Republic of the Philippines.
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

House Bill No,_ 2665

Introduced by Representatives
DIOSDADO MACAPAGAL ARROYO and GLORIA MACAPAGAL ARROYO

AN ACT
REORGANIZING THE COOPERATIVE DEVELOPMENT AUTHORITY, REPEALING
FOR THE PURPOSE REPUBLIC ACT NO. 6939, CREATING THE COOPERATIVE
DEVELOPMENT AUTHORITY

EXPLANATORY NOTE

Cooperatives play a significant role in economic development, especially in rural
areas where the absence of large spending power does not attract private investment to
harness local skills and resources that can uplift the local economy's living standards
besides exporting produce to distant customer locations in cities.

Cooperatives of farmers enable consolidation of fragmented land, investment in
mechanization and irrigation, better bargaining power to buy seeds and fertilizers
cheaply, arrange for proper common storage and greater bargaining power in selling
farm produce to traders as also make banks comfortable in providing agricultural credit,
thereby improving the productivity of agriculture and improving the incomes of farmer-
members of the cooperatives.

Cooperatives of fishing/pisciculture, animal husbandry and dairy, residential
housing, and other economic activities can contribute similarly to economic
development.

Towards this end, being able to adjust with the needs of the times is of
paramount importance, owing to the importance of cooperatives not only in the present
needs of society but also in the future needs of the same.


Legislation has to be enacted if a better chance for both survival and growth is to
be given to cooperatives.

Due to reasons cited above, the expeditious approval of this bill is earnestly
sought.

DIOSDADO PAGAL ARROYO orbedoarnon ARROYO
Second District, Camarines Sur Second District, Pampanga


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

House BillNo.__ 2665

Introduced by Representatives
DIOSDADO MACAPAGAL ARROYO and GLORIA MACAPAGAL ARROYO

AN ACT
REORGANIZING THE COOPERATIVE DEVELOPMENT AUTHORITY, REPEALING
FOR THE PURPOSE REPUBLIC ACT NO. 6939, CREATING THE COOPERATIVE
DEVELOPMENT AUTHORITY

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

SECTION 1. Short Title. —- This Act shall be known as the “Cooperative
Development Authority Charter Act of 2013.”

SECTION 2. Declaration of Policy. - It is hereby declared the policy of the State
to promote the viability and growth of cooperatives as instruments of equity, social
justice and economic development and create an agency, in fuffillment of the mandate
in Section 15, Article XII of the 1987 Constitution

Toward this end, the State shall recognize cooperatives as associations
organized for the economic and social betterment of their members, operating business
enterprises based on mutual aid, and founded upon internationally accepted
cooperative principles and practices. The State recognizes the cooperative sector as
primarily responsible for the institutional development of cooperatives. Accordingly, the
State recognizes the rights of the cooperative sector to initiate and foster within their
‘own ranks cooperative promotion, organization, training, information gathering, audit
and support services, with government assistance where necessary. In furtherance of
this policy, the National Economic and Development Authority shall include the


promotion of growth and expansion of cooperatives as major and indispensable
components of national development plans.

The government and all its branches, subdivisions, instrumentalities and
agencies shall ensure the provision of technical guidance, financial assistance and
other services to enable the cooperatives to develop into viable and responsive
economic enterprises towards a strong cooperative movement free from any condition
which infringes upon the objectives and character of cooperatives. The State shall,
except as provided in this Act, maintain a policy of non-interference in the management
and operation of cooperatives.

SECTION 3. Cooperative Development Authority. — The Cooperative
Development Authority created under Republic Act No. 6939, hereinafter referred to as
the Authority, is hereby reorganized to carry out the provisions of this Act and those of
Republic Act No. 9520, otherwise known as the “Philippine Cooperatives Code of 2008"
The Authority shall have its principal place of business in Metro Manila, and shall
maintain offices and branches in such other places as the proper conduct of its
business shall require. The Authority shall be an agency attached to the Office of the
President for policy and program coordination.

SECTION 4. Powers, Functions and Responsibilities. - The Authority shall have
the following powers and functions:

(a) Exercise supervision and jurisdiction over all types and categories of
cooperatives registered with the Authority;

(b) Register all types of cooperatives including amendments to its by-laws:
division, merger, consolidation, dissolution and liquidation of cooperatives as well
as the transfer of all or substantially all of their assets and liabilities;

(c) Order the cancellation or revocation of the Certificate of Registration after due
notice and hearing pursuant to Articles 67 and 68 of the Philippine Cooperative
Code of 2008 and by-laws of the cooperative;

(4) Formulate, adopt, and implement integrated plans and programs on
cooperative development consistent with the national policy on cooperatives, and
establish an integrated framework on cooperative development for all
government agencies;

(e) Develop and formulate, in consultation with the cooperative sector, and issue
appropriate regulations, standards, rules, orders, guidelines and/or circulars to
implement the Cooperative Code to ensure the sound operation of cooperatives;

(f) Establish a consultative mechanism in order to provide the cooperative sector
a system for maximum participation on matters of government plans, projects
and policies related to cooperatives.


The cooperative sector shall undertake the organization/streamlining or
rationalization of an apex body, representing all types and categories of
cooperatives under the Philippine Cooperative Code of 2008, which shall function
as the overall consultative and coordinating body with the Authority

The Authority, in consultation with the cooperative sector, shall promulgate the
guidelines for the implementation of the consultative mechanism;

(g) Establish and maintain a continuing educational and capability-program for
the Authority;

(h) Require the submission of annual reports, audited financial statements, and
‘such reports in compliance with the Philippine Cooperative Code of 2008, in such
forms as may be prescribed by the Authority;

(i) Conduct regular inspection or examination of a cooperative in accordance with
tules and regulations promulgated by the Authority and when deemed necessary,
conduct a special inspection and investigation to protect the interest and welfare
of the members of cooperatives. However, the Authority may delegate this
power to accredited federations and unions in accordance with the Philippine
Cooperative Code of 2008 and the implementing rules and regulations issued for
this purpose;

(j) Compel the cooperative to call a General Assembly under the supervision of
the Authority, subject to the criteria or condition/s to be defined in the
implementing rules and regulations issued for this purpose;

In case a cooperative fails to call and conduct a General Assembly, the Authority
shall, on its own, call a General Assembly meeting to address and settle the
issues. The Authority may enlist the aid and support of and/or deputize any and
all enforcement agencies of the government and federations and unions for the
implementation of its orders;

(k) Impose sanctions for non-compliance with lawful orders, rules and regulations
of the Authority, including the Articles of Cooperation and the By-Laws of the
cooperative subject to conditions as defined in the implementing rules and
regulations of this Act;

(1) Collect reasonable fees, fines or charges in the performance of its registration
and regulatory functions;

(m) Establish and strengthen extension offices in all political and administrative
regions in the country and such other places as may be determined by the
Authority;


(n) Hear, decide and settle disputes between and among members, officers, and
directors of cooperatives, and between and among cooperatives in accordance
with Article 137 of the Philippine Cooperative Code of 2008;

(0) Implement and enforce its decision with the assistance of deputized law
enforcement agencies or the local government unit concerned as may be
necessary; and

(p) Exercise such other powers and functions as may be necessary to implement
the provisions of the Philippine Cooperative Code of 2008.

SECTION 5. Organizational Structure. - The Authority shall have a Board of
Directors and an Office of the Administrator.

The Board of Directors, hereinafter referred to as the Board, shall be the collegial
policy-making body of the Authority which shall be composed of the Chairperson and six
(6) members of the Board of Directors, all of whom shall be chosen from among the
nominees of the cooperative sector, with two (2) representatives each from Luzon,
Visayas and Mindanao. They shall be appointed by the President of the Philippines and
shall serve for a term of six (6) years without reappointment. Except for the
Chairperson, the Members of the Board shall serve on a part-time basis only: Provided,
That any vacancy in the Board shall be filled-up by appointment of the President in
accordance with the provisions of this section: Provided, further, That a member so
appointed shall serve only for the unexpired term: Provided, finally, That the incumbent
Chairperson and members of the Board shall continue to serve and act as chairperson
and members of the present Board up to the end of their term under Republic Act No.
6939.

Except for the Chairperson, the members of the Board shall be entitled to per
diem at rates to be determined and approved by the Department of Budget and
Management and actual travel expenses.

The Office of the Administrator shall be headed by the Chairperson of the Board
who shall exercise over-all supervision on the operations of the Authority.

SECTION 6. Power and Functions of the Board - The Board as the policy-
making body shall have the following powers and functions:

a) Formulate policies, rules and regulations consistent with the provisions of the
Philippine Cooperative Code of 2008;

b) Adopt implementing rules and regulations for the conduct of the internal
operations of the Authority;


c) Organize the operating structure and functions of the Authority. No changes
in the approved organizational structure including transfer of personnel shall
be effected without the approval of the Board; and

d) Approve and adopt the annual budget of the Authority.

SECTION 7. Qualifications of Members of the Board. - The Chairperson or a
member of the Board who shall be appointed must possess the following qualifications:

(a) A natural born Filipino citizen;

(b) Must not be more than sixty (60) years old at the time of the appointment and
must be in good health;

(c) A holder of at least a bachelor's degree and five (5) years of experience as an
official or officer of a cooperative, government agency, or non-government
organization engaged in cooperative development or, in the absence of a
bachelor’s degree, at least seven (7) years of experience in cooperatives either
as an officer of a cooperative or a government agency or non-government
organization engaged in cooperative development;

(4) Except the Chairperson who should be a resident of the Philippines, the other
members of the Board must be a resident of the region represented for at least
five (5) years; and

(e) Must be recommended and endorsed by a federation and/or union of
cooperatives operating in good standing under the provisions of this Act and the
Philippine Cooperative Code of 2008.

Any person appointed as Chairperson or regular member of the Board shall,
upon appointment, divest himself of any direct or indirect pecuniary interest or dealings
with any cooperative.

SECTION 8. Removal of Member of the Board. — The President of the
Philippines may remove any member of the Board for any of the following reasons:

(a) If the member is subsequently disqualified under the provisions of this Act;

(b) If the member becomes physically or mentally incapacitated to properly
discharge the duties and responsibilities of the position and such incapacity
has lasted more than six (6) months; and

(0) If the member is guilty of acts or omissions which are fraudulent or illegal in
character or which are manifestly opposed to the aims, objectives and
interests of the Authority and the cooperative sector.


SECTION 9. Meetings of the Board. — The Board shall meet at least once a
month for the transaction of its regular business. Special meetings may be called by the
Chairperson or majority of the members of the Board to consider specific matters. A
majority vote by the entire Board shall be required for a decision. All regular and special
meetings of the Board shall be held at the head office in Manila.

SECTION 10. Chairperson/Administrator. - The Chairperson shall be the
Administrator of the Authority and shall have the rank and privileges of an
Undersecretary

In the absence of the Administrator, the Director IV shall be the Officer-in-Charge
of the Authority who shall exercise the powers and duties of the Administrator.

SECTION 11. Powers and Functions of the Chairperson/Administrator. - The
Chairperson/Administrator of the Authority shall have the following powers and
functions:

(a) Preside over the meetings of the Board ;
(b) Supervise the over-all operations of the Authority;

(c) Prepare, consolidate and submit periodic reports for the consideration of the
Board;

(d) Implement a human resource management system consistent with the Civil
Service Code that will promote professionalism and excellence in accordance
with sound principles of management;

(e) Prepare the proposed annual and supplemental budgets of the Authority for
the consideration and approval of the Board;

(f) Report to the President of the Philippines and Congress on the performance
and accomplishment of the Authority on a periodic basis;

(g) Represent the Authority in all undertakings where its presence is required;
and

(h) Perform such other functions as may be required by law.

SECTION 12. Power to Register Cooperatives. - The power to register
cooperatives shall be vested solely on the Authority pursuant to the provisions of the
Philippine Cooperative Code of 2008.

All cooperatives duly registered with the Authority shall present their Certificate of
Registration to the nearest Bureau of Internal Revenue office and the latter shall within
ten (10) days issue the Certificate of Tax Exemption


Any provision of law, executive order, rule or regulation to the contrary
notwithstanding, the certificate of registration issued by the Authority to a duly registered
cooperative shalll ipso facto constitute as the sole legal basis or requirement for the full
enjoyment of the tax exemption granted under Articles 60 and 61 of the Philippine
Cooperative Code of 2008. Any public official or employee who violates or in any
manner circumvents this provision shall be dealt under Article 140 of the Philippine
Cooperative Code of 2008.

The Authority shall cite this provision in the certificate of registration

SECTION 13. Prohibition. — Except as provided for under Article 130 of the
Philippine Cooperative Code of 2008, the use of the word “cooperative” by any person
or organization unless duly registered with the Cooperative Development Authority shall
be prohibited and shall be penalized under Article 140 of the Philippine Cooperative
Code of 2008.

SECTION 14. Settlement of Disputes. — Disputes within or between
cooperatives, or disputes within or between federations or unions shall be meditated,
conciliated or settled in accordance with this Act, Article 137 of the Philippine
Cooperative Code of 2008 and its implementing rules and regulations or Republic Act
No. 9285, otherwise known as the Alternative Dispute Resolution Act of 2004.

SECTION 15. Cooperatives in the Education System. - The history, philosophy,
concepts, values, principles and practices of cooperatives and their role as a factor in
the national economy shall be disseminated both in formal and non-formal education.

Notwithstanding existing laws, memorandum orders and directives, cooperatives
development and administration as a field of study may be offered as a baccalaureate,
post baccalaureate or masteral program in state universities and colleges (SUCs) in
accordance with the standards, rules and regulations promulgated by their respective
Board of Regents, the Commission on Higher Education (CHED) and the Authority in
consultation with the cooperative sector as necessary: Provided, That SUCs shall
provide for equivalency credit and accreditation of work experiences and non-formal
education and training of cooperative leaders, managers and members: Provided,
Further, That is cases where the SUCs do not offer a separate academic program in
cooperatives development and administration, the SUCs shall be encouraged to include
a 3-unit subject in the curricula of accountancy, agribusiness, agriculture, agricultural
economics, business, community development, economics, education, forestry, social
sciences, and other curricula that can be instrumental in the development of
cooperatives. Special incentives including scholarships shall be formulated by the
Authority for students taking up degree courses on cooperatives development and
administration.

The role of non-government organizations, not registered as cooperatives but
duly registered under Philippine laws and engaged in cooperative promotion,


organization, research and education, shall be recognized. The Authority may accredit
such nongovernment organizations as non-academic training organizations. The
training courses offered by them may be eligible as credits for the purposes of
academic, professional and career advancements of their trainees. Existing training
centers for cooperatives may qualify as non-government organizations under this Act.

Upon request of cooperatives, State colleges and universities shall provide
technical assistance and guidance to cooperatives in the communities where they are
located

SECTION 16. Cooperatives in the Banking System. - The promotion and
development of cooperative banks as part of the Philippine banking system and of
financial service cooperatives as defined in the Philippine 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 and the
cooperative sector concemed.

SECTION 17. Cooperatives Engaged in Services Covered by Other Laws. -
Registered cooperatives may engage in business endeavors in accordance with its
approved articles of cooperation provided they acquire the necessary licenses,
franchises, certificates of authority and permits from the appropriate agencies governing
their type of cooperatives such as, but not limited to those providing manpower
services, construction services, professional services, health care services, security
services, social welfare services, research development, related health services,
ecological and environment services, farmers and fisherfolk cooperatives and services ti
indigenous cultural minorities.

SECTION 18. Reorganization of the Authority. — The Authority shall be
reorganized within one hundred twenty (120) days from the effectivity of this Act.

SECTION 19. Transitory Provisions. - Upon the effectivity of this Act, the
personnel of the Cooperative Development Authority shall, unless removed for cause
and after due process, continue to perform their duties and responsibilities and shall
receive their corresponding salaries and benefits.

In the reorganization and staffing of the Authority, these personnel shall be given
preference subject to civil service rules and regulation and rules of the Organization,
Position Classification and Compensation Bureau of the Department of Budget and
Management (DBM); Provided, That those who shall not be absorbed by the
organization shall be allowed to retire under existing retirement laws if qualified or under
Section 10 and other applicable provisions of Executive Order No. 366, Series of 2004,
whichever is beneficial to the employee concemed.

SECTION 20. Appropriations. - The amount necessary for the implementation of
this Act shall be included in the annual General Appropriations Act


SECTION 21. Transfer of Funds and Programs. — The Cooperative Development
Loan Fund and the Fund for Management Training and Assistance Program created
under Presidential Decree No. 175, as amended, and the Cooperative Marketing
Project created under loan agreements, all granted to the Department of Agriculture, is
hereby transferred to the Authority which shall be used for the development and
strengthening of cooperatives.

SECTION 22. Implementing Rules and Regulations. - The Board shall, in
consultation with the cooperative sector, formulate the implementing rules and
regulations for the effective implementation of the provisions of this Act. The
implementing rules and regulations shall take effect within fifteen (15) days after
publication in the Official Gazette or in two (2) newspapers of general circulation. All
subsequent amendments to the implementing rules and regulations shall also be
published before taking effect

SECTION 23. Information Campaign. - The Cooperative Development Authority
is mandated to conduct a six (6) months information campaign on the provisions of this
Act from its effectivity.

SECTION 24. Repealing Clause. - Republic Act No. 6939, creating the
Cooperative Development Authority is hereby repealed. All other laws, decrees,
executive orders, rules and regulations or parts thereof inconsistent with the provisions
of this Act are hereby amended or modified accordingly.

SECTION 25. Separability Clause. — If for any cause any part of this Act is
declared unconstitutional, the rest of the provisions shall remain in force and effect.

SECTION 26. Effectivity Clause. - This Act shall take effect fifteen (15) days

after its publication in the Official Gazette or in at least two (2) national newspapers of
general circulation.

Approved,