Republic of the Philippines
House of Representatives
Quezon City

Fifteenth Congress
First Regular Session

5
House BillNo,__ 9905

Introduced by: REP. PABLO P. GARCIA

EXPLANATORY NOTE

R.A No. 9520, or the Philippine Cooperative Code of 2008 is a landmark piece
of legislation and constitutes a monumental triumph of the cooperative movement in
the country. This is because: first, it is the enabling legal embodiment of a
constitutionally declared state policy on cooperatives, and second, it is the clear
recognition and adherence by our country to the time-honored and universally
accepted principles on cooperatives. These principles are now part of the law of the
land. More particularly, these are:

4, Government assistance ‘to bring about a strong cooperative movement that
is free from any conditions that might infringe upon the autonomy or
organizational integrity of cooperatives.

2. State recognition of the principle of subsidiarity under which the cooperative
sector will initiate and regulate within its own ranks, the promotion and
organization, training and research audit and support services relative to
cooperatives with government where necessary.

3. Democratic and member control in setting their policies and in making
decisions.

4. Autonomy and independence from outside interference in the conduct and
management of its internal affairs.

So vital or even so crucial are the above core policy and principles, so
that now the following act is already considered a CRIME under Art. 140 (Penal
Provision) of the Cooperative Code:

(4) Direct or indirect interference or intervention by any public official or
employee into the intemal affairs of a cooperative of which he is not a member,
such as requiring prior clearance for any policy or decision with in the
cooperatives or any other acts inimical or adverse to the autonomy and
independence of cooperative (Sec.4,Art. 140)


The provisions of the present Charter of the Cooperative Development
Authority or CDA or R.A No. 9369 are already in consonance with the above
core policy and principles of the Cooperative Code.

Thus, under Sec. 1 of R.A. No. 6939, Declaration of Policy — it is
provided among others that:

“Toward this end, the Government and all its branches, subdivisions,
instrumentalities and agencies shall ensure the provision of technical
guidance, financial assistance and other services to enable said
cooperatives to develop into viable and responsive economic enterprises
and thereby bring about a strong cooperative movement that is free from
any conditions that might infringe upon the autonomy or organizational
integrity of cooperatives.

Further, the State recognizes the principle of subsidiarity under which the
cooperative sector will initiate and regulate within its own ranks the
promotion and organization, training and research, audit and support
services relating to cooperatives with government assistance where
necessary.”

However, while in the main, the present Charter of CDA is good enough
to insure the effective implementation of the provisions of the Cooperative Code
of 2008 (this Code was crafted and later adopted taking into consideration the
present charter of CDA or R.A No. 9369), it will be convenient and desirable
that some provisions of R.A No. 9369, be updated and amended to conform
with the new provisions of R.A.No. 9520, that were not found in the old
Cooperative Code or R.A. No 9368.

But in making the amendments, it must always be remembered that
under the Cooperative Code of 2008, the CDA is mandated to implement
its provisions and not to circumvent or even destroy them. The CDA
exists to give force and effect to the provisions of the Cooperative Code
2008 and not the other way around.

This point has to be emphasized and underscored because past
experience has shown that the CDA had incessantly and tirelessly tried to
usurp and exercise powers beyond what are authorized under its Charter or
R.A. No. 6969 and in clear violation of the old Cooperative Code or R.A. No
9368. In one bold, rash and reckless gamble in 2007, the CDA, without any
legal authority whatsoever, issued the so-called Manual of Rules and
Regulations for Cooperatives with Saving or Credit services or the MORR. The
CDA issued MORR knowing fully well that it was in blatant and ruthless
disregard of Sec.123 of R.A No. 9368 or the Cooperative Code of 1990 and,
therefore, ILLEGAL, NULL and VOID from the beginning.

This MORR would have surreptitiously overhauled and emasculated the
provisions of the Cooperative Code because, with respect to cooperatives with
savings and credit services, the CDA would have arrogated unto itself ultra
vires powers similar to if not greater than that of the powers of the BSP (Bangko
Sentral ng Pilipinas) over banks. And what is worst is that CDA had inveigled


the Secretary of Finance and even President GMA into signing this patently
illegal, NULL and VOID document. Fortunately, CDA apparently realizing its
horrendous blunder, voluntarily and unceremoniously withdrew this document
from circulation, and, in effect, “killed” it.

However, even with the self-inflicted and unlamented “death” of the
MORR and in spite of the passage of the Cooperative Code of 2008, there are
“signs” that CDA is still hungering and lobbying for more powers than what are
granted by the Coop Code of 2008 and by its present charter (R.A. No. 9369),
in the guise of proposing the enactment of a new Charter for the CDA. In this
way, CDA can, in effect, amend the Coop Code of 2008 not frontally but
surreptitiously through the backdoor Very clever but very foul

Be that as it may, there is a constant and never-ending need for
those who profess to be true Coop leaders of the country or for those
who claim to represent the great and noble cause of cooperatives, to be
always watchful and vigilant in preserving and protecting the rights and
privileges of cooperatives, as enshrined and held sacrosanct in the
Cooperative Code of 2008 which according to some Coop leaders can
justly be called as the Philippine Bible of Cooperatives.

The amendments to the Charter of CDA or R.A. No. 9369 proposed in
this Bill are clearly in consonance with the provisions of the Cooperative Code
of 2008 and are intended to enable the CDA to implement said provisions in an
orderly and efficient manner. More importantly, these amendments are intended
to promote, preserve and protect the autonomy and independence of
cooperatives from outside interference in the conduct and management
of their internal affairs.

Hence, early passage of the Bill is eamestly requested.
N ps



Republic of the Philippines
House of Representatives
Quezon City

Fifteenth Congress
First Regular Session

oe
House Bill No,_ 38995.

Introduced by: REP. PABLO P. GARCIA

AN ACT TO AMEND R.A. NO. 9369, OTHERWISE KNOWN AS THE CHARTER OF
THE COOPERATIVE DEVELOPMENT AUTHORITY (CDA) FOR THE ORDERLY
AND EFFICIENT IMPLEMENTATION OF THE COOPERATIVE CODE OF 2008 AND
FOR OTHER PURPOSES.

The provisions of R.A. No. 9369 are hereby amended as follows:
SEC. 1. Section 3 is hereby amended to read as follows.

SEC. 3. Powers, Functions and Responsibilities. The Authority shall
have the following powers functions and responsibilities:

(a) Formulate, adopt and implement integrated and comprehensive plans
and programs on cooperative development consistent with the
national policy on cooperatives and the overall socioeconomic
development plans of the Government;

(b) Develop and conduct management and training programs upon
request of cooperatives that will provide members of cooperatives
with the entrepreneurial capabilities, managerial expertise, and
technical skills required for the efficient operation of their
cooperatives and inculcate in them the true spirit of cooperativism
and provide, when necessary, technical and professional assistance
to ensure the viability and growth of cooperatives with special
concern for agrarian reform, fishery and economically depressed
sectors;

(c) Support the voluntary organization and consensual development of
activities that promote cooperative movement and provide assistance
towards upgrading managerial and technical expertise upon request
of the cooperatives concerned;

(d) Coordinate the efforts of the local government units and the private
sector in promotion, organization, and development of cooperatives;

(e) Register all cooperatives and their federations and unions, including
their division, merger, consolidation, dissolution or liquidation. It shall


also register the transfer of all or substantially all of their assets and
liabilities and such other matters as may be required by the Authority;

(f) Require all cooperatives, their federations and unions to submit their
annual financial statements, duly audited by certified public
accountants, and general information sheets;

(g) Order of cancellation after due notice and hearing of the
cooperative’s certificate of registration PURSUANT TO THE
PROVISIONS OF ARTICLES 64, 65, 66, 67 AND 68 OF THE
COOPERATIVE CODE OF 2008.

(h) Assist cooperatives in arranging for financial and other forms of
assistance under such terms and conditions as are calculated to
strengthen their viability and autonomy;

(

Establish extension offices as may be necessary and financially
viable to implement this Act. Initially, there shall be extension offices
in the Cities of Dagupan, Manila, Naga, Iloilo, Cebu, Cagayan de Oro
and Davao;

@

Impose and collect reasonable fees and charges in connection with
the registration of cooperatives;

(k) Administer all grants and donations coursed through the Government
for cooperative development, without prejudice to the right of
cooperatives to directly receive and administer such grants and
donations upon agreement with the grantors and donors thereof;

() Formulate and adopt continuing policy initiatives consultation with the
cooperative sector through public hearing;

(m) Adopt rules and regulations for the conduct of its internal operations;

(n) Submit annual report to the President and Congress on the state of
the cooperative movement; and

(0) Exercise such other functions as may be necessary to implement the
provisions of THE COOPERATIVE CODE OF 2008 and in the
performance thereof the Authority may summarily punish for direct
contempt any person guilty of misconduct in the presence of the
Authority which seriously interrupts any hearing or inquiry with a fine
of not more than five hundred pesos (P500.00) or imprisonment for
not more than ten (10) days or both.

Acts constituting indirect contempt as defined under Rule 71 of the
Rules of Court shall be punished in accordance with said Rule.

SEC. 2. SEC. 8 is hereby amended to read as follows:


Sec. 8. Mediation Conciliation AND SETTLEMENT OF DISPUTES.
Disputes within cooperatives or between cooperatives, or DISPUTES WITHIN
OR BETWEEN FEDERATIONS OR UNIONS SHALL BE MEDIATED,
CONCILIATED OR SETTLED IN ACCORDANCE WITH ART. 137 OF THE
COOPERATIVE CODE OF 2008.

SEC. 3. Sec. 9 is hereby amended to read as follows:

“SEC. 9. Power to Register Cooperatives shall be vested solely on the
Authority PURSUANT TO THE PROVISIONS OF THE COOPERATIVE CODE
OF 2008."

FOLLOWING THE ISSUANCE OF THE CERTIFICATE OF
REGISTRATION AND UPON PRESENTATION OF A CERTIFIED COPY
THEREOF TO THE NEAREST REGIONAL OFFICE OF THE BUREAU OF
INTERNAL REVENUE (BIR) THE LATTER SHALL, WITHIN FIVE (5) DAYS,
THEREAFTER, SHALL ISSUE THE CERTIFICATE OF TAX EXEMPTION
PURSUANT TO ART. 144 OF THE COOPERATIVE CODE OF 2008”.

SEC. 4. Section 12 is hereby amended to read as follows:

SEC. 12. Cooperatives in the Banking System. The promotion and
development of cooperative banks as part of the banking system AND OF
FINANCIAL SERVICE COOPERATIVES AS DEFINED IN THE
COOPERATIVE CODE OF 2008 shall be a major concern of the Authority
which shall undertake the necessary program towards this end in collaboration
with the BANGKO SENTRAL NG PILIPINAS (BSP) and the cooperative sector
concerned.

SEC. 5. Effectivity. This act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general publication.