,;I 
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THIRTEENTH CONGRESS OF THE REPUBLIC 
) 
1 
“04 LIUl., -2 i: ? ‘I‘O 
OF THE PHILIPPINES 
First Regular Session 
1 
S E N A T E  
S.B. No. 
129 
Introduced by Senator Rodolfo G. Biazon 
EXPLANATORY NOTE 
This bill seeks to amend Republic Act No. 6938, otherwise known as the “Cooperative 
Code of the Philippines. ” 
Article XII, Section 1 of the 1986 Constitution provides that ‘>rivate ente 
including corporations, cooperatives, and similar collective organizations shall be encouraged 
to broaden their base of ownersh@. ” Section 6 of the same article states that these organiiations 
shall likewise, “have the right to own, establish, and operate economic enterprises, subject to the 
duiy of the State to promote distributive justice and to intervene when the common good so 
demands. ’ I  
These aforecited provisions recogni2e the important role of cooperatives in the 
development of the nation. Republic Act No. 6938 was enacted specifically “to foster the 
creation and growth of cooperatives as a practical vehicle for promoting sew-reliance and 
harnessing people power towards the attainmenf of economic development and social justice. ’’ 
However, a continuously changing economic climate and studies on the experiences of 
the cooperative sector indicate that the Cooperative Code has to be amended. This is to realize 
the vision of achieving the”ful1 potential of the cooperative sector. A strong and viable one that is 
able to create equitable wealth, expand opportunities, generate jobs, and thereby create the 
conditions to win the people’s war on poverty and strengthen the socio-economic middle class in 
the Philippines. 
In view of the foregoing, the early passage of this proposed measure is therefore earnestly 
sought. 
Senator 


THIRTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
1 
First Regular Session 
) 
S E N A T E  
”04 Jill -2 A 17 59 
Introduced by Senator Rodolfo G. Biazon 
AN ACT 
AMENDING REPUBLIC ACT NO. 6938, OTHERWISE KNOWN AS THE 
COOPERATIVE CODE OF THE PHILIPPINES 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
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SECTION 1. 
Articles 2, 3, 4 and 5 of Chapter I of Republic Act No. 6938, otherwise 
lcnown as the “Cooperative Code of the Philippines” are hereby amended as follows: 
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“ART. 2 Declaration of Policy. - It is the declared policy of the State to foster the creation 
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and growth of cooperatives as a practical vehicle for promoting self-reliance, [and] harnessing 
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people power, AND RATIONAL USE OF RESOURCES towards the attainment of economic 
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development, [and] social justice AND EQUITY. The State shall CREATE A CONDUCIVE 
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ATMOSPHERX THAT SHALL encourage the private sector to undertake the actual 
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formation, REFORMATION, TRANSFORMATION and organization of cooperatives THAT 
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[and] shall LEAD [create an atmosphere that is conducive] to the growth, [and] development 
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AND MODERNIZATION of these cooperatives AND THE OTHER SECTORS OF THE 
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ECONOMY. 
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ART, 3. General Concepts. - A cooperative is a duly registered association of persons, with 
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a common bond of interest, who have voluntarily joined together to achieve a lawful common 
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social or economic end, TO BENEFIT FROM ECONOMIES OF SCALE AND 
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STRENGTHEN THEIR NEGOTIATING POWER, making equitable contributions to the 
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capital required, PATRONIZING THEIR PRODUCTS AND SERVICES and accepting a fair 


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cooperative principles. 
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EVERY COOPERATIVE SHALL ALSO KEEP FAITH WITH THE BASIC 
share of the risks and benefits of the undertaking in accordance with universally accepted 
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COOPERATIVE VALUES OF SELF-HELP, DEMOCRACY, EQUALITY, EQUITY, 
SOLIDARITY, HONESTY, OPENNESS, SOCIAL RESPONSIBILITY AND CARING 
FOR OTHERS. 
ART. 4. Cooperative Principles. - Every cooperative shall conduct its affairs in 
accordance with Filipino culture, GOOD VALUES and experience and the universally accepted 
principles of cooperation which include BUT SHALL NOT BE LIMITED TO the following: 
(1) Open and Voluntary Membership - Membership in a cooperative shall be OPEN AND 
voluntary to all individuals ABLE TO USE AND PATRONIZE THEIR SERVICES AND 
WILLING T.0 ACCEPT THE RESPONSIBILITIES OF MEMBERSHIP, regardless of 
their GENDER, social, political, racial or religious background or beliefs. 
(2) Democratic MEMBER Control. - Cooperatives are democratic organizations[.] 
[Their affairs shall be administered by persons elected or appointed in a manner agreed upon by 
the members.] 
CONTROLLED AND GOVERNED BY THEIR MEMBERS WHO 
ACTIVELY PARTICIPATE IN SETTING THEIR POLICIES AND MAKING 
DECISIONS. PERSONS SERVING AS ELECTED REPRESENTATIVES, DIRECTORS 
AND OFFICERS SHALL BE ACCOUNTABLE TO THE MEMBERSHIP. Members of 
primary cooperatives shall have equal voting rights on a one-member-one-vote principle: 
Provided, however, That in the case of secondary and tertiary cooperatives, the provisions of 
Article 37 of this Code shall apply. 
(3) [Limited Interest in Capital - Share capital shall receive a strictly limited rate of 
interest.] MEMBERSHIP EQUITY - EQUITABLE CONTRIBUTION TO THE 
CAPITALIZATION OF A COOPERATIVE SHALL BE A PRE-CONDITION FOR 
MEMBERSHIP. MEMBERS SHALL RECEIVE IN EQUITABLE PROPORTION 
INTERESTS, NET SURPLUSES, EMOLUMENTS, PROCEEDS OF SALE OF 
PROPERTY, AND BENEFITS FOR THEIR SUBSCRIPTION. NET SURPLUSES MAY 
BE DECLARED BY THE GENERAL MEMBERSHIP FOR DEVELOPMENTAL 
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PURPOSES AND OTHER ACTIVITIES THAT MAY BENEFIT THE COOPERATIVE 
AND ITS MEMBERS, OR THESE MAY BE DISTRIBUTED TO THE MEMBERS; 
(4) [Division ofNet Surplus - Net surplus arising out of the operations of a cooperative 
belongs to its members and shall be equitably distributed for cooperative development, common 
services, indivisible reserve fund and for limited interest on capital and/or patronage refund in 
the manner provided in this Code and in the articles of cooperation and bylaws.] AUTONOMY 
AND INDEPENDENCE. - - OTHER THAN CONTROL IN CONFORMITY WITH THE 
LAWS OF THE LAND, THE STATE GUARANTEES THE AUTONOMY AND 
INDEPENDENCE OF A COOPERATIVE TO OPERATE AND MANAGE ITS OWN 
AFFAIRS; PROVIDED, THAT THE RIGHT OF CONTROL BY ITS MEMBERS OVER 
THEIR COOPERATIVE SHALL BE RETAINED. 
(5) Cooperative Education, TRAINING AND INFORMATION - All cooperatives shall 
make provision for the education, TRAINING AND INFORMATION of their members, 
officers and employees and of the general public TO ENHANCE THEIR SKILLS, 
CAPABILITY AND 
KNOWLEDGE SO 
THAT 
THEY 
CAN 
CONTRIBUTE 
EFFECTIVELY AND EFFICIENTLY TO THE DEVELOPMENT OF THEIR 
COOPERATIVES. [based on the principles of cooperation.] 
(6) Cooperatron Among Cooperatives - All cooperatives[, in order to best serve the 
interest o€ their members and communities,] shall actively COMMUNICATE, LINK AND 
cooperate, with other cooperatives at local, national and international levels TO FACILITATE 
THE TRANSFER OF DATA, TECHNOLOGY, GOODS AND SERVICES THAT SHALL 
IMPROVE THE QUALITY OF LIFE OF ITS MEMBERS AND THE COMMUNITY. 
(7) CONCERN FOR COMMUNITK - COOPERATIVES SHALL WORK FOR THE 
SUSTAINABLE DEVELOPMENT OF THE COMMUNITY, PROTECTION OF THE 
ENVIRONMENT AND PRESERVATION OF NATURAL RESOURCES, THROUGH 
POLICIES APPROVED BY THEIR MEMBERS. 
ART. 5. Dejinition ofTerms -The following terms shall mean: 
(I) x x x  
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(2) General Assembly shall mean the full membership of the cooperative duly assembled 
for the purpose of exercising all the rights and performing all the obligations pertaining to 
cooperatives, as provided by this Code, its articles of cooperation and bylaws: PROVIDED, 
THAT FOR COOPERATIVES WITH NUMEROUS AND DISPERSED MEMBERSHIP, 
THE GENERAL ASSEMBLY MAY BE COMPOSED OF DELEGATES ELECTED BY 
EACH SECTOR OR CHAPTER OF THE COOPERATIVE; 
( 3 ) x x x  
(4) x x x  
(5) x x x  
(6) x x x 
(7) 
x x x  
(8) x x x  
(9) Universally Accepted Principles mean that body of cooperatwe principles adhered to 
worldwide by cooperatives in other jurisdictions[.]; 
(IO) REPRESENTATIVE ASSEMBLY SHALL MEAN THE FULL MEMBERSHIP 
OF A BODY OF REPRESENTATIVES ELECTED BY EACH OF THE SECTORS OR 
SUBDIVISIONS OF THE COOPERATIVE DULY ASSEMBLED FOR THE PURPOSE 
OF EXERCISING SUCH POWERS LAWFULLY DELEGATED UNTO THEM BY THE 
GENERAL ASSEMBLY; 
(11) OFFICERS OF THE COOPERATIVES SHALL INCLUDE THE MEMBERS OF 
THE BOARD OF DIRECTORS, MEMBERS OF THE DIFFERENT COMMITTEES 
CREATED BY THE GENERAL ASSEMBLY, GENERAL MANAGER OR CHIEF 
EXECUTIVE OFFICER, SECRETARY AND TREASURER; 
(12)SOCIAL AUDIT SHALL REFER TO ANY AUDIT INTENDED TO 
DETERMINE 
THE 
FULFILLMENT 
AND 
ACHIEVEMENT 
OF 
SOCIAL 
RESPONSIBILITIES AND OBJECTIVES OF A COOPERATIVE; 
(13)PERFORMANCE AUDIT SHALL REFER TO ANY AUDIT ON THE 
EFFICIENCY AND EFFECTIVENESS OF THE COOPERATIVE AS A WHOLE, ITS 
MANAGEMENT, THE OFFICERS AND/OR ITS VARIOUS RESPONSIBILITY 
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CENTERS AS BASIS FOR IMPROVING INDIVIDUAL, TEAM OR OVERALL 
PERFORMANCE 
AND 
FOR 
OBJECTIVELY INFORMING THE 
GENERAL 
MEMBERSHIP ON SUCH PERFORMANCE; 
(14) A SINGLE-LINE OR SINGLE-PURPOSE COOPERATIVE SHALL REFER TO 
A COOPERATIVE UNDERTAKING ACTIVITIES WHICH ARE RELATED TO ITS 
MAIN LINE OR PURPOSE. 
(15) BANGKO SENTRAL SHALL REFER TO THE BANGKO SENTRAL NG 
PILIPINAS (BSP) CREATED UNDER REPUBLIC ACT NO. 7653. 
(16) MONETARY BOARD SHALL REFER TO THE MONETARY BOARD OF THE 
BANGKO SENTRAL” 
SEC. 2. Articles 6, 7, 9, 10, 11, 12, 14, 16, 18, 23 and 24 of Chapter I1 of the same Code 
are hereby amended as follows: 
“ART. 6. PURPOSES FOR THE Organization of Cooperatives. - A cooperative may be 
organized and registered by at least [fifteen (15)] THIRTY (30) persons for any or all of the 
following purposes: 
(1) To [encourage] PROVIDE A MECHANISM THAT WOULD LEAD 
TO thrift and savings mobilization among the members; 
(2) To generate funds FOR THE PURPOSE OF [and] extendING credit to 
the members for productive and provident purposes; 
(3) To [encourage among members] PROVIDE A MECHANISM FOR 
systematic COOPERATIVE production, 
[and] marketing AND 
PURCHASING OF GOODS AND SERVICES; 
(4)To ASSIST THE MEMBERS IN THE ACQUISITION OF 
AFFORDABLE AND QUALITY [provide] goods and services [and 
other requirements to the members]; 
(5) To PROVIDE A VENUE FOR THE developMENT AND TRANSFER 
OF expertise and skills among its members; 
(6) x x x 
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(7) To insure against losses of the members BROUGHT ABOUT BY 
CALAMITIES AND FORTUITOUS EVENTS; 
(8) To promote and advance the economic, social and educational status of the 
members; 
(9) To establish, own, lease or operate cooperative banks, [cooperative] 
wholesale and retail complexes, insurance ORGANIZATIONS, [and] 
agricultural[/] ENTERPRISES, industrial processing 
[enterprises] 
PLANTS and public markets; 
(10) 
To 
coordinate,[and] 
facilitate, 
AND 
ASSIST ' IN 
THE 
DEVELOPMENT OF OTHER [the activities ofl cooperatives; and 
(1 1) To undertake any and all other activities for the effective and efficient 
implementation of the provisions of this Code. 
ART. 7. GOALS AND Objectives o f a  Cooperative. - The primary objective of every 
cooperative is HUMAN BETTERMENT. TOWARDS THIS END, THE COOPERATIVE 
SHALL [to]: 
(1) [Provide] ENHANCE THE CAPABILITY OF ITS MEMBERS TO THE 
ACCESS OF goods, services and[/or] opportunities THROUGH ORGANIZED 
COLLECTIVE EFFORTS; 
(2) [to its members and thus] Enable ITS MEMBERS [them] to attain increased 
income, [and] savings, investments, productivity, purchasing power, and a better 
way of life; 
(3) [and promote among them] ACT AS MEDIUM FOR THE equitable distribution 
of [net surplus] INCOME through optimum utilization of information, technology 
and other resources; 
(4) DISTRIBUTE THE BENEFITS OF economies of scale, cost-[sharing] and risk- 
sharing without however, conducting the affairs of the cooperative for 
eleemosynary or charitable purposes; 
(5) Provide [maximum] OPTIMUM SOCIAL AND economic benefits AND 
SERVICES to its members; 
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(6) [Teach them efficient and effective ways of doing things in a cooperative manner] 
IMPART TO THE MEMBERS AND TO THE PUBLIC, THE WISDOM OF 
COOPERATIVISM; 
(7) Propagate cooperative practices and new ideas in business and management; [and] 
(8) Allow the lower income AND OTHER MARGINALIZED groups to increase 
their ownership in the wealth of this nation; AND 
(9) ESTABLISH 
LINKAGE 
WITH 
THE 
GOVERNMENT, 
OTHER 
COOPERATIVES, NON-GOVERNMENT ORGANIZATIONS, PEOPLE- 
ORIENTED ORGANIZATIONS AND SUCH OTHER ORGANIZATIONS 
TO FURTHER THE CAUSE OF COOPERATIVISM. 
ART. 8. Cooperatives Not in Restraint of Trade - x x x 
ART. 9. Cooperative Powers and Capacities. - A  cooperative registered under this Code 
shall have the following powers, RIGHTS and capacities: 
(1) TO THE EXCLUSIVE RIGHT OVER THE USE OF ITS REGISTERED 
NAME; 
[I] (2) To sue and be sued [in its cooperative name]; 
[2] (3) TO PURSUE THE PURPOSE OF ITS ORGANIZATION AND TO 
ENSURE THE SUCCESS OF ITS BUSINESS [Of succession]; 
(4) TO ACCEPT OR DENY APPLICATIONS FOR MEMBERSHIP, TO 
CONDUCT PRE-MEMBERSHIP SEMINARS AND OTHER EDUCATIONAL 
ACTIVITIES, AND TO EXPEL OR TERMINATE MEMBERS FROM ITS 
ROSTER AS PROVIDED FOR IN ITS BY-LAWS; 
[31(5) x x x 
[41(6) x x x 
[51(7) x x x 
I61 (8) x x x 
[7] (9) To FORM SUBSIDIARIES AND CHAPTERS, AND join federations or 
unions, as provided in this Code; 
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181 (10) To AVAIL OF LOANS, BE ENTITLED TO CREDIT AND TO accept 
and receive grants, donations and assistance from foreign and domestic sources. 
COOPERATIVES SHALL ALSO BE PROVIDED FREE ASSISTANCE BY 
THE AUTHORITY TO FULFILL THE DOCUMENTARY REQUIREMENTS 
FOR SAID LOANS AND CREDITS AND IN SEEKING GRANTS, 
DONATIONS AND SIMILAR ASSISTANCE; 
(11) TO NEGOTIATE, ENTER INTO, OR RESCIND CONTRACTS IN 
FURTHERANCE OF ITS OBJECTIVES; 
(12) TO HIRE, COMMISSION OR ENGAGE THE SERVICES OF 
PROFESSIONAL MANAGERS, DIRECTORS, 
CONSULTANTS AND 
OTHER PERSONNEL TO ENSURE THE ATTAINMENT OF ITS 
OBJECTIVES; 
(13) 
TO AVAIL OF PREFERENTIAL RIGHTS AND PRIVILEGES 
GRANTED TO COOPERATIVES BY LAW PARTICULARLY REPUBLIC 
ACT 7160, OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE, 
AND 
REPUBLIC 
ACT 
8435, 
OTHERWISE 
KNOWN 
AS 
THE 
AGRICULTURE AND FISHERIES MODERNIZATION ACT OF 1997 
(AFMA); 
(14) 
TO PROVIDE CONTINUITY FOR THE COOPERATIVES BY 
INCULCATING COOPERATIVISM THROUGH TRAINING, SEMINARS 
ON COOPERATIVE KNOW-HOW AND SIMILAR OTHER COOPERATIVE 
ACTIVITIES WHICH ARE GEARED TOWARDS THE ADVANCEMENT OF 
THE MOVEMENT; AND 
191 (15) x x x 
ART. 10. Organizing a Primary Cooperative. - [Fifteen (15)] THIRTY (30) or more 
natural persons[,] who are [citizens of the Philippines] AT LEAST EIGHTEEN (18) YEARS 
OF AGE, MAJORITY OF WHOM ARE FILIPINO CITIZENS, having a common bond of 
interest, WILLING TO ACCEPT AND DISCHARGE THE RESPONSIBILITIES OF 
THEIR MEMBERSHIP aid are ACTUALLY residing, [or] working OR STUDYING in the 
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intended area of operation, may organize AND REGISTER a PRIMARY cooperative WHICH 
SHALL ACQUIRE A JURIDICAL PERSONALITY under this Code. 
ANY NEWLY 
ORGANIZED PRIMARY COOPERATIVE CANNOT BE REGISTERED AND 
OPERATED AS A MULTI-PURPOSE COOPERATIVE. 
A COOPERATIVE MAY 
TRANSFORM INTO A MULTI-PURPOSE COOPERATIVE ONLY AFTER AT LEAST 
TWO (2) YEARS OF OPERATIONS GENERATING A NET SURPLUS. 
ART. 11. [Economic Survey] REQUIREMENTS FOR REGISTRATION. - Every 
group of individuals or cooperatives intending to form a cooperative under this Code shall 
submit to the [Cooperative Development] Authority [a general statement describing the structure, 
purposes and economic feasibility of the proposed cooperative, indicating therein the area of 
operation, the size of membership and other pertinent data.] THE FOLLOWING 
DOCUMENTS: 
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(1) 
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(2) 
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(3) 
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(4) 
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(5) 
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(6) 
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(7) 
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A GENERAL STATEMENT OF THE ORGANIZATION INDICATING 
AMONG 
OTHERS 
ITS 
STRUCTURE, 
ACTUAL 
PERSONNEL, 
PURPOSEIS AREA 
OF OPERATION AND 
WHETHER 
IT IS 
COMPOSED OF PRODUCERS, SERVICE PROVIDERS AND/OR 
CONSUMERS; 
A FEASIBILITY STUDY OF THE PROPOSED COOPERATIVE; 
ARTICLES OF COOPERATION, 
COOPERATIVE BY-LAWS; 
ORGANIZERS' 
CERTIFICATE 
OF 
COMPLETION 
OF 
PRE- 
ORGANIZATION SEMINAR BY THE AUTHORITY OR BY DULY 
ACCREDITED COOPERATIVES; 
BONDS OF ACCOUNTABLE OFFICERS; AND 
OTHER PERTINENT DOCUMENTS THAT THE AUTHORITY MAY 
REQUIRE. 
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THE AUTHORITY SHALL ISSUE THE NECESSARY GUIDELINES FOR THE 
PREPARATION OF THE FEASIBILITY STUDY AND OTHER PERTINENT DATA 
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REQUIRED HEREIN WITHIN THREE MONTHS FROM THE APPROVAL OF THIS 
ACT. 
ART. 12. Liability. - A cooperative [shall be] DULY registered under this Code[,] [with] 
SHALL HAVE limited liability. 
ART. 13. 
ART. 14. 
Term. -x x x 
Articles of Cooperation. - (1) All cooperatives applying for registration 
shall file with the [Cooperative Development] Authority [the] THEIR DULY NOTARIZED 
AND SIGNED articles of cooperation which [shall be signed by each of the organizers and 
acknowledged by them if natural persons, and by the presidents or secretaries, if juridical 
persons, before a notary public. [2]The articles of cooperation] shall SET FORTH: 
(a) The name[s] AND CATEGORY of the cooperative which shall include the word 
“cooperative”; 
(B) A GENERAL STATEMENT OF THE ORGANIZATION INDICATING 
AMONG OTHERS ITS STRUCTURE, ACTUAL PERSONNEL, PURPOSE/S 
AREA 
OF OPERATION AND 
WHETHER IT IS COMPOSED OF 
PRODUCERS, SERVICE PROVIDERS AND/OR CONSUMERS; 
[@)I (C) x x x 
Kc)l (D) x x x 
Kd)l (E) x x x 
[(e)] (F) The names, SIGNATURES, nationality and the postal addresses of the 
registrants; 
[(Ql (GI x x x 
[(!dl (HI x x x 
Kh)l (1) x x x  
131 (2) x x x 
[4] (3) Four (4) copies each of the proposed articles of cooperation, By-Laws, 
FEASIBILITY STUDY and the general statement required undcr Article 11 of this 
Code shall be submitted to the [Cooperative Development] Authority; 
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[5] (4) 
No 
cooperative 
OTHER 
THAN 
A 
COOPERATIVE 
UNION 
AS 
DESCRIBED UNDER THIS CODE, shall be registered unless the articles of 
cooperation is accompanied with the bonds of the accountable officers and a sworn 
statement of the treasurer elected by the subscribers 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: Provided, That in 
no case shall the paid-up share capital be less than [Two thousand pesos (PZ,OOO.OO)] 
THIRTY THOUSAND PESOS (P30,OOO.OO). 
ART. 15 
By-lms. - x x x 
ART. 16. 
Registration, - A cooperative formed or organized under this Code 
acquires juridical personality from the date the [Cooperative Development] Authority issues a 
certificate of registration under its official seal. All applications for registration shall be finally 
disposed of by the [Cooperative Development] Authority within a period of [thirty (30)] SIXTY 
(60) days from the filing thereof, otherwise the application is deemed approved, unless the cause 
of the delay is attributable to the applicant: Provided, That, in case of a denial of the application 
for registration, an appeal shall lie with the Office of the President within ninety (90) days from 
receipt of notice of such denial: Provided, further, That failure of the Office of the President to 
act on the appeal within ninety (90) days from the filing thereof shall mean approval of said 
application: 
PROVIDED, FINALLY, THAT NO COOPERATIVE SHALL BE 
REGISTERED UNLESS THE ORGANIZERS HAVE ATTENDED AND COMPLETED 
A PRE-MEMBERSHIP SEMINAR CONDUCTED BY THE AUTHORITY OR ITS 
DULY ACCREDITED COOPERATIVE UNIONS, FEDERATIONS AND OTHER 
ENTITIES, AND HAVE SUBMITTED THE NECESSARY REQUIREMENTS FOR 
REGISTRATION AS PROVIDED UNDER THIS CODE. 
ART. 17. 
ART. 18. 
Certificate of Registration. - x x x 
Amendment of Articles of Cooperation and Byluws. - 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 (213) vote of all the members 
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The original and amended articles AND BY-LAWS together shall contain all provisions 
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required by law to be set out in the articles of cooperation 1.1 AND BY-LAWS. Amendments 
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shall be indicated by underscoring or otherwise appropriately indicating the change or changes 
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made and a copy [thereof] OF THE AMENDED ARTICLES OR AMENDED BY-LAWS 
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duly certified under oath by the cooperative secretary and a majority of the directors stating the 
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fact that said amendment or amendments TO THE ARTICLES OF COOPERATION 
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AND/OR BY-LAWS have been duly approved by the required vote of the members. All 
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amendments to the articles of cooperation AND/OR BY-LAWS shall be submitted to the 
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[Cooperative Development] Authority. The amendments shall take effect upon its approval by 
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the [Cooperative Development] Authority or within thirty (30) days from the date of filing 
with voting rights, without prejudice to the right of the dissenting members to exercise their right 
to withdraw their membership under Articles 31 and 32. 
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thereof if not acted upon by the Authority for a cause not attributable to the cooperative. 
ART. 19. 
ART. 20. 
ART. 21. 
ART. 22. 
ART. 23. 
Contracts Executed Prior to Registration and Effects Thereof - x x x 
Division of Cooperatives. - x x x 
Merger and Consolidation of Cooperatives. - x x x 
Effects of Merger and Consolidations. - x x x 
Types and Categories of Cooperatives. - (1) Types of Cooperatives - 
Cooperatives may fall under any of the following types: 
(a) SAVZNGSAND Credit Cooperative [is] REFE,RS TO one which promotes thrift AND 
SAVINGS among 'its members [and create] TO GENERATE funds in order to grant 
loans for productive and [provident] PROVIDENTIAL purposes; 
(b) Consumers Cooperative REFERS TO [is] one WHICH [the primary purpose is to] 
UNDERTAKES 
COLLECTIVE 
procureMENT 
and 
distribut[e]ION 
OF 
commodities AND SERVICES to members and non-members; 
(c) Producers Cooperative REFERS TO [is] one WHICH [that] undertakes joint 
AGRICULTURAL OR INDUSTRIAL production OR BOTH [whether agricultural 
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or industrial]; 
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(d) Marketing Cooperative REFERS TO [is] one which engages in the supply of 
production inputs to members and markets their products; 
(e) Service Cooperative REFERS TO [is] one which [engages in] RENDERS medical 
and dental care, hospitalization, [and] transportation, insurance, housing, labor, electric 
light and power, communication, IRRIGATION, WATER SUPPLY and other 
services; 
(f) WORZCERS COOPERATIVE REFERS TO ONE WHOSE MEMBERS ARE AT 
THE SAME TIME THE PAID WORKERS AND/OR THE COOPERATIVE’S 
PRINCIPAL PURPOSE IS TO PROVIDE EMPLOYMENT TO ITS MEMBERS; 
(8) MODEL FARM COOPERATZVE REFERS TO ONE WHICH HAS FARMERS 
OR FISHERFOLK AND AGRARIAN REFORM BENEFICIARIES AS 
MEMBERS FOR THE EFFICIENT MANAGEMENT AND OPERATION OF 
THEIR CONTIGUOUS AREAS IN ACCORDANCE TO THE PROVISIONS OF 
SECTION 7 OF REPUBLIC ACT NO. 8435, OTHERWISE KNOWN AS THE 
AGRICULTURE AND FISHERIES MODERNIZATION ACT OF 1997 (AFMA); 
(H) FARMERS COOPERATIVE REFERS TO COOPERATIVES OWNED AND 
OPERATED BY FARMERS ENGAGED PRIMARILY IN THE PRODUCTION 
OF AGRICULTURAL CROPS AND LIVESTOCK; 
(I) FISHERFOLK COOPERATIVE REFERS TO COOPERATIVES OWNED AND 
OPERATED 
BY 
FISHERFOLK 
PRIMARILY 
ENGAGED 
IN 
THE 
COMMERCIAL PRODUCTION, CULTIVATION AND GATHERING OF 
FISHES AND OTHER MARINE LIFE; 
QPUBLIC 
MARKET AND 
ABTTOIRS 
COOPERATIVES REFER 
TO 
COOPERATIVES OWNED AND OPERATED BY MARKET VENDORS 
PRIMARILY ENGAGED IN THE WHOLESALE AND RETAIL OF 
AGRICULTURAL 
AND 
FISHERY 
PRODUCTS 
INCLUDING 
THE 
OPERATION, 
MANAGEMENT 
AND 
MAINTENANCE 
OF 
PUBLIC 
MARKETS AND ABBATOIRS; 
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(K) LABORATORY 
COOPERATIVES 
REFER 
TO 
A 
COOPERATIVE 
ORGANIZED 
BY 
MINORS 
AFFILIATED 
WITH 
A 
REGISTERED 
COOPERATIVE AND GOVERNED BY SPECIAL GUIDELINES TO BE 
PROMULGATED BY THE AUTHORITY; and 
[(Q] (L) Multi-Purpose Cooperative REFERS TO [is] one which combines two (2) or 
more of the business activities of the[se] different types of cooperatives 
ENUMERATED ABOVE. 
(2) Categories of Cooperatives - Cooperatives shall be categorized according to 
membership and territorial consideration WHICH ARE as follows: 
[(a) In terms of membership, cooperatives shall be categorized into:] 
(a) [(i)] Primary - [The] REFERS TO COOPERATIVES WHOSE members 
[of which] are natural persons; 
(b) [(ii)] Secondary - [The] REFERS TO COOPERATIVES WHOSE 
members [of which] are [primaries1 PRIMARY COOPERATIVES; and 
(c) [(iii)] Tertiary - [The] REFERS TO COOPERATIVES WHOSE 
members [of which] are [secondaries upward to one (1) or more apex 
organizations.] 
SECONDARY 
COOPERATIVES 
OR 
APEX 
ORGANIZATIONS OF COOPERATIVES. 
(b) In terms of territory, cooperatives shall be categorized according to areas of operations 
which may or may not coincide with the political subdivisions of the country. 
ART. 24. 
Federation of Cooperatives. - [(l) A federation of cooperatives, whose 
members are] [plPrimary and/or secondary cooperatives with single line, [or] multipurpose 
business activities, OR RELATED INTERESTS, may AGREE TO FEDERATE 
THEMSELVES FOR THE ENHANCEMENT OF THEIR PURPOSES OR FOR ANY 
OTHER LEGAL ACTIVITY PROPTDED, THAT THE FEDERATION SHALL be 
registered under this Code for any or all of the following purposes: 
(a) Primary Purpose - To carry on any cooperative enterprise authorized under Article 6[;] 
THAT COMPLEMENTS, AUGMENTS, OR SUPPLEMENTS BUT DOES NOT 
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CONFLICT WITH, NOR SUPPLANT THE BUSINESSDCCONOMIC ACTIVITIES OF 
ITS MEMBERS; 
(b) x x x (i) x x x 
(ii) x x x 
(iii) x x x 
(iv) x x x 
(v) x x x 
(vi) x x x 
(2) AT LEAST FIVE (5) ORGANIZED AND [Rlregistered cooperatives may organize a 
federation at the MUNICIPAL, provincial, city, SPECIAL METROPOLITAN POLITICAL 
SUBDIVISION, ECONOMIC ZONE CREATED BY LAW, regional, and national levels 
according to the type of business ACTIVITY carried on I.] 
BY THE COOPERATIVES AND 
SHALL BE REGISTERED WITH THE AUTHORITY.” 
SEC. 3. Articles 26, 27, 28, 29 and 31 of Chapter 111 of the same Code are hereby 
amended as follows: 
“ART. 26. Who May Be ELIGIBLE FOR MembersHIP [of Cooperntivesj. -- Any natural 
person[,] who is AT LEAST EIGHTEEN (18) YEARS OF AGE, [a citizen of the Philippines], 
CAPABLE 
AND 
WILLING 
TO 
DISPOSE 
THE 
ROSPONSIBILITIES 
OF 
MEMBERSHIP, AND HAS BEEN CERTIFIED BY THE AUTHORITY OR ANY OF ITS 
ACCREDITED AGENCIES TO HAVE COMPLETED THE PRE-MEMBERSHIP 
SEMINAR, MAY BE ELIGIBLE TO JOIN A PRIMARY COOPERATIVE. 
A [a] 
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cooperative, 
[or] 
any 
non-profit 
organization, 
OR 
A 
NON-GOVERNMENTAL 
ORGANIZATION with juridical personality shall be eligible for membership in a 
SECONDARY OR TERTIARY cooperative: PROVIDED, THAT [ifl the applicant FOR 
MEMBERSHIP IN ANY CATEGORY OF COOPERATIVE SHALL meet[s] the 
qualifications prescribed in the by-laws. [Provided, That only natural persons may be admitted as 
members of a primary cooperative;] 
THE 
FOREGOING 
PROVISIONS 
NOTWITHSTANDING, 
A 
DULY 
REGISTERED COOPERATIVE, REPRESENTED BY ITS CHIEF EXECUTIVE ’ 
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OFFICER, MAY BE ADMITTED AS A MEMBER OF A PRIMARY SUBSIDIARY 
COOPERATIVE THAT IT HELPED ORGANIZE. 
ART. 21. 
membership, to wit: 
Kinds of Membership. - A cooperative may have two (2) kinds of 
(1) Regular members REFERS TO THOSE WHO WERE CONFERRED 
MEMBERSHIP ONLY AFTER THEY HAVE FULLY SATISFIED ALL 
THE REQUIREMENTS FOR SUCH MEMBERSHIP, AND 
ARE 
ENTITLED TO ALL THE RIGHTS AND PRIVILEGES AS PROVIDED IN 
THE BY-LAWS,; and 
(2) Associate members REFERS TO THOSE WHO HAVE BEEN CONFERRED 
MEMBERSHIP BY THE BOARD OF DIRECTORS THROUGH SPECIAL 
CONSIDERATION: PROVIDED, THAT THEIR MEMBERSHIP SHALL 
BE CONFIRMED BY A MAJORITY VOTE OF THE REGULAR 
MEMBERS IN THE SOONEST HELD GENERAL ASSEMBLY; 
PROVIDED FURTHER THAT [. A regular member is one who is entitled to all 
the rights and privileges of membership.] associate members [is one who has] 
HAVE no right to neither vote nor be voted upon and shall be entitled only to 
such rights and privileges as the by-laws may provide. 
A cooperative organized by minors shall be considered a laboratory cooperative and must 
be affiliated with a registered cooperative. A laboratory cooperative shall be governed by special 
guidelines to be promulgated by the [Cooperative Development] Authority. 
ART. 28. 
Government Oficers and Employees. - (1) Any officer or employee of the 
[Cooperative Development] Authority shall be disqualified to be elected or appointed to any 
position in a cooperative[;]: PROVIDED, THAT THE DISQUALIFICATION DOES NOT 
EXTEND TO A COOPERATIVE ORGANIZED BY THE OFFICERS OR EMPLOYEES 
OF THE AUTHORITY, AND WHOSE MEMBERS ARE ALL OFFICERS OR 
EMPLOYEES OF THE AUTHORITY; (2) ALL [Elelective officials of the Government[,] 
except Barangay Officials, shall be ineligible to become officers and directors of cooperatives; 
and (3) Any government employee OR OFFICIAL may, in the discharge of his duties as 
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member in the cooperative, be allowed by the head of office concerned to use official time for 
attendance at the general assembly, board and committee meetings of cooperatives as well as 
cooperative seminars, conferences, workshops, technical meetings, and training courses locally 
or abroad: Provided, That the operations of the office concerned are not adversely affected. 
ART. 29. 
Applicatiofi FOR MEMBERSHIP. - An applicant for membership shall 
be deemed a member after approval of his membership by the board of directors and shall 
exercise the rights of members after having made such payments to the cooperative in respect to 
membership or acquired interest in the cooperative as may be prescribed in the bylaws. In case 
membership is refused or denied by the board of directors, an appeal may be made to the general 
assembly and the latter's decision shall be final. THE GENERAL ASSEMBLY MAY 
DELEGATE THE FUNCTION OF DECIDING APPEALS ON MEMBERSHIP 
APPLICATION TO A BODY INDEPENDENT OF THE BOARD OF DIRECTORS 
WHOSE DECISION SHALL BE FINAL. 
ART. 29-A. RIGHTS AND PRIVILEGES OF A MEMBER. -- A MEMBER OF A 
COOPERATIVE SHALL HAVE THE FOLLOWING RIGHTS AND PRIVILEGES: 
(1) 
THE RIGHT TO PARTICIPATE IN THE DECISION-MAKING 
PROCESS OF THE COOPERATIVE; 
THE RIGHT TO VOTE ON ALL MATTERS BROUGHT BEFORE 
MEETINGS; 
(2) 
(3) 
THE RIGHT TO BE ELECTED TO POSITIONS IN THE 
COOPERATIVE; 
(4) 
THE RIGHT TO BE INFORMED OF 
COOPERATIVE 
ACTIVITIES 
AND 
OTHER 
RELEVANT 
AND 
VITAL 
INFORMATION OF THE COOPERATIVE; 
(5) 
THE RIGHT TO OPEN, INSPECT AND SCRUTINIZE THE 
COOPERATIVE'S BOOK 
OF ACCOUNTS, MINUTES OF 
MEETINGS, SHARE REGISTER AND OTHER PERTINENT 
RECORDS; 
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THE RIGHT TO EQUALLY AVAIL AND SHARE IN THE 
2 
SERVICES AND BENEFITS THAT THE COOPERATIVE IS 
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EXTENDING 
TO 
MEMBERS 
UPON 
COMPLIANCE 
OF 
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CONDITIONS AND REQUIREMENTS; 
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(7) 
THE RIGHT TO REDRESS GRIEVANCES AGAINST ANY 
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OFFICER OR MEMBER OF THE COOPERATIVE IN THE 
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a 
(8) 
THE RIGHT TO WILLFUL WITHDRAWAL OF MEMBERSHIP 
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AND TO THE FULL RECOVERY OF SHARE CAPITAL AND 
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INTERESTS THEREOF: PROVZDED, THAT ALL LIABILITIES 
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TO THE COOPERATIVE AND 
THE PROVISIONS FOR 
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TERMINATION OF MEMBERSHIP UNDER ARTICLE 32 OF 
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(9) 
THE PRIVILEGE TO ATTEND EDUCATIONAL ACTIVITIES 
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AND SIMILAR SERVICES THAT THE COOPERATIVE MAY 
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EXTEND TO MEMBERS; AND 
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(10) 
THE 
RIGHT 
TO 
ASSIGN 
MEMBER'S 
RIGHTS 
AND 
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PRIVILEGES TO A PERSON OF HIS CHOICE IN HIS ABSENCE 
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AND INCAPACITY: PROVIDED, THAT THE ASSIGNEE SHALL 
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BE ABLE TO PRESENT A VALID AUTHORIZATION FROM THE 
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ASSIGNOR, PROVIDED FURTHER, THAT THE ASSIGNEE DOES 
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NOT HAVE INTERESTS INIMICAL TO OR IN CONFLICT WITH 
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THAT OF THE COOPERATIVE. 
(6) 
GENERAL ASSEMBLY OR ANY PROPER FORUM; 
THIS ACT SHALL HAVE BEEN SATISFIED; 
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ART. 29-B. DUTIESAND RESPONSIBILITIES OFA MEMBER. - A MEMBER OF 
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(1) 
TO PAY CAPITAL STOCK SUBSCRIPTION; 
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(2) 
TO ATTEND 
AND 
ACTIVELY 
PARTICIPATE 
IN 
ALL 
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MEETINGS AND FUNCTIONS THAT THE COOPERATIVE MAY 
A COOPERATIVE SHALL HAVE THE FOLLOWING RESPONSIBILITIES: 


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CALL REQUIRING A MEMBER'S ATTENDANCE ANI) IN THE 
CAPACITY THAT THE COOPERATIVE MAY ASSIGN; 
(3) 
TO PATRONIZE THE BUSINESS OPERATION OF THE 
COOPERATIVE; 
TO PAY, REIMBURSE OR RETURN TO THE COOPERATIVE 
LOAN 
AMORTIZATIONS, 
BORROWINGS, 
MATERIALS, 
BENEFITS 
OR 
EMOLUMENTS 
THAT 
ARE 
INTENDED 
OTHERWISE; 
TO INFORM THE COOPERATIVE OF MATTERS THAT MAY 
AFFECT FAVORABLY OR BE PREJUDICIAL TO ITS BUSINESS, 
INTERESTS OR PROPER FUNCTIONING; AND 
(4) 
(5) 
(6) 
TO ADVANCE AND PROTECT THE INTERESTS OF THE 
COOPERATIVE. 
Liability of Members - x  x x 
Termination ofMembership - (1) x x  x 
ART 30. 
ART 31 
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(2) The death[,J OR insanity[,] [insolvency or dissolution] of a member [shall be 
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considered an automatic termination of membership.] IN A PRIMARY COOPERATIVE, 
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AND THE INSOLVENCY OR DISSOLUTION OF A MEMBER IN A SECONDARY OR 
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TERTIARY COOPERATIVE SHALL BE CONSIDERED VALID GROUNDS FOR 
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TERMINATION OF MEMBERSHIP. 
HOWEVER, THIS PROVISO SHALL NOT 
APPLY 
TO 
AGRARIAN 
REFORM 
BENEFICIARIES-MEMBERS 
OF 
COOPERATIVES. 
(3) A MEMBER MAY TERMINATE MEMBERSHIP AND TRANSFER SHARE 
CAPITAL AND ALL 
THE RIGHTS AND 
PRIVILEGES 
PERTINENT 
TO 
MEMBERSHIP IN FAVOR OF AN HEIR OR NOMINEE: PROVZDED, THAT THE 
WITHDRAWING MEMBER HAS BEEN CLEARED, IN WRITING, BY THE BOARD 
OF DIRECTORS, OF DEBTS AND LIABILITIES INCURRED DURING THE 
INCUMBENCY OF MEMBERSHIP. 
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(4) [(3)] [A member] MEMBERSHIP IN THE COOPERATIVE may be terminated by 
a vote of the majority of all the members of the board of directors AFTER AN IMPARTIAL 
INQUIRY, for any of the following causes: 
(a) When a member has not patronized EVEN ONE OF the services of the cooperative for 
an unreasonable period of time as may be fixed BEFOREHAND by the board of directors; 
(b) When a nieniber has continuously failed to comply with his obligations OR 
RESPONSIBILITIES; 
(c) x x x  
(d) x x x  
A member whose membership the board of directors may wish to terminate shall be 
informed of such intended action in writing and shall be given an opportunity to be heard before 
the said board makes its decision. The decision of the board shall be in writing and shall be 
communicated in person or by registered mail to the member and shall be appealable, within 
thirty (30) days after the decision is promulgated, to the general assembly whose decision 
therein, whether in a general or special session, shall be final. THE GENERAL ASSEMBLY 
MAY DELEGATE THE FUNCTION AND POWER OF DECIDING ON APPEALS ON 
MEMBERSHIP TERMINATION TO A BODY INDEPENDENT OF THE BOARD OF 
DIRECTORS WHOSE DECISION SHALL BE FINAL. Pending a decision by the general 
assembly, the membership remains in force. 
SEC. 4. Articles 34, 35, 36, 37, 38, 39, 40,41, 43,44, 45, 47 and 51 of Chapter IV of the 
same Code are hereby amended as follows: 
“ART. 34. 
Powers of the General Assembly. - The general assembly shall be the 
highest policy-malting body of the cooperative and shall exercise such powers as are stated in 
this Code, in the articles of cooperation and in the by-laws of the cooperative. The general 
assembly shall have the foilowing [exclusive] powers [which cannot be delegated]. 
(a) To determine and approve amendments to the articles of cooperation and by-laws; 
(b) To elect or appoint the members of the board of directors, and to remove them for 
cause; 
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(C) TO APPROVE APPLICATION FOR MEMBERSHIP AND TO TERMINATE 
THE SAME; 
(D) TO SET THE GENERAL POLICY DIRECTION OF THE COOPERATIVE 
THAT SHALL SERVE AS THE BASIS FOR THE MANAGEMENT OF THE 
COOPERATIVE; 
[c] (E) To approve OR DISAPPROVE POLICIES, CONTRACTS, AND developmental 
plans of the cooperative PROMULGATED BY THE BOARD OF DIRECTORS; 
and 
(F) [d] TO DECIDE ON [Slsuch other matters requiring a two-thirds (2/3) of all the 
members of the general assembly, as provided in this Code. 
SUBJECT TO THE OTHER PROVISIONS OF THIS CODE AND ONLY FOR 
PURPOSES OF PROMPT AND INTELLIGENT DECISION-MAKING, THE GENERAL 
ASSEMBLY MAY, BY A TWO-THIRDS (213) VOTE OR WRITTEN ASSENT OF ALL 
ITS MEMBERS WITH VOTING RTGHTS, DELEGATE SOME OF ITS POWERS TO A 
SMALLER BODY OF THE COOPERATIVE OR TO THE REPRESENTATIVE 
ASSEMBLY. 
ART. 35. Meetings. -. MEETINGS SHALL BE THE FORUM WHERE THE 
REGULAR MEMBERS EXERCISE THEIR RIGHT OF CONTROL OVER THE 
ACTIVITIES OF THEIR COOPERATIVE WHICH ARE HELD ON THE FOLLOWING 
OCCASIONS: 
[l] (A) [A regular] THE ANNUAL GENERAL ASSEMBLY meeting WHICH 
shall be held annually by the general assembly on the date fixed in the by-laws, or if 
not so fixed, on any date within ninety (90) days after the close of each fiscal year: 
Provided, That written notice of regular meetings shall be sent to all members of 
record at their official addressed at least two (2) weeks prior to the meeting, unless a 
different period is required in the by-laws. 
[2] (B) THE SPECIAL GENERAL MEETING WHICH MAY BE CALLED 
whenever necessary [a special meeting of the general assembly may be called at any 
time] by [a majority vote of] the board of directors THROUGH A MAJORITY 
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VOTE OF ITS MEMBERS OR THROUGH A WRITTEN REQUEST BY THE 
MAJORITY OF THE AUDIT COMMITTEE OR FROM AT LEAST TEN 
PERCENT (10%) OF THE TOTAL MEMBERS OF THE COOPERATIVE 
AND in [the] cases specified in the by-laws[:], TO TRANSACT SPECIFIC 
BUSINESS THAT NEEDS IMMEDIATE ATTENTION AND ACTION: 
Provided, That at least one (1) week written notice shall be sent to all members. THE 
BOARD OF DIRECTORS, AFTER COMPLIANCE WITH THE REQUIRED 
NOTICE, SHALL CALL THE SPECIAL MEETING WITHIN TWO (2) 
WEEKS UPON RECEIPT OF SAID WRITTEN REQUEST. [However, a special 
meeting shall be.called by the board of directors after compliance with the required 
notice within one (1) month after receipt of a request in writing from at least ten 
percent (10%) of the total members to transact specific business covered by the call.] 
[If the board fails to call a regular or a special meeting within the given period, the 
Cooperative Development Authority, upon petition of ten percent (10Y0) of all the members of 
the cooperative, and for good cause shown, may issue an order to the petitioners directing them 
to call a meeting of the general assembly by giving proper notice required by this Code or by the 
by-laws.] 
[(3)] (C) THE INAUGURGL GENERAL ASSEMBLY IS THE [In the case] 
FIRST GENERAL ASSEMBLY MEETING of a newly approved cooperative 
WHICH [a special general assembly] shall be called within ninety (90) days from 
such approval. 
[(4)] 
(D) 
THE 
AUTHORITY-INITIATED MEETINGS 
REFER 
TO 
MEETINGS CALLED FOR THE FOLLOWING PURPOSES: 
(a) 
For the purpose of reporting to the members the result of any audit, 
examination, or other investigation of the cooperative's affairs ordered or 
made by [it] THE AUTHORITY, [or] AND 
When the cooperative fails to hold an annual general assembly OR 
SPECIAL GENERAL MEETINGS UPON A WRITTEN REQUEST 
BY THE MAJORITY OF THE AUDIT COMMITTEE OR FROM 
(b) 
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AT LEAST TEN PERCENT (10%) OF THE TOTAL MEMBERS OF 
THE COOPERATIVE PETITION during the REQUIRED period 
[required] for the purpose of enabling members to secure any information 
regarding the affairs of the cooperative and benefits that they are entitled 
to receive pursuant to this Code. 
[(l)lxxx 
ART. 36. 
Quorum. - Unless otherwise provided in the by-laws, a quorum shall 
consist of AT LEAST twenty-five per centum (25%).of all the members entitled to vote. 
ART. 37. 
(2) x x x  
Voting System. - (1) x x x 
(3) No member of a primary cooperative shall be permitted to vote by proxy [unless 
provided for specifically in the by-laws of the cooperative]. 
However, the by-laws of a 
cooperative other than a primary COOPERATIVE may provide for voting by proxy. FOR A 
COOPERATIVE OTHER THAN A PRIMARY, [Vjvoting by proxy [means] SHALL 
MEAN allowing a delegate of a cooperative to represent or vote in behalf of another delegate of 
the same cooperative. 
ART. 38. Composition AND TERM O F  OFFICE of the Bourd of Directors - The 
[conduct and management of the affairs of the cooperative shall be vested in a] board of directors 
[which] shall be composed of AT LEAST [not less than] five (5) BUT NOT [nor] more than 
fifteen (15) members elected by the general assembly for a term fixed in the by-laws but not 
exceeding a term of [two (2)j FOUR years and shall hold office until their successors are duly 
elected and qualified, or until duly removed. However, no director shall serve for more than three 
(3) consecutive terms. 
ART. 39. Powers AND FUNCTIONS of the Board of Directors - The board of directors 
shall HAVE THE FOLLOWING POWERS AND FUNCTIONS: 
(1) TO PROMULGATE POLICIES, DIFUCCTIVES, OR RULES THAT SHALL 
SERVE AS GUIDE TO MANAGEMENT; 
(2) TO NEGOTIATE AND ENTER INTO CONTRACT IN BEHALF OF THE 
COOPERATIVE; AND 
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(3) [direct, and supervise the business, manage the property of the cooperative and may,] 
By resolution, TO exercise all such powers of the cooperative THAT [as] are not 
reserved for the general assembly under this Code and the by-laws. 
THE BOARD OF DIRECTORS OF COOPERATIVES WITHOUT A FULL-TIME 
MANAGEMENT TEAM shall, IN ADDITION TO THE ABOVEMENTIONED POWERS 
AND FUNCTIONS, DIRECT, SUPERVISE AND MANAGE THE BUSINESS AND 
PROPERTIES OF THE COOPERATIVE. 
ART. 40. 
Directors. - ( 1  1 x x x 
(2) xxx 
(3) UNLESS OTHERWISE PROVIDED FOR IN THE BY-LAWS, THE MEMBERS 
OF THE BOARD OF DIRECTORS SHALL NOT HOLD ANY OTHER POSITION IN 
THE COOPERATIVE, OTHER THAN AS MEMBERS OF THE BOARD OF 
DIRECTORS. THEY SHALL ELECT AMONG THEMSELVES A CHAIRPERSON AND 
A VICE CHAIRPERSON. 
(4) ANY PERSON ENGAGED IN A BUSINESS SIMILAR TO THAT OF THE 
COOPERATIVE OR WHO IN ANY OTHER WAY HAS A CONFLICT OF INTEREST 
WITH IT, IS DISQUALIFIED FROM ELECTION AS A MEMBER OF THE BOARD OF 
DIRECTORS OF SAID COOPERATIVE. 
ART. 41. 
MeetingSoftheBoard, Quorum.-(1)xxx 
(2) Special meetings of the board of directors may be held at any time upon the call of the 
[President] CHAIRPERSON OR A MAJOMTY OF THE MEMBERS OF THE BOARD, 
or as provided in the by-laws. 
(3) xxx 
(4)xxx 
ART. 42. Vacancy in the Board ofDirectors. - x x x 
ART. 43. Officers offhe Cooperative. - The board of directors shall elect from among 
themselves [only the chairman and vice-chairman] 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. All officers shall serve during good behavior and shall 
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not be removed except for cause after due hearing. Loss of confidence shall not be a valid 
ground for removal unless evidenced by acts or omission causing loss of confidence in the 
honesty and integrity of such ol‘ficer. No two (2) or more persons with relationships up to the 
[third] SECOND civil degree of consanguinity or affinity OR ANY PERSON ENGAGED IN 
A BUSINESS SIMILAR TO THAT OF THE COOPERATIVE OR WHO IN ANY 
OTHER MANNER HAS INTERESTS IN CONFLICT WITH THE COOPERATIVE, shall 
serve as elective or appointive officers in the same [board] COOPERATIVE. 
ART. 44. 
(2) The by-laws shall provide for the creation of an audit committee, A MEDIATION 
AND CONCILIATION COMMITTEE and such other committees as may be necessary for the 
proper conduct of the affairs of the cooperative. THE AUDIT COMMITTEE SHALL BE 
DIRECTLY ACCOUNTABLE AND RESPONSIBLE TO THE GENERAL ASSEMBLY 
WITH THE POWER AND DUTY TO AUDIT THE COOPERATIVE’S FINANCIAL 
PERFORMANCE AND CONTINUOUSLY MONITOR THE ADEQUACY AND 
EFFECTIVENESS 
OF THE 
COOPERATIVE’S FINANCIAL 
MANAGEMENT 
CONTROL SYSTEM AND OTHER RELATED RESPONSIBILITY CENTERS. 
Committees of Cooperatives. - (1) x x x 
Unless otherwise provided in the by-laws, the board, in case of vacancy in said committees, 
may cause an election to fill the vacancy or appoint a person to fill the same subject to the 
provision that the person elected or appointed shall serve only for the unexpired portion of the 
term. 
ART. 45. Functions and Responsibilities of Directors, Ofjcers and Committee Members. - 
The functions and responsibilities of the directors, officers and committee members shall be [as] 
prescribed in detail in the by-laws of a cooperative. 
WITHIN NINETY (90) DAYS FROM REGISTRATION AND IN NO CASE LATER 
THAN NINETY (90) DAYS AFTER HAVING BEEN APPOINTED OR ELECTED, ALL 
DIRECTORS, OFFICERS AND COMMITTEE MEMBERS, MANAGEMENT STAFF 
AND EMPLOYEES SHALL BE REQUIRED TO UNDERGO COOPERATIVE 
TRAININGS TO BE CONDUCTED BY THE AUTHORITY OR DULY ACCREDITED 
COOPERATIVES OR TRAINORS. 
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ART. 46. Liability of Directors, Oficers and Committee Members. - x x x 
ART. 47. Compefisation. - (1) In the absence of any provision in the by-laws fixing their 
compensation, the directors shall not receive any compensation except for reasonable p e ~  
diems: 
PROVIDED, HOWEVER, THAT THE DIRECTORS AND OFFICERS SHALL NOT BE 
ENTITLED TO ANY PER DIEM WHEN, IN THE PRECEDING CALENDAR YEAR, 
THE COOPERATIVE REPORTED A NET LOSS OR HAD A DIVIDEND RATE LESS 
THAN THE OFFICIAL INFLATION RATE FOR THE SAME YEAR.[: Provided, That] 
[a] 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, Ifurther] That no additional compensation other than per diems shall 
be paid during the first year of existence of any cooperative. 
(2) xxx 
(3) xxx 
ART. 48. 
ART. 49. 
ART. 50. 
ART. 51. 
Dealings of Directors, Oficers or Committee Members. - x x x 
Disloyalty of a Director. - x x x 
Illegal Use of ConJidential Information. - x x x 
Removal. - FOR JUST AND VALID GROUNDS, ACTIONS FOR 
THE REMOVAL OF ANY OFFICER ELECTED OR APPOINTED BY THE GENERAL 
ASSEMBLY MAY BE INITIATED BY: 
(A) THE MAJOFUTY OF THE BOARD OF DIRECTORS; 
(B) BY THE MAJORITY OF ANY OF ITS STANDING COMMITTEES; 
(C) TEN PERCENT (10%) OF ALL THE MEMBERS WITH VOTING RIGHTS; 
AND 
(D) ANY MEMBER OF THE COOPERATIVE IN GOOD STANDING. 
SUBJECT TO THE PROVISIONS OF THIS CODE, ALL OTHER OFFICERS 
ELECTED OR APPOINTED OTHER THAN BY THE GENERAL ASSEMBLY, MAY 
BE REMOVED BY THE BODY THAT ELECTED OR APPOINTED THEM OR BY 
SUCH BODY AS MAY BE PROVIDED IN THE BY-LAWS. An [elective] officer [, director, 
or committee member] ELECTED OR APPOINTED BY THE GENERAL ASSEMBLY 
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may be removed by a vote of two-thirds (213) of the voting members present and constituling a 
quorum, in a regular or special general assembly meeting called for the purpose. The person 
involved shall be given an opportunity to be heard at said assembly. 
IN THE ABSENCE OF A GENERAL ASSEMBLY MEETING, AN OFFICER 
ELECTED BY THE GENERAL ASSEMBLY MAY BE REMOVED THROUGH A 
RESOLUTION APPROVED BY THE MAJORITY OF THE BOARD OF DIRECTORS: 
PROWDED, THAT SAID RESOLUTION SHALL BE RATIFIED BY A MAJORITY OF 
ALL THE MEMBERS OF THE COOPERATIVE WITH VOTING RIGHTS. NO SUCH 
BOARD OF DIRECTORS’ RESOLUTION SHALL BE APPROVED WITHOUT 
GIVING THE PERSON INVOLVED DUE PROCESS. 
SEC. 5. Articles 53, 54, 57, 59, 61, 62 and 63 of Chapter V of the same Code are hereby 
amended as follows, 
“ART. 53. 
(a) x x x  
Books to be Kept Open - (1) x x x 
(b) x x x  
(e) x x x 
(d) x x x  
(e) x x x  
(0 x x x  
(g) x x x  
(h) x x x 
(2) The [chairman of the audit committee of a] ACCOUNTANT OF THE cooperative 
shall be responsible for THE MANAGEMENT, MAINTENANCE AND SAFEKEEPING 
OF THE books and records of account of the cooperative in accordance with generally accepted 
accounting practices. He shall also be responsible for the production of the same at the time of 
audit or inspection. THE CHAIRPERSON OF THE AUDIT COMMITTEE SHALL BE 
RESPONSIBLE FOR THE CONTINUOUS AND PERIODIC REVIEW OF THE BOOKS 
AND RECORDS OF ACCOUNTS OF THE COOPERATIVE TO ENSURE THAT 
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THESE ARE IN ACCORDANCE WITH GENERALLY ACCEPTED COOPERATIVE 
AND ACCOUNTING PRINCIPLES AND PRACTICES. 
(3) 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 A 
CONSPICUOUS PLACE IN THE PRINCIPAL OFFICE OF THE COOPERATIVE. 
(4)xxx 
ART. 54. Annual Reports. - (1) Every cooperative shall draw up an annual report of its 
[affairs] ACTIVITIES, PROGRAMS AND AUDITED FINANCIAL STATEMENTS a[s]T 
[of] the end of every [fiscal] CALENDAR year, and publish the same furnishing copies to all its 
members of record. A copy thereof shall be filed with the [Cooperative Development] Authority 
within [sixty (60)] FORTY-FIVE (45) days from the end of [every fiscal] THE CALENDAR 
year. The [form and contents of the] annual report shall be ACCOMPANIED BY THE 
MINUTES OF GENERAL ASSEMBLY MEETINGS, THE LIST OF NEW SET OF 
OFFICERS, AND ALL OTHER MATTERS AS MAY BE prescribed by the rules of the 
Authority. Failure to file the required annual report OF ITS ACTIVITIES, PROGRAMS 
AND AUDITED ANNUAL FINANCIAL STATEMENTS shall be a ground for THE 
SUSPENSION OF ITS RIGHTS AND PRIVILEGES AS A COOPERATIVE UNTIL 
SUCH REQUIRMENTS ARE COMPLIED WITH, OR revocation of authority of the 
cooperative to operate as such. [The fiscal year of every cooperative shall be the calendar year 
except as may be otherwise provided in the by-laws.] 
(2) xxx 
ART. 55, Register of Members as Prima Facie Evidence. - x x x 
ART. 56. Probative Value of Certified Copies ofEntries. - x x x 
ART. 57. Bonding of Accountable Oficers. - Every director, officer and employee 
handling funds, securities or property on behalf of any cooperative shall execute and deliver 
adequate bonds for the faithful performance of [his] THEIR RESPECTIVE duties and 
obligations. The board of directors shall determine the adequacy of such bonds. 
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THE BONDS OF THE ACCOUNTABLE OFFICERS SHALL ACCOMPANY THE 
ARTICLES OF COOPERATION AS A REQUIREMENT FOR REGISTRATION OF 
THE COOPERATIVE. THE BONDS SHALL BE KEPT UP-TO-DATE EVERY YEAR 
AND THE ADEQUACY AND THE FACT OF BEING UP-TO-DATE SHALL BE 
INCLUDED IN THE ANNUAL REPORT WHICH SHALL BE MADE AVAILABLE TO 
THE MEMBERS UPON REQUEST AND SHALL ALSO BE SUBMITTED TO THE 
AUTHORITY. 
ART. 58. Preference of Claims. -x x x  
ART. 59. Instrument for Salary or Wage Deduction. - (1) A member of a cooperative may, 
notwithstanding the provisions of existing laws to the contrary, execute an instrument in favor of 
the cooperative authorizing his employer to deduct from the salary, wage, LUMP SUM, 
COMMUTATION OF LEAVE CREDITS AND ANY OTHER MONETARY BENEFITS 
payable to him by the employer and pay to the cooperative such amount as may be specified in 
satisfaction of any debt or other demand due from the member to the cooperative. 
(2) x x x  
(3) x x x  
(4)xxx 
(5) NOTWITHSTANDING THE PROVISIONS OF EXISTING LAWS TO THE 
CONTRARY, THE RESPONSIBILITIES OF THE EMPLOYER AS STATED IN 
PARAGRAPHS (1) AND (2) OF THIS ARTICLE SHALL BE MANDATORY: 
PROVIDED, THAT IN THE CASE OF A PRIVATE EMPLOYER, THE COOPERATIVE 
MAY AGREE TO REIMBURSE THE EMPLOYER OF THE ACTUAL AND 
REASONABLE COSTS OF DEDUCTING AND REMITTING. 
(6) THE EMPLOYER- SHALL REMIT ALL COLLECTIONS FROM TH,IS 
INSTRUMENT TO THE COOPERATIVE WITHIN FIVE (5) WORKING DAYS AFTER 
THE SALARY DAY. 
ART. 60. Primary Lien. - x x x 
ART. 61. Tax Treatment of Cooperatives. - [Duly registered cooperatives under this code 
which do not transact any business with non-members or the general public shall not be subject 
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to any government taxes or fees imposed under the Internal Revenue Laws and other tax laws. 
Cooperatives not falling under this article shall be governed by the succeeding section.] 
COOPERATIVES THAT ARE DULY REGISTERED IN ACCORDANCE WITH THE 
PROVISIONS OF THIS CODE SHALL BE ENTITLED TO THE FOLLOWING TAX 
AND OTHER EXEMPTIONS: 
(1) COOPERATIVES WHICH TRANSACT EXCLUSIVELY WITH MEMBERS, 
WHETHER REGULAR OR ASSOCIATE, REGARDLESS OF THE AMOUNT 
OF THEIR ACCUMULATED RESERVES AND UNDIVIDED NET SAVINGS, 
AND COOPERATIVES WHICH TRANSACT WITH MEMBERS, WHETHER 
REGULAR OR ASSOCIATE, AS WELL AS WITH NON-MEMBERS AND THE 
GENERAL PUBLIC, WITH AVERAGE PAID-UP SHARE CAPITAL OF NOT 
MORE THAN SIXTY THOUSAND PESOS (P 60,000.00) PER MEMBER SHALL 
BE EXEMPT FROM THE PAYMENT OF: 
(A) ALL KINDS OF NATIONAL INTERNAL REVENUE TAXES AND ALL 
OTHER TAXES, FEES AND CHARGES IMPOSED BY THE NATIONAL 
GOVERNMENT OF WHATEVER KIND AND NATURE, INCLUDING, 
BUT NOT LIMITED TO WITHOLDING TAXES ON ALL FORMS OF 
PASSIVE INCOMES AND CAPITAL GAINS REALIZED FROM THE 
SALE OR EXCHANGE OF ANY PROPERTY OF THE COOPERATIVE, 
WHETHER OR NOT SUCH INCOMES OR GAINS ARE DIRECTLY 
RELATED TO ANY COOPERATIVE ECONOMIC ACTIVITY; 
(B) CITY, PROVINCIAL, MUNICIPAL OR BARANGAY TAXES, FEES AND 
CHARGES, OF WHATEVER KIND OR NATURE, INCLUDING, BUT 
NOT LIMITED TO, ALL FORMS OF LOCAL TAXES, COMMUNITY 
TAXES AND REAL ESTATE TAXES, FEES, CHARGES, IMPOSTS, 
SPECIAL LEVIES AND SPECIAL ASSESSMENTS IMPOSED BY 
VIRTUE OF THE LOCAL GOVERNMENT CODE OF 1991; 
(C)CUSTOMS DUTIES, VALUE ADDED TAX AND OTHER TAXES, 
CHARGES AND FEES ON IMPORTATION OF MACHINERIES, 
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EQUIPMENTS, SPARE-PARTS AND RAW MATERIALS WHICH ARE 
NOT MANUFACTURED OR PRODUCED LOCALLY AS CERTIFIED 
BY THE DEPARTMENT OF TRADE AND INDUSTRY AND WHICH 
ARE DIRECTLY USED IN THEIR COOPERATIVE ACTIVITIES, 
MACHINERIES, SPARE-PARTS, AND RAW MATERIALS IMPORTED 
TAX AND DUTY FREE AS PROVIDED HEREIN SHALL NOT BE 
TRANSFERRED BY THE COOPERATIVE TO ANY OTHER PERSON 
OR ENTITY UNTIL AFTER THE LAPSE OF A PERIOD OF FIVE (5) 
YEARS FROM THE DATE OF RELEASE BY THE BUREAU OF 
CUSTOMS OF 
THE 
IMPORTED 
ITEMS. 
OTHERWISE, THE 
COOPERATIVE AND ITS TRANSFEREE OR ASSIGNEE SHALL BE 
LIABLE TO PAY TWICE THE AMOUNT OF THE TAX AND/OR 
DUTIES THEREON; AND 
(D) ALL OTHER TAXES, FEES AND CHARGES, OF WHATEVER KIND OR 
NATURE, 
IMPOSED 
BY 
ANY 
OTHER 
AGENCY 
OR 
INSTRUMENTALITY OF THE GOVERNMENT. 
THE TWO CLASSES OF COOPERATIVES STATED UNDER PARAGRAPH (1) OF 
THIS ARTICLE SHALL CONTINUE TO BE ENTITLED TO THE TAX AND OTHER 
EXEMPTIONS UNDER PARAGRAPHS (1) (A) TO (1) (D) OF THIS ARTICLE AS 
LONG AS THEY TRANSACT EXCLUSIVELY WITH MEMBERS, REGARDLESS OF 
THE AVERAGE AMOUNT OF THEIR PAID-UP CAPITAL, OR AS LONG AS THEY 
CONTINUE TO MAINTAIN AN AVERAGE PAID-UP SHARE CAPITAL OF NOT 
MORE THAN SIXTY THOUSAND PESOS (P 60,000.00) PER MEMBER EVEN IF 
THEY TRANSACT WITH NON MEMBERS OR THE GENERAL PUBLIC. 
(2) COOPERATIVES WITH AVERAGE PAID-UP SHARE CAPITAL OF MORE 
THAN SIXTY THOUSAND PESOS (P 60,000.00) PER MEMBER AND WHICH 
TRANSACT WITH MEMBERS AS WELL AS NON-MEMBERS, SHALL ONLY 
BE EXEMPT FROM THE PAYMENT OF INCOME TAXES IMPOSED BY THE 
NATIONAL GOVERNMENT FOR A PERIOD OF TEN (10) YEARS 
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COMMENCING FROM ITS DATE OF REGISTRATION WITH THE 
AUTORITY. SUCH COOPERATIVES SHALL BE LIABLE TO PAY ALL 
OTHER NATIONAL OR LOCAL TAXES, CUSTOMS DUTIES, FEES AND 
CHARGES. PROVIDED, THAT THE LIABILITY FOR TAXES OF A 
COOPERATIVE FALLING UNDER THIS PARAGRAPH SHALL BE LIMITED 
ONLY TO INCOME ARISING FROM ITS TRANSACTIONS WITH NON- 
MEMBERS OR THE GENERAL PUBLIC. ITS INCOME AND TRANSACTIONS 
WITH MEMBERS SHALL BE ENTITLED TO THE TAX AND OTHER 
EXEMPTIONS UNDER PARAGRAPHS (1) (A) TO (1) (D) OF THIS ARTICLE. 
PROVIDED, FURTHER, THAT UPON THE EXPIRATION OF THE TEN (10) 
YEAR PERIOD HEREIN, A COOPERATIVE FALLING UNDER THIS 
PARAGRAPH 
SHALL 
BE 
SUBJECT 
TO 
INCOME 
TAX 
ON 
ITS 
TRANSACTIONS WITH NON-MEMBERS OR THE GENERAL PUBLIC 
IMPOSED BY THE NATIONAL GOVERNMENT IN THE SAME MANNER AS 
CORPORATIONS AS PROVIDED FOR UNDER THE TAX REFORM ACT OF 
1997. 
(3) THE AUTHORITY, UPON ITS APPROVAL OF THE REGISTRATION OF A 
COOPERATIVE. SHALL ISSUE A CERTIFICATION INDICATING THE 
NATURE AND EXTENT OF THE TAX EXEMPTION OF THE COOPERATIVE 
BASED ON THE PROVISIONS OF THIS ARTICLE. THIS CERTIFICATION, 
WHICH SHALL BE ISSUED IN LIEU OF THE TAX EXEMPTION 
CERTIFICATE ISSUED BY THE BUREAU OF INTERNAL REVENUE, SHALL 
SERVE AS EVIDENCE OF THE NATURE AND EXTENT OF THE TAX 
EXEMPTION 
STATUS 
OF THE 
COOPERATIVE 
AND 
SHALL 
BE 
RECOGNIZED BY ALL OTHER AGENCIES OF THE GOVERNMENT, AS 
WELL AS PRIVATE ENTITIES, IN THEIR TRANSACTIONS WITH THE 
COOPERATIVE. THE CERTIFICATION SHALL BE RENEWED ON AN 
ANNUAL BASIS UPON APPROVAL BY THE AUTHORITY TO DETERMINE 
ANY CHANGE IN THE TAX EXEMPTION STATUS OF THE COOPERATIVE. 
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(4)DONATIONS MADE BY ANY PERSON OR ENTITY IN FAVOR OF ANY 
COOPERATIVE, REGARDLESS OF ITS CLASSIFICATION, SHALL BE 
EXEMPT FROM ANY AND ALL TAXES, FEES, CHARGES IMPOSED BY THE 
NATIONAL OR LOCAL GOVERNMENT, INCLUDING BUT NOT LIMITED 
TO, DONORS TAXES, TRANSFER TAXES, AND, IF THE ITEM TO BE 
DONATED IS IMPORTED, CUSTOMS DUTIES AND OTHER TAXES, FEES OR 
CHARGES INCIDENT TO THE IMPORTATION. SUCH DONATIONS SHALL 
LIKEWISE BE FULLY DEDUCTIBLE FROM THE GROSS INCOMES OF THE 
DONORS. 
(5) NOTWITHSTANDING 
THE 
PROVISIONS 
OF 
THE 
FOREGOING 
PARAGRAPHS, ANY COOPERATIVE WHICH IS OTHERWISE, ENTITLED 
TO ANY OF THE EXEMPTIONS UNDER THIS ARTICLE, BUT DECLARES 
INTEREST ON ITS MEMBERS’ SHARE CAPITAL IN AN AMOUNT WHICH 
EXCEEDS THE NORMAL RATE OF RETURN ON INVESTMENTS SHALL BE 
DISQUALIFIED FROM BEING ENTITLED TO SUCH EXEMPTIONS FOR THE 
TAXABLE YEAR IN WHICH INTEREST WAS DECLARED. PROVIDED 
THAT, PATRONAGE REFUND, BEING MERE RETURN OF EXCESS 
PAYMENTS BY THE MEMBERS UNDER ARTICLE 86 OF THE CODE, SHALL 
NOT BE SUBJECT TO TAX BOTH ON THE PART OF THE COOPERATIVE 
AND OF THE MEMBERS. 
(6) NOTHING IN THIS ARTICLE SHALL PRECLUDE THE EXAMINATION OF 
THE BOOKS OF ACCOUNTS AND OTHER ACCOUNTING RECORDS OF 
THE COOPERATIVES BY DULY AUTHORIZED NATIONAL INTERNAL 
REVENUE AND LOCAL GOVERNMENT OFFICERS FOR INTERNAL 
REVENUE TAX OR LOCAL TAX PURPOSES, PROVIDED THAT PREVIOUS 
AUTHORIZATION IS OBTAINED FROM THE AUTHORITY”. 
(7) INTEREST INCOME DERIVED FROM CURRENCY BANK DEPOSITS, YIELD 
FROM DEPOSIT SUBSTITUTES, TRUST FUND AND OTHER SIMILAR 
ARRANGEMENTS BY THE COOPERATIVE MEMBERS AS WELL AS BY 
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THE COOPERATIVE BANK FROM OTHER BANKS SHALL BE EXEMPTED 
FROM THE FINAL TAX. 
ART. 62. [Tax and] Other Exemptions ] OTHER EXEMPTIONS OF COOPERATIYES 
- [Cooperatives transacting business with both members and nonmembers shall not be subject to 
tax on their transactions to members. Notwithstanding the provisions of any law or regulation to 
the contrary, such cooperatives dealing with nonmembers shall enjoy the following tax 
exemptions:] ALL COOPERATIVES DULY REGISTERED WITH THE AUTHORITY IN 
ACCORDANCE WITH THE PROVISIONS OF THIS CODE, REGARDLESS OF THEIR 
CLASSIFICATION, SHALL BE ENTITLED TO THE FOLLOWING: 
[(I) Cooperatives with accumulated reserves and undivided net savings of not more than 
Ten million pesos (P10,000,000.00) shall be exempt from all national, city, provincial, municipal 
or harangay taxes of whatever name and nature. Such cooperatives shall he exempt horn custom 
duties, advance sales or compensating taxes on their importation of machineries, equipment and 
spare parts used by them and which are not available locally as certified by the Department of 
Trade and Industry. All tax-free importations shall not be transferred to any person until after 
five (5) years, otherwise, the cooperative and the transferee or assignee shall he solidarily liable 
to pay twice the amount of the tax and/or duties thereon.] 
[(2) Cooperatives with accumulated reserves and undivided net savings of more than Ten 
million pesos (P10,000,000.00) shall pay the following taxes at the full rate:] 
[(a)Income Tax - On the amount allocated for interest on capital: Provided, That the 
same tax is not consequently imposed on interest individually received by 
members;] 
[(b)Sales Tax - On sales to nonmembers: Provided however, That all cooperatives, 
regardless of classification, are exempt from the payment of income and sales 
taxes for a period of ten (1 0) years. j 
[For cooperatives whose exemptions were removed by Executive Order No. 93, the 
ten (10)-year period shall be reckoned from the effectivity date of said Executive Order. 
Cooperatives created after the approval of this Code shall be granted the same exemptions, the 
period of which shall be reckoned from the date of registration with the Authority: Provided, 
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That at least twenty-five per centum (25%) of the net income of the cooperatives is returned to 
the members in the form of interest and/or patronage refunds;] 
[(c)All other taxes unless otherwise provided herein; and] 
[(d)Donations to charitable, research and educational institutions and investments to 
socioeconomic projects within the area of operation o f  the cooperative may be ta 
deductible.] 
[(3) All cooperatives, regardless of the amount of accumulated reserves and undivided net 
savings shall be exempt from payment of local and undivided net savings shall be exempt from 
payment of local taxes on transactions with banks and insurance companies; Provided, That all 
sales or services rendered for non-members shall be subject to the applicable percentage taxes 
except sales made by producers, marketing or service cooperative; Provided further, That 
nothing in the articles shall preclude examination of the books of amount or other accounting 
records of the cooperative by duly authorized internal revenue tax purposes only, after previous 
authorization by the Authority.] 
[(4)] (1) Any judge in his capacity as notary public, ex oficio, shall render service, free of 
charge, to any person or group of persons requiring either the administration of oath or the 
acknowledgment of articles of cooperation of a cooperative applicant for registration and 
instruments of loan from cooperative not exceeding Fifty thousand pesos (P50,OOO.OO). 
[(5)] (2) 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 Fifty thousand pesos 
(P50,OOO.OO) or the deeds of title or 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 faithfbl performance of its duties and obligations. 
((611 (3) x x x 
[(7)1(4) x x x 
[(SI1 (5) x x x 
ART. 63. Privileges of Cooperatives. - x x x 
(1) x x x  
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(2) x x x 
(3) xxx 
(4) In areas where appropriate cooperatives exist, the [preferential right] RIGHT OF 
FIRST REFUSAL to supply AT LEAST FIFTEEN PERCENT (15%) OF THE 
REQUIREMENTS FOR ALL TYPES OF MATERIAL SUPPLIES, LABOR AND 
SERVICES OF government institutions, [and] agencies OR INSTRUMENTALITIES 
INCLUDING GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS, [rice, 
corn and other grains, fish and other marine products, meat, eggs, milk, vegetables, tobacco and 
other agricultural commodities produced by their members] shall be granted to the cooperatives 
concerned; 
(5) [Preferential treatment] THE RIGHT OF FIRST REFUSAL in the allocation of 
fertilizers and in rice distribution shall be granted to cooperatives by the appropriate government 
agencies; 
(6) xxx 
(7) Cooperatives and their federations, such as FARM AND FISHERY PRODUCERS 
AND SUPPLIERS, market vendors AND OTHER cooperatives[,] WHICH HAVE FOR 
THEIR PRIMARY PURPOSE PRODUCTION AND/OR MARKETING OF PRODUCTS 
FROM 
AGRICULTURE, 
FISHERIES 
AND 
SMALL 
ENTREPRENEURIAL 
INDUSTRIES AND FEDERATIONS THEREOF, shall have [preferential rights] THE 
RIGHT OF FIRST REFUSAL in THE OPERATION AND management of public markets 
and/or lease of public market facilities, stalls or spaces AND ABATTOIRS[;]: PROVIDED, 
THAT THE COOPERATIVE ITSELF UTILIZES THESE RIGHTS AND NOT 
THROUGH A MIDDLE-MAN NOR A PERSON NOT CONNECTED WITH NOR A 
MEMBER OF THE COOPERATIVE 
(8) [Credit] [cICooperatives and/or federations ENGAGED IN CREDIT SERVICE shall 
be entitled to loans, credit lines, rediscounting of their loan notes, and other eligible papers with 
the Development Bank of the Philippines, [the Philippine National Bank,] the Land Bank of the 
Philippines and other financial institutions except the [Central Bank of the Philippines] 
BANGKO SENTRAL NG PILIPINAS. 
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THE PHILIPPINE DEPOSIT INSURANCE CORPORATION (PDIC) AND OTHER 
GOVERNMENT 
AGENCIES, 
GOVERNMENT-OWNED 
OR 
CONTROLLED 
CORPORATIONS AND 
GOVERNMENT FINANCIAL INSTITUTIONS SHALL 
PROVIDE 
TECHNICAL 
ASSISTANCE 
TO 
REGISTERED 
NATIONAL 
FEDERATIONS AND UNIONS OF COOPERATIVES WHICH HAVE SIGNIFICANT 
ENGAGEMENT IN SAVINGS AND CREDIT OPERATIONS TO ESTABLISH AND/OR 
STRENGTHEN THE AUTONOMOUS COOPERATIVE DEPOSIT INSURANCE 
SYSTEMB OF THESE FEDERATIONS AND UNIONS. 
( 9 ) x x x  
( 1 O ) x x x  
(11) 
COOPERATIVES ORGANIZED BY ACADEMIC OR NON-ACADEMIC 
PERSONNEL OF EDUCATIONAL INSTITUTIONS SHALL HAVE THE RIGHT OF 
FIRST REFUSAL IN THE OPERATION AND MANAGEMENT OF SCHOOL 
COMMERCIAL FACILITIES, INCLUDING, BUT NOT LIMITED TO CANTEENS, 
BOOK STORES, PHOTOCOPYING STALLS, BOOK RENTAL FACILITIES, 
JANITORIAL SERVICES, INFORMATION TECHNOLOGY SERVICES AND OTHER 
SERVICES 
RELATED 
TO 
THE 
OPERATION 
OF 
THE 
EDUCATIONAL 
INSTITUTION WHERE THEY ARE EMPLOYED: PROWDED, THAT SUCH 
SERVICES ARE OPERATED WITHIN THE PREMISES OF SAID EDUCATIONAL 
INSTITUTION. SAID FACULTY MEMBERS AND EMPLOYEES MAY, IN THE 
DISCHARGE OF THEIR DUTIES AS OFFICERS OR MEMBERS OF THE 
COOPERATIVE, BE ALLOWED BY THE OWNERS AND/OR ADMINISTRATORS OF 
THE EDUCATIONAL INSTITUTION CONCERNED, TO USE OFFICIAL TIME FOR 
ATTENDANCE IN THE GENERAL ASSEMBLY, BOARD AND COMMITTEE 
MEETINGS OF COOPERATIVES AS WELL AS COOPERATIVE SEMINARS, 
CONFERENCES, WORKSHOPS, TECHNICAL MEETINGS, AND 
TRAINING 
COURSES LOCALLY OR ABROAD: PROVIDED, THAT THE OPERATIONS OF THE 
EDUCATIONAL INSTITUTION CONCERNED ARE NOT ADVERSELY AFFECTED. 
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(12) GOVERNMENT AGENCIES AND INSTRUMENTALITIES, INCLUDING 
GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS, SHALL SOURCE 
AT LEAST TEN PERCENT (10%) OF THEIR SUPPLIES, EQUIPMENT AND OTHER 
REQUIREMENTS FROM COOPERATIVES OF PERSONS WITH DISABILITIES 
ENGAGED IN THE MANUFACTURE, FABRICATION OR PRODUCTION OF THE 
SAME: PROWDED, THAT THE PRICES AND QUALITY OF SUPPLIES, EQUIPMENT 
OR OTHER REQUIREMENTS OFFERED ARE COMPETITIVE AND THAT DEMAND 
CAN BE MET BY THESE COOPERATIVES. 
COOPERATIVES OF PERSONS WITH DISABILITIES MUST BE DULY 
REGISTERED AND IN GOOD STANDING WITH THE AUTHORITY AND 
CERTIFIED BY THE NATIONAL COUNCIL FOR THE WELFARE OF DISABLED 
PERSONS. ACCREDITATION WITH THE COUNCIL MUST BE MADE EVERY TWO 
(2) YEARS; AND 
(13) TO AVAIL OF BASIC SERVICES AND FACILITIES UNDER R.A. NO 7160, 
THE LOCAL GOVERNMENT CODE, PARTICULARLY EXTENSION AND ON-SITE 
RESEARCH SERVICES AND FACILITIES RELATED TO AGRICULTURE AND 
FISHERY ACTIVITIES BOTH AS TO PROVIDING PRODUCTS FOR DISPERSAL AS 
WELL AS TO BE RECIPIENTS OF DISPERSAL PROGRAMS OF LOCAL 
GOVERNMENT UNITS. 
SEC. 6. Articles 73,74, 76 and 80 of Chapter VI11 of the same Code are hereby amended 
as follows 
ART. 73. Crpitd Sources. - x x x 
(1) xxx 
(2) x x x 
(3) xxx 
(4) Subsidies, donations, legacies, grants, aids and such other assistance from any local or 
foreign institution whether public or private[.] : PROVZDED, THAT CAPITAL COMING 
FROM SUCH SUBSIDIES, DONATIONS, LEGACIES, GRANTS, AIDS AND OTHER 
ASSISTANCE SHALL NOT BE DIVIDED INTO INDIVIDUAL SHARE CAPITAL 
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HOLDINGS AT ANYTIME BUT SHALL INSTEAD FORM PART OF THE DONATED 
CAPITAL OR FUND OF THE COOPERATIVE. 
ART. 74. Limitation on Share Capital Holdings. - No member of a cooperative other than 
a cooperative shall own or hold more than [twenty per centurn (20%)] TEN PER CENTUM 
(10%) of the 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 centurn (20%)] TEN PER CENTUM (10%) of the share capital of 
the cooperative: Provided, further, That the heir qualify and is admitted as member of the 
cooperative: Provided, Jinally, That where the heir fails to qualify as such member or where his 
total share holding exceeds [twentyper centurn (20%)] TEN PER CENTUM (10%) of the share 
capital, the share or shares in excess will revert to the cooperative upon payment to the heir of 
the value of such shares. 
ART. 75. Assignment of Share Capital Contribution or Interest. - x x x 
ART. 76. [Interest on Share Capitall CAPITAL BUILD-UP. - [Interest on share capital 
shall not exceed the normal rate of return on investments as determined by the Cooperative 
Development Authority and such interest shall be non-cumulative.] THE BY-LAWS OF 
EVERY COOPERATIVE SHALL PROVIDE FOR A REASONABLE AND REALISTIC 
MEMBER CAPITAL BUILD-UP PROGRAM TO ALLOW THE CONTINUING 
GROWTH OF THE MEMBERS’ INVESTMENT IN THEIR COOPERATIVE. 
ART. 77. Shares. - x x x 
ART. 78. Fines. -x x x 
ART. 79. Investment of Capital. - x x x 
ART. 80. Revolving Capital. -The general assembly of any cooperative may authorize the 
board of directors to raise a revolving capital to strengthen its capital structure by deferring the 
payment of patronage refunds and interest on share capital or by the authorized deduction of a 
percentage from the proceeds of products sold OR SERVICES RENDERED, or per unit of 
product OR SERVICES handled. 
The board of directors shall issue. revolving capital 
certificates with serial number, name, amount, and rate of interest to be paid and shall distinctly 
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set forth that the time of retirement by such certificates and the amounts to be returned are at the 
discretion of the board of directors.” 
SEC. 7. Article 82 of Chapter JX of the same Code is hereby amended as follows: 
“ART. 82. Audit Report, SOCIAL AND PERFORMANCE AUDITS, - The auditor shall 
submit to the COOPERATIVE’S BOARD OF DIRECTORS AND audit committee a report 
of the audit which shall contain a statement of the assets and liabilities of the cooperative, 
including earnings and expenses, [amount of net surplus as well as losses and bad debts, if any.] 
STATEMENT 
OF 
CASH 
FLOW 
AND 
AUDITOR’S 
FINDINGS 
AND 
RECOMMENDATIONS. IN 
ADDITION, 
AUDITS 
SHALL BE 
CONDUCTED 
PERIODICALLY BY THE COOPERATIVE TO DETERMINE ITS SOCIAL IMPACT 
AND PERFORMANCE. 
[The audit committee shall forthwith furnish the board of directors a copy of the audit 
report.] Thereafter, the board of directors shall present the complete audit report to the general 
assembly in its next meeting. 
SEC. 8. Articles 86 and 87 of Chapter X of the same Code are hereby amended as follows: 
“ART. 86. Net Surplus. - Notwithstanding the provisions of existing laws, the net surplus 
of cooperatives shall be determined in accordance with its by-laws. Every cooperative shall 
determine its net surplus at the close of every fiscal year and at such other time as may be 
prescribed by the by-laws. 
ANY PROVISION OF LAW TO THE CONTRARY NOTWITHSTANDING, [Tjthe 
net surplus shall not be construed as profit but as excess of payments made by the members for 
the loans borrowed, or the goods and services bought by them from the cooperative OR THE 
BALANCE OF THE RIGHTFUL AMOUNT DUE THE MEMBERS FOR THEIR 
PRODUCTS SOLD OR SERVICES RENDERED TO THE COOPERATIVE and which 
shall be deemed to have been returned to them if the same is distributed as prescribed herein. 
ART. 87. Order of Distribution. - x x x 
(1) x x x  
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such fund. 
(a) The reserve fund shall be used for the stability of the cooperative and to meet net losses 
in its operations. The general assembly may decrease the amount allocated to the reserve fund 
when THE reserve fund already exceeds the share capital. 
Any sum recovered on items previously charged to the reserve fund shall be credited to 
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(b)xxx 
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(c) x x x 
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(i) x x x 
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(ii) x x x 
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(2) An amount for the education and training fund, which shall [be] not [more] BE LESS 
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than tenpev centum (10%) of net surplus. The by-laws may provide that certain fees [or fines] or 
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a portion thereof be credited to such fund. THE FUND SHALL PROVIDE FOR THE 
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TRAINING, PROVISION FOR WORK EXPERIENCE AND SIMILAR OTHER 
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COOPERATIVE ACTIVITIES GEARED TOWARDS THE ATTAINMENT OF THE 
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MISSION, VISION, GOALS AND OBJECTIVES OF THE COOPERATIVE. 
A 
COOPERATIVE MAY DECIDE TO SET ASIDE A PARTICULAR PORTION OF 
THEIR RESOURCES FOR THIS PROGRAM. 
(a) Half of the amounts transferred to the education and training fund annually under this 
subsection may be spent by the cooperative for education and training and other purposes; while 
the other half shall he [credited] REMITTED to the cooperative education and training fund of 
the respective apex organization of which the cooperative is a member. 
IF THE 
COOPERATIVE IS NOT A MEMBER OF ANY APEX ORGANIZATION, IT SHALL 
REMIT HALF OF ITS COOPERATIVE EDUCATION AND TRAINING FUND (CETF) 
TO AN APEX ORGANIZATION CHOSEN BY ITS BOARD OF DIRECTORS FROM 
AMONG THE EXISTING APEX ORGANIZATIONS REGISTERED WITH THE 
AUTHORITY: PROVIDED, THAT THE APEX ORGANIZATION CHOSEN SHALL 
SUBMIT THE FOLLOWING SCHEDULES: (A) COOPERATIVES WHICH HAVE 
REMITTED TO THEM THEIR RESPECTIVE COOPERATIVE EDUCATION AND 
TRAINING FUND (CETF); (B) NATURE AND COST OF BUSINESS CONSULTANCY 
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ASSISTANCE TO COOPERATIVES; AND (C) OTHER TRAINING ACTIVITIES 
UNDERTAKEN SPECIFYING THEREIN THE NATURE, PARTICIPANTS AND COST 
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OF EACH ACTIVITY. An apex organization may be a federation or union. 
A PORTION OF THE COOPERATIVE EDUCATION AND TRAINING FUND OF 
THE PRIMARY COOPERATIVE SHALL BE ALLOCATED FOR THE TRAINING, 
PROVISION FOR WORK EXPERIENCE AND OTHER SIMILAR ACTIVITIES, 
ESPECIALLY OF THE YOUTH WITHIN ITS AREA OF OPERATION IN ADDITION 
TO WHATEVER RESOURCES IT SHALL SET ASIDE FOR THE INVOLVEMENT OF 
THE YOUTH IN THE COOPERATIVE MOVEMENT. 
(b) Upon the dissolution of [the] A cooperative, the unexpended balance of the education 
and training fund appertaining to the cooperative shall be credited to the cooperative education 
and training fund of the apex organization OF WHICH DISSOLVED COOPERATIVE IS A 
MEMBER. 
(3) AN AMOUNT FOR THE COMMUNITY DEVELOPMENT FUND, WHICH 
SHALL NOT BE LESS THAN THREE PERCENT (3%) OF THE NET SURPLUS. THE 
COMMUNITY DEVELOPMENT FUND SHALL BE USED FOR PROJECTS OR 
ACTIVITIES THAT BENEFIT THE COMMUNITY OR COMMUNITIES WHERE THE 
COOPERATIVE OPERATES. 
[(3)] (4) An optional fund, a land and building, [community development,] and any other 
necessary fund the total of which [may] SHALL not exceed [ten per centum (lo%)] SEVEN 
PERCENT(7Yo). 
[(4)] (5) The remaining net surplus shall be made available to the members in the form of 
interest not to exceed the normal rate of return on investments and patronage refunds[.]: 
PROVZDED, THAT ANY AMOUNT REMAINING AFTER THE ALLOWABLE 
INTERESTANDTHEPATRONAGEREFUNDHAVEBEENDEDUCTED,SHALLBE 
CREDITED TO THE RESERVE FUND AND/OR TO THE COMMUNITY 
DEVELOPMENT FUND. 
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 : 
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(b) x x x  
(d) x x x  
SEC. 9. Article 94 of the same Code is hereby amended as follows: 
“ART. 9 4. Privileges. - Subject to such reasonable terms and conditions as the Department 
of Agrarian Reform and the Authority may impose, agrarian reform cooperatives may be given 
the exclusive right to do any or all of the following economic activities in agrarian reform and 
resettlement areas: 
(1) x x x  
(2) x x x 
(3) x x x  
(4)xxx 
(5) x x x 
(6) xxx 
The Government shall provide the necessary financial and technical assistance to agrarian 
reform cooperatives to enable them to discharge effectively their purposes under this article. 
[The Department of Agrarian Reform, the Cooperative Development Authority and the Central 
Bank of the Philippines shall draw up a joint program for the organization and financing of the 
agrarian reform cooperatives subject to this Chapter. The joint program shall be geared towards 
the beneficiaries’ gradual assumption of full ownership and management control of the agrarian 
reform cooperatives within ten (10) years from the date of registration of said cooperatives.] 
SEC. 10. ew Article after Article 99 of Chapter XI11 of the same Code shall be inserted to 
read as follows: 
ART. 99-A. 
GOVERNING PRINCIPLES - COOPERATIVE BANKS ARE 
PRACTICAL VEHICLES TO: 
(A) PROMOTE SELF-RELIANCE AMONG OUR PEOPLE AND HARNESS 
PEOPLE POWER TOWARDS THE ATTAINMENT OF ECONOMIC DEVELOPMENT 
AND SOCIAL JUSTICE; 
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(B) 
ENCOURAGE THRIFT AND SAVINGS MOBILIZATION FOR THE 
ACHIEVEMENT OF SUSTAINABLE ECONOMIC DEVELOPMENT, EQUITY AND 
SOCIAL JUSTICE PRIMARILY AMONG COOPERATIVES AND THEIR MEMBERS. 
THE STATE SHALL REGULATE AND SUPERVISE THE ACTIVITIES OF 
COOPERATIVE BANKS IN ORDER TO ACHIEVE SOUND, STABLE AND 
EFFICIENT OPERATIONS FOR THE PROTECTION OF THE PUBLIC INTEREST. 
SEC. 11.Articles 101, 102, 103, 104, 105, 106, 107, 108 and 109 under Chapter XI11 ofthe 
same Code are hereby amended as follows: 
“ART. 101. 
Registration Requirements. - No entity shall be registered by the 
[Cooperative Development] Authority as a cooperative bank unless the articles of cooperation 
and by-laws thereof as well as its establishment and operation as a cooperative bank SHALL 
have been approved by the MONETARY BOARD OF THE [Central Bank of the Philippines] 
BANGKO SENTRAL and it satisfies all requirements for registration as a cooperative. 
ART. 102. 
Memberskzp - [Membership of a cooperative bank shall include only 
cooperatives and federations of cooperatives.] MEMBERSHIP IN A COOPERATIVE BANK 
MAY BE CATEGORIZED AS REGULAR OR ASSOCIATE. REGULAR MEMBERS 
SHALL REFER TO HOLDERS OF COMMON SHARES OF THE BANK AND SHALL 
ONLY BE OPEN TO COOPERATIVE ORGANIZATIONS. ASSOCIATE MEMBERS 
SHALL REFER TO MEMBERS SUBSCRIBING AND HOLDING PREFERRED 
SHARES OF THE BANK, WHICH MAY INCLUDE BUT SHALL NOT BE LIMITED 
TO THE FOLLOWING: 
(1) INDIVIDUAL 
MEMBERS 
OF 
THE 
BANK’S 
MEMBER-PRIMARY 
COOPERATIVES; AND 
(2) PEOPLES ORGANIZATIONS THAT ARE NOT COOPERATIVES WHICH 
HOLD COMMON SHARES OF COOPERATIVE BANKS PRIOR TO THE 
EFFECTIVITY OF THIS ACT. 
ART. 103. Board ofDirectors. - The number, composition, TERM and voting rights of the 
board of directors shall be defined in the articles of cooperation and by-laws of the cooperative 
bank, notwithstanding provisions of this Code to the contrary. EX OFFICIO MEMBERSHIP 
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IN THE BOARD OF DIRECTORS OF A COOPERATIVE BANK SHALL BE 
ALLOWED SUBJECT TO THE PROVISIONS OF ARTICLE 40(2) OF THIS CODE. 
IN ORDER TO MAINTAIN THE QUALITY OF BANK MANAGEMENT AND 
ACCORD BETTER PROTECTION TO DEPOSITORS AND THE PUBLIC IN 
GENERAL, THE MONETARY BOARD MAY REVIEW THE QUALIFICATIONS OF 
PERSONS WHO ARE ELECTED OR APPOINTED BANK DIRECTORS AND 
OFFICERS, INCLUDING EX-OFFICIO BOARD MEMBERS, AND DISQUALIFY 
THOSE 
UNFIT. 
THE 
MONETARY 
BOARD 
SHALL 
PRESCRIBE 
THE 
QUALIFICATIONS OF BANK DIRECTORS AND OFFICERS FOR THE PURPOSE OF 
THIS SECTION, GIVING DUE RECOGNITION TO THE UNIQUE NATURE AND 
CHARACTER OF COOPERATIVE BANKS. 
ART. 104. 
[Loans. - Cooperatives may obtain loans from a cooperative bank. Loans 
granted by a cooperative bank shall be reported to the Central Bank of the Philippines.] 
POWERS, FUNCTIONS AND ALLIED UNDERTAKINGS OF COOPERATIVE BANKS. - 
COOPERATIVE BANKS SHALL PRIMARILY PROVIDE FINANCIAL, BANKING 
AND CREDIT SERVICES TO COOPERATIVE ORGANIZATIONS AND THEIR 
MEMBERS. 
HOWEVER, 
THE 
MONETARY 
BOARD 
MAY 
PRESCRIBE 
APPROPRIATE 
CEILINGS AND 
CONDITIONS ON BORROWINGS OF A 
COOPERATIVE ORGANIZATION FROM A COOPERATIVE BANK. 
(1) SUBJECT TO SUCH GUIDELINES AS MAY BE ESTABLISHED BY THE 
MONETARY BOARD, A COOPERATIVE BANK MAY: 
(A) ACCEPT SAVINGS AND TIME DEPOSITS; 
(B) MOBILIZE SAVINGS FOR THE BENEFIT OF THE COOPERATIVE 
MOVEMENT; 
(C) RECEIVE FINANCIAL AID OR LOANS FROM ANY INSTITUTION AND 
THE BANGKO SENTRAL FOR AND IN BEHALF OF ITS MEMBERS; 
(D) ACT AS A BALANCING MEDIUM FOR THE SURPLUS FUNDS OF 
COOPERATIVE ORGANIZATIONS; 
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(E) ISSUE NEGOTIABLE INSTRUMENTS TO FACILITATE THE ACTIVITIES 
OF COOPERATIVE ORGANIZATIONS; 
(F) ISSUE DEBENTURES SUBJECT TO THE APPROVAL OF AND UNDER 
CONDITIONS AND 
GUARANTEES TO BE PRESCRIBED BY 
THE 
GOVERNMENT; 
(G) OPEN LETTERS OF CREDIT AND BANK DRAFTS; 
(H) 
BORROW 
MONEY 
FROM 
BANKS 
AND 
OTHER 
FINANCIAL 
INSTITUTIONS WITHIN THE LIMIT TO BE PRESCRIBED BY THE 
BANGKO SENTRAL; 
(I) DISCOUNT 
AND 
REDISCOUNT 
PAPER 
WITH 
PRIVATE 
OR 
GOVERNMENT FINANCIAL INSTITUTIONS; 
(J) ISSUE MORTGAGE AND CHATTEL MORTGAGE CERTIFICATES, BUY 
AND SELL THEM FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF 
OTHERS, OR ACCEPT OR RECEIVE THEM IN PAYMENT FOR OR 
AMORTIZATION OF ITS LOAN; 
(K) 
PURCHASE, HOLD AND CONVEY REAL ESTATE UNDER THE SAME 
CONDITIONS AS THOSE GOVERNING AS COMMERCIAL BANKS 
SPECIFIED UNDER SECTION 51 OF REPUBLIC ACT NO, 8791. 
(L) ENGAGE IN QUASI-BANKING MONEY MARKET OPERATIONS; 
(M) 
EXTEND CREDIT AGAINST THE SECURITY OF JEWELRY, 
PRECIOUS STONES AND ARTICLES OF SIMILAR NATURE, SUBJECT TO 
SUCH RULES AND REGULATIONS AS THE MONETARY BOARD MAY 
PRESCRIBE. 
THE POWERS AND FUNCTIONS UNDER ITEMS (E), (F), (G), (J), (K), AND (L) 
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OF THIS SUB-SECTION MAY BE PERFORMED BY A COOPERATIVE BANK 
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SUBJECT TO SUCH RULES AND REGULATIONS AS MAY BE PROMULGATED BY 
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THE MONETARY BOARD. 
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IN ADDITION TO THE POWERS GRANTED BY THIS CODE AND OTHER 
EXISTING LAWS, ANY COOPERATIVE BANK MAY PERFROM ANY OR ALL OF 
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THE SERVICES OFFERED BY RURAL BANKS UPON PRIOR APPROVAL BY THE 
MONETARY BOARD, INCLUDING THE FOLLOWING : 
(A) OFFER CURRENT OR CHECKING ACCOUNTS SUBJECT TO SUCH 
GUIDELINES AS MAY BE ESTABLISHED BY THE PHILIPPINE CLEARING 
HOUSE CORPORATION; 
(B) ACT AS CORRESPONDENT FOR OTHER FINANCIAL INSTITUTIONS; 
(C) ACT AS COLLECTION AND/OR WITHHOLDING AGENT FOR GOVERN- 
MENT ENTITIES, INCLUDING BUT NOT LIMITED TO THE BUREAU OF 
INTERNAL REVENUE, THE SOCIAL SECURITY SYSTEM AND THE 
BUREAU OF CUSTOMS; 
(D) ACT AS OFFICIAL DEPOSITORY OF NATIONAL AGENCIES, AND OF 
MUNICIPAL, CITY OR PROVINCIAL GOVERNMENT UNITS IN THE 
MUNICIPALITY, CITY OR PROVINCE WHERE THE COOPERATIVE 
BANK IS LOCATED, SUBJECT TO SUCH GUIDELINES AS MAY BE 
ESTABLISHED BY THE MONETARY BOARD AND THE DEPARTMENT OF 
FINANCE; 
(E) EXTEND CREDIT FACILITIES TO PRIVATE AND GOVERNMENT 
EMPLOYEES: PROVZDED, THAT IN THE CASE OF A BORROWER WHO IS 
A PERMANENT EMPLOYEE OR WAGE EARNER, THE TREASURER, 
CASHIER OR PAYMASTER OF THE OFFICE EMPLOYING HIM IS 
AUTHORIZED, 
NOTWITHSTANDING 
THE 
PROVISIONS 
OF 
ANY 
EXISTING LAW, RULES OR REGULATIONS TO THE CONTRARY, TO 
MAKE DEDUCTIONS FROM HIS SALARY, WAGE OR INCOME 
PURSUANT TO THE TERMS OF HIS LOAN, TO REMIT DEDUCTIONS TO 
THE COOPERATIVE BANK CONCERNED, AND 
COLLECT SUCH 
REASONABLE FEES FOR HIS SERVICES; 
NOTHING IN THIS SECTION SHALL BE CONSTRUED AS PRECLUDING A 
COOPERATIVE BANK FROM PERFORMING, WITH PRIOR APPROVAL OF THE 
MONETARY 
BOARD, 
COMMERCIAL 
BANKING 
SERVICES, 
OR 
FROM 
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OPERATING UNDER AN EXPANDED BANKING AUTHORITY, OR FROM 
EXERCISING, WHENEVER APPLICABLE AND NOT INCONSISTENT WITH THE 
PROVISIONS OF THIS ACT AND BANGKO SENTRAL REGULATIONS, SUCH 
OTHER POWERS INCIDENT TO A CORPORATION. 
(2) INVESTMENTS IN ALLIED UNDERTAKINGS. - SUBJECT TO SUCH 
GUIDELINES AS MAY BE ESTABLISHED BY THE MONETARY BOARD, 
COOPERATIVE BANKS MAY INVEST IN EQUITIES OF ALLIED UNDERTAKINGS 
AS HEREINAFTER ENUMERATED: PROVIDED, THAT: 
(A) THE TOTAL INVESTMENT IN EQUITIES SHALL NOT EXCEED TWENTY- 
FIVE PERCENT (25%) OF THE NET WORTH OF THE COOPERATIVE 
BANK; 
(B) THE EQUITY INVESTMENT IN ANY SINGLE ENTERPRISE SHALL BE 
LIMITED TO FIFTEEN PERCENT (15%) OF THE NET WORTH OF THE 
COOPERATIVE BANK; AND 
(C)THE EQUITY INVESTMENT IN OTHER BANKS SHALL BE SUBJECT TO 
THE SAME PROVISIONS GOVERNING SIMILAR INVESTMENTS OF 
COMMERCIAL BANKS AND SHALL BE DEDUCTED FROM THE 
INVESTING BANK’S NET WORTH FOR THE PURPOSE OF COMPUTING 
THE PRESCRIBED RATIO AS PROVIDED IN SECTION 2, ARTICLE 106 
HEREOF: PROVIDED, FURTHER, THAT EQUITY INVESTMENTS SHALL 
NOT BE PERMITTED IN NON-RELATED ACTIVITIES. WHERE THE 
ALLIED ACTIVITY IS A WHOLLY OR MAJORITY-OWNED SUBSIDIARY 
OF THE COOPERATIVE BANK, THE BANGKO SENTRAL MAY SUBJECT 
IT TO EXAMINATION. 
INVESTMENT IN ALLIED UNDERTAKINGS SHALL MEAN INVESTING IN 
INSTITUTIONS ENGAGED IN THE FOLLOWING ACTIVITIES: 
(I) BANKING AND FINANCING; 
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(11) WAREHOUSING AND OTHER POST-HARVEST ACTIVITIES; 
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(1II)FERTILIZER AND 
AGRICULTURAL CHEMICAL AND PESTICIDE 
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DISTRIBUTION; 
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(IV) FARM EQUIPMENT DISTRIBUTION; 
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(V) TRUCKING AND TRANSPORTATION OF AGRICULTURAL PRODUCTS; 
(VI) MARKETING OF AGRICULTURAL PRODUCTS; 
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(VII) LEASING; AND 
(VIII) OTHER UNDERTAKINGS AS MAY BE DETERMINED BY THE 
MONETARY BOARD. 
(3) LIMITATIONS 
ON 
LENDING 
AUTHORITY. 
- 
COOPERATIVE 
ORGANIZATIONS, THEIR MEMBERS, AND THE BANK'S DEPOSITORS MAY 
OBTAIN LOANS FROM 
A 
COOPERATIVE BANK, SUBJECT TO SUCH 
LIMITATIONS AS MAY BE PROVIDED FOR BY THE BANGKO SENTRAL. 
EXCEPT WHEN THE MONETARY BOARD MAY OTHERWISE PRESCRIBE, 
THE DIRECT INDEBTEDNESS TO COOPERATIVE BANWS OF ANY PERSON OR 
ASSOCIATION FOR MONEY BORROWED, EXCLUDING: 
(A)LOANS SECURED BY OBLIGATIONS OF THE BANGKO SENTRAL; 
(B)LOANS FULLY GUARANTEED BY THE GOVERNMENT AS TO THE 
PAYMENT OF PRINCIPAL AND INTEREST; 
(C)LOANS TO THE EXTENT COVERED BY 
THE HOLD-OUT, OR 
ASSIGNMENT OF, DEPOSITS MAINTAINED IN THE PHILIPPINES; 
(D) LOANS TO COOPERATIVE ORGANIZATIONS OF THEIR MEMBERS 
FROM PUNDS PASSED THROUGH THE COOPERATIVE BANK AS A CONDUIT IN 
ANY PRIVATE OR GOVERNMENT LENDING PROGRAM; AND 
(E) OTHER LOANS OR CREDITS, AS THE MONETARY BOARD MAY FROM 
TIME TO TIME SPECIFY AS NON-RISK ASSETS, SHALL AT NO TIME EXCEED 
TWENTY PERCENT (20%) OF THE UNIMPAIRED CAPITAL AND SURPLUS OF 
THE COOPERATIVE BANK. 
NOTWITHSTANDING THE PROVISIONS OF THE PRECEDING PARAGRAPH 
AND SUBJECT TO SUCH REGULATIONS THAT THE MONETARY BOARD MAY 
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PRESCRIBE, THE TOTAL INDEBTEDNESS OF ANY BORROWER TO THE 
2 
COOPERATIVE BANK MAY AMOUNT TO A FURTHER TEN PERCENT (10%) OF 
3 
THE UNIMPAIRED CAPITAL AND SURPLUS OF SUCH BANK PROVIDED, THAT 
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THE ADDITIONAL INDEBTEDNESS IS FOR THE PURPOSE OF FINANCING A 
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SUBDIVISION OR HOUSING DEVELOPMENT, MEDIUM-INCOME OR LOW- 
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THE MONETARY BOARI) MAY REGULATE THE AMOUNT OF CREDIT 
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ACCOMMODATIONS THAT MAY BE EXTENDED DIRECTLY OR INDIRECTLY, 
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BY 
COOPERATIVE 
BANKS 
TO 
THEIR 
DIRECTORS, 
OFFICERS 
OR 
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SHAREHOLDERS. 
HOWEVER, 
THE 
OUTSTANDING 
CREDIT 
INCOME BORROWERS, OR AGRICULTURE, ON A FULLY SECURED BASIS. 
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ACCOMMODATIONS WHICH A COOPERATIVE BANK MAY EXTEND TO EACH 
OF ITS DIRECTORS, OFFICERS OR SHAREHOLDERS, EXCEPT MEMBER 
COOPERATIVE-SHAREHOLDERS, SHALL BE LIMITED TO AN AMOUNT 
EQUIVALENT TO THE RESPECTIVE UNENCUMBERED DEPOSITS AND BOOK 
VALUE OF THEIR PAID-IN CAPITAL CONTRIBUTION IN THE BANK. 
ART. 105. 
Supervision OF COOPERATIVE BANKS. - (1) SUPERvllSION - The 
cooperative banks registered under this Code shall be under the supervision of the [Central Bank] 
BANGKO SENTRAL. 
[The Central Bank upon consultation with the agency and the 
cooperative movement shall formulate guidelines regarding the operations and banking 
transactions of cooperative banks, These guidelines shall give due recognition to the unique 
cooperative nature and character of cooperative banks. To this end, cooperative banks may be 
exempted from Central Bank rules and regulations, applicable to other types of banks, which 
would impede the cooperative rural bank from performing legitimate financial and banking 
services to its members.] THE MONETARY BOARD, SHALL ISSUE GUIDELINES, 
RULES AND REGULATIONS TO IMPLEMENT THE PROVISIONS OF THIS ACT, IN 
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AND UNIONS OF COOPERATIVES. 
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CONSULTATION WITH THE AUTHORITY, AND THE NATIONAL FEDERATIONS 
(2) POWER OF THE BANGKO SENTRAL OVER COOPERATIVE BANKS. - THE 
BANGKO SENTRAL SHALL HAVE THE POWER TO: 
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(a) ENFORCE THE LAWS, ORDERS, INSTRUCTIONS, RULES AND 
REGULATIONS PROMULGATED BY THE MONETARY BOARD 
APPLICABLE TO COOPERATIVE BANKS; 
(b) REQUIRE COOPERATIVE BANKS, THEIR DIRECTORS, OFFICERS 
AND AGENTS TO CONDUCT AND MANAGE THE AFFAIRS OF THE 
COOPERATIVE BANK IN A LAWFUL AND ORDERLY MANNER, 
AND 
(c) UPON PROOF THAT THE COOPERATIVE BANK OR ITS BOARD OF 
DIRECTORS OR OFFICERS ARE CONDUCTING AND MANAGING 
THE AFFAIRS OF THE BANK IN A MANNER CONTRARY TO 
LAWS, ORDERS, INSTRUCTIONS, RULES AND REGULATIONS 
PROMULGATED BY THE MONETARY BOARD OR IN A MANNER 
SUBSTANTIALLY PREJUDICIAL TO THE INTEREST OF THE 
GOVERNMENT, DEPOSITORS, CREDITORS, OR THE GENERAL 
PUBLIC, APPOINT A CONSERVATOR PURSUANT TO SECTION 29 
OF REPUBLIC ACT NO. 7653 WITHOUT PREJUDICE TO THE 
PROSECUTION 
OF 
PERSONS 
RESPONSIBLE 
FOR 
SUCH 
VIOLATIONS UNDER THE PROVISIONS OF SECTIONS 36 AND 37 
OF REPUBLIC ACT NO. 7653. 
ART. 106. 
Cupitulizution AND CAPITAL REQUIREMENTS OF COOPERATIVE 
BANKS. - (1) CAPITALIZATION - A national OR LOCAL cooperative bank shall have a 
minimum [authorized share capital of Two hundred million pesos (P200,000,000.00) 
in relation 
to Art. 14 (5).] PAID-UP CAPITAL IN SUCH AMOUNT AS MAY BE REQUIRED BY 
THE MONETARY BOARD. The authorized share capital shall be divided into such number 
of shares with a minimum par value of One thousand pesos (P1,OOO.OO) per share. For the 
purpose primarily of determining the permanency of equity, the types of shares a cooperative 
bank may issue, including the terms thereof and the rights appurtenant thereto, shall be subject to 
such rules and regulations as the [Central Bank] BANGKO SENTRAL may prescribe 
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(2) CAPITAL REQUIREMENTS. - A local cooperative bank shall have a minimum 
[authorized share] PAID-UP capital of [Twenty million pesos (P20,000,000.00)] IN SUCH 
AMOUNT AS MAY BE REQUIRED BY THE MONETARY BOARD. THE 
AUTHORIZED SHARE CAPITAL OF A NATIONAL COOPERATIVE BANK SHALL 
AT LEAST BE TWO HUNDRED MILLION PESOS (PZOO,OOO,OOO.OO) divided into such 
number of shares with a minimum par value of One thousand pesos (P100.00) per share. For the 
purpose of primarily determining the permanency of equity, the types of share of a cooperative 
bank may issue, including the terms thereof and the rights appurtenant thereto, shall be subject to 
such rules as the [Central Bank] BANGKO SENTRAL may prescribe. 
ART. 107. 
[Distribution of Net Surplus. - The provisions of this Code on the 
allocation and distribution of net surplus shall apply.] PROHIBITED ACT. - ANY BANK 
NOT ORGANIZED AND REGISTERED UNDER THIS CODE, AND ANY PERSON, 
ASSOCIATION, OR CORPORATION DOING THE BUSINESS OF BANKING, NOT 
AUTHORIZED UNDER THIS CODE OR EXISTING LAWS, WHICH SHALL USE THE 
WORDS “COOPERATIVE BANK” AS PART OF ITS NAME OR TITLE AS SUCH 
BANK OR .SUCH PERSON, ASSOCIATION OR CORPORATION, SHALL BE 
PUNISHED BY A FINE OF NOT LESS THAN ONE HUNDRED PESOS (P100.00) BUT 
IN NO CASE EXCEED THIRTY THOUSAND PESOS (P30,OOO.OO) FOR EACH DAY 
DURING WHICH THE SAID WORDS ARE SO USED. 
ART. 108. Privileges AND INCENTIVES OF COOPERATIVE BANKS. - [Cooperative 
banla shall have the following privileges subject to the approval of the Central Bank and 
compliance with applicable banking laws, rules and regulations:] 
(1) [The] Cooperative banks registered under this Code shall be given the same privileges 
AND INCENTIVES granted to the rural banla, private development banks, commercial banks 
and all’other banks to rediscount notes with the [Central Bank] BANGKO SENTRAL, the Land 
Bank of the Philippines, and other government banks without affecting in any way the provisions 
of this Code; [and] 
(2) [To act as a depository of government funds. For this purpose, all government 
departments, agencies and units of the national and local governments including government- 
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owned and -controlled corporations are hereby authorized to deposit their funds in any 
cooperative bank ] SUBJECT TO THE APPROVAL OF THE MONETARY BOARD, A 
COOPERATIVE BANK MAY PUBLISH ITS STATEMENT OF CONDITION IN A 
NEWSPAPER OF GENERAL CIRCULATION, OR A LOCAL NEWSPAPER 
COVERING ITS AREA OF OPERATIONS, AND POST IT IN AN ACCESSIBLE AREA 
OF ITS PREMISES, THE MUNICIPAL BUILDING, THE MUNICIPAL PUBLIC 
MARKET, THE BARANGAY HALL OR THE BARANGAY PUBLIC MARKET, IF 
THERE BE ANY, WHERE THE COOPERATIVE BANK IS LOCATED. 
HOWEVER, CASES OF FORECLOSURE OF MORTGAGES COVERING LOANS 
GRANTED BY A COOPERATIVE BANK AND EXECUTIONS OF JUDGMENTS 
THEREON INVOLVING REAL PROPERTIES AND LEVIED UPON BY A SHERIFF, 
SHALL BE EXEMPT FROM PUBLICATION REQUIREMENT WHERE THE TOTAL 
AMOUNT OF THE LOAN, EXCLUDING INTEREST DUE AND UNPAID, DOES NOT 
EXCEED FIVE HUNDRED THOUSAND PESOS (P500,OOO.OO) OR SUCH AMOUNT AS 
THE MONETARY BOARD MAY PRESCRIBE. 
IT SHALL BE SUFFICIENT 
PUBLICATION IN SUCH CASES IF THE NOTICE OF FORECLOSURE AND 
EXECUTION OF JUDGMENT ARE POSTED IN ACCESSIBLE 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 LAND 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. 
A COOPERATIVE BANK SHALL BE ALLOWED TO FORECLOSE LANDS 
MORTGAGED TO IT SUBJECT TO THE PROVISIONS OF REPUBLIC ACT NO. 6657, 
AS AMENDED. 
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(3)IN ADDITION TO THE PRIVILEGES GENERALLY GRANTED TO 
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COOPERATIVES UNDER THIS CODE, A COOPERATIVE BANK SHALL ALSO BE 
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ENTITLED TO TAX EXEMPTION PRIVILEGES AS PROVIDED FOR UNDER THIS 
CODE. 
ART. 109. 
Assistance to Cooperative Bank’?. - IN ACCORDANCE WITH 
EXISTING POLICIES, GOVERNMENT AGENCIES, GOVERNMENT-OWNED OR 
CONTROLLED 
CORPORATIONS AND 
FINANCIAL INSTITUTIONS SHALL 
PROVIDE 
ASSISTANCE, 
WHETHER 
TECHNICAL 
OR 
FINANCIAL 
OR 
OTHERWISE, TO COOPERATIVE BANKS TO PERMIT THEM TO GROW, 
DEVELOP AND PERFORM THEIR ROLE IN COUNTRYSIDE DEVELOPMENT AND 
TOWARDS A SUSTAINABLE NATIONAL ECONOMIC DEVELOPMENT. Whenever a 
cooperative banlc organized under this Code is distressed or may need assistance in the 
rehabilitation of its financial condition or to avoid bankruptcy, the Monetary Board of the 
[Central Bank of the Philippines] BANGKO SENTRAL NG PILIPINAS shall designate an 
official of the [Central Bank] BANGKO SENTRAL or a person of recognized competence [in], 
PREFERABLY WITH EXPERIENCE IN COOPERATIVE banking [or] AND finance, as 
receiver or conservator of the said bank pursuant to the provisions of Section 29 of [Republic Act 
No. 265, as amended] REPUBLIC ACT NO. 7653.” 
SEC. 12. The title of Chapter XIV of the same Code is hereby amended as follows: 
“CHAPTER XIV 
SPECIAL PROVISIONS RELATING TO SAVZNGSAND CREDIT COOPERATIVE 
SEC. 13. Articles 110, 11 1, 112, 113 and 114 of Chapter XIV of the same Code are hereby 
amended as follows: 
“ART. 110. Coverage. - This Chapter shall apply only to SAVINGS AND credit 
cooperatives and the rest of the provisions of this Code shall apply to them insofar as the same 
are not inconsistent with the provisions of this Chapter 
ART. 1 1 1 I Dejnition and Objectives. - A SAVINGS AND credit cooperative is a financial 
organization owned and operated by its members with the following objectives: 
(1)xxx 
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(2) x x x 
(3) x x x  
ART 112 Organization and Regzstration. - SAVINGS AND [Clcredlt cooperatives shall 
be organized and registered In accordance with the general provisions of this Code[.]: 
PROVIDED, HOWEVER, THAT REGISTERED MULTIPURPOSE COOPERATIVES, 
AND UNIONS AND FEDERATIONS OF COOPERATIVES WITH SIGNIFICANT 
INVOLVEMENT IN SAVINGS AND CREDIT OPERATIONS SHALL FORMALLY 
INFORM THE AUTHORITY ABOUT THIS FACT WITHIN THREE (3) MONTHS 
FROM THE EFFECTIVITY OF THIS ACT AND SHALL SUBMIT A SEPARATE 
ANNUAL AUDITED FINANCIAL REPORT FOR SUCH SAVINGS AND CREDIT 
OPERATIONS TO THE AUTHORITY: 
PROVIDED, FURTHER, THAT ALL 
MULTIPURPOSE COOPERATIVES, AND UNIONS AND FEDERATIONS OF 
COOPERATIVES WHICH SHALL HENCEFORTH BE FORMED AND SHALL 
REGISTER WITH THE AUTHORITY SHALL INDICATE IN THEIR APPLICATION 
FOR REGISTRATION IF THEY HAVE SIGNIFICANT INVOLVEMENT IN SAVINGS 
AND CREDIT OPERATIONS AND SHALL ALSO SUqMIT A SEPARATE ANNUAL 
AUDITED FINANCIAL REPORT FOR SUCH SAVINGS AND CREDIT OPERATIONS 
TO THE AUTHORITY. 
THE AUTHORITY AND THE BANGKO SENTRAL NG PILIPINAS SHALL, 
UPON CONSULTATION WITH THE COOPERATIVE MOVEMENT, JOINTLY 
FORMULATE: 
(1) GUIDELINES REGARDING THE DEPOSIT-TAKING TRANSACTIONS OF 
THESE COOPERATIVES; 
(2) MINIMUM STANDARDS OF OPERATION OF THESE COOPERATIVES; 
AND 
(3) UNIFORM ACCOUNTING AND AUDITING STANDARDS. 
TO ENSURE MINIMUM COMPLIANCE WITH STANDARD REGULATORY 
AND SUPERVISORY PROCEDURES FOR FINANCIAL INSTITUTIONS, THE 
BANGKO SENTRAL NG PILIPINAS SHALL PROVIDE TECHNICAL ASSISTANCE 
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TO THE AUTHORITY IN ITS FULFILLMENT OF ITS REGULATORY FUNCTION 
OVER SAVINGS AND CREDIT COOPERATIVES. 
ART. 113. Organizational Linkage. - SAVINGS AND [Clcredit cooperatives may 
organize chapters or subsidiaries, or join leagues and federations for the purpose of providing 
commonly needed essential services including but not limited to the following: 
(1) x x x  
(3) x x x 
(3) x x x 
(4) x x x 
(5) x x x 
(6) x x x  
(7) x x x 
(8) x x x 
(9) x x x 
Existing support organizations such as federations of SAVINGS AND credit cooperatives, 
SAVINGS AND credit cooperatives at the provincial, regional and national levels may continue 
as such under this Code. 
ART. 114. 
Prohibition. - The term “SAVINGS AND credit cooperative” shall be 
used exclusively by those who are duly registered under this Chapter, and no person or group of 
persons, or organizations shall use the said term unless duly registered herein.” 
SEC. 14. Three (3) new Chapters shall be inserted after Chapter XV of the same Code and 
shall read as follows: 
CHAPTER XVI 
SPECIAL PROVISIONS RELATING TO HOUSING COOPERATIVES 
ART. 118. COVERAGE. - THIS CHAPTER SHALL APPLY ONLY TO HOUSING 
COOPERATIVES AND THE REST OF THE PROVISIONS OF THIS CODE SHALL 
APPLY TO THEM INSOFAR AS THE SAME ARE: NOT INCONSISTENT WITH THE 
PROVISIONS OF THIS CHAPTER. 
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ART. 119. DEFINITION AND OBJECTIVES - A HOUSING COOPERATIVE IS 
ONE WHICH ENGAGES PRIMARILY IN ASSISTING ITS MEMBERS AND THE 
MEMBERS OF THE COMMUNITY IT SERVES, IN THE PROVISION OF HOUSING 
AND THE AMENITIES THAT ACCOMPANY THE BASIC NEED OF SHELTER ON A 
CONTINUING BASIS, IS COLLECTIVELY OWNED AND CONTROLLED BY ITS 
MEMBERS, AND IS COMMITTED TO ADHERE TO UNIVERSALLY ADOPTED 
COOPERATIVE PRINCIPLES AND VALUES. 
A HOUSING COOPERATIVE SHALL HAVE THE FOLLOWING OBJECTIVES: 
(1) TO UNDERTAKE PLANS, PROGRAMS AND ACTIONS TO PROVIDE FOR 
THEIR MEMBERS’ NEEDS FOR AFFORDABLE, SUSTAINABLE AND 
QUALITY HOUSING, SECURITY OF TENURE AND SAFE AND SECURE 
NEIGHBORHOODS; 
(2) TO ENCOURAGE THRIFT AND SAVINGS MOBILIZATION AMONGS ITS 
MEMBERS; 
(3) TO GENERATE FUNDS FOR HOUSING EQUITY REQUIREMENTS, 
ACQUISITION OF LAND, BUILDINGS, COMMUNITY FACILITIES AND 
AMENITIES, OTHER PROPERTIES AND IMPROVEMENT THEREOF FOR 
SATISFACTION OF MEMBERS’ HOUSING NEEDS AND WANTS; 
(4) TO DIRECTLY OR INDIRECTLY ENGAGE IN THE PRODUCTION AND 
DEVELOPMENT OF A HOUSING COMMUNITY WITHIN A CONTIGUOUS 
AREA; 
(5) TO FOSTER AND STRENGTHEN THE PRINCIPLES OF COOPERATIVISM 
BY PROMOTING COMPREHENSIVE AND INTEGRATED COMMUNITY 
DEVELOPMENT PROGRAMS WHICH ARE PLANNED AND MANAGED BY 
THE COOPERATIVE MEMBERS THEREBY ENSURING A SUSTAINED 
AND SELF-RELIANT COOPERATIVE COMMUNITY; 
(6) TO PROMOTE AND ADVANCE THE ECONOMIC, SOCIAL POLITICAL 
AND CULTURAL LIFE OF COOPERATIVE AND COMMUNITY MEMBERS; 
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(7) TO ACQUIRE, OWN AND DEVELOP LAND BUILDINGS AND PROPERTIES 
IN THE FURTHERANCE OF THEIR OBJECTIVES; 
(8) TO ENTER INTO CONTRACTS WITH GOVERNMENT AND OTHER 
PRIVATE ENTITIES FOR FINANCING AND CONSTRUCTING HOUSING 
PROJECTS; 
(9) 
TO UNDERTAKE EDUCATION, TRAINING AND 
INFORMATION 
DISSEMINATION 
ACTIVITIES 
FOR 
THE 
BENEFIT 
OF 
THE 
COOPERATIVE, ITS MEMBERS AND THE COMMUNITY; AND 
(IO) TO UNDERTAKE ANY AND ALL OTHER ACTIVITIES FOR THE 
EFFECTIVE AND EFFICIENT IMPLEMENTATION OF THE PROVISIONS 
OF THIS CODE. 
ART. 
120. MEMBERSHIP - PROVIDED 
THAT 
APPLICANTS 
MEET 
QUALIFICATIONS SPECIFIED IN THE GENERAL PROVISIONS OF THIS 
CODE, THEY SHALL BE CONSIDERED ELIGIBLE FOR MEMBERSHIP IN 
HOUSING 
COOPERATIVES. THE SHELTER NEEDS 
OF INFORMAL 
DWELLERS, THE ELDERLY, THE PHYSICALLY HANDICAPPED, WORKERS, 
STUDENTS AND MEMBERS OF OTHER MARGINALIZED SECTORS SHALL 
BE GIVEN DUE ATTENTION THROUGH THEIR MEMBERSHIP IN HOUSING 
COOPERATIVES. 
ART. 121. ORGANIZATION AND REGISTRATION REQUIREMENTS - A 
PRIMARY 
HOUSING 
COOPERATIVE 
MAY 
BE 
ORGANIZED 
AND 
REGISTERED IN ACCORDANCE WITH THE GENERAL PROVISIONS OF 
THIS CODE. 
ART. 122. PREFERENTIAL RIGHTS - A DULY REGISTERED HOUSING 
COOPERATIVE SHALL HAVE THE FOLLOWING PREFERENTIAL RIGHTS 
IN ADDITION TO THOSE PROVIDED IN THIS CODE: 
(A) ALL PROJECTS OF HOUSING COOPERATIVES PRIMARILY 
INTENDED 
FOR 
UNDERPRIVILEGED 
AND 
HOMELESS 
MEMBERS SHALL BE CONSIDERED TO BE IN COMPLIANCE 
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WITH 
THE 
PROVISION 
OF 
RA 
7279, 
THE 
URBAN 
DEVELOPMENT AND HOUSING ACT, ON BALANCED HOUSING 
DEVELOPMENT, REGARDLESS OF THE COST OF HOUSING 
UNITS; 
(B) HOUSING COOPERATIVES SHALL HAVE PREFEREBTIAL 
RIGHT TO ACQUIRE, LEASE, DEVELOP AND MANAGE IDLE 
GOVERNMENT LANDS AND BUILDINGS WITHIN ITS AREA OF 
OPERATIONS; 
(C) HOUSING COOPERATIVES SHALL HAVE THE RIGHT OF FIRST 
REFUSAL TO ACQUIRE, LEASE, DEVELOP AND MANAGE 
EXISTING GOVERNMENT LANDS AND BUILDINGS IDENTIFIED 
FOR HOUSING; 
(D) HOUSING COOPERATIVE PROJECTS SHALL BE RECOGNIZED 
AS UNITS FOR LIVELIHOOP AND PRODUCTIVITY UNDER RA 
6657 FOR 
MEMBERS 
WHO 
ARE 
AGRARIAN 
REFORM 
GRANTEES; AND 
(E) HOUSING COOPERATIVES SHALL HAVE THE RIGHT TO AVAIL 
OF GOVERNMENT TECHNICAL ASSISTANCE, FACILITIES AND 
EQUIPMENT FOR THE CONSTRUCTION AND MAINTENANCE 
OF THE COOPERATIVE-OWNED HOUSING PROJECT. 
ART. 123. SPECIAL FINANCING WINDOW FOR HOUSING COOPERATIVES - 
THE APPROPRIATE HOUSING AGENCIES AND GOVERNMENT FINANCIAL 
INSTITUTIONS SHALL CREATE A SPECIAL WINDOW FOR FINANCING 
HOUSING PROJECTS UNDERTAKEN BY HOUSING COOPERATIVES, WITH 
INTEREST RATES AND TERMS EQUAL TO, OR BETTER THAN THOSE GIVEN 
FOR SOCIALIZED HOUSING PROJECTS. THIS FINANCING SHALL BE IN THE 
FORM OF BLANKET LOANS OR LONG-TERM WHOLESALE LOANS TO 
QUALIFIED COOPERATIVES, WITHOUT NEED FOR INDIVIDUAL PROCESSING. 
A NEW HOUSING COOPERATIVE MAY AVAIL OF LOANS FROM THIS 
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FINANCING WINDOW IF IT IS GUARANTEED BY A HOUSING COOPERATIVE 
FEDERATION OR ANOTHER PRIMARY HOUSING COOPERATIVE THAT IS 
FINANCIALLY STABLE. 
ART. 124. TAX INCENTImS AND PRIVILEGES OF HOUSING COOPERATIVES - 
ANY HOUSING PROJECT OF A HOUSING COOPERATIVE, REGARDLESS OF THE 
COST, SHALL BE TREATED AS A SOCIALIZED HOUSING PROJECT, AND SHALL 
ENJOY THE SAME EXMEPTIONS AND PRIVILEGES GRANTED TO SOCIALIZED 
HOUSING PROJECTS SUCH AS, BUT SHALL NOT BE LIMITED TO: 
CAPITAL GAINS TAX, BOTH FOR THE SELLER TO THE 
COOPERATIVE AND FOR THE COOPERATIVE AS SELLER 
TO ITS MEMBERS, ON SALE OF LAND FOR USE IN THE 
PROJECT; 
VALU-ADDED TAX FOR THE PROJECT CONTRACTOR; 
PROJECT-RELATED 
COOPERATIVE 
OR 
INDIVIDUAL 
INCOME TAXES ON INCOME DIRECTLY REALIZED FROM 
THE DEVELOPMENT AND IMPROVEMENT OF HOUSING 
SITES; 
TRANSFER TAX FOR BOTH RAW AND COMPLETED 
PROJECTS; 
DONOR’S TAX FOR LAND CERTIFIED BY LGUs TO HAVE 
BEEN 
DONATED 
FOR 
SOCIALIZED 
HOUSING 
OR 
COOPERATIVE HOUSING PURPOSES; 
EXPANDED WITHHOLDING TAX; 
DOCUMENTARY STAMP TAX 
REAL ESTATE TAX, AND 
REGISTRATION FEES AND OTHER FEES RELATED TO THE 
HOUSING PROJECTS. 
THE GENERAL PROVISIONS OF THIS CODE ON THE TAX TREATMENT OF 
COOPERATIVES SHALL APPLY TO HOUSING COOPERATIVES REGARDLESS OF 
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THE AVERAGE SHARE CAPITAL, INSOFAR AS THE SAME ARE NOT 
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INCONSISTENT WITH THE PROVISIONS OF THIS CHAPTER. 
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ART. 125. DISTRIBUTION O F  NET SURPLUS - THE NET SURPLUS OF 
HOUSING COOPERATIVES SHALL BE DISTRIBUTED IN ACCORDANCE WITH 
THE GENERAL PROVISIONS OF THIS CODE PROVIDED THAT THE AMOUNT 
ALLOCATED TO THE OPTIONAL FUND SHALL BE USED AS A MAINTENANCE 
RESERVE FUND IN ACCORDANCE WITH THE BY-LAWS OF THE COOPERATIVE 
THIS SHALL NOT PRECLUDE THE COOPERATIVE FROM SETTING UP ITS OWN 
FUND FOR THIS PURPOSE. 
ART. 126. INTEREST ON SHARE CAPITAL AND PATRONAGE REFUND - AT 
LEAST FIFTY PERCENT (50%) OF INTEREST ON SHARE CAPITAL AND 
PATRONAGE REFUND, ALLOCATED AND DISTRIBUTED IN ACCORDANCE 
WITH THE PROVISIONS OF THIS CODE, SHALL BE RE-INVESTED IN THE 
COOPERATIVE. THE SUM ALLOCATED FOR RE-INVESTMENT SHALL BE 
CREDITED TO ALL MEMBERS AND PATRONS OF THE COOPERATIVE IN 
PROPOSRTION TO THEIR INDIVIDUAL CAPITAL AND PATRONAGE. 
ART. 127. 
PROHIBITION - THE TERM “HOUSING COOPERATIVE” 
SHALL BE USED EXCLUSIVELY BY COOPERATIVES DULY REGISTERED UNDER 
THE PROVISIONS OF THIS CHAPTER. NO PERSON, GROUP OF PERSONS OR 
ORGANIZATIONS SHALL USE SAID TERM UNLESS DULY REGISTERED HEREIN. 
A HOUSING COOPERATIVE IS PROHIBITED FROM TRANSFORMING INTO AND 
REGISTERING AS A MULTI-PURPOSE COOPERATIVE. 
ART. 128. ORGANIZATIONAL LINKAGE - HOUSING COOPERATIVES MAY 
JOIN OR ORGANIZE CHAPTERS, SUBSIDIARIES, LEAGUES OR FEDERATIONS, 
FOR THE PURPOSE OF PROVIDING COMMONLY NEEDED ESSENTIAL 
SERVICES WHICH INCLUDES BUT SHALL NOT BE LIMITED TO THE 
FOLLOWING: 
(A) INTER-LENDING OF SURPLUS FUND; 
(B) DEVELOPMENT ACTIVITIES; 
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(C) PROFESSIONAL AND TECHNICAL ASSISTANCE; 
(D) RESEARCH AND DEVELOPMENT; 
(E) REPRESENTATION; AND 
(F) OTHER SERVICES NEEDED TO CONTINUOUSLY IMPROVE THEIR 
PERFORMANCE. 
CHAPTER XVII 
SPECIAL PROVISIONS FWLATING TO FARMERS’ FISHERFOLK AND MARKET 
VENDORS COOPERATIVES 
ART. 129. COVERAGE - THE PROVISIONS OF THIS CHAPTER SHALL APPLY 
ONLY TO FARMERS, FISHERFOLK AND MARKET VENDORS COOPERATIVES, 
FEDERATIONS AND UNIONS INSOFAR AS THE SAME ARE NOT INCONSISTENT 
WITH THIS CODE. 
ART. 130. DEFINITION OF TERMS - FOR THE PURPOSES OF THIS CHAPTER, 
THE FOLLOWING TERMS SHALL BE DEFlNED AS FOLLOWS: 
(A) FARMERS’ 
COOPERATIVES - REFERS TO COOPERATIVES 
OWNED AND OPERATED BY FARMERS ENGAGED PRIMARILY IN 
THE 
PRODUCTION 
OF 
AGRICULTURAL 
CROPS 
AND 
LIVESTOCK, 
(B) FISHERFOLK COOPERATIVES - REFERS TO COOPERATIVES 
OWNED 
AND 
OPERATED 
BY 
FISHERFOLK 
PRIMARILY 
ENGAGED IN THE COMMERCIAL PRODUCTION, CULTIVATION 
AND GATHERING OF FISHES AND OTHER MARINE LIFE; 
(C) PUBLIC MARKET - REFERS TO THE PHYSICAL AREA AND 
STRUCTURE THAT IS OWNED AND ESTABLISHED BY THE 
GOVERNMENT FOR THE PURPOSE OF FACILITATING THE SALE 
AND TRANSFER OF GOODS FROM VENDORS TO CONSUMERS 
AND FOR RAISING REVENUES OUT OF THE TRANSACTIONS: 
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(D) PUBLIC ABATTOIR - REFERS TO THE PLACE WHERE ANIMALS 
ARE CUSTOMAFULY SLAUGHTERED BEFORE THESE ARE SOLD 
IN THE PUBLIC MARKET; AND 
4 
(E) PUBLIC MARKET AND ABATTOIRS COOPEMTIWS - REFERS TO 
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COOPERATIVES 
OWNED 
AND 
OPERATED 
BY 
MARKET 
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VENDORS PRIMARILY ENGAGED IN THE WHOLESALE AND 
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RETAIL 
OF 
AGRICULTURAL 
AND 
FISHERY 
PRODUCTS 
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INCLUDING 
THE 
OPERATION, 
MANAGEMENT 
AND 
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(A) TO ESTABLISH A DIRECT LINKAGE BETWEEN FARMS AND 
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FISHING VILLAGES WITH PUBLIC MARKET VENDORS TO 
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ENSURE THE CONTINUOUS SUPPLY AND STABILITY OF PRICES 
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OF AGRICULTURAL AND FISHERY PRODUCTS FOR THE 
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BENEFIT OF THE CONSUMERS; 
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(B) TO ESTABLISH COORDINATION BETWEEN AGRICULTURAL 
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PRODUCTION AND MARKETING THAT SHALL LEAD TO THE 
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ESTABLISHMENT OF THE NATIONAL MARKETING UMBRELLA 
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AS STIPULATED UNDER CHAPTER 5 OF REPUBLIC ACT 8435, 
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OTHERWISE KNOWN AS THE AGRICULTURE AND FISHERIES 
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MODERNIZATION ACT OF 1997 (AFMA). 
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(C) TO ENCOURAGE THE ENSUING COOPERATIVES, MERGERS, 
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FEDERATIONS AND UNIONS TO TAKE OVER MANAGEMENT, 
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OPERATION AND SUPERVISION OF PUBLIC MARKETS AND 
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ABATTOIRS, AND OTHER RETAIL OUTLETS; 
MAINTENANCE OF PUBLIC MARKETS AND ABATTOIRS. 
ART. 131. OBJECTIVES - FARMERS, FISHERFOLK, AND MARKET VENDORS 
MAY FORM THEMSELVES INTO COOPERATIVES, FEDERATIONS, MERGERS, 
FEDERATIONS AND UNIONS FOR THE FOLLOWING OBJECTIVES: 
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(D) TO PROVIDE A MECHANISM FOR MARKET VENDORS TO 
ASSIST IN THE FINANCING OF AGRICULTURAL AND FISHERY 
PRODUCTION, PROCESSING AND MARKETING; AND 
(E) TO PREPARE A MECHANISM THAT WOULD HELP SUSTAIN 
COMPETITIVENESS OF LOCAL AGRICULTURE AND FISHERIES 
TO MEET GLOBAL CHALLENGES. 
ART. 132. ORGANIZATION AND REGISTRATION - FARMERS, FISHERFOLK 
AND MARKET VENDORS COOPERATIVES, MERGERS, FEDERATIONS AND 
UNIONS MAY BE ORGANIZED AND REGISTERED IN ACCORDANCE WITH THE 
GENERAL PROVISIONS OF THIS CODE. 
ART. 133. ORGANIZATIONAL LINKAGE. - FARMERS’, FISHERFOLK AND 
MARKET VENDORS AND ABATTOIRS COOPERATIVES MAY BUY OWNERSHIP 
OF SHARE CAPITAL INTO EACH OTHER FOR PURPOSES OF ATTAINING THEIR 
OBJECTIVES: PROVIDED, THAT THE BUYING COOPERATIVE SHALL BE AN 
ASSOCIATE MEMBER AND SHALL NOT OWN MORE THAN TWENTY PERCENT 
(20%) 
OF THE 
OUTSTANDING 
CAPITAL SHARES OF THE MOTHER 
COOPERATIVE. 
ART. 134. PRIVATIZATION OF PUBLIC MARKETS AND ABATTOIRS. - IN 
CONSONANCE WITH THE GOVERNMENT POLICY OF PRIVATIZATION, ANY 
LOCAL GOVERNMENT UNIT MAY PRIVATIZE THE 
OPERATION AND 
MANAGEMENT OF ITS PUBLIC MARKET AND/OR ABATTOIR: PROK’DED, THAT 
THE LOCAL GOVERNMENT UNIT SHALL OFFER THE RIGHT OF FIRST 
REFUSAL TO THE EXISTING PUBLIC MARKET VENDORS’ COOPERATIVE; 
PROVIDED FURTHER, THAT SUCH AN OFFER SHALL BE FREE AND 
UNQUALIFIED AND 
SHALL 
NOT 
INCLUDE 
ANY 
RESTRICTION 
NOR 
DETERRENT TO THE COOPERATIVE; PROVIDED FINALLY, THAT THE 
COOPERATIVE SHALL BE GIVEN A MAXIMUM OF TWO (2) YEARS TO 
CONFIRM THE OFFER. IN THE ABSENCE OF AN EXISTING MARKET VENDORS’ 
COOPERATIVE, THE MARKET VENDORS’ ASSOCIATION OR ANY FORM OF 
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VENDORS’ ORGANIZATION WITHIN THE PUBLIC MARKET SHALL BE 
ALLOWED TO FORM ITSELF INTO A COOPERATIVE. 
THE LOCAL GOVERNMENT UNIT, HOWEVER, SHALL BE FREE TO 
NEGOTIATE WITH OTHER INTERESTED PARTIES UNDER THE FOLLOWING 
CONDITIONS: 
(A) WHEN THE COOPERATIVE FAILS TO INDICATE IN WRITING, 
ITS INTEREST TO THE OFFER WITHIN THE SPECIFIED PERIOD; 
(B) WHEN THE COOPERATIVE FAILS TO UNDERTAKE THE TERMS 
AND CONDITIONS OF THE OFFER AFTER IT WAS ACCEPTED 
AND CONFIRMED; AND 
(C) WHEN 
THE 
COOPERATIVE EXPRESSLY INDICATES ITS 
INCAPACITY AND DISINTEREST TO THE OFFER AFTER THE 
SPECIFIED PERIOD OF CONFIRMATION. 
ART. 135. OPERATZON AND MANAGEMENT. - AFTER TRANSFER OF 
OPERATION AND MANAGEMENT OF A PUBLIC MARKET AND/OR ABATTOIR, A 
PUBLIC MARKET VENDORS’ COOPERATIVE SHALL BE GIVEN LIBERTY TO 
OPERATE AND MANAGE THESE FACILITIES WITHOUT ANY RESTRICTION 
FROM THE LGU: PROVIDED, THAT NO LAW OR LOCAL ORDINANCE SHALL BE 
VIOLATED AND THAT THE TERMS AND CONDITIONS ARE MET BY THE 
COOPERATIVE CONCERNED TO THE SATISFACTION OF THE LOCAL 
GOVERNMENT UNIT. 
ART. 136. LEASE OF FACILITZES. - THE GOVERNMENT MAY LEASE THE 
LAND WHERE THE PUBLIC MARKET OR ABATTOIR IS LOCATED TO THE 
COOPERATIVE FOR A PERIOD NOT EXCEEDING TWENTY-FIVE (25) YEARS, 
SUBJECT TO RENEWAL FOR ANOTHER TWENTY-FIVE (25) YEARS: PROVIDED, 
THAT THE APPLICATION FOR RENEWAL SHALL BE MADE ONE (1) YEAR 
BEFORE THE EXPIRATION OF THE LEASE; PROVIDED FURTHER, THAT SUCH 
LEASE SHALL BE FOR THE EXCLUSIVE USE AND BENEFIT OF THE 
COOPERATIVE AND FOR THE FURTHERANCE OF ITS BUSINESS. 
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CHAPTER XVIII 
SPECIAL PROVISIONS ON YOUTH COOPERATIVES 
ART. 137. COVERAGE. - THE PROVISIONS OF THIS CHAPTER SHALL 
PRIMARILY 
GOVERN YOUTH COOPERATIVES: PROVZDED, THAT THE 
PROVISIONS 
OF OTHER 
CHAPTERS OF THIS 
CODE 
SHALL 
APPLY 
SUPPLETORILY EXCEPT INSOFAR AS THIS CHAPTER OTHERWISE PROVIDES. 
ART. 138. DEFZNITION. - A YOUTH COOPERATIVE IS ONE ORGANIZED TO 
PROMOTE COOPERATIVE CONCEPTS AND PRINCIPLES AMONG THE YOUTH 
WHOSE AGE RANGE FROM TWELVE (12) TO THIRTY-FIVE (35). 
ART. 139. CATEGORZES. - A YOUTH COOPERATIVE MAY BE CATEGORIZED 
AS EITHER SCHOOL OR COMMUNITY-BASED AND SHALL BE DEFINED AS 
FOLLOWS: 
(A) SCHOOL-BASED YOUTH COOPERATIVE - REFERS TO ONE WHOSE 
MEMBERS ARE SECONDARY, TERTIARY OR POST-GRADUATE STUDENTS 
FROM 
EDUCATIONAL 
INSTITUTIONS 
DULY 
RECOGNIZED 
BY 
THE 
DEPARTMENT OF EDUCATION OR BY THE COMMISSION ON HIGHER 
EDUCATION: PROVZDED, THAT NO MEMBER IS MORE THAN THIRTY-FIVE (35) 
YEARS OF AGE: PROVZDED FURTHER, THAT MAJORITY OF ITS MEMBERS 
SHOULD BE ENROLLED IN THE CURRENT SEMESTER OR SCHOOL YEAR; 
(B) COMMUNITY-BASED YOUTH COOPERATIVE - REFERS TO ONE WHOSE 
MEMBERS ARE RESIDING OR WORKING IN THE AREA OF ITS OPERATIONS 
WIT" 
A COMMON BOND OF INTEREST. 
ART.140. PURPOSES OF YOUTH COOPEMTZVES. - A YOUTH COOPERATIVE 
MAY BE ORGANIZED FOR ANY OR ALL OF THE FOLLOWING PURPOSES: 
(A) TO SERVE AS A TRAINING GROUND FOR ITS MEMBERS IN THE 
MANAGEMENT AND OPERATIONS OF A COOPERATIVE ENTERPRISE 
THUS PREPARING THEM TO BECOME PROFESSIONAL MANAGERS 
AND/OR STAFF OF COOPERATIVES; 
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(B) 
TO ENGAGE IN THE BULK BUYING AND DISTRIBUTION OF GOODS 
NEEDED BY ITS MEMBERS, ; 
TO ENHANCE THE SKILLS OF MEMBERS AND UTILIZE THEM IN 
PROVIDING SERVICES IN AN ENTREPRENEURIAL UNDERTAKING 
AND/OR BUSINESS; 
(C) 
(D) 
WITH THE HELP OF A DULY REGISTERED PRIMARY HOUSING 
COOPERATIVE, TO ENGAGE IN COOPERATIVE HOUSING ACTIVITIES 
BY PROVIDING AND MANAGING DORMITORIES OR LODGING 
HOUSES FOR ITS MEMBERS; 
(E) 
TO INTRODUCE ACTIVITIES 
THAT WOULD 
HELP EXPLORE 
CREATIVE ABILITIES OF MEMBERS; AND 
TO PROMOTE AND ADVANCE FILIPINO SOCIAL AND CULTURAL 
VALUES, 
ECOLOGICAL 
AWARENESS 
AND 
SUSTAINABLE 
DEVELOPMENT. 
(F) 
ART. 141. MEMBERSHIP. - THERE SHALL BE TWO KINDS OF MEMBERS IN 
A PRIMARY YOUTH COOPERATIVE WHICH SHALL BE DEFINED AS FOLLOWS: 
(A)REGULAR MEMBERS - REFERS TO THOSE WHO ARE BETWEEN 
EIGHTEEN (18) AND THIRTY-FIVE (35) YEARS OLD AND ARE ENTITLED 
TO ALL RIGHTS AND PRIVILEGES OF MEMBERSHIP; AND 
(B)ASSOCIATE MEMBERS - REFERS TO THOSE WHO ARE BELOW 
EIGHTEEN AND HAVE NO NGHT TO VOTE NOR BE VOTED UPON AND 
SHALL BE ENTITLED ONLY TO SUCH RIGHTS AND PRIVILEGES AS 
THYE BY-LAWS MAY PROVIDE. 
ART. 142. AFFILIATION - A YOUTH COOPERATIVE SHALL BE AFFILIATED 
WITH A DULY REGISTERED PRIMARY COOPERATIVE OPERATING WITHIN 
THE SAME AREA OF ITS OPERATIONS THAT IS WILLING TO ACT AS ITS 
GUARDIAN COOPERATIVE. 
A 
GUARDIAN COOPERATIVE SHALL BE RESPONSIBLE FOR THE 
MANAGEMENT TRAINING AND VALUE FORMATION OF THE OFFICERS AND 
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MEMBERS 
OF THE 
YOUTH 
COOPERATIVE 
IN ACCORDANCE 
WITH 
UNIVERSALLY ACCEPTED PRINCIPLES AND PRACTICES OF COOPERATION. 
ART. 143. ADVISORY BOARD. - AN ADVISORY BOARD SHALL BE 
CONSTITUTED BY THE YOUTH COOPERATIVE WHOSE MEMBERS SHALL 
INCLUDE THE FOLLOWING: 
(A) 
FOR 
SCHOOL-BASED 
YOUH 
COOPERATIVES - 
(1) 
THE 
CHAIRPERSON OR ANY MEMBER OF THE BOARD OF DIRECTORS 
OF THE PRIMARY COOPERATIVE TO WHICH IT IS AFFILIATED; (2) 
THE DEAN OF STUDENT AFFAIRS/SERVICES OF THE SCHOOL OR 
HIS/HER 
DULY 
RECOGNIZED 
REPRESENTATIVE; 
(3) 
A 
REPRESENTATIVE OF A UNION OR FEDERATION IN THE SAME 
AREA; AND (4) COOPERATOWS WHO ORGANIZED THE YOUTH 
COOPERATIVE. 
(B) 
FOR COOMUNITY-BASED YOUTH COOPERATIVES - (1) THE 
CHAIRPERSON 
OR 
A 
REPRESENTATIVE OF THE PRIMARY 
COOPERATIVE 
TO 
WHICH 
IT 
IS 
AFFILIATED; 
(2) 
THE 
COOPERATIVE DEVELOPMENT SPECIALIST ASSIGNED BY THE 
AUTHORITY IN ITS AREA OF OPERATIONS; (3) A REPRESENTATIVE 
OF A UNION OR FEDERATION IN THE SAME AREA; AND (4) 
COOPERATOWS WHO ORGANIZED THE COOPERATIVE. 
ART. 144. FUNCTIONS O F  ADWSORY BOARDS. - ADVISORY BOARDS OF 
YOUTH COOPERATIVES SHALL HAVE THE FOLLOWING FUNCTIONS: 
(A) TO CONFIRM THE APPOINTMENT OF THE MANAGER OF THE 
YOUTH COOPERATIVE AND RECOMMEND REPLACEMENT IF 
CIRCUMSTANCES WARRANT; 
(B) TO REQUIRE THE SUBMISSION OF MONTHLY REPORTS SUCH AS 
FINANCIAL STATEMENTS, MANAGER'S OPERATIONS REPORT, 
MEMBERSHIP GROWTH, POLICIES, OPERATING PROCEDURES, 
RULES AND REGULATIONS AND SUCH OTHER REPORTS THAT IT 
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MAY DEEM NECESSARY TO FACILITATE ITS TASK OF ADVISING 
AND ASSISTING THE YOUTH COOPERATIVE: 
(C) TO RECOMMEND MODIFICATIONS OR REVISIONS OF POLICIES, 
OPERATING PROCEDURES, RULES AND REGULATIONS THAT IT 
DEEMS NECESSARY FOR THE IMPROVEMENT AND PROTECTION OF 
THE INTERESTS OF THE YOUTH COOPERATIVE AND ITS MEMBERS; 
(D) TO PREPARE AND SUBMIT PERIODIC REPORTS ON THE STATE OF 
THE YOUTH COOPERATIVE TO THE GUARDIAN COOPERATIVE; 
(E) FOR ONE OF ITS MEMBERS TO BE PRESENT DURING MEETINGS OF 
THE YOUTH COOPERATIVE; AND 
SUCH OTHER FUNCTIONS AS MAY BE NECESSARY TO HELP THE 
YOUTH COOPERATIVE ATTAIN ITS VISION, MISSION, GOALS AND 
(F) 
OBJECTIVES. 
ART. 145. TERMINATION OF MEMBERSHIP. - MEMBERSHIP IN A YOUTH 
COOPERATIVE MAY BE TERMINATED FOR REASONS AS PROVIDED IN ITS BY- 
LAWS. 
ART. 
146. OFFICE SPACE 
FOR 
YOUTH COOPERATIVES. - THE 
EDUCATIONAL INSTITUTION WHERE A YOUTH COOPERATIVE OPERATES 
SHALL PROVIDE FOR AN OFFICE, SPACE OR FACILITY FOR ITS OPERATIONS 
FREE OF RENT OR ANY CHARGES. THE LOCAL GOVERNMENT UNIT THROUGH 
SHALL LIKEWISE GRANT THE SAME PRIVILEGE TO COMMUNITY-BASED 
YOUTH COOPERATIVES. 
ART. 147. SCHOLARSHIP FUND. - THE AMOUNT OF THE NET SURPLUS 
ALLOCATED TO THE OPTIONAL FUND SHALL BE USED BY A YOUTH 
25 
COOPERATIVE FOR SCHOLARSHIP OF ITS MEMBERS SUBJECT TO THE 
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PROVISIONS OF ITS BY-LAWS. 
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“Chapter [XVI] XVIII 
29 
MISCELLANEOUS PROVISIONS 
SEC. 15. Chapter XVI ofthe same Code is hereby amended as follows: 
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ART. [ 1191 148. Compliance with Other Laws - (1) x x x 
(2) x x x 
(3) x x x 
ART. [120] 149. Register of Cooperatives. - x x x 
ART. [121] 150.Settlement of 
Disputes[.], CONCILIATION AND MEDIATION 
PROCEEDINGS, - Disputes among members, officers, directors, and committee members, 
[and] intra-cooperative, INTER-COOPERATIVE, INTRA-FEDERATION OR INTER- 
FEDERATION disputes shall, as far as practicable, be settled amicably in accordance with the 
conciliation or mediation mechanisms embodied in the bylaws of the cooperative and in 
applicable laws. 
THE 
CONCILIATION 
AND 
MEDIATION 
COMMITTEE 
OF 
THE 
COOPERATIVE SHALL FACILITATE THE AMICABLE SETTLEMENT OF 
DISPUTES AMONG MEMBERS, OFFICERS, DIRECTORS AND COMMITTEE 
MEMBERS, AND INTRA-COOPERATIVE DISPUTES. 
Should such a conciliation [/I OR mediation proceeding fail, the matter shall be settled in a 
court of competent jurisdiction[,] : PROVIDED, HOWEVER, THAT THE CONCILIATION 
AND MEDIATION COMMITTEE OF THE COOPERATIVE AND THE APEX 
ORGANIZATIONB TO WHICH THE COOPERATIVE BELONGS SHALL ISSUE A 
CERTIFICATION THAT, AFTER DUE EFFORT, THE CONCILIATION OR 
MEDIATION PROCEEDINGS HAVE FAILED BEFORE ANY PARTY CAN VALIDLY 
FILE A COMPLAINT WITH THE APPROPRIATE BODY.” 
SEC. 16. Chapter XVII of the same Code is hereby amended as follows: 
“Chapter [XVII] XIX 
FINAL PROVISIONS 
ART. [ 1221 151. Electric Cooperatives. - Electric cooperatives shall be covered by this 
Code. However, there shall be a transition period of [three (3) years] ONE (1) YEAR within 
which the [Cooperative Development] Authority and the National Electrification Administration 
shall help and assist electric cooperatives to qualify under this Code[.]: PROVZDED, THAT 
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WHILE THE AUTHORITY WILL HAVE GENERAL SUPERVISION OVER THE 
ELECTRIC COOPERATIVES, PARTICULARLY WITH THEIR INTERNAL AND 
INSTITUTIONAL 
CONCERNS, 
THE 
NATIONAL 
ELECTRIFICATION 
ADMINISTRATION (NEA) WILL MAINTAIN ITS FINANCIAL AND TECHNICAL 
SUPERVISION OF THE ELECTRIC COOPERATIVES. The [Cooperative Development] 
Authority and the National Electrification Administration shall jointly promulgate rules and 
regulations to the end that the provisions of this law are EFFECTIVELY IMPLEMENTED 
AND ARE harmonized with the provisions of Presidential Decree No. 269. 
ART, (1231 152. Regulations. - (1) The [Cooperative Development] Authority may issue 
regulations to implement those provisions of this Code which expressly call for the issuance 
thereof. This paragraph shall not apply to those cases wherein a specific provision of this Code 
expressly designates particular government agencies which shall issue the regulations called for 
by any provision of this Code. 
(2) x x x 
(3) x x x 
(a) x x x  
(b) x x x 
(c) x x x 
(d) x x x 
ART. 11241 153. Penal Provisions - The following acts or omissions affecting 
cooperatives are hereby prohibited: 
(1) The use of the word “cooperative” by any person or of persons or organizations, 
domestic or foreign, unless duly registered as a cooperative under this Code. In case of violation 
hereof, the individual or individuals concerned, or in the case of an organization, its officers and 
directors shall upon conviction, each suffer the penalty of imprisonment [for one (1) year] OF 
NOT LESS THAN TWO (2) YEARS NOR MORE THAN FIVE (5) YEARS and a fine not 
exceeding [One thousand pesos (Pl,OOO.OO)] TWENTY THOUSAND PESOS (P20,OOO.OO) or 
both at the discretion of the court; 
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(2)ANY PERSON WHO WILLFULLY ATTEMPTS IN ANY MANNER TO 
EVADE OR DEFEAT TAX IN VIOLATION OF THE PROVISIONS OF ARTICLES 61 
AND 62 OF THIS CODE SHALL, IN ADDITION TO OTHER PENALTIES PROVIDED 
BY LAW, UPON CONVICTION THEREOF, BE PUNISHED BY A FINE OF NOT LESS 
THAN THIRTY THOUSAND PESOS (P30,OOO.OO) BUT NOT MORE THAN ONE 
HUNDRED THOUSAND PESOS (PlOO,OOO.OO) AND SUFFER IMPRISONMENT OF 
NOT LESS THAN TWO (2) YEARS BUT NOT MORE THAN FOUR (4) 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. 
[2](3) Direct or indirect interference or intervention by any public official or employee into 
the internal affairs of a cooperative of which he is not a member, such as, but not limited to, the 
following: 
(a) Influencing the election or appointment of officers, directors, committee members, and 
employees through public or private endorsement or campaign for or against any person or group 
of persons; 
(b) Requiring prior clearance for any policy or decision within the cooperative; 
(c) Requesting or demanding for the creation of positions or organizational units, or 
recommending any person for appointment, transfer, or removal from his position; or 
(d) Any other acts inimical or adverse to the autonomy and independence of cooperatives. 
In case of violation of any provision of this subsection, the individual or individuals, and in 
the case of organizations, its officers and directors shall, upon conviction by a court, each suffer 
a penalty of not less than [one (1) year] TWO (2) YEARS but not more than five (5) years 
imprisonment or a fine in the amount of not less than [Five thousand pesos (PS,OOO.OO)] 
TWENTY THOUSAND PESOS (P20,000.00), 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. 
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[3](4) A director, officer or committee member who violated the provisions of Article [47] 
46 (liability of directors, officers and committee members), Article [50] 49 (disloyalty of a 
director) and Article [51] 50 (illegal use of confidential information) shall upon conviction suffer 
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a fine of not less than Five thousand pesos (P5,OOO.OO) nor more than Five hundred thousand 
pesos (P500,OOO.OO) or imprisonment of not less than five (5) years but not more than ten (10) 
years or both at the court’s discretion; 
[4](5) 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 (I) year and a fine 
of not less than One thousand pesos (P l,OOO.OO), or both at the discretion of the court.” 
ART. 11251 154. Printing and Distribution. - x x x 
ART. [I261 155. Znterpretation and Construction. - x x x 
ART. [127] 156. Repeals. - Except as expressly provided by this Code, Presidential Decree 
No. 175 and all other laws, or parts thereof, inconsistent with any provision of this Code shall be 
deemed repealed: Provided, however, That nothing in this Code shall be interpreted to mean the 
amendment or repeal of any provision of Presidential Decree No. 269 WITH REGARD TO 
THE ORGANIZATION AND STRUCTURE OF THE NATIONAL ELECTRIFICATION 
ADMINISTRATION (NEA): Provided, further, That the electric cooperatives which qualify 
as such under this Code shall fall under the coverage thereof.” 
ART. [ 1281 157. Transitovy Provisions. - [All cooperatives registered under Presidential 
Decree Nos. 175 and 775, and Executive Order No. 398 shall be deemed registered with the 
Cooperative Development Authority: Provided however, That they shall submit to the nearest 
Cooperative Development Authority office their certificates of registration, copies of their 
articles of incorporation and by-laws, and their latest duly audited financial statements within 
one (1) year from the effectivity of this Act, otherwise, their registration shall be cancelled: 
Provided further, That cooperatives created under Presidential Decree No. 269, as amended by 
Presidential Decree No. 164.5, shall be given three (3) years within which to qualify and register 
with the Authority, Provided finally, That after these cooperatives shall have qualified and 
registered, the provisions of Section 3 and 5 of Presidential Decree No. 1645 shall no longer be 
applicable to the said cooperatives.] 
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(1) ALL COOPERATIVES REGISTERED UNDER REPUBLIC ACT NOS. 6938 
AND 6939 SHALL BE DEEMED REGISTERED WITH THE AUTHORITY: PROWDED, 
THAT ALL COOPERATIVES CREATED UNDER PRESIDENTIAL DECREE NO. 269, 
AS AMENDED BY PRESIDENTIAL DECREE NO. 1645, SHALL BE GIVEN ONE (1) 
YEAR FROM THE EFFECTIVITY OF THIS ACT WITHIN WHICH TO QUALIFY 
AND REGISTER WITH THE AUTHORITY: PROMDED, HOWEVER, THAT 
ELECTRIC COOPERATIVES WHICH HAVE NOT YET CONVERTED AT THE END 
OF THE ONE-YEAR PERIOD PROVIDED FOR BY THIS ACT SHALL BE 
PROHIBITED FROM USING THE WORD “COOPERATIVE” IN THEIR NAMES; 
THEY SHALL INSTEAD BE CALLED “ELECTRIC ASSOCIATIONS” AND SHALL 
CONTINUE TO BE UNDER THE SUPERVISION OF THE NEA: 
PROWDED, 
FURTHER, THAT SUCH ELECTRIC ASSOCIATIONS SHALL HAVE THE OPTION 
TO CONVERT AND REGISTER WITH THE AUTHORITY AT ANY TIME AS 
PROVIDED FOR UNDER THIS ACT: PROUDED, FINALLY, THAT AFTER THESE 
COOPERATIVES 
SHALL 
HAVE 
QUALIFIED 
AND 
REGISTERED, 
THE 
PROVISIONS OF SECTIONS 3 AND 5 OF PRESIDENTIAL DECREE NO. 1645 SHALL 
NO LONGER BE APPLICABLE TO SAID COOPERATIVES. 
(2) THE BOARD OF DIRECTORS OF ELECTRIC COOPERATIVES WHICH 
HAVE NOT YET CONVERTED AND QUALIFIED UNDER REPUBLIC ACT NO’S. 
6938 AND 6939 SHALL WITHIN TWO (2) MONTHS AFTER THE EFFECTIVITY OF 
THIS ACT CREATE AND CONVENE A SPECIAL COMMITTEE WHICH SHALL: (A) 
PREPARE AND DISTRIBUTE TO ALL ITS MEMBERS A PROPOSED ARTICLES OF 
CONVERSION AND BYLAWS OR AN ACCURATE SUMMARY THEREOF; AND (B) 
CONDUCT AN INFORMATION AND EDUCATION CAMPAIGN AMONG ITS 
MEMBERS REGARDING THE PROPOSED CONVERSION: PROVIDED, THAT THE 
SAID COMMITTEE SHALL INCLUDE THE REPRESENTATIVES OF THE 
AUTHORITY, THE NEA, THE LOCAL COOPERATIVE DEVELOPMENT COUNCILS 
(CDCS), THE LOCAL GOVERNMENT UNITS (LGUS), THE COOPERATIVE 
FEDERATIONS 
AND 
UNIONS 
AND 
CONCERNED 
NON 
GOVERNMENT 
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ORGANIZATIONS (NGOs) AND PEOPLES ORGANIZATIONS (POs) IN THE AREA: 
PROVIDED, 
FURTHER, 
THAT THE REPRESENTATIVES 
OF THE CDCS, 
COOPERATIVE FEDERATIONS AND UNIONS, NGOs AND POs SHALL BE CHOSEN 
BY THE RESPECTIVE ORGANIZATIONS FROM THEIR MEMBERS WHO ARE 
ALSO MEMBERS OF THE ELECTFUC COOPERATIVES.” 
SEC. 17. Separability Clause. - If any provision of this Act is subsequently declared 
unconstitutional, the validity of the remaining provisions hereof shall remain in full force and 
effect. 
SEC. 18. Repealing Clause. - The pertinent provisions of the National Internal Revenue 
Code, and all other laws, decrees, orders or regulations or parts thereof, that are inconsistent with 
this Act are hereby repealed or modified accordingly. 
SEC. 19. Effectivity - This Act shall take effect upon its approval: 
Approved, 
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