylaws may
20 
provide.' Provided, That an associate member who meets all the requirements of
21 
regular membership, including the Pre-Membership Education Seminar, continues to
22 
patronize the cooperative for two (2) years, and signifies the intention to remain a
23 
member shall be considered a regular member.
24 
Sec. 33. Qualifications of Membership. - Members of registered primary
25 
cooperatives must be natural persons, Filipino citizens or former natural-born Filipino
26 
citizens, of legal age, with capacity to enter into a contract, within the common bond
27 
of membership and area of operation, and must possess the qualifications and none
28 
of the disqualifications as provided for in the By-laws of the cooperative; Provided,
29 
that in case of former natural-born Filipino citizens, they must comply with Philippine
30 
taxation laws; Provided, further, that the age requirement shall not apply to laboratory
31 
cooperatives as defined in Section 4 (p). A member must have completed the Pre-
32 
Membership Education Seminar.
27


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
Sec. 34. Government Officers and Employees. -
(A) All elective officials of the Government shall be ineligible to become officers 
of cooperatives: Provided, That the disqualification does not extend to a 
party list representative who represents the cooperative sector: Provided, 
further. That nothing precludes cooperatives from engaging in activities in 
support of party lists representing the sector, such as, but not limited to 
participating in campaigning or donating funds;
(B) Employees of the Authority are allowed to become a member of any 
cooperative. However, they shall be disqualified to be elected or appointed 
as an officer, except for cooperatives organized among themselves; and
(C) Any government employee or official may, in the discharge of the duties as 
a member in the cooperative, be allowed by the head of office concerned 
to use official time for attendance at the General Assembly, Board and 
committee meetings including cooperative seminars, conferences, 
workshops, technical meetings, and training courses locally or abroad.
Sec. 35. Processing of Applications for Membership. - An application for 
membership shall be acted upon by the Board of Directors within the period fixed in 
the By-laws but not later than thirty (30) days. Otherwise, the application for 
membership shall be deemed approved, subject to the condition that the applicant 
has submitted the duly accomplished application and has paid the membership fees 
to the cooperative.
In case the application for membership is denied by the Board of Directors, the 
general assembly may opt to create an appeal committee, and within fifteen (15) 
days after receipt of the notice of denial and the decision of the said committee shall 
be final.
If the Committee fails to decide within the prescribed period, the appeal is deemed 
approved in favor of the applicant.
Sec. 36. Liability of Members. - A member shall be liable for the debts of the 
cooperative to the extent of the member's subscription to the share capital of the 
cooperative.
Sec. 37. Termination of Membership. -
28


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
(A) A member of a cooperative may withdraw membership from the 
cooperative by giving written notice to the Board of Directors which shall 
be acted upon within thirty (30) days from receipt of said notice;
(B) The death or insanity of a member in a primary cooperative, and the 
insolvency or dissolution, de-listing, or cancellation of the certificate of 
registration of a member in a secondary cooperative shall be considered 
valid grounds for termination of membership: Provided, That in the case 
of death or insanity of an agrarian reform beneficiary-member of a 
cooperative, the qualified next-of-kin may assume the duties and 
responsibilities of the original member;
(C) Termination of membership in the cooperative shall be initiated through 
the filing of a complaint before the ethics committee of the cooperative. 
The committee shall recommend to the Board of Directors the termination 
of membership for any of the following causes:
(1) Failure to patronize any services of the cooperative for an 
unreasonable period of time as provided in the By-laws;
(2) Failure to comply with the obligations of membership as provided in 
the By-laws or policies of the cooperative;
(3) Violation of the By-laws of the cooperative;
(4) Commission of any act or omission injurious or prejudicial to the 
interest or the welfare of the cooperative; and
(5) Others, as may be provided in the By-laws of the cooperative.
Such member shall be informed, in writing, and be given an opportunity to be heard 
by the grievance committee. The result of the investigation shall be referred to the 
Board of Directors for its consideration. Based on the recommendation of the 
grievance committee, the Board may terminate membership in the cooperative by a 
majority vote of all its members. The decision of the Board shall be in writing, and 
communicated either personally, or by registered or electronic mail. The decision 
may be appealed to the General Assembly within thirty (30) days from receipt 
thereof.
The General Assembly shall decide on such appeal within thirty (30) days after 
receipt thereof. Failure of the General Assembly to decide within the prescribed
29


1 
period shall be deemed in favor of the member. The decision of the General
2 
Assembly decision shall be final and executory. Pending the final decision, the
3 
membership shall remain in force. This notwithstanding, the member may file a
4 
petition for review of the decision of the General Assembly with the Authority within
5 
fifteen (15) days from receipt thereof.
6 
Sec. 38. Refund of Interests. - All sums computed in accordance with the By-
7 
laws due from the cooperative to a former member shall be paid in accordance with
8 
this Code and as prescribed in the Implementing Rules and Regulations: Provided,
9 
That such refund shall not be made if upon such payment, the value of the assets
10 
of the cooperative would be less than the aggregate amount of its debts and
11 
liabilities exclusive of the members' share capital contribution.
12 
In the computation of the interest due to the former member, the current balance
13 
of such member in the ledger of accounts of the cooperative shall be taken into
14 
account.
15
16 
CHAPTER IX
17 
ADMINISTRATION
18
19 
Sec. 39. Composition of the Generai Assembiy and Representative Assembly.
20 
- The General Assembly shall be the full membership of the cooperative, exercising
21 
all the rights and performing all the obligations as provided in this Code, and in its
22 
Articles of Cooperation and By-laws.
23 
For cooperatives with numerous and dispersed membership, the General Assembly
24 
shall delegate the exercise of its powers to a Representative Assembly, the members
25 
of which are elected by each sector, chapter, or district of the cooperative: Provided,
26 
That in cases provided under this Code for the call of a regular or special General
27 
Assembly, or the approval or confirmation thereof, the Representative Assembly
28 
shall also suffice, where applicable. Such delegation shall be in accordance with the
29 
rules and regulations of the Authority.
30 
Sec. 40. Powers of the Genera! Assembly. - The General Assembly shall be
31 
the highest policy-making body of the cooperative and shall exercise such powers
32 
as are stated in this Code, and in the Articles of Cooperation and By-laws of the
30


1 
cooperative. The General Assembly, through its members entitled to vote, shall have
2 
the following exclusive powers which cannot be delegated;
3 
(A) Determine and approve amendments to the Articles of Cooperation and
4 
By-laws;
5 
(B) Elect, appoint, or remove, the members of the Board of Directors.
6 
However, in the case of the electric cooperatives registered under the
7 
Authority, the election of the members of the Board shall be in accordance
8 
with its By-laws or election guidelines;
9 
(C) Approve the annual strategic and developmental plans, and the budget of
10 
the cooperative;
11 
(D)Approve or disapprove proposals from the Board of Directors pertaining
12 
to external borrowings, investments, grants, donations, and other financial
13 
assistance; and
14 
(E) Decide membership issues within the cooperative.
15 
Subject to such other provisions of this Code and only for purposes of prompt and
16 
intelligent decision-making, the General Assembly may by a three-fourths (3/4) vote
17 
of all its members entitled to vote, present and constituting a quorum, delegate
18 
some of its powers to the Board of Directors. These powers shall be enumerated
19 
under the By-laws of the cooperative.
20 
Sec. 41. Meetings. -
21 
(A)The General Assembly shall conduct a regular annual meeting on a date
22 
fixed in the By-laws, which shall be within ninety (90) days or one hundred
23 
eighty (180) days after the close of each calendar year, for primary or
24 
secondary cooperatives, respectively: Provided, That notice of regular
25 
meetings shall be sent in writing, by posting or publication, or through
26 
other electronic means to all members of record;
27 
(B) Whenever necessary, a special meeting of the General Assembly may be
28 
called at any time by a majority vote of the Board of Directors, or upon
29 
petition of at least ten per centum (10%) of the total members who are
30 
entitled to vote, or as provided for in the By-laws: Provided, That a notice
31 
in writing shall be sent one (1) week prior to the meeting to all members
32 
who are entitled to vote.
31


1 
If the Board fails to call a regular or special meeting within the given
2 
period, the Authority, upon petition of ten per centum (10%) of members
3 
entitled to vote, or the quorum as stated in their By-laws, and for good
4 
cause shown, shall issue an order to the petitioners directing them to call
5 
a meeting of the General Assembly by giving proper notice as required in
6 
this Code or in the By-laws;
7 
(C)In the case of a newly registered cooperative, a special General Assembly
8 
meeting shall be called within sixty (60) days from such approval of its
9 
registration, for the following purposes:
10 
(1) Presentation of approved Articles of Cooperation and By-laws;
11 
(2) Approval of the annual strategic and development plans, and budget;
12 
and
13 
(3) Other matters, as may be determined by the cooperative.
14 
(D)The Authority shall compel the cooperative to call a General or
15 
Representative Assembly for the purpose of reporting to the members the
16 
result of any examination or other investigation of the cooperative affairs;
17 
and
18 
(E) Notice of any meeting may be waived, expressly or impliedly, by any
19 
member.
20 
Sec. 42. Mode of Conducting Regular or Special Assembly Meetings. -
21 
Regular and special assembly meetings may be conducted in any of the following
22 
manner:
23 
(A) Duly assembled in one venue, wherein the meetings are held on the
24 
same day; or
25 
(B) Simultaneously, wherein the meetings are held on the same day but in
26 
different venues.
27 
As a general rule, assembly meetings shall be conducted in a manner provided in
28 
the By-laws of the cooperative. However, due to technological advancement, public
29 
health and safety measures, increased level of participation of members and other
30 
equally important considerations in favor of the viability and growth of cooperatives,
31 
cooperatives are allowed to conduct their assembly meetings through
32 
videoconferencing or a combination of physical attendance and videoconferencing.
32


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
except for electric cooperatives: Provided, That cooperatives who opt to conduct 
General Assembly meetings through videoconferencing or a combination of physical 
attendance and videoconferencing as an alternative mode shall amend their By-laws 
adopting the same: Provided, further. That cooperatives shall adopt policies and 
procedures sufficiently addressing administrative, technical, and logistical concerns 
for an effective and efficient video conference meeting.
Sec. 43. Quorum. - Unless a higher requirement is provided in the By-laws 
of the cooperative, a quorum shall consist of at least twenty-five per centum 
(25%) of all the members entitled to vote: Provided, That electric cooperatives 
shall follow the minimum quorum requirement as may be prescribed by the 
National Electrification Administration (NEA): Provided, further, That the quorum 
for Representative Assembly shall in no case be lower than twenty-five per centum 
(25%) of the total membership entitled to vote.
In the case of federations and unions, the quorum requirement shall be twenty five 
per centum (25%) of the total number of members present and entitled to vote.
Sec. 44. Voting System. - Each member of a primary cooperative shall have 
only one (1) vote regardless of the share capital of such member. In federations or 
secondary cooperatives, a one member-coop, one vote system applies regardless of 
the member-primaries' share capital.
The votes cast by the delegates shall be deemed as votes cast by the members 
thereof.
The foregoing notwithstanding, the By-laws of a cooperative, other than a primary 
cooperative, may provide for voting by proxy. Voting by proxy means allowing a 
delegate of a cooperative to represent or vote on behalf of another delegate of the 
same cooperative.
Sec. 45. Composition and Term of the Board of Directors. - The Board of 
Directors shall be composed of not less than five (5) nor more than fifteen (15) 
members elected by the General Assembly for a term of two (2) years, but not to 
exceed three (3) consecutive terms. The Board shall hold office until their successors 
are duly elected and qualified, or until duly removed for cause.
33


1 
For federations, a member-cooperative shall have only one representative eligible
2 
to run and be voted upon as a member of the Board, irrespective of the member-
3 
cooperative's share capital holdings.
4 
Sec. 46. Powers of the Board of Directors. - The Board of Directors shall be
5 
responsible for the annual strategic planning, direction-setting and policy-
6 
formulation activities of the cooperatives.
7 
Sec. 47. Directors. -
8 
(A) Any member of a cooperative who has the right to vote and be voted
9 
upon, and who possesses all the qualifications and none of the
10 
disqualifications provided in this Code or in its By-laws shall be eligible for
11 
election as director, subject to the limitation imposed by the second
12 
paragraph of Section 45 of this Code.
13 
(B)The cooperative may, by resolution of its Board of Directors, admit as an
14 
ex officio director or committee member one appointed by any financing
15 
institution from which the cooperative received financial assistance, solely
16 
to provide technical knowledge not available within its membership. Such
17 
director or committee member need not be a member of the cooperative
18 
and shall have no powers, rights, nor responsibilities except to provide
19 
technical assistance as required by the cooperative.
20 
(C)The members of the Board of Directors shall not hold any other position
21 
directly involved in the day to day operation and management of the
22 
cooperative.
23 
(D)Any member engaged in a business similar to that of the cooperative or
24 
who, in any way, has a conflict of interest with it, is disqualified from being
25 
elected as a director.
26 
Sec. 48. Meeting of the Board and Quorum Requirement. -
27 
(A) In the case of primary cooperatives, regular meetings of the Board of
28 
Directors shall be held at least once a month. Special meetings may be
29 
held at any time: i) at the call of the Chairperson, upon prior written notice
30 
given at least three (3) days prior to the date of said meeting; ii) or at the
31 
call of a majority of the members of the Board, upon prior written notice
32 
given at least one (1) day before said meeting: Provided, that only two
34


1 
(2) special meetings may be held in one (1) month. Notices may be sent
2 
through electronic means, to the official contact number or email account
3 
of the officers.
4 
(B) A majority of the members of the Board shall constitute a quorum for the
5 
conduct of business.
6 
(C)Each member of the Board shall only have one vote, whether it be a
7 
primary or secondary cooperative, irrespective of the share capital
8 
holdings of the member-cooperative.
9 
(D)Directors cannot attend or vote by proxy at Board meetings.
10 
(E) Cooperatives may opt to allow meetings of the Board of Directors and
11 
members of the different committees of the cooperative to be conducted
12 
either through physical attendance or videoconferencing, or both, subject
13 
to the rules on sending of notices, quorum, and voting requirements as
14 
provided for in the By-laws. In the conduct of meetings through
15 
videoconferencing, cooperatives shall adopt their own policies and
16 
procedures which shall be included in their By-laws.
17 
Sec. 49. Vacancy in the Board of Directors. - In case of a vacancy, other
18 
than by expiration of term or an increase in the number of Board of Directors, the
19 
Board, if still constituting a quorum, may, in a special meeting called for the purpose,
20 
appoint, by majority vote, any member of the cooperative to fill such vacancy:
21 
Provided, That the director so appointed shall possess all of the qualifications and
22 
none of the disqualifications as prescribed under this Code and the By-laws of the
23 
cooperative. If the remaining members of the Board do not constitute a quorum, the
24 
vacancy shall be filled in an election conducted through a special General Assembly
25 
called for the purpose, held within thirty (30) days from the time the vacancy occurs,
26 
or during the regular General Assembly, whichever comes first. The director so
27 
appointed or elected shall serve only for the unexpired term of the predecessor in
28 
office.
29 
If the General Assembly fails to fill the vacancy, as directed in the preceding
30 
paragraph, or in case of the vacancy of the entire Board of Directors, the Authority
31 
shall compel the cooperative, through the Election Committee, to call for a special
32 
General Assembly for the purpose of electing a new Board of Directors. In the
35


1 
absence of the Election Committee, the General Assembly may appoint an Ad Hoc
2 
Committee that shall be responsible to call for such special General Assembly.
3 
Sec. SO. Officers of the Cooperative. - The officers of the cooperative shall
4 
include the members of the Board of Directors, members of the different
5 
committees. General Manager or Chief Executive Officer, Secretary, Treasurer, and
6 
other officers as may be provided for in the By-laws. As such, they shall exercise
7 
their duties and responsibilities within the scope of their defined functions.
8 
The Board of Directors shall elect from among themselves the Chairperson and Vice-
9 
Chairperson, and elect or appoint other officers of the cooperative from outside of
10 
the Board, in accordance with their By-laws.
11 
The Board of Directors is prohibited from appointing any person within the fourth
12 
civil degree of consanguinity or affinity of the members of the Board of Directors.
13 
Neither shall the appointive officers be related to each other up to the fourth civil
14 
degree of consanguinity or affinity. Further, no officer shall engage in a business
15 
similar to that of the cooperative nor in any other manner have interests in conflict
16 
with the cooperative.
17 
Sec. 51. Committees of Cooperatives. -
18 
(A) The By-laws may create an executive committee, the members of which
19 
shall be appointed by the Board of Directors with such powers and duties
20 
as may be delegated to it in the By-laws or by a majority vote of all the
21 
members of the Board of Directors.
22 
(B)The By-laws shall provide for the creation of other committees, such as
23 
conciliation-mediation, ethics, gender and development, education, and
24 
other committees as may be necessary for the conduct of the affairs of
25 
the cooperative. The members of the audit and election committee shall
26 
be elected by the General Assembly, while the members of the other
27 
remaining committees shall be appointed by the Board.
28 
Unless otherwise provided in the By-laws, the Board, in case of a vacancy
29 
in the committees, may appoint or call an election to fill the vacancy, as
30 
the case may be: Provided, that the person so appointed or elected shall
31 
serve only for the unexpired portion of the term.
36


1 
Sec. 52. Functions, Responsibilities and Training Requirements of Directors,
2 
Officers and Committee Members. - The functions and responsibilities of directors,
3 
officers, and committee members, as well as their training requirements, shall be
4 
prescribed in the By-laws of the cooperative, in accordance with the rules and
5 
regulations issued by the Authority.
6 
Sec. 53. Liability of Directors, Officers and Committee Members. - Directors,
7 
officers, and committee members shall be jointly and severally liable for all damages
8 
or losses to the cooperative, its members, or other persons in case of the following;
9 
(A) Willfully and knowingly voting for or assenting to patently unlawful acts;
10 
(B) Gross negligence or bad faith in directing the affairs of the cooperative;
11 
or
12 
(C) Acquiring any personal or pecuniary interest in conflict with their duty.
13 
When directors, officers, or committee members attempt to or have acquired, in
14 
violation of their duties, any interest or equity adverse to the cooperative in respect
15 
to any matter which has been reposed in them in confidence, they shall, as a trustee
16 
for the cooperative, be liable for damages and shall be accountable for double the
17 
profits which otherwise would have accrued to the cooperative.
18 
Sec. 54. Compensation and Other Emoluments. -
19 
(A) In the absence of any provision in the By-laws fixing their compensation,
20 
the directors, or officers of the cooperative shall not receive any
21 
compensation except for reasonable per diems. Provided, That no
22 
additional compensation other than per diems s\\aW be paid during the first
23 
year of existence of any cooperative; Provided, further. That only the
24 
General Assembly shall approve any additional compensation or the
25 
increase thereof.
26 
(B) Directors and officers shall not be entitled to any per diem if the
27 
cooperative reported a net loss in the preceding calendar year or a had a
28 
dividend rate less than the official rate for the same year.
29 
(C) Unless already fixed in the By-laws, the compensation of all other
30 
employees shall be determined by the Board of Directors in accordance
31 
with the Regional Tripartite and Wage Productivity Board.
37


1 
Sec. 55. Dealings of Directors, Officers, or Committee Members. - A contract
2 
entered into by the cooperative with one (1) or more of its directors, or their spouses
3 
and relatives within the first civil degree of consanguinity or affinity, is voidable, at the
4 
option of the cooperative, uniess the foilowing conditions are present:
5 
(A)The presence of such director in the Board meeting wherein contract was
6 
approved was not necessary to constitute a quorum for such meeting;
7 
(B) The vote of such director was not necessary for the approval of the contract;
8 
and
9 
(C)The contract is fair, reasonable, and beneficial to the cooperative under the
10 
circumstances.
11 
In the case of contracts executed between the cooperative and its other officers or
12 
committee members, or their spouses or relatives within the first civil degree of
13 
consanguinity or affinity, such contracts are voidable, at the option of the cooperative,
14 
unless previously authorized by the General Assembly or by the Board of Directors,
15 
and the contract is fair, reasonable, and beneficial to the cooperative under the
16 
circumstances.
17 
The Board of Directors shall report any such contract to the General Assembly during
18 
its regular meeting for ratification.
19 
Where any of the first two conditions set forth in the preceding paragraph is absent,
20 
in the case of a contract with a director, such contract may be ratified by a three-
21 
fourths (3/4) vote of all the members entitled to vote, present and constituting a
22 
quorum in a meeting called for the purpose: Provided, That full disclosure of the
23 
adverse interest of the directors involved is made at such meeting, and that the
24 
contract is fair and reasonable under the circumstances.
25 
Sec. 56. Disloyalty of a Director and Other Officers of the Cooperative. - A
26 
director or other officer of the cooperative who, by virtue of such office, directly or
27 
indirectly acquires for themselves an opportunity which should belong to the
28 
cooperative, shall be liable for damages and must account for double the profits that
29 
otherwise would have accrued to the cooperative by refunding the same. This
30 
provision shall be applicable, notwithstanding the fact that the director or other
31 
officers of the cooperative used their own funds to acquire such opportunity.
32 
Sec. 57. Illegal Use of Confidential Information. -
38


1 
(A)A director, officer, or any person who, in conspiration or connivance
2 
therewith, makes use of confidential information to the benefit or
3 
advantage of such person, which, if generally known, may adversely affect
4 
the operation and viability of the cooperative, shall be held liable for the
5 
direct losses and for the unrealized benefit suffered by the cooperative,
6 
as a result of the transaction.
7 
(B)The cooperative shall take the necessary steps to enforce the liabilities
8 
described in paragraph (A) herein.
9 
Sec. 58. Removal From Office. - No officer may be removed except for cause,
10 
as provided in the internal policies of the cooperative, after due notice and hearing.
11 
Loss of trust and confidence in the performance of duties shall be a valid ground for
12 
removal.
13 
All complaints for the removal of any elected officer shall be filed with the Board of
14 
Directors, except as otherwise provided herein. Upon finding prima facie evidence
15 
of guilt, the Board shall inform the officer concerned and present its recommendation
16 
for removal in a regular or special General Assembly called for the purpose, wherein
17 
such officer shall be given a final opportunity to present his case. The regular or
18 
special General Assembly, by a three-fourths (3/4) votes of the members entitled to
19 
vote present and constituting a quorum, shall approve or disapprove the removal of
20 
the officer.
21 
In cases involving directors, the complaint shall be filed with the Ethics and Grievance
22 
committee, which shall follow the procedure set in the preceding paragraph.
23 
In cases involving the removal of any appointive officer, a complaint shall be filed
24 
with the Ethics and Grievance committee of the cooperative, which shall submit its
25 
recommendation to the Board of Directors for proper action. The decision of the
26 
Board of Directors may be appealed to the General Assembly.
27 
During the investigation, the Board of Directors or the Ethics and Grievance
28 
committee may, as the case may be, upon majority vote, place such officer under
29 
preventive suspension, as prescribed in the By-laws.
30 
The decision of the General Assembly may be appealed to the Authority.
31
32 
CHAPTER X
39


1 
RESPONSIBILITIES, RIGHTS AND PRIVILEGES OF COOPERATIVES
2
3 
Sec. 59. Address. - Every cooperative shall have an official postal address
4 
where the principal office is located and an electronic mail address to which all
5 
communications, reports, notices, and summons may be served, and where all other
6 
documents required shall be submitted. The Articles of Cooperation and the By-laws
7 
shall be amended accordingly should there be a change in the official postal and
8 
electronic mail addresses of the cooperative.
9 
For this purpose, an electronic mail registry shall be created in accordance with the
10 
guidelines to be promulgated by the Authority.
11 
Sec. 60. Books to be Kept Open. -
12 
(A) Every cooperative shall have the following documents ready and
13 
accessible to its members and representatives of the Authority for
14 
inspection, examination, and investigation during reasonable office hours
15 
at its registered principal office:
16 
(1) A copy of this Code and all other laws pertaining to cooperatives;
17 
(2) A copy of the Implementing Rules and Regulations of this Code;
18 
(3) A copy of the Articles of Cooperation and By-laws of the cooperative;
19 
(4) A registry of members;
20 
(5) The books of the minutes of the meetings of the General Assembly,
21 
Board of Directors and committees;
22 
(6) A share and transfer book, except for unions;
23 
(7) Financial statements and other financial records; and
24 
(8) Such other documents as may be prescribed by the Authority, laws,
25 
and the By-laws.
26 
(B)The accountant or the bookkeeper of the cooperative shall be responsible
27 
for the maintenance and safekeeping of the books and records of accounts
28 
of the cooperative in accordance with generally accepted accounting
29 
practices. The accountant or bookkeeper shall also be responsible for the
30 
production of the same at the time of audit, inspection, examination, or
31 
investigation.
40


1 
The Audit committee shall be responsible for the continuous and periodic
2 
review of the books and records of accounts to ensure that such records
3 
are in accordance with generally accepted accounting practices. It shall
4 
also be responsible for the production of the same at the time of audit or
5 
inspection.
6 
(C) Each cooperative shall maintain records of accounts such that the true and
7 
correct condition and the results of the operation of the cooperative may
8 
be ascertained therefrom at any time. The financial statements, audited
9 
according to generally accepted auditing standards, principles and
10 
practices, shall be published annually and shall be kept posted in
11 
conspicuous places in the principal office of the cooperative, its branches,
12 
and satellite offices.
13 
(D)Subject to the pertinent provisions of the National Internal Revenue Code,
14 
as amended, and other laws, a cooperative may dispose, by burning or
15 
any method of complete destruction, any document, record or book
16 
pertaining to its financial and non-financial operations which are already
17 
more than five (5) years old except those relating to transactions which
18 
are the subject of civil, criminal, and administrative proceedings. An
19 
inventory of the audited documents, records and books to be disposed of
20 
shall be drawn up and certified to by the Cooperative Secretary and the
21 
Chairman of the audit committee and presented to the Board of Directors,
22 
which may thereupon approve the disposition of said records.
23 
The information and data 
being examined may contain confidential
24 
matters or privilege communication which should not be disclosed or used
25 
without the consent of the cooperative in accordance with Republic Act
26 
No. 10173, otherwise known as the "Data Privacy Act of 2012."
27 
Sec. 61. Annual Reports. - Every cooperative shall prepare an annual
28 
progress report with the necessary attachments as may be prescribed by the
29 
Authority at the end of every calendar year. The reports shall be made accessible to
30 
its members, and copies thereof shall be available upon request of members on
31 
record during reasonable office hours. These reports shall be filed with the Authority
32 
within one hundred twenty (120) days from the end of the calendar year. The form
41


1 
and contents of the reports shall be as prescribed by the rules of the Authority.
2 
Failure to file the required reports on time shall subject the accountable officer to
3 
fines and penalties as may be prescribed by the Authority. Failure to file the required
4 
reports despite notice shall be a ground for the suspension or cancellation of the
5 
Certificate of Registration of the cooperative, subject to the guidelines to be issued
6 
by the Authority.
7 
If a cooperative fails to make and file the reports required herein, or fails to include
8 
therein any matter required by the Code, the Authority shall, within thirty (30) days
9 
from the expiration of the prescribed period, send such cooperative a notice stating
10 
its non-compliance and the commensurate fines and penalties that will be imposed
11 
until such time that the cooperative has complied with the requirements.
12 
Sec. 62. Registry of Members as Prima Facie Evidence. - A registry of
13 
members kept by the cooperative shall be prima facie evidence of the following
14 
particulars:
15 
(A)The date on which the name of any person was entered in such registry
16 
or list of members; and
17 
(B)The date on which any such person ceased to be a member.
18 
However, other information may be required in accordance with the guidelines that
19 
shall be prescribed by the Authority in consultation with the cooperative sector.
20 
Sec. 63. Probative Vaiue of Certified Copies of Entries. - A copy of any entry
21 
in any book, registry, or list regularly kept in the course of business of the
22 
cooperative shall, if duly certified in accordance with the rules of evidence, be
23 
admissible as evidence of the existence of entry and prima facie evidence of the
24 
matters and transactions therein recorded.
25 
No cooperative or person in possession of the books of such cooperative shall, in
26 
any legal proceedings to which the cooperative is not a party, be compelled to
27 
produce any of the books of the cooperative, unless by order of the Authority in the
28 
exercise of its adjudicatory powers or a competent court.
29 
Sec. 64. Bond of Accountabie Officers. - All officers and employees handling
30 
funds, securities, or property on behalf of the cooperative shall be covered by a
31 
surety bond or a fidelity bond to be issued by a duly registered insurance or bonding
32 
company, the adequacy of which shall be determined by the Board of Directors, for
42


1 
the faithful performance of their respective duties and obligations. The cooperative
2 
may likewise secure other insurance policies for its protection against losses of
3 
monies, securities, and other properties.
4 
Within thirty (30) days upon approval of the registration of a cooperative, the bonds
5 
of the accountable officers shall be submitted to the Authority. The bond for the
6 
cooperative's Treasurer shall be ten per centum (10%) of the sum of the initial paid-
7 
up capital and membership fees. The bonds for all accountable officers shall be
8 
renewed annually and adjusted accordingly.
9 
Sec. 65. Preference of Claims. -
10 
(A) Notwithstanding the provisions of existing laws, rules and regulations to
11 
the contrary, any debt due to the cooperative from the member shall
12 
constitute a first lien upon any raw materials, production, inputs, and
13 
products produced; or any land, building, facilities, equipment, goods or
14 
services acquired and held, by such member through the proceeds of the
15 
loan or credit granted by the cooperative to such member for as long as
16 
the same is not fully paid.
17 
(B)No property or interest on property which is subject to a lien under
18 
paragraph (A) herein shall be sold nor conveyed to third parties without
19 
the prior permission of the cooperative. The lien upon the property or
20 
interest shall continue to exist even after the sale or conveyance thereof
21 
until such lien has been duly extinguished.
22 
(C) Notwithstanding the provisions of any law to the contrary, any sale or
23 
conveyance made in contravention of the preceding paragraph shall be
24 
void.
25 
Sec. 66. Instrument for Salary or Wage Deduction. -
26 
(A) A member of a cooperative shall, notwithstanding the provisions of
27 
existing laws to the contrary, execute an instrument in favor of the
28 
cooperative authorizing the employer to deduct from the salary or wages,
29 
commutation of leave credits, and any other monetary benefits payable
30 
by the employer, and remit such amount as maybe specified in satisfaction
31 
of a debt, share capital contribution, or other demand due from the
32 
member to the cooperative.
43


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
(B) Upon the execution of such instrument and as may be required by the 
cooperative contained in a written notification, the employer shall make 
the deduction in accordance with the agreement and remit forthwith to 
the cooperative the amount so deducted within ten (10) days after the 
end of the payroll month. The employer shall make the deduction for as 
long as such debt or other demand remains unpaid by the employee.
(C) The term "employer" as used in this Section shall include all private firms, 
national government agencies, including government-owned and 
controlled corporations, government instrumentalities with corporate 
powers, government corporate entities, or government financial 
institutions, and local government units that employ a member of a 
cooperative and have agreed to carry out the terms of the instrument 
mentioned in this Section.
(D) The provisions of this Section shall apply to all similar agreements referred 
to in paragraph (a) herein and were enforced prior to the approval of this 
Code.
(E) Notwithstanding the provisions of existing laws to the contrary, the 
responsibilities of the employer as stated in paragraphs (a) and (b) herein 
shall be mandatory and without the need for any prior conditions, 
accreditation or other similar processes to facilitate or implement the 
deductions: Provided, That in the case of a private employer, the actual 
and reasonable cost for deducting and remitting may be collected.
(F) The member may withdraw such consent at any time and for any reason, 
which shall also be put in writing. Any person who acts contrary to this 
provision shall be held liable under this Code and other laws, as the case 
may be.
Sec. 67. Primary Lien. - Notwithstanding the provision of any law to the 
contrary, a cooperative shall have primary lien upon the capital, deposits, or interests 
of a member for any debt due to the cooperative from such member.
Sec. 68. Tax Treatment of Cooperatives. - Duly registered cooperatives 
under this Code which do not transact any business with non-members or the 
general public shall not be subject to any taxes, fees, and charges imposed under
44


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
the internal revenue laws and other tax laws. Cooperatives not falling under this 
Section shall be governed by the succeeding provisions.
Sec. 69. Tax and Other Exemptions. - Duly registered cooperatives 
transacting business with both members and non-members shall not be subject to 
tax on their transactions with members. Further, the transactions of members with 
the cooperative shall not be subject to any taxes, fees, and charges, including but 
not limited to final taxes on members' share capital and deposits and corresponding 
documentary stamp taxes.
Notwithstanding the provisions of any law or regulation to the contrary, such 
cooperatives dealing with non-members shall enjoy the following tax exemptions:
(A) Duly registered agricultural cooperatives and non agricultural cooperatives 
whose Reserve Funds have an existing balance of One hundred million 
pesos (P100,000,000.00) and below, shall be exempt from all national 
internal revenue taxes, fees, and charges of whatever name and nature 
Imposed under the internal revenue laws and other tax laws.
Such cooperatives shall be exempt from customs duties, advance sales or 
compensating taxes on their importation of machineries, equipment, 
batteries, accessories, and spare parts used in the operations of the 
cooperatives and which are not available locally as certified by the DTI. All 
tax- and duty-free imports shall not be sold nor the beneficial ownership 
thereof be transferred to any person until after five (5) years, otherwise, 
the cooperative and the transferee or assignee shall be solidarily liable to 
pay twice the amount of the imposed tax or duties;
(B) Duly registered agricultural and non agricultural cooperatives whose 
Reserve Funds have an existing balance of more than One hundred million 
pesos (P100,000,000.00), shall pay the following taxes at the full rate:
(1) Income Tax on income derived from transactions with non-members: 
Provided, That the same tax is not consequently imposed on interest 
individually received by members. Provided, further. That cooperatives 
regardless of classification, are exempt from income tax from the date 
of registration with the Authority. The tax base for all cooperatives 
liable to pay income tax shall be the income directly related from the
45


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
business transactions with non-members after deducting the 
amounts for the statutory funds;
(2) Value-Added Tax (VAT) on transactions with non-members: Provided, 
however. That duly registered cooperatives shall be exempt from the 
imposition of VAT, on the following:
(i) Sales by Agricultural cooperatives duly registered with the 
Authority to their members as well as sale of their produce, whether 
in its original state or processed form, to non-members; their 
importation of direct farm inputs, machineries and equipment, 
including spare parts thereof, to be used directly and exclusively in 
the production and/or processing of their produce, and their resale to 
other Agricultural cooperatives;
(ii) Gross receipts from lending activities by credit or multi-purpose 
cooperatives duly registered with the Authority; and
(iii) 
Sales by non-agricultural, non-electric and non-credit 
cooperatives duly registered with the Authority: Provided, That the 
share capital contribution of all members does not exceed Fifteen 
thousand pesos (P15,000) each and regardless of the aggregate 
capital and net surplus ratably distributed among the members: 
Provided, That the exempt transactions in the foregoing shall include 
sales made by cooperatives duly registered with the Authority 
organized and operated by their members to undertake the 
production and processing of raw materials or of goods produced by 
their members into finished or process products for sale by the 
cooperatives to their members and non-members: Provided, 
however. That any processed product or its derivative arising from 
the raw materials produced by their members, sold in the name and 
for the account of the cooperative shall be deemed a product of the 
cooperative and its members: Provided, further, That at least 
twenty-five per centum (25%) of the net income of the cooperatives 
is returned to the members in the form of interest and/or patronage 
refunds: Provided, finaiiy. That VAT shall not be imposed for the
46


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
purchase of modernized vehicles under the Public Utility Vehicle 
Modernization Program;
(3) All sales of goods and/or services rendered for non-members shall be 
subject to the applicable percentage taxes except sales made by 
commodities or service cooperatives; and
(4) All other taxes unless otherwise provided herein.
Donations to duly accredited charitable, research and educational 
institutions and reinvestment to socioeconomic projects within the 
area of operation of the cooperative may be tax deductible.
(C) AII duly registered cooperatives shall be exempt from payment of local 
taxes, fees and charges whether barangay, municipal, city, or provincial 
taxes and taxes on transactions with banks and insurance companies. The 
Authority shall furnish the Municipal, City, or Provincial Assessor's Office a 
certified list of duly registered cooperatives as basis of their removal from 
the Assessment Rolls;
(D) In areas where there are no available notaries public, the judge, exercising 
his/her ex-officio capacity as notary public, shall render service, free of 
charge, to any person or group of persons requiring the administration of 
oath or the acknowledgment of Articles of Cooperation and instruments of 
loan from cooperatives not exceeding Five Hundred Thousand Pesos 
(P500,000.00);
(E) Any register of deeds shall accept for registration, free of charge, any 
instrument relative to a loan made under this Code which does not exceed 
Two Hundred and Fifty Thousand Pesos (P250,000.00) or the deeds of 
title of any property acquired by the cooperative or any paper or document 
drawn in connection with any action brought by the cooperative or with 
any court judgment rendered in its favor or any instrument relative to a 
bond of any accountable officer of a cooperative for the faithful 
performance of his/her duties and obligations;
(F) Cooperatives shall be exempt from the payment of all court and sheriff's 
fees payable to the Philippine Government for and in connection with all 
actions brought under this Code, or where such action is brought by the
47


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
Authority before the court, to enforce the payment of obligations 
contracted in favor of the cooperative;
(G) AII cooperatives shall be exempt from putting up a bond for bringing an 
appeal against the decision of an inferior court or for seeking to set aside 
any third party claim: Provided, That a certification of the Authority 
showing that the net assets of the cooperative are in excess of the amount 
of the bond required by the court in similar cases shall be accepted by the 
court as a sufficient bond;
(H) Any security issued by cooperatives shall be exempt from the provisions 
of the Securities Act provided such security shall not be speculative.
Any public official or employee who violates or in any manner circumvents this 
provision shall be dealt with in accordance with the penal provisions of this Code.
Sec. 70. Issuance of Certificate of Tax Exemption for Cooperatives. - The 
Authority shall furnish the Bureau of Internal Revenue (BIR) a certified endorsement 
of a list of cooperatives in good standing and compliant with the reportorial 
requirements of the Authority that serves as basis for the issuance of a Certificate 
of Tax Exemption. The BIR shall formulate the necessary guidelines in streamlining 
the issuance of Certificate of Tax Exemption for cooperatives; Provided, That, 
individual tax identification number (TIN) of members of the cooperative should not 
be a requirement in the processing of application and renewal of Certificate of Tax 
Exemption.
Sec. 71. Priviieges of Cooperatives. - Cooperatives registered under this 
Code, notwithstanding the provisions of any law to the contrary, shall also be 
accorded the following privileges:
(A) Cooperatives shall enjoy the privilege of depositing their sealed cash boxes 
or containers, documents or any valuable papers in the safes of the 
municipal, city, or provincial treasurers, and other government offices free 
of charge, and the custodian of such articles shall issue a receipt 
acknowledging the articles received, duly witnessed by another person;
(B) Cooperatives organized among government employees, notwithstanding 
any law or regulation to the contrary, shall enjoy the free use of any
48


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
available space in their agency, whether owned or rented by the 
Government;
(C) Cooperatives rendering special types of services and facilities such as cold 
storage, ice plant, electricity, transportation, water, communications, and 
similar services and facilities shall be given preference in the grant of a 
franchise or certificate therefor: Provided, That such cooperatives shall 
open their membership to all persons qualified in their areas of operation. 
In case there are two (2) or more applicants for the same public service 
franchise or certificate of public convenience and necessity, all things 
being equal, preference shall be given to a cooperative engaged in public 
services;
(D) In areas where there are agricultural cooperatives, at least fifty per 
centum (50%) of the supply to government institutions, agencies, and 
LGUs, of rice, corn, grains, fish and other marine products, meat, eggs, 
milk, vegetables, and other agricultural commodities such as fertilizers, 
seeds and other agricultural inputs and implements, and related products, 
shall be sourced from such cooperatives;
(E) Preferential and equitable treatment in the allocation or control of 
bottomries of commercial shipping vessels in connection with the 
shipment of goods and products of cooperatives;
(F) Cooperatives and their federations engaged in the production and/or the 
marketing of products from agriculture, fisheries and small entrepreneurial 
industries, shall have exclusive preferential rights in the management of 
public markets, and lease of public market facilities, stalls or spaces, 
slaughterhouses, and storage facilities: Provided, That no cooperative 
forming a joint venture, partnership or any other similar arrangement with 
a non-cooperative entity can utilize these rights;
(G) Cooperatives engaged in credit services shall be entitled to loans, credit 
lines, rediscounting of their loan notes, and other eligible papers with the 
Development Bank of the Philippines (DBP), the Land Bank of the 
Philippines (LBP), and other financial institutions except the Bangko 
Sentral ng Piiipinas (BSP);
49


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
The Philippine Deposit Insurance Corporation (PDIC) and other 
government agencies, government-owned and controlled corporations, 
and government financial institutions shall provide technical assistance to 
federations engaged in savings and credit operations to establish and 
strengthen their own cooperative deposit insurance systems;
(H) Public transport service cooperatives shall be entitled to financing support 
from Government Financial Institutions for the acquisition and 
maintenance of land, sea, and air transport equipment, facilities, and 
parts, and shall be preferred in securing a franchise for active or potential 
routes for public transport. They shall have preferential rights to the 
management and operation of public terminals and ports whether land, 
sea, or air, and wharves, where the cooperative operates, as well as in 
the operation of arrastre and stevedoring services therein.
(I) Cooperatives shall be given preference in the procurement of government 
projects subject to the existing procurement laws, rules and regulations.
(J) Cooperatives shall enjoy the privilege of being represented by the 
provincial or city fiscal, or the Office of the Solicitor General, free of 
charge, except when the adverse party is the Republic of the Philippines;
(K) Cooperatives organized by faculty members and employees of educational 
institutions shall have the preferential right to manage the school canteen 
and other services related to the operation of the educational institution 
where they are employed: Provided, That such services are operated 
within the premises of the said educational institution;
(L) The relevant regulatory agencies, and LGUs shall not discriminate against 
duly registered cooperatives seeking accreditation as service providers, or 
seeking to engage in a particular business: Provided, That they possess 
all other qualifications under the law. Any person who acts contrary to this 
provision may be held liable under this Code and all other relevant laws 
and issuances;
(M) 
Cooperatives shall be entitled to financing support from the relevant 
government agencies that shall allocate funds for the establishment of
50


1 
projects and programs for the development and promotion of
2 
cooperatives; and
3 
(N)The relevant government agencies and government financial institutions
4 
shall create a special window for financing, in the form of blanket or long-
5 
term wholesale loans without need for individual processing, to qualified
6 
cooperatives engaged in housing projects. Such shall offer interest rates
7 
and terms equal to, or better than those given for socialized housing
8 
projects.
9 
The Authority, in consultation with appropriate government agencies and the
10 
cooperative sector, shall issue rules and regulations on all matters concerning
11 
housing cooperatives and socialized housing projects. Furthermore, the sector shall
12 
be consulted in matters of policy and implementation that will affect the rules and
13 
regulations on cooperatives.
14
15 
CHAPTER XI
16 
INSOLVENCY, SUSPENSION, DISSOLUTION, LIQUIDATION, AND
17 
DELISTING OF COOPERATIVES
18
19 
Sec. 72. Proceeding Upon Insolvency. - In case a cooperative is unable to
20 
fulfill its obligations to creditors due to insolvency, such cooperative may apply for
21 
such remedies as it may deem fit under the provisions of R.A. No. 10142, otherwise
22 
known as the Financial Rehabilitation and Insolvency Act.
23 
Nothing in this Article, however, precludes creditors from seeking protection from
24 
said insolvency law.
25 
Sec. 73. Effect of Declaration of Insolvency by a Competent Court. - Should
26 
the cooperative be declared insolvent by the court, its Certificate of Registration shall
27 
be cancelled, and it shall be delisted from the registry of cooperatives of the
28 
Authority. The coop may appeal.
29 
Sec. 74. Suspension of Certificate of Registration. - A penalty of suspension,
30 
after due process, shall be imposed on a cooperative on any of the following grounds:
31 
(A) Willful refusal to submit annual progress reports with the necessary
32 
attachments within the period mandated by this Code: Provided, That in
51


1 
case of newly-registered cooperatives, this provision shall only apply three
2 
(3) years after they have registered;
3 
(B) Willful refusal to comply with an interlocutory order, a final and executory
4 
decision, or award from the CDA Board of Directors, or from any of its
5 
Regional Offices or adjudication officers, or by a voluntary arbitrator in
6 
relation to an investigation, voluntary arbitration, or adjudication.
7 
Sec. 75. Voluntary Dissolution Where no Creditors are Affected. - If the
8 
dissolution of a cooperative does not prejudice the rights of any creditor having a
9 
claim against it, the dissolution may be effected by a majority vote of the Board of
10 
Directors, and by a resolution duly adopted by the affirmative vote of at least three-
11 
fourths (3/4) of all the members entitled to vote, present and constituting a quorum
12 
in a special General Assembly called by the directors for such purpose: Provided,
13 
That the notice of time, place, and object of the meeting shall be posted for three
14 
(3) consecutive weeks in the principal office of said cooperative, in a public place in
15 
the municipality, city, or province where the cooperative operates, and in its official
16 
website and social media accounts.
17 
The notice of such meeting shall be sent to each member of record either by personal
18 
delivery, registered mail, or through electronic means at least thirty (30) days prior
19 
to said meeting. A copy of the resolution authorizing the dissolution shall be certified
20 
to by a majority of the Board of Directors and countersigned by the Cooperative
21 
Secretary.
22 
Upon compliance with all the requisites for voluntary dissolution, the Authority shall
23 
issue the Certificate of Dissolution.
24 
Sec. 76. Voluntary Dissolution Where Creditors Are Affected. - In case
25 
creditors of the cooperative are affected, the petition for dissolution, signed by a
26 
majority of its Board of Directors or the Chief Executive Officer or General Manager,
27 
as the case may be, and verified by the Chairperson of the Board or the Cooperative
28 
Secretary, shall be filed with the Authority. The petition shall state that the
29 
dissolution was affirmed by a vote of at least three-fourths (3/4) of all the members
30 
entitled to vote, present and constituting a quorum in a special General Assembly
31 
called for the purpose, and shall set forth all the claims and demands against the
32 
cooperative.
52


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
If the petition is sufficient in form and substance, the Authority shall issue an order 
reciting the purpose of the petition and shall fix a period for the filing of any 
oppositions thereto, which shall not be less than thirty (30) nor more than sixty (60) 
days after the entry of the order. Before such period, a copy of the order shall be 
published at least once in a newspaper of general circulation published in the 
municipality or city where the principal office of the cooperative is situated or in the 
absence of such local newspaper, in a newspaper of general circulation in the 
Philippines at the expense of the cooperative, and a copy shall likewise be posted 
for three (3) consecutive weeks in three (3) public places in the municipality or city 
where the cooperative's office is located: Provided, That the publication requirement 
shall not apply to micro and small cooperatives.
Upon the expiry of such period, the Authority shall proceed to hear the petition and 
try any issue raised in the opposition filed. If there is no opposition or such is 
insufficient, and the material allegations in the petition are proven, the Authority 
shall issue a Certification of Dissolution and direct the disposition of assets of the 
cooperative in accordance with existing rules and regulations. The Certificate of 
Dissolution shall set forth:
(A) The assets and liabilities of the cooperative;
(B) The claim of any creditor;
(C) The number of members;
(D) The nature and extent of the interests of the members of the cooperative; 
and
(E) The appointment of the liquidators.
The Authority shall issue a Certificate of Cancellation of Registration upon approval 
of the final report of the liquidators.
Sec. 77. Cancellation by Order of the Authority. - The Authority may cancel, 
after due notice and hearing, the cooperative's Certificate of Registration on any of 
the following grounds:
(A) Having obtained its registration by fraud;
(B) Engaging in an illegal or unauthorized purpose;
53


1 
(C) Willful violation, despite written notice by the Authority, of the provisions
2 
of this Code or its Implementing Rules and Regulations, other issuances
3 
of the Authority consistent with this Code, or By-laws of the cooperative;
4 
(D)Willful refusal to comply with an order issued or given by the Authority;
5 
(E) Willful failure to operate on a cooperative basis; and
6 
(F) Failure to meet the required minimum capital and minimum number of
7 
members in the cooperative.
8 
The decision of the Authority on the cancellation of the Certificate of Registration of
9 
a cooperative may be appealed to the Authority's Board of Directors within thirty
10 
(30) days from the receipt of thereof. The decision of the Authority's Board of
11 
Directors shall be final and executory unless elevated or appealed to a regular court.
12 
Sec. 78. Cancellation by Failure to Operate. - If a cooperative has not
13 
commenced operations within three (3) years after the issuance of its Certificate of
14 
Registration, or has not carried on its business for three (3) consecutive years, the
15 
Authority shall send a show cause order for the cooperative to explain its failure to
16 
operate. Failure to provide justifiable cause shall authorize the Authority, after due
17 
notice, to cancel the Certificate of Registration and delist it from the registry.
18 
Sec. 79. Liquidation of a Cooperative. - Every cooperative whose term of
19 
existence expires by its own limitation, or whose existence is terminated by voluntary
20 
dissolution or cancellation of its Certificate of Registration by the Authority shall
21 
cease to operate. Flowever, it can continue to exist for three (3) years for winding
22 
up its affairs, prosecuting and defending suits by or against it, and the disposition,
23 
conveyance and distribution of its properties and assets.
24 
The cooperative is authorized to convey all of its interests in the properties to
25 
trustees for the benefit of its members, creditors, and other persons in interest, after
26 
which, all interests which the cooperative had in the properties are terminated.
27 
Upon the winding up of the cooperative affairs, any asset distributable to any
28 
creditor, shareholder, or member who is unknown or cannot be found shall be given
29 
to the federation or union to which the cooperative is affiliated with.
30 
A cooperative shall only distribute its assets or properties upon lawful dissolution,
31 
and after payment of all its debts and liabilities, except in the case of decrease of
32 
share capital of the cooperative, and as otherwise allowed by this Code.
54


1 
Sec. 80. Delisting of Cooperatives. - Cooperatives may be delisted from the
2 
Registry of Cooperatives due to the following causes:
3 
(A) Voluntary Dissolution;
4 
(B)Involuntary Dissolution;
5 
(C) Cancellation by Order of the Authority;
6 
(D)Cancellation by Failure to Operate; and
7 
(E) Merger or Consolidation.
8 
Sec. 81. Rules and Regulations on the Insolvency, Suspension, Dissolution,
9 
Liquidation, and De-listing Cooperatives. - the guidelines on the implementation of
10 
this Chapter shall be included in the Implementing Rules and Regulations of this Code,
11 
in consultation with the cooperative sector.
12
13 
CHAPTER XII
14 
CAPITAL, PROPERTY, AND FUNDS
15
16 
Sec. 82. Capital and Funds. - The capitalization of cooperatives and
17 
federations, or funds in the case of unions, shall be governed by this Code and its
18 
Implementing Rules and Regulations that will be developed in consultation with the
19 
cooperative sector.
20 
Sec. 83. Capital Sources. - Cooperatives registered under this Code may
21 
derive their capital from any or all of the following sources:
22 
(A) Member's share capital;
23 
(B) Loans and borrowings;
24 
(C) Deposits from members;
25 
(D)Revolving capital which consists of the deferred payment of patronage
26 
refunds, or interest on share capital;
27 
(E) Joint venture partners;
28 
(F) Subsidies, donations, legacies, grants, aids and such other assistance or
29 
investment from any local or foreign institution whether public or private:
30 
Provided, That capital coming from such subsidies, donations, legacies,
31 
grants, aids, investments, and other assistance shall not be divided into
32 
individual share capital holdings at any time, but instead shall form part
55


1 
of the donated capital or fund of the cooperative. Upon dissolution or
2 
cancellation of the cooperative, such donated capital shall be subject to
3 
escheat; and
4 
(G)Reserve funds utilized for investment and as capital for the operations of
5 
the cooperative as approved by the Board of Directors or General
6 
Assembly.
7 
Sec. 84. Limitation on Share Capital Subscription - No member of primary
8 
cooperative other than the cooperative itself shall own or hold more than twenty per
9 
centum (20%) of the subscribed share capital of the cooperative.
10 
Where a member of a cooperative dies, his heir shall be entitled to the shares of the
11 
decedent: Provided, That the total shareholding of the heir does not exceed twenty
12 
per centum (20%) of the share capital of the cooperative: Provided, further. That
13 
the heir qualifies and is admitted as a member of the cooperative: Provided, finally,
14 
That where the heir fails to qualify as a member or where his total shareholding
15 
exceeds twenty per centum (20%) of the share capital, the shares in excess will
16 
revert to the cooperative upon payment to the heir of the value of such shares.
17 
For federations as stated in its Articles of Cooperation and By-laws, the share capital
18 
holdings of any one member-cooperative shall not exceed forty per centum (40%)
19 
of the subscribed share capital of the federation, provided that the voting scheme
20 
shall be one cooperative, one vote.
21 
A foreign federation of Cooperatives if admitted as associate member of a Philippine
22 
federation of cooperatives may hold or own up to 40% of the preferred share capital
23 
of said Philippine federation: Provided, That the redemption date of such preferred
24 
share capital shall be at least (5) years after effectivity of membership; Provided,
25 
further. That during the five-year period, withdrawal of the preferred shared capital
26 
shall not be allowed.
27 
Sec. 85. Assignment of Share Capital Contribution or Interest. - Subject to
28 
the provisions of this Code and the approval of the majority of the Board of Directors,
29 
no member shall transfer his/her shares or interest in the cooperative or any part
30 
thereof unless:
31 
(A)The member has held such share capital contribution or interest for more
32 
than one (1) year;
56


1 
(B)The assignment is made to the cooperative or to a member of the
2 
cooperative or to a person who falls within the field of the membership of
3 
the cooperative; and
4 
(C)The Board of Directors has approved such assignment.
5 
Sec. 86. Capital BuHd-Up. - The By-laws of every cooperative, except for
6 
cooperative unions, shall prescribe a reasonable and realistic member capital or
7 
deposits build-up program to allow the continuing growth of the contribution of the
8 
members to the cooperative as their economic conditions continue to improve. Upon
9 
approval of the membership, the member shall execute a subscription agreement on
10 
his equitable contribution to the cooperative. Upon full payment thereof, the member
11 
may apply for an additional sh8re capital subscription, and execute a new
12 
subscription agreement.
13 
Sec. 87. Shares. - The term "share" refers to a unit of capital in a
14 
cooperative, except for cooperative unions, the par value of which may be fixed at
15 
any figure not less than One hundred pesos (PIOO.OO) but not more than One
16 
thousand pesos (P1,000.00). The share capital of the cooperative is the money paid
17 
or required to be paid by the members for the operations of the cooperative.
18 
Unless otherwise provided for in its policies, the cooperative shall issue Share
19 
Certificates at the end of the calendar year based on the number of shares fully paid
20 
for the said period.
21 
Cooperatives are prohibited from issuing multiple types of shares with different par
22 
values, and from increasing or decreasing the par value of the share capital without
23 
amending their Articles of Cooperation and By-laws.
24 
A share can either be a common share issued to a regular member, or a preferred
25 
share issued to associate members.
26 
Sec. 88. Fines. - The policies of a cooperative may prescribe a fine on unpaid
27 
subscribed share capital. Provided, That such fine is fair and reasonable.
28 
Sec. 89. Investment of Capital. - A cooperative, upon approval as provided
29 
in its By-laws, may invest its capital in any of the following:
30 
(A) Any reputable bank;
31 
(B)Securities issued or guaranteed by the Government;
32 
(C) Real estate primarily for the use of the cooperative or its members;
57


1 
(D)Federation investment to a cooperative, or primary cooperative
2 
investment to another primary cooperative, subject to the rules or
3 
guidelines that will be developed by the Authority in consultation with
4 
the cooperative sector; or
5 
(E) Any other manner authorized in the By-laws.
6 
Sec. 90. Revolving Capital. - The General Assembly may authorize the Board
7 
of Directors to raise a revolving capital from the proceeds of products sold or services
8 
rendered, or per unit of product or services handled, to strengthen its capital
9 
structure.
10
11 
CHAPTER XIII
12 
AUDIT, INQUIRY, AND MEMBERS' RIGHT TO EXAMINE
13
14 
Sec. 91. Audit of Cooperatives. - Cooperatives registered under this Code
15 
shall be subject to an annual audit of its financial and social performance in
16 
accordance with the Implementing Rules and Regulations to be promulgated by the
17 
Authority in consultation with the cooperative sector. The financial audit shall be
18 
conducted by an external auditor who shall independent from the cooperative or any
19 
of its subsidiaries, and must be a member in good standing of the Philippine Institute
20 
of Certified Public Accountants (PICPA), and is accredited by both the Board of
21 
Accountancy and the Authority. However, if the total assets or total liabilities of
22 
agricultural, fisheries and other cooperatives is less than Three Million Pesos (P
23 
3,000,000.00), or such amount as maybe determined appropriate by the Department
24 
of Agriculture (DA), and concerned agencies, the financial statements maybe
25 
certified under oath by the bookkeeper, treasurer, and the president.
26 
The social performance audit may be conducted by the audit committee, by the
27 
internal auditor of the cooperative, or by an independent auditor engaged by the
28 
cooperative.
29 
The federation representative may assist the Authority in the visit, inspections and
30 
investigation of their member cooperative, to ensure compliance with laws and
31 
regulations, and to protect their members and the public in general.
58


1 
Sec. 92. Audit Report. - The complete audit reports shall be submitted to
2 
the Board of Directors, which shall be presented to the General Assembly for
3 
approval. The Board of Directors shail be liable under Section 170 of this Code shouid
4 
it fail to present such reports to the General Assembly.
5 
Sec. 93. Non-Liability for Defamations. - The auditor shaii not be held liable
6 
in any action for defamation for acts done or for any statement made by him/her in
7 
good faith in connection with the conduct of audit of the cooperative.
8 
Sec. 94. Right to Examine. - Aii members shaii have the right to examine the
9 
records of the cooperative under Section 60 of this Code at any time during
10 
reasonable hours of the operating days of the cooperative: Provided, That the
11 
member submits a letter request three (3) days prior to the date of his demand to
12 
examine the records and stating therein the purpose of the request.
13 
The Board of Directors shall consider the purpose and reason for the request to
14 
examine the records to determine its propriety. The Board of Directors shaii have
15 
the right to refuse the request after proper consultation with the requesting member,
16 
upon the foiiowing grounds:
17 
(A)The member has improperly used any information secured through any
18 
prior examination of the records of such cooperative or of any other
19 
cooperative; or
20 
(B)The member is not acting in good faith or for a iegitimate purpose in
21 
making the demand to examine records.
22 
If the request to examine is denied based on the aforementioned grounds, the
23 
member shaii have the burden of proving to the Board that such request is made in
24 
good faith and for a iegitimate purpose. If the deniai is made in bad faith, the
25 
directors who voted for such refusal shall be penalized under Section 177 of this
26 
Code.
27 
Sec. 95. Safety of Records. - Every cooperative shaii, at its principai office,
28 
keep and carefuily presen/e the records required by this Code to be prepared and
29 
maintained. The By-iaws shaii also provide the condition and the accountable
30 
persons for the safekeeping of the records in accordance with appiicabie iaws on
31 
data privacy. The cooperative shaii take all necessary precautions to prevent its ioss,
32 
destruction, or faisification.
59


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
CHAPTER XIV
ALLOCATION AND DISTRIBUTION OF NET SURPLUS
Sec. 96. Net Surplus. - Notwithstanding the provisions of existing laws, the 
net surplus of cooperatives shall be determined in accordance with its By-laws. Every 
cooperative shall determine its net surplus at the close of every calendar year.
Any provision of law to the contrary notwithstanding, the net surplus shall not be 
construed as profit but as an excess of payments made by the members for the 
loans borrowed, or the goods and services availed by them from the cooperative or 
the difference of the rightful amount due to the members for their products sold or 
services rendered to the cooperative including other inflows of assets resulting from 
its other operating activities and which shall be deemed to have been returned to 
them if the same is distributed as prescribed herein.
Sec. 97. Net Surplus Allocation and Statutory Funds. - The net surplus shall 
be subject to the allocation of the following statutory funds, which shall be recorded 
in the books of account, for the cooperative's growth and development:
(A) An amount for the reserve fund which shall be at least ten per centum 
(10%) of the net surplus, provided, that in the first 5 years of operation 
after registration, the amount allocated for the reserved fund shall not be 
less than 30% of the net surplus;
The Reserved fund shall be used for the stability of the cooperative and to 
cover net losses in its operations, including losses incurred during a 
pandemic, state of emergency, and other such force majeure, : provided , 
that if any of the aforementioned events occur necessitating the use of the 
reserved fund, cooperative may use not greater than fifteen percent (15%) 
of the latter to mitigate the losses incurred, as may be approved or 
confirmed by the General Assembly, as the case may be. Any sum recorded 
on items previously charged to the reserved fund shall be credited to such 
fund.
60


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
The fund shall be recorded in the books of account of the cooperative, and 
the cash allocation for the reserved fund shall be deposited separately in an 
account established for that purpose.
The general assembly may decrease the amount allocated to the reserve 
fund when the reserve fund already exceeds the share capital.
Upon the dissolution of the cooperative, the reserve fund shall be distributed 
in accordance with the rules and regulations on liquidation to be issued by 
the Authority.
(B) The Cooperative Education and Training Fund (CETF), which shall not 
exceed ten per centum (10%) of the net surplus, shall be used for the 
training, development and similar other cooperative activities geared 
towards the growth of the cooperative movement:
(1) Half of the CETF shall be used to provide for the education and training 
of its officers, members, and employees; while the other half shall be 
remitted to a federation and/or union that the cooperative opted to 
join, which must redound to the benefit and development of the 
member-cooperatives, such as, but not limited to trainings, seminars, 
and other related activities.
Should a cooperative holds multiple affiliations, the primary cooperative 
has the discretion on the allocation of its CETF.
(2) The balance of the CETF shall be utilized within the succeeding fiscal 
year following its allocation and shall be utilized in accordance with the 
policies and guidelines issued by the Authority.
(3) Upon the dissolution of the cooperative, the unexpended balance of 
the CETF shall be credited to the cooperative education and training 
fund of the federation and or union in which it is a member or affiliated 
with.
(C) The Community Development Fund (CDF), which shall not be less than 
five percentum (5%) of the net surplus, shall be used for projects or 
activities that will benefit the community where the cooperative operates. 
However, the cooperative may extend assistance to marginalized
61


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
communities or affected areas outside its area of operation in times of 
calamities, disaster, or national emergency.
The cooperative shall allocate certain percentage of the Community 
Development Fund (CDF) but not to exceed 50% of the total CDF 
allocated, for calamity, disaster or national emergency. Provided, further, 
that part of the community development fund should be allocated for 
climate resiliency programs, environmentai programs, including support in 
insuring crops and related agri-agra products of the cooperatives.
In the case of cooperatives whose common bond of membership is 
institutional, the community refers to the institution where the cooperative 
is operating.
The allocation for the CDF for the current year shall be fully utilized in the 
following year unless the projects or activities as approved by a majority 
of the members entitled to vote, present and constituting a quorum in a 
General Assembly meeting, require multi-year utilization. For multi-year 
projects or programs, the allocation shall be fully utilized within the period 
as stated in the plan.
(D) The optional fund, which shall not exceed five per centum (5%) of the net 
surplus, shall be used for the acquisition of land and construction of 
building, and any other expenses anent to it. Provided, it is approved by 
at least three-fourths (3/4) of all members entitled to vote, present and 
constituting a quorum, which shall be in accordance with the 
Implementing Rules and Regulations to be promulgated by the Authority. 
This fund may also be used for the benefit of its members and employees 
under exceptional circumstances such as the occurrence of a pandemic, 
crisis, or force majeure. However, if the optional fund is insufficient, the 
cooperative may charge any deficiency to direct expenses.
(E) The remaining net surplus shall be made available in full to the members 
in the form of interest on share capital following the formula for 
computation as provided by the Authority: Provided, That this is approved 
by a majority of the members entitled to vote, present and constituting a 
quorum.
62


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
(F)The sum allocated for patronage refunds shall be made available at the 
same rate to all patrons of the cooperative in proportion to their individual 
patronage: Provided, That:
(1) In the case of a member patron with paid-up share capital contribution, 
his/her proportionate amount of patronage refund shall be paid to 
him/her unless he agrees to credit the amount to his/her account as 
additional share capital contribution;
(2) In the case of a member patron with unpaid share capital contribution, 
his/her proportionate amount of patronage refund shall be credited to 
his/her account until his/her account until his/her share capital 
contribution has been fully paid;
(3) In the case of a non-member patron, his/her proportionate amount of 
patronage refund shall be set aside in a fund created for the purpose 
and shall be allocated to individual non-member patrons only upon 
request and presentation of evidence of the amount of his/her 
patronage. The amount so allocated shall be credited to such patrons 
toward payment of the minimum capital contribution for membership. 
When a sum equal to this amount has accumulated at any time within 
two (2) years from the start of his/her patronage, such patron shall be 
deemed and become a member of the cooperative if he so agrees or 
requests and complies with the provisions of the By-laws for admission 
to membership; and
(4) Any non-member patron who has accumulated the sum necessary for 
membership but who does not request nor agree to become a member 
or fails to comply with the provisions of the By-laws for admission to 
membership, the amount so accumulated or credited to their account 
together with any part of the general fund for non-member patrons 
shall be credited to any of the statutory funds as approved by a 
majority of the members entitled to vote, present and constituting a 
quorum.
63


1 
CHAPTER XV
2 
AGRICULTURAL COOPERATIVES
3
4 
Sec. 98. Definition and Coverage. - This Chapter shall apply to all agricultural
5 
cooperatives, as defined in this Code: Provided, That the provisions of the other
6 
chapters of this Code shall apply suppletorily except insofar as this Chapter otherwise
7 
provides.
8 
Sec. 99. Cooperative Business Activities and Aiiied Services. - A duly
9 
registered agriculture cooperative may engage in all or any of the following activities:
10 
(A) Raising and/or culture of plants, high-value crops, animals, fish, poultry,
11 
livestock, other agri-products as source of food, feed, and fiber, and other
12 
agri-fishery or non-food commodities;
13 
(B) Production of salt;
14 
(C) Community and social forestry;
15 
(D) Provision of credit facilities for marginal farmers and fishermen;
16 
(E) Facilitating the procurement and distribution of farm inputs/implements
17 
for its members;
18 
(F) Facilitating the production, procurement, repacking, importation,
19 
distribution and marketing farm inputs/implements for its members such
20 
as but not limited to, meat type, and dairy animals, planting materials,
21 
semen, silage, feed, veterinary supplies, seeds, fertilizers and chemicals,
22 
farm equipment, food processing, and engineering supplies/equipment,
23 
and other inputs as maybe needed by the agricultural industry;
24 
(G)Propagation, production, harvest, postharvest, processing, packing,
25 
repacking, marketing exportation, and sale of members' agri-products,
26 
dairy products, and by-products and produce; marketing, and sale of
27 
members' agri-products and/or produce;
28 
(H)Maintenance and management of irrigation systems, water impounding,
29 
and other agricultural facilities; and
30 
(I) Other allied services such as but not limited to warehousing, cold storage,
31 
and other post-harvest services, hauling, and transport of members'
64


1 
products/produce and such other similar business services and activities
2 
that will reduce cost and/or value addition of output.; and
3 
(J) Learning site entrepreneurship for extension, technology demonstration,
4 
agri-tourism, and farm business schools.
5 
Sec. 100. Pre-Cooperative Agricultural Organization. - Prior to registration
6 
with the Authority, a group of natural persons intending to form an agriculture
7 
cooperative may voluntariiy form a Pre-Cooperative Agricuitural Organization (PCAO)
8 
that shall have its own juridical personality to undertake activities that shall
9 
determine the viability of the creation of a cooperative under this Code. Prior to
10 
registration, the PCAO must be registered as such with the Cooperative Development
11 
Officers (CDOs).
12 
The Department of Agriculture (DA) and the Authority, in coordination with the
13 
CDOs, shall assist PCAOs so that they can formally organize as cooperatives under
14 
this Code; Provided, that should the PCAO decide to formally organize into a
15 
cooperative, it must comply with the provisions of Sections 8 and 14 of this Code.
16 
Further, Section 18 shall apply to all contracts executed by pre-cooperative
17 
organizations prior to registration under this Code.
18 
The DA and the Authority shall jointly issue guidelines on the mechanisms for PCAOs.
19 
Sec. 101. Registration of Agricultural Cooperatives. - Agricultural
20 
cooperatives shall file their application for registration with the regional office of the
21 
Authority that has jurisdiction over its area of operation. The requirements and
22 
procedure for registration of agricultural cooperatives shall be in accordance with
23 
the rules and regulations to be promulgated by the Authority in consultation with
24 
the cooperative sector.
25 
Sec. 102. Capital Requirements of Agricultural Cooperatives. - The
26 
authorized share capital of an agriculture cooperative shall be stated in its Articles
27 
of Cooperation and that prior to its registration, at least twenty five per centum
28 
(25%) of the authorized share capital shall be subscribed to by the members and at
29 
least twenty five (25%) of the subscribed share capital shall be paid-up: Provided,
30 
That the paid-up capitalization requirement for primary cooperatives shall not be
31 
less than Fifteen Thousand Pesos (P15,000.00).
65


1 
Sec. 103. Bond of Membership. - The bond of membership of agricultural
2 
cooperatives shall be any of the following:
3 
(A) Residential - members are farmers, farm workers, fisherfolk who are
4 
actually and physically residing within the area of operation;
5 
(B) Occupational- members are those who are engage in raising, culture of
6 
plants, animals, as well as those from the technical and scientific
7 
communities of the agriculture sector;
8 
{C) Associationai- members are from registered associations, groups, clubs,
9 
cultural and other similar aggrupation of farmers, farm workers, and
10 
fisherfolk; and
11 
(D) Institutional - members consist of employees, workers and/or officers of
12 
a particular institution who will undertake or are undertaking agricultural
13 
projects.
14 
Sec. 104. Clustering and Consolidation. - In order to pool their resources for
15 
increased viability and market competitiveness, the DA, DAR, DTI, the Authority and
16 
the cooperative sector shall institutionalize the farm and fisheries clustering and
17 
consolidation (F2C2) program that will promote, encourage agricultural cooperatives
18 
and facilitate their cooperation into clusters that will encompass the whole
19 
agricultural value chain, including but not limited to land consolidation, postharvest
20 
processing, distribution, logistics, marketing, and promotions.
21 
Within sixty (60) days from the effectivity of this Code, The DA, DAR, DTI and CDA,
22 
in consultation with the sector, shall jointly issue the guidelines for the
23 
implementation of the foregoing program, and shall provide the necessary assistance
24 
at every step of the clustering and consolidation process, including the formulation
25 
of cluster development plans.
26 
Sec. 105. Partnership and Joint Venture with Private Entities. - Duly
27 
registered private entities, such as those conducting Agricultural Research and
28 
Development, among others, may enter into a partnership or joint venture with
29 
agricultural cooperatives in order to provide the latter with investments and technical
30 
support, such as, but not limited to technological, logistics, and facilities support,
31 
among others. Such partnership or joint venture shall be registered with the
66


1 
necessary regulatory authorities, including the CDA, and enjoy the relevant
2 
exemptions and privileges under this Code.
3 
The details of the joint venture or partnership with private entities shall be left to
4 
the discretion of the cooperatives. Further details shall be laid down in the
5 
implementing rules and regulations of this code.
6 
Sec. 106. Role of National Coordinating Committee on Cooperatives
7 
Development. - The Authority shall mobilize the National Coordinating Committee
8 
on Cooperative Development (NCC-CD) for the promotion of the growth, viability,
9 
and development of Agricultural cooperatives. Provided, That the NCC-CD shall
10 
coordinate with the DA and the farmers and fisherfolk Enterprise Development
11 
Council (FFEDC) on matters related to growth, development, and sustainability of
12 
the agriculture and fisheries cooperatives.
13 
Sec. 107. Roie ofLGUs. - The Local Government Units shall:
14 
(A) Ensure the appointment of Cooperative Development Officers, in
15 
compliance with Republic Act No. 11535;
16 
(B) Create a Committee on Agricultural cooperatives Development in the Local
17 
Government Legislative Council which shall focus on addressing legislative
18 
concerns on Agricultural cooperatives;
19 
(C) Legislate necessary ordinances for the promotion and development of
20 
agricultural cooperatives;
21 
(D) Disseminate information to people and facilitate the establishment and
22 
development of the management and operations of agricultural
23 
cooperatives in their respective localities;
24 
(E) Expedite the issuance of the necessary permits for the implementation of
25 
programs and projects of the Authority and other national government
26 
agencies for the benefit of agricultural cooperatives;
27 
(F) Upon written request of the Authority, assist in the resolution of inter-
28 
cooperative disputes among agricultural cooperatives operating within
29 
their localities;
30 
(G) Facilitate and conduct seminars, trainings, and/or conferences necessary
31 
for the organization, registration, management and operations of
32 
agricultural cooperatives, in coordination with federations and unions; and
67


1 
(H)Provide technical assistance and skills training for farmers, farm workers,
2 
and fisherfolk to engage in income-generating activities.
3 
Sec. 108. Role of Cooperative Development Councils and National
4 
Government Agencies. - The Authority shall, in collaboration with the LGUs through
5 
the Regional, Provincial, City, and Municipal Cooperative Development Councils and
6 
the Cooperative Development Officers, facilitate programs and policies affecting
7 
agricultural cooperatives in accordance with a Joint Memorandum Circular to be
8 
promulgated by the Authority and the LGU.
9 
Agricultural cooperatives shall be entitled to financing support from the relevant
10 
government agencies that shall allocate funds for the establishment of projects and
11 
programs for the development and promotion of agricultural cooperatives.
12 
Sec. 109. Benefits and Privileges of Agricultural cooperatives. - An
13 
agriculture cooperative shall enjoy the following benefits and privileges:
14 
(A)Taxes, Duties, and Liens:
15 
(1) All benefits, privileges, and tax treatments of cooperatives as defined
16 
and enumerated under Chapter X of this Code shall apply to agricultural
17 
cooperatives;
18 
(2) Agricultural cooperatives shall be exempt from customs duties,
19 
advance sales or compensating taxes on their importation and local
20 
purchase of machineries, equipment, accessories, batteries, and spare
21 
parts used by them: Provided, That all tax- and duty-free imports and
22 
local purchases shall not be sold nor the beneficial ownership thereof
23 
be transferred to any person until after five (5) years, otherwise, the
24 
cooperative and the transferee or assignee shall be solidarily liable to
25 
pay twice the amount of the imposed tax and/or duties; and
26 
(3) All real properties owned, and those directly used for the operations,
27 
management, and maintenance of agricultural cooperatives shall be
28 
exempt from the payment of real property taxes imposed under
29 
existing laws.
30 
(B)Trainings and Conferences - All trainings and conferences necessary for
31 
the organization, registration, management and operations of an
32 
agriculture cooperative, rendered by the appropriate government agency.
68


1 
shall be given free of charge, including costs of venue, training materials,
2 
speakers and resource persons. The CDOs shall be primarily responsible
3 
for these trainings and conferences within their respective localities;
4 
(C) Consolidation - Agricultural cooperatives may consolidate agricultural
5 
lands owned by its members within in a contiguous area for purposes of
6 
agricultural development; and
7 
(D)Direct Purchase by National and Local Government Agencies - To promote
8 
and support agricultural cooperatives, national and local government
9 
agencies shall directly purchase agricultural products from accredited
10 
agricultural cooperatives; Provided, that said products are necessary in the
11 
performance of their respective mandates.
12 
For the purposes of this Code, the procurement by national and local
13 
government agencies of said agricultural products shall be exempt from
14 
the application of the bidding process prescribed under relevant
15 
government procurement laws; Provided, that said agencies shall undergo
16 
a negotiated procurement under the applicable guidelines of the
17 
Government Procurement Policy Board.
18 
(E) Loans and Grants:
19 
(l)AII loans applied for by agricultural cooperatives in any government-
20 
owned or -controlled banks or government financial institutions shall
21 
enjoy preferential treatment as to the requirements, rates, securities,
22 
and collaterals; and
23 
(2) The DA shall coordinate with the BSP to lower the requirements for all
24 
loans applied for and granted to agricultural cooperatives.
25 
Sec. 110. Merger and Consoiidation of Agricuiturai Cooperatives.
26 
- Notwithstanding the provisions of this Code, the merger and consolidation of
27 
agricultural cooperatives shall be in accordance with the Implementing Rules and
28 
Regulations to be promulgated by the Authority.
29 
Sec. 111. Inter-Cooperative Arrangements of Agricultural Cooperatives. -
30 
Agricultural cooperatives shall be allowed to enter into inter-cooperative
31 
arrangements with and among other cooperatives and other entities to pursue value
32 
and supply chain solutions and other agribusiness development programs, subject
69


1 
to the guidelines to be promulgated by the Authority in consultation with the
2 
cooperative sector.
3 
Sec. 112. Local Development Hubs. - Local Development Hub (LDH) refers
4 
to a farming zone or transport infrastructure, which is generally far from formal
5 
markets, and serves a minimum of one hundred (100) farmers, linking them to
6 
buyers, who may be, among others, traders, processors, and export companies. The
7 
DA and CDA shall jointly establish LDHs in order to strengthen the market linkages
8 
between farmers and buyers, fostering agricultural development and economic
9 
growth at the local level. Further, they shall jointly issue the guidelines for the
10 
operations and maintenance thereof.
11 
Sec. 113. Annual Trade Fair and Awards. - The DA, in coordination with the
12 
CDA, and in partnership with the cooperative sector, and other stakeholders shall
13 
establish and hold the Annual Agricultural cooperatives Trade Fair and Awards to
14 
showcase the exemplary business achievement, latest innovations, and other
15 
emerging trends in the sector.
16 
Sec. 114. Cooperative Representations to the Relevant Government
17 
Agencies:
18 
(A) Agricultural Credit Policy Council;
19 
(B) Philippine Crop Insurance Corporation;
20 
(C) Land Bank of the Philippines; and
21 
(D)Development Bank of the Philippines
22 
The representation of cooperatives in these government institutions are subject to
23 
the normal process of nomination and appointment of the appointing authority.
24
CHAPTER XVI
AGRARIAN REFORM COOPERATIVES
25
26
27
28
29
30
31
32
Sec. 115. Coverage. - The provisions of this Chapter shall primarily govern 
agrarian reform cooperatives, including Agrarian Reform Beneficiaries (ARBs) 
Cooperative as defined in Department of Agrarian Reform (DAR) Administrative 
Order No. 05, Series of 2009: Provided, That the provisions of the other chapters of 
this Code shall apply suppletorily except insofar as this Chapter otherwise provides.
70


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
Provincial, city and municipal government units acquiring private agricultural lands 
by expropriation or other modes of acquisition to be used for actual, direct and 
exclusive public purposes, such as roads and bridges, public markets, school sites, 
resettlement sites, local government facilities, public parks and barangay plazas or 
squares, consistent with the approved local comprehensive land use plan, shall not 
be subject to the five (5)-hectare retention limit under this Section and Sections 70 
and 73(a) of Republic Act No. 6657, as amended: Moreover, cooperatives acquiring 
private agricultural lands by modes of acquisition to be used for actual, direct and 
exclusive public purposes, such as large scale farming, shall also not be subject to 
the five (5)-hectare retention limit under this Section and Sections 70 and 73(a) of 
Republic Act No. 6657, as amended. Within six (6) months from the effectivity of 
this Act, the DAR shall submit a comprehensive study on the land size appropriate 
for each type of crop to Congress for a possible review of limits of land sizes, 
including provided in this Act.1"
Sec. 116. Purpose. - An agrarian reform cooperative as defined shall be 
organized for any of the following purposes:
(A) To develop an appropriate system of land tenure, land development, land 
consolidation or land management in areas covered by agrarian reform;
(B) To coordinate and facilitate the dissemination of scientific methods of 
production, and provide assistance in the storage, transport, and 
marketing of farm products for agrarian reform beneficiaries and their 
immediate family;
(C) To provide financial facilities to ARBs for provident or productive purposes 
at reasonable costs;
(D) To arrange and facilitate the expeditious transfer of appropriate and 
suitable technology to ARBs and marginal farmers at the lowest possible 
cost;
(E) To provide social security benefits, health, medical and social insurance 
benefits, and other social and economic benefits that promote the general 
welfare of the ARBs and marginal farmers;
RA 9700 (CARP with extension Sec 6A and 6B
71


1 
(F)To provide non-formal education, vocational and technical training, and
2 
livelihood programs to ARBs and marginal farmers;
3 
(G)To act as conduits for external assistance and services to the ARBs and
4 
marginal farmers;
5 
(H)To undertake a comprehensive and integrated development program in
6 
agrarian reform and resettlement areas with special concern for the
7 
development of agri-based, marine-based, and cottage-based industries;
8 
(I) To represent the ARBs on any or all matters that affect their interest; and
9 
(J) To undertake such other economic or social activities as may be necessary
10 
or incidental in the pursuit of the foregoing purposes.
11 
Sec. 117. Cooperative Estate. - Landholdings acquired by the State, like
12 
plantations, estates, or haciendas for the benefit of the workers in accordance with
13 
the Comprehensive Agrarian Reform Program shall be collectively owned by the
14 
worker-beneficiaries under a cooperative set-up.
15 
Sec. 118. Infrastructure. - In agrarian reform and resettlement areas, the
16 
Government shall grant to agrarian reform cooperatives preferential treatment in the
17 
construction, maintenance and management of roads, bridges, canals, wharves,
18 
ports, reservoirs, irrigation systems, waterworks systems, and other infrastructures
19 
with government funding. For this purpose, the Government shall provide technical
20 
assistance, facilities, and equipment to such agrarian reform cooperatives.
21 
Sec. 119. Lease of Public Lands. - The Government may lease public lands
22 
to any agrarian reform cooperative for a period not exceeding twenty-five (25) years,
23 
subject to renewal for another twenty-five (25) years only: Provided, That the
24 
application for renewal shall be made one (1) year before the expiration of the lease:
25 
Provided, further, That such lease shall be for the exclusive use and benefit of the
26 
ARBs and the marginal farmers subject to the provisions of the Comprehensive
27 
Agrarian Reform Program, as amended.
28 
Sec. 120. Preferential Right - In agrarian reform areas, an agrarian reform
29 
cooperative shall have the preferential right in the grant of franchise and certificate
30 
of public convenience and necessity for the operation of public utilities and services:
31 
Provided, That it meets the requirements and conditions imposed by the appropriate
32 
government agency granting the franchise or certificate of public convenience and
72


1 
necessity. In cases where there is an electric service provider in the area, it shall,
2 
upon the request of an agrarian reform cooperative, immediately provide electric
3 
services to the agrarian reform areas. If the electric service provider fails to provide
4 
the services requested within a period of one (1) year, the agrarian reform
5 
cooperative concerned may undertake to provide the electric services in the area
6 
through its own resources. All investments made by the said agrarian reform
7 
cooperative for the electrification of the agrarian reform resettlement areas shall be
8 
the subject of sale to the electric service provider once it takes on the service.
9 
Sec. 121. Special Privileges. - Subject to such reasonable terms and
10 
conditions as the DAR and the Authority may impose, agrarian reform cooperatives
11 
may be given the exclusive right to do any of the following economic activities in
12 
agrarian reform and resettlement areas;
13 
(A) Supply and distribution of consumer, agricultural, aquacultural, and
14 
industrial goods, production inputs, and raw materials and supplies,
15 
machinery, equipment, facilities, and other services and requirements of
16 
the ARBs and marginal farmers at reasonable prices;
17 
(B) Marketing of the products and services of the ARBs in local and foreign
18 
markets;
19 
(C) Processing of the products of the members into finished consumer or
20 
industrial goods for domestic consumption or for export;
21 
(D)Provision of essential public services at cost, such as power, irrigation,
22 
potable water, passenger or cargo transportation by land or sea,
23 
communication services, and public health and medical care services;
24 
(E) Management, conservation, and commercial development of marine,
25 
forestry, mineral, water, and other natural resources subject to
26 
compliance with the laws and regulations on environmental and ecological
27 
controls; and
28 
(F) Provision of financial, technological, and other services and facilities
29 
required by the ARBs in their daily lives and livelihood.
30 
The foregoing notwithstanding, an agrarian reform cooperative cannot, on its own,
31 
by policy or any other means, disqualify a member as an ARB, whether directly or
32 
constructively.
73


1 
The Government shall provide the necessary financial and technical assistance to
2 
agrarian reform cooperatives to enable them to effectively discharge their purposes
3 
under this Chapter. The DAR, the Authority and the BSP shall draw up a joint
4 
program for the organization and financing of agrarian reform cooperatives. The
5 
joint program shall be geared towards the gradual assumption of full ownership and
6 
management control by ARBs of the agrarian reform cooperatives.
7 
Sec. 122. Organization and Registration. - Agrarian reform cooperatives may
8 
be organized and registered in accordance with the requirements of this Code only
9 
upon prior certification by the DAR that said proposed cooperative is needed and
10 
that its organization is feasible and will be economically viable in its operations.
11 
The Authority, in consultation with the concerned government agencies and
12 
cooperative sector, shall issue appropriate rules and regulations pertaining to the
13 
provisions of this Chapter.
14
15 
CHAPTER XVII
16 
COOPERATIVE BANKS
17
18 
Sec. 123. Organization, Registration, and Membership. - The organization
19 
and membership of a Cooperative Bank shall be governed by the following
20 
provisions:
21 
(A) Organization - At least fifteen (15) cooperatives duly established and
22 
registered under this Code 
may register a cooperative 
bank with 
the
23 
Authority.
24 
{JB>) Registration - The application for the registration of the Articles of
25 
Cooperation and By-laws, including its amendments, by a cooperative
26 
bank with the Authority shall be accompanied by a Certificate of Authority
27 
issued by the BSP.
28 
{Q Membership - Membership in a cooperative bank shall be open to:
29 
(1) cooperatives of all types and categories;
30 
(2) foreign cooperatives; and
31 
(3) pre-cooperative organizations established under Presidential Decree
32 
No. 175.
74


1 
Membership in a cooperative bank is either regular or associate. Regular membership
2 
shall be limited to cooperative organizations and a foreign cooperative subject to
3 
60% and 40% shares respectively. Associate members shall be pre-cooperative
4 
organizations established under Presidential Decree No. 175, and other institutions,
5 
such as foreign cooperative institutions that have subscribed to preferred shares
6 
only.
7 
The common shareholdings of a local cooperative shall at all times be at least sixty
8 
per centum (60%) shares of the cooperative bank.
9 
Common shares a foreign cooperative shall not be more than forty per centum
10 
(40%) of the total outstanding shares. Other provisions of this Code shall apply
11 
suppletorily insofar as they are not inconsistent with this Chapter.
12 
Sec. 124. Powers and Functions of Cooperative Banks. - Cooperative banks
13 
shall primarily provide a wide range of financial services to cooperative organizations,
14 
their members, and to the public. A cooperative bank may perform any of the
15 
following banking services:
16 
(A) Extend loans and advances primarily for the purpose of meeting the
17 
normal credit needs of cooperatives as well as farmers, farm workers,
18 
fisherfolks, or their families, merchants, and private and public employees:
19 
Provided, That loans and advances granted to cooperatives shall not be
20 
subject to individual ceilings on loans to directors, officers, stockholders,
21 
and related interests (DOSRI);
22 
(B) Accept savings and time deposits;
23 
(C)Act as a correspondent bank of other financial institutions;
24 
(D)Discount and Rediscount paper with the LBP, DBP or any other bank,
25 
including its branches and agencies. Said banks shall specify the nature of
26 
paper deemed acceptable for rediscounting, as well as the rediscount rate
27 
to be charged by any of these banks;
28 
(E) Act as collection agent;
29 
(F) Act as a depository bank of LGUs and other government agencies or
30 
instrumentalities;
31 
(G)Acquire readily marketable bonds and other debt securities;
32 
(H)Buy and sell foreign exchange;
75


1 
(I) Act as conduit bank for the disbursement of government funds intended
2 
for lending to agriculture, small-medium enterprises (SMEs) and projects
3 
for local economic development;
4 
(J) Eligible to participate in government program allocations for agricultural
5 
lending, social housing, loans to rural micro enterprises and other
6 
initiatives towards inclusive growth;
7 
(K) Offer financial technology services, such as digital lending and payment,
8 
and digital wealth management, among others, subject to prior approval
9 
of the BSP; and
10 
(L) Offer other banking services as provided in Section 53 of Republic Act No.
11 
8791.
12 
In addition to the powers granted to cooperative banks by this Code and other existing
13 
laws, any cooperative bank may perform any or all of the banking services offered by
14 
other types of banks subject to the prior approval of the BSP.
15 
Sec. 125. Establishment of Branches and Other Offices. - The establishment
16 
of branches, branch-lite units, or other banking offices by cooperative banks shall
17 
be governed by the rules and regulations of the BSP. The cooperative bank shall
18 
furnish the Authority with a copy of the Certificate of Authority issued by the BSP.
19 
Sec. 126. Management of Cooperative Banks. - The management of the
20 
cooperative banks shall be governed by the rules and regulations to be promulgated
21 
by the BSP, in consultation with the Authority. To maintain the quality of bank
22 
management and accord appropriate protection to depositors and the public in
23 
general, the BSP shall prescribe the fit and proper qualifications of bank directors
24 
and officers for the purposes of this Article, giving due recognition to the unique
25 
nature and character of cooperative banks. The number, composition, and term of
26 
the Board of Directors shall be defined in the Articles of Cooperation and By-laws of
27 
the cooperative bank, in accordance with the following guidelines:
28 
(A) Board and Committees. - The cooperative bank shall constitute, at a
29 
minimum, the Board of Directors, Election Committee, and Audit
30 
Committee.
31 
The Board of Directors shall be composed of at least five (5) but not more
32 
than fifteen (15) members, at least one (1) of whom is an independent
76


1 
director. It shall be entrusted with the management of the affairs of the
2 
Cooperative Bank. It shall be responsible for the strategic planning,
3 
direction-setting and policy formulation activities of the cooperative bank.
4 
The members of the Board of Directors shall be elected by the General
5 
Assembly or Representative Assembly.
6 
The Election Committee shall be responsible for the formulation and
7 
implementation of election rules and guidelines. It shall supervise the
8 
conduct of election, election-related activities, canvass and certify the
9 
results of the election, and decide cases relative to such election, except
10 
those involving the committee itself or its members. The members of the
11 
Election Committee shall be elected by the General Assembly or
12 
Representative Assembly.
13 
The Audit Committee is a Board-level committee whose composition,
14 
functions and responsibilities shall be in accordance with the existing
15 
regulations of the BSP. Other Board-level committees may be created as
16 
may be directed by the BSP.
17 
Other committees may be created by the Board of Directors with powers,
18 
functions, and responsibilities which shall be defined in the By-laws; and
19 
(B) Key Management Officers. - The key management officers shall be
20 
appointed by the Board and shall include the President, Treasurer, Internal
21 
Auditor, and Compliance Officer, or their equivalent ranks. The BSP shall
22 
prescribe the qualifications and disqualifications of the key management
23 
officers.
24 
Sec. 127. Vacancy in the Committees. - In case of vacancy in the
25 
committees, the Board of Directors of the cooperative bank, unless otherwise
26 
provided in the By-laws, will appoint a person to fill the same, subject to the provision
27 
that the person appointed shall serve only for the unexpired portion of the term.
28 
Sec. 128. Compensation of Directors. - In the absence of any provision in
29 
the By-laws fixing their compensation, the directors shall not receive any
30 
compensation except for reasonable per diems: Provided, however. That the
31 
directors and officers shall not be entitled to any per diem when, in the preceding
32 
calendar year, the cooperative bank reported a net loss or had a dividend rate less
77


1 
than the official inflation rate for the same year. Any compensation other than per
2 
diems may be granted to directors by a majority vote of the members with voting
3 
rights at a regular or special general assembly meeting specifically called for the
4 
purpose: Provided, That no additional compensation other than per diems s\\d\\ be
5 
paid during the first year of existence of the Cooperative Bank.
6 
In no case shall the total yearly compensation of directors exceed ten per centum
7 
(10%) of the net income of the cooperative bank during the preceding year.
8 
Sec. 129. Deaiings of Directors, Officers, Stockhoiders, and Reiated Interests
9 
(DOSRI). - Dealings with directors and officers of the Cooperative Bank shall comply
10 
with the provisions of Section 36 of RA 8791, otherwise known as General Banking
11 
Law (GBL) of 2000. However, the limits on loans to dealings of directors, officers,
12 
stockholders, and related interests shall not apply to loans, other credit
13 
accommodations, or guarantees extended by the cooperative bank to its member
14 
primary cooperatives.
15 
Sec. 130. liiegai Use of Confidentiai Information. - The liability of a director
16 
or officer, or an associate of a director or officer, who, for his/her benefit or
17 
advantage or that of an associate, makes use of confidential information that, if
18 
generally known, might reasonably be expected to adversely affect the operations
19 
and viability of the cooperative bank shall adhere to the provisions of Section 57 of
20 
this Code.
21 
Sec. 131. Bond for Faithfui Performance of Duties and Obligations. - The
22 
bond for the faithful performance of duties and obligations of accountable officers
23 
of the cooperative bank shall adhere to the provisions of Section 64.
24 
Sec. 132. Quorum Requirement and Voting Rights of the Cooperative Bank
25 
Board of Directors. - In meetings of the Board of Directors of the Cooperative Bank,
26 
the same provisions under Section 48 of this Code shall apply.
27 
Sec. 133. Composition of the General Assembly. - The General Assembly
28 
shall be composed of regular members who are entitled to vote under the Articles
29 
of Cooperation and By-laws of the cooperative bank. Provided, That, a cooperative
30 
shall have only one (1) vote regardless of the share capital of such member. The
31 
votes cast by the delegates shall be deemed as votes cast by the members thereof.
78


1 
Sec. 134. Powers of the General Assembly. - The General Assembly shall be
2 
the highest policy-making body of the cooperative bank and shall exercise the same
3 
powers as enumerated in Section 40 of this Code.
4 
Sec. 135. Meetings. - The conduct of meetings of the General Assembly of
5 
cooperative banks shall adhere to the provisions specified in Section 41 of this Code.
6 
Sec. 136. Quorum and Voting System. - The quorum requirement for
7 
General Assembly meetings of cooperative banks, whether special or regular, shall
8 
be one-half (V2) plus one (1) of the number of voting shares of all the members
9 
entitled to vote.
10 
To amend its Articles of Cooperation and by-laws, at least three-fourths (3/4) vote
11 
of all the members with voting rights, present and constituting a quorum shall be
12 
required. All other voting requirements shall be prescribed by the BSP.
13 
The voting rights of the members shall be proportionate to the number of their paid-
14 
up shares.
15 
The cooperative bank may opt to amend its Articles of Cooperation and By-laws
16 
through a referendum, subject to the guidelines to be issued by the Authority.
17 
However, the vote requirement shall still be two-thirds (%) vote of all the members
18 
entitled to vote.
19 
Sec. 137. Investment in Allied Undertakings. - Subject to the requirements
20 
and restrictions as may be imposed by the Monetary Board under its existing rules
21 
and regulations. Cooperative Banks may invest in equities of allied undertakings
22 
which may include, but are not limited to the following:
23 
(A) Banks, financial institutions and non-bank financial intermediaries;
24 
(B) Warehousing and other post-harvest facilities;
25 
(C) Fertilizers, agricultural chemicals, and pesticides distribution;
26 
(D)Farm equipment distribution;
27 
(E) Trucking and transportation of agricultural products;
28 
(F) Marketing of agricultural products;
29 
(G) Leasing;
30 
(H)Automated teller machine (ATM) networks;
31 
(I) Public transportation;
32 
(J) Financial technology; and
79


1 
(K) other undertakings as may be determined by the Monetary Board of the
2 
BSP.
3 
Sec. 138. Limitations on Lending Authority. - Except as the Monetary Board
4 
may otherwise prescribe, the direct indebtedness to Cooperative Banks of any
5 
person, company, corporation, or firm, including the indebtedness of members of a
6 
partnership and association, for money borrowed, shall in no time exceed twenty
7 
five per centum (25%) of unimpaired capital and surplus of the cooperative bank.
8 
However, the direct indebtedness mentioned shall exclude loans secured by
9 
obligations of the BSP; loans fully guaranteed by the Government as to the payment
10 
of principal and interest; loans to the extent covered by the hold-out on, or
11 
assignment of, deposits maintained in the lending cooperative bank and held in the
12 
Philippines; and other loans or credits as the Monetary Board may, from time to
13 
time, specify non-risk assets.
14 
Sec. 139. Capitai Requirement for Cooperative Banks. - A cooperative bank
15 
shall have a minimum paid-up capital in such amount as may be required by the
16 
BSP. The BSP may prescribe rules and regulations on the types of shares a
17 
cooperative bank may issue, including the terms thereof and rights appurtenant
18 
thereto to determine compliance with laws and regulations governing capital and
19 
equity structure of banks. Provided, That Cooperative Banks shall issue par value
20 
shares only.
21 
Sec. 140. Samahang Nayon and Municipai Katipunan ng mga Samahang
22 
Nayon. - Samahang Nayon (SN) and Municipal Katipunan ng mga Samahang Nayon
23 
(MKSN) which held common shares of cooperative banks prior to the effectivity of
24 
RA 9520 shall apply for conversion to cooperatives in order to maintain their status
25 
as regular members of cooperative banks: Provided, That the cooperative banks
26 
shall exert efforts to inform and assist the SN and MKSN to convert within a period
27 
of three (3) years from the effectivity of this Code. Upon failure of the SN and MKSN
28 
to finally convert to a cooperative within said period, the funds held in the name of
29 
such SN and MKSN shall be considered as preferred shares and shall remain as
30 
capital of the cooperative bank.
31 
Sec. 141. Additionai Source of Capitai of the Cooperative Banks. - The funds
32 
or common shares in cooperative banks held in the name of cooperatives whose
80


1 
Certificates of Registration have already been cancelled by the Authority and which
2 
failed to liquidate such funds or shares during its liquidation shall remain as capital
3 
in said cooperative banks and shall be treated as preferred shares.
4 
Sec. 142. Supervision and Reguiation of Cooperative Banks. - All cooperative
5 
banks shall be under the supervision of the BSP: Provided, however, that the
6 
Authority shall monitor the cooperative banks' compliance with cooperative laws,
7 
rules, and regulations. With respect to the governance of the cooperative banks, the
8 
provisions of the banking laws, rules, and regulations shall prevail, notwithstanding
9 
Section 71 of RA 8791.
10 
Sec. 143. Promuigation of Guideiines. - The BSP and the Authority may
11 
formulate guidelines to implement or clarify the provisions of this Chapter. Provided,
12 
That the BSP, as the regulator of banks, shall be the primary regulator of cooperative
13 
banks consistent with the provisions of RA 8791: Provided, further, That in order to
14 
minimize the burden of dually-regulated entities, the BSP shall, in consultation with
15 
the Authority and the cooperative banks, in its promulgation of rules and regulations,
16 
to the extent aiiowed in banking and other relevant laws, and insofar as consistent
17 
with its exercise of supervisory and regulatory powers over banks, in its promulgation
18 
of rules and regulations, consider the requirements of this Code and the Authority
19 
for cooperatives in general.
20 
Sec. 144. Priviieges and Incentives of Cooperative Banks. - Cooperative
21 
banks registered under this Code shall have the following privileges and incentives:
22 
(A)Those privileges and incentives accorded to cooperatives under this Code
23 
and other prior laws including exemption from all national, provincial, city,
24 
municipal or barangay taxes, fees, and charges of whatever nature and
25 
description. Provided, however. That when a cooperative bank has
26 
reached an undivided net savings of more than One Hundred Million Pesos
27 
(P100,000,000.00), transactions to non-members shall be taxable.
28 
(B)The foreclosure of mortgages covering loans granted by cooperative
29 
banks and executions of judgment thereon involving real properties levied
30 
upon by sheriff shall be exempt from the publications in newspapers
31 
where the total amount of loan, excluding interests due and unpaid, does
32 
not exceed One Million Pesos (P1,000,000.00) or such amount as the
81


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
Monetary Board may prescribe as may be warranted by prevailing 
economic conditions. It shall be deemed sufficient publication in such 
cases where the notices of foreclosure and execution of judgment are 
posted in the most conspicuous areas such as the municipal building, the 
municipal public market, the cooperative bank, and the barangay hall 
where the land mortgaged is situated during the period of sixty (60) days 
immediately preceding the public auction or execution of judgment. Proof 
of publication as required herein shall be accomplished via an affidavit of 
the sheriff or officer conducting the foreclosure sale or execution of 
judgment and shall be attached with the records of the case;
(C) A cooperative bank shall be allowed to foreclose lands mortgaged to it 
subject to the provisions of RA 6657, as amended. For agrarian lands 
foreclosed by a cooperative bank, the disposal of the same to another 
qualified beneficiary under RA 6657, as amended, shall be made through 
the same cooperative bank. Further, the amortization of the beneficiary in 
favor of DAR shall be coursed through the servicing cooperative bank: 
Provided, however, that cooperative banks shall be exempt from the 
landholding limits as prescribed by DAR or any other law requiring the 
same;
(D) For cooperative banks granted by the BSP with accreditation as Rural 
Financial Institution (RFI) under RA 10000, the following privileges shall 
be awarded:
(1) Unrestricted branching rights to set-up agriculture-oriented branches 
in unbanked municipalities and predominantly agricultural 
communities, subject to existing regulations on minimum capitalization 
for banks and the size of branch network;
(2) Automatic eligibility with Philippine Guarantee Corporation (with 
respect to agricultural credit guarantee), Philippine Crop Insurance 
Corporation (PCIC), and governmental agencies providing services 
towards risk-mitigation in the agriculture sector;
82


1 
(3) Priority status as credit delivery partner or conduit of government-
2 
directed programs for agricultural through the DA and other
3 
government agencies; and
4 
(4) Entitlement to participate free of charge in capability-building activities
5 
in agriculture lending such as, but not limited to, exchange of best-
6 
practice experiences, study tour, technology transfer among ASEAN
7 
member-states and other fora of international cooperation; and
8 
(E) Notwithstanding the provisions herein, privileges and incentives granted
9 
to rural banks pursuant to RA 7353, otherwise known as the "Rural Act of
10 
1992," shall also be granted to cooperative banks duly registered under
11 
this Act.
12
13 
CHAPTER XVIII
14 
INSURANCE COOPERATIVES
15
16 
Sec. 145. Insurance Cooperative. - Existing cooperatives may organize
17 
themselves into an insurance cooperative for the purpose of engaging in the
18 
business of insuring life, non-life, pre-need (life plan, education, and pension) health,
19 
and property of cooperatives and their members.
20 
Sec. 146. Types of Insurance Provided. - Under the cooperative insurance
21 
program established and formed by the virtue of the provisions of this Code, the
22 
insurance cooperative shall provide its constituting cooperatives and their members
23 
different types of insurance coverage consisting of life insurance with special group
24 
coverage, loan protection, retirement plans, endowment, health and accident
25 
coverage, pre-need plans, fire insurance, marine insurance, motor vehicle coverage,
26 
bonding, crop and livestock protection, and equipment insurance, among others.
27 
Sec. 147. AppiicabiUty of Insurance Laws. - The provisions of the Insurance
28 
Code and all other laws and regulations relative to the organization and operation
29 
of an insurance company shall apply to insurance cooperatives organized under this
30 
Code. The requirements on capitalization, investments and reserves of insurance
31 
firms may be liberally modified upon consultation with the Authority and the
83


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
cooperative sector, but in no case may the requirement be reduced to less than half 
of those provided for under the Insurance Code and other related laws.
Other provisions of this Code shall apply suppletorily insofar as they are not 
inconsistent with this Chapter.
In case of conflict of law, the Insurance Code law shall prevail.
Sec. 148. Implementing Rules for Insurance Cooperatives. — The Insurance 
Commission and the Authority, in consultation with the concerned cooperative 
sector, shall issue the appropriate rules and regulations implementing the provisions 
of this Chapter.
CHAPTER XIX
COOPERATIVES ENGAGED IN PUBLIC SERVICES
Sec. 149. Definition and Coverage. - A cooperative engaged in public 
services refers to one organized to render public services, as authorized under a 
franchise, certificate of public convenience, certificate of public convenience and 
necessity, concession, or any other appropriate form of authorization or permit duly 
issued by the appropriate government agency. Such services may include but is not 
limited to the following:
(A) Health services;
(B) Power generation, transmission, and/or distribution;
(C) Ice plants and cold storage services;
(D) Communication services including telephone and digital communications, 
and other value-added services;
(E) Land, water, and air transportation services for passengers and/or 
cargoes;
(F) Public markets, slaughterhouses, management of land transport terminals 
and ports, and other similar services;
(G) Water supply and distribution system services; and
(H) Such other types of public services as may be engaged in by any 
cooperative.
84


1 
Such cooperatives shall be primarily governed by this Chapter and the general
2 
provisions of this Code insofar as they may be applicable unless they are inconsistent
3 
herewith.
4 
Sec. 150. Registration Requirements. - In addition to the requirements
5 
provided under Section 14 of this Code, no cooperative engaged in public services
6 
shall be registered unless it satisfies the following requirements:
7 
(A) Its Articles of Cooperation and By-laws provide for the membership of the
8 
users and/or producers of the service of such cooperatives; and
9 
(B)Such other requirements as may be imposed by the other pertinent
10 
government agencies concerned.
11 
Sec. 151. Regulation of Cooperatives Engaged in Public Services. - The
12 
internal affairs of cooperatives engaged in public services, such as: i) the rights and
13 
privileges of members; ii) the rules and procedures for meetings of the General
14 
Assembly, Board of Directors and committees; iii) the election and qualifications of
15 
officers, directors, and committee members; iv) allocation and distribution of 
surpluses; and v) all other such matters, shall be governed by this Code.
All matters relating to the franchise, certificate of public convenience, certificate of 
public convenience and necessity, concession, or any other appropriate form of 
authorization or permit of cooperatives engaged in public services such as 
capitalization and investment requirements, equipment and facilities, frequencies, 
rate-fixing and such other matters affecting their public service operations shall be 
governed by the proper government agency concerned.
The Authority together with other concerned government agencies shall jointly issue 
rules and regulations necessary to implement this Chapter.
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
CHAPTER XX
TRANSPORT SERVICE COOPERATIVES
Sec. 152. Definition and Coverage. - This Chapter shall govern transport 
service cooperatives as defined in this Code, including those organized under the 
provisions of Executive Order No. 898, series of 1983 and by vehicle operators defined
85


1 
or provided for under the Public Transport Modernization Program of the Department
2 
of Transportation (DOTr).
3 
Sec. 153. Engagement in Allied Business by Transport Service Cooperatives.
4 
- Subject to pertinent national laws and local ordinances, primary transport service
5 
cooperatives including federations of cooperatives, may engage in a business related
6 
to transportation service, including but not limited to:
7 
(A) Importation, distribution, and marketing of petroleum products in
8 
accordance with existing laws;
9 
(B) Operation of gasoline stations, automotive service centers, and
10 
management of land transport terminals and ports;
11 
(C)Importation, distribution, marketing, and sale of spare parts, automotive
12 
supplies, and accessories;
13 
(D)Marketing of vehicle and drivers insurance policies as an agent or liaison
14 
of a licensed insurance company;
15 
(E) Establishment and operation of fleet management services; and
16 
(F) Automotive maintenance credit facilities for the purpose of extending
17 
loans for the maintenance and repair of public utility vehicles.
18 
(G)Business directly related to the transport sector such as food hubs and
19 
canteens in terminal.
20 
Sec. 154. Registration, Regulation, and Supervision of Transport Service
21 
Cooperatives. - The DOTr-Office of Transport Cooperatives shall have jurisdiction
22 
over accreditation, regulation and supervision of Transport service cooperatives. This
23 
notwithstanding, the relevant regulatory agencies shall have jurisdiction over the
24 
technical operations of such cooperatives as transport service entities.
25 
The Authority shall have jurisdiction over the registration of transport service
26 
cooperatives only in relation to their organization and management including its
27 
compliance with this Act and other relevant laws.
28 
Sec. 155. Renewal of Franchise and Vehicle Registration. - Renewals of
29 
franchise and vehicle registration shall be granted to transportation service
30 
cooperatives: Provided, That such cooperative presents a certificate of good
31 
standing issued by the Authority (or Certificate of Compliance) Office of Transport
86


1 
Cooperatives of the DOTr, and the LGU concerned as proof that it has continuously
2 
provided the required public transportation services.
3 
The Authority, in consultation with the concerned government agencies and
4 
cooperative sector, shall issue appropriate rules and regulations pertaining to the
5 
provisions of this Chapter.
6 
Sec. 156. Oversight Committee. - A multi-sectoral committee on transport
7 
service cooperatives, composed of representatives from the Authority, the DOTr, the
8 
Department of the Interior and Local Government (DILG), the Land Transportation
9 
Franchising and Regulatory Board (LTFRB), the Land Transportation Office (LTO),
10 
other concerned government agencies, as may be necessary, and the federation of
11 
transport service cooperatives, and other stakeholders shall be established and
12 
thereafter be charged with the monitoring, recommendation of policies and
13 
programs affecting the operations of transport service cooperatives, and such other
14 
functions.
15 
A regional monitoring committee shall likewise be established at the regional offices
16 
of the Authority for the same purpose.
17 
The functions of the monitoring committees shall be prescribed in the Implementing
18 
Rules and Regulations to be promulgated by the Authority, in coordination with the
19 
relevant government agencies.
20 
Sec. 157. Vehicie Service Deaier/Provider - All vehicle service providers must
21 
adhere to the provisions of R.A. No. 10642 or the Lemon Law of the Philippines in
22 
terms of repairs, maintenance, and after sales issues of vehicles acquired through the
23 
PUVMP or the Public Transport Modernization Program.
24 
Moreover, the government shall extend subsidies and other incentives for local
25 
manufacturers who will invest in the modernization of public utility vehicles.
26 
The Department of Trade and Industry (DTI), the Department of Transportation
27 
(DOTr), and in consultation with concerned agencies and cooperative sectors, shall
28 
issue appropriate rules and regulations pertaining to the provisions of this chapter.
29 
Sec. 158. Financiai Assistance, Government Subsidy - government financial
30 
assistance provided to drivers/operators who elect to modernize shall not be lower
31 
than twenty percent (20 %) of the price per unit to lighten the capital burden of
32 
modernization. Moreover, the DOTr shall work with the public and private institutions
87


1 
such as cooperative banks, and other financial services cooperatives to name a few,
2 
provide equitable financing for these modernized vehicles.
3 
Sec. 159. Access to data and loan information - Subject to data privacy act,
4 
government financial institutions shall provide the necessary data and information
5 
regarding loan transactions related to PUV modernization program.
6 
Sec. 160. LGU Support for Common Terminals - The Local Government Unit
7 
within the route of the public transportation shall provide a common terminal free of
8 
charge in the first year of operation in order to provide safe, accessible and maximum
9 
service to the commuting public.
10
11 
CHAPTER XXI
12 
CREDIT AND SAVINGS COOPERATIVES AND CREDIT COOPERATIVES
13
14 
Sec. 161. Coverage. - This Chapter shall apply to credit cooperatives and
15 
credit and savings cooperatives, including multi-purpose cooperatives and
16 
federations. The provisions of the other chapters of this Code shall apply suppletorily
17 
except insofar as this Chapter otherwise provides.
18 
Sec. 162. Purposes and Objectives. - Cooperatives engaged solely in credit
19 
or in both credit and savings services, owned and operated by its members, shall
20 
have the following purposes and objectives:
21 
(A)To encourage savings among its members;
22 
(B)To provide loans for productive or provident purposes to its members and
23 
related services to enable its members to maximize the benefit from such
24 
loans;
25 
(C)To promote the cooperatives engaged in credit and credit and savings as
26 
preferred financial institutions among Filipinos; and
27 
(D)To promote the safe, sound, stable, and sustainable operations of
28 
cooperatives engaged in credit and credit and savings by regulating and
29 
supervising their operations and curtailing or preventing any act or
30 
practice which is prejudicial to the interests of their members and the
31 
general public.
88


1 
Sec. 163. Regulation and Supervision of Cooperatives Engaged in Credit and
2 
Credit and Savings. - Pursuant to its powers, functions, and responsibilities under
3 
RA 11364, the Authority shall exercise regulatory powers and supervision over the
4 
operations of the cooperatives engaged in credit, and credit and savings.
5 
The Authority shall, in consultation with the concerned government agencies and
6 
cooperative sector, issue appropriate rules and regulations pertaining to the
7 
provisions of this Chapter.
8
9 
CHAPTER XXII
10 
ELECTRIC COOPERATIVES
11
12 
Sec. 164. Coverage. - The provisions of this Code shall apply to all electric
13 
cooperatives registered with the Authority. This shall also cover new distribution
14 
utilities that will register with the Authority.
15 
Electric cooperatives may undertake power generation utilizing renewable energy
16 
sources, including hybrid systems, acquisition and operation of sub transmission or
17 
distribution as its primary purposes.
18 
Sec. 165. Registration of Electric Cooperatives. - The registration of an
19 
electric cooperative with the Authority under this Code shall be submitted to the
20 
members for approval through a referendum, called for the purpose as provided for
21 
under Articles 165 and 166 of this Code.
22 
Sec. 166. Voting Requirement for Registration. - In compliance with the
23 
referendum as a voting procedure, the required number of votes for registration with
24 
the Authority shall be a majority of all members entitled to vote.
25 
Sec. 167. Documents to be Submitted for Registration with the Authority. -
26 
For purposes of registration, electric cooperatives shall submit the following
27 
documents:
28 
(A) Copy of the Board Resolution certifying to the result of the vote approved
29 
through a referendum approving the registration of the cooperative with
30 
the Authority in compliance with Section 162 of this Code;
31 
(B) Certified copy of the Articles of Incorporation or Cooperation and By-laws
32 
as required by the Authority;
89


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
(C) DuIy audited financial statements for the past two (2) years;
(D) List of names of the incumbent Board of Directors and their addresses 
certified by the Board Secretary and attested by the Chairperson;
(E) Within six (6) months from the registration, the Treasurer shall submit a 
sworn statement of the authorized share capital, the subscribed share 
capital of members, and the amount of paid-up share capital received by 
the Treasurer; and
(F) Bonds of accountable officers.
Sec. 168. Effects of Registration with the Authority. - Upon the effectivity of 
this Code, electric cooperatives that are duly registered with the Authority, and 
issued a Certificate of Registration, shall be covered by the provisions of this Code 
as well as future rules and issuances of the Authority; Provided, that electric 
cooperatives shall remain under the supervisory powers of the NEA, pursuant to 
Presidential Decree (PD) No. 269, as amended, and other existing laws; Provided, 
further, that provisions of this Code consistent with PD No. 269, as amended, shall 
apply suppletorily.
(A) Electric cooperatives registered with the Authority are entitled to 
congressional allocations, grants, subsidiaries and other financial 
assistance for rural electrification which can be coursed through the 
Department of Energy, National Electrification Administration, or local 
government units, as may be appropriate. The electric cooperatives 
registered under this Code can avail of the financial services and technical 
assistance provided by government financial institutions and technical 
development agencies on terms respecting their independence as 
autonomous cooperatives;
(B) All condoned loans, subsidies, grants, and other assistance shall form part 
of the donated capital and funds of the electric cooperatives and, as such, 
it shall not be sold, traded, nor be divided into shareholdings at any time. 
The donated capital/fund shall be valuated for the sole purpose of 
determining the equity participation of the members: Provided, That in 
the case of dissolution of the cooperative, said donated capital shall be 
subject to escheat; and
90


1 
(C) Electric cooperatives registered and confirmed with the Authority under
2 
Repubiic Act No. 6938 and Repubiic Act No. 9520 are hereby deemed
3 
registered under this Code.
4 
Sec. 169. Share Capital in the Electric Cooperatives. - The eiectric
5 
cooperatives registered with the Authority shali issue and distribute share certificates
6 
under the name of each of their members, taking into consideration their previous
7 
equity contributions, the amortization component through the payments made,
8 
capitai buiid-up and other capital contributions.
9 
The NEA shall, within ten (10) days upon final completion of reconciliation of relevant
10 
loan accounts with the electric cooperative concerned, issue a certification on the
11 
aggregate amount of payments made on the principal component of the
12 
amortizations, as the basis for the issuance of equity share certificates by the electric
13 
cooperatives to its Member-Customer-Owners (MCOs) on record.
14 
The ERC shall, within forty-five (45) days from the close of each fiscal year, issue a
15 
certificate to the electric cooperative concerned on the total amount collected for
16 
capital contributions from the MCOs for such period, for which equity share
17 
certificate will be issued.
18 
No share capital certificate shall be issued to a subscriber until the full amount of
19 
his/her subscription together with interest and expenses, if any is due, has been
20 
paid. The distribution of share capital certificates shall be done annually preferably
21 
during the General Assembly meeting.
22 
In case of loss or destruction, the electric cooperative may issue a duplicate
23 
certificate, if such certificate is proven to have been lost, destroyed, defaced,
24 
mutilated, torn or is surrendered to the electric cooperative upon execution and
25 
submission by a member of an Affidavit of Loss or such other documents evidencing
26 
defacement/mutilation or surrender of such share capital certificate.
27 
Sec. 170. Registration Options of Electric Cooperatives. - Electric
28 
Cooperatives registered with the National Electrification Administration (NEA) under
29 
Presidential Decree No. 269, as amended, which opt not to register with the
30 
Authority are allowed to retain the word "cooperative" in their registered names:
31 
Provided, that they shall not be entitled to the benefits and privileges under this
32 
Code.
91


1 
Sec. 171. Role of the Energy Regulatory Commission. - All rates and tariffs
2 
of electric cooperatives registered under the Authority shall be subject to the rules
3 
on application and approval of and by the Energy Regulatory Commission (ERC) for
4 
distribution utilities.
5 
Sec. 172. Cancellation of Registration with the Authority. - The cancellation
6 
of the registration of an electric cooperative shall be granted by the Authority as
7 
provided under Chapter XI of this Code.
8 
The Authority, in consultation with the concerned cooperative sector, shall issue
9 
appropriate rules and regulations pertaining to the provisions of this Chapter.
10
11 
CHAPTER XXIII
12 
FOREIGN PARTNERSHIPS
13
14 
Sec. 173. Membership of Foreign Cooperatives in Federations. - Foreign
15 
cooperatives may invest, partner with, or become members of federations: Provided,
16 
that they are recognized by international coalitions of cooperatives or by the relevant
17 
authority in the country of origin, as well as registered with the Authority; Provided,
18 
further, That they comply with all relevant laws allowing them to do business in the
19 
Philippines: The details of their investment, participation, or membership shall be
20 
left to the discretion of the local federation. Further details shall be laid down in the
21 
Implementing Rules and Regulations of this Code, in consultation with the
22 
cooperative sector.
23 
Provided, finally. That their engagement with the local cooperatives shall be subject
24 
to an agreement which shall be submitted for the approval of the Authority, pursuant
25 
to its implementing rules.
26 
Foreign cooperatives that shall transact with local federations must comply with
27 
Philippine taxation laws, the Anti-Money Laundering Act, and other pertinent laws,
28 
classified under the Philippines' foreign investment negative list for foreign equity
29 
restrictions under the Philippine Constitution and specific laws, and shall be under the
30 
regulation of the pertinent agencies for the duration of their engagement with the
31 
federations. Foreign cooperatives shall not interfere, directly or indirectly, in the
92


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
management and internal affairs of the federations in accordance with the generally 
accepted cooperative principles of independence and autonomy, notwithstanding that 
local cooperatives shall be one hundred percent (100%) wholly owned and controlled 
by Filipinos.
Sec. 174. Limitations. - The equity or share capital of the foreign cooperative 
shall not exceed forty per centum (40%) of the total equity or subscribed share 
capital of the partnership or federation, as the case may be.
CHAPTER XXIV
MISCELLANEOUS PROVISIONS
Sec. 175. Compliance With Other Laws. - All cooperatives duly registered 
under this Code shall, at all times, be subject to all relevant laws, rules and 
regulations, as well as issuances and directives issued by a duly authorized 
government regulatory body in exercise of its jurisdiction.
This notwithstanding, cooperatives that are registered or applying for specific 
licenses with other regulatory agencies must comply with the governance 
requirements of said agency to operate or function as such.
Sec. 176. Registry of Cooperatives. - The Authority shall keep a registry 
which shall contain a chronological entry of the name of every cooperative 
registered, suspended, dissolved, or cancelled under this Code together with other 
relevant information. The Authority shall publish and post on its website a list of 
existing cooperatives, cooperatives under dissolution or suspension, and those 
whose registration have been cancelled, together with other relevant information, 
as may be prescribed in the Implementing Rules and Regulations of this Code.
Sec. 177. Settlement of Disputes, Conciliation, Mediation, and Arbitration 
Proceedings. - Disputes among members, officers, directors, and committee 
members, and intra-cooperative, inter-cooperative, intra-federation or inter­
federation disputes shall, as far as practicable, be settled amicably in accordance 
with the conciliation or mediation mechanisms embodied in the By-laws of 
cooperatives and in such other applicable laws.
93


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
The Conciliation-Mediation Committee of the cooperative shall facilitate the amicable 
settlement of intra-cooperative disputes or disputes among members, officers, 
directors, and committee members.
Should such conciliation or mediation proceeding fail, the party may settle the 
dispute through arbitration or adjudication: Provided, however, That before any 
party can validly file a complaint with the Authority for voluntary arbitration or 
adjudication, it must first secure a certification from its Conciliation-Mediation 
Committee and from the cooperative union or federation to which it is affiliated that 
despite all efforts to settle the issues, the conciliation-mediation proceeding failed. 
Once the arbitrators or the appropriate adjudication division acquires jurisdiction 
over the case, it shall have exclusive jurisdiction. The decision of the arbitrator shall 
be final and executory. For this purpose, the Authority shall create a database of 
qualified arbitrators which shall also be posted in its official website 
Decisions rendered by the Authority in the exercise of its adjudicatory powers shall 
be appealable to the Court of Appeals in accordance with the applicable rules.
In case of election-related issues, the aggrieved party may elevate the case for 
adjudication to the proper regional office of the Authority in accordance with the 
CDA Omnibus Rules of Procedure without undergoing alternative dispute resolution. 
Settlement of disputes of electric cooperatives shall be governed by the provisions 
of PD No. 269, as amended, and other applicable laws.
Sec. 178. Joint Congressionai Oversight Committee on Cooperatives 
(JCOCQ. - There is hereby created a Joint Congressional Oversight Committee 
composed of the Chairperson of the Senate Committee on Cooperatives and the 
Chairperson of the House Committee on Cooperatives Development, with four (4) 
members each from both Houses. The said members shall be duly appointed by the 
Senate President and the Speaker of the House of Representatives from the 
members of the respective committee.
Sec. 179. Issuance of Injunctive Relief on the Authority. - Only the Court of 
Appeals or Supreme Court may issue a restraining order or injunction enjoining the 
Authority from examining and investigating cooperatives subject to its supervision 
or examination.
94


1 
CHAPTER XXV
2 
FINAL PROVISIONS
3
4 
Sec. 180. Pena! Provisions. - The following acts or omissions affecting
5 
cooperatives are hereby prohibited:
6 
(A)The use of the word "cooperative" shall not be allowed unless authorized
7 
under this Code. However, organizations registered with other
8 
government agencies are allowed to retain the word "cooperative" in their
9 
registered names, Provided, Thatt\\ese organizations shall not be entitled
10 
to the benefits and privileges under this Code.
11 
In case of violation, the penalty of imprisonment of not less than two (2)
12 
years nor more than five (5) years and a fine not exceeding Two hundred
13 
thousand pesos (P200,000.00) or both at the discretion of the court, shall
14 
be imposed, upon conviction, on the individual or, in the case of an
15 
organization, its officers and directors.
16 
The Authority may, motu proprio, file complaints for violation of this provision.
17 
(B)Any person who willfully attempts in any manner to evade or defeat tax
18 
in violation of Articles 68 and 69 of this Code shall, in addition to the
19 
payment of double the amount of the tax due, be punished by a fine of
20 
not less than Five hundred thousand pesos (P500,000.00) but not more
21 
than Ten million pesos (P10,000,000.00) and suffer imprisonment of not
22 
less than six (6) years but not more than ten (10) years: Provided, That
23 
the conviction or acquittal obtained under this Section shall not be a bar
24 
to the filing of a civil suit for the collection of taxes;
25 
(C) Direct or indirect violation or circumvention of the provisions of Sections
26 
68 and 69 of this Code committed by any public official or employee of
27 
any bureau, office or agency of the government that deprives, diminishes
28 
or in any manner hinders or restricts any duly registered cooperative from
29 
the full enjoyment of the exemption from the payment of the taxes, fees
30 
and charges enumerated therein, shall upon conviction, suffer a penalty
31 
of not less than seven (7) years but not more than twelve (12) years
32 
imprisonment or a fine in the amount of not less than Five hundred
95


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
thousand pesos (P500/000.00) but not more than One million pesos 
(PI,000,000.00) or both at the discretion of the court and shall further be 
disqualified to hold any other office;
(D) Direct or indirect interference or intervention by any public official or 
employee in the internal affairs of a cooperative of which he is not a 
member, such as, but not limited to, the following:
(1) Influencing the election or appointment of officers, directors, 
committee members and employees through public or private 
endorsement or campaign for or against any person or group of 
persons;
(2) Requiring prior clearance for any policy or decision within the 
cooperative;
(3) Requesting or demanding for the creation of positions or organizational 
units, or recommending any person for appointment, transfer, or 
removal from his/her position; or
(4) Any other acts inimical or adverse to the autonomy and independence 
of cooperatives.
(E) A director, officer or committee member who violated the provisions of 
Section 53 on the Liability of Directors, Officers and Committee Members, 
Section 56 on the Disloyalty of a Director, and Section 57 on the Illegal 
Use of Confidential Information shall upon conviction suffer a fine of not 
less than Five hundred thousand pesos (P500,000.00) nor more than One 
million pesos (P1,000,000.00) or imprisonment of not less than five (5) 
years but not more than ten (10) years or both at the court's discretion;
(F) The following are considered offenses punishable by a penalty of 
imprisonment of not less than one (1) year nor more than five (5) years 
or a fine of not more than One hundred thousand pesos (P100,000.00) or 
both at the discretion of the court:
(1) Omission or refusal to furnish any information, report or other 
document that is required under this Code;
96


1 
(2) Providing information, reports or other documents to the Authority that
2 
are required under this Code which the person knows to be false or
3 
misleading;
4 
(3) Omission or refusal to keep a book or registry under this Code or to
5 
make the required entry therein;
6 
(4) Making an entry required under this Code in a book or registry, which
7 
the person knows to be false or misleading;
8 
(5) Hindering an authorized person from making an inspection, audit,
9 
examination or investigation required under this Code;
10 
(6) Failure to comply with an order or written instructions issued or given
11 
by the Authority;
12 
(7) Violation of the provisions regarding transactions with a restricted
13 
party; and
14 
(8) Abetting, counseling, allowing, authorizing or commanding another
15 
person to commit an offense punishable by this Code: Provided, That
16 
in case the violator is a cooperative or juridical person, the penalty
17 
shall be imposed on its directors and officers.
18 
(G)Any violation of any provision of this Code for which no penalty is imposed
19 
shall be punished by imprisonment of not less than six (6) months nor
20 
more than one (1) year and a fine of not less than Ten thousand pesos
21 
(PIO,000.00), or both at the discretion of the court.
22 
The cooperative or any of its members can file a case against any officer
23 
or employee of the BIR or of any other government agency with the
24 
Ombudsman, the Civil Service Commission, other appropriate government
25 
agency or the courts of law.
26 
In case of violation of any provision of this Code, the individual or individuals, and
27 
in the case of organizations or government agencies, its officers, and directors shall,
28 
upon conviction by a Court, each suffer a penalty of not less than two (2) years but
29 
not more than five (5) years imprisonment or a fine in the amount of not less than
30 
Fifty thousand pesos (P50,000.00), or both at the discretion of the court. In the case
31 
of a public official or employee, the offender shall upon conviction, suffer the
32 
accessory penalty of temporary absolute disqualification.
97


1 
Sec. 181. Administrative Sanctions. - The Authority shall conduct
2 
investigations, file necessary charges, discipline, suspend or remove erring officers
3 
and members of the cooperative for violation of cooperative laws, rules, regulations,
4 
issuances of the Authority, the Articles of Cooperation, and By-laws, after due
5 
process, and direct the General Assembly to replace the suspended or removed
6 
officers.
7 
Any violations on the procedures of the rules on adjudication shall likewise be
8 
penalized under this Article. Such administrative sanctions shall be implemented in
9 
accordance with the rules and regulations to be promulgated by the Authority.
10 
Sec. 182. Interpretation - any doubt in the interpretation of any provision in
11 
this Act shall be liberally interpreted in favor of the cooperatives and its members.
12 
Sec. 183. Ipso-Facto Ciause. - Unless otherwise provided by law,
13 
cooperatives are entitled to the privileges, benefits, and exemptions granted by RA
14 
7160, and other existing laws.
15 
Sec. 184. Transitory Provisions. -
16 
(A) All cooperatives registered with the Authority under RA 6938, as amended
17 
by RA 9520, are hereby deemed registered under this Code;
18 
(B) Registration of electric cooperatives with the Authority shall not be
19 
considered as a transfer of ownership of its assets and liabilities nor
20 
shall it constitute a change in the nature, structure, and status
21 
of the cooperative. Said registration shall not result in the
22 
revocation of the condoned loans under RA 9136, otherwise
23 
known as the "Eiectric Power Industry Reform Act of 
2001, '1
24 
Provided, That electric cooperatives with existing loans shall 
not 
be
25 
subject to the control and supervision of its creditors and 
shall
26 
only be limited to the fulfillment of each civil obligations;
27 
(C)The authority granted to non-cooperatives as Training Service
28 
Providers shall continue to be effective and can be renewed upon
29 
expiration.
30 
Sec. 185. Printing and Distribution. - The National Printing Office shall
31 
publish this Code in the Official Gazette in full within sixty (60) days from the date
32 
of approval thereof. Copies of this Code shall be given to every department, agency.
98


1 
and instrumentality of the National Government, including regional, provincial
2 
offices, and local governments including government-owned and controlled
3 
corporations.
4 
Sec. 186. Implementing Rules and Regulations. - Within ninety (90) days
5 
from the effectivity of this Act, the Authority shall promulgate rules and regulation
6 
to implement the provisions of this Act. Within the same period, the particular
7 
government agencies expressly designated under specific provisions in this Code,
8 
after prior consultation with the cooperative sector, shall also issue the regulations
9 
called for by such respective provisions.
10 
Sec. 187. Appropriations. - The amount necessary to carry out the provisions
11 
of this Code shall be included in the annual General Appropriations Act.
12 
Sec. 188. Separability Clause. - If any part of this Code is declared
13 
unconstitutional, the remaining parts or provisions shall remain in full force and effect.
14 
Sec. 189. Repealing Clause. - Except as expressly provided by this Code, RA
15 
6938, RA 9520, and all other laws, or parts thereof, inconsistent with any provision
16 
of this Code shall be deemed repealed: Provided, That the provisions of Revenue
17 
Regulation No. 20-2001, and all laws, decrees, executive orders, implementing rules
18 
and regulations, BIR circulars, CDA memorandum circulars, memorandum orders,
19 
letters of instruction, local government ordinances, or parts thereof inconsistent with
20 
any of the provisions of this Act are hereby repealed, amended or modified
21 
accordingly; Provided, further, nothing in this Code shall eliminate, diminish, or
22 
reduce the powers, functions, authority, and responsibilities of the NEA over electric
23 
cooperatives under PD No. 269, as amended, and other existing laws. Provided,
24 
finally, that nothing in this Act shall be construed or interpreted as diminishing the
25 
jurisdiction of the Philippine Competition Commission under the PCA to conduct
26 
inquiry, investigate, and hear and decide on cases involving any violation of the PCA
27 
and other existing competition laws motu proprio or upon receipt of a verified
28 
complaint from an interested party or upon referral by the concerned regulatory
29 
agency.
30 
Sec. 190. Effectivity Clause. - This Code shall take effect fifteen (15) days
31 
after its publication in the Official Gazette or in a newspaper of general circulation.
Approved,
99