. 'iS’/fiCP of 1 
:
TWENTIETH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
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SENATE
622
25 JUL15 Pl:36
RKCEIV-D 3
S. B. No.
Introduced by SEN. WIN GATCHALIAN
AN ACT PROVIDING FOR THE 
REVISED COOPERATIVE CODE OF THE PHILIPPINES
EXPLANATORY NOTE
Cooperatives play a vital role in our economy as they help their members become 
productive citizens, which redound to the overall progress of our country. No less than 
the 1987 Philippine Constitution has recognized the role of cooperatives in nation building 
when it mandated the Congress to "create an agency to promote the viability and growth 
of cooperatives as instruments for social justice and economic development." This has 
been further affirmed when the Congress enacted Republic Act (RA) No. 6938, otherwise 
known as the "Cooperative Code of the Philippines", as amended by RA No. 9520 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."
Cooperatives help build a better world by providing an inclusive model of economic 
participation which fosters social cohesion and helps reduce inequalities. In the 
Philippines, cooperatives have been helpful in empowering and uplifting the lives of 
people from different segments of the society, including those from the informal sector, 
who do not have the documentary requirements and financial capacity to access funding 
from banking institutions. In 2023, there arei20,752 registered cooperatives under the


Cooperative Development Authority, and this number continuously increase over the 
years.
This bill seeks to amend the existing Cooperative Code, as amended, to address 
the various issues being faced by cooperatives and their members that hamper their 
growth and development as well as to encourage the creation of new cooperatives and 
foster the spirit of cooperativism in order to achieve the state's goal of fostering financial 
inclusion and economic growth especially for the less marginalized sector.
In view of the foregoing, urgent approval of this measure is^rnestly sought.
TCHALIAI


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TWENTIETH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
c'ffi.v cf [
25 JUL 15 PI 36
SENATE 
S.B. NO.
RtXEr>,f£0 2V
Introduced by Senator Win Gatchalian
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 1. GENERAL PROVISIONS
SECTION 1. Title. - 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
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conducive to the growth and development of these cooperatives.
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Towards this end, the State shall, through the different branches,
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subdivisions, instrumentalities, and agencies of the government, regulate the
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conduct of cooperatives and support their growth and development in partnership
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with the private sector. The State shall also ensure the provision of technical and


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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.
Further, the State recognizes the principle of subsidiarity under which the 
cooperative sector initiates and fosters, within their own ranks, cooperative 
promotion, organization, training, information gathering, audit, and support services, 
with government assistance if necessary.
SEC. 3. Cooperative, Principles and Values. -
(a) A cooperative is an autonomous and duly registered association of persons with 
a common bond of interest who have voluntarily joined together to achieve 
their social, economic, and cultural needs and aspirations by making equitable 
contributions to the capital required, patronizing their products and services, 
and accepting a fair share of the risks and benefits of the undertaking in 
accordance with universally accepted cooperative principles;
(b) Cooperative principies - Every cooperative shall conduct its affairs in 
accordance with Filipino culture, good values and experience, and the following 
universally accepted principles of cooperation:
(1) Voiuntary and Open Membership - Cooperatives are voluntary organizations, 
open to all persons able to use their services and willing to accept the 
responsibilities of membership, without gender, social, racial, cultural, 
political or religious discrimination.
{1) Democratic Member Control - Cooperatives are democratic organizations 
that are controlled by their members who actively participate in setting their


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policies and making decisions. Men and women serving as elected
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representatives, directors or officers are accountable to the membership. In
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primary cooperatives, members have equal voting rights of one member,
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one vote. Cooperatives at other levels are organized in the same democratic
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manner.
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(3) Member Economic Participation - Members contribute equitably to, and
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democratically control, the capital of their cooperative. At least part of that
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capital is the common property of the cooperative. They shall receive limited
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compensation or limited interest, if any, on capital subscribed and paid as a
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condition of membership. Members allocate surpluses for any or all of the
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following purposes: developing the cooperative by setting up reserves, part
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of which should at least be indivisible; benefitting members in proportion to
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their patronage of the cooperative's business; and, supporting other
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activities approved by the membership.
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{A) Autonomy and Independence - Cooperatives are autonomous, self-help
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organizations controlled by their members. If they enter into agreements
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with other organizations, including government, or raise capital from
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external sources, they shall do so on terms that ensure democratic control
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of their members and maintain their cooperative autonomy.
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(5) Education, Training, and Information - Cooperatives shall provide education
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and training for their members, elected and appointed representatives,
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managers, and employees, so that they can contribute effectively and
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efficiently to the development of their cooperatives.


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(6) Cooperation Among Cooperatives - Cooperatives serve their members most
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effectively and strengthen the cooperative movement by working together
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through local, national, regional and international structures.
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(7) Concern for Community - Cooperatives work for the sustainable
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development of their communities through policies approved by their
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members.
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(c) Cooperative Vaiues- Cooperatives are based on the values of self-help, self-
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responsibility, democracy, equality, equity, and solidarity. Cooperative
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members believe in the ethical values of honesty, openness, social
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responsibility and caring for others.
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SEC. 4. Definition of Terms. - As used in this Act:
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(a) Area of Operation refers to the place where the cooperative operates and
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conducts its business, as provided for in its Articles of Cooperation and By-
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laws;
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(b) Articles of Cooperation refers to the document registered with the Cooperative
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Development Authority, including its amendments, that defines and regulates
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the relations between the cooperative and the State;
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(c) Authority refers to the Cooperative Development Authority;
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(d) Board of Directors refers to the collegial body responsible for the strategic
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planning, direction-setting, and policy-formulation activities of the cooperative;
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(e) Branch-iite unit refers to a cooperative bank that performs limited banking
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activities and records its transactions in the books of the head office or the
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branch to which it is annexed;


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(f) By-laws refers to the document registered with the Authority, including its
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amendments, that defines and regulates the operations of the cooperative and
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governs the relations between the cooperative and its members and among
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themselves;
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(g) Clustering refers to the grouping together of cooperatives under finance,
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marketing, public utilities, education and advocacy, agriculture, and human
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services;
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(h) Committees refer to the mandatory committees under this Code entrusted with
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specific functions and responsibilities and such other committees that the Board
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of Directors deem necessary for the governance of the business affairs of the
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cooperative;
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(i) Compensation refers to a broad term that include remuneration given for
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services rendered, like salary which is paid regularly, or is defined under Art.
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97 of the Labor Code of the Philippines;
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(j) Cooperative Union refers to a cooperative whose members are registered
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cooperatives, federations, or both, organized purposely to represent the
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interest and welfare of all types of cooperatives at the city, provincial, regional,
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national, and sectoral levels;
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(k) Federation of Cooperatives refers to an aggrupation of cooperatives registered
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with the Authority to undertake business activities in support of its primary and
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secondary member cooperatives to address common needs, engage in
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capacity-building activities and delegated supervision in support of its member
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cooperatives, organized at the municipal, city, provincial, regional, national,
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special metropolitan political subdivision, or economic zones created by law;


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(I) General Assembly refers to the full membership of the cooperative duly
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assembled physically, via videoconferencing, or both, for the purpose of
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exercising ail the rights and performing aii the obligations pertaining to
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cooperatives, as provided by this Code, its Articles of Cooperation, and By-
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laws;
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(m) Honorarium refers to the token of appreciation granted for the expert service
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rendered in the specific field that does not receive compensation;
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(n) Investment refers to equity participation in any enterprise formed, organized
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or existing under the laws of the Philippines;
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(o) Interest on Share Capital refers to the amount earned by the members on their
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investment in the cooperative. The interest on share capitai and the patronage
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refund shall be determined at the end of the caiendar year after the net surplus
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shall have been computed in accordance with the Articles of Cooperation and
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By-laws or by the Board of Directors;
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(p) Laboratory Cooperative refers to a cooperative affiiiated with and registered by
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a primary cooperative, and whose membership consists of minors;
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(q) Member xe^exs to a person either natural or juridical, who has been approved
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and admitted by the Board of Directors of the cooperative, federation, or union,
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after undergoing the Pre-Membership Education Seminar and has vowed to
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adhere to the Articles of Cooperation and its By-laws. Members shall be
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classified as regular or associate, as quaiified by the cooperative;
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(r) Member Entitled to Vote refers to a regular member who has complied with all
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the requirements of the cooperative, has fulfilied all of their duties and
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obligations, and possess es none disqualifications as provided by the Articles


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of Cooperation and By-laws of the cooperative, as declared by the Board of
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Directors;
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(s) Patronage Refund refers to the payment to the members of a percentage or
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portion of the amount availed of, the interest on loans paid, or other services
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availed from the cooperative. The amount will be determined at the end of the
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fiscal period after the computation of the net surplus. The percentage of the
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allocation will be in accordance with the provisions in its Articles of Cooperation,
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the By-laws, or by the Board of Directors. The formula and basis for the
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computation of the rate of patronage refund will be determined by the
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Authority.
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(t) Per diem refers to the allowance given as reimbursement for extra expenses
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incurred in the performance of their duties
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(u) Performance Audit refers to an audit conducted by the Authority on the
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efficiency, efficacy, and effectiveness of the cooperative's overall performance
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as a whole, its management and officers, and its various responsibility centers
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as basis for improving individual, team, or overall performance, and for
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objectively informing the general membership of the cooperative on such
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performance;
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(v) Primary Cooperative refers to a cooperative, registered with the Authority, the
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members of which are natural persons;
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(w) Registration refers to the operative act granting juridical personality to a
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proposed cooperative and is evidenced by a Certificate of Registration;
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(x) Representative Assembly refers to the full membership of a body of
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representatives elected by each of the sectors, chapters, or districts of the


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cooperative duly assembled for the purpose of exercising such powers in
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accordance with its By-laws;
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(y) Reserved Fund refers to an account by the cooperative which is set aside to
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cover unexpected losses, or financial obligations. For purposes of this Act, the
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said fund can be used as stated in Section 98 of this Act.
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(z) Samahang Nayon and Municipal Katipunan ng mga Samahang Nayon refers to
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pre-cooperative organizations established under Presidential Decree (PD) No.
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175 entitled "Strengthening the Cooperative Movement";
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(aa) Secondary Cooperative refers to a cooperative, the members of which are
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primary cooperatives, federations, or unions;
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(bb) Single-Purpose Cooperative refers to a cooperative that undertakes only one
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economic activity, except one that is allowed to undertake allied economic
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activities;
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(cc) Share Capital refers to the equitable contribution of a member to the
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cooperative fund, the working capital fund of the cooperative, which shall have a
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par value of at least One Hundred Pesos (PIOO.OO) and issued as common or
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preferred shares depending on the type of membership with the cooperative;
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(dd) Social Audit refers to an audit conducted to assess the social impact of the
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cooperative and its ethical performance vis-a-vis its stated mission, vision, goals,
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and code of social responsibility. It is a mechanism whereby it can account for the
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social performance of a cooperative and evaluate its impact on the community,
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making the cooperative accountable for its decisions and actions to its members;
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(ee) Subscription Agreement refers to the document executed by a member to
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signify the amount that the member intends to contribute to the cooperative fund;


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(ff) Subsidiary Cooperative refers to a cooperative, all or majority of whose
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members or sharehoiders come from a parent cooperative, organized for any other
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purpose different from that of, and receives technicai, manageriai, and financial
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assistance from the latter, in accordance with the rules and regulations of the
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Authority;
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(gg) Video Conferencing- refers to a conference between two (2) or more
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participants at different physical location by using computer networks, to transmit
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audio and video data; and
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(hh) Worker Beneficiary refers to a natural person who renders service for value
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as an employee or laborer in an agricultural enterprise or farm within an agrarian
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reform cooperative.
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CHAPTER II. PURPOSES AND ORGANIZATION
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SEC. 5. Goals and Objectives of a Cooperative. - The primary objective
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of every cooperative is to help improve the quality of life of its members. Towards
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this end, the cooperative shall, among others, aim to:
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(a) Increase income, savings, investments, productivity, and purchasing power of
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its members; and promote among themselves equitable distribution of net
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surplus through maximum utilization of economies of scale, cost sharing and
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risk-sharing;
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(b) Provide optimum social and economic benefits to its members;
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(c) Providing trainings for its members on the efficient ways of processing tasks in
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a cooperative manner;
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(d) Propagate best practices, innovative ideas in business undertakings and
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management through the utilization of new technologies;


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(e) Empower the marginalized sector to gain opportunities through education and
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skills training;
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(f) Actively collaborate with the government, other cooperatives, and people-
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oriented organizations to promote cooperatives as a practical means towards
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sustainable socio-economic development;
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(g) Adopt membership expansion mechanism to ensure the growth of the
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cooperative movement;
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(h) Implement policy guidelines that will ensure transparency, accountability, and
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equitable access to its resources and services; and promote the interests of the
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members;
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(i) Advance the competitiveness, innovativeness, and sustainability of
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cooperatives in various industries;
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(j) Coordinate with other cooperatives through learning and information exchange
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to foster sustainable development;
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(k) Advocate legal framework and enabling policies appropriate for the
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development of cooperatives;
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(I) Be the voice and the institution of the marginalized for purposes of promoting
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ecological and people-centered development;
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(m) Encourage thrift and savings mobilization among the members;
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(n) Generate funds and extend credit to the members for productive and provident
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purposes;
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(o) Encourage among members systematic production and marketing;
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(p) Provide goods and services and other requirements to the members;
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(q) Develop expertise and skills among its members;
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(r) Acquire lands and provide housing benefits for the members;
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(s) Provide insurance programs to cover the risk of finandai losses in the
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operations of a cooperative;
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(t) Promote and advance the economic, social, and educational status of the
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members;
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(u) Establish, own, lease, or operate cooperative banks, cooperative wholesale and
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retail complexes, insurance, agricultural and industrial processing enterprises,
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and public markets;
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(v) Coordinate and facilitate the activities of cooperatives;
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(w) Advocate for the cause of the cooperative movement;
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(x) Ensure the viability of cooperatives through the utilization of new technologies;
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(y) Encourage and promote self-help or self-employment as an engine for
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economic growth and poverty alleviation;
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(z) Adopt such other plans which may help foster the welfare of the members,
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their families, and the community; and
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(aa) Undertake any activity stated in the Articles of Cooperation and By-laws of
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the cooperative.
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SEC. 6. Cooperatives Not in Restraint of Trade. - No cooperative or
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method or act thereof which complies with this Code shall be deemed a conspiracy
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or combination in restraint of trade or an illegal monopoly, or an attempt to lessen
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competition or fix prices arbitrarily in violation of any laws of the Philippines.
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This notwithstanding, fair competition between cooperatives is paramount in
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their collective growth. Cooperatives shall support and foster a level playing field in
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their industries. Accordingly, Sections 6, 7, 21 and 111 of this Code shall be in
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consonance with Republic Act (RA) No. 10667, otherwise known as the "Philippine
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Competition Act."
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SEC. 7. Cooperative Powers and Capacities. - A cooperative registered
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under this Code shall have the following powers, rights and capacities:
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(a)To the exclusive use of its registered name;
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(b)To sue and be sued;
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(c) Of succession;
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(d)To amend its Articles of Cooperation in accordance with the provisions of this
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Code;
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(e)To adopt By-laws not contrary to law, morals, or public policy, and amend or
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repeal the same in accordance with this Code;
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(f) To purchase, receive, take or grant, hold, convey, sell, lease, pledge, mortgage,
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or otherwise deal with such real and personal property as the transaction of
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the lawful affairs of the cooperative may reasonably and necessarily require,
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subject to the limitations prescribed by law and the Constitution;
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(g) To enter into joint venture agreement and partnership, or any other commercial
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activity with other cooperatives;
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(h)To enter into division, merger or consolidation, as provided 
in this Code;
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(i) To form subsidiary cooperatives and join federations, unions, or Credit Surety
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Fund Cooperatives, as provided in this Code;
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(j) To avail of loans, be entitled to credit, and accept and receive grants,
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donations, and assistance from foreign and domestic sources, subject to the
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conditions of the loans, credits, grants, donations or assistance that must not
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undermine the autonomy of the cooperative;
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(k) To avail of preferential rights granted to cooperatives under RA 7160, otherwise
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known as the "Local Government Code of 1991," and other laws, particularly
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the grant of franchises to establish, construct, operate and maintain ferries,
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wharves, markets or slaughterhouses and lease public utilities, including access
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to extension and on-site research services and facilities related to agriculture
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and fishery activities;
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(I) To establish, own, and operate schools in all levels of the education system,
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subject to the rules and regulations of the Department of Education,
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Commission on Higher Education, and Technical Education and Skills
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Development Authority;
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(m) To operate branch, satellite, and liaison offices within its area of operation,
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subject to the rules and regulation by the Authority. The Authority and the
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sector shall issue rules regarding the creation and operation of branch, satellite,
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and liaison offices of cooperatives;
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(n) To provide training for their officers and members for continued
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development and personal improvement. If a cooperative is unable to
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provide training for its members, it may engage the services of a federation
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or union. Government agencies and experts from the private sector are
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authorized to assist in the organization, training, and development of a
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cooperative and its members if the cooperative wishes to do so. In this
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regard, cooperatives and other institutions shall be accredited as training
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service providers by the Authority; and
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(o)To exercise such other powers granted in this Code as shall be necessary to
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carry out its purposes stated in its Articles of Cooperation.
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SEC. 8. Organizing a Primary Cooperative. - At least fifteen (15) natural 
persons who are Filipino citizens, of legal age, having a common bond of interest, 
and are residing or working in the intended area of operation, may organize a 
primary cooperative under this Code. The cooperators shall attend and complete a 
Pre-Registration Seminar (PRS) as a prerequisite for registration. The details and 
requisites of the PRS must be included in the Implementing Rules and Regulations 
of this Code.
Every group of individuals or cooperatives intending to form a cooperative 
under this Code shall submit to the Authority a general statement describing, among 
others the structure and purposes of the proposed cooperative: and shall also submit 
an economic survey, indicating therein the area of operation, the size of 
membership, and other pertinent data in a format provided by the Authority.
No primary cooperative, except agricultural cooperatives, shall be organized 
as a multi-purpose cooperative unless it has been in operation for at least two (2) 
years and shall have complied with the minimum requirements for multi-purpose 
cooperatives as prescribed by the Authority.
In order to encourage cooperativism among the youth, a primary cooperative 
may organize a laboratory cooperative as defined under this Code. A laboratory 
cooperative shall have all the rights, privileges, and duties of a regular cooperative, 
and shall be governed by special guidelines to be promulgated by the Authority, in 
consultation with the cooperative sector.
SEC. 9. Mandatory Personnel of the Cooperative. - All cooperatives shall 
have a General Manager and a Bookkeeper to be authorized to operate.
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SEC. 10. Liability of the Cooperative. - A cooperative duly registered 
under this Code shall have limited liability.
SEC. 11. Term of existence of cooperative. - A cooperative shall have 
perpetual existence from the date of registration unless voluntarily dissolved or the 
Certificate of Registration is cancelled for reasons provided under this Code and its 
Implementing Rules and Regulations.
SEC. 12. Articles of Cooperation. - All primary cooperatives applying for 
registration shall present to the Authority the Certificate of Pre-Registration Seminar 
and the Articles of Cooperation, signed by all cooperators and acknowledged by 
them before a notary public.
In case of cooperative banks, insurance cooperatives, federations, or unions, 
the Articles of Cooperation shall be acknowledged by its Chairpersons and 
Cooperative Secretaries before a notary public. The Articles of Cooperation shall 
contain the following provisions:
a. Name of the cooperative, which shall include the word "Cooperative", "Coop", 
"Koop", or "Kooperatiba" and specify the type of cooperative;
b. Purpose or purposes and the economic activities for which the cooperative is 
to be registered;
c. Powers and capacities;
d. Area of operation, the postal address of its principal office, and the official 
electronic mail address of the cooperative;
e. Names, nationality, and the postal addresses of the cooperators;
f. Common bond of membership;
g. List of names of the directors;
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h. Amount of authorized, subscribed, and paid-up share capital, the number of 
shares, and the par-value of each share, and the names of the cooperators, 
except for cooperative unions;
i. A statement as to whether the cooperative is primary or secondary;
j. Other provisions consistent with this Code or any related law; and
k. Certificate of Authority from the appropriate government agency.
SEC. 13. By-laws. - Every cooperative to be registered under this Code shall 
adopt By-laws consistent with the provisions of this Code, which shall be filed 
together with the Articles of Cooperation. The By-laws of each cooperative shall 
provide:
a. The qualifications for admission to membership;
b. The equitable contribution or interest to be acquired as a condition precedent 
for the exercise of the right of membership;
c. The rights, privileges, duties, responsibilities, and liabilities of membership;
d. The circumstances under which membership is acquired, maintained, and 
terminated, and the procedure to be followed;
e. The conditions under which the transfer of a share or interest of the members 
shall be permitted;
f. The general conduct of the affairs of the cooperative relative to agenda, time, 
place and manner of calling, convening, and conducting meetings, quorum 
requirements, voting systems of the General Assembly, the Board of Directors, 
committees and the officers, including their qualifications, disqualifications, 
powers, duties, and responsibilities;
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g. The manner in which the capital may be raised and the purposes for which it 
can be utilized;
h. The accounting and auditing systems;
i. The manner of contracting loans and borrowings including the limitations 
thereof;
j. The allocation and distribution of net surplus;
k. The manner of adopting and amending By-laws;
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The institution of a conciliation or mediation mechanism for the amicable 
settlement of disputes among members, directors, officers and committee 
members of the cooperative; and
m. Other matters incident to the purposes and activities of the cooperative.
CHAPTER III. REGISTRATION
SEC. 14. Requirements for Registration. - The proposed Articles of 
Cooperation, By-laws, and such other required documents shall be submitted in 
accordance with the rules and regulations to be prescribed by the Authority.
Except for cooperative unions as described under Section 30 hereof, no 
cooperative shall be registered unless the Articles of Cooperation is accompanied 
with the bonds of the accountable officers and a sworn statement of the Treasurer 
showing that at least twenty-five per centum (25%) of the authorized share capital 
has been subscribed and at least twenty-five per centum (25%) of the total 
subscription has been paid.
The Authority shall initially fix the minimum paid-up share capital in the 
Implementing Rules and Regulations of this Code, periodically assess the required
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paid-up share capital, and may increase or decrease it through subsequent 
regulation whenever necessary upon consultation with the cooperative sector.
The Authority may prescribe such other registration requirements as it may 
deem necessary.
SEC. 15. Registration. - A cooperative formed and organized under this
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Code acquires juridical personality from the date the Authority issues a Certificate of
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Registration under its official seal. All applications for registration shall be finally
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disposed of by the Authority within a period of fifteen (15) working days from the
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filing of the complete documentary requirements, both in form and in substance,
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otherwise the application is deemed approved, unless the cause of the delay is
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justified as the case may be: Provided, That in case of a denial of the application for
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registration, the applicant may file a Motion for Reconsideration within five (5) days
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from the receipt of such denial. The Motion for Reconsideration must be resolved
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within fifteen (15) days from the filing thereof. An appeal to the Board of Directors
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of the Authority may be filed within fifteen (15) days from receipt of notice of denial
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of the Motion for Reconsideration.
The decision of the Board of Directors shall be final and executory but may 
be elevated to the Court of Appeals through a Petition for Review.
The grounds for denial of the registration shall be prescribed in the 
Implementing Rules and Regulations of this Code.
SEC. 16. Certificate of Registration. - A Certificate of Registration issued 
by the Authority under its official seal shall be conclusive evidence that the 
cooperative therein mentioned is duly registered unless it is proved that the 
registration thereof has been cancelled. Moreover, once the Cooperative is issued of
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certificate of compliance, it shall be valid for five (5) years, unless revoked by the 
authority after due process due to willful refusal to comply with the reportorial 
requirements set forth by law.
SEC. 17. Amendment of Articles of Cooperation and By-laws. - Unless 
otherwise prescribed by this Code and for legitimate purposes, any provision or 
matter stated in the Articles of Cooperation and By-laws may be amended by two- 
thirds (%) vote of all the members entitled to vote, present and constituting a
8 
quorum, without prejudice to the right of the dissenting members to exercise their
9 
right to withdraw their membership under Section 37 of this Code.
A cooperative may opt to amend its Articles of Cooperation and By-laws
11 
through a referendum by a vote of two-thirds (Vs) of all the members entitled to
12 
vote, present and constituting a quorum.
13 
Both the original and amended Articles of Cooperation By-laws shall contain
14 
all the provisions required by law. Amendments shall be indicated by underscoring
15 
or otherwise appropriately indicating the change or changes made. A copy of the
16 
amended Articles of Cooperation or By-laws shall be duly certified under oath by the
17 
Cooperative Secretary and majority of the directors, stating the fact that the
18 
amendment or amendments to the Articles of Cooperation and By-laws have been
19 
duly approved by the required vote of the members. All amendments to the Articles
20 
of Cooperation and By-laws shall be submitted to the Authority.
21 
An application for amendments shall be deemed approved by the Authority
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within a period of thirty (30) days from the filing thereof: Provided, That the
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documentary requirements are complete in form and substance, unless the cause of
24 
the delay is justified.
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SEC. 18. Contracts Executed Prior to Registration and Effects
2 
Thereof. - Subject to the execution of a formal written contract made in the
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cooperative's name or on its behalf prior to its registration, all contracts executed
4 
prior to its registration between private persons and the cooperative shall remain
5 
valid and binding between the parties insofar as it redounds to the benefit of the
6 
cooperative.
7 
SEC. 19. Effects of Failure to Operate or Comply with Conditions on
8 
Registration. - The Certificate of Registration shall be deemed cancelled and the
9 
cooperative shall be delisted from the registry of cooperatives if the cooperative
10 
failed to commence its authorized business activity within five (5) years from the
11 
issuance of its Certificate of Registration.
12 
SEC. 20. Division of Cooperatives. - A registered cooperative, through a
13 
resolution approved by a vote of two-thirds (2/3) of all the members entitled to vote,
14 
present and constituting a quorum, may divide itself into two (2) or more
15 
cooperatives. Such division of the cooperative shall be valid.- Provided, That the
16 
purpose of the division is not to defraud the creditors.
17 
The dissenting members shall have the right to exercise their right to
18 
withdraw their membership pursuant to Section 37 of this Code.
19 
The Authority shall prescribe the rules and regulations for the division of the
20 
cooperative: Provided, That all the requirements set forth in this Code have been
21 
complied with by the newly-formed cooperatives.
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CHAPTER IV. MERGER AND CONSOLIDATION OF COOPERATIVES
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SEC. 21. Merger or Consolidation of Cooperatives. -
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(a) Two (2) or more cooperatives may merge or consolidate into a single 
cooperative.
(b) No merger or consolidation shall be valid unless approved by a two-thirds (Vs) 
vote of all the members entitled to vote, present and constituting a quorum of 
each of the constituent cooperatives at separate General Assembly meetings. 
The dissenting members shall have the right to exercise their right to withdraw 
their membership pursuant to Section 37 of this Code.
(c) The Authority shall issue the guidelines governing the procedure of merger or 
consolidation of cooperatives. The merger or consolidation shall be effective 
upon the issuance by the Authority of the Certificate of Merger, or in the case 
of a consolidation of cooperatives, a new Certificate of Registration.
SEC. 22. Effects of Merger and Consolidation. - The merger and 
consolidation of cooperatives shall have the following effects:
(a) In case of merger of cooperatives, the constituent cooperatives shall become 
a single cooperative or, in the case of consolidation of cooperatives, the 
consolidated cooperative shall be the new cooperative;
(b) The single cooperative or the consolidated cooperative shall possess all 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
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SEC. 23. Types and Categories of Cooperatives. -
2 
(a) Clusters of Cooperatives - Cooperatives may fall under any of the following
3 
clusters based on their business activity:
4 
(1) Credit, Finance, Banking, and Insurance Ouster refers to cooperatives
5 
organized for the promotion of financial freedom and literacy among its
6 
members, and undertakes savings, lending, and other financial services to
7 
its members, such as:
8 
(i) Cooperative Banks. - Cooperative banks are organized for the
9 
primary purpose of providing a wide range of financial services
10 
to cooperatives and their members;
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(ii) Credit Cooperatives. - Credit cooperatives are engaged solely in
12 
lending services;
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(iii) Credit and Savings 
Cooperatives. - Credit and savings
14 
cooperatives promote and undertake savings and lending
15 
services among its members. They generate a common pool of
16 
funds in order to provide financial assistance to their members
17 
for productive and provident purposes;
18 
(iv) Credit Surety Fund 
Cooperatives. - Credit surety fund
19 
cooperatives, in partnership with Local Government Units
20 
(LGUs), are comprised of well-capitalized and well-managed
21 
member-cooperatives or non-government organizations that
22 
meet the criteria and qualifications prescribed by the Authority,
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LGUs, Government Financial Institutions, and other government
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agencies;
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(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 Ouster refers to 
cooperatives organized for the supply, procurement, and marketing of 
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;
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(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 Ouster 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 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
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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.
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(4) Education and Advocacy Ouster 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:
(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.
(5) Agriculture, Agrarian, Aquaculture, Farmers, Dairy, and Fisherfoik Ouster 
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:
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(i) Agrarian Reform Cooperatives. - Agrarian reform cooperatives 
are organized by marginai 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, agro-industry, agri-business, or 
services related to agricultural production, which shall 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, agro-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;
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(v) Fishetfolk Cooperatives. - Fisherfolk cooperatives are organized 
by marginalized fisherfolk whose products are marketed either 
as fresh or processed, for the mobiiization of capitai 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 Ouster refers 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:
(i) Communications Cooperatives. - Communications cooperatives 
are organized to own, operate, and manage communication 
structures and arrangements, such as radio, cable TV, 
newspaper, and related 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
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undertaking power generation, utilizing renewable energy
2 
sources, including hybrid systems, acquisition and operation of
3 
sub transmission or distribution to the household members;
4 
(iii) Transport Service Cooperatives. - Transport service
5 
cooperatives are organized to render public land, water, or air
6 
transportation services for the safe conveyance of passengers
7 
or cargoes, or are engaged in providing related or auxiliary
8 
services to the transport industry;
9 
(iv) Water Service Cooperatives. - Water service cooperatives are
10 
organized to own, operate, and manage water systems for the
11 
provision and distribution of potable water for the members and
12 
their households; and
13 
(v) Other cooperatives as may be determined by the Authority
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under this cluster in consultation with the cooperative sector.
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(b) Categories of Cooperatives. Cooperatives are categorized as follows:
16 
(1) In terms of membership, cooperatives may be categorized into:
17 
A. Primary Cooperatives; and
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B. Secondary Cooperatives;
19 
(2) In terms of territory, cooperatives are categorized according to areas of
20 
operations; and
21 
(3) In terms of assets, cooperatives shall follow the business size categories
22 
used by the Department of Trade and Industry (DTI).
23 
SEC. 24. Apex of Cooperatives. - The Apex of Cooperatives refers to the
24 
singular cooperative vested with a juridical personality and the mandate to represent
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the cooperative sector at the national and international levels, fully and voluntarily
2 
organized by the members of the cooperative sector. It shall have the mandate to
3 
engage in discussions and advise the appropriate authorities on all matters relating to
4 
cooperatives, as well as to promote the cooperative identity and culture.
5 
CHAPTER VI. FEDERATION OF COOPERATIVES
6 
SEC. 25. Area of Coverage. - A federation of cooperatives may be organized
7 
at the municipal or city level, district or provincial level, regional, inter-regional or
8 
national levels.
9 
SEC. 26. Members of a Federation of Cooperatives. - Members of a
10 
federation of cooperatives shall consist of cooperatives with common needs or
11 
purposes: Provided, That a member cooperative may freely withdraw membership
12 
from the federation.
13 
The minimum number of members shall be at least ten (10) primary or
14 
secondary cooperatives for a federation of cooperatives.
15 
SEC. 27. Authorized, Subscribed, and Paid-Up Capital of a
16 
Federation. - The authorized share capital of a cooperative shall be provided for in
17 
its Articles of Cooperation where at least twenty-five per centum (25%) of the
18 
authorized share capital shall be subscribed to by the members and at least twenty-
19 
five per centum (25%) of the subscribed share capital shall be paid up prior to its
20 
registration.
21 
The minimum paid-up share capital for a federation of cooperatives shall be
22 
One million pesos (P1,000,000.00).
23 
SEC. 28. Registration of Federation of Cooperatives. — A federation of
24 
cooperatives shall be registered with the Authority.
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SEC. 29. Functions of a Federation of Cooperatives. - A federation of 
cooperatives shall undertake the following functions:
(a) To carry on any cooperative enterprise authorized under Section 5 that 
complements, augments, or supplements but does not conflict, compete with, 
nor supplant the business or economic activities of its members;
(b) To carry on, encourage, and assist educational and advisory work relating to 
the business activities of its members;
(c) To render services designed to encourage simplicity, efficiency, and economy 
in the conduct of the business of its member cooperatives and to facilitate the 
implementation of their bookkeeping, accounting, and other systems and 
procedures;
(d) To print, publish, and circulate any newspaper or other publication in the 
interest of its member-cooperatives and enterprises;
(e) To coordinate and facilitate the activities of its member-cooperatives;
(f) To enter into joint ventures with local or international cooperatives in the 
manufacture and sale of products in the Philippines and abroad;
(g) To mandatorily act as conciliator-mediator in inter-intra cooperative disputes 
among and between the members and officers of primary cooperatives;
(h) To assist members in the submission of the required reports and other 
compliances to the Authority and other government or regulatory bodies;
(i) To assist in the liquidation of the remaining assets of dissolved or cancelled 
primary cooperative members;
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(j) To develop programs on education, training, monitoring, coaching, research,
2 
and advocacy that complement, augment, or supplement the businesses of
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their members; and
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(k)To assist the Authority in ensuring the compliance of its member-cooperatives
5 
with the laws, regulations, policies, and inspection or examination findings of
6 
government regulatory agencies.
7 
CHAPTER VII. COOPERATIVE UNIONS
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SEC. 30. Organization and Duties. - All registered cooperatives may
9 
organize or join cooperative unions to protect the interest and promote the welfare
10 
of all types of cooperatives: Provided, That a member cooperative may freely
11 
withdraw membership from the union. The cooperative unions shall represent the
12 
constituent cooperatives at the appropriate level-and exercise the following duties
13 
and functions:
14 
(a) To represent its member organizations;
15 
(b)To acquire, analyze, and disseminate economic, statistical, and other
16 
information relating to its members and to all types of cooperatives within its
17 
area of operation;
18 
(c) To sponsor studies in the economic, legal, financial, social and other phases of
19 
cooperation, and publish the results thereof;
20 
(d)To conduct trainings to member-cooperatives as an accredited training
21 
provider;
22 
(e)To promote the knowledge of cooperative principles and practices;
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(f) To develop the cooperative movement in their respective jurisdictions;
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(g)To assist the national and local government units in cooperative development
2 
activities within their respective jurisdiction;
3 
(h)To assist in the dissemination and monitoring of the Philippine Cooperative
4 
Medium Term Plan;
5 
(i) To assist the members in the submission of the required reports and other
6 
compliances to the Authority and other government or reguiatory bodies;
7 
(j) To assist the Authority, upon written request, in the performance of its power
8 
of inspection or examination;
9 
(k)To advise the appropriate authorities on ail questions relating to cooperatives
10 
at the municipal, city, district, provincial or regional levels;
11 
(I) To act as liquidators or rendering assistance in the liquidation of the remaining
12 
assets of dissolved primary cooperative members; and
13 
(m) To do and perform such other non-business activities as may be necessary to
14 
attain the foregoing objectives.
15 
Sec. 31. Sources of Funds for Cooperative Unions. - The funds of a
16 
cooperative union shall be sourced from the membership fees, dues and
17 
contributions, remitted cooperative education and training fund (CETF) from
18 
member-cooperatives, training fees,-fundraising activities, donations, grants, or
19 
subsidies from local and foreign sources, whether private or public.
20 
CHAPTER VIII. MEMBERSHIP
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SEC. 32. Membership. - A cooperative shall have regular members or
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associate members.
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A regular member is one who has complied with all the membership
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requirements, including the Pre-Membership Seminar, and entitled to all the rights
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and privileges of membership. An associate member is one who has no right to vote 
nor be voted upon and shall be entitled only to such rights and privileges as the 
bylaws may provide; Provided, That an associate member who meets all the 
requirements of regular membership, including the Pre-Membership Education 
Seminar, continues to patronize the cooperative for two (2) years, and signifies the 
intention to remain a member shall be considered a regular member.
SEC. 33. Qualifications of Membership. - Members of registered primary 
cooperatives must be natural persons, Filipino citizens or former natural-born Filipino 
citizens, of legal age, with capacity to enter into a contract, within the common bond 
of membership and area of operation, and must possess the qualifications and none 
of the disqualifications as provided for in the By-laws of the cooperative; Provided, 
that in case of former natural-born Filipino citizens, they must comply with Philippine 
taxation laws; Provided, further, that the age requirement shall not apply to laboratory 
cooperatives as defined in Section 4 (p). A member must have completed the Pre- 
Membership Education Seminar.
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;
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(b) Employees of the Authority are allowed to become a member of any
2 
cooperative. However, they shall be disqualified to be elected or appointed as
3 
an officer, except for cooperatives organized among themselves; and
4 
Any government employee or official may, in the discharge of the duties as a
5 
member in the cooperative, be allowed by the head of office concerned to use official
6 
time for attendance at the General Assembly, Board and committee meetings including
7 
cooperative seminars, conferences, workshops, technical meetings, and training
8 
courses locally or abroad.
9 
SEC. 35. Processing of Applications for Membership. - An application
10 
for membership shall be acted upon by the Board of Directors within the period fixed
11 
in the By-laws but not later than thirty (30) days. Otherwise, the application for
12 
membership shall be deemed approved, subject to the condition that the applicant
13 
has submitted the duly accomplished application and has paid the membership fees
14 
to the cooperative.
15 
In case the application for membership is denied by the Board of Directors,
16 
the general assembly may opt to create an appeal committee, and within fifteen (15)
17 
days after receipt of the notice of denial and the decision of the said committee shall
18 
be final.
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If the Committee fails to decide within the prescribed period, the appeal is
20 
deemed approved in favor of the applicant.
21 
SEC. 36. Liability of Members. - A member shall be liable for the debts of
22 
the cooperative to the extent of the member's subscription to the share capital of the
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cooperative.
24 
SEC. 37. Termination of Membership. —
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(a) A member of a cooperative may withdraw membership from the cooperative
2 
by giving written notice to the Board of Directors which shall be acted upon
3 
within thirty (30) days from receipt of said notice.
4 
(b)The death or insanity of a member in a primary cooperative, and the insolvency
5 
or dissolution, de-listing, or cancellation of the certificate of registration of a
6 
member in a secondary cooperative shall be considered valid grounds for
7 
termination of membership: Provided, That in the case of death or insanity of
8 
an agrarian reform beneficiary-member of a cooperative, the qualified next-of-
9 
kin may assume the duties and responsibilities of the original member;
10 
(c) Termination of membership in the cooperative shall be initiated through the
11 
filing of a complaint before the ethics committee of the cooperative. The
12 
committee shall recommend to the Board of Directors the termination of
13 
membership for any of the following causes:
14 
(1) Failure to patronize any services of the cooperative for an unreasonable
15 
period of time as provided in the By-laws;
16 
(2) Failure to comply with the obligations of membership as provided in the By-
17 
laws or policies of the cooperative;
18 
(3) Violation of the By-laws of the cooperative;
19 
(4) Commission of any act or omission injurious or prejudicial to the interest or
20 
the welfare of the cooperative; and
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(5) Others, as may be provided in the By-laws of the cooperative.
22 
Such member shall be informed, in writing, and be given an opportunity to
23 
be heard by the grievance committee. The result of the investigation shall be referred
24 
to the Board of Directors for its consideration. Based on the recommendation of the
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grievance committee, the Board may terminate membership in the cooperative by a
2 
majority vote of all its members. The decision of the Board shall be in writing, and
3 
communicated either personally, or by registered or electronic mail. The decision
4 
may be appealed to the General Assembly within thirty (30) days from receipt
5 
thereof.
6 
The General Assembly shall decide on such appeal within thirty (30) days
7 
after receipt thereof. Failure of the General Assembly to decide within the prescribed
8 
period shall be deemed in favor of the member. The decision of the General
9 
Assembly decision shall be final and executory. Pending the final decision, the
10 
membership shall remain in force. This notwithstanding, the member may file a
11 
petition for review of the decision of the General Assembly with the Authority within
12 
fifteen (15) days from receipt thereof.
13 
SEC. 38. Refund of Interests. - All sums computed in accordance with the
14 
By-laws due from the cooperative to a former member shall be paid in accordance
15 
with this Code and as prescribed in the Implementing Rules and Regulations:
16 
Provided, That such refund shall not be made if upon such payment, the value of
17 
the assets of the cooperative would be less than the aggregate amount of its debts
18 
and liabilities exclusive of the members' share capital contribution.
19 
In the computation of the interest due to the former member, the current
20 
balance of such member in the ledger of accounts of the cooperative shall be taken
21 
into account.
22 
CHAPTER IX. ADMINISTRATION
23 
SEC. 39. Composition of the General Assembly and Representative
24 
Assembly. - The General Assembly shall be the full membership of the cooperative.
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1 exercising all the rights and performing all the obligations as provided in this Code,
2
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and in its Articles of Cooperation and By-laws.
For cooperatives with numerous and dispersed membership, the General 
Assembly shall delegate the exercise of its powers to a Representative Assembly, 
the members of which are elected by each sector, chapter, or district of the 
cooperative: Provided, That in cases provided under this Code for the call of a regular 
or special General Assembly, or the approval or confirmation thereof, the
8 
Representative Assembly shall also suffice, where applicable. Such delegation shall
9 
be in accordance with the rules and regulations of the Authority.
SEC. 40. Powers of the General Assembly. - The General Assembly shall
11 
be the highest policy-making body of the cooperative and shall exercise such powers
12 
as are stated in this Code, and in the Articles of Cooperation and By-laws of the
13 
cooperative. The General Assembly, through its members entitled to vote, shall have
14 
the following exclusive powers which cannot be delegated:
(a) Determine and approve amendments to the Articles of Cooperation and By- 
iaws;
(b) Elect, appoint, or remove, the members of the Board of Directors. However, in 
the case of the electric cooperatives registered under the Authority, the election 
of the members of the Board shall be in accordance with its By-laws or election 
guidelines;
(c) Approve the annual strategic and developmental plans, and the budget of the 
cooperative;
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(d) Approve or disapprove proposals from the Board of Directors pertaining to
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external borrowings, investments, grants, donations, and other financial
3 
assistance; and
4 
(e) Decide membership issues within the cooperative.
5 
Subject to such other provisions of this Code and only for purposes of prompt
6 
and intelligent decision-making, the General Assembly may by a three-fourths (3/4)
7 
vote of all its members entitled to vote, present and constituting a quorum, delegate
8 
some of its powers to the Board of Directors. These powers shall be enumerated
9 
under the By-laws of the cooperative.
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SEC. 41. Meetings. -
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(a) The General Assembly shall conduct a regular annual meeting on a date fixed
12 
in the By-laws, which shall be within ninety (90) days or one hundred eighty
13 
(180) days after the close of each calendar year, for primary or secondary
14 
cooperatives, respectively: Provided, That notice of regular meetings shall be
15 
sent in writing, by posting or publication, or through other electronic means to
16 
all members of record.
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(b) Whenever necessary, a special meeting of the General Assembly may be called
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at any time by a majority vote of the Board of Directors, or upon petition of at
19 
least ten per centum (10%) of the total members who are entitled to vote, or
20 
as provided for in the By-laws: Provided, That a notice in writing shall be sent
21 
one (1) week prior to the meeting to all members who are entitled to vote.
22 
If the Board fails to call a regular or special meeting within the given
23 
period, the Authority, upon petition of ten per centum (10%) of members
24 
entitled to vote, or the quorum as stated in their By-laws, and for good cause
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shown, shall issue an order to the petitioners directing them to call a meeting
2 
of the General Assembly by giving proper notice as required in this Code or in
3 
the By-laws;
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(c) In the case of a newly registered cooperative, a special General Assembly
5 
meeting shall be called within sixty (60) days from such approval of its
6 
registration, for the following purposes:
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(1) Presentation of approved Articles of Cooperation and By-laws;
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(2) Approval of the annual strategic and development plans, and budget;
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and
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(3) Other matters, as may be determined by the cooperative.
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(d)The Authority shall compel the cooperative to call a General or Representative
12 
Assembly for the purpose 
of reporting 
to the members the 
result of any
13 
examination or other investigation of the cooperative affairs; and
14 
(e) Notice of any meeting may be waived, expressly or impliedly, by any member.
15 
SEC. 42. Mode of Conducting Regular or Special Assembly
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Meetings. - Regular and special assembly meetings may be conducted in any of
17 
the following manner:
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(a) Duly assembled In one venue, wherein the meetings are held on the same
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day; or
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(b) Simultaneously, wherein the meetings are held on the same day but in
21 
different venues.
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As a general rule, assembly meetings shall be conducted in a manner
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provided in the By-laws of the cooperative. However, due to technological
24 
advancement, public health and safety measures, increased level of participation of
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members and other equally important considerations in favor of the viability and
2 
growth of cooperatives, cooperatives are allowed to conduct their assembly
3 
meetings through videoconferencing or a combination of physical attendance and
4 
videoconferencing, except for electric cooperatives: Provided, That cooperatives
5 
who opt to conduct General Assembly meetings through videoconferencing or a
6 
combination of physical attendance and videoconferencing as an alternative mode
7 
shall amend their By-laws adopting the same: Provided, further. That cooperatives
8 
shall adopt policies and procedures sufficiently addressing administrative, technical,
9 
and logistical concerns for an effective and efficient videoconference meeting.
10 
SEC. 43. Quorum. - Unless a higher requirement is provided in the By-
11 
laws of the cooperative, a quorum shall consist of at least twenty-five per centum
12 
(25%) of all the members entitled to vote: Provided, That electric cooperatives
13 
shall follow the minimum quorum requirement as may be prescribed by the
14 
National Electrification Administration (NEA): Provided, further, That the quorum
15 
for Representative Assembly shall in no case be lower than twenty-five per centum
16 
(25%) of the total membership entitled to vote.
17 
In the case of federations and unions, the quorum requirement shall be twenty-
18 
five per centum (25%) of the total number of members present and entitled to vote.
19 
SEC. 44. Voting System. — Each member of a primary cooperative shall have
20 
only one (1) vote regardless of the share capital of such member. In federations or
21 
secondary cooperatives, a one member-coop, one vote system applies regardless of
22 
the member-primaries' share capital.
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The votes cast by the delegates shall be deemed as votes cast by the
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members thereof.
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The foregoing notwithstanding, the By-laws of a cooperative, other than a
2 
primary cooperative, may provide for voting by proxy. Voting by proxy means
3 
allowing a delegate of a cooperative to represent or vote on behalf of another
4 
delegate of the same cooperative.
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SEC. 45. Composition and Term of the Board of Directors. - The Board
6 
of Directors shall be composed of not less than five (5) nor more than fifteen (15)
7 
members elected by the General Assembly for a term of two (2) years, but not to
8 
exceed three (3) consecutive terms. The Board shall hold office until their successors
9 
are duly elected and qualified, or until duly removed for cause.
10 
For federations, a member-cooperative shall have only one representative
11 
eligible to run and be voted upon as a member of the Board, irrespective of the
12 
member-cooperative's share capital holdings.
13 
SEC. 46. Powers of the Board of Directors. - The Board of Directors
14 
shall be responsible for the annual strategic planning, direction-setting and policy-
15 
formulation activities of the cooperatives.
SEC. 47. Directors. -
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(a) Any member of a cooperative who has the right to vote and be voted upon, 
and who possesses all the qualifications and none of the disqualifications 
provided in this Code or in its By-laws shall be eligible for election as director, 
subject to the limitation imposed by the second paragraph of Section 45 of 
this Code.
(b) The cooperative may, by resolution of its Board of Directors, admit as an ex 
officio director or committee member one appointed by any financing 
institution from which the cooperative received financial assistance, solely
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to provide technical knowledge not available within its membership. Such
2 
director or committee member need not be a member of the cooperative
3 
and shall have no powers, rights, nor responsibilities except to provide
4 
technical assistance as required by the cooperative.
5 
(c) The members of the Board of Directors shail not hold any other position
6 
directly involved 
in the day to day 
operation and management of the
7 
cooperative.
8 
(d) Any member engaged in a business similar to that of the cooperative or who,
9 
in any way, has a conflict of interest with it, is disqualified from being elected
10 
as a director.
11 
SEC. 48. Meeting of the Board and Quorum Requirement. -
12 
(a) In the case of primary cooperatives, regular meetings of the Board of Directors
13 
shall be held at least once a month. Special meetings may be held at any time:
14 
i) at the call of the Chairperson, upon prior written notice given at least three
15 
(3) days prior to the date of said meeting; ii) or at the call of a majority of the
16 
members of the Board, upon prior written notice given at least one (1) day
17 
before said meeting: Provided, that only two (2) special meetings may be held
18 
in one (1) month. Notices may be sent through electronic means, to the official
19 
contact number or email account of the officers.
20 
(b)A majority of the members of the Board shall constitute a quorum for the
21 
conduct of business.
22 
(c) Each member of the Board shall only have one vote, whether it be a primary
23 
or secondary cooperative, irrespective of the share capital holdings of the
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member-cooperative.
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(d) Directors cannot attend or vote by proxy at Board meetings.
(e) Cooperatives may opt to allow meetings of the Board of Directors and members 
of the different committees of the cooperative to be conducted either through 
physical attendance or videoconferencing, or both, subject to the rules on 
sending of notices, quorum, and voting requirements as provided for in the By­
laws. In the conduct of meetings through videoconferencing, cooperatives shall 
adopt their own policies and procedures which shall be included in their By­
laws.
SEC. 49. Vacancy in the Board of Directors. — In case of a vacancy, other 
than by expiration of term or an increase in the number of Board of Directors, the 
Board, if still constituting a quorum, may, in a special meeting called for the purpose, 
appoint, by majority vote, any member of the cooperative to fill such vacancy: 
Provided, That the director so appointed shall possess all of the qualifications and 
none of the disqualifications as prescribed under this Code and the By-laws of the 
cooperative. If the remaining members of the Board do not constitute a quorum, the 
vacancy shall be filled in an election conducted through a special General Assembly 
called for the purpose, held within thirty (30) days from the time the vacancy occurs, 
or during the regular General Assembly, whichever comes first. The director so 
appointed or elected shall serve only for the unexpired term of the predecessor in 
office.
If the General Assembly fails to fill the vacancy, as directed in the preceding 
paragraph, or in case of the vacancy of the entire Board of Directors, the Authority 
shall compel the cooperative, through the Election Committee, to call for a special 
General Assembly for the purpose of electing a new Board of Directors. In the
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absence of the Election Committee, the General Assembly may appoint an Ad Hoc 
Committee that shall be responsible to call for such special General Assembly.
SEC. 50. Officers of the Cooperative. - The officers of the cooperative 
shall include the members of the Board of Directors, members of the different 
committees. General Manager or Chief Executive Officer, Secretary, Treasurer, and 
other officers as may be provided for in the By-laws. As such, they shall exercise 
their duties and responsibilities within the scope of their defined functions.
The Board of Directors shall elect from among themselves the Chairperson 
and Vice-Chairperson, and elect or appoint other officers of the cooperative from 
outside of the Board, in accordance with their By-laws.
The Board of Directors is prohibited from appointing any person within the fourth 
civil degree of consanguinity or affinity of the members of the Board of Directors. 
Neither shall the appointive officers be related to each other up to the fourth civil 
degree of consanguinity or affinity. Further, no officer shall engage in a business 
similar to that of the cooperative nor in any other manner have interests in conflict 
with the cooperative.
SEC. 51. Committees of Cooperatives.-
(a) The By-laws may create an executive committee, the members of which shall 
be appointed by the Board of Directors with such powers and duties as may be 
delegated to it in the By-laws or by a majority vote of all the members of the 
Board of Directors.
(b) The By-laws shall provide for the creation of other committees, such as 
conciliation-mediation, ethics, gender and development, education, and other 
committees as may be necessary for the conduct of the affairs of the
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cooperative. The members of the audit and election committee shall be elected
2 
by the General Assembly, while the members of the other remaining
3 
committees shall be appointed by the Board.
4 
Unless otherwise provided in the By-laws, the Board, in case of a vacancy in
5 
the committees, may appoint or call an election to fill the vacancy, as the case may
6 
be: Provided, That the person so appointed or elected shall serve only for the
7 
unexpired portion of the term.
8 
SEC. 52. Functions, Responsibilities and Training Requirements of
9 
Directors, Officers and Committee Members. - The functions and
10 
responsibilities of directors, officers, and committee members, as well as their
11 
training requirements, shall be prescribed in the By-laws of the cooperative, in
12 
accordance with the rules and regulations issued by the Authority.
13 
SEC. 53. Liability of Directors, Officers and Committee Members. -
14 
Directors, officers, and committee members shall be jointly and severally liable for
15 
all damages or losses to the cooperative, its members, or other persons in case of
16 
the following:
17 
(a) Willfully and knowingly voting for or assenting to patently unlawful acts;
18 
(b) Gross negligence or bad faith in directing the affairs of the cooperative; or
19 
(c) Acquiring any personal or pecuniary interest in conflict with their duty.
20 
When directors, officers, or committee members attempt to or have acquired,
21 
in violation of their duties, any interest or equity adverse to the cooperative in
22 
respect to any matter which has been reposed in them in confidence, they shall, as
23 
a trustee for the cooperative, be liable for damages and shall be accountable for
24 
double the profits which otherwise would have accrued to the cooperative.
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SEC. 54. Compensation and Other Emoluments. -
2 
(a) In the absence of any provision in the By-laws fixing their compensation, the
3 
directors, or officers of the cooperative shall not receive any compensation
4 
except for reasonable per diems-. Provided, That no additional compensation
5 
other than per diems shall be paid during the first year of existence of any
6 
cooperative: Provided, further, That only the General Assembly shall approve
7 
any additional compensation or the increase thereof.
8 
(b) Directors and officers shall not be entitled to any per diem if the cooperative
9 
reported a net loss in the preceding calendar year or a had a dividend rate less
10 
than the official rate for the same year.
11 
(c) Unless already fixed in the By-laws, the compensation of all other employees
12 
shall be determined by the Board of Directors in accordance with the Regional
13 
Tripartite and Wage Productivity Board.
14 
SEC. 55. Dealings of Directors, Officers, or Committee Members. - A
15 
contract entered into by the cooperative with one (1) or more of its directors, or their
16 
spouses and relatives within the first civil degree of consanguinity or affinity, is
17 
voidable, at the option of the cooperative, unless the following conditions are present:
18 
(a) The presence of such director in the Board meeting wherein contract was
19 
approved was not necessary to constitute a quorum for such meeting;
20 
(b) The vote of such director was not necessary for the approval of the contract; and
21 
(c) The contract is fair, reasonable, and beneficial to the cooperative under the
22 
circumstances.
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In the case of contracts executed between the cooperative and its other officers
24 
or committee members, or their spouses or relatives within the first civil degree of
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consanguinity or affinity, such contracts are voidable, at the option of the cooperative, 
unless previously authorized by the General Assembly or by the Board of Directors, 
and the contract is fair, reasonable, and beneficial to the cooperative under the 
circumstances.
The Board of Directors shall report any such contract to the General Assembly 
during its regular meeting for ratification.
Where any of the first two conditions set forth in the preceding paragraph is 
absent, in the case of a contract with a director, such contract may be ratified by a 
three-fourths (3/4) vote of all the members entitled to vote, present and constituting 
a quorum in a meeting called for the purpose: Provided, That full disclosure of the 
adverse interest of the directors involved is made at such meeting, and that the 
contract is fair and reasonable under the circumstances.
SEC. 56. Disloyalty of a Director and Other Officers of the 
Cooperative. - A director or other officer of the cooperative who, by virtue of such 
office, directly or indirectly acquires for themselves an opportunity which should 
belong to the cooperative, shall be liable for damages and must account for double 
the profits that otherwise would have accrued to the cooperative by refunding the 
same. This provision shall be applicable, notwithstanding the fact that the director 
or other officers of the cooperative used their own funds to acquire such opportunity.
SEC. 57. Illegal Use of Confidential Information. - 
(a) A director, officer, or any person who, in conspiration or connivance therewith, 
makes use of confidential information to the benefit or advantage of such 
person, which, if generally known, may adversely affect the operation and
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viability of the cooperative, shall be held liable for the direct losses and for the 
unrealized benefit suffered by the cooperative, as a result of the transaction. 
(b)The cooperative shall take the necessary steps to enforce the liabilities 
described in paragraph (a) herein.
SEC. 58. Removal From Office. - No officer may be removed except for 
cause, as provided in the internal policies of the cooperative, after due notice and 
hearing. Loss of trust and confidence in the performance of duties shall be a valid 
ground for removal.
All complaints for the removal of any elected officer shall be filed with the 
Board of Directors, except as otherwise provided herein. Upon finding prima facie 
evidence of guilt, the Board shall inform the officer concerned and present its 
recommendation for removal in a regular or special General Assembly called for the 
purpose, wherein such officer shall be given a final opportunity to present his case. 
The regular or special General Assembly, by a three-fourths (3/4) votes of the 
members entitled to vote present and constituting a quorum, shall approve or 
disapprove the removal of the officer.
In cases involving directors, the complaint shall be filed with the Ethics and 
Grievance committee, which shail follow the procedure set in the preceding 
paragraph.
In cases invoiving the removal of any appointive officer, a complaint shall be 
filed with the Ethics and Grievance committee of the cooperative, which shall submit 
its recommendation to the Board of Directors for proper action. The decision of the 
Board of Directors may be appealed to the General Assembly.
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During the investigation, the Board of Directors or the Ethics and Grievance
2 
committee may, as the case may be, upon majority vote, place such officer under
3 
preventive suspension, as prescribed in the By-laws.
4 
The decision of the General Assembly may be appealed to the Authority.
5 
CHAPTER X. RESPONSIBILITIES, RIGHTS AND PRIVILEGES OF
6 
COOPERATIVES
7 
SEC. 59. Address. - Every cooperative shall have an official postal address
8 
where the principal office is located and an electronic mail address to which all
9 
communications, reports, notices, and summons may be served, and where ail other
10 
documents required shall be submitted. The Articles of Cooperation and the By-laws
11 
shall be amended accordingly should there be a change in the official postal and
12 
electronic mail addresses of the cooperative.
13 
For this purpose, an electronic mail registry shall be created in accordance
14 
with the guidelines to be promulgated by the Authority.
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SEC. 60. Books to be Kept Open. -
16 
(a) Every cooperative shall have the following documents ready and accessible to
17 
its members and representatives of the Authority for inspection, examination,
18 
and investigation during reasonable office hours at its registered principal
19 
office:
20 
(1) A copy of this Code and all other laws pertaining to cooperatives;
21 
(2) A copy of the Implementing Rules and Regulations of this Code;
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(3) A copy of the Articles of Cooperation and By-laws of the cooperative;
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(4) A registry of members;
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(5) The books of the minutes of the meetings of the General Assembly, Board 
of Directors and committees;
(6) A share and transfer book, except for unions;
(7) Financial statements and other financial records; and
(8) Such other documents as may be prescribed by the Authority, laws, and the 
By-laws.
(b) The accountant or the bookkeeper of the cooperative shall be responsible for 
the maintenance and safekeeping of the books and records of accounts of the 
cooperative in accordance with generally accepted accounting practices. The 
accountant or bookkeeper shall also be responsible for the production of the 
same at the time of audit, inspection, examination, or investigation.
The Audit committee shall be responsible for the continuous and periodic 
review of the books and records of accounts to ensure that such records are in 
accordance with generally accepted accounting practices. It shall also be 
responsible for the production of the same at the time of audit or inspection.
(c) Each cooperative shall maintain records of accounts such that the true and 
correct condition and the results of the operation of the cooperative may be 
ascertained therefrom at any time. The financial statements, audited according 
to generally accepted auditing standards, principles and practices, shall be 
published annually and shall be kept posted in conspicuous places in the 
principal office of the cooperative, its branches, and satellite offices.
(d) Subject to the pertinent provisions of the National Internal Revenue Code, as 
amended, and other laws, a cooperative may dispose, by burning or any 
method of complete destruction, any document, record or book pertaining to
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its financial and non-financial operations which are already more than five (5) 
years old except those relating to transactions which are the subject of civil, 
criminal, and administrative proceedings. An inventory of the audited 
documents, records and books to be disposed of shall be drawn up and certified 
to by the Cooperative Secretary and the Chairman of the audit committee and 
presented to the Board of Directors, which may thereupon approve the 
disposition of said records.
The information and data being examined may contain confidential matters 
or privilege communication which should not be disclosed or uused without 
the consent of the cooperative in accordance with Republic Act No. 10173, 
otherwise known as the " Data Privacy Act of 2012."
SEC. 61. Annual Reports. - Every cooperative shall prepare an annual 
progress report with the necessary attachments as may be prescribed by the 
Authority at the end of every calendar year. The reports shall be made accessible to 
its members, and copies thereof shall be available upon request of members on 
record during reasonable office hours. These reports shall be filed with the Authority 
within one hundred twenty (120) days from the end of the calendar year. The form 
and contents of the reports shall be as prescribed by the rules of the Authority. 
Failure to file the required reports on time shall subject the accountable officer to 
fines and penalties as may be prescribed by the Authority. Failure to file the required 
reports despite notice shall be a ground for the suspension or cancellation of the 
Certificate of Registration of the cooperative, subject to the guidelines to be issued 
by the Authority.
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If a cooperative fails to make and file the reports required herein, or fails to
2 
include therein any matter required by the Code, the Authority shall, within thirty
3 
(30) days from the expiration of the prescribed period, send such cooperative a
4 
notice stating its non-compliance and the commensurate fines and penalties that will
5 
be imposed until such time that the cooperative has complied with the requirements.
6 
SEC. 62. Registry of Members as Prima Facie Evidence. - A registry of
7 
members kept by the cooperative shall be prima facie evidence of the following
8 
particulars:
9 
(a) The date on which the name of any person was entered in such registry or list
10 
of members; and
11 
(b)The date on which any such person ceased to be a member.
12 
However, other information may be required in accordance with the guidelines
13 
that shall be prescribed by the Authority in consultation with the cooperative sector.
14 
SEC. 63. Probative Value of Certified Copies of Entries. - A copy of any
15 
entry in any book, registry, or list regularly kept in the course of business of the
16 
cooperative shall, if duly certified in accordance with the rules of evidence, be
17 
admissible as evidence of the existence of entry and prima facie evidence of the
18 
matters and transactions therein recorded.
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No cooperative or person in possession of the books of such cooperative shall, 
in any legal proceedings to which the cooperative is not a party, be compelled to 
produce any of the books of the cooperative, unless by order of the Authority in the 
exercise of its adjudicatory powers or a competent court.
SEC. 64. Bond of Accountable Officers. - All officers and employees 
handling funds, securities, or property on behalf of the cooperative shall be covered
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by a surety bond or a fidelity bond to be issued by a duly registered insurance or 
bonding company, the adequacy of which shall be determined by the Board of 
Directors, for the faithful performance of their respective duties and obligations. The 
cooperative may likewise secure other insurance policies for its protection against 
losses of monies, securities, and other properties.
Within thirty (30) days upon approval of the registration of a cooperative, the 
bonds of the accountable officers shall be submitted to the Authority. The bond for 
the cooperative's Treasurer shall be ten per centum (10%) of the sum of the initial 
paid-up capital and membership fees. The bonds for all accountable officers shall be 
renewed annually and adjusted accordingly.
SEC. 65. Preference of Claims. -
(a) Notwithstanding the provisions of existing laws, rules and regulations to the 
contrary, any debt due to the cooperative from the member shall constitute a 
first lien upon any raw materials, production, inputs, and products produced; 
or any land, building, facilities, equipment, goods or services acquired and held, 
by such member through the proceeds of the loan or credit granted by the 
cooperative to such member for as long as the same is not fully paid.
(b) No property or interest on property which is subject to a lien under paragraph 
(a) herein shall be sold nor conveyed to third parties without the prior 
permission of the cooperative. The lien upon the property or interest shall 
continue to exist even after the sale or conveyance thereof until such lien has 
been duly extinguished.
(c) Notwithstanding the provisions of any law to the contrary, any sale or 
conveyance made in contravention of the preceding paragraph shall be void.
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SEC. 66. Instrument for Salary or Wage Deduction. -
(a) A member of a cooperative shall, notwithstanding the provisions of existing 
laws to the contrary, execute an instrument in favor of the cooperative 
authorizing the employer to deduct from the salary or wages, commutation of 
leave credits, and any other monetary benefits payable by the employer, and 
remit such amount as maybe specified in satisfaction of a debt, share capital 
contribution, or other demand due from the member to the cooperative.
(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
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other similar processes to facilitate or implement the deductions: Provided,
1 
That in the case of a private employer, the actual and reasonable cost for
3 
deducting and remitting may be collected.
4 
(f) The member may withdraw such consent at any time and for any reason, which
5 
shall also be put in writing. Any person who acts contrary to this provision shall
6 
be held liable under this Code and other laws, as the case may be.
7 
SEC. 67. Primary Lien. - Notwithstanding the provision of any law to the
8 
contrary, a cooperative shall have primary lien upon the capital, deposits, or interests
9 
of a member for any debt due to the cooperative from such member.
10 
SEC. 68. Tax Treatment of Cooperatives. - Duly registered cooperatives
11 
under this Code which do not transact any business with non-members or the
12 
general public shall not be subject to any taxes, fees, and charges imposed under
13 
the internal revenue laws and other tax laws. Cooperatives not falling under this
14 
Section shall be governed by the succeeding provisions.
15 
SEC. 69. Tax and Other Exemptions. - Duly registered cooperatives
16 
transacting business with both members and non-members shall not be subject to
17 
tax on their transactions with members. Further, the transactions of members with
18 
the cooperative shall not be subject to any taxes, fees, and charges, including but
19 
not limited to final taxes on members' share capital and deposits and corresponding
20 
documentary stamp taxes.
21 
Notwithstanding the provisions of any law or regulation to the contrary, such
22 
cooperatives dealing with non-members shall enjoy the following tax exemptions:
23 
a) Duly registered agricultural cooperatives and non-agricultural
24 
cooperatives whose Reserve Funds have an existing balance of Twenty
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million pesos (P20,000,000.00) 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 Twenty million 
pesos (P20,000,000.00), 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 business 
transactions with non-members after deducting the amounts for the 
statutory funds;
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(2) Value-Added Tax (VAT) on transactions with non-members: 
Provided, however, That duiy registered cooperatives shall be exempt 
from the imposition of VAT, on the following:
i) Sales by Agricultural cooperatives duiy registered with the 
Authority to their members as weii as saie of their produce, 
whether in its originai 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 resaie to other 
Agricuiturai cooperatives;
ii) Gross receipts from lending activities by credit or multi­
purpose cooperatives duiy 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
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their members into finished or process products for sale by
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the cooperatives to their members and non-members:
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Provided, however, That any processed product or its
4 
derivative arising from the raw materials produced by their
5 
members, sold in the name and for the account of the
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cooperative shall be deemed a product of the cooperative
7 
and its members: Provided, further. That at least twenty-
8 
five per centum (25%) of the net income of the
9 
cooperatives is returned to the members in the form of
10 
interest and/or patronage refunds.
11 
(3) All sales of goods and/or services rendered for non-members shall
12 
be subject to the applicable percentage taxes except sales made by
13 
commodities or service cooperatives; and
14 
(4) All other taxes unless otherwise provided herein.
15 
Donations to duly accredited charitable, research and educational institutions
16 
and reinvestment to socioeconomic projects within the area of operation of the
17 
cooperative may be tax deductible.
18 
(c) All duly registered cooperatives shall be exempt from payment of local taxes,
19 
fees and charges whether barangay, municipal, city, or provincial taxes and
20 
taxes on transactions with banks and insurance companies. The Authority shall
21 
furnish the Municipal, City, or Provincial Assessor's Office a certified list of duly
22 
registered cooperatives as basis of their removal from the Assessment Rolls;
23 
(d) In areas where there are no available notaries public, the judge, exercising
24 
his/her ex-officio capacity as notary public, shall render service, free of charge.
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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 Authority 
before the court, to enforce the payment of obligations contracted in favor of 
the cooperative.
(g) All 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.
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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. Privileges 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 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
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Similar services and facilities shall be given preference in the grant of a 
franchise or certificate therefor: Provided, That such cooperatives shail open 
their membership to ail persons qualified in their areas of operation. In case 
there are two (2) or more appiicants 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 pubiic services;
(d) In areas where there are agricuiturai cooperatives, at least fifty per centum 
(50%) of the suppiy to government institutions, agencies, and LGUs, of rice, 
corn, grains, fish and other marine products, meat, eggs, miik, 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
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Development Bank of the Philippines (DBP), the Land Bank of the Philippines
2 
(LBP), and other financial institutions except the Bangko Sentral ng Pilipinas
3 
(BSP);
4 
The Philippine Deposit Insurance Corporation (PDIC) and other government
5 
agencies, government-owned and controlled corporations, and government
6 
financial institutions shall provide technical assistance to federations engaged
7 
in savings and credit operations to establish and strengthen their own
8 
cooperative deposit insurance systems;
9 
(h) Public transport service cooperatives shall be entitled to financing support from
10 
Government Financial Institutions for the acquisition and maintenance of land,
11 
sea, and air transport equipment, facilities, and parts, and shall be preferred in
12 
securing a franchise for active or potential routes for public transport. They
13 
shall have preferential rights to the management and operation of public
14 
terminals and ports whether land, sea, or air, and wharves, where the
15 
cooperative operates, as well as in the operation of arrastre and stevedoring
16 
services therein.
17 
(i) Cooperatives shall be given preference in the procurement of government
18 
projects subject to the existing procurement laws, rules and regulations.
19 
(j) Cooperatives shall enjoy the privilege of being represented by the provincial or
20 
city fiscal, or the Office of the Solicitor General, free of charge, except when
21 
the adverse party is the Republic of the Philippines;
22 
(k) Cooperatives organized by faculty members and employees of educational
23 
institutions shall have the preferential right to manage the school canteen and
24 
other services related to the operation of the educational institution where they
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are employed: Provided, That such services are operated within the premises
2 
of the said educational institution;
3 
(I) The relevant regulatory agencies, and LGUs shall not discriminate against duly
4 
registered cooperatives seeking accreditation as service providers, or seeking
5 
to engage in a particular business: Provided, That they possess all other
6 
qualifications under the law. Any person who acts contrary to this provision
7 
may be held liable under this Code and all other relevant laws and issuances;
8 
(m) Cooperatives shall be entitled to financing support from the relevant
9 
government agencies that shall allocate funds for the establishment of projects
10 
and programs for the development and promotion of cooperatives; and
11 
(n) The relevant government agencies and government financial institutions shall
12 
create a special window for financing, in the form of blanket or long-term
13 
wholesale loans without need for individual processing, to qualified
14 
cooperatives engaged in housing projects. Such shall offer interest rates and
15 
terms equal to, or better than those given for socialized housing projects.
16 
The Authority, in consultation with appropriate government agencies and the
17 
cooperative sector, shall issue rules and regulations on all matters concerning
18 
housing cooperatives and socialized housing projects. Furthermore, the sector shall
19 
be consulted in matters of policy and implementation that will affect the rules and
20 
regulations on cooperatives.
21 
CHAPTER XI. INSOLVENCY, SUSPENSION, DISSOLUTION, LIQUIDATION,
22 
AND DELISTING OF COOPERATIVES
23 
SEC. 72. Proceeding Upon Insolvency. - In case a cooperative is unable
24 
to fulfill its obligations to creditors due to insolvency, such cooperative may apply
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for such remedies as it may deem fit under the provisions of R.A. No. 10142,
2 
otherwise known as the Financial Rehabilitation and Insolvency Act.
3 
Nothing in this Article, however, precludes creditors from seeking protection
4 
from said insolvency law.
5 
SEC. 73. Effect of Declaration of Insolvency by a Competent Court. -
6 
Should the cooperative be declared insolvent by the court, its Certificate of
7 
Registration shall be cancelled, and it shall be delisted from the registry of
8 
cooperatives of the Authority .The coop may appeal.
9
10 
SEC. 74. Suspension of Certificate of Registration. - A penalty of
11 
suspension, after due process, shall be imposed on a cooperative on any of the
12 
following grounds:
13 
a. Willful refusal to submit annual progress reports with the necessary
14 
attachments within the period mandated by this Code: Provided, That in case
15 
of newly-registered cooperatives, this provision shall only apply three (3) years
16 
after they have registered;
17 
b. Willful refusal to comply with an interlocutory order, a final and executory
18 
decision, or award from the CDA Board of Directors, or from any of its Regional
19 
Offices or adjudication officers, or by a voluntary arbitrator in relation to an
20 
investigation, voluntary arbitration, or adjudication.
21 
SEC. 75. Voluntary Dissolution Where no Creditors are Affected. - If
22 
the dissolution of a cooperative does not prejudice the rights of any creditor having
23 
a claim against it, the dissolution may be effected by a majority vote of the Board of
24 
Directors, and by a resolution duly adopted by the affirmative vote of at least three-
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fourths (3/4) of all the members entitled to vote, present and constituting a quorum 
in a special General Assembly called by the directors for such purpose: Provided, 
That the notice of time, place, and object of the meeting shall be posted for three 
(3) consecutive weeks in the principal office of said cooperative, in a public place in 
the municipality, city, or province where the cooperative operates, and in its official 
website and social media accounts.
The notice of such meeting shall be sent to each member of record either by 
personal delivery, registered mail, or through electronic means at least thirty (30) 
days prior to said meeting. A copy of the resolution authorizing the dissolution shall 
be certified to by a majority of the Board of Directors and countersigned by the 
Cooperative Secretary.
Upon compliance with all the requisites for voluntary dissolution, the Authority 
shall issue the Certificate of Dissolution.
SEC. 76. Voluntary Dissolution Where Creditors Are Affected. - In 
case creditors of the cooperative are affected, the petition for dissolution, signed by 
a majority of its Board of Directors or the Chief Executive Officer or General Manager, 
as the case may be, and verified by the Chairperson of the Board or the Cooperative 
Secretary, shall be filed with the Authority. The petition shall state that the 
dissolution was affirmed by a vote of at least three-fourths (3/4) of all the members 
entitled to vote, present and constituting a quorum in a special General Assembly 
called for the purpose, and shall set forth all the claims and demands against the 
cooperative.
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
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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.
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SEC. 77. Cancellation by Order of the Authority. - The Authority may
2 
cancel, after due notice and hearing, the cooperative's Certificate of Registration on
3 
any of the following grounds:
4 
a. Having obtained its registration by fraud;
5 
b. Engaging in an illegal or unauthorized purpose;
6 
c. Willful violation, despite written notice by the Authority, of the provisions of
7 
this Code or its Implementing Rules and Regulations, other issuances of the
8 
Authority consistent with this Code, or By-laws of the cooperative;
9 
d. Willful refusal to comply with an order issued or given by the Authority;
10 
e. Willful failure to operate on a cooperative basis; and
11 
f. Failure to meet the required minimum capital and minimum number of
12 
members in the cooperative.
13 
The decision of the Authority on the cancellation of the Certificate of
14 
Registration of a cooperative may be appealed to the Authority's Board of Directors
15 
within thirty (30) days from the receipt of thereof. The decision of the Authority's
16 
Board of Directors shall be final and executory unless elevated or appealed to a
17 
regular court.
18 
SEC. 78. Cancellation by Failure to Operate. - If a cooperative has not
19 
commenced operations within three (3) years after the issuance of its Certificate of
20 
Registration, or has not carried on its business for three (3) consecutive years, the
21 
Authority shall send a show cause order for the cooperative to explain its failure to
22 
operate. Failure to provide justifiable cause shall authorize the Authority, after due
23 
notice, to cancel the Certificate of Registration and delist it from the registry.
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SEC. 79. Liquidation of a Cooperative. - Every cooperative whose term
2 
of existence expires by its own limitation, or whose existence is terminated by
3 
voluntary dissolution or cancellation of its Certificate of Registration by the Authority
4 
shall cease to operate. However, it can continue to exist for three (3) years for
5 
winding up its affairs, prosecuting and defending suits by or against it, and the
6 
disposition, conveyance and distribution of its properties and assets.
7 
The cooperative is authorized to convey all of its interests in the properties to
8 
trustees for the benefit of its members, creditors, and other persons in interest, after
9 
which, all interests which the cooperative had in the properties are terminated.
10 
Upon the winding up of the cooperative affairs, any asset distributable to any
11 
creditor, shareholder, or member who is unknown or cannot be found shall be given
12 
to the federation or union to which the cooperative is affiliated with.
13 
A cooperative shall only distribute its assets or properties upon lawful
14 
dissolution, and after payment of all its debts and liabilities, except in the case of
15 
decrease of share capital of the cooperative, and as otherwise allowed by this Code.
16 
SEC. 80. Delisting of Cooperatives. - Cooperatives may be delisted from
17 
the Registry of Cooperatives due to the following causes:
18 
a. Voluntary Dissolution;
19 
b. Involuntary Dissolution;
20 
c. Cancellation by Order of the Authority;
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d. Cancellation by Failure to Operate; and
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e. Merger or Consolidation.
23 
SEC. 81. Rules and Regulations on the Insolvency, Suspension,
24 
Dissolution, Liquidation, and De-listing Cooperatives. - The guidelines on the
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implementation of this Chapter shall be included in the Implementing Rules and
2 
Regulations of this Code, in consultation with the cooperative sector.
3 
CHAPTER XII. CAPITAL, PROPERTY, AND FUNDS
4 
SEC. 82. Capital and Funds. - The capitalization of cooperatives and
5 
federations, or funds in the case of unions, shall be governed by this Code and its
6 
Implementing Rules and Regulations that wiil be developed in consultation with the
7 
cooperative sector.
8 
SEC. 83. Capital Sources. - Cooperatives registered under this Code may
9 
derive their capital from any or all of the following sources:
10 
a. Member's share capital;
11 
b. Loans and borrowings;
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c. Deposits from members;
13 
d. Revolving capital which consists of the deferred payment of patronage refunds,
14 
or interest on share capital;
15 
e. Joint venture partners;
16 
f. Subsidies, donations, legacies, grants, aids and such other assistance or
17 
investment from any local or foreign institution whether public or private:
18 
Provided, That capitai coming from such subsidies, donations, legacies, grants,
19 
aids, investments, and other assistance shall not be divided into individual share
20 
capital holdings at any time, but instead shall form part of the donated capital
21 
or fund of the cooperative. Upon dissolution or cancellation of the cooperative,
22 
such donated capital shall be subject to escheat; and
23 
g. Reserve funds utilized for investment and as capital for the operations of the
24 
cooperative as approved by the Board of Directors or General Assembly.
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SEC. 84. Limitation on Share Capital Subscription - No member of 
primary cooperative other than the cooperative itself shall own or hold more than 
twenty per centum (20%) of the subscribed share capital of the cooperative.
Where a member of a cooperative dies, his heir shall be entitled to the shares 
of the decedent: Provided, That the total share holding of the heir does not exceed 
twenty per centum (20%) of the share capital of the cooperative: Provided, further, 
1 
That the heir qualifies and is admitted as a member of the cooperative: Provided,
8 
finaiiy, That where the heir fails to qualify as a member or where his total share
9 
holding exceeds twenty per centum (20%) of the share capital, the shares in excess
10 
will revert to the cooperative upon payment to the heir of the value of such shares.
11 
For federations as stated in its Articles of Cooperation and By-laws, the share
12 
capital holdings of any one member-cooperative shall not exceed forty per centum
13 
(40%) of the subscribed share capital of the federation: Provided, That the voting
14 
scheme shall be one cooperative, one vote.
15 
A foreign federation of Cooperatives if admitted as associate member of a
16 
Philippine federation of cooperatives may hold or own up to 40% of the preferred
17 
share capital of said Philippine federation: Provided, That the redemption date of
18 
such preferred share capital shall be at least (5) years after effectivity of
19 
membership; Provided, further. That during the five-year period, withdrawal of the
20 
preferred shared capital shall not be allowed.
21 
SEC. 85. Assignment of Share Capital Contribution or Interest -
22 
Subject to the provisions of this Code and the approval of the majority of the Board
23 
of Directors, no member shall transfer his/her shares or interest in the cooperative
24 
or any part thereof unless:
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a. The member has held such share capital contribution or interest for more than 
one (1) year;
b. The assignment is made to the cooperative or to a member of the cooperative 
or to a person who falls within the fieid of the membership of the cooperative; 
and
c. The Board of Directors has approved such assignment.
SEC. 86. Capital BuHd-Up. - The By-laws of every cooperative, except for 
cooperative unions, shall prescribe a reasonable and realistic member capital or 
deposits build-up program to allow the continuing growth of the contribution of the 
members to the cooperative as their economic conditions continue to improve. Upon 
approval of the membership, the member shall execute a subscription agreement on 
his equitabie contribution to the cooperative. Upon full payment thereof, the member 
may apply for an additional share capital subscription, and execute a new 
subscription agreement.
SEC. 87. Shares. - The term "share" refers to a unit of capital in a 
cooperative, except for cooperative unions, the par value of which may be fixed at 
any figure not less than One hundred pesos (PIOO.OO) but not more than One 
thousand pesos (PI,000.00). The share capital of the cooperative is the money paid 
or required to be paid by the members for the operations of the cooperative.
Unless otherwise provided for in its policies, the cooperative shall issue Share 
Certificates at the end of the calendar year based on the number of shares fully paid 
for the said period.
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Cooperatives are prohibited from issuing multiple types of shares with 
different par values, and from increasing or decreasing the par value of the share 
capital without amending their Articles of Cooperation and By-laws.
A share can either be a common share issued to a regular member, or a 
preferred share issued to associate members.
SEC. 88. Fines. - The policies of a cooperative may prescribe a fine on 
unpaid subscribed share capital. Provided, That such fine is fair and reasonable.
SEC. 89. Investment of Capital. - A cooperative, upon approval as 
provided in its By-laws, may invest its capital in any of the following:
a. Any reputable bank;
b. Securities issued or guaranteed by the Government;
c. Real estate primarily for the use of the cooperative or its members;
d. Federation investment to a cooperative, or primary cooperative investment to 
another primary cooperative, subject to the rules or guidelines that will be 
developed by the Authority in consultation with the cooperative sector; or
e. Any other manner authorized in the By-laws.
SEC. 90. Revolving Capital. - The General Assembly may authorize the 
Board of Directors to raise a revolving capital from the proceeds of products sold or 
services rendered, or per unit of product or services handled, to strengthen its capital 
structure.
CHAPTER XIII. AUDIT, INQUIRY, AND MEMBERS' RIGHT TO EXAMINE
SEC. 91. Audit of Cooperatives. - Cooperatives registered under this Code 
shall be subject to an annual audit of its financial and social performance in 
accordance with the Implementing Rules and Regulations to be promulgated by the
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Authority in consuitation with the cooperative sector. The financiai audit shaii be
2 
conducted by an externai auditor who shaii independent from the cooperative or any
3 
of its subsidiaries, and must be a member in good standing of the Phiiippine Institute
4 
of Certified Pubiic Accountants (PICPA), and is accredited by both the Board of
5 
Accountancy and the Authority. However, if the totai assets or totai iiabiiities of
6 
agricuiturai, fisheries and other cooperatives is iess than Three Miiiion Pesos (P
7 
3,000,000.00), or such amount as maybe determined appropriate by the Department
8 
of Agricuiture (DA), and concerned agencies, the financiai statements maybe
9 
certified under oath by the bookkeeper, treasurer, and the president.
10 
The sociai performance audit may be conducted by the audit committee, by
11 
the internai auditor of the cooperative, or by an independent auditor engaged by the
12 
cooperative.
13 
The federation representative may assist the Authority in the visit, inspections
14 
and investigation of their member cooperative, to ensure compiiance with laws and
15 
regulations, and to protect their members and the public in general.
16 
SEC. 92. Audit Report. - The complete audit reports shall be submitted to
17 
the Board of Directors, which shall be presented to the General Assembly for
18 
approval. The Board of Directors shall be liable under Section 170 of this Code should
19 
it fail to present such reports to the General Assembly.
20 
SEC. 93. Non-Liability for Defamations. - The auditor shall not be held
21 
liable in any action for defamation for acts done or for any statement made by
22 
him/her in good faith in connection with the conduct of audit of the cooperative.
23 
SEC. 94. Right to Examine. - All members shall have the right to examine
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the records of the cooperative under Section 60 of this Code at any time during
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reasonable hours of the operating days of the cooperative: Provided, That the
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member submits a letter request three (3) days prior to the date of his demand to
3 
examine the records and stating therein the purpose of the request.
4 
The Board of Directors shall consider the purpose and reason for the request
5 
to examine the records to determine its propriety. The Board of Directors shall have
6 
the right to refuse the request after proper consultation with the requesting member,
7 
upon the following grounds:
8 
a. The member has improperly used any information secured through any prior
9 
examination of the records of such cooperative or of any other cooperative;
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or
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b. The member is not acting in good faith or for a legitimate purpose in making
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the demand to examine records.
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If the request to examine is denied based on the aforementioned grounds, 
the member shall have the burden of proving to the Board that such request is made 
in good faith and for a legitimate purpose. If the denial is made in bad faith, the 
directors who voted for such refusal shall be penalized under Section 177 of this 
Code.
SEC. 95. Safety of Records. - Every cooperative shall, at its principal office, 
keep and carefully preserve the records required by this Code to be prepared and 
maintained. The By-laws shall also provide the condition and the accountable 
persons for the safekeeping of the records in accordance with applicable laws on 
data privacy. The cooperative shall take all necessary precautions to prevent its loss, 
destruction, or falsification.
CHAPTER XIV. ALLOCATION AND DISTRIBUTION OF NET SURPLUS
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SEC. 96. Net Surplus. - Notwithstanding the provisions of existing laws, the
2 
net surplus of cooperatives shall be determined in accordance with its By-laws. Every
3 
cooperative shall determine its net surplus at the close of every calendar year.
4 
Any provision of law to the contrary notwithstanding, the net surplus shall not
5 
be construed as profit but as an excess of payments made by the members for the
6 
loans borrowed, or the goods and services availed by them from the cooperative or
7 
the difference of the rightful amount due to the members for their products sold or
8 
services rendered to the cooperative including other inflows of assets resulting from
9 
its other operating activities and which shall be deemed to have been returned to
10 
them if the same is distributed as prescribed herein.
11 
SEC. 97. Net Surplus Allocation and Statutory Funds. - The net surplus
12 
shall be subject to the allocation of the following statutory funds, which shall be
13 
recorded in the books of account, for the cooperative's growth and development:
14 
a. An amount for the reserve fund which shall be at least ten per centum (10%) of
15 
the net surplus, provided, that in the first 5 years of operation after registration,
16 
the amount allocated for the reserved fund shall not be less than 30% of the net
17 
surplus;
18 
The Reserved fund shall be used for the stability of the cooperative and to
19 
cover net losses in its operations, including losses incurred during a pandemic, state
20 
of emergency, and other such force majeure, : provided , that if any of the
21 
aforementioned events occurm necessitating the use of the reserved fund,
22 
cooperative may use not greater than fifteen percent (15%) of the latter to mitigate
23 
the losses incurred, as may be approved or confirmed by the General Assembly, as
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the case may be. Any sum recorded on items previously charged to the reserved
2 
fund shall be credited to such fund.
3 
The fund shall be recorded in the books of account of the cooperative, and
4 
the cash allocation for the reserved fund shall be deposited separately in an account
5 
established for that purpose.
6 
The general assembly may decrease the amount allocated to the
7 
reserve fund when the reserve fund already exceeds the share capital.
8 
Upon the dissolution of the cooperative, the reserve fund shall be distributed in
9 
accordance with the rules and regulations on liquidation to be issued by the
10 
Authority.
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b. The Cooperative Education and Training Fund (CETF), which shall not exceed
12 
ten per centum (10%) of the net surplus, shall be used for the training,
13 
development and similar other cooperative activities geared towards the
14 
growth of the cooperative movement:
15 
(1) Half of the CETF shall be used to provide for the education and training of
16 
its officers, members, and employees; while the other half shall be remitted
17 
to a federation and/or union that the cooperative opted to join, which must
18 
redound to the benefit and development of the member-cooperatives, such
19 
as, but not limited to trainings, seminars, and other related activities.
20 
Should a cooperative holds multiple affiliations, the primary cooperative has
21 
the discretion on the allocation of its CETF.
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(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.
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(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 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, 
environmental 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 aliocation 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.
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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 (%) 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.
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
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his/her account until his/her account until his/her share capital contribution
2 
has been fully paid;
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(3) In the case of a non-member patron, his/her proportionate amount of
4 
patronage refund shall be set aside in a fund created for the purpose and
5 
shall be allocated to individual non-member patrons only upon request and
6 
presentation of evidence of the amount of his/her patronage. The amount
7 
so allocated shall be credited to such patrons toward payment of the
8 
minimum capital contribution for membership. When a sum equal to this
9 
amount has accumulated at any time within two (2) years from the start of
10 
his/her patronage, such patron shall be deemed and become a member of
11 
the cooperative if he so agrees or requests and complies with the provisions
12 
of the By-laws for admission to membership; and
13 
(4) Any non-member patron who has accumulated the sum necessary for
14 
membership but who does not request nor agree to become a member or
15 
fails to comply with the provisions of the By-laws for admission to
16 
membership, the amount so accumulated or credited to their account
17 
together with any part of the general fund for non-member patrons shall be
18 
credited to any of the statutory funds as approved by a majority of the
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members entitled to vote, present and constituting a quorum.
20 
CHAPTER XV. AGRICULTURAL COOPERATIVES
21 
SEC. 98. Definition and Coverage. - This Chapter shall apply to all
22 
agricultural cooperatives, as defined in this Code: Provided, That the provisions of
23 
the other chapters of this Code shall apply suppletorily except insofar as this Chapter
24 
otherwise provides.
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SEC. 99. Cooperative Business Activities and Allied Services. - A duly 
registered agriculture cooperative may engage in all or any of the following activities:
a. Raising and/or culture of plants, high-value crops, animals, fish, poultry, 
livestock, other agri-products as source of food, feed, and fiber, and other agri­
fishery or non-food commodities;
b. Production of salt;
c. Community and social forestry;
d. Provision of credit facilities for marginal farmers and fishermen;
e. Facilitating the procurement and distribution of farm inputs/implements for its 
members;
f. Facilitating the production, procurement, repacking, importation, distribution 
and marketing farm inputs/implements for its members such as but not limited 
to, meat type, and dairy animals, planting materials, semen, silage, feed, 
veterinary supplies, seeds, fertilizers and chemicals, farm equipment, food 
processing, and engineering supplies/equipment, and other inputs as maybe 
needed by the agricultural industry;
g. Propagation, production, harvest, postharvest, processing, packing, repacking, 
marketing exportation, and sale of members'agri-products, dairy products, and 
by-products and produce;marketing, and sale of members' agri-products 
and/or produce;
h. Maintenance and management of irrigation systems, water impounding, and 
other agricultural facilities; and
i. 
Other allied services such as but not limited to warehousing, cold storage, and 
other post-harvest services, hauling, and transport of members'
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products/produce and such other similar business services and activities that
2 
will reduce cost and/or value addition of output.; and
3 
j. Learning site entrepreneurship for extension, technology demonstration, agri-
4 
tourism, and farm business schools.
5 
SEC. 100. Pre-Cooperative Agricultural Organization. - Prior to
6 
registration with the Authority, a group of natural persons intending to form an
7 
agriculture cooperative may voluntarily form a Pre-Cooperative Agricultural
8 
Organization (PCAO) that shall have its own juridical personality to undertake
9 
activities that shall determine the viability of the creation of a cooperative under this
10 
Code. Prior to registration, the PCAO must be registered as such with the Cooperative
11 
Development Officers (CDOs).
12 
The Department of Agriculture (DA) and the Authority, in coordination with
13 
the CDOs, shall assist PCAOs so that they can formally organize as cooperatives
14 
under 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
19 
PCAOs.
20 
SEC. 101. Registration of Agricultural Cooperatives. - Agricultural
21 
cooperatives shall file their application for registration with the regional office of the
22 
Authority that has jurisdiction over its area of operation. The requirements and
23 
procedure for registration of agricultural cooperatives shall be in accordance with
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the rules and regulations to be promulgated by the Authority in consultation with 
the cooperative sector.
SEC. 102. Capital Requirements of Agricultural Cooperatives. - The
authorized share capital of an agriculture cooperative shall be stated in its Articles 
of Cooperation and that prior to its registration, at least twenty five per centum 
(25%) of the authorized share capital shall be subscribed to by the members and at 
least twenty five (25%) of the subscribed share capital shall be paid-up: Provided, 
That the paid-up capitalization requirement for primary cooperatives shall not be 
less than Fifteen Thousand Pesos (P15,000.00).
SEC. 103. Bond of Membership. - The bond of membership of agricultural 
cooperatives shall be any of the following:
a. Residential - members are farmers, farm workers, fisherfolk who are actually 
and physically residing within the area of operation;
b. Occupational - members are those who are engage in raising, culture of plants, 
animals, as well as those from the technical and scientific communities of the 
agriculture sector;
c. Associational - members are from registered associations, groups, clubs, 
cultural and other similar aggrupation of farmers, farm workers, and fisherfolk; 
and
d. Institutional - members consist of employees, workers and/or officers of a 
particular institution who will undertake or are undertaking agricultural 
projects.
SEC. 104. Clustering and Consolidation. - In order to pool their 
resources for increased viability and market competitiveness, the DA, DAR, DTI, the
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Authority and the cooperative sector shall institutionalize the farm and fisheries
2 
clustering and consolidation (F2C2) program that will promote, encourage
3 
agricultural cooperatives and facilitate their cooperation into clusters that will
4 
encompass the whole agricultural value chain, including but not limited to land
5 
consolidation, postharvest processing, distribution, logistics, marketing, and
6 
promotions.
7 
Within sixty (60) days from the effectivity of this Code, The DA, DAR, DTI and
8 
CDA, in consultation with the sector, shall jointly issue the guidelines for the
9 
implementation of the foregoing program, and shall provide the necessary assistance
10 
at every step of the clustering and consolidation process, including the formulation
11 
of cluster development plans.
12 
SEC. 105. Partnership andJoint Venture with Private Entities. — Duly
13 
registered private entities, such as those conducting Agricultural Research and
14 
Development, among others, may enter into a partnership or joint venture with
15 
agricultural cooperatives in order to provide the latter with investments and technical
16 
support, such as, but not limited to technological, logistics, and facilities support,
17 
among others. Such partnership or joint venture shall be registered with the
18 
necessary regulatory authorities, including the CDA, and enjoy the relevant
19 
exemptions and privileges under this Code.
20 
The details of the joint venture or partnership with private entities shall be left
21 
to the discretion of the cooperatives. Further details shall be laid down in the
22 
implementing rules and regulations of this code.
23 
SEC. 106. Role of National Coordinating Committee on Cooperatives
24 
Development - The Authority shall mobilize the National Coordinating Committee
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on Cooperative Development (NCC-CD) for the promotion of the growth, viability, 
and development of Agricultural cooperatives. Provided, That the NCC-CD shall 
coordinate with the DA and the farmers and fisherfolk Enterprise Development Cuncil 
(FFEDC) on matters related to growth, development, and sustainability of the 
agriculture and fisheries cooperatives.
SEC. 107. Role ofLGUs. - The Local Government Units shall:
a. Ensure the appointment of Cooperative Development Officers, in compliance 
with Republic Act No. 11535;
b. Create a Committee on Agricultural cooperatives Development in the Local 
Government Legislative Council which shall focus on addressing legislative 
concerns on Agricultural cooperatives;
c. Legislate necessary ordinances for the promotion and development of 
agricultural cooperatives;
d. Disseminate information to people and facilitate the establishment and 
development of the management and operations of agricultural cooperatives 
in their respective localities;
e. Expedite the issuance of the necessary permits for the implementation of 
programs and projects of the Authority and other national government 
agencies for the benefit of agricultural cooperatives;
f. 
Upon written request of the Authority, assist in the resolution of inter­
cooperative disputes among agricultural cooperatives operating within their 
localities;
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g. Facilitate and conduct seminars, trainings, and/or conferences necessary for 
the organization, registration, management and operations of agricultural 
cooperatives, in coordination with federations and unions; and
h. Provide technical assistance and skills training for farmers, farm workers, and 
fisherfolk to engage in income-generating activities.
SEC. 108. Role of Cooperative Development Councils and National 
Government Agencies. - The Authority shall, in collaboration with the LCDs 
through the Regional, Provincial, City, and Municipal Cooperative Development 
Councils and the Cooperative Development Officers, facilitate programs and policies 
affecting agricultural cooperatives in accordance with a Joint Memorandum Circular 
to be promulgated by the Authority and the LGU.
Agricultural cooperatives shall be entitled to financing support from the 
relevant government agencies that shall allocate funds for the establishment of 
projects and programs for the development and promotion of agricultural 
cooperatives.
SEC. 109. Benefits and Privileges of Agricultural Cooperatives. - An
agriculture cooperative shall enjoy the following benefits and privileges; 
a. Taxes, Duties, and Liens:
(1) AII benefits, privileges, and tax treatments of cooperatives as defined and 
enumerated under Chapter X of this Code shall apply to agricultural 
cooperatives;
(2) Agricultural cooperatives shall be exempt from customs duties, advance 
sales or compensating taxes on their importation and local purchase of 
machineries, equipment, accessories, batteries, and spare parts used by
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them: Provided, That all tax- and duty-free imports and local purchases shall
2 
not be sold nor the beneficial ownership thereof be transferred to any person
3 
until after five (5) years, otherwise, the cooperative and the transferee or
4 
assignee shall be solidarily liable to pay twice the amount of the imposed tax
5 
and/or duties; and
6 
(3) All real properties owned, and those directly used for the operations,
7 
management, and maintenance of agricultural cooperatives shall be exempt
8 
from the payment of real property taxes imposed under existing laws.
9 
b. Trainings and Conferences - All trainings and conferences necessary for the
10 
organization, registration, management and operations of an agriculture
11 
cooperative, rendered by the appropriate government agency, shall be given
12 
free of charge, including costs of venue, training materials, speakers and
13 
resource persons. The CDOs shall be primarily responsible for these trainings
14 
and conferences within their respective localities;
15 
c. Consolidation - Agricultural cooperatives may consolidate agricultural lands
16 
owned by its members within in a contiguous area for purposes of agricultural
17 
development; and
18 
d. Direct Purchase by National and Local Government Agencies - To promote and
19 
support agricultural cooperatives, national and local government agencies shall
20 
directly purchase agricultural products from accredited agricultural
21 
cooperatives: Provided, That said products are necessary in the performance
22 
of their respective mandates.
23 
For the purposes of this Code, the procurement by national and local
24 
government agencies of said agricultural products shall be exempt from the
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application of the bidding process prescribed under relevant government 
procurement laws: Provided, That said agencies shall undergo a negotiated 
procurement under the applicable guidelines of the Government Procurement 
Policy Board, 
e. Loans and Grants:
(1) All loans applied for by agricultural cooperatives in any government-owned 
or -controlled banks or government financial institutions shall enjoy 
preferential treatment as to the requirements, rates, securities, and 
collaterals; and
(2) The DA shall coordinate with the BSP to lower the requirements for all loans 
applied for and granted to agricultural cooperatives.
SEC. 110. Merger and Consolidation of Agricultural Cooperatives. - 
Notwithstanding the provisions of this Code, the merger and consolidation of 
agricultural cooperatives shall be in accordance with the Implementing Rules and 
Regulations to be promulgated by the Authority.
SEC. 111. Inter-Cooperative Arrangements of Agricultural
Cooperatives. -
Agricultural cooperatives shall be allowed to enter into inter-cooperative 
arrangements with and among other cooperatives and other entities to pursue value 
and supply chain solutions and other agribusiness development programs, subject 
to the guidelines to be promulgated by the Authority in consultation with the 
cooperative sector.
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SEC. 112. Local Development Hubs. - Local Development Hub (LDH) 
refers to a farming zone or transport infrastructure, which is generally far from 
formal markets, and serves a minimum of one hundred (100) farmers, linking them 
to buyers, who may be, among others, traders, processors, and export companies. 
The DA and CDA shall jointly establish LDHs in order to strengthen the market 
linkages between farmers and buyers, fostering agricultural development and 
economic growth at the local level. Further, they shall jointly issue the guidelines for 
the operations and maintenance thereof.
SEC. 113. Annual Trade Fair and Awards. - The DA, in coordination with 
the CDA, and in partnership with the cooperative sector, and other stakeholders shall 
establish and hold the Annual Agricultural cooperatives Trade Fair and Awards to 
showcase the exemplary business achievement, latest innovations, and other 
emerging trends in the sector.
CHAPTER XVI. AGRARIAN REFORM COOPERATIVES 
SEC. 114. 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.
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.
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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. 115. 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;
RA 9700 (CARP with extension Sec 6A and 6B
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e. To provide social security benefits, health, medical and social insurance
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benefits, and other social and economic benefits that promote 
the general
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welfare of the ARBs and marginal farmers;
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f. To provide non-formal education, vocationai and technical training, and
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livelihood programs to ARBs and marginal farmers;
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g. To act as conduits for externai assistance and services to the ARBs and
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marginal farmers;
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h. To undertake a comprehensive and integrated development program in
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agrarian reform and resettlement areas with special concern for the
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development of agro-based, marine-based, and cottage-based industries;
11 
i. To represent the ARBs on any or all matters that affect their interest; and
12 
j. To undertake such other economic or social activities as may be necessary or
13 
incidental in the pursuit of the foregoing purposes.
14 
SEC. 116. Cooperative Estate. - Landholdings acquired by the State, like
15 
plantations, estates, or haciendas for the benefit of the workers in accordance with
16 
the Comprehensive Agrarian Reform Program shall be collectively owned by the
17 
worker-beneficiaries under a cooperative set-up.
18 
SEC. 117. Infrastructure. - In agrarian reform and resettlement areas,
19 
the Government shall grant to agrarian reform cooperatives preferential treatment
20 
in the construction, maintenance and management of roads, bridges, canals,
21 
wharves, ports, reservoirs, irrigation systems, waterworks systems, and other
22 
infrastructures with government funding. For this purpose, the Government shall
23 
provide technical assistance, facilities, and equipment to such agrarian reform
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cooperatives.
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SEC. 118. Lease of Public Lands. - The Government may lease public
2 
lands to any agrarian reform cooperative for a period not exceeding twenty-five (25)
3 
years, subject to renewal for another twenty-five (25) years only: Provided, That the
4 
application for renewal shall be made one (1) year before the expiration of the lease:
5 
Provided, further, That such lease shall be for the exclusive use and benefit of the
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ARBs and the marginal farmers subject to the provisions of the Comprehensive
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Agrarian Reform Program, as amended.
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SEC. 119. Preferential Right - In agrarian reform areas, an agrarian
9 
reform cooperative shall have the preferential right in the grant of franchise and
10 
certificate of public convenience and necessity for the operation of public utilities
11 
and services: Provided, That it meets the requirements and conditions imposed by
12 
the appropriate government agency granting the franchise or certificate of public
13 
convenience and necessity. In cases where there is an electric service provider in
14 
the area, it shall, upon the request of an agrarian reform cooperative, immediately
15 
provide electric services to the agrarian reform areas. If the electric service provider
16 
fails to provide the services requested within a period of one (1) year, the agrarian
17 
reform cooperative concerned may undertake to provide the electric services in the
18 
area through its own resources. All investments made by the said agrarian reform
19 
cooperative for the electrification of the agrarian reform resettlement areas shall be
20 
the subject of sale to the electric service provider once it takes on the service.
21 
SEC. 120. Special Privileges. - Subject to such reasonable terms and
22 
conditions as the DAR and the Authority may impose, agrarian reform cooperatives
23 
may be given the exclusive right to do any of the following economic activities in
24 
agrarian reform and resettlement areas;
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a. Supply and distribution of consumer, agricultural, aquacultural, and industrial
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goods, production inputs, and raw materials and supplies, machinery,
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equipment, facilities, and other services and requirements of the ARBs and
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marginal farmers at reasonable prices;
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b. Marketing of the products and services of the ARBs in local and foreign
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markets;
7 
c. Processing of the products of the members into finished consumer or industrial
8 
goods for domestic consumption or for export;
9 
d. Provision of essential public services at cost, such as power, irrigation, potable
10 
water, passenger or cargo transportation by land or sea, communication
11 
services, and public health and medical care services;
12 
e. Management, conservation, and commercial development of marine, forestry,
13 
mineral, water, and other natural resources subject to compliance with the laws
14 
and regulations on environmental and ecological controls; and
15 
f. Provision of financial, technological, and other services and facilities required
16 
by the ARBs in their daily lives and livelihood.
17 
The foregoing notwithstanding, an agrarian reform cooperative cannot, on its
18 
own, by policy or any other means, disqualify a member as an ARB, whether directly
19 
or constructively.
20 
The Government shall provide the necessary financial and technical assistance
21 
to agrarian reform cooperatives to enable them to effectively discharge their
22 
purposes under this Chapter. The DAR, the Authority and the BSP shall draw up a
23 
joint program for the organization and financing of agrarian reform cooperatives.
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The joint program shall be geared towards the gradual assumption of full ownership
2 
and management control by ARBs of the agrarian reform cooperatives.
3 
SEC. 121. Organization and Registration. - Agrarian reform cooperatives
4 
may be organized and registered in accordance with the requirements of this Code
5 
only upon prior certification by the DAR that said proposed cooperative is needed
6 
and that its organization is feasible and will be economically viable in its operations.
7 
The Authority, in consultation with the concerned government agencies and
8 
cooperative sector, shall issue appropriate rules and regulations pertaining to the
9 
provisions of this Chapter.
10 
CHAPTER XVII. COOPERATIVE BANKS
11 
SEC. 122. Organization/ Registrationf and Membership, — The
12 
organization and membership of a Cooperative Bank shall be governed by the
13 
following provisions:
14 
a. Organization - At least fifteen (15) cooperatives duly established and registered
15 
under this Code may register a cooperative bank with the Authority.
16 
b. Registration - The application for the registration of the Articles of Cooperation
17 
and By-laws, including its amendments, by a cooperative bank with the
18 
Authority shall be accompanied by a Certificate of Authority issued by the BSP.
19 
c. Membership - Membership in a cooperative bank shall be open to:
20 
(1) cooperatives of all types and categories;
21 
(2) natural persons who are members of a cooperative;
22 
(3) foreign cooperatives;
23 
(4) pre-cooperative organizations established under Presidential Decree No.
24 
175; and
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(5) individuals.
2 
Membership in a cooperative bank is either regular or associate. Regular
3 
membership shall be limited to cooperative organizations, individuals who are
4 
members of a domestic cooperative, or a foreign cooperative. Associate members
5 
shall be pre-cooperative organizations established under Presidential Decree No.
6 
175, as well as individuals and other institutions, such as foreign cooperative
7 
institutions that have subscribed to preferred shares only.
8 
The common shareholdings of a local cooperative shall at all times be at least
9 
sixty per centum (60%) of the total outstanding voting shares of the cooperative
10 
bank.
11 
Common shares held by individuals who are members of a cooperative, and
12 
foreign cooperatives shall not be more than forty per centum (40%) of the total
13 
outstanding voting shares: Provided, That the common shareholdings of each
14 
individual who is a member of a cooperative shall not be more than five per centum
15 
(5%) of the total outstanding voting shares.
16 
Other provisions of this Code shall apply suppletorily insofar as they are not
17 
inconsistent with this Chapter.
18 
SEC. 123. Powers and Functions of Cooperative Banks. - Cooperative
19 
banks shall primarily provide a wide range of financial services to cooperative
20 
organizations, their members, and to the public. A cooperative bank may perform
21 
any of the following banking services:
22 
a. Extend loans and advances primarily for the purpose of meeting the normal
23 
credit needs of cooperatives as well as farmers, farm workers, fisherfolks, or
24 
their families, merchants, and private and public employees: Provided, That
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loans and advances granted to cooperatives shall not be subject to individual
2 
ceilings on loans to directors, officers, stockholders, and related interests
3 
(DOSRI);
4 
b. Accept savings and time deposits;
5 
c. Act as a correspondent bank of other financial institutions;
6 
d. Discount and Rediscount paper with the LBP, DBF or any other bank, including
7 
its branches and agencies. Said banks shall specify the nature of paper deemed
8 
acceptable for rediscounting, as weli as the rediscount rate to be charged by
9 
any of these banks;
10 
e. Act as collection agent;
11 
f. Act as a depository bank of LGUs and other government agencies or
12 
instrumentalities;
13 
g. Acquire readily marketable bonds and other debt securities;
14 
h. Buy and sell foreign exchange;
15 
i. Act as conduit bank for the disbursement of government funds intended for
16 
lending to agriculture, small-medium enterprises (SMEs) and projects for local
17 
economic development;
18 
j. Eligible to participate in government program allocations for agricultural
19 
lending, social housing, loans to rural micro enterprises and other initiatives
20 
towards inclusive growth;
21 
k. Offer financial technology services, such as digital lending and payment, and
22 
digital wealth management, among others, subject to prior approval of the
23 
BSP; and
24 
I. Offer other banking services as provided in Section 53 of Republic Act No. 8791.
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In addition to the powers granted to cooperative banks by this Code and other
2 
existing laws, any cooperative bank may perform any or all of the banking services
3 
offered by other types of banks subject to the prior approval of the BSP.
4 
SEC. 124. Establishment of Branches and Other Offices. - The
5 
establishment of branches, branch-lite units, or other banking offices by cooperative
6 
banks shall be governed by the rules and regulations of the BSP. The cooperative
7 
bank shall furnish the Authority with a copy of the Certificate of Authority issued by
8 
the BSP.
9 
SEC. 125. Management of Cooperative Banks. - The management of
10 
the cooperative banks shall be governed by the rules and regulations to be
11 
promulgated by the BSP, in consultation with the Authority. To maintain the quality
12 
of bank management and accord appropriate protection to depositors and the public
13 
in general, the BSP shall prescribe the fit and proper qualifications of bank directors
14 
and officers for the purposes of this Article, giving due recognition to the unique
15 
nature and character of cooperative banks. The number, composition, and term of
16 
the Board of Directors shall be defined in the Articles of Cooperation and By-laws of
17 
the cooperative bank, in accordance with the following guidelines:
18 
a. Board and Committees. - The cooperative bank shall constitute, at a minimum,
19 
the Board of Directors, Election Committee, and Audit Committee.
20 
The Board of Directors shall be composed of at least five (5) but not more than
21 
fifteen (15) members, at least one (1) of whom is an independent director. It
22 
shall be entrusted with the management of the affairs of the Cooperative Bank.
23 
It shall be responsible for the strategic planning, direction-setting and policy
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formulation activities of the cooperative bank. The members of the Board of
2 
Directors shall be elected by the General Assembly or Representative Assembly.
3 
The Election Committee shall be responsible for the formulation and
4 
implementation of election rules and guidelines. It shall supervise the conduct
5 
of election, eiection-related activities, canvass and certify the results of the
6 
election, and decide cases relative to such election, except those involving the
7 
committee itself or its members. The members of the Election Committee shall
8 
be elected by the General Assembly or Representative Assembly.
9 
The Audit Committee is a Board-level committee whose composition, functions
10 
and responsibilities shall be in accordance with the existing regulations of the
11 
BSP. Other Board-level committees may be created as may be directed by the
12 
BSP.
13 
Other committees may be created by the Board of Directors with powers,
14 
functions, and responsibilities which shall be defined in the By-laws; and
15 
b. Key Management Officers. - The key management officers shall be appointed
16 
by the Board and shall include the President, Treasurer, Internal Auditor, and
17 
Compliance Officer, or their equivalent ranks. The BSP shall prescribe the
18 
qualifications and disqualifications of the key management officers.
19 
SEC. 126. Vacancy in the Committees. - In case of vacancy in the
20 
committees, the Board of Directors of the cooperative bank, unless otherwise
21 
provided in the By-laws, will appoint a person to fill the same, subject to the provision
22 
that the person appointed shall serve only for the unexpired portion of the term.
23 
SEC. 127. Compensation of Directors. - In the absence of any provision
24 
in the By-laws fixing their compensation, the directors shall not receive any
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5
6
7
compensation except for reasonable per diems-. Provided, however, That the 
directors and officers shall not be entitled to any per diem when, in the preceding 
calendar year, the cooperative bank reported a net loss or had a dividend rate less 
than the official inflation rate for the same year. Any compensation other than per 
diems may be granted to directors by a majority vote of the members with voting 
rights at a regular or special general assembly meeting specifically called for the 
purpose: Provided, That no additional compensation other than per diems shd\\ be
8 
paid during the first year of existence of the Cooperative Bank.
9 
In no case shall the total yearly compensation of directors exceed ten per
10 
centum (10%) of the net income of the cooperative bank during the preceding year.
11 
SEC. 128. Dealings of Directors, Officers, Stockholders, and Related
12 
Interests (DOSRI). - Dealings with directors and officers of the Cooperative Bank
13 
shall comply with the provisions of Section 36 of RA 8791, otherwise known as
14 
General Banking Law (GBL) of 2000. However, the limits on loans to dealings of
15 
directors, officers, stockholders, and related interests shall not apply to loans, other
16 
credit accommodations, or guarantees extended by the cooperative bank to its
17 
member primary cooperatives.
18 
SEC. 129. Illegal Use of Confidential Information. - The liability of a
19 
director or officer, or an associate of a director or officer, who, for his/her benefit or
20 
advantage or that of an associate, makes use of confidential information that, if
21 
generally known, might reasonably be expected to adversely affect the operations
22 
and viability of the cooperative bank shall adhere to the provisions of Section 57 of
23 
this Code.
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SEC. 130. Bond for Faithful Performance of Duties and Obligations.
- The bond for the faithful performance of duties and obligations of accountable 
officers of the cooperative bank shall adhere to the provisions of Section 64.
SEC. 131. Quorum Requirement and Voting Rights of the 
Cooperative Bank Board of Directors. - In meetings of the Board of Directors of 
the Cooperative Bank, the same provisions under Section 48 of this Code shall apply.
SEC. 132. Composition of the General Assembly. - The General 
Assembly shall be composed of regular members who are entitled to vote under the 
Articles of Cooperation and By-laws of the cooperative bank.
SEC. 133. Powers of the General Assembly. - The General Assembly shall 
be the highest policy-making body of the cooperative bank and shall exercise the 
same powers as enumerated in Section 40 of this Code.
SEC. 134. Meetings. - The conduct of meetings of the General Assembly of 
cooperative banks shall adhere to the provisions specified in Section 41 of this Code.
SEC. 135. Quorum and Voting System. - The quorum requirement for 
General Assembly meetings of cooperative banks, whether special or regular, shall 
be one-half (V2) plus one (1) of the number of voting shares of all the members 
entitled to vote.
To amend its Articles of Cooperation and by-laws, at least three-fourths (3/4) 
vote of all the members with voting rights, present and constituting a quorum shall 
be required. All other voting requirements shall be prescribed by the BSP.
The voting rights of the members shall be proportionate to the number of 
their paid-up shares.
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The cooperative bank may opt to amend its Articles of Cooperation and By-
2 
laws through a referendum, subject to the guidelines to be issued by the Authority.
3 
However, the vote requirement shall still be two-thirds (2/3) vote of all the members
4 
entitled to vote.
5 
SEC. 136. Investment in Allied Undertakings. - Subject to the
6 
requirements and restrictions as may be imposed by the Monetary Board under its
7 
existing rules and regulations. Cooperative Banks may invest in equities of allied
8 
undertakings which may include, but are not limited to the following:
9 
a. Banks, financial institutions and non-bank financial intermediaries;
10 
b. Warehousing and other post-harvest facilities;
11 
c. Fertilizers, agricultural chemicals, and pesticides distribution;
12 
d. Farm equipment distribution;
13 
e. Trucking and transportation of agricultural products;
14 
f. Marketing of agricultural products;
15 
g. Leasing;
16 
h. Automated teller machine (ATM) networks;
17 
i. Public transportation;
18 
j. Financial technology; and
19 
k. Other undertakings as may be determined by the Monetary Board of the BSP.
20 
SEC. 137. Limitations on Lending Authority. - Except as the Monetary
21 
Board may otherwise prescribe, the direct indebtedness to Cooperative Banks of any
22 
person, company, corporation, or firm, including the indebtedness of members of a
23 
partnership and association, for money borrowed, shall in no time exceed twenty
24 
five per centum (25%) of unimpaired capital and surplus of the cooperative bank.
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However, the direct indebtedness mentioned shall exclude loans secured by
2 
obligations of the BSP; loans fully guaranteed by the Government as to the payment
3 
of principal and interest; loans to the extent covered by the hold-out on, or
4 
assignment of, deposits maintained in the lending cooperative bank and held in the
5 
Philippines; and other loans or credits as the Monetary Board may, from time to
6 
time, specify non-risk assets.
7 
SEC. 138. Capital Requirement for Cooperative Banks. - A cooperative
8 
bank shall have a minimum paid-up capital in such amount as may be required by
9 
the BSP. The BSP may prescribe rules and regulations on the types of shares a
10 
cooperative bank may issue, including the terms thereof and rights appurtenant
11 
thereto to determine compliance with laws and regulations governing capital and
12 
equity structure of banks. Provided, That Cooperative Banks shall issue par value
13 
shares only.
14 
SEC. 139. Samahang Nayon and Municipal Katipunan ng mga
15 
Samahang Nayon. - Samahang Nayon (SN) and Municipal Katipunan ng mga
16 
Samahang Nayon (MKSN) which held common shares of cooperative banks prior to
17 
the effectivity of RA 9520 shall apply for conversion to cooperatives in order to
18 
maintain their status as regular members of cooperative banks: Provided, That the
19 
cooperative banks shall exert efforts to inform and assist the SN and MKSN to convert
20 
within a period of three (3) years from the effectivity of this Code. Upon failure of
21 
the SN and MKSN to finally convert to a cooperative within said period, the funds
22 
held in the name of such SN and MKSN shall be considered as preferred shares and
23 
shall remain as capital of the cooperative bank.
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SEC. 140. Additional Source of Capitai of the Cooperative Banks. -
The funds or common shares in cooperative banks held in the name of cooperatives 
whose Certificates of Registration have already been cancelled by the Authority and 
which failed to liquidate such funds or shares during its liquidation shall remain as 
capital in said cooperative banks and shall be treated as preferred shares.
SEC. 141. Supervision and Regulation of Cooperative Banks. - All 
cooperative banks shall be under the supervision of the BSP: Provided, however,
8 
that the Authority shall monitor the cooperative banks' compliance with cooperative
9 
laws, rules, and regulations. With respect to the governance of the cooperative
10 
banks, the provisions of the banking laws, rules, and regulations shall prevail,
11 
notwithstanding Section 71 of RA 8791.
12 
SEC. 142. Promulgation of Guidelines. - The BSP and the Authority may
13 
formulate guidelines to implement or clarify the provisions of this Chapter. Provided,
14 
That the BSP, as the regulator of banks, shall be the primary regulator of cooperative
15 
banks consistent with the provisions of RA 8791: Provided, further. That in order to
16 
minimize the burden of dually-regulated entities, the BSP shall, in consultation with
17 
the Authority and the cooperative banks, in its promulgation of rules and regulations,
18 
to the extent allowed in banking and other relevant laws, and insofar as consistent
19 
with its exercise of supervisory and regulatory powers over banks, in its promulgation
20 
of rules and regulations, consider the requirements of this Code and the Authority
21 
for cooperatives in general.
22 
SEC. 143. Privileges and Incentives of Cooperative Banks. -
23 
Cooperative banks registered under this Code shall have the following privileges and
24 
incentives:
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a. Those privileges and incentives accorded to cooperatives under this Code and
2 
other prior laws including exemption from all national, provincial, city,
3 
municipal or barangay taxes, fees, and charges of whatever nature and
4 
description: Provided, however, That when a cooperative bank has reached an
5 
undivided net savings of more than One Hundred Million Pesos
6 
(P100,000,000.00), transactions to non-members shall be taxable.
7 
b. The foreclosure of mortgages covering loans granted by cooperative banks and
8 
executions of judgment thereon involving real properties levied upon by sheriff
9 
shall be exempt from the publications in newspapers where the total amount
10 
of loan, excluding interests due and unpaid, does not exceed One Million Pesos
11 
(PI,000,000.00) or such amount as the Monetary Board may prescribe as may
12 
be warranted by prevailing economic conditions. It shall be deemed sufficient
13 
publication in such cases where the notices of foreclosure and execution of
14 
judgment are posted in the most conspicuous areas such as the municipal
15 
building, the municipal public market, the cooperative bank, and the barangay
16 
hall where the land mortgaged is situated during the period of sixty (60) days
17 
immediately preceding the public auction or execution of judgment. Proof of
18 
publication as required herein shali be accomplished via an affidavit of the
19 
sheriff or officer conducting the foreclosure sale or execution of judgment and
20 
shall be attached with the records of the case;
21 
c. A cooperative bank shall be allowed to foreclose lands mortgaged to it subject
22 
to the provisions of RA 6657, as amended. For agrarian lands foreclosed by a
23 
cooperative bank, the disposal of the same to another qualified beneficiary
24 
under RA 6657, as amended, shall be made through the same cooperative
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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;
(3) Priority status as credit delivery partner or conduit of government-directed 
programs for agricultural through the DA and other government agencies; 
and
(4) Entitlement to participate free of charge in capability-building activities in 
agriculture lending such as, but not limited to, exchange of best-practice 
experiences, study tour, technology transfer among ASEAN member-states 
and other fora of international cooperation; and
e. Notwithstanding the provisions herein, privileges and incentives granted to 
rural banks pursuant to RA 7353, otherwise known as the "Rural Act of 1992," 
shall also be granted to cooperative banks duly registered under this Act.
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CHAPTER XVIII. INSURANCE COOPERATIVES
SEC. 144. Insurance Cooperative. - Existing cooperatives may organize 
themselves into an insurance cooperative for the purpose of engaging in the 
business of insuring life, non-life, pre-need (life plan, education, and pension) 
health, and property of cooperatives and their members.
SEC. 145. Types of Insurance Provided. - Under the cooperative 
insurance program established and formed by the virtue of the provisions of this 
Code, the insurance cooperative shall provide its constituting cooperatives and their 
members different types of insurance coverage consisting of life insurance with 
special group coverage, loan protection, retirement plans, endowment, health and 
accident coverage, pre-need plans, fire insurance, marine insurance, motor vehicle 
coverage, bonding, crop and livestock protection, and equipment insurance, among 
others.
SEC. 146. Applicability of Insurance Laws. - The provisions of the 
Insurance Code and all other laws and regulations relative to the organization and 
operation of an insurance company shall apply to insurance cooperatives organized 
under this Code. The requirements on capitalization, investments and reserves of 
insurance firms may be liberally modified upon consultation with the Authority and 
the 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.
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SEC. 147. 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. 148. 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. 
Such cooperatives shall be primarily governed by this Chapter and the general
provisions of this Code insofar as they may be applicable unless they are inconsistent 
herewith.
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SEC. 149. Registration Requirements. - In addition to the requirements
2 
provided under Section 14 of this Code, no cooperative engaged in public services
3 
shall be registered unless it satisfies the following requirements:
4 
a. Its Articles of Cooperation and By-laws provide for the membership of the users
5 
and/or producers of the service of such cooperatives; and
6 
b. Such other requirements as may be imposed by the other pertinent
7 
government agencies concerned.
8 
SEC. 150. Regulation of Cooperatives Engaged in Public Services. -
9 
The internal affairs of cooperatives engaged in public services, such as: i) the rights
10 
and privileges of members; ii) the rules and procedures for meetings of the General
11 
Assembly, Board of Directors and committees; Hi) the election and qualifications of
12 
officers, directors, and committee members; iv) allocation and distribution of
13 
surpluses; and v) all other such matters, shall be governed by this Code.
14 
All matters relating to the franchise, certificate of public convenience,
15 
certificate of public convenience and necessity, concession, or any other appropriate
16 
form of authorization or permit of cooperatives engaged in public services such as
17 
capitalization and investment requirements, equipment and facilities, frequencies,
18 
rate-fixing and such other matters affecting their public service operations shall be
19 
governed by the proper government agency concerned.
20 
The Authority together with other concerned government agencies shall
21 
jointly issue rules and regulations necessary to implement this Chapter.
22
CHAPTER XX. TRANSPORT SERVICE COOPERATIVES
23 
SEC. 151. Definition and Coverage. — This Chapter shall govern transport
24 
service cooperatives as defined in this Code, including those
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organized under the provisions of Executive Order No. 898, series of 1983 and
2 
by vehicle operators defined or provided for under the Public Transport Modernization
3 
Program of the Department of Transportation (DOTr).
4 
SEC. 152. Engagement in Allied Business by Transport Service
5 
Cooperatives. - Subject to pertinent national laws and local ordinances, primary
6 
transport service cooperatives including federations of cooperatives, may engage in
7 
a business related to transportation service, including but not limited to:
8 
a. Importation, distribution, and marketing of petroleum products in accordance
9 
with existing laws;
10 
b. Operation of gasoline stations, automotive service centers, and management
11 
of land transport terminals and 
ports;
12 
c. Importation, distribution, marketing, and sale of spare parts, automotive
13 
supplies, and accessories;
14 
d. Marketing of vehicle and drivers insurance policies as an agent or liaison of a
15 
licensed insurance company;
16 
e. Establishment and operation of fleet management services; and
17 
f. Automotive maintenance credit facilities for the purpose of extending loans for
18 
the maintenance and repair of public utility vehicles.
19 
g. Business directly related to the transport sector such as food hubs and canteens
20 
in terminal.
21 
SEC. 153. Registration, Regulation, and Supervision of Transport
22 
Service Cooperatives. - The DOTr-Office of Transport Cooperatives shall have
23 
jurisdiction over accreditation, regulation and supervision of Transport service
24 
cooperatives
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7
This notwithstanding, the relevant regulatory agencies shail have jurisdiction 
over the technical operations of such cooperatives as transport service entities.
The Authority shail have jurisdiction over the registration .of transport service 
cooperatives only in relation to their organization and management including its 
compiiance with this Act and other reievant laws.
SEC. 154. Renewal of Franchise and Vehicle Registration. - Renewals 
of franchise and vehicle registration shall be granted to transportation service
8 
cooperatives: Provided, That such cooperative presents a certificate of good
9 
standing issued by the Authority (or Certificate of Compliance) Office of
10 
Transport Cooperatives of the DOTr, and the LGU concerned as proof that it has
11 
continuously provided the required public transportation services.
12 
The Authority, in consultation with the concerned government agencies and
13 
cooperative sector, shall issue appropriate rules and regulations pertaining to the
14 
provisions of this Chapter.
15 
SEC. 155. Oversight Committee. A multi-sectoral committee on transport
16 
service cooperatives, composed of representatives from the Authority, the DOTr, the
17 
Department of the Interior and Local Government (DILG), the Land Transportation
18 
Franchising and Regulatory Board (LTFRB), the Land Transportation Office (LTO),
19 
other concerned government agencies, as may be necessary, and the federation of
20 
transport service cooperatives, and other stakeholders shall be established and
21 
thereafter be charged with the monitoring, recommendation of policies and
22 
programs affecting the operations of transport service cooperatives, and such other
23 
functions.
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A regional monitoring committee shali likewise be established at the regional
2 
offices of the Authority for the same purpose.
3 
The functions of the monitoring committees shall be prescribed in the
4 
Implementing Rules and Regulations to be promulgated by the Authority, in
5 
coordination with the reievant government agencies.
6 
SEC. 156. Vehicle Service Dealer/Provider - Ail vehicle service providers
7 
must adhere to the provisions of R.A. No. 10642 or the Lemon Law of the Philippines
8 
in terms of repairs , maintenance, and after sales issues of vehicies acquired through
9 
the PUVMP or the Pubiic Transport Modernization Program.
10 
Moreover, the government shail extend subsidies and other incentives for locai
11 
manufacturers who wiil invest in the modernization of public utiiity vehicles.
12 
The Department of Trade and Industry (DTI), the Department of Transportation
13 
(DOTr), and in consuitation with concerned agencies and cooperative sector, shall
14 
issue appropriate ruies and reguiations pertaining to the provisions of this chapter.
15 
SEC. 157. Financial Assistance, Government Subsidy. - Government
16 
financiai assistance provided to drivers/operators who elect to modernize shali not be
17 
iower than twenty percent (20%) of the price per unit to lighten the capital burden of
18 
modernization. Moreover, the DOTR shali work with the public and private institutions
19 
such as cooperative banks, and other financial services cooperatives to name a few,
20 
provide equitable financing for these modernized vehicles.
21 
SEC. 158. Access to data and loan information. - Subject to data privacy
22 
act, government financial institutions shail provide the necessary data and information
23 
regarding loan transactions related to PUV modernization program.
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1 
SEC. 159. LGU Support for Common Terminals- The Local
2 
Government Unit within the route of the public transportation shall provide a common
3 
terminal free of charge in the first year of operation in order to provide safe, accessible
4 
and maximum service to the commuting public.
5 
CHAPTER XXI. CREDIT AND SAVINGS COOPERATIVES
6 
AND CREDIT COOPERATIVES
7 
SEC. 160. Coverage. - This Chapter shall apply to credit cooperatives and
8 
credit and savings cooperatives, including multi-purpose cooperatives and
9 
federations. The provisions of the other chapters of this Code shall apply suppletorily
10 
except insofar as this Chapter otherwise provides.
11 
SEC. 161. Purposes and Objectives. - Cooperatives engaged solely in
12 
credit or in both credit and savings services, owned and operated by its members,
13 
shall have the following purposes and objectives:
14 
a. To encourage savings among its members;
15 
b. To provide loans for productive or provident purposes to its members and
16 
related services to enable its members to maximize the benefit from such loans;
17 
c. To promote the cooperatives engaged in credit and credit and savings as
18 
preferred financial institutions among Filipinos; and
19 
d. To promote the safe, sound, stable, and sustainable operations of cooperatives
20 
engaged in credit and credit and savings by regulating and supervising their
21 
operations and curtailing or preventing any act or practice which is prejudicial
22 
to the interests of their members and the general public.
23 
SEC. 162. Regulation and Supervision of Cooperatives Engaged in
24 
Credit and Credit and Savings. - Pursuant to its powers, functions, and
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responsibilities under RA 11364, the Authority shall exercise regulatory powers and
2 
supervision over the operations of the cooperatives engaged in credit, and credit
3 
and savings.
4 
The Authority shall, in consultation with the concerned government agencies
5 
and cooperative sector, issue appropriate rules and regulations pertaining to the
6 
provisions of this Chapter.
7 
CHAPTER XXII. ELECTRIC COOPERATIVES
8 
SEC. 163. Coverage. - The provisions of this Code shall apply to all electric
9 
cooperatives registered with the Authority. This shall also cover new distribution
10 
utilities that will register with the Authority.
11 
Electric cooperatives may undertake power generation utilizing renewable
12 
energy sources, including hybrid systems, acquisition and operation of sub
13 
transmission or distribution as its primary purposes.
14 
SEC. 164. Registration of Electric Cooperatives. - The registration of an
15 
electric cooperative with the Authority under this Code shall be submitted to the
16 
members for approval through a referendum, called for the purpose as provided for
17 
under Articles 165 and 166 of this Code.
18 
SEC. 165. Voting Requirement for Registration. - In compliance with
19 
the referendum as a voting procedure, the required number of votes for registration
20 
with the Authority shall be a majority of all members entitled to vote.
21 
SEC. 166. Documents to be Submitted for Registration with the
22 
Authority. - For purposes of registration, electric cooperatives shall submit the
23 
following documents:
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(a) Copy of the Board Resolution certifying to the result of the vote approved
2 
through a referendum approving the registration of the cooperative with the
3 
Authority in compliance with Section 162 of this Code;
4 
(b) Certified copy of the Articles of Incorporation or Cooperation and By-laws as
5 
required by the Authority;
6 
(c) Duly audited financial statements for the past two (2) years;
7 
(d) List of names of the incumbent Board of Directors and their addresses certified
8 
by the Board Secretary and attested by the Chairperson;
9 
(e) Within six (6) months from the registration, the Treasurer shall submit a sworn
10 
statement of the authorized share capital, the subscribed share capital of
11 
members, and the amount of paid-up share capital received by the Treasurer;
12 
and
13 
(f) Bonds of accountable officers.
14 
SEC. 167. Effects of Registration with the Authority. -Upon the
15 
effectivity of this Code, electric cooperatives that are duly registered with the
16 
Authority, and issued a Certificate of Registration, shall be covered by the provisions
17 
of this Code as well as future rules and issuances of the Authority; Provided, that
18 
electric cooperatives shall remain under the supervisory powers of the NEA, pursuant
19 
to Presidential Decree (PD) No. 269, as amended, and other existing laws; Provided,
20 
further, that provisions of this Code consistent with PD No. 269, as amended, shall
21 
apply suppletorily.
22 
a. Electric cooperatives registered with the Authority are entitled to congressional
23 
allocations, grants, subsidiaries and other financial assistance for rural
24 
electrification which can be coursed through the Department of Energy,
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National Electrification Administration, or local government units, as may be
2 
appropriate. The electric cooperatives registered under this Code can avail of
3 
the financial services and technical assistance provided by government financial
4 
institutions and technical development agencies on terms respecting their
5 
independence as autonomous cooperatives;
6 
b. All condoned loans, subsidies, grants, and other assistance shall form part of
7 
the donated capital and funds of the electric cooperatives and, as such, it shall
8 
not be sold, traded, nor be divided into shareholdings at any time. The donated
9 
capital/fund shall be valuated for the sole purpose of determining the equity
10 
participation of the members: Provided, That in the case of dissolution of the
11 
cooperative, said donated capital shall be subject to escheat; and
12 
c. Electric cooperatives registered and confirmed with the Authority under
13 
Republic Act No. 6938 and Republic Act No. 9520 are hereby deemed registered
14 
under this Code.
15 
SEC. 168. Share Capital in the Electric Cooperatives. - The electric
16 
cooperatives registered with the Authority shall issue and distribute share certificates
17 
under the name of each of their members, taking into consideration their previous
18 
equity contributions, the amortization component through the payments made,
19 
capital build-up and other capital contributions.
20 
The NEA shall, within ten (10) days upon final completion of reconciliation of
21 
relevant loan accounts with the electric cooperative concerned, issue a certification
22 
on the aggregate amount of payments made on the principal component of the
23 
amortizations, as the basis for the issuance of equity share certificates by the electric
24 
cooperatives to its Member-Customer-Owners (MCOs) on record.
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The ERC shall, within forty-five (45) days from the close of each fiscal year,
2 
issue a certificate to the electric cooperative concerned on the total amount collected
3 
for capital contributions from the MCOs for such period, for which equity share
4 
certificate will be issued.
5 
No share capital certificate shall be issued to a subscriber until the full amount
6 
of his/her subscription together with interest and expenses, if any is due, has been
7 
paid. The distribution of share capital certificates shall be done annually preferably
8 
during the General Assembly meeting.
9 
In case of loss or destruction, the electric cooperative may issue a duplicate
10 
certificate, if such certificate is proven to have been lost, destroyed, defaced,
11 
mutilated, torn or is surrendered to the electric cooperative upon execution and
12 
submission by a member of an Affidavit of Loss or such other documents evidencing
13 
defacement/mutilation or surrender of such share capital certificate.
14 
SEC. 169. Registration Options of Electric Cooperatives. - Electric
15 
Cooperatives registered with the National Electrification Administration (NEA) under
16 
Presidential Decree No. 269, as amended, which opt not to register with the
17 
Authority are allowed to retain the word "cooperative" in their registered names:
18 
Provided, that they shall not be entitled to the benefits and privileges under this
19 
Code.
20 
SEC. 170. Role of the Energy Regulatory Commission. - All rates and
21 
tariffs of electric cooperatives registered under the Authority shall be subject to the
22 
rules on application and approval of and by the Energy Regulatory Commission (ERC)
23 
for distribution utilities.
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SEC. 171. Cancellation of Registration with the Authority. - The
2 
cancellation of the registration of an electric cooperative shall be granted by the
3 
Authority as provided under Chapter XI of this Code.
4 
The Authority, in consultation with the concerned cooperative sector, shall
5 
issue appropriate rules and regulations pertaining to the provisions of this Chapter.
6 
CHAPTER XXIII. FOREIGN PARTNERSHIPS
7 
SEC. 172. Membership of Foreign Cooperatives in Federations. -
8 
Foreign cooperatives may invest, partner with, or become members of federations:
9 
Provided, that they are recognized by international coalitions of cooperatives or by
10 
the relevant authority in the country of origin, as well as registered with the
11 
Authority: Provided, further, That they comply with all relevant laws allowing them
12 
to do business in the Philippines. The details of their investment, participation, or
13 
membership shall be left to the discretion of the local federation. Further details shall
14 
be laid down in the Implementing Rules and Regulations of this Code, in consultation
15 
with the cooperative sector: Provided, finally. That their engagement with the local
16 
cooperatives shall be subject to an agreement which shall be submitted for the
17 
approval of the Authority, pursuant to its implementing rules.
18 
Foreign cooperatives that shall transact with local federations must comply with
19 
Philippine taxation laws, the Anti-Money Laundering Act, and other pertinent laws,
20 
classified under the Philippines' foreign investment negative list for foreign equity
21 
restrictions under the Philippine Constitution and specific laws, and shall be under the
22 
regulation of the pertinent agencies for the duration of their engagement with the
23 
federations. Foreign cooperatives shall not interfere, directly or indirectly, in the
24 
management and internal affairs of the federations in accordance with the generally
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accepted cooperative principles of independence and autonomy, notwithstanding that
2 
local cooperatives shall be one hundred percent (100%) wholly owned and controlled
3 
by Filipinos.
4 
SEC. 173. Limitations. - The equity or share capital of the foreign
5 
cooperative shall not exceed forty per centum (40%) of the total equity or subscribed
6 
share capital of the partnership or federation, as the case may be.
7 
CHAPTER XXV. MISCELLANEOUS PROVISIONS
8 
SEC. 174 . Compliance With Other Laws. - All cooperatives duly
9 
registered under this Code shall, at all times, be subject to all relevant laws, rules
10 
and regulations, as well as issuances and directives issued by a duly authorized
11 
government regulatory body in exercise of its jurisdiction.
12 
This notwithstanding, cooperatives that are registered or applying for specific
13 
licenses with other regulatory agencies must comply with the governance
14 
requirements of said agency to operate or function as such.
15 
SEC. 175. Registry of Cooperatives. - The Authority shall keep a registry
16 
which shall contain a chronological entry of the name of every cooperative
17 
registered, suspended, dissolved, or cancelled under this Code together with other
18 
relevant information. The Authority shall publish and post on its website a list of
19 
existing cooperatives, cooperatives under dissolution or suspension, and those
20 
whose registration have been cancelled, together with other relevant information,
21 
as may be prescribed in the Implementing Rules and Regulations of this Code.
22 
SEC. 176. Settlement of Disputes, Conciliation, Mediation, and
23 
Arbitration Proceedings. - Disputes among members, officers, directors, and
24 
committee members, and intra-cooperative, inter-cooperative, intra-federation or
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inter-federation disputes shall, as far as practicable, be settled amicably in
2 
accordance with the conciliation or mediation mechanisms embodied in the By-iaws
3 
of cooperatives and in such other applicabie laws.
4 
The Conciliation-Mediation Committee of the cooperative shail facilitate the
5 
amicable settlement of intra-cooperative disputes or disputes among members,
6 
officers, directors, and committee members.
7 
Should such conciliation or mediation proceeding faii, the party may settle the
8 
dispute through arbitration or adjudication: Provided, however, That before any
9 
party can validly file a complaint with the Authority for voluntary arbitration or
10 
adjudication, it must first secure a certification from its Conciiiation-Mediation
11 
Committee and from the cooperative union or federation to which it is affiliated that
12 
despite ali efforts to settle the issues, the conciliation-mediation proceeding failed.
13 
Once the arbitrators or the appropriate adjudication division acquires
14 
jurisdiction over the case, it shall have exclusive jurisdiction. The decision of the
15 
arbitrator shall be final and executory. For this purpose, the Authority shall create a
16 
database of qualified arbitrators which shall also be posted in its official website
17 
Decisions rendered by the Authority in the exercise of its adjudicatory powers
18 
shall be appealable to the Court of Appeals in accordance with the applicable rules.
19 
In case of election-related issues, the aggrieved party may elevate the case
20 
for adjudication to the proper regional office of the Authority in accordance with the
21 
CDA Omnibus Rules of Procedure without undergoing alternative dispute resolution.
22 
Settlement of disputes of electric cooperatives shall be governed by the
23 
provisions of PD No. 269, as amended, and other applicable laws.
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SEC. 177 Joint Congressional Oversight Committee on Cooperatives
2 
(JCOCQ. - There is hereby created a Joint Congressional Oversight Committee
3 
composed of the Chairperson of the Senate Committee on Cooperatives and the
4 
Chairperson of the House Committee on Cooperatives Development, with four (4)
5 
members each from both Houses. The said members shall be duly appointed by the
6 
Senate President and the Speaker of the House of Representatives from the
7 
members of the respective committee.
8 
SEC. 178. Issuance of Injunctive Relief on the Authority. - Only the
9 
Court of Appeals or Supreme Court may issue a restraining order or injunction
10 
enjoining the Authority from examining and investigating cooperatives subject to its
11 
supervision or examination.
12 
CHAPTER XXVI. FINAL PROVISIONS
13 
SEC. 179. Pena! Provisions. - The following acts or omissions affecting
14 
cooperatives are hereby prohibited:
15 
(a) The use of the word "cooperative" shall not be allowed unless authorized under
16 
this Code. However, organizations registered with other government agencies
17 
are allowed to retain the word "cooperative" in their registered names,
18 
Provided, That these organizations shall not be entitled to the benefits and
19 
privileges under this Code.
20 
In case of violation, the penalty of imprisonment of not less than two (2) years
21 
nor more than five (5) years and a fine not exceeding Two hundred thousand
22 
pesos (P200,000.00) or both at the discretion of the court, shall be imposed, upon
23 
conviction, on the individual or, in the case of an organization, its officers and
24 
directors.
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9
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18
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21
22
The Authority may, motu proprio, file complaints for violation of this provision.
(b) Any person who willfully attempts in any manner to evade or defeat tax in 
violation of Articles 68 and 69 of this Code shall, in addition to the payment of 
double the amount of the tax due, be punished by a fine of not less than Five 
hundred thousand pesos (P500,000.00) but not more than Ten million pesos 
(P10,000,000.00) and suffer imprisonment of not less than six (6) years but 
not more than ten (10) years: Provided, That the conviction or acquittal 
obtained under this Section shall not be a bar to the filing of a civil suit for the 
collection of taxes;
(c) Direct or indirect violation or circumvention of the provisions of Sections 68 and 
69 of this Code committed by any public official or employee of any bureau, 
office or agency of the government that deprives, diminishes or in any manner 
hinders or restricts any duly registered cooperative from the full enjoyment of 
the exemption from the payment of the taxes, fees and charges enumerated 
therein, shall upon conviction, suffer a penalty of not less than seven (7) years 
but not more than twelve (12) years imprisonment or a fine in the amount of 
not less than Five hundred thousand pesos (P500,000.00) but not more than 
One million pesos (P1,000,000.00) 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:
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(1) Influencing the election or appointment of officers, directors, committee
2 
members and employees through public or private endorsement or
3 
campaign for or against any person or group of persons;
4 
(2) Requiring prior clearance for any policy or decision within the cooperative;
5 
(3) Requesting or demanding for the creation of positions or organizational
6 
units, or recommending any person for appointment, transfer, or removal
7 
from his/her position; or
8 
(4) Any other acts inimical or adverse to the autonomy and independence of
9 
cooperatives.
10 
(e) A director, officer or committee member who violated the provisions of Section
11 
53 on the Liability of Directors, Officers and Committee Members, Section 56
12 
on the Disloyalty of a Director, and Section 57 on the Illegal Use of Confidential
13 
Information shall upon conviction suffer a fine of not less than Five hundred
14 
thousand pesos (P500,000.00) nor more than One million pesos
15 
(P1,000,000.00) or imprisonment of not less than five (5) years but not more
16 
than ten (10) years or both at the court's discretion;
17 
(f) The following are considered offenses punishable by a penalty of imprisonment
18 
of not less than one (1) year nor more than five (5) years or a fine of not more
19 
than One hundred thousand pesos (P100,000.00) or both at the discretion of
20 
the court:
21 
(1) Omission or refusal to furnish any information, report or other document
22 
that is required under this Code;
23 
(2) Providing information, reports or other documents to the Authority that are
24 
required under this Code which the person knows to be false or misleading;
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23
24
(3) Omission or refusal to keep a book or registry under this Code or to make 
the required entry therein;
(4) Making an entry required under this Code in a book or registry, which the 
person knows to be faise or misieading;
(5) Hindering an authorized person from making an inspection, audit, 
examination or investigation required under this Code;
(6) Failure to comply with an order or written instructions issued or given by the 
Authority;
(7) Vioiation of the provisions regarding transactions with a restricted party; and
(8) Abetting, counseiing, aliowing, authorizing or commanding another person 
to commit an offense punishable by this Code: Provided, That in case the 
vioiator is a cooperative or juridical person, the penalty shall be imposed on 
its directors and officers.
(g) Any violation of any provision of this Code for which no penalty is imposed shall
be punished by imprisonment of not less than six (6) months nor more than
one (1) year and a fine of not less than Ten thousand pesos (P10,000.00), or
both at the discretion of the court.
The cooperative or any of its members can file a case against any officer or 
employee of the BIR or of any other government agency with the Ombudsman, the 
Civil Service Commission, other appropriate government agency or the courts of law.
In case of violation of any provision of this Code, the individual or individuals, 
and in the case of organizations or government agencies, its officers, and directors 
shall, upon conviction by a Court, each suffer a penalty of not less than two (2) years 
but not more than five (5) years imprisonment or a fine in the amount of not less
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21
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23
24
than Fifty thousand pesos (PSO/OOO.OO), or both at the discretion of the court. In 
the case of a public official or employee, the offender shall upon conviction, suffer 
the accessory penalty of temporary absolute disqualification.
SEC. 180. Administrative Sanctions. - The Authority shall conduct 
investigations, file necessary charges, discipline, suspend or remove erring officers 
and members of the cooperative for violation of cooperative laws, rules, regulations, 
issuances of the Authority, the Articles of Cooperation, and By-laws, after due 
process, and direct the General Assembly to replace the suspended or removed 
officers.
Any violations on the procedures of the rules on adjudication shall likewise be 
penalized under this Article. Such administrative sanctions shall be implemented in 
accordance with the rules and regulations to be promulgated by the Authority.
SEC. 181. Interpretation - any doubt in the interpretation of any provision 
in this Act shall be liberally interpreted in favor of the cooperatives and its members.
SEC. 182. Ipso-Facto Clause. -Unless otherwise provided by law, 
cooperatives are entitled to the privileges, benefits, and exemptions granted by RA 
7160, and other existing laws.
SEC. 183. Transitory Provisions. -
(a) All cooperatives registered with the Authority under RA 6938, as amended 
by RA 9520, are hereby deemed registered under this Code.
(b) Registration of electric cooperatives with the Authority shall not be 
considered as a transfer of ownership of its assets and liabilities nor 
shall it constitute a change in the nature, structure, and status of the 
cooperative. Said registration shall not result in the revocation of the
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condoned loans under R. A. No. 9136, otherwise known as the "Electric
2 
Power Industry Reform Act of2001, Provided, That electric cooperatives
3 
with existing loans shall not be subject to the control and supervision of its
4 
creditors and shall only be limited to the fulfillment of each civil obligations.
5 
(c)The authority granted to non-cooperatives as Training Service Providers
6 
shall continue to be effective and can be renewed upon expiration.
7 
SEC. 184. Printing and Distribution. - The National Printing Office shall
8 
publish this Code in the Official Gazette in full within sixty (60) days from the date
9 
of approval thereof. Copies of this Code shall be given to every department, agency,
10 
and instrumentality of the National Government, including regional, provincial
11 
offices, and local governments including government-owned and controlled
12 
corporations.
13 
SEC. 185. Implementing Rules and Regulations. - Within ninety (90)
14 
days from the effectivity of this Act, the Authority shall promulgate rules and
15 
regulation to implement the the provisions of this Act. Within the same period, the
16 
particular government agencies expressly designated under specific provisions in this
17 
Code, after prior consultation with the cooperative sector, shall also issue the
18 
regulations called for by such respective provisions.
19 
SEC. 186. Appropriations. - The amount necessary to carry out the
20 
provisions of this Code shall be included in the annual General Appropriations Act.
21 
SEC. 187. Separability Clause. -If any part of this Code is declared
22 
unconstitutional, the remaining parts or provisions shall remain in full force and effect.
23 
SEC. 188. Repealing Clause. - Except as expressly provided by this Code,
24 
R. A. No. 6938, R. A. No. 9520, and all other laws, or parts thereof, inconsistent with
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3
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5
6
7
8
9
10
11
12
13
14
15
16
any provision of this Code shall be deemed repealed: Provided, That the provisions 
of Revenue Regulation No. 20-2001, and all laws, decrees, executive orders, 
implementing rules and regulations, BIR circulars, CDA memorandum circulars, 
memorandum orders, letters of instruction, local government ordinances, or parts 
thereof inconsistent with any of the provisions of this Act are hereby repealed, 
amended or modified accordingly: Provided, further, nothing in this Code shall 
eliminate, diminish, or reduce the powers, functions, authority, and responsibilities 
of the NEA over electric cooperatives under PD No. 269, as amended, and other 
existing laws: Provided, finaiiy, that nothing in this Act shall be construed or 
interpreted as diminishing the jurisdiction of the Philippine Competition Commission 
under the PCA to conduct inquiry, investigate, and hear and decide on cases 
involving any violation of the PCA and other existing competition laws motu proprio 
or upon receipt of a verified complaint from an interested party or upon referral by 
the concerned regulatory agency.
SEC. 189. Effectivity Clause. - This Code shall take effect fifteen (15) days 
after its publication in the Officiai Gazette or in a newspaper of general circulation.
Approved,
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