Republic of the Philippines
HOUSE OF REPRESENTATIVE

Quezon City
15" Congress
‘Third Regular Session
2349
COMMITTEE REPORT NO.
16 AUG 2012

Submitted by the Ces Development on
Re: House Bill No.

Recommending its approval in substitution of House Bill No. 5989
Sponsor/s: Representative Ping-ay and Paez

Mr. Speaker:

‘The Committee on Cooperatives Development to which was referred House Bill No.
5989 introduced by Rep. Jose R. Ping-ay and Cresente C. Paez, entitled:

MENDING CHAPTER XI, ON COOPERATIVE BANKS, OF
°T NO. 9520, OTHERWISE KNOWN AS THE PHILIPPINE
COOPERATIVE CODE OF 2009 AND FOR OTHER PURPOSES’

6481

entitled:

has considered the same and recommends that the attached House Bill No.”

“AN ACT AMENDING CHAPTER XII, ON COOPERATIVE BANKS, OF
REPUBLIC ACT NO. 9520, OTHERWISE KNOWN AS THE PHILIPPINE
COOPERATIVE CODE OF 2009 AND FOR OTHER PURPOSES

be approved in substitution of House Bill No. 5989 with Reps. Jose R, Ping-ay, Cresente C.
Paez, Isidro Q. Lico, Isodro T. Ungab, George P. Amaiz , Agapito H. Guanlao and Carlos M.
Padilla as authors thereof.

THE HONORABLE SPEAKER
HOUSE OF REPRESENTATIVES
QUEZON CITY


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
‘Third Regular Session

HOUSE BILL NO. 6481

Introduced by Reps. Jose R. Ping-ay, Cresente C. Paez, Isidro Q. Lico, Isidro T. Ungab,
_ George P. Arnaiz, Agapito H. Guanlao and Carlos M. Padilla

AN ACT
AMENDING CHAPTER XII, ON COOPERATIVE BANKS, OF REPUBLIC ACT NO. 9520,
OTHERWISE KNOWN AS THE PHILIPPINE COOPERATIVE CODE OF 2008
AND FOR OTHER PURPOSES

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

SECTION 1. Article 97 of Republic Act No. 9520 is hereby amended with the insertion
of a new paragraph 3, which shall read as follows:

“ART. 97. Organization, Membership and Establishment of a Cooperative Bank.

(D)xxx
Q)xxx

(3) A FOREIGN COOPERATIVE ORGANIZATION OR ITS EQUIVALENT
COUNTERPART DULY ESTABLISHED AND REGISTERED IN ITS COUNTRY OF
ORIGIN MAY BECOME AN ASSOCIATE OR REGULAR MEMBER OF
COOPERATIVE BANKS, SUBJECT TO PRIOR BSP APPROVAL OF
SUBSTANTIAL ACQUISITION OR TRANSFER OF SHARES IN A COOPERATIVE
BANK PROVIDED, THAT SUCH FOREIGN COOPERATIVE OR COUNTERPART
SATISFIES THE DEFINITION OF A COOPERATIVE FOUND IN ARTICLE 3 OF
THIS CODE. PRIOR TO MEMBERSHIP IN A COOPERATIVE BANK, THE
FOREIGN COOPERATIVE SHALL SUBMIT TO THE BSP AND CDA PROOF OF

ITs ‘“ABLISHMENT AND REGISTRATION AS SUCH FROM ITS COUNTRY OF
ORIGIN.

A QUALIFIED FOREIGN COOPERATIVE ORGANIZATION MAY OWN UP

TO FORTY PERCENT (40%) OF THE VOTING SHARES OF A COOPERATIVE
BANK.


Qe teGrer —

SHALL BE SUBJECT TO ARTICLE 61 (6) OF THIS CODE, However, in
cases of foreclosure of mortgages covering loans granted by a cooperative
bank, and the execution of judgments thereon involving real properties and
levied upon by a sheriff, it shall be exempt from publication requirement
where the total amount of the loan, excluding interest and other charges due
and unpaid, does not exceed Two hundred fifty thousand pesos (P250,000.00)
or such amount as the BSP may prescribe, as may be warranted by the
prevailing economic conditions and by the nature and character of the
Cooperative banks. It shall be sufficient publication in such cases if the notice
of foreclosure and execution of judgment are posted in conspicuous areas of
the cooperative bank’s premises, the municipal hall, the municipal public
market, the barangay hall, or the barangay public market, if there be any,
where the property mortgaged is situated, within a period of sixty (60) days
immediately preceding the public auction or the execution of judgment. Proof
of publication as required herein shall be accomplished by an affidavit of the
sheriff or officer conducting the foreclosure sale or execution of judgment,
and shall be attached to the record of the case.

((2)3) xxx

SEC. 4. If any section or provision of this Act shall be declared unconstitutional or

invalid, such shall not invalidate any other section of this Act.

SEC. 5. All laws, decrees, orders, rules, regulations, ordinances or parts thereof which are

inconsistent with this Act are hereby repealed or modified accordingly.

SEC. 6. This Act shall take effect fifteen (15) days following its publication in the

Official Gazette or in two (2) national newspapers of general circulation.


FACT SHEET
HOUSE BILL NO. 6481

“AN ACT

AMENDING CHAPTER XII, ON COOPERATIVE BANKS, OF REPUBLIC ACT NO.
9520, OTHERWISE KNOWN AS THE PHILIPPINE COOPERATIVE CODE OF
2008 AND FOR OTHER PURPOSES”

Introduced by: HONS. JOSE R. PING-AY & CRESENTE C. PAEZ

Committee Referral: COMMITTEE ON COOPERATIVES DEVELOPMENT

Committee Chairperson: HON. JOSE R. PING-AY

OBJECTIVES:

To strengthen the loan portfolio of cooperative banks by allowing foreign
investments thereby significantly improving its capacity to support economic
endeavors in the countryside;

To enhance the financial capacity of cooperative banks in providing loans with
reasonable terms thereby supporting the economic growth of its partners in
the local comniunities;

To provide linkage as the government's retailer of funds in order to enhance
the viability of cooperatives as an economic enterprise.

KEY PROVISIONS.

Allows foreign cooperative organizations to become a regular or associate
member of cooperative banks;

Sets the maximum limit for the qualified foreign cooperative investor at forty
percent (40%) of the voting shares of the cooperative bank;

Seeks to exempt the loans, credit accommodations and guarantees extended
by the cooperative bank to its primary cooperative members from the DOSRI
limits as provided in Section 36 of the General Banking Act;

Strengthens the cooperative bank's regulatory capital requirement by not
deducting the loans, credit accommodations and guarantees extended by
cooperative banks to its primary cooperative members;

Encourages local banking institutions, whether private or government to
deposit with the cooperative banks at least 25% of their total loanable funds
under the Agri-Agra Reform Credit Act of 2000;

Clarifies the privileges and incentives of cooperative banks.

RELATED LAWS:

RA 8791, the General Banking Law of 2000
RA 9520, the Cooperative Code of 2008
RA 10000, the Agri-Agra Reform Credit Act of 2009