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Republic of the Phil

HOUSE OF REPRESENTATIV! FS
Quezon City, Metro Manila

TWENTIETH CONGRESS
First Regular Session

House Bill No._2412

Introduced by Representative FELIMON M. ESPARES

AN ACT
ESTABLISHING LOCAL COOPERATIVES DEVELOPMENT FUND FOR EACH LOCAL
GOVERNMENT UNIT (LGU) AND APPROPRIATING FUNDS THEREFOR, AND FOR
OTHER PURPOSES

EXPLANATORY NOTE

The bill seeks to require each local government unit (LGU) to appropriate and allot
at least 1% of their Internal Revenue Appropriatioms (IRA) or two percent (2%) of their
funds for local development projects, specifically for cooperative development in their
respective jurisdictions.

This measure responds to the constitutional mandate to promote the viability and
growth of cooperatives as instruments of social justice and economic development.
Cooperatives play a crucial role in community building, beginning with a strong membership
base rooted in their localities. This proximity allows them to effectively identify and address
community needs while providing financial empowerment and inclusion, especially to the
informal sector. Moreover, a portion of a cooperative’s net surplus is mandatorily allocated
to a Community Development Fund, which directly benefits the local communities where
they operate. As the LGUs stand to benefit from the presence, impactm, and success of
cooperatives, it is only fitting that they, in turn, commit to strengthening and empowering
the same.

In addition, the provision of a mandatory allocation is consistent with Republic Act
No. 11535, which makes the position of a Cooperatives Development Officer mandatory in
the Municipal, City, and Provinical levels, werein said LGUs have the option to set the rank,
remuneration, and other emoluments of the CDOs subject to exicting laws, rules, and
regulations. It is worth noting, however, that many LGUs have yet to appoint their respective
CDOs, primarily due to funding constraints that this bill seeks to address.

To note, there are still many LGUs that do not have CDOs due to lack of funds and
resources.

The proposed allocation will ensure that sufficient resources are made available for
the implementation of programs, projects, and activities of LGUs directed toward
cooperative development, including: (a) participatory local cooperative development


planning, (b) provision of technical and financial assistance and services to local
cooperatives, (c) promotion, organization, and mobilization of cooperatives for local social
and economic development, (d) capacity development and capacity building interventions
for local cooperatives' leaders, members and partners, and (e) support to the local
cooperative development councils and local cooperatives’ development offices’ plans and
programs of action.

In view of the foregoing, the immediate passage of this me is earnestly sought.

HON. FELIMON M. ESPARES


Republic of the P1

HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

TWENTIETH CONGRESS
First Regular Session

2412

Introduced by Representative FELIMON M. ESPARES

House Bill No.

AN ACT
ESTABLISHING LOCAL COOPERATIVES DEVELOPMENT FUND FOR EACH LOCAL
GOVERNMENT UNIT (LGU) AND APPROPRIATING FUNDS THEREFOR, AND FOR
OTHER PURPOSES

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

Section 1. Short Title. - This Act shall be known as the "Local Cooperatives
Development Fund Act."

Section 2. Declaration of Policy. - The State recognized the roles of cooperatives as
an instrument for economic development, social justice, and equity. The State guaranteed
that the rights of the cooperatives, anchored upon internationally accepted prindples and
practices, shall be respected, promoted, and fulfilled. The State mandates national
government agencies and local government authorities to promote the growth and
expansion of cooperatives, provide resources and mechanisms to strengthen the
cooperatives movement, enable policies and programs to transform cooperatives as a viable,
responsive, and resilient economic enterprise, and facilitate partnerships with other national
and local stakeholders. The State, except as provided in this Act, shall maintain the
principles of noninterference in the development and management of cooperatives and
guarantee that the cooperatives shall be free from conditions that Infringe upon its
objectives and characteristics.

Section 3. Creation of Locai Cooperatives Development Fund. - The Local
Cooperatives Development Fund, herein referred to as LCDF, is hereby created to be
managed and administered by the provincial, city, and municipal local government units, to
support local cooperatives development in their jurisdictions.

Section 4. Funding Source. - Provincial, city, and municipal local government units
are hereby mandated to appropriate at least one percent (1%) of their Internal Revenue
Allocations (IRA) for programs, projects, and activities for local cooperatives development;
Provided, that provincial, city, and municipal local government units belonging to fourth to
sixth income classification, may opt to allocate at least two percent (2%) of their local
development projects as their LCDF; Provided, further, the local government units belonging


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to fourth to sixth income classification shall commit to progressive realize this mandate
within the next five years upon effectivity of this Act.

Section 5. Use of Funds. - The LCDF shall primarily be used to support and fund
programs, project, and activities directed towards the following:

(1) Formulation and implementation of a participatory Local Cooperatives
Development Plan and localized special programs deemed as priorities of the local
cooperatives.

(2) Provision of technical guidance, financial assistance, and other services to local
cooperatives.

(3) Promotion, organization, and mobilization of local cooperatives as a viable and
responsive community-based social and economic development enterprise.

(4) Provision of capacity development and capacity-building initiatives and activities
for local cooperatives.

(5)Support the plans, programs, and activities for the local cooperatives’
development councils and local cooperatives development officers in line with its
mandates under existing laws.

Section 6. Implementing Rules and Regulations. - The Cooperatives Development
Authority and the Department of Interior Local Government shall, in consultation with the
cooperative sector and concerned leagues of local governments, formulate and disseminate
the IRR within ninety (90) days since the effectivity of this Act.

Section 7. Congressional Oversight - Upon the effectivity of this Act, the Joint
Congressional Committee on Cooperatives (JCOCC), created under Republic Act No.
9520, shall review and monitor the implementation of this Act.

Section 8. Repealing Clause - All laws, decrees, executive orders, rules and
regulations, issuances, or parts thereof Inconsistent with this Act are hereby repealed or
amended accordingly.

Section 9. Effectivity. -This Act shall take effect fifteen (15) days after its publication
in the Official Gazette or a newspaper of general circulation.

Approved,