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FOURTEENTH CONGRESS OF THE REPUBLIC} 
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OF THE PHILIPPINES 
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First Regular Session 
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COMMITTEE REPORT NO. 5 d 
Submitted by the Committees on Cooperatives; Banks, Financial Institutions and 
Currencies; Constitutional Amendments, Revision of Codes and Laws; Finance; Urban 
Planning, 
Housing 
and 
Resettlement; 
and 
Ways 
and 
Means 
on 
MAY - 
- 7ng_R 
Re 
Senate Bill No. . 2264 
its approval in substitution of Senate Bill Nos. 184, 428, 444, 1147, 
Sponsor: 
Senator Zubiri 
MR. PRESIDENT: 
The Committees on Cooperatives; Banks, Financial Institutions and Currencies; 
Constitutional Amendments, Revision of Codes and Laws; Finance; Urban Planning, 
Housing and Resettlement; and Ways and Means to which were referred: 
Senate Bill No. 184, introduced by Senator Biazon, entitled: 
An Act 
Amending Republic Act No. 6938, Otherwise Known as the Cooperative Code of the 
Philippines 
Senate Bill No. 428, introduced by Senator Ejercito Eshada, entitled 
An Act 
to Promote and Encourage the Organization and Sustained Development of 
Cooperatives as Instruments for the Fulfillment of the Basic Need of Housing for the 
Homeless and Underprivileged and Amending for that Purpose Republic Act No. 
6938, the Cooperative Code of the Philippines, and for Other Purposes 
Senate Bill No. 444, 
to Strengthen 
Estrada, entitled: 
Efficient and Effective Program 
Implementation and Organizational Management, and Align the Direction of 
Existing and Future Cooperatives Towards People Empowerment and Balanced 
Sustained Economic Development of All Cooperatives, Amending for that Purpose 
Republic Act 6938, The Cooperative Code of the Philippines, and for Other 
Purposes 


Senate Bill No. 1147, inhoduced by Senator Pimentel Jr., entitled 
An Act 
Expanding Countryside Credit Through Cooperative Banks and Encouraging the 
Growth and Development of Cooperative Banks by Amending Chapter XI11 of 
Republic Act No. 6938, Otherwise known as the Cooperative Code of the Philippines 
and for Other Purposes 
Senate Bill No. 1553, introduced by Senator Zubiri, entitled 
An Act 
Amending the Cooperative Code of the Philianines 
Cooperative Code of 2007 
i 
.. 
And Senate Bill No. 1924, introduced by Senator Manny Villar, entitled 
An Act 
To Establish A Fund Known As The Transport Cooperatives Loan Fund To 
Finance The Acquisition Of Vehicles By Transportation Cooperatives 
have considered the same and have the honor to report them back to the Senate with the 
recommendation that the attached bill, Senate Bill No: 2 2 h; , prepared by the 
Committees, entitled: 
An Act 
Amending the Cooperative Code of the Philippines to be Known as the Philippine 
Cooperative Code of 2008 
be approved in substitution of Senate Bill Nos. 184,428,444, 
Senators Biazon, Ejercito Estrada, Pimentel Jr., Zubiri, and Villar as authors. 


Respectfully submitted: 
Chairmen: 
IGUEL I?. ZUBIRI 
ttees on Cooperatives; 
an Planning, Housing and Resettlement 
Member: Committees on Constitutional 
Amendments, Revisions and Laws; Finance; 
Ways and Means 
SEN. FRANCIS G. ESCLJDERO 
Committee on Ways and Means 
Member: Finance; Urban Planning, 
Housing and Resettlement 
SEN.EDG u& 
0 J . A  GARA 
Committee on Banks, Financial 
Institutions and Currencies 
Vice Chairman: Committees on 
Cooperatives, Finance 
Member: Committees on Constitutional 
Amendments, Revision of Codes and Laws; 
Urban Planning, Housing and Resettlement; 
Banks, Financial Institutions and Currencies 
Member: Committees on Constitutional 
Amendments, Revision of Codes and Laws 
Urban Planning, Housing and Resettlement; 
Ways and Means 
and Laws 
Member: Committees on Cooperatives 
Banks, Financial Institutions and 
Currencies; Finance; Ways and Means 


n 
Vice-Chairmen: 
S E N ~ G O R I O  
B. HONASAN IJ 
Comm ttee on Cooperatives 
Mem er: Finance; Urban Planning, 
Hous ng and Resettlement; 
Ways and Means 
N 
Constitutional Amendments, Revision of 
Codes and Laws; Finance; Urban Planning; 
Housing and Resettlement 
S
E
P
I
 
REVILLA Jr. 
Com ittee 
rban Planning, Housing 
an 
esettl 
ent 
Member: Committees on Cooperatives; 
Banks, Financial Institutions and 
Currencies; Finance; Ways and Means 
SEN. J ~ K E R  
P. ARROYO 
Committee on Finance 
Member: Committees on Constitutional 
Amendments, Revisions and Laws; 
Ways and Means 
NTIAGO 
Committee dh Finance 
Member: Committees on Banks, Financial 
Institutions and Currencies; Constitutional 
Amendments, Revision of Codes and Laws 


Members: 
Committees on CUoperative; Constitutional 
Amendments, Revision of Codes and Laws; 
Finance; -- 
e& 
A o m m i t t e e s  on Cooperatives; 
Constitutional Amendments, Revision of 
Codes and Laws; Finance; Urban Planning, 
Housing and Resettlement; Ways and Means 
Instituti&sdnd Currencies; Finance; 
Ways and Means 
___- - - 
Committees on Cooperatives; Banks, 
Financial Institutions and Currencies; 
Constitutional Amendments, 
Revision of Codes and Laws; Finance; 
Urban Planning, Housing and Resettlement; 
Ways andMeans A 
SEN. ALAN PETER S. CAYETANO 
Committees on Banks, Financial Institutions 
And Currencies; Urban Planning, Housing 
and Resettlement; Ways and Means 
I 
Institutions and currencies; Constitutional 
Amendments, Revision of Codes and Laws; 
Finance; Ways and Means 
SEN. ANTONIO F. TRTLLANES IV 
Committees on Finance; Ways and Means 
A 
Resettlement 


Members: 
SEN. COMPARERA “PIA” S. CAYETANO 
Committees on Cooperative; Constitutional 
Amendments, Revision of Codes and Laws; 
Finance; 
Constitutional Amendments, 
SEN. LOREN B. LEGARDA 
Committees on Cooperatives; Banks, 
Financial Institutions and Currencies; 
Revision of Codes and Laws; Finance; 
Urban Planning, Housing and Resettlement; 
Ways and Means 
SEN. M.A. MADRIGAL 
Committees on Cooperatives; 
Constitutional Amendments, Revision of 
Codes and Laws; Finance; Urban Planning, 
I-Ionsing and Resettlement; Ways and Means 
SEN. PANFILO M. LACSON 
Committees on Banks, Financial 
Institutions and Currencies; Finance; 
Ways and Means 
SEN. MANUEL “LITO” LAPID 
Committees on Finance; Ways and Means 
SEN. ALAN PETER S. CAYETANO 
Committees on Banks, Financial Institutions 
And Currencies; Urban Planning, Housing 
and Resettlement; Ways and Means 
SEN. MAR A. ROXAS 
Committees on Banks, Financial 
Institutions and Currencies; Constitutional 
Amendments, Revision of Codes and Laws; 
Finance; Ways and Means 
S E ~ .  
A~TONIO F. TRILLANES IV 
Committees on Finance; Ways and Means 
SEN. BENIGN0 S. AQUINO I11 
Committee on Urban Planning, Housing and 
Resettlement 


Ex-Officio 
Members : 
S N. PANGILINAN 
esident Pro- Tempore 
V 
4 
SEN. 
UILINO Q. PIMENTEL, JR. 
@ Minority Leader 
HON. MANNY VILLAR 
Senate President 
Senate of the Philippines 
Pasay City 


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FOURTEENTH CONGRESS OF THE 
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REPUBLIC OF THE PHILIPPINES ) 
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First Regular Session 
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SENATE 
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S.No. ' 2264 
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Introduced by Senators BIAZON, ESTRADA, PIMENTEL, ZUBIRI, and VILLAR 
AN ACT 
AMENDING THE COOPERATIVE CODE OF THE PHILIPPINES TO BE KNOWN AS 
THE "PHILIPPINE COOPERATIVE CODE OF 2008" 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Articles 1,2, 3, 4 and 5 of Chapter I on General Concepts and 
Principles of Republic Act No. 6938, otherwise known as the "Cooperative Code of the 
Philippines" are hereby amended to read as follows: 
ARTICLE 1. Tifle - This Act shall be known as the [Cooperative Code of the 
Philippines".] PHILIPPINE COOPERATIVE CODE OF 2008. 
ART. 2. Declaration of Policy. - x x x 
ART. 3. General Concepfs - A cooperative is aN AUTONOMOUS AND duly 
registered association of persons, with a common bond of interest, who have voluntarily 
joined together to achieve THEIR [a lawful common] social, [or] economic [end], AND 
CULTURAL NEEDS AND ASPIRATIONS BY making equitable contributions to the 
capital required, PATRONIZING THEIR PRODUCTS AND SERVICES and accepting a 
fair share of the risks and benefits of the undertaking in accordance with universally 
accepted cooperative principles. 
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 ARE NOT LIMITED TO, the 
following: 
(1) [Open and Voluntary] VOLUNTARY AND 
OPEN Membership - 
[Membership in a cooperative shall be voluntary and available to all individuals 


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regardless of their social, political, racial or religious background or beliefs.] 
COOPERATIVES ARE VOLUNTARY ORGANIZATIONS, OPEN TO ALL PERSONS 
ABLE 
TO 
USE 
THEIR 
SERVICES AND 
WILLING 
TO 
ACCEPT 
THE 
RESPONSIBILITIES OF MEMBERSHIP, WITHOUT GENDER, SOCIAL, RACIAL, 
CULTURAL, POLITICAL, OR RELIGIOUS DISCRIMINATION. 
(2) 
Democratic MEMBER Control - Cooperatives are democratic 
organizations[.] Dheir affairs shall be administered by persons elected or appointed in a 
manner agreed upon by the members. 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.] 
THAT ARE CONTROLLED BY THEIR MEMBERS WHO ACTIVELY 
PARTICIPATE IN SETTING THEIR POLICIES AND MAKING DECISIONS. MEN AND 
WOMEN SERVING AS ELECTED REPRESENTATIVES, DIRECTORS OR OFFICERS 
ARE ACCOUNTABLE TO THE MEMBERSHIP. IN PRIMARY COOPERATIVES, 
MEMBERS HAVE EQUAL VOTING RIGHTS OF ONE-MEMBER, ONE-VOTE. 
COOPERATIVES AT 
OTHER LEVELS ARE ORGANIZED IN THE SAME 
DEMOCRATIC MANNER. 
(3) [Limited lnterest on Capital - Share capital 
shall 
receive a strictly 
limited rate of interest.] MEMBER ECONOMIC PART/C/PAT/ON - MEMBERS 
CONTRIBUTE EQUITABLY TO, AND DEMOCRATICALLY CONTROL, THE CAPITAL 
OF THEIR COOPERATIVE. AT LEAST PART OF THAT CAPITAL IS THE COMMON 
PROPERTY OF 
THE 
COOPERATIVE. THEY 
SHALL 
RECEIVE LIMITED 
COMPENSATION OR LIMITED INTEREST, IF ANY, ON CAPITAL SUBSCRIBED 
AND PAID AS A CONDITION OF MEMBERSHIP. MEMBERS ALLOCATE 
SURPLUSES FOR ANY OR ALL OF THE FOLLOWING PURPOSES: DEVELOPING 
THE COOPERATIVE BY SETTING UP RESERVES, PART OF WHICH AT LEAST 
SHOULD BE INDIVISIBLE; BENEFITTING MEMBERS IN PROPORTION TO THEIR 
PATRONAGE OF THE COOPERATIVE’S BUSINESS, AND SUPPORTING OTHER 
ACTIVITIES APPROVED BY THE MEMBERSHIP. 
(4) [Division Of Net 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 andlor patronage refund in the manner provided in this Code and in 
the articles of cooperation and by-laws.] 
AUTONOMY AND /NDEP€NDENCE - 
COOPERATIVES 
ARE 
AUTONOMOUS, 
SELF-HELP 
ORGANIZATIONS 
CONTROLLED BY THEIR MEMBERS. IF THEY ENTER INTO AGREEMENTS WITH 
OTHER ORGANIZATIONS, INCLUDING GOVERNMENT, OR RAISE CAPITAL FROM 
EXTERNAL SOURCES, THEY SHALL DO SO ON TERMS THAT ENSURE 
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DEMOCRATIC CONTROL 
OF THEIR 
MEMBERS AND 
MAINTAIN THEIR 
COOPERATIVE AUTONOMY. 
(5) [Cooperative Education - All cooperatives shall make provision for the 
education of their members, officers and employees and of the general public based on 
the principles of cooperation.] 
EDUCATION, TRAINING AND lNFORMATlON - 
COOPERATIVES SHALL PROVIDE EDUCATION AND TRAINING FOR THEIR 
MEMBERS, ELECTED AND APPOINTED REPRESENTATIVES, MANAGERS, AND 
EMPLOYEES, SO THAT THEY 
CAN 
CONTRIBUTE 
EFFECTIVELY AND 
EFFICIENTLY TO THE DEVELOPMENT OF THEIR COOPERATIVES. 
(6) Cooperation Among Cooperatives - [All cooperatives, in order to best 
serve the interest of their members and communities, shall actively cooperate with 
other cooperatives at local, national and international levels.] COOPERATIVES SERVE 
THEIR MEMBERS MOST EFFECTIVELY AND STRENGTHEN THE COOPERATIVE 
MOVEMENT BY WORKING TOGETHER THROUGH LOCAL, NATIONAL, REGIONAL 
AND INTERNATIONAL STRUCTURES. 
(7) CONCERN FOR COMMUNlTY - COOPERATIVES WORK FOR THE 
SUSTAINABLE DEVELOPMENT OF THEIR COMMUNITIES THROUGH POLICIES 
APPROVED BY THEIR MEMBERS. 
ART. 5. Definition of Terms -- The following terms shall mean: 
(1) x x x  
(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 by- 
laws[;]: 
PROVIDED, THAT FOR COOPERATIVES WITH 
NUMEROUS AND 
DISPERSED MEMBERSHIP, THE GENERAL ASSEMBLY MAY BE COMPOSED OF 
DELEGATES ELECTED BY EACH SECTOR, CHAPTER OR DISTRICT OF THE 
COOPERATIVE IN ACCORDANCE WITH THE RULES AND REGULATIONS OF THE 
AUTHORITY. 
(3) x x x 
(4) x x x 
(5) x x  x 
(6) x x x  
(7) x x  x 
(8) Cooperative Development Authority REFERS TO the government agency 
in charge of the registration [and], regulation AND PROMOTION FOR THE 
DEVELOPMENT of cooperatives as such, hereinafter referred to as the Authority; 
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(9) Universally Accepfed Principles mean that body of cooperative principles 
adhered to worldwide by cooperatives. 
(IO) 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, TREASURER AND MEMBERS HOLDING 
OTHER POSITIONS AS MAYBE PROVIDED FOR IN THE BY-LAWS. 
(11) SOCIAL AUDIT SHALL REFER TO AN AUDIT INTENDED TO 
DETERMINE HOW WELL THE COOPERATIVE IS ABLE 
TO 
FULFILL 
ITS 
SOCIAL RESPONSIBILITIES TO ITS MEMBERS AND COMMUNITY. 
(12) PERFORMANCE AUDIT SHALL REFER TO AN AUDIT ON THE 
EFFICIENCY AND EFFECTIVENESS OF THE COOPERATIVE AS A WHOLE, ITS 
MANAGEMENT, THE OFFICERS AND/OR ITS VARIOUS RESPONSIBILITY 
CENTERS AS BASIS FOR IMPROVING INDIVIDUAL, TEAM OR OVER-ALL 
PERFORMANCE AND 
FOR 
OBJECTIVELY 
INFORMING THE 
GENERAL 
MEMBERSHIP ON SUCH PERFORMANCE; 
(13) A 
SINGLE-LINE 
OR 
SINGLE-PURP OS€ COOP€RATIVE SHALL 
INCLUDE COOPERATIVE UNDERTAKING ACTIVITIES WHICH ARE RELATED TO 
ITS MAIN LINE OF BUSINESS OR PURPOSE. 
(14) SERVICE COOPERATIVES ARE THOSE WHICH PROVIDE ANY TYPE 
OF SERVICE TO ITS MEMBERS, INCLUDING BUT NOT LIMITED TO, TRANSPORT, 
INFORMATION AND COMMUNICATION, INSURANCE, HOUSING, ELECTRIC, 
HEALTH, SERVICES, EDUCATION, BANKING, SAVINGS AND CREDIT, AND 
BUSINESS PROCESS OUTSOURCING. 
(15) SUBSIDIARYREFERS TO ANY ORGANIZATION ALL OR MAJORITY OF 
WHOSE MEMBERSHIP OR SHAREHOLDERS COME FROM A COOPERATIVE, 
ORGANIZED FOR ANY OTHER PURPOSE DIFFERENT FROM THAT OF, AND 
RECEIVES TECHNICAL, MANAGERIAL AND FINANCIAL ASISTANCE FROM, A 
COOPERATIVE, IN ACCORDANCE WITH THE RULES AND REGULATIONS OF 
THE AUTHORITY. 
(16) FEDERATION OF COOPERATIVES REFERS TO THREE OR MORE 
PRIMARY COOPERATIVES, DOING THE SAME LINE OF BUSINESS, ORGANIZED 
AT THE MUNICIPAL, PROVINCIAL, CITY, SPECIAL METROPOLITAN POLITICAL 
SUBDIVISION, OR ECONOMIC ZONES CREATED BY LAW, REGISTERED WITH 
THE AUTHORITY TO UNDERTAKE BUSINESS ACTIVITIES IN SUPPORT OF ITS 
MEMBERS. 
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(17) REPRESENTATIVE ASSEMBLY REFERS TO A GROUP OF MEMBERS 
TO WHOM THE GENERAL ASSEMBLY HAS DELEGATED ITS POWERS AS 
PROVIDED UNDER ITS BY-LAWS. 
SEC. 2. Articles 6, 7, 9, 10, 11, 12, 14, 16, 18, 20, 23 and 24 of Chapter II on 
Organization and Registration of the same Code are hereby amended as follows: 
ART. 6. [Organization] PURPOSES of Cooperatives. - A cooperative may be 
organized and registered [by at least fifteen (15) persons] for any or all of the following 
purposes: 
(I) x x x  
(2) 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 
(IO) x x x  
(1 1) TO ADVOCATE FOR THE CAUSE OF THE COOPERATIVE MOVEMENT; 
(12) TO ENSURE THE VIABILITY OF COOPERATIVES THROUGH THE 
UTILIZATION OF NEW TECHNOLOGIES; 
(13) TO ENCOURAGE AND PROMOTE SELF-HELP OR SELF-EMPLOYMENT 
AS A DRIVE ENGINE FOR ECONOMIC GROWTH AND POVERTY ALLEVIATION. 
(14) x x x "  
Art. 7. Objectives of a Cooperative. - (1) The primary objective of every 
cooperative is HUMAN BETTERMENT. TOWARDS THIS END, THE COOPERATIVE 
SHALL AIM to: 
(A) 
provide goods and services to its members and thus enable them to attain 
increased income and savings, investments, productivity, and purchasing power, and 
promote among them equitable distribution of net surplus through maximum utilization 
of economies of scale, cost-sharing and risk-sharing; [without, however, conducting 
the affairs of the cooperative for eleemosynary or charitable purposes.] 
[A cooperative shall] 
(B) provide [maximum] OPTIMUM SOCIAL AND economic benefits to its 
members[,]; 
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(C) teach them efficient ways of doing things in a cooperative manner[,]: [and] 
(D) propagate cooperative practices and new ideas in business and 
management; [and] 
ownership in the wealth of the nation[.]; AND 
(E) 
allow the lower income AND LESS PRIVILEGED groups to increase their 
(F) 
COOPERATE WITH THE GOVERNMENT, OTHER COOPERATIVES 
AND PEOPLE-ORIENTED ORGANIZATIONS TO FURTHER THE ATTAINMENT OF 
ANY OF THE FOREGOING OBJECTIVES. 
(2) 
EVERY COOPERATIVE SHALL HAVE AT LEAST ONE (1) MAJOR 
SOCIO-CIVIC UNDERTAKING THAT MUST HAVE A POSITIVE IMPACT ON SUCH 
SOCIAL CONCERNS AS: MEMBERSHIP EDUCATION, ENVIRONMENT, HEALTH, 
DEMOCRACY AND/OR SUCH OTHER ASPECTS OF HUMAN BETTERMENT OR 
EMPOWERMENT. 
ART. 8. Cooperative Not in Restraint of Trade. - xxx 
ART. 9. Cooperative Powers and Capacities. - A cooperative registered under 
this Code shall have the following powers, RIGHTS and capacities: 
sued [in its cooperative name]; 
(1) TO THE EXCLUSIVE USE OF ITS REGISTERED NAME, to sue and be 
(2) x x x  
(3) x x x  
(4) x x x 
(5) x x  x 
(6) x x x  
(7) To FORM SUBSIDIARIES AND join federations or unions, as provided in this 
(8) To AVAIL OF LOANS, BE ENTITLED TO CREDIT'AND TO accept and 
receive grants, donations and assistance from foreign and domestic sources, [;and] 
AND BE PROVIDED ASSISTANCE BY THE AUTHORITY, UPON WRITTEN 
REQUEST, TO BE ABLE TO FULFILL THE DOCUMENTARY REQUIREMENTS FOR 
THE SAID LOANS, CREDIT, GRANTS, 
1. -. DONATIONS AND SIMILAR ASSISTANCE. 
Code; 
(9) TO AVAIL OF ,BASIC 
SERVICES, FACILITIES, AND PREFERENTIAL 
OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE, AND O T H E ~  
LAWS, 
PARTICULARLY THOSE IN THE GRANT OF FRANCHISES, TO ESTABLISH, 
RIGHTS GRANTED TO CO0,PERATIVES UNDER REPUBLIC ACT NO. 7160, 
I,,: i.?vV:+;ll?~ 
5"',i 
,> 5- 
CONSTRUCT, OPERATE AND 'MAINTAIN, FERRIES, WtfAEVES, MARKETS OR 
SLAUGHTERHOUSES AND TO .
.
 
LEASE PUBLIC 
L1 . 
UTILi~IES,; 
, I? . 


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(IO) TO ORGANIZE AND OPERATE SCHOOLS IN ACCORDANCE WITH THE 
EDUCATION ACT AND OTHER PERTINENT LAWS. 
(1 1 )  To exercise such other powers granted by this Code necessary to carry out 
its purpose or purposes as stated in its articles of cooperation. 
ART. 10. Organizjng a Primary cooperative. - Fifteen (15) or more natural 
persons[,] 
who are [citizens of the Philippines] 
OF LEGAL AGE, 
FILIPINO 
CITIZENS, having a common bond of interest and are ACTUALLY residing or working 
in the intended area of operation, may organize a PRIMARY cooperative under this 
Code. PROVIDED, THAT A 
PROSPECTIVE MEMBER OF A 
PRIMARY 
COOPERATIVE MUST HAVE COMPLETED A PRE-MEMBERSHIP EDUCATION 
SEMINAR (PMES) CONDUCTED BY INSTITUTIONS WITH COOPERATIVE 
DEVELOPMENT PROGRAMS ACCREDITED BY THE AUTHORITY. 
ART. 11. Economic Survey. - 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, AMONG OTHERS the 
structure[,] AND purposes [and economic feasibility] of the proposed cooperative [,I: 
PROVIDED, THAT THE STRUCTURE AND ACTUAL STAFFING PATTERN OF THE 
COOPERATIVE SHALL INCLUDE A BOOKKEEPER. PROVIDED, FURTHER, THAT 
THEY SHALL NOT BE ALLOWED TO OPERATE WITHOUT THE NECESSARY 
PERSONNEL AND SHALL ALSO SUBMIT AN ECONOMIC SURVEY, indicating therein 
the area of operation, the size of membership, and other pertinent data ON A FORMAT 
PROVIDED BY THE AUTHORITY. 
ART. 12. Liability.- A cooperative [shall be] DULY registered under this Code[,] 
[with] SHALL HAVE limited liability. 
ART. 13. Term. - x x x 
ART. 14. Articles of Cooperation. - (1) All cooperatives applying for registration 
shall file with the [Cooperative Development] Authority the articles of cooperation 
which shall be signed by each of the organizers and acknowledged by them if natural 
persons, and by the [presidents] CHAIRPERSONS or secretaries, if juridical person, 
before a notary public. 
(2) x x x  
(a) x x x  
(b) x x  x 
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(c) x x x  
(d) x x x  
(e) x x  x 
(9 x x x  
(9) x x x  
(h) x x x  
(3) x x x  
(4) Four (4) copies of each of the proposed articles of cooperation, by-laws, and 
the general statement required under Article 11 of this Code shall be submitted to the 
[Cooperative Development] Authority. 
(5) No cooperative, OTHER THAN A COOPERATIVE UNION AS DESCRIBED 
UNDER ARTICLE 25 AND AN ADVOCACY COOPERATIVE AS DESCRIBED UNDER 
ARTICLE 23 HEREOF, 
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). 
THE AUTHORITY SHALL PERIODICALLY ASSESS THE REQUIRED PAID-UP 
SHARE CAPITAL AND MAY INCREASE IT EVERY FIVE (5) YEARS WHEN 
NECESSARY UPON CONSULTATION WITH THE COOPERATIVE SECTOR. 
ART. 15. By-laws. - 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 (3O)J 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.] 
ART. 17. Certificate ofRegisfration. - x x x 
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ART. 18. Amendment of Articles of Cooperation and By-laws. - 
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 
(2/3)] A THREE-FOURTHS (3/4) vote of all the members with voting rights[,] PRESENT 
AND CONSTITUTING A QUORUM without prejudice to the right of the dissenting 
members to exercise the right to withdraw their membership under Articles 31 and 32. 
The original and amended articles AND/OR BY-LAWS together shall contain all 
provisions required by law to be set out in the articles of cooperation [.I AND BY- 
LAWS. Amendments shall be indicated by underscoring or otherwise appropriately 
indicated the change or changes made and a copy [thereof] OF THE AMENDED 
ARTICLES OR AMENDED BY-LAWS duly certified under oath by the cooperative 
secretary and a majority of the directors stating the fact that said amendment or 
amendments TO THE ARTICLES OF COOPERATION AND/OR BY-LAWS have been 
duly approved by the required vote of the members. All amendments to the articles of 
cooperation AND/OR BY-LAWS shall be submitted to the [Cooperative Development] 
Authority. The amendments shall take effect upon its approval by the [Cooperative 
Development] Authority or within thirty (30) days from the date of filing thereof if not 
acted upon by the Authority for a cause not attributable to the cooperative. 
ART. 19. Contracts Executed Prior to Registration and Effect Thereof - x x 
ART. 20. Division of Cooperatives. - Any registered cooperative may, by a 
resolution approved by a vote of [two-thirds (2/3) of the members eligible to vote at a 
general assembly meeting,] THREE-FOURTHS (3/4) OF ALL THE MEMBERS WITH 
VOTING RIGHTS, PRESENT AND CONSTITUTING A QUORUM, resolve to divide 
itself into two (2) or more cooperatives. The procedure for such division shall be 
prescribed in the regulations of the [Cooperative Development] Authority. The new 
cooperatives shall become legally established upon registration with the Authority: 
Provided, That all the requirements set forth in this Code have been complied with by 
the new cooperatives: Provided, further, That no division of a cooperative in fraud of 
creditors shall be valid. 
ART. 21. Merger and Consolidation of Cooperatives. - (1) Two (2) or more 
cooperatives may merge into [a] ONE cooperative[s] or may consolidate into a new 
single cooperative which shall be the consolidated cooperative. 
(2) No merger or consolidation shall be valid unless approved by [two-thirds 
(213) of all the members eligible to vote] A THREE-FOURTHS (314) VOTE OF ALL 
THE MEMBERS WITH VOTING RIGHTS, PRESENT AND CONSTITUTING A 
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QUORUM [oq IN each of the constituent cooperatives at separate general assembly 
meetings. The dissenting members shall have the right to exercise their right to 
withdraw their membership pursuant to Articles 30[1] and 31[2]. 
(3) The [Cooperative Development] Authority shall issue the guidelines 
governing the procedure of merger or consolidation of cooperatives. In any case, the 
merger or consolidation shall be effective upon the issuance of the certificate of merger 
or consolidation by the [Cooperative Development] Authority. 
ART. 22. Effects of Merger and Consolidation. - x x x 
ART. 23. Types and Categories of Cooperatives. - (1) Types of Cooperatives. 
- Cooperatives may fall under any of the following types: 
(a) ADVOCACY COOPERATIVE - IS A PRIMARY COOPERATIVE WHICH 
PROMOTES AND ADVOCATES COOPERATIVISM AMONG ITS MEMBERS AND 
THE PUBLIC THROUGH SOCIALLY-ORIENTED PROJECTS, EDUCATION AND 
TRAINING, 
RESEARCH 
AND 
COMMUNICATION, AND 
OTHER 
SIMILAR 
ACTIVITIES TO REACH OUT TO ITS INTENDED BENEFICIARIES. 
(b) AGRARlAN REFORM COOPERATlVE - IS ONE WHOSE MEMBERS 
ARE MARGINAL FARMERS WHERE THE MAJORITY THEREOF ARE AGRARIAN 
REFORM BENEFICIARIES ORGANIZED FOR THE PURPOSE OF DEVELOPING 
AN APPROPRIATE SYSTEM OF LAND TENURE, LAND DEVELOPMENT, LAND 
CONSOLIDATION OR LAND MANAGEMENT IN AREAS COVERED BY AGRARIAN 
REFORM; 
(c) Consumers Cooperative is one the primary purpose of which is to procure 
and distribute commodities to members and non-members; 
(d) COOPERATlVE BANK IS ONE ORGANIZED UNDER THIS CODE, THE 
PRIMARY PURPOSE OF WHICH IS TO PROVIDE A WIDE RANGE OF FINANCIAL 
SERVICES TO 
COOPERATIVES AND 
THEIR 
MEMBERS. 
IT 
INCLUDES 
COOPERATIVE RURAL BANKS; 
(e) CREDlT COOPERATIVE IS ONE THAT PROMOTES AND UNDERTAKES 
SAVINGS AND LENDING SERVICES among its members [and create]. IT 
GENERATES A COMMON POOL OF funds in order to PROVIDE FINANCIAL 
ASSISTANCE AND OTHER SERVICES TO ITS MEMBERS [grant loans] for 
productive and provident purposes; 
(9 DAIRY COOPERATIVE - IS ONE WHOSE MEMBERS ARE ENGAGED IN 
THE PRODUCTION OF FRESH MILK WHICH MAY BE PROCESSED AND/OR 
MARKETED AS DAIRY PRODUCTS; 
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(g) EDUCATION COOPERATIVE - IS A COOPERATIVE WHOSE PRIMARY 
PURPOSE IS TO OWN AND OPERATE LICENSED EDUCATIONAL INSTITUTIONS, 
NOTWITHSTANDING THE PROVISIONS OF THE EDUCATION ACT; 
(h) ELECTRIC COOPERATlVE- IS A SERVICE COOPERATIVE SET UP FOR 
POWER GENERATION, TRANSMISSION AND FINAL DISTRIBUTION TO ITS 
HOUSEHOLD MEMBERS; 
(i) FISHERMEN COOfERATlVE - IS ONE ORGANIZED BY MARGINALIZED 
FISHERMEN IN LOCALITIES WHOSE PRODUCTS ARE MARKETED EITHER AS 
FRESH GOODS OR AS PROCESSED PRODUCTS; 
(j) HEALTH SERVICES COOPERATIVE- IS A SERVICE COOPERATIVE SET 
UP TO PROVIDE MEDICAL, DENTAL CARE, AND OTHER HEALTH SERVICES. 
(k) HOUSING COOPERATIVE - IS A SERVICE COOPERATIVE ENGAGED IN 
ASSISTING OR PROVIDING ACCESS TO HOUSING FOR THE BENEFIT OF ITS 
REGULAR MEMBERS WHO ACTIVELY PARTICIPATE IN THE SAVINGS PROGRAM 
FOR HOUSING. IT IS CO-OWNED AND DEMOCRATICALLY CONTROLLED BY ITS 
MEMBERS; 
(I) lNSURANCE COOPERATlVf - IS ONE ENGAGED IN THE BUSINESS OF 
INSURING LIFE AND PROPERTY OF COOPERATIVES AND THEIR MEMBERS: 
(m) Marketing Cooperative is one which engages in the supply of production 
inputs to members and markets their products; 
(n) Multi-purpose Cooperative is one which combines two (2) or more of the 
business activities of these different types of cooperatives; 
ANY NEWLY ORGANIZED PRIMARY COOPERATIVE MAY BE REGISTERED 
AS MULTI-PURPOSE COOPERATIVE ONLY AFTER COMPLIANCE WITH THE 
MINIMUM REQUIREMENTS FOR MULTIPURPOSE COOPERATIVES SET UNDER 
THIS CODE; 
(0) Producers Cooperative is one that undertakes joint production whether 
agricultural or industrial; 
(p) 
TRANSPORT 
COOPERATIVE - 
TRANSPORTATION 
SERVICE 
COOPERATIVES INCLUDE LAND, SEA AND AIR TRANSPORTATION FOR 
PASSENGER OR CARGO ORGANIZED UNDER THE PROVISIONS OF THIS CODE; 
(4) OTHER TYPES OF COOPERATIVE AS MAY BE DETERMINED BY THE 
AUTHORITY. 
(2) Categories of Cooperatives - xxx 
(a) x x x  
(i) x x x  
(ii) x x x 
(iii) x x x 
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(b) x x x 
ART. 24. FUNCTlONS OF A Federation of Cooperatives. - [(I)] A federation 
of cooperatives [, whose members are primary andlor secondary cooperatives with 
single line or multi-purpose business activities, may be registered under this Code for 
any or all oq SHALL UNDERTAKE the following [purposes] FUNCTIONS: 
(a) [Primary Purpose -1 To carry on any cooperative enterprise authorized under 
Article 6[;] THAT COMPLEMENTS, AUGMENTS, OR SUPPLEMENTS BUT DOES 
NOT CONFLICT, COMPETE WITH, NOR SUPPLANT THE BUSINESS OR 
ECONOMIC ACTIVITIES OF ITS MEMBERS; 
(b) [Secondary Purpose - (i)] 
(c) 
[(ii)] x x x 
(d) [(iii)] x x x 
(e) [Wl x x x 
0 @)I x x x 
(9) 
[(vi)l x x x 
(h) 
[(vii)] x x x 
[ (2) Registered cooperatives may organize a federation at the provincial, city, 
regional, and national levels according to the type of business carried on.] 
ART. 25. Cooperative Unions. - x x x 
SEC. 3. Articles 26, 27, 28, 29, 30 and 31 of Chapter 111 on Membership of the 
same Code are hereby renumbered and amended to read as follows: 
[ART. 26. Who May Be Members of Cooperatives. - Any natural person, who 
is a citizen of the Philippines, a cooperative, or non-profit organization with juridical 
personality shall be eligible for membership in a cooperative if the applicant meets the 
qualifications prescribed in the bylaws: Provided, That, that only natural persons may 
be admitted as members of a primary cooperative. ] 
ART. 26. Kinds of Membership. - x x x 
A regular member is one WHO HAS COMPLIED WITH ALL THE MEMBERSHIP 
REQUIREMENTS AND [who is] entitled to all the rights and privileges of membership. 
An associate member is one who has no right to vote nor be voted upon and shall be 
entitled only to such rights and privileges as the by-laws may provide: PROVIDED, 
THAT, AN ASSOCIATE MEMBER WHO MEETS THE MINIMUM REQUIREMENTS 
OF REGULAR MEMBERSHIP, CONTINUES TO PATRONIZE THE COOPERATIVE 
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FOR ONE (7) YEAR, AND INTENDS TO BE A MEMBER SHALL BE CONSIDERED 
AS ONE. 
ART. 27. Government Officers 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. 
(2) xxx 
[(3) Any government employee OR OFFICIAL may, in the discharge of his duties 
as 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. 1 
ART. 28. Application. - 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. FOR 
THIS PURPOSE, THE GENERAL ASSEMBLY MAY OPT TO CREATE AN APPEAL 
AND GRIEVANCE COMMITTEE. THE MEMBERS OF THE COMMITTEE SHALL 
SERVE FOR A PERIOD OF ONE (1) YEAR AND SHALL DECIDE APPEALS ON 
MEMBERSHIP APPLICATION WITHIN THIRTY DAYS UPON RECEIPT THEREOF. IF 
THE COMMITTEE FAILS TO DECIDE WITHIN THE PRESCRIBED PERIOD, THE 
APPEAL IS DEEMED APPROVED IN FAVOR OF THE APPLICANT. 
ART 29. Liability of Members.- x x x 
ART. 30. Termination of Membership. - (I) A member of a cooperative may, for 
any VALID reason, withdraw his membership from the cooperative by giving a sixty- 
(60) day notice to the board of directors. SUBJECT TO THE BY-LAWS OF THE 
COOPERATIVE, mthe withdrawing member shall be entitled to a refund of his share 
capital contribution and all other interests in the cooperative: Provided, That such 
refund shall not be made if upon such payment the value of the assets of the 
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cooperative would be less than the aggregate amount of its debts and liabilities 
exclusive of his share capital contribution. 
(2) The death, insanity, insolvency or dissolution of a member shall be 
considered an automatic termination of membership. HOWEVER, IN THE CASE OF 
THE DEATH OR INSANITY OF A HOUSING AND AGRARIAN REFORM 
BENEFICIARY-MEMBER OF A COOPERATIVE, THE NEXT OF KIN MAY ASSUME 
THE DUTIES AND RESPONSIBILITIES OF THE ORIGINAL MEMBER. 
(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 for any of the following 
causes: 
(a) 
When a member has not patronized ANY OF the services of the 
cooperative for an unreasonable period of time as may be fixed 
BEFOREHAND by the board of directors; 
(b) 
x x x  
(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 FROM RECEIPT OF [after] the decision [is 
promulgated] to the general assembly AS PROVIDED UNDER ARTICLE 28. [whose 
decision therein, whether in a general or special session, shall be final. Pending a 
decision by the general assembly, the membership remains in force.] 
ART. 31. Refund of Interests. - x x x 
SEC. 4. Articles 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 
50 and 51 of Chapter IV on Administration of the same Code are hereby renumbered 
and amended to read as follows: 
ART. 32. Composition of the General Assembly. - x x x 
ART. 33. Powers of the General Assembly. - x x x 
(1) x x x  
(2) To elect or appoint the members of the board of directors, and to 
remove 
them for cause[;]. HOWEVER, IN THE CASE OF THE ELECTRIC COOPERATIVES 
REGISTERED UNDER THIS CODE, ELECTION OF THE MEMBERS OF THE 
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BOARD SHALL BE HELD IN ACCORDANCE WITH THE ADOPTED BY-LAWS OR 
ELECTION GUIDELINES OF SUCH ELECTRIC COOPERATIVE; AND 
(3) To approve developmental plans of the cooperative[; and]. 
[(4) Such other matters requiring a two-thirds (213) of all the members of the 
general assembly, as provided in this Code.] 
SUBJECT TO OTHER PROVISIONS OF THIS CODE AND ONLY FOR 
PURPOSES OF PROMPT AND INTELLIGENT DECISION-MAKING, THE GENERAL 
ASSEMBLY MAY, BY A THREE-FOURTHS (3/4) VOTE OF ALL ITS MEMBERS WITH 
VOTING RIGHTS, PRESENT AND CONSTITUTING A QUORUM, DELEGATE SOME 
OF ITS POWERS TO THE REPRESENTATIVE ASSEMBLY. 
THESE POWERS 
SHALL 
BE 
ENUMERATED UNDER 
THE 
IMPLEMENTING RULES AND 
REGULATIONS OF THIS ACT. 
ART. 34. Meetings. - (1) A regular meeting 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] WHO ARE ENTITLED TO 
VOTE at their official addresses at least two (2) weeks prior to the meeting, unless a 
different period is required in the by-laws. 
Whenever necessary, a special meeting of the general assembly may be 
called at any time by a majority vote of the board of directors or [in the cases specified] 
AS PROVIDED FOR in the by-laws: Provided, That at least one (1) week written 
notice shall be sent to all members WHO ARE ENTITLED TO VOTE. 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 per centurn (10%) of the total members WHO ARE ENTITLED TO VOTE 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 (10%) of all the 
members of the cooperative WHO ARE ENTITLED TO VOTE, and for good cause 
shown, [may] SHALL 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. 
(2) 
(3) In the case of a newly approved cooperative, a special general assembly 
shall be called, AS FAR AS PRACTICABLE, within ninety (90) days from such 
approval. 
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(4) The Authority may call a special meeting of the cooperativeI:] [(a)] [Flfor the 
purpose of reporting to the members the result of any [audit,] examination, or other 
investigation of the cooperative affairs ordered or made by [him; or] THE AUTHORITY. 
[(b) When the cooperative fails to hold an annual general assembly during the 
period required for the purpose of enabling the members to secure any information 
regarding the affairs of the cooperative and benefits that they are entitled to receive 
pursuant to this Code.] 
(5) x x x 
ART. 35. Quorum. - [Unless otherwise provided in the by-laws,] [a] A quorum 
shall consist of AT LEAST twenty-five per centurn (25%) of all the members entitled to 
vote. IN THE CASE OF COOPERATIVE BANKS AND ELECTRIC COOPERATIVES 
REGISTERED UNDER THIS CODE, A QUORUM SHALL BE AS PROVIDED IN 
THEIR BY-LAWS. 
ART. 36. Voting System. - (I) Each member of a primary cooperative shall 
have only one (1) vote. THE VOTING RIGHTS OF MEMBERS OF SECONDARY OR 
TERTIARY 
COOPERATIVES 
SHALL 
BE 
PROVIDED 
FOR 
UNDER 
THE 
IMPLEMENTING RULES AND REGULATIONS OF THIS ACT. [A secondary or tertiary 
cooperative shall have voting rights as delegate of members-cooperatives, but such 
cooperatives shall have only five (5) votes. The votes cast by the delegates shall be 
deemed as votes cast by the members thereof.] 
[(2) No voting agreement, or other device to evade the one-member-one-vote 
provision except as provided under subsection (1) hereof shall be valid. 3) No member 
of a primary cooperative shall be permitted to vote by proxy [unless provided for 
specifically in the bylaws of the cooperative.] 
However, the by-laws of a cooperative other than a primary may provide for 
voting by proxy. Voting by proxy means allowing a delegate of a cooperative to 
represent or vote in behalf of another delegate of the same cooperative. 
ART. 37. Composition AND TERM of the Board of Directors. - UNLESS 
OTHERWISE PROVIDED IN THE BY-LAWS, the [conduct] DIRECTION and 
management of the affairs of a cooperative shall be vested in a board of directors 
which shall be composed of not less than five (5) nor more than fifteen (15) members 
elected by the general assembly for a term fixed in the bylaws but not exceeding a 
term of two (2) years and shall hold office until their successors are duly elected and 
qualified, or until duly removed FOR CAUSE. [However, no director shall serve for 
more than three (3) consecutive terms.] 
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ART. 38. Powers of the Board of Directors. - The board of directors OF 
COOPERATIVES SHALL BE RESPONSIBLE FOR THE STRATEGIC PLANNING, 
DIRECTION-SETTING AND POLICY-FORMULATION ACTIVITIES. [shall direct and 
supervise the business, manage the property of the cooperative and 
may, by 
resolution, exercise all such powers of the cooperative as are not reserved for the 
general assembly under this Code and the bylaws.] 
ART. 39. Directors. - (1) x x x 
(2) x x x  
(3) THE MEMBERS OF THE BOARD OF DIRECTORS SHALL NOT HOLD ANY 
OTHER POSITION DIRECTLY INVOLVED IN THE DAY TO DAY OPERATION AND 
MANAGEMENT OF THE COOPERATIVE. 
ART. 40. Meeting of the Board AND Quorum R€QU/R€M€NT. - (1) IN THE 
CASE OF PRIMARY COOPERATIVES, [Rlregular meetings of the board of directors 
[of every cooperative] shall be held AT LEAST ONCE A MONTH [monthly unless the 
by-laws provide otherwise.] 
(2) Special meetings of the board of directors may be held at any time upon the 
call of the [President] CHAIRPERSON OR A MAJORITY OF THE MEMBERS OF THE 
BOARD [or as provided in the bylaws], PROVIDED, THAT NOTICES OF MEETING 
SPECIFYING THE AGENDA OF THE SPECIAL MEETING SHALL BE GIVEN TO ALL 
MEMBERS OF THE BOARD AT LEAST ONE (1) WEEK BEFORE THE SAID 
MEETING. 
(3) x x x  
(4) x x x  
ART. 41. Vacancy in the Board of Directors.- x x x 
ART. 42. Officers of the 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] the by-laws[.] OF THE COOPERATIVE. 
All officers shall serve during good behavior and shall not be removed except for a 
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 officer. No two (2) or more persons with relationships up to the [third] 
SECOND civil degree of consanguinity or affinity NOR SHALL ANY PERSON 
ENGAGED IN A BUSINESS SIMILAR TO THAT OF THE COOPERATIVE OR WHO IN 
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ANY OTHER MANNER HAS INTERESTS IN CONFLICT WITH THE COOPERATIVE 
shall serve as elective or appointive officer[s] in the same [board] COOPERATIVE. 
ART. 43. CommiffeeS of Cooperatives. - (1) x x x 
(2) 
The by-laws shall provide for the creation of an audit, [committee,] 
ELECTION, MEDIATION AND CONCILIATION, ETHICS, AND SUCH OTHER 
COMMITTEES AS MAY BE NECESSARY FOR THE CONDUCT OF THE AFFAIRS 
OF THE COOPERATIVE. THE MEMBERS OF BOTH THE AUDIT AND ELECTION 
COMMITTEES SHALL BE ELECTED BY THE GENERAL ASSEMBLY AND THE 
REST SHALL BE APPOINTED BY THE BOARD. [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. IT SHALL HAVE THE POWER AND 
DUTY TO 
CONTINUOUSLY MONITOR THE ADEQUACY AND EFFECTIVENESS OF THE 
COOPERATIVE’S 
MANAGEMENT 
CONTROL 
SYSTEM 
AND 
AUDIT 
THE 
PERFORMANCE OF THE COOPERATIVE AND ITS VARIOUS RESPONSIBILITY 
CENTERS. 
Unless otherwise provided in the by-laws, the board in case of A vacancy in 
[said] IN THE committees, may [cause] CALL 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. 44. Functions, [and] Responsibilities AND TRAINING REQUIREMENTS 
of Directors, Officers and Committee Members. - The functions and responsibilities 
of the directors, officers and committee members shall be IN ACCORDANCE WITH 
THE RULES AND REGULATIONS ISSUED BY THE AUTHORITY. [OR as prescribed 
in detail in the bylaws 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 AND MANAGEMENT STAFF 
SHALL BE REQUIRED TO UNDERGO TRAININGS TO BE CONDUCTED BY 
INSTITUTIONS WITH 
COOPERATIVE 
DEVELOPMENT 
PROGRAMS 
DULY 
ACCREDITED BY THE AUTHORITY. 
ART. 45. Liability of Directors, Officers and Commitfee Members. - x x x 
When a director, officer or committee member attempts to acquire or acquires, in 
violation of his duty, any interest or equity adverse to the cooperative in respect to any 
matter which has been reposed in him in confidence, he shall, as a trustee for the 


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cooperative, be liable for damages and SHALL BE ACCOUNTABLE for double the 
profits which otherwise would have accrued to the cooperative. 
ART. 46. Compensation. - x x x 
ART. 47. Dealings of Directors, Officers or Committee Members. - 
A 
contract of the cooperative with one (1) or more of its directors, officers, committee is 
voidable, at the option of [such] THE cooperative, unless all the following conditions are 
present: 
That the presence of such director in the board meeting [in which] WHEREIN 
(1) 
(2) 
x x x  
(3) x x x  
(4) x x x  
Where any of the first two conditions set forth in the preceding paragraph is absent 
in the case of a contract with a director, such contract may be ratified by a [two-thirds 
(2/3)] 
THREE-FOURTHS (3/4) vote of all the members with voting rights, PRESENT 
AND CONSITUTING A QUORUM in a meeting called for the purpose; Provided, That 
full disclosure of the adverse interest of the directors involved is made at such meeting, 
and that the contract is fair and reasonable under the circumstances. 
the contract was approved was not necessary to constitute a quorum for such meeting, 
ART. 48. Disloyalty of a Director. - A director who, by virtue of his office, 
acquires for himself an opportunity which should belong to the cooperative shall be 
liable for damages and must account for double the profits that otherwise would have 
accrued to the cooperative by refunding the same, unless his act has been ratified by a 
[two-thirds (2/3)] THREE-FOURTHS (3/4) vote of all the members with voting rights 
PRESENT AND CONSTITUTING A QUORUM. This provision shall be applicable, 
notwithstanding the fact that the director used his own funds in the venture. 
ART. 49. Illegal Use of Confidential Information. - (1) A director or officer, or 
an associate of a director or officer, who, [in connection with a transaction relating to 
shares of a cooperative or a debt obligation of a cooperative and] for his benefit or 
advantage or that of an associate, makes use of a confidential information that, if 
generally known might reasonably be expected to ADVERSELY affect THE 
OPERATION AND VIABILITY OF THE COOPERATIVE [materially the value of the 
share or the debt obligation], shall be held: 
Liable to compensate THE COOPERATIVE [any person] for [a] 
direct IossES suffered by that [person as a result of the transaction 
(a) 
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unless the information was known or reasonably should have been 
known to the person at the time of the transaction] COOPERATIVE 
AS A RESULT OF THE ILLEGAL USE OF INFORMATION; and 
(b) 
x x x  
(2) x x x  
Art. 50. Removal. - An [elective] officer [, director, or committee member] may 
be removed by [a] THREE-FOURTHS (3/4) votes [of two-thirds (2/3) of the voting] OF 
THE REGULAR members present and constituting 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. 
SEC. 5. Articles 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62 and 63 of Chapter V on 
Responsibilities, Rights and Privileges of Cooperatives of the same code are hereby 
renumbered and amended to read as follows: 
ART. 51. Address. - x x x 
ART. 52. Books to be Kept Open. - (1) 
Every cooperative shall have the 
following [open] DOCUMENTS READY AND ACCESSIBLE to its members and 
representatives of the Authority for inspection during reasonable office hours at its 
official address: 
(a) x x x  
(b) x x x  
(c) x x x  
(d) x x x  
(e) x x x 
(9 x x x  
(9) x x x  
(h) x x  x 
(2) The [chairman of the audit committee of a cooperative] ACCOUNTANT OR 
THE BOOKKEEPER OF THE COOPERATIVE shall be responsible for THE 
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 AUDIT COMMITTEE SHALL BE RESPONSIBLE FOR THE CONTINUOUS 
AND PERIODIC REVIEW OF THE BOOKS AND RECORDS OF ACCOUNT TO 
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ENSURE THAT THESE ARE IN ACCORDANCE WITH THE COOPERATIVE 
PRINCIPLES AND GENERALLY ACCEPTED ACCOUNTING 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) Subject to the pertinent provisions of the National Internal Revenue Code and 
other laws, a cooperative may dispose by way of burning or other method of complete 
destruction any document, record or book pertaining to its financial and non-financial 
operations which are already more than five (5) years old except those relating to 
transactions which are the subject of civil, criminal and administrative proceedings. An 
inventory of the audited documents, records, and books to be disposed of shall be 
drawn up and certified to by the [cooperative] secretary OF THE COOPERATIVE and 
the chairman of the audit committee [of the cooperative] and presented to the board of 
directors which may thereupon approve the disposition of the said records. 
ART. 53. [Annual] Reports. - (1) Every cooperative shall draw up [an annual] 
REGULAR reports of its [affairs] PROGRAM OF ACTIVITIES, INCLUDING THOSE 
IN PURSUANCE OF THEIR SOCIO-CIVIC UNDERTAKINGS, SHOWING THEIR 
PROGRESS AND ACHIEVEMENTS AT [as of] the end of every fiscal year. THE 
REPORTS SHALL BE MADE ACCESSIBLE TO ITS MEMBERS, and COPIES 
THEREOF SHALL BE FURNISHED [publish the same furnishing copies] to all its 
members of record. THESE REPORTS [A copy thereof] shall be filed with the 
[Cooperative Development] Authority within [sixty (60)] ONE HUNDRED TWENTY 
(120) DAYS from the end of [every fiscal] THE CALENDAR year. The form and 
contents of the [annual] reports shall be prescribed by the rules of the Authority. 
Failure to file the required [annual] reports shall SUBJECT THE ACCOUNTABLE 
OFFICER(S) TO FINES AND PENALTIES AS MAYBE PRESCRIBED BY THE 
AUTHORITY, AND SHALL be a ground for THE 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 bylaws] FOR THOSE 
THAT MAY BE ALLOWED BY THE AUTHORITY. 
(2) If any cooperative fails to make, publish and file the report required herein, or 
fails to include therein any matter required by this Code, the [Cooperative Development] 
Authority shall, within fifteen (15) days from the expiration of the prescribed period, 
send such cooperative a [registered] WRITTEN notice, [directed to its official postal 
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address] stating [the] ITS NON-COMPLIANCE AND THE COMMENSURATE FINES 
AND PENALTIES THAT WILL BE IMPOSED UNTIL SUCH TIME THAT THE 
COOPERATIVE HAS COMPLIED WITH THE REQUIREMENTS. [delinquency and its 
consequences. If the cooperative fails to make, publish or file a copy of the report within 
thirty (30) days from receipt of such notice, any member of the cooperative or the 
Government may petition the court for mandamus to compel the cooperative and its 
officers to make, publish and file such report, as the case may be, and require the 
cooperative or the officers at fault to pay all the expenses of the proceeding, including 
counsel fees when the filing is made by a member.] 
ART. 54. Register of Members as Prima Facie Evidence.- x x x 
ART. 55. Probative Value of Certified Copies of Entries. - x x x 
ART. 56. Bonding of Accountable Officers. - Every director, officer and 
employee handling funds, securities or property on behalf of the cooperative shall BE 
COVERED BY A SURETY BOND TO BE ISSUED BY A DULY REGISTERED 
INSURANCE OR BONDING COMPANY [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. 
UPON FILING OF THE APPLICATION FOR REGISTRATION OF A 
COOPERATIVE, THE BONDS OF THE ACCOUNTABLE OFFICERS SHALL BE 
REQUIRED BY THE AUTHORITY. SUCH BONDS SHALL BE RENEWED ANNUALLY 
AND THE AUTHORITY SHALL ACCORDINGLY BE INFORMED OF SUCH 
RENEWAL. 
ART. 57. Preference of Claims. - 
(1) 
Notwithstanding the provisions of existing laws, rules and regulations to 
the contrary, but subject to the prior claim of the [Cooperative Development] Authority, 
any debt due a cooperative from a member shall CONSTITUTE [be] A first lien upon 
any raw materials, production inputs, and products produced; or any land, building, 
facilities, equipment, goods or services acquired and held, by such member through 
the proceeds of the loan or credit granted by the cooperative to him for as the same is 
not fully paid. 
(2) x x x  
(3) x x x  
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ART. 58. lnstrument 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) Upon the execution of such instrument and as may be required by the 
cooperative contained in a written request, the employer shall make the deduction in 
accordance with the agreement and remit forthwith the amount so deducted WITHIN 
TEN (IO) DAYS AFTER THE END OF THE PAYROLL MONTH to the cooperative. The 
employer shall make the deduction for as long as such debt or other demand or any 
part of it remains unpaid by the employee. 
(3) x x x  
(4) The provisions of this Article shall also apply to all such agreements of the 
nature referred to in paragraph (1) as were in force on the date of the approval of this 
Code. 
ART. 59. Primary Lien. - x x x 
ART. 60. Tax Treatment of Cooperatives. - x x x 
ART. 61. Tax and Other Exemptions. - x x x 
(1) x x x  
(2) x x x  
(a) x x x 
(b) x x x  
(c) x x x  
(d) x x x  
(3) x x x  
(4) Any judge in his capacity as notary public, ex-officio, 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 (P 50,000.00)] TWO HUNDRED FIFTY THOUSAND PESOS (P 250,000.00). 
(5) 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 (P 50,000.00)] TWO HUNDRED FIFTY THOUSAND PESOS (P 
250,000.00) or the deeds of title or any property acquired by the cooperative or any 
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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 faithful performance of its duties and 
obligations. 
(6) x x x 
(8) x x x 
(7) x x x  
ART. 62. Privileges of Cooperatives. - x x x 
(1) x x x  
(2) x x x  
(3) x x x  
(4) In areas where appropriate cooperatives exist the [preferential right] RIGHT 
OF FIRST REFUSAL to supply government institutions and agencies 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 FlRST REFUSAL in the allocation of 
fertilizers, INCLUDING SEEDS AND OTHER AGRICULTURAL INPUTS AND 
IMPLEMENTS, and in rice distribution shall be granted to cooperatives by the 
appropriate government agencies; 
(6) x x x 
(7) Cooperatives and their federations, such as FARM AND FISHERY 
PRODUCERS AND SUPPLIERS, 
market vendors AND OTHERS [cooperatives,] 
WHICH HAVE FOR THEIR PRIMARY PURPOSE PRODUCTION AND/OR THE 
MARKETING OF PRODUCTS FROM AGRICULTURE, FISHERIES AND SMALL 
ENTREPRENEURIAL INDUSTRIES AND FEDERATIONS THEREOF, shall have 
[preferential rights] THE RIGHT OF FIRST REFUSAL in THE management of public 
markets and/or lease of public market facilities, stalls or spaces[;]: PROVIDED, THAT 
ONLY THE COOPERATIVES MUST UTILIZE THESE RIGHTS. 
(8) [Credit] [cICooperatives ENGAGED IN CREDIT SERVICES andlor 
federations 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. 
(9) A PUBLIC TRANSPORT SERVICE COOPERATIVE MAY BE ENTITLED TO 
FINANCING SUPPORT FOR THE ACQUISITION AND/OR MAINTENANCE OF 
LAND, SEA AND AIR TRANSPORT EQUIPMENT, FACILITIES AND PARTS 
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THROUGH THE PROGRAM OF THE GOVERNMENT FINANCIAL INSTITUTIONS. IT 
SHALL HAVE THE RlGHT OF FlRST REFUSAL ON THE MANAGEMENT AND 
OPERATION OF PUBLIC TERMINALS AND PORTS WHETHER LAND, SEA OR AIR 
TRANSPORT WHERE THE COOPERATIVE OPERATES. 
r(9)1(1 0) x x x 
[10](11) x x x  
(12) 
COOPERATIVES ORGANIZED BY 
FACULTY MEMBERS AND 
EMPLOYEES OF EDUCATIONAL INSTITUTIONS SHALL HAVE THE RIGHT OF 
FIRST REFUSAL IN THE MANAGEMENT OF THE CANTEEN AND OTHER 
SERVICES RELATED TO THE OPERATION OF THE EDUCATIONAL INSTITUTION 
WHERE THEY ARE EMPLOYED: PROVIDED, THAT SUCH SERVICES ARE 
OPERATED WITHIN THE PREMISES OF THE SAID EDUCATIONAL INSTITUTIONS. 
(1 3) THE APPROPRIATE HOUSING AGENCIES AND GOVERNMENT 
FINANCIAL INSTITUTIONS SHALL CREATE A SPECIAL WINDOW FOR FINANCING 
HOUSING PROJECTS UNDERTAKEN BY 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. 
SEC. 6. Article 64 of Chapter VI on Insolvency of Cooperatives of the same Code 
is hereby renumbered and amended to read as follows: 
ART. 63. Proceedings Upon Insolvency. - In case a cooperative is unable to 
fulfill its obligations to creditors due to insolvency, such cooperative may apply such 
remedies as it may deem fit under the provisions of [the Insolvency Law][( ] Act No. 
1956 [)I, as amended [)I 
OTHERWISE KNOWN AS THE INSOLVENCY LAW. x x x 
SEC. 7. Articles 65, 66, 67, 68, 69, 70 and 71 of Chapter VI1 on Dissolution of 
Cooperatives of the same Code are hereby renumbered and amended to read as 
follows: 
ART. 64. Voluntary Dissolution Where No Creditors Are Affected. - If the 
dissolution of a cooperative does not prejudice the rights of any creditor having a claim 
against it, the dissolution may be effected by a majority vote of the board of directors, 
and by a resolution duly adopted by the affirmative vote of at least [two-thirds (2/3)] 
THREE-FOURTHS (3/4) of all the members with voting rights, PRESENT AND 
CONSTITUTING A QUORUM at a meeting to be held upon call of the directors: 
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Provided, That notice of time, place and object of the meeting shall be published for 
three (3) consecutive weeks in a newspaper published in the place where the principal 
office of said cooperative is located, or if no newspaper is published in such place, in a 
newspaper of general circulation in the Philippines: Provided further, That notice of 
such meeting is sent to each stockholder or member either by registered mail or by 
personal delivery at least thirty (30) days prior to said meeting. A copy of the resolution 
authorizing the dissolution shall be certified by a majority of the board of directors and 
countersigned by the secretary of the cooperative. The [Cooperative Development] 
Authority shall thereupon issue the certificate of dissolution. 
ART. 65. Voluntary Dissolution Where Creditors Are Affected. - Where the 
dissolution of a cooperative may prejudice the rights of any creditor, the petition for 
dissolution shall be filed with the [Cooperative Development] Authority. The petition 
shall be signed by a majority of its board of directors or other officers managing its 
affairs, shall be verified by its [president] CHAIRPERSON or secretary or one of its 
directors and shall set forth all claims and demands against it and that its dissolution 
was resolved upon by the affirmative vote of at least [two-thirds (2/3)] THREE- 
FOURTHS (3/4) of all the members with voting rights, PRESENT AND 
CONSTITUTING QUORUM at a meeting called for that purpose. x x x 
ART. 66. Involuntary Dissolution.- x x x 
ART. 67. Dissolution by Order of the Authority. - x x x 
ART. 68. Dissolution by Failure to Organize and Operate. - If a cooperative 
has not commenced business and operation within two (2) years after the date shown 
on its certificate of registration or has not carried on A business for two (2) consecutive 
years, the Authority shall send A formal inquiry to the said cooperative as to the status 
of its operation. Failure of the cooperative to promptly provide justifiable cause for its 
failure to operate shall warrant the Authority to strike off its name from the register and, 
for all intents and purposes, the cooperative shall be deemed dissolved. 
ART. 69. Cooperative Liquidation. - Every cooperative whose charter expires 
by its own limitation or whose cooperative existence is terminated by voluntary 
dissolution or is terminated by appropriate judicial proceedings shall nevertheless be 
continued as a body cooperative for three (3) years after the time [when it would have 
been so] IT IS dissolved, for the purpose of prosecuting and defending suits by or 
against it; and enabling it to settle and close its affairs, to dispose of and convey its 
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property and to distribute its assets, but not for the purpose of continuing the business 
for which it was established. 
At any time during THE said three (3) years, [said] THE cooperative is authorized 
and empowered to convey all of its property to trustees for the benefit of members, 
creditors and other persons in interest. From and after any such conveyance by the 
cooperative of its property in trust for the benefit of its members, creditors and others in 
interest, all interest which the cooperative had in the property terminates the legal 
interest vested in the trustees and the beneficial interest vested in the members, 
creditors, or other persons in interest. x x x 
ART. 70. Rules and Regulations on Liquidation.- x x x 
SEC. 8. Articles 72, 73, 74, 75, 76, 77, 78, 79 and 80 of Chapter Vlll on Capital, 
Property and Funds of the same Code are hereby renumbered and amended to read 
as follows: 
ART. 71. Capital. - x x x 
ART. 72. Capital Sources. - x x x 
(1) x x x  
(2) x x x  
(3) x x x  
(4) Subsidies, donations, legacies, grants, aids and such other assistance from 
any local or foreign institution whether public or private[.]: 
PROVIDED, THAT 
CAPITAL COMING FROM SUCH SUBSIDIES, DONATIONS, LEGACIES, GRANTS, 
AIDS AND OTHER ASSISTANCE SHALL NOT BE DIVIDED INTO INDIVIDUAL 
SHARE CAPITAL HOLDINGS AT ANYTIME BUT SHALL INSTEAD FORM PART OF 
THE DONATED CAPITAL OR FUND OF THE COOPERATIVE. 
UPON DISSOLUTION, SUCH DONATED CAPITAL SHALL FORM PART OF 
THE RESERVE FUND. 
ART. 73. Limitation on Share Capital Holdings. - No member of a PRIMARY 
cooperative other than a cooperative ITSELF shall own or hold more than [twenty 
percent (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 
percent (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: 
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Provided, findy, That where the heir fails to qualify as such member or where his total 
share holding exceeds [twenty percent (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. 74. Assignment of Share Capital Contribution or lnterest. - x x x 
ART. 75. [Interest on Share Capital.] 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 AS THEIR OWN ECONOMIC CONDITIONS CONTINUE TO 
IMPROVE. 
ART. 76. Shares. -- The term "share" refers to a unit of capital IN A PRIMARY 
COOPERATIVE the par value of which may be fixed at any figure [but not less than 
one peso (Pl.OO)] NOT MORE THAN FIVE THOUSAND PESOS (P5,OOO.OO). The 
share capital of a cooperative is the money paid or required to be paid for to conduct its 
operations. The method of issuing the share certificates may be prescribed in the by- 
laws of cooperative. 
ART. 77. Fines. -- The by-laws of a cooperative may prescribe a fine on unpaid 
subscribed share capital [subject to the guidelines which the Cooperative Development 
Authority may issue.]: PROVIDED, THAT SUCH FINE IS FAIR AND REASONABLE 
UNDER THE CIRCUMSTANCES. 
ART. 78. lnvestment of Capital. - x x x 
ART. 79. 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 set forth that the time of retirement 
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[by] OF such certificates and the amounts to be returned are at the discretion of the 
board of directors. 
SEC. 9. Article 81, 82, 83, 84 and 85 of Chapter IX on Audit, Inquiry and 
Members' Right to Examine of the same Code are hereby renumbered and amended 
to read as follows: 
ART. 80. Annual Audit - Cooperatives under this Code shall be subject to an 
annual FINANCIAL, PERFORMANCE AND SOCIAL audit [by an auditor]. 
THE 
FINANCIAL AUDIT SHALL BE CONDUCTED BY AN EXTERNAL AUDITOR who 
satisfies all the following qualifications: 
(1) He is independent of the cooperative being audited and of any subsidiary of 
the cooperative; and 
(2) He is a member [of any recognized professional accounting or cooperative 
auditors' association with similar qualifications] IN GOOD STANDING OF THE 
PHILIPPINE INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANCY (PICPA) AND IS 
ACCREDITED BY THE BOARD OF ACCOUNTING AND THE AUTHORITY. 
ART. 81. Audit Report -The auditor shall submit to the BOARD OF DIRECTORS 
AND TO THE audit committee THE [a report of the] FINANCIAL 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.] 
REPORT WHICH SHALL BE IN ACCORDANCE WITH THE GENERALLY 
ACCEPTED AUDITING STANDARDS FOR COOPERATIVES AS 
JOINTLY 
PROMULGATED BY THE PHILIPPINE INSTITUTE OF CERTIFIED PUBLIC 
ACCOUNTANTS (PICPA) AND THE AUTHORITY. 
PERFORMANCE AND SOCIAL AUDIT REPORTS WHICH CONTAIN THE 
FINDINGS AND RECOMMENDATIONS OF THE AUDITOR SHALL LIKEWISE BE 
SUBMITTED TO THE BOARD OF DIRECTORS. 
[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 
[of] TO the general assembly in its next meeting. 
SOCIAL 
AND 
PERFORMANCE 
AUDITS 
SHALL 
BE 
CONDUCTED 
INTERNALLY BY THE AUDIT COMMITTEE OR PAID STAFF OR VOLUNTEER 
MEMBERS OF THE COOPERATIVE OR EXTERNALLY, BY QUALIFIED EXTERNAL 
AUDITORS. 
ART. 82. Non-liability for Defamation. - x x x 
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ART. 83. Right to Examine.- x x x 
ART. 84. Safety of Records. - x x x 
SEC. I O .  Articles 86 and 87 of Chapter X on Allocation and Distribution of Net 
Surplus of the same Code are hereby RENUMBERED AND amended to read as 
follows: 
ART. 85. Net Surplus. - Notwithstanding the provisions of existing laws, the 
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, mthe 
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 DIFFERENCE OF THE RIGHTFUL AMOUNT DUE TO THE 
MEMBERS FOR THEIR PRODUCTS SOLD OR SERVICES RENDERED TO THE 
COOPERATIVE INCLUDING OTHER INFLOWS OF ASSETS RESULTING FROM ITS 
OTHER OPERATING ACTIVITIES and which shall be deemed to have been returned 
to them if the same is distributed as prescribed herein. 
ART. 86. Order of Distribution. - The net surplus of every cooperative shall be 
distributed as follows: 
(1) 
An amount for the reserve fund which shall be at least ten per centum 
(10%) of net surplus: PROVIDED, THAT, IN THE FIRST FIVE (5) YEARS OF 
OPERATION AFTER REGISTRATION, THIS AMOUNT SHALL NOT BE LESS THAN 
FIFTY PER CENTUM (50%) OF THE NET SURPLUS. 
(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. x x x 
(b) x x x  
(c) x x  x 
(i) x x x 
(ii) x x x 
(2) An amount for the education and training fund, [which] shall [be] not [morel 
BE LESS than ten per centurn (10%) of THE net surplus. The by-laws may provide 
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that certain fees [or fines] or a portion thereof be credited to such fund. THE FUND 
SHALL PROVIDE FOR THE TRAINING, PROVISION FOR WORK EXPERIENCE 
AND SIMILAR OTHER COOPERATIVE ACTIVITIES GEARED TOWARDS THE 
ACHIEVEMENT OF THE OBJECTIVES OF THE MOVEMENT. 
(a) 
Half of the amounts transferred to the education and training fund 
annually under this subsection [may] SHALL be spent by the 
cooperative for education[,] and training.[, and other] purposes; 
while the other half shall be [credited] REMITTED to [the] A 
HIGHER LEVEL NON-BUSINESS COOPERATIVE UNION OR 
FEDERATION [cooperative education and training fund of the 
respective apex organization] CHOSEN BY THE COOPERATIVE 
OR of which IT [a cooperative] is a member. THE HIGHER LEVEL 
NON-BUSINESS COOPERATIVE UNION OR 
FEDERATION 
SHALL SUBMIT TO THE AUTHORITY AND ITS CONTRIBUTING 
COOPERATIVES THE FOLLOWING SCHEDULES: (I) LIST OF 
COOPERATIVES WHICH HAVE REMITTED THEIR RESPECTIVE 
COOPERATIVE EDUCATION AND TWINING FUNDS (CETF); (If) 
BUSINESS CONSULTANCY ASSISTANCE TO INCLUDE THE 
NATURE AND COST; AND (Ill) OTHER TRAINING ACTIVITIES 
UNDERTAKEN 
SPECIFYING 
THEREIN 
THE 
NATURE, 
PARTICIPANTS AND COST OF EACH ACTIVITY. [An apex 
organization may be a federation or union.] 
(b) 
x x x  
(3) AN AMOUNT FOR THE COMMUNITY DEVELOPMENT FUND, WHICH 
SHALL NOT BE LESS THAN THREE PER CENTUM (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 cenfurn 
(IO%)] SEVEN PER CENTUM (7%). 
[(4)](5) The remaining net surplus shall be made available to the members in the 
form of interest ON SHARE CAPITAL not to exceed the normal rate of return on 
investments and patronage refunds[.]: PROVIDED, THAT ANY AMOUNT REMAINING 
AFTER THE ALLOWABLE INTEREST AND THE PATRONAGE REFUND HAVE 
BEEN DEDUCTED SHALL BE CREDITED TO THE RESERVE FUND AND/OR THE 
COMMUNITY DEVELOPMENT FUND. x x x 
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SEC. 11. Articles 88 to 95 under Chapter XI on the Special Provisions Relating 
to Agrarian Reform Cooperatives of the same Code are hereby renumbered and 
amended to read as follows: 
CHAPTER XI 
AGRARIAN REFORM COOPERATIVES 
ART. 87. Coverage. - x x x 
[ART. 89. Definition and Purpose - An agrarian reform cooperative within the 
meaning of this Code is one where the majority of the members are agrarian reform 
beneficiaries and marginal farmers and organized for any or all of the following 
purposes:] 
ART. 88. Cooperative Estates. - x x x 
ART. 89. Infrastructure. - x x x 
ART. 90. Lease of Public Lands. - x x x 
ART. 91. Preferential Right. - x x x 
ART. 92. Privileges. - x x x 
(1) x x x  
(2) x x x  
(3) x x x  
(4) x x x  
(5) x x x  
(6) x x x  
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. v h e  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 (IO) 
years from the date of registration of said cooperatives.] 
> 
ART. 93. Organization and Registration. - x x x 
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SEC. 12 . 
Articles 96 to 98 of Chapter XI1 on Special Provisions on Public 
Service Cooperatives of the same Code are hereby transferred to another chapter. 
This chapter is now retitled, renumbered and amended to read, as follows: 
CHAPTER XI1 
COOPERATIVE BANK 
ART. 94. Governing Law. - [(I)] The provisions of this Chapter shall primarily 
govern cooperative banks registered under this Code and the other provisions of this 
Code shall apply to them only insofar as they are not inconsistent with the provisions 
contained in this Chapter. 
A COOPERATIVE BANK REGISTERED UNDER THIS CODE SHALL BE 
UNDER THE SUPERVISION OF THE BANGKO SENTRAL NG PILIPINAS (BSP). 
[(2) 
Cooperatives duly established and registered under the provisions of this 
Code may organize among themselves a cooperative bank which shall likewise be 
considered a cooperative registerable under the provisions of this Code subject to the 
requirements of and requisite authorization from the Central Bank.] 
[ART. 100. Definition, Classification and Functions. - A cooperative bank is 
one organized by the majority shares of which is owned and controlled by cooperatives 
primarily to provide financial and credit services 
to cooperatives. The term 
"cooperative bank" shall include cooperative rural banks. A cooperative bank may 
perform the following functions: 
(1) To carry on banking and credit services for the cooperatives; 
(2) To receive financial aid or loans from the Government and the Central Bank 
of the Philippines for and in behalf of the cooperative banks and primary cooperatives 
and their federations engaged in business and to supervise the lending and collection 
of loans; 
(3) To mobilize savings of its members for the benefit of the cooperative 
movement; 
(4) To act as a balancing medium for the surplus funds of cooperatives and their 
(5) To discount bills and promissory notes issued and drawn by cooperatives; 
(6) To issue negotiable instruments to facilitate the activities of cooperatives; 
(7) 
federations; 
To issue debentures subject to the approval of and under conditions and 
guarantees to be prescribed by the Government: 
(8) To borrow money from banks and other financial institutions within the limit to 
be prescribed by the Central Bank; and 
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(9) To carry out all other functions as may be prescribed by the Authority: 
Provided, That the performance of any banking function shall be subject to prior 
approval by the Central Bank of the Philippines.] 
[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 have been approved by the Central Bank of the Philippines and it 
satisfies all requirements for registration as a cooperative.] 
ART. 95. 
ORGANIZATION, Membership AND ESTABLISHMENT OF 
COOPERATIVE BANK. - [Membership of a cooperative bank shall include only 
cooperatives and federations of cooperatives.] (1) COOPERATIVE ORGANIZATIONS 
DULY ESTABLISHED AND REGISTERED UNDER THIS CODE MAY ORGANIZE A 
COOPERATIVE 
BANK, 
WHICH 
SHALL 
LIKEWISE 
BE 
CONSIDERED 
A 
COOPERATIVE REGISTERABLE UNDER THE PROVISIONS OF THIS CODE 
SUBJECT TO THE REQUIREMENTS AND REQUISITE AUTHORIZATION FROM 
THE BANGKO SENTRAL. THERE SHALL ONLY BE ON€ COOPERATIVE BANK 
PER PROVINCE, HOWEVER, THE BSP MAY AUTHORIZE THE ESTABLISHMENT 
OF ADDITIONAL COOPERATIVE BANKS IF WARRANTED BY FAVORABLE 
ECONOMIC CONDITIONS IN THE AREA. 
A COOPERATIVE BANK MAY 
ESTABLISH BRANCHES WITH PRIOR APPROVAL BY THE BSP IN PLACES 
WHERE OTHER BANKS ARE ALLOWED TO ESTABLISH BRANCHES. 
(2) 
MEMBERSHIP IN A COOPERATIVE BANK SHALL EITHER BE 
REGULAR OR ASSOCIATE. REGULAR MEMBERSHIP SHALL BE OPEN ONLY TO 
COOPERATIVE ORGANIZATIONS WHICH ARE HOLDERS OF COMMON SHARES 
OF THE BANK. 
ASSOCIATE MEMBERS ARE THOSE SUBSCRIBING AND 
HOLDING PREFERRED SHARES OF THE BANK, WHICH MAY INCLUDE BUT ARE 
NOT LIMITED TO THE FOLLOWING: 
(A) 
INDIVIDUAL MEMBERS OF THE BANKS MEMBER-PRIMARY 
COOPERATIVES; AND 
(6) 
SAMAHANG NAYON AND MUNICIPAL KATIPUNAN NG MGA 
SAMAHANG NAYON (MKSN) WHICH HELD COMMON SHARES 
OF COOPERATIVE BANKS PRIOR TO THE EFFECTIVITY OF 
THIS ACT SHALL APPLY FOR CONVERSION TO FULL- 
FLEDGED COOPERATIVES IN ORDER TO MAINTAIN THEIR 
STATUS AS REGULAR MEMBERS OF COOPERATIVE BANKS: 
PROVIDED, THAT THEY SHALL NOTIFY THE COOPERATIVE 
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BANK CONCERNED OF THEIR INTENTION TO CONVERT 
WITHIN A PERIOD OF NINETY (90) DAYS FROM THE 
EFFECTIVITY OF THIS ACT. 
SAMAHANG NAYON AND MKSN 
ARE HEREBY GIVEN A PERIOD OF ONE (I) YEAR FROM THE 
EFFECTIVITY 
OF 
THIS 
ACT 
TO 
COMPLETE 
THEIR 
CONVERSION TO COOPERATIVES. 
COOPERATIVE BANKS 
SHALL EXERT REASONABLE EFFORTS TO INFORM THEIR 
MEMBER SAMAHANG NAYON AND MKSN TO FINALLY 
CONVERT OR TO GIVE THE NOTICE OF CONVERSION WITHIN 
THE 
PRESCRIBED PERIOD. 
UPON THE 
FAILURE OF 
SAMAHANG NAYON OR MKSN TO FINALLY CONVERT TO A 
FULL-FLEDGED COOPERATIVE WITHIN 
THE 
MAXIMUM 
PERIOD 
OF 
ONE 
YEAR, 
THE 
COOPERATIVE 
BANK 
CONCERNED MAY CONVERT THE COMMON SHARES HELD 
BY SUCH ASSOCIATIONS TO PREFERRED SHARES. 
ART. 96. [Board of Directors. - The number, composition, 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.] 
ADM/N/STRATION OF COOPERATIVE BANKS. - TO MAINTAIN THE QUALITY OF 
BANK MANAGEMENT AND ACCORD BETTER PROTECTION TO DEPOSITORS 
AND THE PUBLIC IN GENERAL, THE BSP MAY PASS UPON AND REVIEW THE 
QUALIFICATIONS OF PERSONS WHO ARE ELECTED OR APPOINTED BANK 
DIRECTORS AND OFFICERS, AND DISQUALIFY THOSE UNFIT. THE BSP SHALL 
PRESCRIBE THE QUALIFICATIONS OF BANK DIRECTORS AND OFFICERS FOR 
THE PURPOSES OF THIS SECTION, GIVING DUE RECOGNITION TO THE UNIQUE 
COOPERATIVE NATURE AND CHARACTER OF COOPERATIVE BANKS. 
NOTWITHSTANDING THE PROVISIONS OF THIS CODE, THE NUMBER, 
COMPOSITION AND TERM OF THE BOARD OF DIRECTORS SHALL BE DEFINED 
IN THE ARTICLES OF COOPERATION AND BY-LAWS OF THE COOPERATIVE 
BANK. 
ART. 97. QUORUM AND VOTING RIGHTS. - THE QUORUM REQUIREMENT 
FOR GENERAL ASSEMBLY MEETINGS, WHETHER SPECIAL OR REGULAR, 
SHALL BE ONE-HALF PLUS ONE OF THE NUMBER OF VOTING SHARES OF ALL 
THE MEMBERS IN GOOD STANDING. ON MEETINGS OF THE BOARD OF 
DIRECTORS, WHETHER SPECIAL OR REGULAR, THE QUORUM REQUIREMENT 
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SHALL BE ONE-HALF PLUS ONE OF THE ENTIRE MEMBERSHIP OF THE BOARD 
OF DIRECTORS. ONE DIRECTOR SHALL HAVE ONE VOTE EACH. 
THE VOTING RIGHTS OF STOCKHOLDERS SHALL BE EQUIVALENT TO 
THE NUMBER OF THEIR PAID-UP SHARES. 
ART. 98. [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, 
FUNCTlONS 
AND 
ALLlED 
UNDERTAKlNGS OF 
COOPERATlVE BANKS. - COOPERATIVE BANKS SHALL PRIMARILY PROVIDE 
FINANCIAL, 
BANKING 
AND 
CREDIT 
SERVICES 
TO 
COOPERATIVE 
ORGANIZATIONS AND THEIR MEMBERS. HOWEVER, THE BSP MAY PRESCRIBE 
APPROPRIATE GUIDELINES, CEILINGS AND CONDITIONS ON BORROWINGS OF 
A COOPERATIVE ORGANIZATION FROM A COOPERATIVE BANK. 
THE POWERS AND FUNCTIONS OF A COOPERATIVE BANK SHALL BE 
SUBJECT TO SUCH RULES AND REGULATIONS AS MAY BE PROMULGATED BY 
THE BSP. 
IN ADDITION TO THE POWERS GRANTED BY THIS CODE AND OTHER 
EXISTING LAWS, ANY COOPERATIVE BANK MAY PERFORM ANY OR ALL OF THE 
SERVICES OFFERED BY RURAL BANKS UPON PRIOR APPROVAL OF THE BSP. 
NOTHING IN THIS ARTICLE SHALL BE CONSTRUED AS PRECLUDING A 
COOPERATIVE BANK FROM PERFORMING, WITH PRIOR APPROVAL OF THE 
BSP, THRIFT BANKING SERVICES, COMMERCIAL BANKING SERVICES, OR FROM 
OPERATING UNDER AN 
EXPANDED BANKING AUTHORITY, 
OR 
FROM 
EXERCISING, WHENEVER APPLICABLE AND NOT INCONSISTENT WITH THE 
PROVISIONS OF THIS ACT AND BSP, SUCH OTHER POWERS INCIDENT TO A 
CORPORATION. 
COOPERATIVE BANK MAY INVEST IN THE EQUITIES OF COOPERATIVE 
INSURANCE AND IN OTHER ALLIED UNDERTAKINGS SUBJECT TO GUIDELINES 
AS MAY BE PRESCRIBED BY THE BSP. 
ART. 99. Supervision. - The cooperative banks registered under this Code shall 
be under the supervision of the [Central Bank] BSP. The [Central Bank] BSP upon 
consultation with the [agency] AUTHORITY and the [cooperative movement] 
NATIONAL FEDERATION OF COOPERATIVE BANKS 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] BSP rules and regulations, applicable to other types of banks, which would 
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3a 
impede the cooperative rural bank from 
services to its members. 
performing legitimate financial and banking 
ART. 100. Capitalization AND CAPITAL REQUIREMENTS OF COOPERATIVE 
BANKS. - 1) 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 
BSP IN CONSULTATION WITH THE NATIONAL FEDERATION OF COOPERATIVE 
BANKS. The authorized share capital shall be divided into such number of shares with 
a minimum par value of One Thousand Pesos (PI ,000.00) per share FOR NATIONAL 
COOPERATIVE BANKS AND ONE HUNDRED PESOS (P100.00) PAR VALUE PER 
SHARE FOR LOCAL COOPERATIVE BANKS. 
For the purpose of primarily 
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] BSP may prescribe. 
(2) x x x  
(3) THE AGRICULTURAL CREDIT POLICY COUNCIL (ACPC) THROUGH ITS 
EXECUTIVE DIRECTOR, THE AUTHORITY THROUGH 
ITS BOARD OF 
ADMINISTRATORS, THE DEPARTMENT OF AGRARIAN 
REFORM (DAR) 
THROUGH 
ITS SECRETARY AND 
OTHER GOVERNMENT-OWNED AND 
CONTROLLED 
NON-FINANCIAL 
INSTITUTIONS 
WITH 
LOANING 
AND 
DEVELOPMENT 
FUNCTIONS 
AND 
PROGRAMS, 
THROUGH 
THEIR 
APPROPRIATE 
AUTHORITIES, 
MAY 
UTILIZE 
FUNDS 
SUCH 
AS 
THE 
COMPREHENSIVE AGRICULTURAL LOAN FUND (CALF), THE COOPERATIVE 
DEVELOPMENT LOAN FUND (CDLF), THE 
COOPERATIVE MARKETING 
PROJECT FUND (CMPF), THE RICE SEED PRODUCTION PROGRAM 
FUND 
(RSPPF), DUTCH RURAL DEVELOPMENT ASSISTANCE PROGRAM FUND 
(DRDAPF) AND OTHER FUNDS EXISTING OR MAY HEREINAFTER BE CREATED 
UNDER THEIR RESPECTIVE ADMINISTRATIONS TO SUBSCRIBE TO THE 
PREFERRED SHARES OF COOPERATIVE 
BANK EITHER THROUGH THE 
CONVERSION OF THE LIABILITIES OF COOPERATIVE BANK DUE TO THESE 
INSTITUTIONS INTO PREFERRED SHARES AND/OR FRESH CAPITAL INFUSION 
SUBJECT TO MUTUALLY AGREED TERMS AND CONDITIONS BY THE PARTIES. 
PROVIDED, THAT SUCH PREFERRED SHARES HELD BY SUCH NON-FINANCIAL 
INSTITUTIONS SHALL BE RETIRED IN WHOLE OR IN PART AT BOOK VALUE 
WHEN THE COOPERATIVE BANK HAS ACQUIRED 
ENOUGH CAPITAL 
STRENGTH TO PERMIT THE RETIREMENT OF SUCH SHARES. PROVIDED, 
FURTHER, THAT IN THE CASE OF DAR AND OTHER GOVERNMENT-OWNED 
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AND CONTROLLED NON-FINANCIAL INSTITUTIONS WHICH BY REASON OF 
THEIR CHARTER OR DUE TO CERTAIN LEGAL IMPEDIMENTS, MAY NOT BE 
ALLOWED BY LAW TO OWN PREFERRED SHARES WITH COOPERATIVE BANK, 
SHALL DENOMINATE THEIR INVESTMENTS AS " SUBORDINATED LOAN" TO 
THE COOPERATIVE BANK FOR AT LEAST TEN (IO) YEARS, SUBJECT TO 
OTHER MUTUAL TERMS AND CONDITIONS BY THE PARTIES: AND PROVIDED, 
FURTHER, THAT THE ACPC, THE CDA, THE DAR AND THE OTHER 
GOVERNMENT-OWNED AND CONTROLLED NON-FINANCIAL INSTITUTIONS 
MAY UTILIZE EARNINGS DERIVED FROM SUCH BASIC SOURCE FUNDS SUCH 
AS THE CALF, CDLF, CMPF, RSPPF, DRDAPF AND OTHER FUNDS CREATED 
UNDER THEIR ADMINISTRATION FOR INSTITUTION-BUILDING, CREDIT AND 
CREDIT-RELATED PROGRAMS AND ACTIVITIES. 
(4) IN ORDER TO FURTHER AUGMENT THE CAPITALIZATION OF 
COOPERATIVE BANKS, THE BARRIO SAVINGS FUND (BSF) AND BARRIO 
GUARANTEE FUND (BGF) COLLECTED/DEDUCTED BY VARIOUS BANKS 
THROUGHOUT THE COUNTRY FROM THE LOAN PROCEEDS OF FARMER- 
BORROWERS WHO WERE MEMBERS OF COOPERATIVES AND SAMAHANG 
NAYON IN COMPLIANCE TO PD 175 AND ACCOMPANYING LETTER OF 
INSTRUCTIONS, WHICH ARE STILL FLOATING AND OUTSTANDING EITHER AS 
ACTIVE OR DORMANT DEPOSIT ACCOUNTS IN THE BOOKS OF THOSE BANKS, 
SHALL BE REMITTED TO THE COOPERATIVE BANK LOCATED IN THE 
PROVINCE WHERE THE DEPOSITORY BANKS OF THE BSF AND BGF ARE 
LOCATED, OR IF THERE IS NO COOPERATIVE BANK IN THE PROVINCE, TO 
THE COOPERATIVE BANK NEAREST TO THE PROVINCE. THE BSP IN 
COORDINATION WITH THE NATIONAL FEDERATION OF COOPERATIVE BANKS 
SHALL COME UP WITH THE IMPLEMENTING GUIDELINES ON HOW TO CREDIT 
THE OWNERS OF THE FUNDS. THOSE FUNDS WHOSE OWNERS COULD NOT 
BE LOCATED OR IDENTIFIED SHALL BE ENDOWED TO THE NATIONAL 
FEDERATION OF COOPERATIVE BANKS IN ORDER TO FINANCE THE 
COOPERATIVE BANKS STRENGTHENING PROGRAM OF THE FEDERATION. 
BEFORE THE EFFECTIVITY OF THE RULES WHICH THE BSP IS 
AUTHORIZED TO PRESCRIBE UNDER THIS PROVISION, SECTION 22 OF THE 
GENERAL BANKING ACT, AS AMENDED, SECTION 9 OF THE THRIFT BANKS 
ACT, AND ALL PERTINENT RULES ISSUED PURSUANT THERETO SHALL 
CONTINUE TO BE IN FORCE. 
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[ART. 107. Distribution of Net Surplus. - The provisions of this Code on the 
allocation and distribution of net surplus shall apply.] 
ART. 101. 
Privileges AND INCENTIVES OF COOPERATIVE BANKS. - 
[Cooperative banks 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 banks, private development banks, 
commercial banks, and all other banks to rediscount notes with the [Central Bank] 
BSP, 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-owned and controlled corporations are hereby authorized to 
deposit their funds in any cooperative bank.]SUBJECT TO THE APPROVAL OF THE 
BSP, A COOPERATIVE BANK SHALL PUBLISH A STATEMENT OF ITS FINANCIAL 
CONDITION, INCLUDING THOSE OF ITS SUBSIDIARIES AND AFFILIATES, IN SUCH 
TERMS UNDERSTANDABLE TO THE LAYMAN AND IN SUCH FREQUENCY AS MAY BE 
PRESCRIBED BY THE BSP, IN ENGLISH OR FILIPINO, AT LEAST ONCE EVERY QUARTER IN 
A NEWSPAPER OF GENERAL CIRCULATION IN THE CITY OR PROVINCE WHERE THE 
PRINCIPAL IS LOCATED IN THE CASE OF A DOMESTIC INSTITUTION. BUT IF NO 
NEWSPAPER IS PUBLISHED IN THE SAME PROVINCE, THEN IN A NEWSPAPER PUBLISHED 
IN METRO MANILA OR IN THE NEAREST CITY OR PROVINCE. THE BSP, HOWEVER, 
MAY PRESCRIBE ALTERNATIVE COMPLIANCE THAT MAY CONSTITUTE 
SUFFICIENT PUBLICATION 
IN CASES OF FORECLOSURE OF MORTGAGES XOVERING LOANS 
GRANTED BY A COOPERATIVE BANK, AND EXECUTION 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 AND OTHER CHARGES DUE 
AND UNPAID, DOES NOT EXCEED TWO HUNDRED FIFTY THOUSAND PESOS 
(P250,OOO.OO) OR SUCH AMOUNT AS THE BSP MAY PRESCRIBE, AS MAY BE 
WARRANTED BY THE PREVAILING ECONOMIC CONDITIONS AND BY THE 
NATURE AND CHARACTER OF COOPERATIVE BANKS. 
IT SHALL BE 
SUFFICIENT PUBLICATION IN SUCH CASES IF THE NOTICE OF FORECLOSURE 
AND EXECUTION OF JUDGMENT ARE POSTED IN CONSPICUOUS AREAS OF 
THE COOPERATIVE BANKS 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 
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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, OTHERWISE KNOWN AS THE COMPREHENSIVE AGRARIAN REFORM LAW 
OF 1988. 
ART. 102. Assistance to [a] Cooperative Banks. - IN ACCORDANCE WITH 
EXISTING POLICIES, GOVERNMENT AGENCIES, GOVERNMENT-OWNED OR 
CONTROLLED CORPORATIONS AND FINANCIAL INSTITUTIONS SHALL PROVIDE 
ASSISTANCE, TECHNICAL 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 bank 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] 
BSP [shall] MAY designate ONE OF ITS OFFICIALS [an official of the Central Bank] 
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, OTHERWISE KNOWN AS THE NEW CENTRAL BANK 
ACT. 
ART. 103. SETTLEMENT OF DISPUTES. - IN CASES OF BANKING-RELATED 
CONFLICTS, PROVISIONS OF THE GENERAL BANKING ACT AND THE RULES 
AND REGULATIONS OF THE MONETARY BOARD SHALL PREVAIL. 
SEC. 13. Articles 99 to 109 of Chapter Xlll on Special Provisions relating to 
Cooperative Banks of the same Code is hereby transferred to another chapter. This 
chapter is now retitled, renumbered and amended to read, as follows: 
CHAPTER Xlll 
INSURANCE COOPERATIVE 
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[Art. 115. Cooperative Insurance Societies. - Existing cooperatives may 
organize themselves into a cooperative insurance entity for the purpose of covering the 
insurance requirements of the cooperative members including their.. and assets.] 
Art. 104. Types of Insurance Provided. - xxx 
Art. 105. Applicability of Insurance Laws. - xxx 
Art. 106. Implementing Rules. - xxx 
SEC. 14. Articles 110 to 114 of Chapter XIV on Special Provisions relating to 
This 
Credit Cooperative of this Code are hereby transferred to another chapter. 
chapter is now retitled, renumbered and amended to read, as follows: 
CHAPTER XIV 
PUBLIC SERVICE COOPERATIVE 
ART. 107. Definition and Coverage. - xxx 
ART. 108. Registration Requirements. - No public service cooperative shall be 
registered unless it satisfies the following requirements: 
[(I) It has the favorable endorsement of the proper government agency 
authorized to issue the franchise or certificates of public convenience and necessity;] 
([2]1) Its articles of cooperation and by-laws provide for the membership of the 
users andlor producers of the service of such cooperatives; and 
([3]2) 
[It satisfies] such other requirements as may be imposed by the other 
pertinent government agencies concerned. In case there are two (2) or more applicants 
for the same public service franchise or certificate of public convenience and necessity, 
all things being equal, preference shall be given to a public service cooperative. 
ART. 109. Regulation of Public Service Cooperatives. - (1) The internal 
affairs of public service cooperatives such as the rights and privileges of members, the 
rules and procedures for meetings of the general assembly, board of directors and 
committees; for the election and qualifications of officers, directors, and committee 
members, allocation and distribution of surpluses, and all other matters relating to their 
internal affairs, shall be governed by this Code. 
(2) All matters relating to the franchise or certificate of public convenience and 
necessity of public service cooperatives such as capitalization and investment 
requirements, equipment and facilities, frequencies, rate-fixing and such other matters 
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affecting their public service operations shall be governed by the proper government 
agency concerned. 
(3) The [Cooperative Development] Authority and the proper government agency 
concerned shall jointly issue the necessary rules and regulations to implement this 
Chapter. 
(4) THE AUTHORITY SHALL ESTABLISH A COMMITTEE FOR THE 
MONITORING OF TRANSPORTATION SERVICE COOPERATIVES COMPOSED OF 
REPRESENTATIVES FROM THE AUTHORITY, THE LAND TRANSPORTATION AND 
FRANCHISE REGULATORY BOARD (LTFRB), THE LAND TRANSPORTATION 
OFFICE (LTO), OFFICE OF TRANSPORT COOPERATIVES, OTHER CONCERNED 
GOVERNMENT AGENCIES, AS MAY BE NECESSARY, AND THE NATIONAL 
FEDERATION OF TRANSPORTATION COOPERATIVES. A LOCAL MONITORING 
COMMITTEE SHALL LIKEWISE BE ESTABLISHED AT THE EXTENSION OFFICES 
OF THE AUTHORITY TO FACILITATE THE MONITORING OF TRANSPORTATION 
COOPERATIVES. 
ART. 1 I O .  ENGAGEMENT IN ALLIED BUSINESSES BY TRANSPORTATION 
SERVICE COOP€RATIVES. - SUBJECT TO PERTINENT NATIONAL LAWS AND 
LOCAL ORDINANCES, PRIMARY TRANSPORTATION SERVICE COOPERATIVES 
INCLUDING SECONDARY AND TERTIARY FEDERATION OF COOPERATIVES MAY 
ENGAGE IN A BUSINESS RELATED TO TRANSPORTATION SERVICES, 
INCLUDING BUT NOT LIMITED TO: 
(1) 
IMPORTATION, DISTRIBUTION AND MARKETING OF PETROLEUM 
PRODUCTS IN ACCORDANCE WITH THE EXISTING LAW(S); 
(2) 
OPERATION OF GASOLINE STATIONS AND TRANSPORTATION 
SERVICE CENTERS; 
IMPORTATION, DISTRIBUTION AND MARKETING OF SPARE PARTS 
AND SUPPLIES; 
MARKETING OF VEHlCLElDRlVERS INSURANCE POLICIES; 
(3) 
(4) 
SEC. 15, Articles 115 to 118 of Chapter XV on Special Provisions relating to 
Cooperative Insurance Societies of the same Code are hereby transferred to another 
chapter. This chapter is now retitled, renumbered and amended to read, as follows: 
CHAPTER XV 
CREDIT COOPERATIVE 
ART. 11 I. Coverage. - xxx 
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[ART. 111. Definition and Objectives. - A credit cooperative is a financial 
(1) xxx; 
(2) xxx; and 
(3) xxx.] 
organization owned and operated by its members with the following objectives: 
ART. 11 2. Organization and Registration. - xxx 
ART. 11 3. Organizational Linkage. - xxx 
(1) 
xxx; 
(2) 
xxx; 
(3) 
xxx; 
(4) 
xxx; 
(5) 
xxx; 
(6) 
xxx; 
(7) 
xxx; 
(8) 
xxx; and 
(9) 
xxx. 
xxx 
ART. 114. REGULATION AND SUPERVISION OF CREDIT COOPERATIVES. 
- THE AUTHORITY 
SHALL HAVE OVERALL SUPERVISION OVER THE 
OPERATIONS 
AND 
EXERCISE 
REGULATORY 
POWERS 
OVER 
CREDIT 
COOPERATIVES 
[ART. 114. Prohibition. - The term "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. 16. Articles 119 to 121 of Chapter XVI on Miscellaneous Provisions of the 
This chapter is now retitled, 
same Code are hereby transferred to another chapter. 
renumbered and amended to read, as follows: 
CHAPTER XVI 
ELECTRIC COOPERATIVES 
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ART. 115. COVERAGE. - THE PROVISIONS OF THIS ACT MAY APPLY TO 
ALL ELECTRIC COOPERATIVES INCLUDING THOSE REGISTERED UNDER THE 
AUTHORITY AND THE NATIONAL ELECTRIFICATION ADMINISTRATION. THIS 
SHALL ALSO COVER NEW ELECTRIC COOPERATIVES WHICH MAY UNDERTAKE 
POWER GENERATION, TRANSMISSION AND DISTRIBUTION AS ITS PRIMARY 
PURPOSES. 
ART. 116. REGISTRATION 
OF ELECTRIC COOPERATIVES. - THE 
REGISTRATION OF AN ELECTRIC COOPERATIVE WITH THE AUTHORITY UNDER 
THIS CODE SHALL BE SUBMITTED FOR APPROVAL TO THE MEMBERS IN A 
GENERAL ASSEMBLY. HOWEVER, THE BOARD OF DIRECTORS MAY INITIALLY 
APPROVE REGISTRATION WITH THE AUTHORITY BUT ARE REQUIRED TO SEEK 
CONFIRMATION THROUGH A SPECIAL GENERAL ASSEMBLY CALLED FOR THE 
PURPOSE. 
ART. 117. QUORUM REQUIREMENT. - THE QUORUM REQUIREMENT FOR 
A GENERAL ASSEMBLY SHALL BE AS CURRENTLY SET FORTH UNDER THE 
ARTICLES AND BY-LAWS OF THE ELECTRIC COOPERATIVES. 
ART. 118. 
REGISTRATION DOCUMENTS TO BE SUBMITTED. - FOR 
PURPOSES OF REGISTRATION, ELECTRIC COOPERATIVES SHALL SUBMIT THE 
FOLLOWING DOCUMENTS: 
(A)CERTlFlED COPY OF THE ARTICLES OF INCORPORATION AND 
BY-LAWS; 
(B) COPY OF THE RESOLUTION FILED BY THE GENERAL ASSEMBLY 
APPROVING THE REGISTRATION OF THEN COOPERATIVE WITH 
THE AUTHORITY. 
(C)COPY OF THE CERTIFICATE OF REGISTRATION WITH THE 
NATIONAL ELECTRIFICATION ADMINISTRATION; 
(D)DULY AUDITED FINANCIAL STATEMENTS FOR THE PAST TWO 
(2) YEARS; 
(E)LlST OF NAMES OF INCUMBENT BOARD OF DIRECTORS AND 
THEIR ADDRESSES CERTIFIED BY THE BOARD SECRETARY 
AND ATTESTED BY THE CHAIRMAN; 
(F)WlTHlN SIX (6) MONTHS FROM THE REGISTRATION, THE 
TREASURER SHALL SUBMIT A SWORN STATEMENT OF THE 
AUTHORIZED SHARE CAPITAL, THE SUBSCRIBED SHARE 
CAPITAL OF MEMBERS. THE PAID-UP SHARE CAPITAL OF 
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MEMBER AND THE AMOUNT OF PAID-UP SHARE CAPITAL 
RECEIVED BY THE TREASURER; AND 
(G)BOND OF ACCOUNTABLE OFFICER. 
ART. 
119. 
REGISTRATION 
WITH 
THE AUTHORITY. - 
ELECTRIC 
COOPERATIVES NOT YET DULY REGISTERED WITH THE AUTHORITY MAY 
WITHIN TWO (2) YEARS FROM THE EFFECTIVITY OF THIS ACT REGISTER AS 
SUCH WITH THE AUTHORITY BY SUBMITTING ALL ITS REQUIRED DOCUMENTS. 
ART. 120. ROLE OF THE ENERGY REGULATORY COMMISSION. - ALL 
RATES AND TARIFFS OF ELECTRIC COOPERATIVES REGISTERED UNDER THE 
AUTHORITY SHALL BE SUBJECT TO THE RULES ON APPLICATION AND 
APPROVAL OF AND BY THE ENERGY REGULATORY COMMISSION FOR 
DISTRIBUTION UTILITIES. 
ART. 121. ROLE OF THE NATIONAL ELECTRIFICATION ADMINISTRATION. 
- THE NEA SHALL BE A SOURCE OF TECHNICAL AND FINANCIAL ASSISTANCE 
AND SUPPORT FOR ELECTRIC COOPERATIVES REGISTERED WITH THE 
AUTHORITY, UPON REQUEST OF THE ELECTRIC COOPERATIVE CONCERNED. 
ART. 122. EFFECTS OF REGISTRATION WITH THE AUTHORITY. - 
ELECTRIC COOPERATIVES REGISTERED WITH THE AUTHORITY, UPON 
ISSUANCE OF THE CERTIFICATE OF REGISTRATION, SHALL NO LONGER BE 
COVERED BY THE PROVISIONS OF SECTIONS 3, 5 AND 7 OF P.D. NO. 1645 AND 
SECTION 17 OF P.D. NO. 269. PROVIDED, THAT ART. 98 OF R.A. NO. 6938 SHALL 
GOVERN THEIR INTERNAL AFFAIRS. PROVIDED FURTHER, THAT NEA SHALL 
NO LONGER EXERCISE REGULATORY OR SUPERVISORY 
POWERS 
OVER 
THEM 
WITH 
RESPECT 
TO 
MATTERS 
RELATING 
TO 
FRANCHISE, 
CAPITALIZATION AND INVESTMENT REQUIREMENTS, PERSONNEL AND HIRING 
POLICIES, EQUIPMENT AND FACILITIES, RATE STUDIES, SALARIES AND 
EMOLUMENTS AND PER DIEMS OF EMPLOYEES AND THE DIRECTORS OF THE 
ELECTRIC COOPERATIVE AND OTHER MATTERS AFFECTING THEIR PUBLIC 
S ERVl CE 
OPERATIONS . 
ELECTRIC COOPERATIVES THAT HAVE BEEN DULY REGISTERED WITH 
THE AUTHORITY AND ISSUED A CERTIFICATE OF REGISTRATION SHALL, FROM 
THE DATE OF REGISTRATION BE COVERED BY THE PROVISIONS OF THE 
COOPERATIVE CODE OF THE PHILIPPINES AS WELL AS FUTURE RULES AND 
OTHER ISSUANCES. PROVIDED, HOWEVER, THAT THE SECURITY OF TENURE 
OF MANAGEMENT AND EMPLOYEES SHALL BE RESPECTED, WITH NO 
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DIMINUTION OF THEIR EXISTING SALARIES, EMOLUMENTS, RANKS AND OTHER 
BENEFITS. 
THE NEA SHALL RETURN THE MORTGAGE DOCUMENTS COVERING 
LOANS TO ELECTRIC COOPERATIVES WHICH HAVE BEEN CONDONED UNDER 
ART. 60 OF THE ELECTRIC POWER INDUSTRY REFORM ACT (RA 9136). 
ART. 123. SHARE CAPITAL IN THE ELECTRIC COOPERATIVES. - THE 
ELECTRIC COOPERATIVE SHALL DISTRIBUTE SHARE CERTIFICATES UNDER 
THE NAME OF THEIR MEMBER, TAKING INTO CONSIDERATION THEIR 
PREVIOUS EQUITY CONTRIBUTIONS AND THE AMORTIZATION COMPONENT 
THROUGH THE PAYMENTS MADE. 
THE ELECTRIC COOPERATIVE SHALL 
VALUATE THE ASSETS OF THE ELECTRIC COOPERATIVE, INCLUDING LOANS 
CODONED, 
SUBSIDIES, 
GRANTS AND 
AWARD 
SHARE 
CERTIFICATES 
EVIDENCING OWNERSHIP, ACCORDING TO THE FORMULA, SCHEDULE AND 
THE TIME TABLE TO BE DETERMINED BY THE AUTHORITY. 
SEC. 17. The Miscellaneous Provisions on Chapter XVI, Articles 119 to 121 of 
this Code are hereby transferred, renumbered and amended under this Chapter to 
read, as follows: 
CHAPTER [XVI] XVll 
MISCELLANEOUS PROVISIONS 
ART. f24. Compliance With Other Laws. - (1) x x x 
(2) x x x  
(3) x x x  
ART. 125. Register of Cooperatives. - x x x 
ART. 126. Settlement of Disputes[.], CONCILIATION, AND MEDIA TlON 
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 by-laws of 
cooperative and in applicable laws. 
THE CONCILIATION AND MEDIATION COMMITTEE OF THE COOPERATIVE 
SHALL FACILITATE THE AMICABLE SETTLEMENT OF INTRA-COOPERATIVE 
DISPUTES AND DISPUTES AMONG MEMBERS, OFFICERS, DIRECTORS, AND 
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COMMITTEE MEMBERS. Should such conciliation [/‘I 
OR mediation proceeding fail, 
the matter shall be settled [in a court of competent Jurisdiction.] THRU VOLUNTARY 
ARBITRATION: 
PROVIDED, HOWEVER, THAT 
THE CONCILIATION AND 
MEDIATION COMMITTEE OF THE COOPERATIVE AND THE HIGHER LEVEL NON- 
BUSINESS COOPERATIVE UNION OR FEDERATION TO WHICH IT 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 
AUTHORITY FOR 
VOLUNTARY ARBITRATION. 
FOR THIS PURPOSE, THE AUTHORITY SHALL 
CONSTITUTE AND QUALIFY A LIST OF QUALIFIED VOLUNTARY ARBITRATORS. 
THE JURISDICTION OF VOLUNTARY ARBITRATORS SHALL BE EXCLUSIVE 
AND ORIGINAL AND THEIR DECISIONS SHALL BE APPEALABLE TO THE OFFICE 
OF THE PRESIDENT. THE AUTHORITY SHALL ISSUE AND ADOPT THE PROPER 
RULES OF PROCEDURE GOVERNING ARBITRATION AS THE PRIMARY AND 
EXCLUSIVE MODE FOR DISPUTE RESOLUTION IN ACCORDANCE WITH THE 
ALTERNATIVE DISPUTE RESOLUTION ACT OF 2004. 
SEC. 18. 
The Final Provisions on Chapter XVll of this Code are hereby 
transferred, renumbered and amended under this Chapter to read, as follows: 
CHAPTER [XVII] XVlll 
FINAL PROVISIONS 
[ART. 122. Electric Cooperatives. - Electric cooperatives shall be covered by this 
Code. However, there shall be a transition period of three (3) years within which the 
Cooperative 
Development Authority and the National Electrification Administration 
shall help and assist electric cooperatives to qualify under this Code. 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 
harmonized with the provisions of Presidential Decree No. 269.1 
ART. 127. Implementing Rules and Regulations. - 
(1) The [Cooperative 
Development] Authority [may] SHALL issue RULES AND regulations to implement 
[those] THE provisions of this Code IN CONSULTATION WITH CONCERNED 
GOVERNMENT AGENCIES AND THE COOPERATIVE SECTOR. [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.] 
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[(2) 
Where a provision of this Code does not expressly call for nor authorize the 
issuance of regulation, no regulation shall be issued thereon. Any regulation issued in 
violation of this paragraph shall be null and void ab initio.] 
[(3)1(2) x x x 
(a) x x x  
(b) x x x  
(c) x x x 
(d) x x x  
ART. 128. 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, 000.00) or both at the discretion of 
the court; 
THE AUTHORITY SHALL MOTU PROPRIO, INITIATE ANY COMPLAINTS FOR 
VIOLATIONS OF THIS PROVISION. 
(2) ANY PERSON WHO WILLFULLY ATTEMPTS IN ANY MANNER TO EVADE 
OR DEFEAT TAX IN VIOLATION OF THE PROVISIONS OF ARTICLES 60 AND 61 
OF THIS CODE 
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 (P100,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. 
SHALL, IN ADDITION 
(3) ANY ABUSE OR CIRCUMVENTION OF THE PROVISIONS OF 
ARTICLES 60 AND 61 OF THIS CODE BY ANY OFFICER OR EMPLOYEE OF THE 
GOVERNMENT SHALL BE DEALT WITH IN ACCORDANCE WITH THE 
PROVISIONS OF E.O. 292, THE ADMINISTRATIVE CODE OF 1987. 
THE COOPERATIVE OR ANY OF ITS MEMBERS CAN FILE A CASE AGAINST 
ANY OFFICER OR EMPLOYEE OF THE BUREAU OF INTERNAL REVENUE OR OF 
ANY OTHER GOVERNMENT AGENCY WITH THE OMBUDSMAN, CIVIL SERVICE 
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COMMISSION, OTHER APPROPRIATE GOVERNMENT AGENCY OR THE COURTS 
OF LAW. 
[(2)1 (4) x x x 
(a) x x x 
(b) x x x 
(c) x x x 
(d) x x x  
In case of violation of any provision of this [subsection] CODE, 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 (P5,000.00)] 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. 
[(3)] (4) A director, officer or committee member who violates the provisions of 
Article [47] 45 ON THE [(I [IILiability of [dIDirectors, [o]Officers and [cICommittee 
[m]Members, Article [50] 48 ON THE [(][d]Disloyalty of a [dIDirector), and Article [51] 
49 ON THE [(I [illllegal [u]Use of [cIConfidential [illnformation) shall upon conviction 
suffer 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 (IO) years or both at the court's discretion; 
[(4)1(5) x x x 
THE FOLLOWING ARE CONSIDERED OFFENSES PUNISHABLE BY THE 
PENALTY OF IMPRISONMENT OF NOT LESS THAN ONE (1) YEAR NOR MORE 
THAN FIVE (5) YEARS OR A FINE OF NOT MORE THAN FIFTY (P50,OOO.OO) 
THOUSAND PESOS OR BOTH AT THE DISCRETION OF THE COURT: 
OMISSION OR REFUSAL TO FURNISH ANY INFORMATION, REPORT 
OR OTHER DOCUMENT THAT IS REQUIRED TO BE FURNISHED 
UNDER THIS CODE; 
PROVIDING TO THE AUTHORITY INFORMATION, REPORTS OR 
OTHER DOCUMENTS THAT ARE REQUIRED UNDER THIS CODE 
WHICH THE PERSON KNOWS TO BE FALSE OR MISLEADING; 
OMISSION OR REFUSAL TO KEEP A BOOK OR REGISTER 
REQUIRED UNDER THIS ACT OR TO MAKE A REQUIRED ENTRY 
THEREIN; 
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MAKING AN ENTRY REQUIRED UNDER THIS CODE IN A BOOK OR 
REGISTER, WHICH THE PERSON KNOWS TO BE FALSE OR 
MISLEADING; 
HINDERING A PERSON WHO, AS PART OF THE PERSON’S DUTIES, 
IS MAKING AN INSPECTION, AN AUDIT, AN EXAMINATION OR AN 
INVESTIGATION UNDER THIS CODE; 
FAILURE 
TO 
COMPLY 
WITH 
AN 
ORDER 
OR 
WRITTEN 
INSTRUCTIONS ISSUED OR GIVEN BY THE AUTHORITY; 
VIOLATION OF THE PROVISIONS REGARDING TRANSACTIONS 
WITH A RESTRICTED PARTY; AND 
ABETTING, 
COUNSELING, 
ALLOWING, 
AUTHORIZING 
OR 
COMMANDING ANOTHER PERSON TO COMMIT AN OFFENSE 
PUNISHABLE BY THIS CODE: PROVIDED, THAT IN CASE THE 
VIOLATOR IS A COOPERATIVE OR JURIDICAL PERSON, THE 
PENALTY SHALL BE IMPOSED ON ITS DIRECTORS AND OFFICERS. 
ART. 129. Printing and Distribution. - (1) x x x 
(2) x x x  
ART. 130. Interpretation and Construction. - x x x 
ART. 131. RepeaI[s]/NG CLAUSE. - 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, THAT THE 
PROVISIONS OF SECTIONS 3, 5, AND 7 OF PRESIDENTIAL DECREE NO. 1645 
AND SECTION 17 OF PRESIDENTIAL DECREE NO. 269, EXECUTIVE ORDER 623 
SERIES OF 2007, REVENUE REGULATION NO. 20-2001, AND ALL LAWS, 
DECREES, EXECUTIVE ORDERS, IMPLEMENTING RULES AND REGULATIONS, 
BIR CIRCULARS, MEMORANDUM ORDERS, LETTERS OF INSTRUCTIONS, 
LOCAL GOVERNMENT ORDINANCES, OR PARTS THEREOF INCONSISTENT 
WITH ANY OF THE PROVISIONS OF THIS ACT ARE HEREBY REPEALED, 
AMENDED OR MODIFIED ACCORDINGLY. [Provided, however, That nothing in this 
Code shall be interpreted to mean the amendment or repeal of any provision of 
Presidential Decree No. 269 Provided, further, That the electric cooperatives which 
qualify as such under this Code shall fall under the coverage thereof.] 
ART. 132. 
TRANSlTORY PROVISIONS. - all cooperatives registered under 
Presidential Decree Nos.175 and 775, Executive Order No. 898, REPUBLIC ACT NOS. 
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6938 AND 6939, and all other laws shall be deemed registered with the [Cooperative 
Development] A[a]uthority: Provided, however, That they shall submit to the nearest 
[Cooperative Development Authority] office of the Authority their certificate of 
registration, copies of the articles of cooperation 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 ALL cooperatives 
INCLUDING THOSE created under Presidential Decree No. 269, as amended by 
Presidential Decree No. 1645, NOT YET REGISTERED WITH THE AUTHORITY shall 
be given [three (3) years] TWO (2) YEARS within which to qualify and register with the 
Authority. [Provided, finally, That after these cooperatives shall have qualified and 
registered, the provisions of sections 3, 5 and 7 of PD no. 1645 shall no longer be 
applicable to said cooperatives.] 
ART. 133. Separability Clause. - Should any provision of this Code be declared 
unconstitutional, the [rest of the provisions shall not be affected thereby] VALIDITY OF 
THE REMAINING PROVISIONS HEREOF SHALL REMAIN IN FULL FORCE AND 
EFFECT. 
Art. 134. Effectivity Clause. - This Act shall take effect fifteen days after its 
publication in two (2) newspapers of general circulation. 
Approved, 
51