TWENTIETH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
)
SENATE
S. No. 867
■f." (.©ffiCr of tl:? . .1 , l'
25 AUG -4 P5 :51
RECcIVcD BY.
Introduced by Senator Jinggoy Ejercito Estrada
AN ACT
PROVIDING FOR THE REVISED COOPERATIVE CODE OF THE PHILIPPINES
EXPLANATORY NOTE
Republic Act No. 6938, otherwise known as the "Cooperative Code of the 
Philippines" was signed into law in 1990 and served as the legal framework in the 
establishment and operations of cooperatives in the country. The law was amended 
in 2008 through the passage of Republic Act No. 9520 or the "Philippine Cooperative 
Code of 2008" to enhance the governing guidelines that will in turn allow the 
cooperatives in the country to flourish and be more productive.
As emphasized by an article published by the Cooperative Development 
Authority (CDA), "There must now be a paradigm shift towards an economic system 
that is based on collective cooperation where the people harness their collective 
potentials; where the marginalized sectors are drawn into the mainstream of 
development processes; where the people have access and control over their 
resources; where wealth and power are democratized; and where people and the 
environment are the priorities rather than business and profit. That alternative 
development paradigm is called cooperativism whose DNA are as follows; members- 
owned, value-based and sustainable. Its values are industry, honesty, hard-work, 
cooperation, equity, democratic control, and where people have societal concern.


Food security and ecological integrity are its parameters of engagement rather than 
extraction and exploitation of nature."1
According to the CDA in its 2024 Cooperative Statistics2, there are a total of 
20,962 cooperatives in the country, 1,644 of which are new. This is a significant 
increase from the 18,848 operating cooperatives accounted for in 2020. In terms of 
location Region III remains to have the most number of cooperatives since 2020 and 
according to type, majority remains to be multipurpose cooperatives. Based on 
asset size, majority or 13,525 of the cooperatives are micro, while others are small 
(3,925), medium (2,567) and large (945). These cooperatives have 13.6 million 
membership nationwide and have generated 335,100 employment.
These figures show the vast reach of the cooperatives in working with our 
people and their great potential to contribute more to the economy of the country.
The '''Revised Cooperative Code of the Phiiippined' seeks to address the 
various concerns that constrict the growth and development of cooperatives. As 
emphasized by President Ferdinand R. Marcos, Jr. in his Second State of the Nation 
Address, there is an urgent need to revisit the Cooperative Code to encourage and 
support the establishment of cooperatives in the different parts of the country. This 
is a significant foundation of a genuine, long-term, democratic, and sustainable 
progress of our economy.
In view of the foregoing, the immediate passage of this measure is highly 
recommended.
NGGQY EJERCITO ESTRADA
1COOPERATIVISM: THE URGENT CALL OF THE TIMES I CDA
2 FY 2024 Cooperative Statistics I CDA


TWENTIETH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
;l §^t’lUTT 
o( ti’^
25 AUG -4 P5S1
SENATE
S. No. 867
RliCEIVED BY:
Introduced by Senator Jinggoy Ejercito Estrada
AN ACT
PROVIDING FOR THE REVISED COOPERATIVE CODE OF THE PHILIPPINES
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
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Section 1. Short Title. -This Act shall be known as the "Revised Cooperative
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Code of the PhUippined'.
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Sec. 2. Declaration of Policy. - It is the policy of the State to foster the
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creation and growth of cooperatives as a practical vehicle for promoting self-reliance
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and harnessing people power towards the attainment of economic development and
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social justice. The State shall encourage the private sector to undertake the actual
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formation and organization of cooperatives and shall create an atmosphere that is
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conducive to the growth and development of these cooperatives.
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Towards this end, the State shall, through the different branches,
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subdivisions, instrumentalities, and agencies of the government, regulate the
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conduct of cooperatives and support their growth and development in partnership
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with the private sector. The State shall also ensure the provision of technical and
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financial assistance, and other services to enable the cooperatives to develop into
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viable and responsive economic enterprises towards a strong cooperative movement,
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free from conditions that infringe upon the objectives and character of cooperatives.
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Further, the State recognizes the principle of subsidiarity under which the
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cooperative sector initiates and fosters, within their own ranks, cooperative


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promotion, organization, training, information gathering, audit, and support services,
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with government assistance if necessary.
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Sec. 3. General Concepts.-
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a) A cooperative is an autonomous and duly registered association of persons
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with common bond of interest who have voluntarily joined together to
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achieve their social, economic, and cultural needs and aspirations by
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making equitable contributions to the capital required, patronizing their
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products and services, and accepting a fair share of the risks and benefits
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of the undertaking in accordance with universally-accepted cooperative
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principle;
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b) Cooperative principles - Every cooperative shall conduct its affairs in
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accordance with Filipino culture, good values and experience, and the
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following universally-accepted principles of cooperation;
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1) Voluntary and Open Membership - Cooperatives are voluntary
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organizations, open to all persons able to use their services and
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willing to accept the responsibilities of membership, without
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gender, social, racial, cultural, political or religious discrimination.
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2) Democratic Member Control - Cooperatives are democratic
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organizations controlled by its members who actively participate in
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settling their policies and making decisions. Elected
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representatives, directors or officers are accountable to the
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membership. In primary cooperatives, members have equal voting
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rights of one member - one vote. Cooperatives at other levels or
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organized in the same democratic manner.
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3) Member Economic Participation - Members contribute equitably to,
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and democratically control, the capital of their cooperative. At least
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part of that capital is the common property of the cooperative.
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Members shall receive limited compensation or limited interest, if
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any, on capital subscribed and paid as a condition of membership.
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Members allocate surpluses for any or all of the following purposes:
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developing the cooperative by setting up reserves, part of which
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should be indivisible; benefitting members in proportion to their


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patronage of the cooperative's business; and supporting other 
activities approved by the membership.
4) Autonomy and Independence - Cooperatives are autonomous, self- 
help organizations controlled by their members. If cooperatives 
enter into agreements with other organizations, including 
government, or raise capital from external sources, they shall do so 
on terms that ensure democratic control of their members and 
maintain cooperative autonomy.
5) Education, Training, and Information - 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 - Cooperatives serve their 
members more effectively and strengthen the cooperative 
movement by working together through local, national, and 
international structures.
7) Concern for Community - Cooperatives work for the sustainable 
development of their communities through policies approved by 
their members.
c) Cooperative Vaiues - Cooperatives are based on the values of self-help, 
self-responsibility, democracy, equality, equity, and solidarity. Cooperative 
members believe in the ethical values of honesty, openness, social 
responsibility, and caring for others.
Sec. 4. Definition of Terms. - As used in this Act:
a) Area of Operation refers to the place where the cooperative operates and 
conducts its business, as provided for in its articles of cooperation and 
bylaws;
b) Articles of Cooperation refers to the document registered with the 
Cooperative Development Authority, including its amendments, that 
defines and regulates the relations between the cooperative and the State;
c) Authority refev to the Cooperative Development Authority;


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d) Board of Directors refers to the collegial body responsible for the strategic 
planning, direction-setting, and policy-formulation activities of the 
cooperative;
e) Branch-Hte unit refers to a cooperative bank that performs limited banking 
activities and records its transaction in the books of the head office or the 
branch to which it is annexed;
f) Byiaws refers to the document registered with the Authority, including its 
amendments, that defines and regulates the operations of the cooperative 
and governs the relations between the cooperative and its members and 
among themselves;
g) Ciustering and Consolidation refers to the grouping together of the crops, 
livestock and/or fish producers within a community or adjacent 
communities on the basis of proximity of their production areas, similarity 
of inputs, share production activities/processes and/or common final 
products, where there is potential for unified management of production 
activities, sourcing of inputs, access to financing, processing, logistics, 
storage, marketing, and enhanced quality of produce. It shall not be 
limited to the notion of simply merging contiguous land properties and 
assets.
h) Committees refer to the mandatory committees under this Code entrusted 
with specific functions and responsibilities and such other committees that 
the Board of Directors deem necessary for the governance of the business 
affairs of the cooperative;
i) 
Compensation refers to a broad term that includes all forms of 
remuneration given for services rendered, like salary which is paid 
regularly. It does not imply an immediate payment or direct return, nor 
the payment of cash fare or its equivalent. It also includes any 
remuneration, by whatever name it may be designated. However, as used 
in Section 3.b.c. in this Code, compensation shall refer to the interest on 
share capital and patronage refund;
j) Cooperative Union refers to a cooperative whose members are registered 
cooperatives, federations, or both, organized purposely to represent the


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interest and welfare of all types of cooperatives at the city, provincial, 
regional, national, and sectoral levels;
k) Federation of Cooperatives refers to a cooperative, the members of which 
are primary and/or secondary cooperatives, registered with the Authority 
to conduct related business in support of its member cooperatives to 
address common needs, engage in capacity-building activities and 
delegated supervision in support of its member cooperatives and its 
exercise of self-regulation among its members, organized at the municipal, 
city, provincial, regional, national, special metropolitan political 
subdivision, or economic zones created by law;
l) 
General Assembly refers to the full membership of the cooperative duly 
assembled physically, via video conferencing, or both, for the purpose of 
exercising all the rights and performing all the obligations pertaining to 
cooperatives, as provided by this Code, its articles of cooperation, and 
bylaws;
m) Honorarium refers to the token of appreciation granted for the expert 
service rendered in the specific field that does not receive compensation;
n) Interest on Share Capital refers to the amount earned by the members on 
their contribution in the cooperative. The interest on share capital and the 
patronage refund shall be determined at the end of the calendar year after 
the net surplus shall have been distributed in accordance with the articles 
of cooperation and bylaws or by the Board of Directors;
o) Investment refers to equity participation in any enterprise formed, 
organized or existing under the laws of the Philippines;
p) Laboratory Cooperative refers to a cooperative affiliated with and 
registered by a primary cooperative, and whose membership consists of 
minors;
q) Member refers to a person either natural or juridical, who has been 
approved and admitted by the Board of Directors of the cooperative, 
federation, or union, after undergoing the Pre-Membership Education 
Seminar and has vowed to adhere to the articles of cooperation and its


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bylaws. Members shall be classified as regular or associate, as qualified by 
the cooperative;
r) Member Entitled to Vote refers to a regular member who has complied 
with all the membership requirements of the cooperative, has fulfilled all 
of their duties and obligations, and possesses none of the disqualifications 
as provided by the articles of cooperation and bylaws of the cooperative, 
as declared by the Board of Directors;
s) Patronage Refund refers to the payment to the members of a percentage 
or portion of the amount availed of, the interest on loans paid, or other 
services availed from the cooperative. The amount will be determined at 
the end of the fiscal year after the distribution of the net surplus. The 
percentage of the allocation will be in accordance with the provisions in its 
articles of cooperation, the bylaws, or by the Board of Directors. The 
formula and basis for the computation of the rate of patronage refund will 
be determined by the Authority.
t) Per Diem refers to the allowance given as reimbursement for extra 
expenses incurred in the performance of their duties;
u) Performance Audit refers to an audit conducted by the Authority on the 
efficiency, efficacy, and effectiveness of the cooperative's overall 
performance as a whole, its management and officers, and its various 
responsibility centers as basis for improving individual, team, or overall 
performance, and for objectively informing the general membership of the 
cooperative on such performance;
v) Primary Cooperative refers to a cooperative, the members of which are 
natural persons. In the case of water service cooperatives, institutional 
users may be accepted as associate members;
w) Registration refers to the operative act granting juridical personality to a 
proposed cooperative and is evidenced by a Certificate of Registration;
x) Representative Assembiy refers to the full membership of a body of 
representatives elected by each of the sectors, chapters, or districts of the 
cooperative duly assembled for the purpose of exercising such powers in 
accordance with its bylaws;


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y) Samahang Nayon and Municipal Katipunan ng mga Samahang Nayon 
refers to pre-cooperative organizations established under Presidential 
Decree No. 175 entitled, "Strengthening the Cooperative Movement";
z) Secondary Cooperative refers to a cooperative, the members of which are 
primary cooperatives;
a a) Single-Purpose Cooperative refers to a cooperative that undertakes only 
one economic activity, except one that is allowed to undertake allied 
economic activities;
hb)Share Capital refers to the equitable contribution of a member to the 
cooperative fund, the working capital fund of the cooperative, which shall 
have a par value of at least One hundred pesos (PIOO.OO) and issued as 
common or preferred shares depending on the type of membership with 
the cooperative;
cc) Social Audit refers to an audit conducted to assess the social impact of the 
cooperative and its ethical performance vis-a-vis its stated mission, vision, 
goals, and code of social responsibility. It is a mechanism whereby it can 
account for the social performance of a cooperative and evaluate its 
impact on the community, making the cooperative accountable for its 
decisions and actions to its members;
66)Subscription Agreement refers to the document executed by a member to 
signify the amount that the member intends to contribute to the 
cooperative fund;
ee)Subsidiary Cooperative refers to a cooperative, all or majority of whose 
members or shareholders come from a parent cooperative, organized for 
any other purpose different from that of, and receives technical, 
managerial, and financial assistance from the latter, in accordance with 
the rules and regulations of the Authority;
ff) Video Conferencing refers to a conference between two (2) or more 
participants at different sites by using computer networks to transmit 
audio and video data; and


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gg) Worker Beneficiary refers to a natural person who renders service for
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value as an employee or laborer in an agricultural enterprise or farm
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within an agrarian reform cooperative.
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CHAPTER II
5 
PURPOSES AND ORGANIZATION
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Sec. 5. Goals and Objectives of a Cooperative. - The primary objective of
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every cooperative is to help improve the quality of life of its members. Towards this
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end, the cooperative shall, among others, aim to:
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a) Increase income, savings, investments, productivity, and purchasing
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power of its members; and promote among themselves equitable
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distribution of net surplus through maximum utilization of economies of
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scale, cost sharing and risk-sharing;
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b) Provide optimum social and economic benefits to its members;
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c) Provide trainings for its members on the efficient ways of processing tasks
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in a cooperative manner;
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d) Propagate best practices, innovative ideas in business undertakings and
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management through the utilization of new technologies;
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e) Empower the marginalized sector to gain opportunities through education
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and skills training;
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f) Actively collaborate with the government, other cooperatives, and people
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oriented organizations to promote cooperatives as a practical means
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towards sustainable socioeconomic development;
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g) Adopt membership expansion mechanism to ensure the growth of the
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cooperative movement;
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h) Implement policy guidelines that will ensure transparency, accountability,
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and equitable access to its resources and services; and promote the
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interests of the members;
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i) Advance the sustainability, competitiveness, and innovativeness of
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cooperatives in various industries;
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j) Coordinate with other cooperatives through learning and information
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exchange to foster sustainable development;


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k) Advocate legal framework and enabling policies appropriate for the
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development of cooperatives;
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I) Be the voice and the institution of the marginalized for purposes of
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promoting ecological and people-centered development;
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m) Encourage thrift and savings mobilization among the members;
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n) Generate funds and extend credit to the members for productive and
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provident purposes;
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o) Encourage among members systematic production and market-oriented
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production;
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p) Provide goods and services and other requirements to the members;
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q) Develop expertise and skills among its members;
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r) Acquire lands and provide housing benefits for the members;
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s) Provide insurance programs to cover the risk of financial losses in the
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operations of a cooperative, and provide assistance to mitigate effects of
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economic shocks or natural calamities or disasters;
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t) Promote and advance the economic, social, and educational status of the
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members;
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u) Establish, own, lease, or operate cooperative banks, cooperative wholesale
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and retail complexes, insurance, agricultural and industrial processing
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enterprises, and public markets;
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v) Coordinate and facilitate the activities of cooperatives;
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w) Advocate for the cause of the cooperative movement;
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x) Ensure the viability of cooperatives through the utilization of new
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technologies;
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y) Encourage and promote self-help or self-employment as an engine for
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economic growth and poverty alleviation;
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z) Adopt such other plans which may help foster the welfare of the members,
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their families, and the community; and
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aa)Undertake any activity stated in the articles of cooperation and bylaws of
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the cooperative.
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Sec. 6. Cooperatives Not in Restraint of Trade. - No cooperative or method
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or act thereof which complies with this Code shall be deemed a conspiracy or


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combination in restraint of trade or an illegal monopoly, or an attempt to lessen
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competition or fix prices arbitrarily in violation of any laws of the Philippines.
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This notwithstanding, fair competition among cooperatives is paramount in
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their collective growth. Cooperatives shall support and foster a level playing field in
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their industries. Accordingly, Sections 6, 7, 21 and 111 of this Code shall be in
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consonance with Republic Act No. 10667, otherwise known as the "Philippine
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Competition Act".
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Sec. 7. Cooperative Powers and Capacities. - A cooperative registered under
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this Code shall have the following powers, rights and capacities:
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a) To the exclusive use of its registered name;
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b) To sue and be sued;
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c) Of succession;
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d) To amend its articles of cooperation in accordance with the provisions of
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this Code;
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e) To adopt bylaws not contrary to law, morals, or public policy, and amend
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or repeal the same in accordance with this Code;
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f) To purchase, receive, take or grant, hold, convey, sell, lease, pledge,
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mortgage, or otherwise deal with such real and personal property as the
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transaction of the lawful affairs of the cooperative they are reasonably and
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necessarily require, subject to the limitations prescribed by law and the
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Constitution;
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g) To enter into joint venture agreement and partnership, or any other
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commercial activity with other cooperatives;
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h) To enter into division, merger or consolidation, as provided in this Code;
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i) To form subsidiary cooperatives and join federations, unions, 
or Credit
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Surety Fund Cooperatives, as provided in this Code;
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j) To avail of loans, be entitled to credit. And accept and receive grants,
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donations, and assistance from foreign and domestic sources, subject to
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the conditions of the loans, credits, grants, donations or assistance that
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must not undermine the autonomy of the cooperative;
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k) To avail of preferential rights granted to cooperatives under Republic Act
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No. 7160, otherwise known as the "Local Government Code of 1991", and
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Other laws, particularly the grant of franchises to establish, construct, 
operate, and maintain ferries, wharves, markets or slaughterhouses and 
lease public utilities, including access to extension and on-site research 
services and facilities related to agriculture and fishery services;
l) To establish, own, and operate schools in all levels of the education 
system, subject to the rules and regulations of the Department of 
Education, Commission on Higher Education, and Technical Education and 
Skills Development Authority;
m) To operate branch, satellite, and liaison offices within its area of operation, 
subject to the rules and regulation by the Authority. The Authority and 
the sector shall issue rules regarding the creation and operation of branch, 
satellite, and liaison offices of cooperatives;
n) To provide training for their officers and members for continued 
development and personal improvement. If a cooperative is unable to 
provide training for its members, it may engage the services of a 
federation or union. Government agencies and experts from the private 
sector are authorized to assist in the organization, training, and 
development of a cooperative and its members if the cooperative wishes 
to do so. In this regard, cooperatives and other institutions shall be 
accredited as Training Service Providers by the Authority: Provided, That a 
federation shall only provide training In accordance with its business or 
specialization for their members, while a union shall provide basic and 
other training that benefits the sector, unless there is no existing or 
functioning union or federation in the area: Provided, further, That 
government agencies and experts from the private sector are authorized 
to assist in the organization, training, and development of a cooperative 
and its members, in coordination with federations and unions; and
o) To exercise such other powers granted in this Code as shall be necessary 
to carry out its purposes stated in its articles of cooperation.
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Sec. 8. Organizing a Primary Cooperative. - At least fifteen (15) natural 
persons who are Filipino citizens, of legal age, having a common bond of interest, 
and are residing or working in the intended area of operation, may organize a 
primary cooperative under this Code, provided that no cooperative with the same 
line of business is operating in the same area of operation. The cooperators shall 
attend and complete a Pre-Registration Seminar (PRS) as a prerequisite for 
registration. The details and requisites of the PRS must be included in the 
impiementing rules and regulations of this Code: Provided, That a prospective 
member of a primary cooperative must have completed a Pre-Membership Education 
Seminar (PMES).
Foreign nationals may join in organizing a primary cooperative as associate 
members: Provided, That the foreign national is a natural-born Filipino citizen who is 
a naturalized citizen of a foreign country or is a son or daughter of a Filipino citizen 
who is a naturalized citizen of a foreign country: Provided, further, That their 
intention in joining the cooperative is for the growth and development of a Philippine 
cooperative community.
Overseas Filipino Workers (OFW) may organize and register primary 
cooperatives, subject to the rules and regulations to be promulgated by the 
Authority.
Indigenous cultural communities may organize and register primary 
cooperatives consistent with their traditions, culture, practices, beliefs, and value 
systems.
Islamic communities may organize and register primary cooperatives 
consistent with the Sharia laws and principles as enunciated by the noble qur'an and 
the hadiths of the Prophet Mohammad.
No primary cooperative shall be organized as a multi-purpose cooperative 
unless it has been in operation for at least two (2) years and shall have complied 
with the minimum requirements for multi-purpose cooperatives as prescribed by the 
Authority; Provided, That agricultural cooperatives shall be exempt from the 
requirements in organizing a multi-purpose cooperative.
In order to encourage cooperativism among the youth, a primary cooperative 
may organize a laboratory cooperative as defined under this Code. A laboratory
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cooperative shall have all the rights, privileges, and duties of a regular cooperative,
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and shall be governed by special guidelines to be promulgated by the Authority, in
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consultation with the cooperative sector.
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Sec. 9. Mandatory Personnel of the Cooperative. - All cooperatives shall have
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a General Manager and a Bookkeeper to be authorized to operate.
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Sec. 10. Liability of the Cooperative. - A cooperative duly registered under
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this Code shall have limited liability.
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Sec. 11. Term of Existence of Cooperative. - A cooperative shall have
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perpetual existence from the date of registration unless voluntarily dissolved or the
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Certificate of Registration is cancelled for reasons provided under this Code and its
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implementing rules and regulations.
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Sec. 12. Articles of Cooperation. - All primary cooperatives applying for
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registration shall present to the Authority the Certificate of Pre-Registration Seminar
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and the articles of cooperation, signed by all cooperators and acknowledged by them
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before a notary public.
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In case of cooperative banks, insurance cooperatives, federations, or unions,
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the articles of cooperation shall be acknowledged by its Chairpersons and
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Cooperative Secretaries before a notary public. The articles of cooperation shall
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contain the following provisions:
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a) Name of the cooperative, which shall include the word "Cooperative",
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"Coop", "Koop", or "Kooperatiba" and specify the type of cooperative;
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b) Purpose or purposes and the economic activities for which the cooperative
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is to be registered;
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c) Powers and capacities;
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d) Area of operation, the postal address of its principal office, and the official
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electronic mail address of the cooperative;
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e) Names, nationality, and the postal addresses of the cooperators;
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f) Common bond of membership;
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g) List of names of the directors;
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h) Amount of authorized, subscribed, and paid-up share capital, the number
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of shares, and the par-value of each share, and the names of the
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cooperators, except for cooperative unions;
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i) A statement as to whether the cooperative is primary or secondary;
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j) Other provisions consistent with this Code or any related law; and
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k) Certificate of Authority from the appropriate government agency.
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Sec. 13. Bylaws. - Every cooperative to be registered under this Code shall
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adopt bylaws consistent with the provisions of this Code, which shall be filed
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together with the articles of cooperation. The bylaws of each cooperative shall
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provide:
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a) The qualifications for admission to membership;
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b) The equitable contribution or interest to be acquired as a condition
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precedent for the exercise of the right of membership;
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c) The rights, privileges, duties, responsibilities, and liabilities of
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membership;
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d) The circumstances under which membership is acquired, maintained, and
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terminated, and the procedure to be followed;
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e) The conditions under which the transfer of a share or interest of the
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members shall be permitted;
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f) The general conduct of the affairs of the cooperative relative to agenda,
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time, place and manner of calling, convening, and conducting meetings,
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quorum requirements, voting systems of the General Assembly, the Board
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of Directors, committees and the officers, including their qualifications,
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disqualifications, powers, duties, and responsibilities;
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g) The manner in which the capital may be raised and the purposes for which
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it can be utilized;
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h) The accounting and auditing systems thereof;
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i) The manner of contracting loans and borrowings including the limitations
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j) The allocation and distribution of net surplus;
27 
k) The manner of adopting and amending bylaws;
28 
I) The institution of a conciliation or mediation mechanism for the amicable
29 
settlement of disputes among members, directors, officers and committee
30 
members of the cooperative; and
31 
m) Other matters incident to the purposes and activities of the cooperative.
32 
CHAPTER III
14


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REGISTRATION
2 
Sec. 14. Requirements of Registration. - The proposed articles of cooperation,
3 
bylaws, and such other required documents shall be submitted in accordance with
4 
the rules and regulations to be prescribed by the Authority.
5 
Except for cooperative unions as described under Section 31 hereof, no
6 
cooperative shall be registered unless the articles of cooperation is accompanied
7 
with the bonds of the accountable officers and a sworn statement of the Treasurer
8 
showing that at least twenty-five percent (25%) of the authorized share capital has
9 
been subscribed and at least twenty-five percent (25%) of the total subscription has
10 
been paid.
11 
The Authority shall initially fix the minimum paid-up share capital in the
12 
implementing rules and regulations of this Code, periodically assess the required
13 
paid- up share capital, and may increase or decrease it through subsequent
14 
regulation whenever necessary upon consultation with the cooperative sector.
15 
The Authority may prescribe such other registration requirements as it may
16 
deem necessary, in consultation with the cooperative sector.
17 
Sec. 15. Registration. - A cooperative formed and organized under this Code
18 
acquires juridical personality from the date the Authority issues a Certificate of
19 
Registration under its official seal. All applications for registration shall be finally
20 
disposed of by the Authority within a period of twenty (20) working days from the
21 
filing of the complete documentary requirements, both in form and in substance,
22 
otherwise the application is deemed approved, unless the cause of the delay is
23 
justified as the case may be: Provided, That in case of a denial of the application for
24 
registration, the applicant may file a Motion for Reconsideration within five (5) days
25 
from the receipt of such denial. The Motion for Reconsideration to the Authority
26 
denying the application must be resolved within fifteen (15) days from the filing
27 
thereof An appeal to the Board of Directors of the Authority may be filed within
28 
twenty (20) working days from receipt of notice of denial of the Motion for
29 
Reconsideration. The decision of the Board of Directors shall be final and executory
30 
but may be appealed to a regular court through a petition for review.
31 
The grounds for denial of the registration shall be prescribed in the
32 
implementing rules and regulations of this Code.
15


1 
Sec. 16. Certificate of Registration. - A Certificate of Registration issued by
2 
the Authority under its official seal shall be conclusive evidence that the cooperative
3 
therein mentioned is duly registered unless it is proved that the registration thereof
4 
has been cancelled. Moreover, once the cooperative is issued a Certificate of
5 
Compliance, it shall be valid for five (5) years, unless revoked by the Authority after
6 
due process due to willful refusal to comply with the reportorial requirements set
7 
forth by law.
8 
Sec. 17. Amendment of Articies of Cooperation and Byiaws. - Unless
9 
otherwise prescribed by this Code and for legitimate purposes, any provision or
10 
matter stated in the articles of cooperation and bylaws may be amended by two-
11 
thirds (2/3) vote of all the members entitled to vote, without prejudice to the right of
12 
the dissenting members to exercise their right to withdraw their membership under
13 
Section 37 of this Code.
14 
A cooperative may opt to amend its articles of cooperation and bylaws
15 
through a referendum by a vote of two-thirds (2/3) of all the members entitled to
16 
vote, present and constituting a quorum.
17 
Both the original and amended articles of cooperation bylaws shall contain all
18 
the provisions required by law. Amendments shall be indicated by underscoring or
19 
otherwise appropriately indicating the change or changes made. A copy of the
20 
amended articles of cooperation or bylaws shall be duly certified under oath by the
21 
Cooperative Secretary and majority of the directors, stating the fact that the
22 
amendment or amendments to the articles of cooperation and bylaws have been
23 
duly approved by the required vote of the members. All amendments to the articles
24 
of cooperation and bylaws shall be submitted to the Authority.
25 
An application for amendments shall be deemed approved by the Authority
26 
within a period of twenty (20) days from the filing thereof: Provided, That the
27 
documentary requirements are complete in form and substance.
28 
Sec. 18. Contracts Executed Prior to Registration and Effects Thereof -
29 
Subject to the execution of a formal written contract made in the cooperative's name
30 
or on its behalf prior to its registration, all contracts executed prior to its registration
31 
between private persons and the cooperative shall remain valid and binding between
32 
the parties insofar as it redounds to the benefit of the cooperative.
16


1 
Sec. 19. Effects of Failure to Operate or Comply with Conditions on
2 
Registration. - The Certificate of Registration shall be deemed cancelled and the
3 
cooperative shall be delisted from the registry of cooperatives if the cooperative
4 
failed to commence its authorized business activity within five (5) years from the
5 
issuance of its Certificate of Registration.
6 
Sec. 20. Division of Cooperatives. - A registered cooperative, through a
7 
resolution approved by a vote of two-thirds (2/3) of all the members entitled to vote,
8 
present and constituting a quorum, may divide itself into two (2) or more
9 
cooperatives. Such division of the cooperative shall be valid: Provided, That the
10 
purpose of the division is not to defraud the creditors: Provided, further, That the
11 
division shall ensure the continuity of the existing government programs and
12 
projects.
13 
The dissenting members shall have the right to exercise their right to
14 
withdraw their membership pursuant to Section 38 of this Code.
15 
The Authority shall prescribe the rules and regulations for the division of the
16 
cooperative: Provided, That all the requirements set forth in this Code have been
17 
complied with by the newly-formed cooperatives.
18 
CHAPTER IV
19 
MERGER AND CONSOLIDATION OF COOPERATIVES
20 
Sec. 21. Merger or Consolidation of Cooperatives. -
21 
a) Two (2) or more cooperatives may merge or consolidate into a single
22 
cooperative.
23 
b) No merger or consolidation shall be valid unless approved by a two-thirds
24 
(2/3) vote of all the members entitled to vote, present and constituting a
25 
quorum of each of the constituent cooperatives at separate General
26 
Assembly meetings. The dissenting members shall have the right to
27 
exercise their right to withdraw their membership pursuant to Section 38
28 
of this Code.
29 
c) The Authority shall issue the guidelines governing the procedure of merger
30 
or consolidation of cooperatives. The merger or consolidation shall be
31 
effective upon the issuance by the Authority of the Certificate of Merger,
17


1 
or in the case of a consolidation of cooperatives, a new Certificate of
2 
Registration.
3 
Sec. 22. Effects of Merger and Consolidation. - The merger and consolidation
4 
of cooperatives shall have the following effects:
5 
a) In case of merger of cooperatives, the constituent cooperatives shall
6 
become a single cooperative or, in the case of consolidation of
7 
cooperatives, the consolidated cooperative shall be the new cooperative;
8 
b) The single cooperative or the consolidated cooperative shall possess all
9 
the assets, rights, privileges, immunities, and franchises and assume all
10 
the liabilities and obligations of each of the constituent cooperatives;
11 
c) Any claim, action, or proceeding instituted by or against the constituent
12 
cooperatives may be continued by the single or consolidated cooperative;
13 
and
14 
d) The merger or consolidation shall not impair the rights of creditors nor any
15 
lien upon the property of the constituent cooperatives.
16 
CHAPTER V
17 
TYPES AND CATEGORIES OF COOPERATIVES
18 
Sec. 23. Types and Categories of Cooperatives.-
19 
a) Clusters of Cooperatives - Cooperatives may fall under any of the following
20 
clusters based on their business activity:
21 
1) Credit, Finance, Banking, and Insurance Ouster refers to
22 
cooperatives organized for the promotion of financial freedom and
23 
literacy among its members, and undertakes savings, lending, and
24 
other financial services to its members, such as:
25 
i) Cooperative Banks. - Cooperative banks are organized for the
26 
primary purpose of providing a wide range of financial services
27 
to cooperatives and their members;
28 
ii) Credit Cooperatives. - Credit cooperatives are engaged solely
29 
in lending services;
30 
iii) Credit and Savings Cooperatives. - Credit and savings
31 
cooperatives promote and undertake savings and lending
32 
services among its members. They generate a common pool of
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funds in order to provide financial assistance to their members 
for productive and provident purposes;
iv) Credit Surety Fund Cooperatives. - Credit surety fund 
cooperatives, in partnership with Local Government Units 
(LGUs), are comprised of well-capitalized and well managed 
member-cooperatives or non-government organizations that 
meet the criteria and qualifications prescribed by the Authority, 
LGUs, Government Financial Institutions, and other 
government agencies;
v) 
Insurance Cooperatives. - Insurance cooperatives are engaged 
in the business of insuring the life, general, property, and pre­
need (life plan, education, and pension) of cooperatives and 
their members;
vi) Savings and Deposits Cooperatives. - Savings and deposits 
cooperatives are engaged solely in promoting and encouraging 
savings among its members; and
vii) Other cooperatives as may be determined by the Authority 
under this cluster in consultation with the cooperative sector.
2) Consumers, Marketing, Producers, and Logistics duster refers to 
cooperatives organized for the supply, procurement, transport, 
storage, distribution, and marketing of products of its members, 
industrial production, and nonagricultural business activity for the 
production and processing of raw materials or goods or its 
derivative, such as:
i) Consumers Cooperatives. - Consumer cooperatives are 
engaged primarily in procuring and distributing 
commodities to members and non-members;
ii) Marketing Cooperatives. - Marketing cooperatives are 
engaged in the supply of production inputs to members 
and markets their products, including trading and 
processing;
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iii) Logistics Cooperatives. - Logistics cooperatives are 
engaged in operations involving facilities and supplies 
whose business is related to the supply chain;
iv) Producers Cooperatives. - Producers cooperatives are 
engaged in joint production whether agricultural or 
industrial. They are formed and operated by the members 
to undertake the production and processing of raw 
materials or goods produced by the members into finished 
or processed products for sale by the cooperative. Any end 
product or its derivative arising from the raw materials 
produced by the members, sold in the name and for the 
account of the cooperative, shall be deemed a product of 
the cooperative and its members; and
v) Other cooperatives as may be determined by the Authority 
under this cluster in consultation with the cooperative 
sector.
3) Human Services, Health, Housing, Workers, and Labor Service 
Ouster refers to cooperatives organized for providing employment 
and business opportunities to its members, housing, and services 
related to medical, dental, health and wellness, and death care, 
technology, including digital payment services, such as:
i) Health 
Services Cooperatives. 
- 
Health 
services
cooperatives are organized for the primary purpose of 
providing medical, dental, paramedic, diagnostic, and other 
health services, including cooperative health organizations, 
hospitals, clinics, pharmacies, and transporting of patients;
ii) Housing 
Services Cooperatives. 
- 
Housing 
services
cooperatives are organized to assist or provide access to 
socialized housing for the benefit of the members who 
actively participate in the savings program for housing;
iii) Labor Services Cooperatives. - Labor services cooperatives 
are engaged in providing specific services to a principal
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under a legitimate contracting or subcontracting 
arrangement, as defined under existing laws, and in 
accordance with the cooperative principles set forth under 
this Code;
iv) Technology Service Cooperatives. - Technology service 
cooperatives are organized to provide the members with 
services that are designed to facilitate the use of 
Information Technology by end users, electronic money 
issuers licensed by Bangko Sentral ng Pilipinas (BSP), or 
provide specialized technology-oriented solutions by 
combining the processes and functions of software, 
hardware, networks, telecommunications, and electronics, 
among others;
v) Workers Cooperatives. - Workers cooperatives are 
organized by workers, including the self-employed, who are 
at the same time the members and owners of the 
enterprise. The principal purpose of these cooperatives is 
to provide employment and business opportunities to the 
members and manage them in accordance with 
cooperative principles; and
vi) Other cooperatives as may be determined by the Authority 
under this cluster in consultation with the cooperative 
sector.
4) Education, Advocacy, and Union Ouster refers to cooperatives 
organized for the promotion and advocacy of cooperativism among 
its members and the public through socially-oriented projects, 
education and training, research and communication, such as:
i) Advocacy Cooperatives. - Advocacy cooperatives promote 
cooperativism and advocate policies for the general interest 
and welfare of the members, the sector, the movement, 
and the public through socially-oriented projects, education 
and training, research and communication, campaigns,
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lobbying, and other similar activities to reach out to 
intended beneficiaries;
ii) Education Cooperatives. - Education cooperatives are 
organized for the primary purpose of owning and operating 
licensed educational institutions, subject to existing laws, 
rules and regulations; and
iii) Other cooperatives as may be determined by the Authority 
under this cluster in consultation with the cooperative 
sector.
5) Agriculture, Agrarian, Aquaculture, Farmers, Dairy, and Fisherfoik 
Ouster refers to cooperatives engaged in the raising or culture of 
plants and animals, and the production and processing of 
agricultural produce and its derivatives, including cooperatives 
organized by agrarian reform beneficiaries and marginal farmers, 
for the purpose of developing a sustainable system of land tenure, 
land development, land consolidation, or land management, such 
as:
i) Agrarian Reform Cooperatives. - Agrarian reform 
cooperatives are organized by marginal farmers, majority 
of whom are agrarian reform beneficiaries, for the purpose 
of developing an appropriate system of land tenure, land 
development, land consolidation, or land management 
areas covered by agrarian reform;
ii) Agriculture Cooperatives. - Agriculture cooperatives are 
organized as agricultural-based economic enterprises 
voluntarily established through joint investment, joint 
ownership, and joint management for the purpose of 
improving agricultural production capacity, agro-industry, 
agri-business, or services related to agricultural production, 
which shall include agrarian reform, dairy, fishermen, 
community forestry, and aquaculture cooperatives, as well 
as consumers, marketing, producers, and multi-purpose
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cooperatives whose primary business activity is at least 
fifty percent (50%) related to agricultural production, agro­
industry, agri-business, or services related to agricultural 
production
iii) Dairy Cooperatives. - Dairy cooperatives are engaged in 
the production and marketing of fresh milk which may be 
processed or marketed as dairy products;
iv) Farmers 
Cooperatives. 
- Farmers 
cooperatives are
organized by marginalized farmers, majority of whom are 
not agrarian reform beneficiaries, for the purpose of 
supporting their products, either fresh or processed;
v) Fisherfolk Cooperatives. 
- Fisherfolk 
cooperatives are
organized by marginalized fisherfolk whose products are 
marketed either as fresh or processed, for the mobilization 
of capital in the procurement of fishing boats, nets, gears, 
and accessories, production of aquatic products, and 
access to storage and agricultural facilities;
vi) Irrigators Cooperatives. 
- Irrigators 
cooperatives are
engaged in providing sustainable irrigation services for 
farmers; and
vii) Other cooperatives as may be determined by the Authority 
under this cluster in consultation with the cooperative 
sector.
6) Public Utilities Cluster refers to cooperatives organized for the 
purpose of undertaking electricity generation, utilizing renewable 
energy sources, including hybrid systems, acquisition and operation 
of sub-transmission or distribution; operation and management of 
water systems; land, air, and sea transportation services; and
communications services, including telephone and digital 
communications, which require a franchise or certificate of public 
convenience and necessity such as:
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i) Communications Cooperatives. - Communications 
cooperatives are organized to own, operate, and manage 
communication structures and arrangements, such as 
radio, cable TV, newspaper, and related industries, for the 
widespread dissemination of information for the members 
and the public;
ii) Transport Service Cooperatives. - Transport service 
cooperatives are organized to render public land, water, or 
air transportation services for the safe conveyance of 
passengers or cargoes, or are engaged in providing related 
or auxiliary services to the transport industry;
iii) Water Service Cooperatives. - Water service cooperatives 
are organized to own, operate, and manage water systems 
for the provision and distribution of potable water for the 
members and their households; and
iv) Other cooperatives as may be determined by the Authority 
under this cluster in consultation with the cooperative 
sector.
7) Multi-Purpose Cooperative refers to one which combines two (2) or 
more of the business activities of the different types of 
cooperatives;
i) Categories of Cooperatives. Cooperatives are categorized 
as follows:
1. In terms of membership, cooperatives may be 
categorized into:
a. Primary Cooperatives; and
b. Secondary Cooperatives;
2. In terms of territory, cooperatives are categorized 
according to areas of operations; and
3. In terms of assets, cooperatives shall adhere to the 
categorization of enterprises as provided under 
Section 3 of Republic Act No. 6977, as amended.
24


1 
Sec. 24. Apex of Cooperatives. - The Apex of Cooperatives refers to the
2 
singular cooperative vested with a juridical personality and the mandate to represent
3 
the cooperative sector at the national and international levels, fully and voluntarily
4 
organized by the members of the cooperative sector. It shall have the mandate to
5 
engage in discussions and advise the appropriate authorities on all matters relating
6 
to cooperatives, as well as to promote the cooperative identity and culture.
7 
CHAPTER VI
8 
FEDERATION OF COOPERATIVES
9 
Sec. 25. Area of Coverage. - A federation of cooperatives may be organized
10 
at the municipal or city level, district or provincial level, regional, inter-regional or
11 
national levels.
12 
Sec. 26. Members of a Federation of Cooperatives. - Members of a federation
13 
of cooperatives shall consist of cooperatives with common needs or purposes:
14 
Provided, That a member cooperative may freely withdraw membership from the
15 
federation.
16 
The minimum number of members shall be at least ten (10) primary or
17 
secondary cooperatives for a federation of cooperatives.
18 
Sec. 27. Authorized, Subscribed, and Paid-Up Capitai of a Federation. - The
19 
authorized share capital of a cooperative shall be provided for in its articles of
20 
cooperation where at least twenty-five percent (25%) of the authorized share capital
21 
has been subscribed to by the members and at least twenty-five percent (25%) of
22 
the total subscription has been paid prior to its registration.
23 
The minimum paid-up share capital for a federation of cooperatives shall be
24 
One million pesos (P1,000,000.00).
25 
Sec. 
28. Registration of Federation of Cooperatives. - A federation of
26 
cooperatives shall be registered with the Authority.
27 
Sec. 
29. Functions of a Federation of Cooperatives. - A federation of
28 
cooperatives shall undertake the following functions:
29 
a) To carry on any cooperative enterprise authorized under Section 5 hereof
30 
that complements, augments, or supplements but does not conflict,
31 
compete with, nor supplant the business or economic activities of its
32 
members;
25


1 
b) To carry on, encourage, and assist educational and advisory work relating
2 
to the business activities of its members;
3 
c) To render services designed to encourage simplicity, efficiency, and
4 
economy in the conduct of the business of its member cooperatives and to
5 
facilitate the implementation of their bookkeeping, accounting, and other
6 
systems and procedures;
7 
d) To print, publish, and circulate any newspaper or other publication in the
8 
interest of its member-cooperatives and enterprises;
9 
e) To coordinate and facilitate the activities of its member-cooperatives;
10 
f) To enter into joint ventures with local or international cooperatives in the
11 
manufacture and sale of products in the Philippines and abroad;
12 
g) To 
mandatorily act as conciliator-mediator in inter-intra cooperative
13 
disputes among and between the members and officers of primary
14 
cooperatives;
15 
h) To assist members in the submission of the required reports and other
16 
compliances to the Authority and other government or regulatory bodies;
17 
i) To render assistance, if requested, in the liquidation of the remaining
18 
assets of dissolved or cancelled primary cooperative members;
19 
j) To 
develop programs on education, training, monitoring, coaching,
20 
research, and advocacy that complement, augment, or supplement the
21 
businesses of their members;
22 
k) To 
assist the Authority in ensuring the compliance of its member-
23 
cooperatives with the laws, regulations, policies, and inspection or
24 
examination findings of government regulatory agencies;
25 
I) To conduct studies in the economic, legal, financial, social and other
26 
phases of cooperation, and publish the results thereof;
27 
m)To conduct trainings to member-cooperatives as an accredited training
28 
provider; and
29 
n) To promote the knowledge of cooperative principles and practices.
30 
Sec. 30. Special Types of Federations. - A special type of federation may be
31 
organized and registered by primary cooperatives who may not necessarily be in the
26


1 
same line of business but who wish to offer and are able to cater to their members
2 
the following exclusive services:
3 
1) Water supply system services;
4 
2) Healthcare services;
5 
3) Deathcare services;
6 
4) Technology services;
7 
5) Digital payment services;
8 
6) Deposit insurance services; and
9 
7) Such other services as may be determined by the Authority.
10 
Primary cooperatives who federate under this Section are prohibited from
11 
engaging in any economic or business activity not related to their original line of
12 
business or not authorized under their articles of cooperation and bylaws or under
13 
this Code.
14 
CHAPTER VII
15 
COOPERATIVE UNIONS
16 
Sec. 31. Organization and Duties. - All registered cooperatives may organize
17 
or join cooperative unions to protect the interest and promote the welfare of all
18 
types of cooperatives: Provided, That a member cooperative may freely withdraw
19 
membership from the union. The cooperative unions shall represent the constituent
20 
cooperatives at the appropriate level and exercise the following duties and functions:
21 
a) To represent its member organizations;
22 
b) To acquire, analyze, and disseminate economic, statistical, and other
23 
information relating to its members and to all types of cooperatives within
24 
its area of operation;
25 
c) To sponsor studies in the economic, legal, financial, social and other
26 
phases of cooperation, and publish the results thereof;
27 
d) To conduct trainings to member-cooperatives as an accredited training
28 
provider;
29 
e) To promote the knowledge of cooperative principles and practices in their
30 
respective jurisdictions;
31 
f) To develop the cooperative movement;
27


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g) To assist the national agencies and local government units in cooperative
2 
development activities within their respective jurisdiction;
3 
h) To assist in the dissemination and monitoring of the Philippine Cooperative
4 
Development Plan;
5 
i) To assist the members in the submission of the required reports and other
6 
compliances to the Authority and other government or regulatory bodies;
7 
j) To assist the Authority, upon written request, in the performance of its
8 
power of inspection or examination by way of providing relevant
9 
information, such as research, reports, and financial records;
10 
k) To advise the appropriate authorities on all questions relating to
11 
cooperatives at the municipal, city, district, provincial or regional levels;
12 
I) To act as liquidators or rendering assistance in the liquidation of the
13 
remaining assets of dissolved primary cooperative members upon request
14 
of the dissolved primary cooperative;
15 
m) To do and perform such other non-business activities as may be necessary
16 
to attain the foregoing objectives; and
17 
n) To do and perform such other allied services incidental to the furtherance
18 
of the foregoing objectives, such as but not limited to, the maintenance of
19 
training centers, catering, lease of venue, lodging, publication, and
20 
reproduction and sale of training and research materials.
21 
Sec. 32. Sources of Funds for Cooperative Unions. - The funds of a
22 
cooperative union shall be sourced from the membership fees, dues, and
23 
contributions, remitted cooperative education and training fund (CETF) from
24 
member-cooperatives, training fees, fundraising activities, donations, grants, or
25 
subsidies from local and foreign sources, whether private or public.
26 
CHAPTER VIII
27 
MEMBERSHIP
28 
Sec. 33. Membership. - A cooperative shall have regular members or
29 
associate members.
30 
A regular member is one who has complied with all the membership
31 
requirements, including the Pre-Membership Seminar, and entitled to all the rights
32 
and privileges of membership. An associate member is one who has no right to vote
28


1 
nor be voted upon nor be appointed to any position in the cooperative and shall be
2 
entitled only to such rights and privileges as the bylaws may provide: Provided, That
3 
an associate member who meets all the requirements of regular membership,
4 
including the Pre-Membership Education Seminar, continues to patronize the
5 
cooperative for two (2) years, and signifies the intention to remain a member shall
6 
be considered a regular member.
7 
Sec. 34. Qualifications of Membership. - Members of registered primary
8 
cooperatives must be natural persons, Filipino citizens or former natural-born Filipino
9 
citizens, of legal age, with capacity to enter into a contract, within the common bond
10 
of membership and area of operation, and must possess the qualifications and none
11 
of the disqualifications as provided for in the bylaws of the cooperative: Provided,
12 
That in case of former natural-born Filipino citizens, they must comply with
13 
Philippine taxation laws: Provided, further. That the age requirement shall not apply
14 
to laboratory cooperatives as defined in Section 4 hereof. A member must have
15 
completed the Pre- Membership Education Seminar.
16 
Sec. 35. Government Officers and Employees. -
17 
a) All elective officials of the Government shall be ineligible to become
18 
officers of cooperatives: Provided, That the disqualification does not
19 
extend to a party list representative who represents the cooperative
20 
sector: Provided, further. That nothing precludes cooperatives from
21 
engaging in activities in support of party lists representing the sector, such
22 
as, but not limited to participating in campaigning or donating funds;
23 
b) Employees of the Authority are allowed to become a member of any
24 
cooperative. However, they shall be disqualified to be elected or appointed
25 
as an officer, except for cooperatives organized among themselves; and
26 
c) Any government employee or official may, in the discharge of the duties
27 
as a member in the cooperative, be allowed by the head of office
28 
concerned to use official time for attendance at the General Assembly,
29 
Board and committee meetings including 
cooperative seminars,
30 
conferences, workshops, technical meetings, and training courses locally
31 
or abroad.
29


1 
Sec. 36. Processing of Applications for Membership. - An application for
2 
membership shall be acted upon by the Board of Directors within the period fixed in
3 
the bylaws but not later than thirty (30) days. Otherwise, the application for
4 
membership shall be deemed approved, subject to the condition that the applicant
5 
has submitted the duly accomplished application and has paid the membership fees
6 
to the cooperative.
7 
In case the application for membership is denied by the Board of Directors, an
8 
appeal may be made to the Election Committee, sitting as the appeals and grievance
9 
body, within fifteen (15) days after receipt of the notice of denial and the decision of
10 
the Election Committee shall be final.
11 
If the Election Committee fails to decide within the prescribed period, the
12 
appeal is deemed approved in favor of the applicant.
13 
Sec. 37. Liability of Members. - A member shall be liable for the debts of the
14 
cooperative to the extent of the member's subscription to the share capital of the
15 
cooperative.
16 
Sec. 38. Termination of Membership. -
17 
a) Subject to the Terms and Conditions as stated in the bylaws of the
18 
cooperative, a member of a cooperative may withdraw membership from
19 
the cooperative by giving written notice to the Board of Directors which
20 
shall be acted upon within thirty (30) days from receipt of said notice.
21 
b) The death or insanity of a member in a primary cooperative, and the
22 
insolvency or dissolution, de-listing, or cancellation of the certificate of
23 
registration of a member in a secondary cooperative shall be considered
24 
valid grounds for termination of membership: Provided, That in the case of
25 
death or insanity of an agrarian reform beneficiary-member of a
26 
cooperative, the qualified next-of-kin may assume the duties and
27 
responsibilities of the original member;
28 
c) Termination of membership in the cooperative shall be initiated through
29 
the filing of a complaint before the ethics committee of the cooperative.
30 
The committee shall recommend to the Board of Directors the termination
31 
of membership for any of the following causes:
30


1 
1) Failure to patronize any services of the cooperative for an unreasonable
2 
period of time as provided in the bylaws;
3 
2) Failure to comply with the obligations of membership as provided in the
4 
bylaws or policies of the cooperative;
5 
3) Violation of the bylaws of the cooperative;
6 
4) Commission of any act or omission injurious or prejudicial to the
7 
interest or the welfare of the cooperative; and
8 
5) Others, as may be provided in the bylaws of the cooperative.
9 
Such member shall be informed, in writing, and be given an opportunity to be
10 
heard by the grievance committee. The result of the investigation shall be referred
11 
to the Board of Directors for its consideration. Based on the recommendation of the
12 
grievance committee, the Board may terminate membership in the cooperative by a
13 
majority vote of all its members. The decision of the Board shall be in writing, and
14 
communicated either personally, or by registered or electronic mail. The decision
15 
may be appealed to the General Assembly within thirty (30) 
days from receipt
16 
thereof.
17 
The General Assembly shall decide on such appeal within thirty (30) days
18 
after receipt thereof. Failure of the General Assembly to decide within the prescribed
19 
period shall be deemed in favor of the member. The decision of the General
20 
Assembly decision shall be final and executory. Pending the final decision, the
21 
membership shall remain in force. This notwithstanding, the member may file a
22 
petition for review of the decision of the General Assembly with the Authority within
23 
fifteen (15) days from receipt thereof.
24 
Sec. 39. Refund of Interests. - All sums computed in accordance with the
25 
bylaws due from the cooperative to a former member shall be paid in accordance
26 
with this Code and as prescribed in the implementing rules and regulations:
27 
Provided, That in case of payment where the value of the assets of the cooperative
28 
would be less than the aggregate amount of its debts and liabilities exclusive of the
29 
members' share capital contribution such refund shall not be made.
30 
In the computation of the interest due to a former member, the current
31 
balance of such member in the ledger of accounts of the cooperative shall be taken
32 
into account.
31


1 
CHAPTER IX
2 
ADMINISTRATION
3 
Sec. 40. Composition of the General Assembly and Representative Assembly.
4 
- The General Assembly shall be the full membership of the cooperative, exercising
5 
all the rights and performing all the obligations as provided in this Code, and in its
6 
articles of cooperation and bylaws.
7 
For cooperatives with numerous and dispersed membership, the General
8 
Assembly shall delegate the exercise of its powers to a Representative Assembly, the
9 
members of which are elected by each sector, chapter, or district of the cooperative
10 
in accordance with its articles of cooperation and bylaws: Provided, That in cases
11 
provided under this Code for the call of a regular or special General Assembly, or the
12 
approval or confirmation thereof, the Representative Assembly shall also suffice,
13 
where applicable. Such delegation shall be in accordance with the rules and
14 
regulations of the Authority.
15 
Sec. 41. Powers of the General Assembly. - The General Assembly shall be
16 
the highest policy-making body of the cooperative and shall exercise such powers as
17 
are stated in this Code, and in the articles of cooperation and bylaws of the
18 
cooperative. The General Assembly, through its members entitled to vote, shall have
19 
the following exclusive powers which cannot be delegated:
20 
a) Determine and approve amendments to the articles of cooperation and
21 
bylaws;
22 
b) Elect, appoint, or remove, the members of the Board of Directors;
23 
c) Approve the annual strategic and developmental plans, and the budget of
24 
the cooperative;
25 
d) Approve or disapprove proposals from the Board of Directors pertaining to
26 
external borrowings, investments, grants, donations, and other financial
27 
assistance; and
28 
e) Decide membership issues within the cooperative.
29 
Subject to such other provisions of this Code and only for purposes of prompt
30 
and intelligent decision-making, the General Assembly may by a three-fourths (3/4)
31 
vote of all its voting members present and constituting a quorum, delegate some of
32


1 
its powers to the Board of Directors. These powers shall be enumerated under the
2 
bylaws of the cooperative.
3 
SEC. 42. Meetings. -
4 
a) The General Assembly shall conduct a regular annual meeting on a date
5 
fixed in the bylaws, which shall be within ninety (90) days or one hundred
6 
eighty (180) days after the close of each calendar year, for primary or
7 
secondary cooperatives, respectively: Provided, That notice of regular
8 
meetings shall be sent in writing, by posting or publication, or through
9 
other electronic means to all members of record.
10 
b) Whenever necessary, a special meeting of the General Assembly may be
11 
called at any time by a majority vote of the Board of Directors, or upon
12 
petition of at least ten percent (10%) of the total members who are
13 
entitled to vote, or as provided for in the bylaws: Provided, That a notice
14 
in writing shall be sent one (1) week prior to the meeting to all members
15 
who are entitled to vote. If the Board fails to call a regular or special
16 
meeting within the given period, the Authority, upon petition of ten
17 
percent (10%) of members entitled to vote, or the quorum as stated in
18 
their bylaws, and for good cause shown, shall issue an order to the
19 
petitioners directing them to call a meeting of the General Assembly by
20 
giving proper notice as required in this Code or in the bylaws;
21 
c) In the case of a newly registered cooperative, a special General Assembly
22 
meeting shall be called within sixty (60) days from such approval of its
23 
registration, for the following purposes:
24 
1) Presentation of approved articles of cooperation and bylaws;
25 
2) Approval of the annual strategic and development plans, and
26 
budget; and
27 
3) Other matters, as may be determined by the cooperative.
28 
d) The Authority shall compel the cooperative to call a General or
29 
Representative Assembly for the purpose of reporting to the members the
30 
result of any examination or other investigation of the cooperative affairs;
31 
and
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1 
e) Notice of any meeting may be waived, expressly or impliedly, by any
2 
member.
3 
Sec. 43. Mode of Conducting Regular or Special Assembly Meetings. -Regular
4 
and special assembly meetings may be conducted in any of the following manner:
5 
a) Duly assembled in one venue, wherein the meetings are held on the same
6 
day; or
7 
b) Simultaneously, wherein the meetings are held on the same day but in
8 
different venues.
9 
As a general rule, assembly meetings shall be conducted in a manner
10 
provided in the bylaws of the cooperative. However, due to technological
11 
advancement, public health and safety measures, increased level of participation of
12 
members and other equally important considerations in favor of the viability and
13 
growth of cooperatives, cooperatives are allowed to conduct their assembly
14 
meetings through video conferencing or a combination of physical attendance and
15 
video conferencing: Provided, That cooperatives who opt to conduct General
16 
Assembly meetings through video conferencing or a combination of physical
17 
attendance and video conferencing as an alternative mode shall amend their bylaws
18 
adopting the same: Provided, further, That cooperatives shall adopt policies and
19 
procedures sufficiently addressing administrative, technical, and logistical concerns
20 
for an effective and efficient video conference meeting.
21 
Sec. 44. Quorum. - Unless a higher requirement is provided in the bylaws of
22 
the cooperative, a quorum shall consist of at least twenty-five percent (25%) of all
23 
the members entitled to vote: Provided, That the quorum for Representative
24 
Assembly shall in no case be lower than twenty-five percent (25%) of the total
25 
membership entitled to vote.
26 
In the case of federations and unions, the quorum requirement shall be fifty
27 
percent (50%) of the total number of members entitled to vote.
28 
Sec. 45. Voting System. - Each member of a primary cooperative shall have
29 
only one (1) vote regardless of the share capital of such member. In the case of
30 
federations, they may opt to adopt in their bylaws incentive voting or share voting.
31 
In the case of incentive voting, the member-cooperatives shall have one (1)
32 
basic vote and up to five (5) incentive votes, as provided in the bylaws. In case of
34


1 
share voting, the voting rights of the member-cooperatives shall be proportionate to
2 
the number of their paid-up shares, subject to the limitation imposed under Section
3 
84 of this Code: Provided, That at least one-third (1/3) of the seats in the Board
4 
shall be reserved for small shareholders. The votes cast by the delegates shall be
5 
deemed as votes cast by the members thereof.
6 
The foregoing notwithstanding, the bylaws of a cooperative, other than a
7 
primary cooperative, may provide for voting by proxy. Voting by proxy means
8 
allowing a delegate of a cooperative to represent or vote on behalf of another
9 
delegate of the same cooperative.
10 
Sec. 46. Composition and Term of the Board of Directors. - Unless otherwise
11 
provided in the bylaws, the direction and management of the affairs of a cooperative
12 
shall be vested in a board of directors which shall be composed of not less than five
13 
(5) nor more than fifteen (15) members elected by the general assembly for a term
14 
of two (2) years and shall hold office until their successors are duly elected and
15 
qualified, or until duly removed for cause. However, registered cooperatives or those
16 
applying for specific incenses with other regulatory agencies must comply with the
17 
governance requirements of said agency to operate or function as such.
18 
For federations, a member-cooperative shall have only one representative
19 
eligible to run and be voted upon as a member of the Board, irrespective of the
20 
member- cooperative's share capital holdings.
21 
Sec. 47. Powers of the Board of Directors. - The Board of Directors shall be
22 
responsible for the 
annual strategic planning, direction setting, and policy-
23 
formulation activities of the cooperatives.
24 
Sec. 48. Directors. -
25 
a) Any member of a cooperative who has the right to vote and be voted
26 
upon, and 
who possesses ail the qualifications and none of the
27 
disqualifications provided in this Code or in its bylaws shall be eligible for
28 
election as director, subject to the limitation imposed by the second
29 
paragraph of Section 45 of this Code.
30 
b) The cooperative may, by resolution of its Board of Directors, admit as an
31 
ex officio director or committee member one appointed by any financing
32 
institution from which the cooperative received financial assistance, solely
35


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
to provide technical knowledge not available within its membership. Such 
director or committee member need not be a member of the cooperative 
and shall have no powers, rights, nor responsibilities except to provide 
technical assistance as required by the cooperative.
c) 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.
d) Any member engaged in a business similar to that of the cooperative or 
who, in any way, has a conflict of interest with it, is disqualified from 
being elected as a director.
Sec. 49. Meeting of the Board and Quorum Requirement -
a) In the case of primary cooperatives, regular meetings of the Board of 
Directors shall be held at least once a month. Special meetings may be 
held at any time: i) at the call of the Chairperson, upon prior written 
notice given at least three (3) days prior to the date of said meeting; ii) or 
at the call of a majority of the members of the Board, upon prior written 
notice given at least one (1) day before said meeting: Provided, That only 
two (2) special meetings may be held in one (1) month. Notices may be 
sent through electronic means, to the official contact number or email 
account of the officers.
b) A majority of the members of the Board shall constitute a quorum for the 
conduct of business.
c) Each member of the Board shall only have one (1) vote, whether it be a 
primary or secondary cooperative, irrespective of the share capital 
holdings of the member-cooperative.
d) Directors cannot attend or vote by proxy at Board meetings.
e) Cooperatives may opt to allow meetings of the Board of Directors and 
members of the different committees of the cooperative to be conducted 
either through physical attendance or video conferencing, or both, subject 
to the rules on sending of notices, quorum, and voting requirements as 
provided for in the bylaws. In the conduct of meetings through video
36


1 
conferencing, cooperatives shall adopt their own policies and procedures
2 
which shall be included in their bylaws.
3 
Sec. 50. Vacancy in the Board of Directors. - In case of a vacancy, other than
4 
by expiration of term or an increase in the number of Board of Directors, the Board,
5 
if still constituting a quorum, may, in a special meeting called for the purpose,
6 
appoint, by majority vote, any member of the cooperative to fill such vacancy:
7 
Provided, That the director so appointed shall possess all of the qualifications and
8 
none of the disqualifications as prescribed under this Code and the bylaws of the
9 
cooperative. If the remaining members of the Board do not constitute a quorum, the
10 
vacancy shall be filled in an election conducted through a special General Assembly
11 
called for the purpose, held within thirty (30) days from the time the vacancy occurs,
12 
or during the regular General Assembly, whichever comes first. The director so
13 
appointed or elected shall serve only for the unexpired term of the predecessor in
14 
office.
15 
If the General Assembly fails to fill the vacancy, as directed in the preceding
16 
paragraph, or in case of the vacancy of the entire Board of Directors, the Authority
17 
shall compel the cooperative, through the Election Committee, to call for a special
18 
General Assembly for the purpose of electing a new Board of Directors. In the
19 
absence of the Election Committee, the General Assembly may appoint an Ad Hoc
20 
Committee that shall be responsible to call for such special General Assembly.
21 
Sec. 51. Officers of the Cooperative. - The officers of the cooperative shall
22 
include the members of the Board of Directors, members of the different
23 
committees. General Manager or Chief Executive Officer, Secretary, Treasurer, and
24 
other officers as may be provided for in the bylaws. As such, they shall exercise their
25 
duties and responsibilities within the scope of their defined functions.
26 
The Board of Directors shall elect from among themselves the Chairperson
27 
and Vice-Chairperson, and elect or appoint other officers of the cooperative from
28 
outside of the Board, in accordance with their bylaws.
29 
The Board of Directors is prohibited from appointing any person within the
30 
third civil degree of consanguinity or affinity of the members of the Board of
31 
Directors. Neither shall the appointive officers be related to each other up to the
32 
second civil degree of consanguinity or affinity. No officer shall engage in a business
37


1 
similar to that of the cooperative nor in any other manner have interests in conflict
2 
with the cooperative.
3 
Sec. 52. Committees of Cooperatives.-
4 
a) The bylaws may create an executive committee, the members of which
5 
shall be appointed by the Board of Directors with such powers and duties
6 
as may be delegated to it in the bylaws or by a majority vote of all the
7 
members of the Board of Directors.
8 
b) The bylaws shall provide for the creation of other committees, such as
9 
conciliation-mediation, ethics, gender and development, education, and
10 
other committees as may be necessary for the conduct of the affairs of
11 
the cooperative. The members of the audit and election committee shall
12 
be elected by the General Assembly, while the members of the other
13 
remaining committees shall be appointed by the Board. Unless otherwise
14 
provided in the bylaws, the Board, in case of a vacancy in the committees,
15 
may appoint or call an election to fill the vacancy, as the case may be:
16 
Provided, That the person so appointed or elected shall serve only for the
17 
unexpired portion of the term.
18 
Sec. 53. Functions, Responsibiiities, and Training Requirements of Directors,
19 
Officers and Committee Members. - The functions and responsibilities of directors,
20 
officers, and committee members, as well as their training requirements, shall be
21 
prescribed in the bylaws of the cooperative, in accordance with the rules and
22 
regulations issued by the Authority.
23 
Sec. 54. Liability of Directors, Officers, and Committee Members. - Directors,
24 
officers, and committee members shall be jointly and severally liable for all damages
25 
or losses to the cooperative, its members, or other persons in case of the following:
26 
a) Willfully and knowingly voting for or assenting to patently unlawful acts;
27 
b) Gross negligence or bad faith in directing the affairs of the cooperative; or
28 
c) Acquiring any personal or pecuniary interest in conflict with their duty.
29 
When directors, officers, or committee members attempt to or have acquired,
30 
in violation of their duties, any interest or equity adverse to the cooperative in
31 
respect to any matter which has been reposed in them in confidence, they shall, as a
38


1 
trustee for the cooperative, be liable for damages and shall be accountable for
2 
double the profits which otherwise would have accrued to the cooperative.
3 
Sec. 55. Honorarium and Other Emoluments. -
4 
a) In the absence of any provision in the bylaws fixing their honorarium/per
5 
diem, the directors shall not receive any compensation except for
6 
reasonable honorarium/per diems-. Provided, 
That no 
additional
7 
compensation other than per diems shall be paid during the first year of
8 
existence of any cooperative: Provided, 
further. That only the General
9 
Assembly shall approve any additional honorarium/per diem or the
10 
increase thereof.
11 
b) Directors and officers shall not be entitled to any per diem if the
12 
cooperative reported a net loss in the preceding calendar year or had a
13 
dividend rate less than the official rate for the same year.
14 
c) Unless already fixed in the bylaws, the compensation of all other
15 
employees shall be determined 
by the Board of Directors in accordance
16 
with the Regional Tripartite and Wage Productivity 
Board.
17 
Sec. 56. Dealings of Directors, Officers, or Committee Members. - A contract
18 
entered into by the cooperative with one (1) or more of its directors, or their
19 
spouses and relatives within the first civil degree of consanguinity or affinity, is
20 
voidable, at the option of the cooperative, unless the following conditions are
21 
present:
22 
a) The presence of such director in the Board meeting wherein contract was
23 
approved was not necessary to constitute a quorum for such meeting;
24 
b) The vote of such director was not necessary for the approval of the
25 
contract; and
26 
c) The contract is fair, reasonable, and beneficial to the cooperative under
27 
the circumstances.
28 
In the case of contracts executed between the cooperative and its other
29 
officers or committee members, or their spouses or relatives within the first civil
30 
degree of consanguinity or affinity, such contracts are voidable, at the option of the
31 
cooperative, unless previously authorized by the General Assembly or by the Board
39


1 
of Directors, and the contract is fair, reasonable, and beneficial to the cooperative
2 
under the circumstances.
3 
The Board of Directors shall report any such contract to the General Assembly
4 
during its regular meeting for ratification.
5 
Where any of the first two conditions set forth in the preceding paragraph is
6 
absent, in the case of a contract with a director, such contract may be ratified by a
7 
three-fourths (3/4) vote of all the members entitled to vote, present and constituting
8 
a quorum in a meeting called for the purpose: Provided, That full disclosure of the
9 
adverse interest of the directors involved is made at such meeting, and that the
10 
contract is fair and reasonable under the circumstances.
11 
Sec. 57. Disloyalty of a Director and Other Officers of the Cooperative. - A
12 
director or other officer of the cooperative who, by virtue of such office, directly or
13 
indirectly acquires for themselves an opportunity which should belong to the
14 
cooperative, shall be liable for damages and must account for double the profits that
15 
otherwise would have accrued to the cooperative by refunding the same. This
16 
provision shall be applicable, notwithstanding the fact that the director or other
17 
officers of the cooperative used their own funds to acquire such opportunity.
18 
Sec. 58. Illegal Use of Confidential Information. -
19 
a) A director, officer, or any person who, in conspiration or connivance
20 
therewith, makes use of confidential information to the benefit or
21 
advantage of such person, which, if generally known, may adversely affect
22 
the operation and viability of the cooperative, shall be held liable for the
23 
direct losses and for the unrealized benefit suffered by the cooperative, as
24 
a result of the transaction.
25 
b) The cooperative shall take the necessary steps to enforce the liabilities
26 
described in paragraph (a) herein.
27 
Sec. 59. Removal From Office. - No officer may be removed except for cause,
28 
as provided in the internal policies of the cooperative, after due notice and hearing.
29 
Loss of trust and confidence in the performance of duties shall be a valid ground for
30 
removal.
31 
All complaints for the removal of any elected officer shall be filed with the
32 
Board of Directors, except as otherwise provided herein. Upon finding prima facie
40


1 
evidence of guilt, the Board shall inform the officer concerned and present its
2 
recommendation for removal in a regular or special General Assembly called for the
3 
purpose, wherein such officer shall be given a final opportunity to present his case.
4 
The regular or special General Assembly, by a three-fourths (3/4) votes of the
5 
members entitled to vote, present and constituting a quorum, shall approve or
6 
disapprove the removal of the officer.
7 
In cases involving directors, the complaint shall be filed with the Ethics and
8 
Grievance Committee, which shall follow the procedure set in the preceding
9 
paragraph.
10 
In cases involving the removal of any appointive officer, a complaint shall be
11 
filed with the Ethics and Grievance Committee of the cooperative, which shall submit
12 
its recommendation to the Board of Directors for proper action. The decision of the
13 
Board of Directors may be appealed to the General Assembly.
14 
During the investigation, the Board of Directors or the Ethics and Grievance
15 
Committee may, as the case may be, upon majority vote, place such officer under
16 
preventive suspension, as prescribed in the bylaws.
17 
The decision of the General Assembly may be appealed to the Authority.
18 
CHAPTER X
19 
RESPONSIBILITIES, RIGHTS AND PRIVILEGES OF COOPERATIVES
20 
Sec. 60. Address. - Every cooperative shall have an official postal address
21 
where the principal office is located and an electronic mail address to which all
22 
communications, reports, notices, and summons may be served, and where all other
23 
documents required shall be submitted. The articles of cooperation and the bylaws
24 
shall be amended accordingly should there be a change in the official postal and
25 
electronic mail addresses of the cooperative.
26 
For this purpose, an electronic mail registry shall be created in accordance
27 
with the guidelines to be promulgated by the Authority.
28 
Sec. 61. Books to be Kept Open. -
29 
a) Every cooperative shall have the following documents ready and
30 
accessible to its members and representatives of the Authority for
31 
inspection, examination, and investigation during reasonable office hours
32 
at its registered principal office:
41


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14
15
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20 
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24
25
26
27
28
29
30
31
32
1) A copy of this Code and all other laws pertaining to cooperatives;
2) A copy of the implementing rules and regulations of this Code;
3) A copy of the articles of cooperation and bylaws of the cooperative;
4) A registry of members;
5) The books of the minutes of the meetings of the General Assembly, 
Board of Directors and committees;
6) A share and transfer book, except for unions;
7) Financial statements and other financial records; and such other 
documents as may be prescribed by the Authority, laws, and the 
bylaws.
b) The accountant or the bookkeeper of the cooperative shall be responsible 
for the maintenance and safekeeping of the books and records of accounts 
of the cooperative in accordance with generally accepted accounting 
practices. The accountant or bookkeeper shall also be responsible for the 
production of the same at the time of audit, inspection, examination, or 
investigation.
The Audit Committee shall be responsible for the continuous 
and periodic review of the books and records of accounts to ensure that 
such records are in accordance with generally accepted accounting 
practices. It shall also be responsible for the production of the same at the 
time of audit or inspection.
c) 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 
conspicuous places in the principal office of the cooperative, its branches, 
and satellite offices.
d) Subject to the pertinent provisions of the National Internal Revenue Code, 
as amended, and other laws, a cooperative may dispose, by burning or 
any method of complete destruction, any document, record or book 
pertaining to its financial and non-financial operations which are already
42


1 
more than five (5) years old except those relating to transactions which
2 
are the subject of civil, criminal, and administrative proceedings. An
3 
inventory of the audited documents, records and books to be disposed of
4 
shall be drawn up and certified to by the Cooperative Secretary and the
5 
Chairman of the Audit Committee and presented to the Board of Directors,
6 
which may thereupon approve the disposition of said records.
7 
The information and data being examined which may contain confidential
8 
matters or privileged communication should not be disclosed or used without the
9 
consent of the cooperative in accordance with Republic Act No. 10173, otherwise
10 
known as the "Data Privacy Act of 2012".
11 
Sec. 62. Annual Receipts. - Every cooperative shall prepare an annual
12 
progress report with the necessary attachments as may be prescribed by the
13 
Authority at the end of every calendar year. The reports shall be made accessible to
14 
its members, and copies thereof shall be available upon request of members on
15 
record and properly authorized government agencies with developmental functions
16 
and extension services for cooperatives during reasonable office hours. These
17 
reports shall be filed with the Authority within one hundred twenty (120) days from
18 
the end of the calendar year. The form and contents of the reports shall be as
19 
prescribed by the rules of the Authority. Failure to file the required reports on time
20 
shall subject the accountable officer to fines and penalties as may be prescribed by
21 
the Authority. Failure to file the required reports despite notice shall be a ground for
22 
the suspension or cancellation of the Certificate of Registration of the cooperative,
23 
subject to the guidelines to be issued by the Authority.
24 
If a cooperative fails to make and file the reports required herein, or fails to
25 
include therein any matter required by the Code, the Authority shall, within thirty
26 
(30) days from the expiration of the prescribed period, send such cooperative a
27 
notice stating its non-compliance and the commensurate fines and penalties that will
28 
be imposed until such time that the cooperative has complied with the requirements.
29 
Sec. 63. Registry of Members as Prima Facie Evidence. - A registry of
30 
members kept by the cooperative shall be prima facie evidence of the following
31 
particulars:
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1 
a) The date on which the name of any person was entered in such registry or
2 
list of members; and
3 
b) The date on which any such person ceased to be a member. However,
4 
other information may be required in accordance with the guidelines that
5 
shall be prescribed by the Authority in consultation with the cooperative
6 
sector.
7 
Sec. 64. Probative Value of Certified Copies of Entries. - A copy of any entry
8 
in any book, registry, or list regularly kept in the course of business of the
9 
cooperative shall, if duly certified in accordance with the rules of evidence, be
10 
admissible as evidence of the existence of entry and prima facie evidence of the
11 
matters and transactions therein recorded.
12 
No cooperative or person in possession of the books of such cooperative shall,
13 
in any legal proceedings to which the cooperative is not a party, be compelled to
14 
produce any of the books of the cooperative, unless by order of the Authority in the
15 
exercise of its adjudicatory powers or a competent court.
16 
Sec. 65. Bond of Accountable Officers. - All officers and employees handling
17 
funds, securities, or property on behalf of the cooperative shall be covered by a
18 
surety bond or a fidelity bond to be issued by a duly registered insurance or bonding
19 
company, the adequacy of which shall be determined by the Board of Directors, for
20 
the faithful performance of their respective duties and obligations. The cooperative
21 
may likewise secure other insurance policies for its protection against losses of
22 
monies, securities, and other properties.
23 
Within thirty (30) days upon approval of the registration of a cooperative, the
24 
bonds of the accountable officers shall be submitted to the Authority. The bond for
25 
the cooperative's Treasurer shall be ten percent (10%) of the sum of the initial paid-
26 
up capital and membership fees. The bonds for all accountable officers shall be
27 
renewed annually and adjusted accordingly.
28 
Sec. 66. Preference of Claims. -
29 
a) Notwithstanding the provisions of existing laws, rules, and regulations to
30 
the contrary, any debt due to the cooperative from the member shall
31 
constitute a first lien upon any raw materials, production, inputs, and
32 
products produced; or any land, building, facilities, equipment, goods or
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services acquired and held, by such member through the proceeds of the 
loan or credit granted by the cooperative to such member for as long as 
the same is not fully paid.
b) No property or interest on property which is subject to a lien under 
paragraph (a) herein shall be sold nor conveyed to third parties without 
the prior permission of the cooperative. The lien upon the property or 
interest shall continue to exist even after the sale or conveyance thereof 
until such lien has been duly extinguished.
c) Notwithstanding the provisions of any law to the contrary, any sale or 
conveyance made in contravention of the preceding paragraph shall be 
void.
Sec. 67. Instrument for Salary or Wage Deduction. -
a) A member of a cooperative shall, notwithstanding the provisions of 
existing laws to the contrary, execute an instrument in favor of the 
cooperative authorizing the employer to deduct from the salary or wages, 
commutation of leave credits, and any other monetary benefits payable by 
the employer, and remit such amount as may be specified in satisfaction 
of a debt, share capital contribution, or other demand due from the 
member to the cooperative.
b) 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 to the 
cooperative the amount so deducted within ten (10) days after the end of 
the payroll month. The employer shall make the deduction for as long as 
such debt or other demand remains unpaid by the employee.
c) The term "employer" as used in this Section shall include all private firms, 
national government agencies, including government-owned and 
controlled corporations, government instrumentalities with corporate 
powers, government corporate entities, or government financial 
institutions, and local government units that employ a member of a 
cooperative and have agreed to carry out the terms of the instrument 
mentioned in this Section.
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d) The provisions of this Section shall apply to all similar agreements referred
2 
to in paragraph (a) herein and were enforced prior to the approval of this
3 
Code.
4 
e) Notwithstanding the provisions of existing laws to the contrary, the
5 
responsibilities of the employer as stated in paragraphs (a) and (b) herein
6 
shall be mandatory and without the need for any prior conditions,
7 
accreditation or other similar processes to facilitate or implement the
8 
deductions: Provided, That in the case of a private employer, the actual
9 
and reasonable cost for deducting and remitting may be collected.
10 
f) The member may withdraw such consent at any time and for any reason,
11 
which shall also be put in writing. Any person who acts contrary to this
12 
provision shall be 
held liable under this Code and other laws, as the case
13 
may be.
14 
Sec. 68. Primary Lien. - Notwithstanding the provision of any law to the
15 
contrary, a cooperative shall have primary lien upon the capital, deposits, or
16 
interests of a member for any debt due to the cooperative from such member.
17 
Sec. 69. Tax Treatment of Cooperatives. - Duly registered cooperatives under
18 
this Code which do not transact any business with nonmembers or the general public
19 
shall not be subject to any taxes, fees, and charges imposed under the internal
20 
revenue laws and other tax laws. Cooperatives not falling under this Section shall be
21 
governed by the succeeding provisions.
22 
Sec. 70. Tax and Other Exemptions. - Duly registered cooperatives shall not
23 
be subject to tax on their transactions with members. Further, the transactions of
24 
members with the cooperative, including member's share capital and deposits shall
25 
not be subject to any taxes, fees, and charges, including but not limited to final
26 
taxes on members' share capital and deposits and corresponding documentary
27 
stamp taxes.
28 
Notwithstanding the provisions of any law or regulation to the contrary,
29 
cooperatives dealing with non-members shall be subject to the following:
30 
a) Duly registered agricultural cooperatives and non-agricultural cooperatives
31 
whose Reserve Funds have an existing balance of One hundred million
32 
pesos (P100,000,000.00) and below shall be exempt from all national
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internal revenue taxes, fees, and charges of whatever name and nature 
imposed under the internal revenue laws and other tax laws;
Such cooperatives shall be exempt from customs duties, advance sales 
or compensating taxes on their importation of machineries, equipment, 
batteries, accessories, and spare parts used in the operations of the 
cooperatives and which are not available locally as certified by the 
Department of Trade and Industry (DTI). All tax- and duty-free imports 
shall not be sold nor the beneficial ownership thereof be transferred to 
any person until after five (5) years, otherwise, the cooperative and the 
transferee or assignee shall be solitarily liable to pay twice the amount of 
the imposed tax or duties;
b) Non-agricultural cooperatives transacting with non-members whose 
Reserve Funds have an existing balance of more than One hundred million 
pesos (P100,000,000.00) shall pay the following taxes at the full rate:
1) Special Income Tax of ten percent (10%) of net surplus: 
Provided, That the same tax is not consequently imposed on 
interest individually received by members. The tax base for all 
cooperatives liable to pay income tax shall be the income directly 
related from the business transactions with non-members after 
deducting the amounts for the statutory funds; and
2) Value-Added Tax (VAT) on transactions with non-members: 
Provided, however, That duly registered cooperatives shall be 
exempt from the imposition of VAT, on the following:
i) Sales by Agricultural cooperatives duly registered with the 
Authority to their members as well as sale of their produce, 
whether in its original state or processed form, to non­
members; their importation of direct farm inputs, 
machineries and equipment, including spare parts thereof, 
to be used directly and exclusively in the production and/or 
processing of their produce, and their resale to other 
Agricultural cooperatives;
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ii) Gross receipts from lending activities by credit or multi­
purpose cooperatives duly registered with the Authority; 
and
iii) Sales by non-agricultural, non-electric and non-credit 
cooperatives duly registered with the Authority: Provided, 
That the share capital contribution of all members does not 
exceed One hundred thousand pesos (P100,000.00) each 
and regardless of the aggregate capital and net surplus 
ratably distributed among the members: Provided, further. 
That the exempt transactions in the foregoing shall include 
sales made by cooperatives duly registered with the 
Authority organized and operated by their members to 
undertake the production and processing of raw materials 
or of goods produced by their members into finished or 
process products for sale by the cooperatives to their 
members and non-members: Provided, however, That any 
processed product or its derivative arising from the raw 
materials produced by their members, sold in the name 
and for the account of the cooperative shall be deemed a 
product of the cooperative and its members: Provided, 
furthermore. That at least twenty- five percent (25%) of 
the net income of the cooperatives is returned to the 
members in the form of interest and/or patronage refunds: 
Provided, finaiiy. That VAT shall not be imposed for the 
purchase of modernized vehicles under the Public Utility 
Vehicle Modernization Program;
3) All sales of goods and/or services rendered for non-members shall 
be subject to the applicable percentage taxes except sales made 
by commodities or service cooperatives; and
4) All other taxes unless otherwise provided herein.
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Donations to duly accredited charitable, research and educational 
institutions and reinvestment to socioeconomic projects within the 
area of operation of the cooperative may be tax deductible.
c) All duly registered cooperatives shall be exempt from payment of local 
taxes, fees and charges whether barangay, municipal, city, or provincial 
taxes and taxes on transactions with banks and insurance companies. The 
Authority shall furnish the Municipal, City, or Provincial Assessor's Office a 
certified list of duly registered cooperatives as basis of their removal from 
the Assessment Rolls;
d) In areas where there are no available notaries public, the judge, exercising 
his/her ex-officio capacity as notary public, shall render service, free of 
charge, to any person or group of persons requiring the administration of 
oath or the acknowledgment of articles of cooperation and instruments of 
loan from cooperatives not exceeding Five hundred thousand pesos 
(P500,000.00);
e) 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 
Two hundred and fifty thousand pesos (P250,000.00) or the deeds of title 
of any property acquired by the cooperative or any paper or document 
drawn in connection with any action brought by the cooperative or with 
any court judgment rendered in its favor or any instrument relative to a 
bond of any accountable officer of a cooperative for the faithful 
performance of their duties and obligations;
f) Cooperatives shall be exempt from the payment of ail court and sheriffs 
fees payable to the Philippine Government for and in connection with all 
actions brought under this Code, or where such action is brought by the 
Authority before the court, to enforce the payment of obligations 
contracted in favor of the cooperative;
g) All cooperatives shall be exempt from putting up a bond for bringing an 
appeal against the decision of an inferior court or for seeking to set aside 
any third party claim: Provided, That a certification of the Authority 
showing that the net assets of the cooperative are in excess of the
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amount of the bond required by the court in similar cases shall be
2 
accepted by the court as a sufficient bond; and
3 
h) Any security issued by cooperatives shall be exempt from the provisions of
4 
Republic Act No. 8799, otherwise known as "The Securities Regulation
5 
Code", provided, such security shall not be speculative.
6 
Any public official or employee who violates or in any manner
7 
circumvents this provision shall be dealt with in accordance with the penal
8 
provisions of this Code.
9 
Sec. 71. Issuance of Certificate of Tax Exemption for Cooperatives. - The
10 
Authority shall furnish the Bureau of Internal Revenue (BIR) a certified endorsement
11 
of a list of cooperatives in good standing and compliant with the reportorial
12 
requirements of the Authority that serves as basis for the issuance of a Certificate of
13 
Tax Exemption. The BIR shall formulate the necessary guidelines in streamlining the
14 
issuance of Certificate of Tax Exemption for cooperatives: Provided, That, individual
15 
tax identification number (TIN) of members of the cooperative should not be a
16 
requirement in the processing of application and renewal of Certificate of Tax
17 
Exemption.
18 
Sec. 72. Privileges of Cooperatives. - Cooperatives registered under this
19 
Code, notwithstanding the provisions of any law to the contrary, shall also be
20 
accorded the following privileges:
21 
a) Cooperatives shall enjoy the privilege of depositing their sealed cash boxes
22 
or containers, documents or any valuable papers in the safes of the
23 
municipal, city, or provincial treasurers, and other government offices free
24 
of charge, and the custodian of such articles shall issue a receipt
25 
acknowledging the articles received, duly witnessed by another person;
26 
b) Cooperatives organized among government employees, notwithstanding
27 
any law or regulation to the contrary, shall enjoy the free use of any
28 
available space in their agency, whether owned or rented by the
29 
Government;
30 
c) Cooperatives rendering special types of services and facilities such as cold
31 
storage, ice plant, electricity, transportation, water, communications, and
32 
similar services and facilities shall be given preference in the grant of a
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franchise or certificate therefor: Provided, That such cooperatives shall 
open their membership to all persons qualified in their areas of operation. 
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 cooperative engaged in public 
services;
d) In areas where there are agricultural cooperatives, at least fifty percent 
(50%) of the supply to government institutions, agencies, and LGUs, of 
rice, corn, grains, fish and other marine products, meat, eggs, milk, 
vegetables, and other agricultural commodities such as fertilizers, seeds 
and other agricultural inputs and implements, and related products, shall 
be sourced from such cooperatives;
e) Preferential and equitable treatment in the allocation or control of 
bottomries of commercial shipping vessels in connection with the shipment 
of goods and products of cooperatives;
f) Cooperatives and their federations engaged in the production and/or the 
marketing of products from agriculture, fisheries and small entrepreneurial 
industries, shall have exclusive preferential rights in the management of 
public markets, and lease of public market facilities, stalls or spaces, 
slaughterhouses, and storage facilities: Provided, That no cooperative 
forming a joint venture, partnership or any other similar arrangement with 
a non-cooperative entity can utilize these rights;
g) Cooperatives engaged in credit services shall be entitled to loans, credit 
lines, rediscounting of their loan notes, and other eligible papers with the 
Development Bank of the Philippines (DBP), the Land Bank of the 
Philippines (LBP), and other financial institutions except the BSP;
The Philippine Deposit Insurance Corporation (PDIC) and other 
government agencies, government-owned and controlled corporations, 
and government financial institutions shall provide technical assistance to 
federations engaged in savings and credit operations to establish and 
strengthen their own cooperative deposit insurance systems;
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h) Public transport service cooperatives shall be entitled to financing support 
from Government Financial Institutions for the acquisition and 
maintenance of land, sea, and air transport equipment, facilities, and 
parts, and shall be preferred in securing a franchise for active or potential 
routes for public transport. They shall have preferential rights to the 
management and operation of public terminals and ports whether land, 
sea, or air, and wharves, where the cooperative operates, as well as in the 
operation of arrastre and stevedoring services therein.
i) Cooperatives shall be given preference in the procurement of government 
projects subject to the existing procurement laws, rules and regulations.
j) Cooperatives shall enjoy the privilege of being represented by the 
provincial or city fiscal, or the Office of the Solicitor General, free of 
charge, except when the adverse party is the Republic of the Philippines;
k) Cooperatives organized by faculty members and employees of educational 
institutions shall have the preferential right to manage the school 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 institution;
l) The relevant regulatory agencies, and LGUs shall not discriminate against 
duly registered cooperatives seeking accreditation as service providers, or 
seeking to engage in a particular business: Provided, That they possess all 
other qualifications under the law. Any person who acts contrary to this 
provision may be held liable under this Code and all other relevant laws 
and issuances;
m) Cooperatives shall be entitled to financing support from the relevant 
government agencies that shall allocate funds for the establishment of 
projects and programs for the development and promotion of 
cooperatives; and
n) The relevant government agencies and government financial institutions 
shall create a special window for financing, in the form of blanket or long­
term wholesale loans without need for individual processing, to qualified 
cooperatives engaged in housing projects. Such shall offer interest rates
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and terms equal to, or better than those given for socialized housing
2 
projects.
3 
The Authority, in consultation with appropriate government agencies and the
4 
cooperative sector, shall issue rules and regulations on all matters concerning
5 
housing cooperatives and socialized housing projects. Furthermore, the sector shall
6 
be consulted in matters of policy and implementation that will affect the rules and
7 
regulations on cooperatives.
8 
CHAPTER XI
9 
INSOLVENCY, SUSPENSION, DISSOLUTION, LIQUIDATION, AND
10 
DELISTING OF COOPERATIVES
11 
Sec. 73. Proceeding Upon Insolvency. - In case a cooperative is unable to
12 
fulfill its obligations to creditors due to insolvency, such cooperative may apply for
13 
such remedies as it may deem fit under the provisions of Republic Act No. 10142,
14 
otherwise known as the "Financial Rehabilitation and Insolvency Act".
15 
Sec. 74. Effect of Declaration of Insolvency by a Competent Court. - Should
16 
the cooperative be declared insolvent by the court, its Certificate of Registration shall
17 
be cancelled, and it shall be delisted from the registry of cooperatives of the
18 
Authority.
19 
Sec. 75. Suspension of Certificate of Registration. - A penalty of suspension,
20 
after due process, shall be imposed on a cooperative on any of the following
21 
grounds:
22 
a) Willful failure to submit annual progress reports with the necessary
23 
attachments within the period mandated by this Code: Provided, That in
24 
the case of newly-registered cooperatives, this provision shall only apply
25 
three (3) years after they have registered; or
26 
b) Willful failure or refusal to comply with an interlocutory order, a final and
27 
executory decision, or award from the Board of Directors of the Authority,
28 
or from any of its Regional Offices or adjudication officers, or by a
29 
voluntary arbitrator in relation to an investigation, voluntary arbitration, or
30 
adjudication.
31 
Sec. 76. Voluntary Dissolution Where no Creditors are Affected. - If the
32 
dissolution of a cooperative does not prejudice the rights of any creditor having a
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claim against it, the dissolution may be effected by a majority vote of the Board of
2 
Directors, and by a resolution duly adopted by the affirmative vote of at least three-
3 
fourths (3/4) of all the members entitled to vote, present and constituting a quorum
4 
in a special General Assembly called by the directors for such purpose: Provided,
5 
That the notice of time, place, and object of the meeting shall be posted for three
6 
(3) consecutive weeks in the principal office of said cooperative, in a public place in
7 
the municipality, city, or province where the cooperative operates, and in its official
8 
website and social media accounts.
9 
The notice of such meeting shall be sent to each member of record either by
10 
personal delivery, registered mail, or through electronic means at least thirty (30)
11 
days prior to said meeting. A copy of the resolution authorizing the dissolution shall
12 
be certified to by a majority of the Board of Directors and countersigned by the
13 
Cooperative Secretary.
14 
Upon compliance with all the requisites for voluntary dissolution, the Authority
15 
shall issue the Certificate of Dissolution.
16 
Sec. 77. Voluntary Dissolution Where Creditors Are Affected. - In case
17 
creditors of the cooperative are affected, the petition for dissolution, signed by a
18 
majority of its Board of Directors or the Chief Executive Officer or General Manager,
19 
as the case may be, and verified by the Chairperson of the Board or the Cooperative
20 
Secretary, shall be filed with the Authority. The petition shall state that the
21 
dissolution was affirmed by a vote of at least three-fourths (3/4) of all the members
22 
entitled to vote, present and constituting a quorum in a special General Assembly
23 
called for the purpose, and shall set forth all the claims and demands against the
24 
cooperative.
25 
If the petition is sufficient in form and substance, the Authority shall issue an
26 
order reciting the purpose of the petition and shall fix a period for the filing of any
27 
oppositions thereto, which shall not be less than thirty (30) nor more than sixty (60)
28 
days after the entry of the order. Before such period, a copy of the order shall be
29 
published at least once in a newspaper of general circulation published in the
30 
municipality or city where the principal office of the cooperative is situated or in the
31 
absence of such local newspaper, in a newspaper of general circulation in the
32 
Philippines at the expense of the cooperative, and a copy shall likewise be posted for
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three (3) consecutive weeks in three (3) public places in the municipality or city
2 
where the cooperative's office is located: Provided, That the publication requirement
3 
shall not apply to micro and small cooperatives.
4 
Upon the expiry of such period, the Authority shall proceed to hear the
5 
petition and try any issue raised in the opposition filed. If there is no opposition or
6 
such is insufficient, and the material allegations in the petition are proven, the
7 
Authority shall issue a Certification of Dissolution and direct the disposition of assets
8 
of the cooperative in accordance with existing rules and regulations. The Certificate
9 
of Dissolution shall set forth:
10 
a) The assets and liabilities of the cooperative;
11 
b) The claim of any creditor;
12 
c) The number of members;
13 
d) The nature and extent of the interests of the members of the cooperative;
14 
and
15 
e) The appointment of the liquidators.
16 
The Authority shall issue a Certificate of Cancellation of Registration upon
17 
approval of the final report of the liquidators.
18 
Sec. 78. Cancellation by Order of Authority. - The Authority may cancel, after
19 
due notice and hearing, the cooperative's Certificate of Registration on any of the
20 
following grounds:
21 
a) Having obtained its registration by fraud;
22 
b) Engaging in an illegal or unauthorized purpose;
23 
c) Willful violation, despite written notice by the Authority, of the provisions
24 
of this Code or its implementing rules and regulations, other issuances of
25 
the Authority consistent with this Code, or bylaws of the cooperative;
26 
d) Willful refusal to comply with an order issued or given by the Authority;
27 
e) Willful failure to operate on a cooperative basis; or
28 
f) 
Failure to meet the required minimum capital and minimum number of
29 
members in the cooperative.
30 
The decision of the Authority on the cancellation of the Certificate of
31 
Registration of a cooperative may be appealed to the Authority's Board of Directors
32 
within thirty (30) days from the receipt thereof. The decision of the Authority's Board
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of Directors shall be final and executory unless elevated or appealed to a regular
2 
court.
3 
Sec. 79. Cancellation by Failure to Operate. - If a cooperative has not
4 
commenced operations within three (3) years after the issuance of its Certificate of
5 
Registration, or has not carried on its business for three (3) consecutive years, the
6 
Authority shall issue a show cause order for the cooperative to explain its failure to
7 
operate. Failure to provide justifiable cause shall authorize the Authority, after due
8 
notice, to cancel the Certificate of Registration and delist it from the registry.
9 
Sec. 80. Liquidation of a Cooperative. - Every cooperative whose term of
10 
existence expires by its own limitation, or whose existence is terminated by
11 
voluntary dissolution or cancellation of its Certificate of Registration by the Authority
12 
shall cease to operate. However, it can continue to exist for three (3) years for
13 
winding up its affairs, prosecuting and defending suits by or against it, and the
14 
disposition, conveyance and distribution of its properties and assets.
15 
The cooperative is authorized to convey all of its interests in the properties to
16 
trustees for the benefit of its members, creditors, and other persons in interest, after
17 
which, all interests which the cooperative had in the properties are terminated.
18 
Upon the winding up of the cooperative affairs, any asset distributable to any
19 
creditor, shareholder, or member who is unknown or cannot be found shall be given
20 
to the federation or union to which the cooperative is affiliated with.
21 
A cooperative shall only distribute its assets or properties upon lawful
22 
dissolution, and after payment of all its debts and liabilities, except in the case of
23 
decrease of share capital of the cooperative, and as otherwise allowed by this Code.
24 
Sec. 81. Delisting of Cooperatives. - Cooperatives may be delisted from the
25 
Registry of Cooperatives due to any of the following causes:
26 
a) Voluntary Dissolution;
27 
b) Involuntary Dissolution;
28 
c) Cancellation by Order of the Authority;
29 
d) Cancellation by Failure to Operate; or
30 
e) Merger or Consolidation.
31 
Sec. 82. Rules and Regulations on the Insolvency, Suspension, Dissolution,
32 
Liquidation, and De-Hsting of Cooperatives. - The guidelines on the implementation
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of this Chapter shall be included in the implementing rules and regulations of this
2 
Code.
3 
CHAPTER XII
4 
CAPITAL, PROPERTY, AND FUNDS
5 
Sec. 83. Capital and Funds. - The capitalization of cooperatives and
6 
federations, or funds in the case of unions, shall be governed by this Code and its
7 
implementing rules and regulations that will be developed in consultation with the
8 
cooperative sector.
9 
Sec. 84. Capital Sources. - Cooperatives registered under this Code may
10 
derive their capital from any or all of the following sources:
11 
a) Member's share capital;
12 
b) Loans and borrowings;
13 
c) Deposits from members only, except for cooperative banks which accept
14 
deposits from both members and non-members, or the general public;
15 
d) Revolving capital which consists of the deferred payment of patronage
16 
refunds, or interest on share capital;
17 
e) Joint venture partners; and
18 
f) Subsidies, donations, legacies, grants, aids, and such other assistance or
19 
investment from any local or foreign institution whether public or private:
20 
Provided, That capital coming from such subsidies, donations, legacies,
21 
grants, aids, investments, and other assistance shall not be divided into
22 
individual share capital holdings at any time, but instead shall form part of
23 
the donated capital or fund of the cooperative. Upon dissolution or
24 
cancellation of the cooperative, such donated capital shall be subject to
25 
escheat.
26 
Sec. 85. Limitation on Share Capital Subscription. - No member of primary
27 
cooperative other than the cooperative itself shall own or hold more than twenty
28 
percent (20%) of the subscribed share capital of the cooperative.
29 
Where a member of a cooperative dies, their heir shall be entitled to the
30 
shares 
of the decedent: Provided, That the total shareholding
31 
of the heir does not exceed twenty percent (20%) of the share capital of the
32 
cooperative: Provided, further. That the heir qualifies and is admitted as a member
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of the cooperative: Provided, finally, That where the heir fails to qualify as a member
2 
or where their total shareholding exceeds twenty percent (20%) of the share capital,
3 
the shares in excess will revert to the cooperative upon payment to the heir of the
4 
value of such shares.
5 
For federations as stated in its articles of cooperation and bylaws, the share
6 
capital holdings of any one member-cooperative shall not exceed forty percent
7 
(40%) of the subscribed share capital of the federation. A foreign federation of
8 
cooperatives if admitted as associate member of a Philippine federation of
9 
cooperatives may hold or own up to forty percent (40%) of the preferred share
10 
capital of said Philippine federation: Provided, That the redemption date of such
11 
preferred share capital shall be at least five (5) years after effectivity of
12 
membership: Provided, further. That during the five-year period, withdrawal of the
13 
preferred share capital shall not be allowed.
14 
Sec. 86. Assignment of Share Capital Contribution or Interest - Subject to
15 
the provisions of this Code and the approval of the majority of the Board of
16 
Directors, no member shall transfer their shares or interest in the cooperative or any
17 
part thereof unless:
18 
a) The member has held such share capital contribution or interest for more
19 
than one (1) year;
20 
b) The assignment is made to the cooperative or to a member of the
21 
cooperative or to a person who falls within the field of the membership of
22 
the cooperative; and
23 
c) The Board of Directors has approved such assignment.
24 
Sec. 87. Capital Buiid-Up. - The bylaws of every cooperative, except for
25 
cooperative unions, shall prescribe a reasonable and realistic member capital or
26 
deposits build-up program to allow the continuing growth of the contribution of the
27 
members to the cooperative as their economic conditions continue to improve. Upon
28 
approval of the membership, the member shall execute a subscription agreement on
29 
their equitable contribution to the cooperative. Upon full payment thereof, the
30 
member may apply for an additional share capital subscription, and execute a new
31 
subscription
32 
agreement.
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Sec. 88. Shares. - The term "share" refers to a unit of capital in a
2 
cooperative, except for cooperative unions, the par value of which may be fixed at
3 
any figure not less than One hundred pesos (PIOO.OO) but not more than One
4 
thousand pesos (P1,000.00). The share capital of the cooperative is the money paid
5 
or required to be paid by the members for the operations of the cooperative.
6 
Unless otherwise provided for in its policies, the cooperative shall issue Share
7 
Certificates at the end of the calendar year based on the number of shares fully paid
8 
for the said period.
9 
Cooperatives are prohibited from issuing multiple types of shares with
10 
different par values, and from increasing or decreasing the par value of the share
11 
capital without amending their articles of cooperation and bylaws.
12 
A share can either be a common share issued to a regular member, or a
13 
preferred share issued to associate members.
14 
Sec. 89. Fines. - The policies of a cooperative may prescribe a fine on unpaid
15 
subscribed share capital: Provided, That such fine is fair and reasonable.
16 
Sec. 90. Investment of Capital. - A cooperative, upon approval as provided in
17 
its bylaws, may invest its capital in any of the following:
18 
a) Any reputable bank;
19 
b) Securities issued or guaranteed by the Government;
20 
c) Real estate primarily for the use of the cooperative or its members; or
21 
d) Any other manner authorized in the byiaws.
22 
Sec. 91. Revolving Capital. - The General Assembly may authorize the Board
23 
of Directors to raise a revolving capital from the proceeds of products sold or
24 
services rendered, or per unit of product or services handled, to strengthen its
25 
capital structure.
26 
CHAPTER XIII
27 
AUDIT, INQUIRY, AND MEMBERS' RIGHT TO EXAMINE
28 
Sec. 92. Audit of Cooperatives. - Cooperatives registered under this Code
29 
shall be subject to an annual audit of its financial and social performance in
30 
accordance with the implementing rules and regulations to be promulgated by the
31 
Authority. The financial audit shall be conducted by an external auditor who shall be
32 
independent from the cooperative or any of its subsidiaries, and must be a member
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in good standing of the Philippine Institute of Certified Public Accountants (PICPA),
2 
and is accredited by both the Board of Accountancy and the Authority. However, if
3 
the total assets or total liabilities of agricultural and fisheries cooperatives is less
4 
than Three million pesos (P3,000,000.00), or such other amount as may be
5 
determined appropriate by the Department of Agriculture (DA), the financial
6 
statements may be certified under oath by the bookkeeper, treasurer, and the
7 
president.
8 
The social performance audit may be conducted by the Audit Committee, by
9 
the internal auditor of the cooperative, or by an independent auditor engaged by the
10 
cooperative. The Authority, in consultation with the cooperative sector, shall
11 
promulgate the rules and standards for the social audit of cooperatives.
12 
Sec. 93. Audit Report. - The complete audit reports shall be submitted to the
13 
Board of Directors, which shall be presented to the General Assembly for approval.
14 
The Board of Directors shall be liable under Section 170 of this Code should it fail to
15 
present such reports to the General Assembly.
16 
Sec. 94. Non-Liability for Defamations. - The auditor shall not be held liable in
17 
any action for defamation for acts done or for any statement made by them in good
18 
faith in connection with the conduct of audit of the cooperative.
19 
Sec. 95. Right to Examine. - All members shall have the right to examine the
20 
records of the cooperative under Section 61 of this Code at any time during
21 
reasonable hours of the operating days of the cooperative: Provided, That the
22 
member submits a letter request three (3) days prior to the date of their demand to
23 
examine the records and stating therein the purpose of the request.
24 
The Board of Directors shall consider the purpose and reason for the request
25 
to examine the records to determine its propriety. The Board of Directors shall have
26 
the right to refuse the request after proper consultation with the requesting member
27 
on any of the following grounds:
28 
a) The member has improperly used any information Sec.ured through any
29 
prior examination of the records of such cooperative or of any other
30 
cooperative; or
31 
b) The member is not acting in good faith or for a legitimate purpose in
32 
making the demand to examine records.
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If the request to examine is denied based on the aforementioned grounds,
the
member shall have the burden of proving to the Board that such request is made in 
good faith and for a legitimate purpose. If the denial is made in bad faith, the 
directors
who voted for such refusal shall be penalized under Section 170 of this Code.
Sec. 96. Safety of Records. - Every cooperative shall, at its principal office, 
keep and carefully preserve the records required by this Code to be prepared and 
maintained. The bylaws shall also provide the condition and the accountable persons 
for the safekeeping of the records in accordance with applicable laws on data 
privacy. The cooperative shall take all necessary precautions to prevent its loss, 
destruction, or falsification.
CHAPTER XIV
ALLOCATION AND DISTRIBUTION OF NET SURPLUS
Sec. 97. Net Surplus. - Notwithstanding the provisions of existing laws, the 
net surplus of cooperatives shall be determined in accordance with its bylaws. Every 
cooperative shall determine its net surplus at the close of every calendar year.
Any provision of law to the contrary notwithstanding, the net surplus shall not 
be construed as profit but as an excess of payments made by the members for the 
loans borrowed, or the goods and services availed 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.
Sec. 98. Net Surplus Allocation and Statutory Funds. - The net surplus shall 
be subject to the allocation of the following statutory funds, which shall be recorded 
in the books of account, for the cooperative's growth and development:
a) An amount for the reserve fund which shall be at least ten percent (10%) 
of the net surplus provided, that in the first five (5) years of operation 
after registration, the amount allocated for the reserve fund shall not be 
less than thirty percent (30%) of the net surplus.
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The reserve fund shall be used for the stability of the cooperative and 
to cover net losses in its operations, including losses incurred during a 
pandemic, state of emergency, and other such force majeure: Provided, 
that if any of the aforementioned events occur, necessitating the use of 
the reserve fund, cooperatives may use not greater than fifteen percent 
(15%) of the latter to mitigate the losses incurred, as may be approved or 
confirmed by the general assembly, as the case may be. Any sum 
recovered on items previously charged to the reserve fund shall be 
credited to such fund.
The fund shall be recorded in the books of account of the cooperative 
and the cash allocation for the reserve fund shall be deposited separately 
in an account established for that purpose.
The general assembly may decrease the amount allocated to the 
reserve fund when the reserve fund already exceeds the share capital and 
may approve the utilization of the reserve fund for investment to enhance 
the growth and development of the cooperative: Provided, That the 
liquidity of the cooperative shall be taken into account when utilizing a 
portion of the reserve fund for investment: Provided, further. That the 
cooperative may only utilize no more than fifty percent (50%) of the 
reserve fund for investment upon approval of at least a majority vote of all 
members entitled to vote, present and constituting a quorum: Provided, 
fmaiiy. That the board of directors shall conduct due diligence and only 
invest in short-term low-risk investment options.
Upon the dissolution of the cooperative, the reserve fund shall be 
distributed in accordance with the rules and regulations on liquidation to 
be issued by the Authority.
b) The Cooperative Education and Training Fund (CETF), which shall not 
exceed ten percent (10%) of the net surplus, shall be used for the 
training, development, and similar other cooperative activities geared 
towards the growth of the cooperative movement:
1) Half of the CETF shall be used to provide for the education and 
training of its officers, members, and employees; while the other
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half shall be remitted to a federation and/or union that the 
cooperative of which it is a member, which must redound to the 
benefit and development of the member-cooperatives. Should a 
cooperative have multiple affiliations, seventy percent (70%) of 
the CETF remittance shall be given to the cooperative union/s to 
which it is a member while the remaining thirty percent (30%) 
shall be distributed between the federations it is affiliated with.
2) The balance of the CETF shall be utilized within the succeeding 
fiscal year following its allocation and shall be utilized in 
accordance with the policies and guidelines to be promulgated by 
the Authority;
3) Upon the dissolution of the cooperative, the unexpended balance 
of the CETF shall be credited to the cooperative education and 
training fund of the union in which it is a member or the union 
where it was last affiliated with.
c) The Community Development Fund (CDF), which shall not be less than 
five percent (5%) of the net surplus, shall be used for projects or activities 
that will benefit the community where the cooperative operates. However, 
the cooperative may extend assistance to marginalized communities or 
affected areas outside its area of operation in times of calamities, disaster, 
or national emergency, at the discretion of the General Assembly.
In the case of cooperatives whose common bond of membership is 
institutional, the community refers to the municipality or city where the 
principal or branch office is located.
The allocation for the CDF for the current year shall be fully utilized in 
the following year unless the projects or activities as approved by a 
majority of the members entitled to vote, present and constituting a 
quorum in a General Assembly meeting, require multi-year utilization. For 
multi-year projects or programs, the allocation shall be fully utilized within 
the period as stated in the plan.
The utilization of the CDF shall be in accordance with the guidelines to 
be promulgated by the Authority.
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d) The optional fund, which shall not exceed five percent (5%) of the net 
surplus, may be used for the acquisition of land and construction of 
building, and any other necessary fund: Provided, That it is approved by at 
least three-fourths (3/4) of all members entitled to vote, present and 
constituting a quorum, which shall be in accordance with the 
implementing rules and regulations to be promulgated by the Authority.
This fund may also be used for the benefit of its members and 
employees under exceptional circumstances such as the occurrence of a 
pandemic, crisis, or force majeure. However, if the optional fund is 
insufficient, the cooperative may charge any deficiency to direct expenses.
e) The remaining net surplus shall be made available in full to the members 
in the form of interest on share capital following the formula for 
computation as provided by the Authority: Provided, That this is approved 
by a majority of the members entitled to vote, present and constituting a 
quorum.
f) The sum allocated for patronage refunds shall be made available at the 
same rate to all patrons of the cooperative in proportion to their individual 
patronage: Provided, That;
1) In the case of a member patron with paid-up share capital 
contribution, the member patron's proportionate amount of 
patronage refund shall be paid to the member patron unless the 
member patron agrees to credit the amount to the member 
patron's account as additional share capital contribution;
2) In the case of a member patron with unpaid share capital 
contribution, the member patron's proportionate amount of 
patronage refund shall be credited to the member patron's 
account until the share capital contribution has been fully paid;
3) In the case of a non-member patron, the non-member patron's 
proportionate amount of patronage refund shall be set aside in a 
fund created for this purpose and shall be allocated to individual 
non-member patrons only upon request and presentation of 
evidence of the amount of their patronage. The amount allocated
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1 
shall be credited to such patrons toward payment of the minimum
2 
capital contribution for membership. When a sum equal to this
3 
amount has accumulated at any time within two (2) years from
4 
the start of their patronage, such patrons shall be deemed and
5 
become members of the cooperative if they agree or request and
6 
comply with the provisions of the bylaws for admission to
7 
membership; and
8 
4) Any non-member patron who has accumulated the sum necessary
9 
for membership but who does not request nor agree to become a
10 
member or fails to comply with the provisions of the bylaws for
11 
admission to membership, the amount so accumulated or
12 
credited to their account together with any part of the general
13 
fund for non-member patrons shall be credited to any of the
14 
statutory funds as approved by a majority of the members
15 
entitled to vote, present and constituting a quorum.
16 
CHAPTER XV
17 
AGRICULTURAL COOPERATIVES
18 
Sec. 99. Definition of Coverage. - This Chapter shall apply to all agricultural
19 
cooperatives, as defined in this Code: Provided, That the provisions of the other
20 
chapters of this Code shall apply suppletorily except insofar as this Chapter
21 
otherwise provides.
22 
Sec. 100. Cooperative Business Activities and Allied Services. - A duly
23 
registered agricultural cooperative may engage in all or any of the following
24 
activities:
25 
a) Raising and/or culture of plants, high-value crops, animals, fish, poultry,
26 
dairy and meat-type livestock, other agri-products as source of food, feed,
27 
and fiber, and other agrifishery or non-food commodities;
28 
b) Marine and inland fishing;
29 
c) Production and/or sale of salt;
30 
d) Community and social forestry;
31 
e) Provision of credit facilities for marginal farmers and fishermen;
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f) Facilitating the production, procurement, repacking, importation,
2 
distribution and marketing of farm inputs/implements for its members
3 
such as but not limited to, meat-type and dairy animals, planting
4 
materials, semen, silage, feeds, veterinary supplies, seeds, fertilizers and
5 
chemicals, farm equipment, food processing and engineering
6 
supplies/equipment, and other inputs as may be needed by the
7 
agricultural industry;
8 
g) Propagation, production, harvest, postharvest, processing, packing,
9 
repacking, marketing, exportation, and sale of members' agri-products,
10 
dairy products and by-products, and/or produce;
11 
h) Maintenance and management of irrigation systems, water impounding,
12 
and other agricultural facilities;
13 
i) Other allied services such as but not limited to warehousing, cold storage
14 
and cold chain, other post-harvest services, hauling, transport of
15 
members' products/produce, and such other similar business services and
16 
activities that will reduce cost and/or value addition of output; and
17 
j) Learning site entrepreneurship for extension, technology demonstration,
18 
agri-tourism, and farm business schools.
19 
Sec. 101. Pre-Cooperative Agricultural Organization. - Prior to registration
20 
with the Authority, a group of natural persons intending to form an agriculture
21 
cooperative may voluntarily form a Pre-Cooperative Agricultural Organization (PCAO)
22 
that shall have its own juridical personality to undertake activities that shall
23 
determine the viability of the creation of a cooperative under this Code. Prior to
24 
registration, the PCAO must be registered as such with the local Cooperative
25 
Development Officers (LCDOs).
26 
The DA and the Authority, in coordination with the CDOs, shall assist PCAOs
27 
so that they can formally organize as cooperatives under this Code: Provided, That
28 
should the PCAO decide to formally organize into a cooperative, it must comply with
29 
the provisions of Sections 8 and 14 of this Code. Section 18 shall apply to all
30 
contracts executed by pre-cooperative organizations prior to registration under this
31 
Code.
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The DA and the Authority shall jointly issue guidelines on the mechanisms for
2 
PCAOs.
3
4 
Sec. 102. Registration of Agricuiturai Cooperatives. - Agricultural cooperatives
5 
shall file their application for registration with the regional office of the Authority that
6 
has jurisdiction over its area of operation. The requirements and procedure for
7 
registration of agricultural cooperatives shall be in accordance with the rules and
8 
regulations to be promulgated by the Authority.
9 
No fees shall be assessed or charged to any agricultural cooperative by any
10 
government entity, national or local, at any stage of its organization and registration
11 
process.
12 
Sec. 103. Capitai Requirements of Agricuiturai Cooperatives. - The authorized
13 
share capital of an agriculture cooperative shall be stated in its articles of
14 
cooperation and that prior to its registration, at least twenty five percent (25%) of
15 
the authorized share capital shall be subscribed to by the members and at least
16 
twenty- five percent (25%) of the subscribed share capital shall be paid-up:
17 
Provided, That the paid-up capitalization requirement for primary cooperatives shall
18 
not be less than Fifteen thousand pesos (P15,000.00).
19 
Sec. 104. Bond of Membership. - The bond of membership of agricultural
20 
cooperatives shail be any of the foliowing:
21 
a) Residential - members are farmers, farm workers, fisherfolk who are
22 
actually and physically residing within the area of operation;
23 
b) Occupational - members are those who are engaged in raising, culture of
24 
plants, animals, as well as those from the technical and scientific
25 
communities of the agriculture sector;
26 
c) Associational - members are from registered associations, groups, clubs,
27 
cultural and other similar aggrupation of farmers, farm workers, and
28 
fisherfolk; or
29 
d) Institutional - members consist of employees, workers and/or officers of a
30 
particular institution who will undertake or are undertaking agricultural
31 
projects.
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Sec. 105. Clustering and Consolidation. - In order to pool their resources for
2 
increased viability and market competitiveness, the DA, in collaboration with the
3 
Department of Agrarian Reform (DAR), the DTI, the Authority, and the cooperative
4 
sector shall institutionalize the farm and fisheries clustering and consolidation (F2C2)
5 
program that will promote, encourage agricultural cooperatives and facilitate their
6 
cooperation into clusters that will encompass the whole agricultural value chain,
7 
including but not limited to land consolidation, postharvest processing, distribution,
8 
logistics, marketing, and promotions.
9 
Within sixty (60) days from the effectivity of this Code, the DA, the DAR, the
10 
DTI and the Authority, in consultation with the cooperative sector, shall jointly issue
11 
the guidelines for the implementation of the program, and shall provide the
12 
necessary assistance at every step of the clustering and consolidation process,
13 
including the formulation of cluster development plans.
14 
Sec. 106. Partnership and Joint Venture with Private Entities. - Duly
15 
registered private entities may enter into a partnership or joint venture with
16 
agricultural cooperatives in order to provide the latter with investments and technical
17 
support, such as, but not limited to technological, logistics, and facilities support,
18 
among others.
19 
Such partnership or joint venture shall be registered with the necessary
20 
regulatory authorities, including the Authority, and enjoy the relevant exemptions
21 
and privileges under this Code.
22 
The details of the joint venture or partnership with private entities shall be left
23 
to the discretion of the cooperatives. Further details shall be laid down in the
24 
implementing rules and regulations of this Code.
25 
Sec. 107. Pole of the National Coordinating Committee on Cooperatives
26 
Development. - The Authority shall mobilize the National Coordinating Committee on
27 
Cooperative Development (NCC-CD) in partnership with the cooperative sector and
28 
other stakeholders for the promotion of the growth, viability, and development of
29 
Agricultural and fisheries cooperatives: Provided, That the NCC-CD shall coordinate
30 
with the DA and the Farmers and Fisherfolk Enterprise Development Council (FFEDC)
31 
on matters related to the growth, development, and sustainability of the agricultural
32 
and fisheries cooperatives.
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Sec. 108. Role ofLGUs. - The Local Government Units shall:
2 
a) Ensure the appointment of Cooperative Development Officers, in
3 
compliance with Republic Act No. 11535;
4 
b) Create a Committee on Agricultural Cooperatives Development in the Local
5 
Government Legislative Council which shall focus on addressing legislative
6 
concerns on agricultural cooperatives;
7 
c) Legislate necessary ordinances for the promotion and development of
8 
agricultural cooperatives;
9 
d) Disseminate information to people and facilitate the establishment and
10 
development of the management 
and operations of agricultural
11 
cooperatives in their respective localities;
12 
e) Expedite the issuance of the necessary permits for the implementation of
13 
programs and projects of the Authority and other national government
14 
agencies for the benefit of agricultural cooperatives;
15 
f) Upon written request of the Authority, assist in the resolution of inter-
16 
cooperative disputes among agricultural cooperatives operating within
17 
their localities;
18 
g) Facilitate and conduct seminars, trainings, and/or conferences necessary
19 
for the organization, registration, management and 
operations of
20 
agricultural cooperatives, in coordination with federations and unions;
21 
h) Provide technical assistance and skills training for farmers, farm workers,
22 
and fisherfolk to engage in income-generating activities;
23 
i) Provide access to land for agricultural and fisheries cooperatives for
24 
farming and other purposes which include leasing or allocating public
25 
lands for cooperatives use;
26 
j) Offer financial support to agricultural and fisheries cooperatives through
27 
grants, subsidies, or low-interest loans; and
28 
k) Facilitate linkage between agricultural and fisheries cooperatives and other
29 
institutions offering assistance/services.
30 
Sec. 109. Role of Cooperative Development Councils and National
31 
Government Agencies. - The Authority shall, in collaboration with the LGUs through
32 
the Regional, Provincial, City, and Municipal Cooperative Development Councils and
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the Cooperative Development Officers, facilitate programs and policies affecting
2 
agricultural cooperatives in accordance with a Joint Memorandum Circular to be
3 
promulgated by the Authority and the LGU.
4 
Agricultural cooperatives shall be entitled to financing support from the
5 
relevant government agencies that shall allocate funds for the establishment of
6 
projects and programs for the development and promotion of agricultural
7 
cooperatives.
8 
Sec. 110. Benefits and Privileges of Agricultural Cooperatives. - An agriculture
9 
cooperative shall enjoy the following benefits and privileges:
10 
a) Taxes, Duties, and Liens:
11 
1) All benefits, privileges, and tax treatments of cooperatives as
12 
defined and enumerated under Chapter X of this Code shall apply to
13 
agricultural cooperatives;
14 
2) Agricultural cooperatives shall be exempt from customs duties,
15 
advance sales or compensating taxes on their importation and local
16 
purchase of machineries, equipment, accessories, batteries, and
17 
spare parts used by them: Provided, That all tax- and duty-free
18 
imports and local purchases shall not be sold nor the beneficial
19 
ownership thereof be transferred to any person until after five (5)
20 
years, otherwise, the cooperative and the transferee or assignee
21 
shall be solitarily liable to pay twice the amount of the imposed tax
22 
and/or duties; and
23 
3) All real properties owned, and those directly used for the operations,
24 
management, and maintenance of agricultural cooperatives shall be
25 
exempt from the payment of real property taxes imposed under
26 
existing laws.
27 
b) Trainings and Conferences - All trainings and conferences necessary for
28 
the organization, registration, management and operations of an
29 
agriculture cooperative, rendered by the appropriate government agency,
30 
shall be given free of charge, including costs of venue, training materials,
31 
speakers and resource persons. The CDOs shall be primarily responsible
32 
for these trainings and conferences within their respective localities;
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c) Consolidation - Agricultural cooperatives may consolidate agricultural lands
2 
owned by its members within a contiguous area for purposes of
3 
agricultural development; and
4 
d) Direct Purchase by National and Local Government Agencies - To promote
5 
and support agricultural cooperatives, national and local government
6 
agencies shall directly purchase agricultural products from accredited
7 
agricultural cooperatives: Provided, That said products are necessary in
8 
the performance of their respective mandates.
9 
For the purposes of this Code, the procurement by national and local
10 
government agencies of said agricultural products shall be exempt from
11 
the application of the bidding process prescribed under relevant
12 
government procurement laws: Provided, That said agencies shall undergo
13 
a negotiated procurement under the applicable guidelines of the
14 
Government Procurement Policy Board.
15 
e) Loans and Grants:
16 
1) All loans applied for by agricultural cooperatives in any government-
17 
owned or -controlled banks or government financial institutions
18 
shall enjoy preferential treatment as to the requirements, rates,
19 
Securities, and collaterals; and
20 
2) The DA shall coordinate with the BSP to lower the requirements for
21 
all loans applied for and granted to agricultural cooperatives.
22 
Sec. 111. Merger and Consoiidation of Agricuiturai Cooperatives. -
23 
Notwithstanding the provisions of this Code, the merger and consolidation of
24 
agricultural cooperatives shall be in accordance with the implementing rules and
25 
regulations to be promulgated by the Authority.
26 
Sec. 112. Inter-Cooperative Arrangements of Agricuiturai Cooperatives. -
27 
Agricultural cooperatives shall be allowed to enter into intercooperative
28 
arrangements with and among other cooperatives and other entities to pursue value
29 
and supply chain solutions and other agribusiness development programs, subject to
30 
the guidelines to be promulgated by the Authority in consultation with the
31 
cooperative sector.
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Sec. 113. Local Development Hubs. - Local Development Hub (LDH) refers to
2 
a farming zone or transport infrastructure, which is generally far from formal
3 
markets, and serves a minimum of one hundred (100) farmers, linking them to
4 
buyers, who may be, among others, traders, processors, and export companies. The
5 
DA, the DTI, and the Authority shall jointly establish or make use of the existing
6 
LDHs in order to strengthen the market linkages between farmers and buyers,
7 
fostering agricultural development and economic growth at the local level. They shall
8 
jointly issue the guidelines for the operations and maintenance thereof.
9 
Sec. 114. Annual Trade Fair and Awards. - The DA, in coordination with the
10 
Authority, and in partnership with the cooperative sector shall establish and hold the
11 
Annual Agricultural Cooperatives Trade Fair and Awards and other development-
12 
oriented projects and activities to showcase the exemplary business achievement,
13 
latest innovations, and other emerging trends in the sector.
14 
CHAPTER XVI
15 
AGRARIAN REFORM COOPERATIVES
16 
Sec. 115. Coverage. - The provisions of this Chapter shall primarily govern
17 
agrarian reform cooperatives, including Agrarian Reform Beneficiaries (ARBs)
18 
Cooperative as defined in Department of Agrarian Reform Administrative Order No.
19 
05, Series of 2009: Provided, That the provisions of the other chapters of this Code
20 
shall apply suppletorily except insofar as this Chapter otherwise provides.
21 
Sec. 116. Purpose. - An agrarian reform cooperative as defined shall be
22 
organized for any of the following purposes:
23 
a) To develop an appropriate system of land tenure, land development, land
24 
consolidation or land management in areas covered by agrarian reform;
25 
b) To coordinate and facilitate the dissemination of scientific methods of
26 
production and provide assistance in the storage, transport, and
27 
marketing of farm products for agrarian reform beneficiaries and their
28 
immediate family;
29 
c) To provide financial facilities to ARBs for provident or productive purposes
30 
at reasonable costs;
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1 
d) To arrange and facilitate the expeditious transfer of appropriate and
2 
suitable technology to ARBs and marginal farmers at the lowest possible
3 
cost;
4 
e) To provide social Security benefits, health, medical and social insurance
5 
benefits, and other social and economic benefits that promote the general
6 
welfare of the ARBs and marginal farmers;
7 
f) To provide non-formal education, vocational and technical training, and
8 
livelihood programs to ARBs and marginal farmers;
9 
g) To act as conduits for external assistance and services to the ARBs and
10 
marginal farmers;
11 
h) To undertake a comprehensive and integrated development program in
12 
agrarian reform and resettlement areas with special concern for the
13 
development of agro-based, marine-based, and cottage-based industries;
14 
i) To represent the ARBs on any or all matters that affect their interest; and
15 
j) To undertake such other economic or social activities as may be necessary
16 
or incidental in the pursuit of the foregoing purposes.
17 
Sec. 117. Cooperative Estate. - Landholdings acquired by the State, like
18 
plantations, estates, or haciendas for the benefit of the workers in accordance with
19 
the Comprehensive Agrarian Reform Program shall be collectively owned by the
20 
worker-beneficiaries under a cooperative set-up.
21 
Sec. 118. Infrastructure. - In agrarian reform and resettlement areas, the
22 
Government shall grant to agrarian reform cooperatives preferential treatment in the
23 
construction, maintenance, and management of roads, bridges, canals, wharves,
24 
ports, reservoirs, irrigation systems, waterworks systems, and other infrastructures
25 
with government funding. For this purpose, the Government shall provide technical
26 
assistance, facilities, and equipment to such agrarian reform cooperatives.
27 
Sec. 119. Lease of Public Lands. - The Government may lease public lands to
28 
any agrarian reform cooperative for a period not exceeding twenty-five (25) years,
29 
subject to renewal for another twenty-five (25) years only: Provided, That the
30 
application for renewal shall be made one (1) year before the expiration of the
31 
lease: Provided, further. That such lease shall be for the exclusive use and benefit of
32 
the ARBs and the marginal farmers subject to the provisions of Republic Act No.
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1 
6657 otherwise known as "The Comprehensive Agrarian Reform Law of 1988", as
2 
amended.
3 
Sec. 120. Preferential Right - In agrarian reform areas, an agrarian reform
4 
cooperative shall have the preferential right in the grant of franchise and Certificate
5 
of Pubiic Convenience and Necessity for the Operation of Public Utiiities and
6 
Services: Provided, That it meets the requirements and conditions imposed by the
7 
appropriate government agency granting the franchise or Certificate of Public
8 
Convenience and Necessity. In cases where there is an electric service provider in
9 
the area, it shall, upon the request of an agrarian reform cooperative, immediately
10 
provide electric services to the agrarian reform areas. If the electric service provider
11 
fails to provide the services requested within a period of one (1) year, the agrarian
12 
reform cooperative concerned may undertake to provide the eiectric services in the
13 
area through its own resources. All investments made by the said agrarian reform
14 
cooperative for the electrification of the agrarian reform resettlement areas shall be
15 
the subject of sale to the electric service provider once it takes on the service.
16 
Sec. 121. Special Privileges. - Subject to such reasonable terms and
17 
conditions as the DAR and the Authority may impose, agrarian reform cooperatives
18 
may be given the exclusive right to do any of the foliowing economic activities in
19 
agrarian reform and resettlement areas:
20 
a) Supply and distribution of consumer, agricultural, aquacultural, and
21 
Industrial goods, production inputs, raw materials and supplies,
22 
machinery, equipment, facilities, and other services and requirements of
23 
the ARBs and marginal farmers at reasonable prices;
24 
b) Marketing of the products and services of the ARBs in local and foreign
25 
markets;
26 
c) Processing of the products of the members into finished consumer or
27 
industrial goods for domestic consumption or for export;
28 
d) Provision of essential public services at cost, such as power, irrigation,
29 
potable water, passenger or cargo transportation by land or sea,
30 
communication services, and public health and medical care services;
31 
e) Management, conservation, and commercial development of marine,
32 
forestry, mineral, water, and other natural resources subject to compliance
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1 
with the laws and regulations on environmental and ecological controls;
2 
and
3 
f) Provision of financial, technological, and other services and facilities
4 
required by the ARBs in their daily lives and livelihood.
5 
The foregoing notwithstanding, an agrarian reform cooperative cannot, on its
6 
own, by policy or any other means, disqualify a member as an ARB, whether directly
7 
or constructively.
8 
The Government shall provide the necessary financial and technical assistance
9 
to agrarian reform cooperatives to enable them to effectively discharge their
10 
purposes under this Chapter. The DAR, the Authority and the BSP shall draw up a
11 
joint program for the organization and financing of agrarian reform cooperatives.
12 
The joint program shall be geared towards the gradual assumption of full ownership
13 
and management control by ARBs of the agrarian reform cooperatives.
14 
Sec. 122. Organization and Registration. - Agrarian reform cooperatives may
15 
be organized and registered in accordance with the requirements of this Code only
16 
upon prior certification by the DAR that said proposed cooperative is needed and
17 
that its organization is feasible and will be economically viable in its operations.
18 
The Authority, in consultation with the concerned government agencies and
19 
cooperative sector, shall issue appropriate rules and regulations pertaining to the
20 
provisions of this Chapter.
21 
CHAPTER XVII
22 
COOPERATIVE BANKS
23 
Sec. 123. Organization, Registration, and Membership. - The organization and
24 
membership of a Cooperative Bank shall be governed by the following provisions:
25 
a) Organization - At least fifteen (15) cooperatives duly established and
26 
registered under this Code may register a cooperative bank with the
27 
Authority.
28 
b) Registration - The application for the registration of the articies of
29 
cooperation and bylaws, including its amendments, by a cooperative bank
30 
with the Authority shall be accompanied by a Certificate of Authority
31 
issued by the BSP.
32 
c) Membership - Membership in a cooperative bank shall be open to:
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1 
1) cooperatives of all types and categories;
2 
2) natural persons who are members of the bank's member-primary
3 
cooperatives;
4 
3) foreign cooperatives;
5 
4) pre-cooperative organizations established under Presidential 
Decree
6 
No. 175; and
7 
5) individuals.
8 
Membership in a cooperative bank shall either be regular or associate.
9 
Regular membership shall be limited to cooperative organizations, individual
10 
members of the bank's member-primary cooperatives or foreign cooperatives.
11 
Associate members shall be pre-cooperative organizations established under P.D.
12 
No. 175 and individuals who are subscribing and holding preferred shares only.
13 
The common shareholdings of domestic cooperative organizations shall at all
14 
times be at least sixty percent (60%) of the total outstanding voting shares of the
15 
Cooperative Bank. Common shares held by individual members of the bank's
16 
member- primary cooperatives and foreign cooperatives shall not be more than forty
17 
percent (40%) of the total outstanding voting shares: Provided, That the common
18 
shares held by individual members shall not be more than five percent (5%) of the
19 
total outstanding voting shares.
20 
Other provisions of this Code shall apply suppletorily insofar as they are not
21 
inconsistent with this Chapter.
22 
Sec. 124. Powers and Functions of Cooperative Banks. - Cooperative banks
23 
shall primarily provide a wide range of financial services to cooperative
24 
organizations, their members, and to the public. A cooperative bank may perform
25 
any of the following banking services:
26 
a) Extend loans and advances primarily for the purpose of meeting the
27 
normal credit needs of cooperatives as well as farmers, farm workers,
28 
fisherfolks, or their families, merchants, private and public employees, and
29 
self-employed individuals: Provided, That loans and advances granted to
30 
cooperatives shall not be subject to individual ceilings on loans to
31 
directors, officers, stockholders, and related interests (DOSRI);
32 
b) Accept savings and time deposits;
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1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
c) Act as a correspondent bank of other financial institutions;
d) Discount and rediscount paper with the LBP, DBP or any other bank, 
including its branches and agencies. Said banks shall specify the nature of 
paper deemed acceptable for rediscounting, as well as the rediscount rate 
to be charged by any of these banks;
e) Act as collection agent;
f) Act as a depository bank of LGUs and other government agencies or 
instrumentalities;
g) Acquire readily marketable bonds and other debt Securities;
h) Buy and sell foreign exchange;
i) Acquire shares of publicly listed companies;
j) Act as conduit bank for the disbursement of government funds intended 
for lending to agriculture, small-medium enterprises (SMEs), and projects 
for local economic development;
k) Eligible to participate in government program allocations for agricultural 
lending, social housing, loans to rural micro enterprises, and other 
initiatives towards inclusive growth;
l) Offer financial technology services such as digital lending and payment, 
and digital wealth management, among others, subject to prior approval 
of the BSP;
m) Participate in treasury and money market operations such as:
i) Repurchase Agreements with the BSP;
ii) Reverse Repurchase Agreements with the BSP;
iii) Overnight Lending Facility of the BSP;
iv) Overnight Deposits with the BSP;
v) Term Deposit Facility with the BSP; and
Vi) Sales and Marketing of Financial Products
n) Offer credit card services;
o) Act as lending banks for credit surety fund cooperatives, as provided 
under Republic Act No. 10744, otherwise known as the "Credit Surety 
Fund Cooperative Act of 2015";
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1 
p) Act as depository bank of cooperatives with regard to their reserve funds,
2 
if such banks exist in their area of operations; and
3 
q) Offer other banking services as provided in Section 53 of Republic Act No.
4 
8791.
5 
In addition to the powers granted to cooperative banks by this Code and
6 
other existing laws, any cooperative bank may perform any or all of the banking
7 
services offered by other types of banks subject to the prior approval of the BSP.
8 
Sec. 125. Establishment of Branches and Other Offices. - The establishment
9 
of branches, branch-lite units, or other banking offices by cooperative banks shall be
10 
governed by the rules and regulations of the BSP. The cooperative bank shall furnish
11 
the Authority with a copy of the Certificate of Authority issued by the BSP.
12 
Sec. 126. Management of Cooperative Banks. - The management of the
13 
cooperative banks shall be governed by the rules and regulations to be promulgated
14 
by the BSP, In consultation with the Authority. To maintain the quality of bank
15 
management and accord appropriate protection to depositors and the public in
16 
general, the BSP shall prescribe the fit and proper qualifications of bank directors
17 
and officers for the purposes of this Article, giving due recognition to the unique
18 
nature and character of cooperative banks. The number, composition, and term of
19 
the Board of Directors shall be defined in the articles of cooperation and bylaws of
20 
the cooperative bank, in accordance with the following guidelines:
21 
(a) Board and Committees. - The cooperative bank shall constitute, at a
22 
minimum, the Board of Directors, Election Committee, and Audit
23 
Committee.
24 
The Board of Directors shall be composed of at least five (5) but not
25 
more than fifteen (15) members, at least one (1) of whom is an
26 
independent director. It shall be entrusted with the management of the
27 
affairs of the Cooperative Bank. It shall be responsible for the strategic
28 
planning, direction-setting and policy formulation activities of the
29 
cooperative bank. The members of the Board of Directors shall be elected
30 
by the General Assembly or Representative Assembly.
31 
The Election Committee shall be responsible for the formulation and
32 
implementation of election rules and guidelines. It shall supervise the
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1 
conduct of election, election-related activities, canvass and certify the
2 
results of the election, and decide cases relative to such election, except
3 
those involving the committee itself or its members. The members of the
4 
Election Committee shall be elected by the General Assembly or
5 
Representative Assembly.
6 
The Audit Committee is a Board-level committee whose composition,
7 
functions and responsibilities shall be in accordance with the existing
8 
regulations of the BSP. Other Board-level committees may be created as
9 
may be directed by the BSP. Other committees may be created by the
10 
Board of Directors with powers, functions, and responsibilities which shall
11 
be defined in the bylaws; and
12 
(b)Key Management Officers. - The key management officers shall be
13 
appointed by the Board and shall include the President, Treasurer, Internal
14 
Auditor, and Compliance Officer, or their equivalent ranks. The BSP shall
15 
prescribe the qualifications and disqualifications of the key management
16 
officers.
17 
Sec. 127. Vacancy in the Committees. - In case of vacancy in the
18 
committees, the Board of Directors of the Cooperative Bank, unless otherwise
19 
provided in the bylaws, will appoint a person to fill the same, subject to the provision
20 
that the person appointed shall serve only for the unexpired portion of the term.
21 
Sec. 128. Compensation of Directors. - In the absence of any provision in the
22 
bylaws fixing their compensation, the directors shall not receive any compensation
23 
except for reasonable per diems: Provided, however, That the directors and officers
24 
shall not be entitled to any per diem when, in the preceding calendar year, the
25 
cooperative bank reported a net loss or had a dividend rate less than the official
26 
inflation rate for the same year. Any compensation other than per diems may be
27 
granted to directors by a majority vote of the members with voting rights at a
28 
regular or special general assembly meeting specifically called for the purpose:
29 
Provided, That no additional compensation other than per diems shall be paid during
30 
the first year of existence of the Cooperative Bank.
31 
In no case shall the total yearly compensation of directors exceed ten percent
32 
(10%) of the net income of the cooperative bank during the preceding year.
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1 
Sec. 129. Dealings of Directors, Officers, Stockholders, and Related Interests
2 
(DOSRI). - Dealings with directors and officers of the Cooperative Bank shall comply
3 
with the provisions of Section 36 of Republic Act No. 8791, otherwise known as "The
4 
General Banking Law of 2000". However, the limits on loans to dealings of directors,
5 
officers, stockholders, and related interests shall not apply to loans, other credit
6 
accommodations, or guarantees extended by the cooperative bank to its member
7 
primary cooperatives.
8 
Sec. 130. Illegal Use of Confidential Information. - The liability of a director or
9 
officer, or an associate of a director or officer, who, for their benefit or advantage or
10 
that of an associate, makes use of confidential information that, if generally known,
11 
might reasonably be expected to adversely affect the operations and viability of the
12 
cooperative bank shall adhere to the provisions of Section 58 of this Code.
13 
Sec. 131. Bond for Faithful Performance of Duties and Obligations. - The
14 
bond for the faithful performance of duties and obligations of accountable officers of
15 
the cooperative bank shall adhere to the provisions of Section 65.
16 
Sec. 132. Quorum Requirement and Voting Rights of the Cooperative Bank
17 
Board of Directors. - In meetings of the Board of Directors of the Cooperative Bank,
18 
the same provisions under Section 49 of this Code shall apply.
19 
Sec. 133. Composition of the General Assembly. - The General Assembly shall
20 
be composed of regular members who are entitled to vote under the articles of
21 
cooperation and bylaws of the cooperative bank.
22 
Sec. 134. Powers of the General Assembly. - The General Assembly shall be
23 
the highest policy-making body of the cooperative bank and shall exercise the same
24 
powers as enumerated in Section 41 of this Code.
25 
Sec. 135. Meetings. - The conduct of meetings of the General Assembly of
26 
cooperative banks shall adhere to the provisions specified in Section 42 of this Code.
27 
Sec. 136. Quorum and Voting System. - The quorum requirement for General
28 
Assembly meetings of cooperative banks, whether special or regular, shall be one-
29 
half (1/2) plus one (1) of the number of voting shares of all the members entitled to
30 
vote.
31 
To amend its articles of cooperation and bylaws, at least three-fourths (3/4)
32 
vote of all the members with voting rights, present and constituting a quorum shall
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1 
be required. All other voting requirements shall be prescribed by the BSP. The voting
2 
rights of the members shall be proportionate to the number of their paid-up shares.
3 
The cooperative bank may opt to amend its articles of cooperation and bylaws
4 
through a referendum, subject to the guidelines to be issued by the Authority.
5 
However, the vote requirement shall still be two-thirds (2/3) vote of all the members
6 
entitled to vote.
7 
Sec. 137. Investment in Allied Undertakings. - Subject to the requirements
8 
and restrictions as may be imposed by the Monetary Board under its existing rules
9 
and regulations. Cooperative Banks may invest in equities of allied undertakings
10 
which may include, but are not limited to the following:
11 
a) Banks, financial institutions and non-bank financial intermediaries;
12 
b) Warehousing and other post-harvest facilities;
13 
c) Fertilizers, agricultural chemicals, and pesticides distribution;
14 
d) Farm equipment distribution;
15 
e) Trucking and transportation of agricultural products;
16 
f) Marketing of agricultural products;
17 
g) Leasing;
18 
h) Automated teller machine (ATM) networks;
19 
i) Public transportation;
20 
j) Financial technology; and
21 
k) Other undertakings as may be determined by the Monetary Board of the
22 
BSP.
23 
Sec. 138. Limitations on Lending Authority. - Except as the Monetary Board
24 
may otherwise prescribe, the direct indebtedness to Cooperative Banks of any
25 
person, company, corporation, or firm, including the indebtedness of members of a
26 
partnership and association, for money borrowed, shall in no time exceed twenty
27 
five percent (25%) of unimpaired capital and surplus of the cooperative bank. Direct
28 
indebtedness shall exclude loans secured by obligations of the BSP; loans fully
29 
guaranteed by the Government as to the payment of principal and interest; loans to
30 
the extent covered by the hold-out on, or assignment of, deposits maintained in the
31 
lending cooperative bank and held in the Philippines; and other loans or credits
32 
which the Monetary Board may, from time to time, specify as non-risk assets.
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1 
Sec. 139. Capital Requirement for Cooperative Banks. - A cooperative bank
2 
shall have a minimum paid-up capital in such amount as may be required by the
3 
BSP. The BSP may prescribe rules and regulations on the types of shares a
4 
cooperative bank may issue, including the terms thereof and rights appurtenant
5 
thereto to determine compliance with laws and regulations governing capital and
6 
equity structure of banks: Provided, That Cooperative Banks shall issue par value
7 
shares only.
8 
Sec. 140. Samahang Nayon and Municipal Katipunan ng mga Samahang
9 
Nayon. - Samahang Nayon (SN) and Municipal Katipunan ng mga Samahang Nayon
10 
(MKSN) which held common shares of cooperative banks prior to the effectivity of
11 
Republic Act No. 9520 shall apply for conversion to cooperatives in order to maintain
12 
their status as regular members of cooperative banks: Provided, That the
13 
cooperative banks shall exert efforts to inform and assist the SN and MKSN to
14 
convert within three (3) years from the effectivity of this Code: Provided, further,
15 
That the funds held in the name of the SN and the MKSN that failed to convert to a
16 
cooperative within the said period shall be converted to preferred shares and shall
17 
remain as capital of the cooperative bank.
18 
Sec. 141. Additional Source of Capital of the Cooperative Banks. - The
19 
unliquidated funds or common shares in cooperative banks held in the name of
20 
cooperatives whose Certificates of Registration are cancelled shall be converted to
21 
preferred shares and shall remain as capital in said cooperative banks.
22 
Sec. 142. Supervision and Regulation of Cooperative Banks. - All cooperative
23 
banks shall be under the supervision of the BSP: Provided, however. That the
24 
Authority shall monitor the cooperative banks' compliance with cooperative laws,
25 
rules, and regulations. With respect to the governance of the cooperative banks, the
26 
provisions of the banking laws, rules, and regulations shall prevail, notwithstanding
27 
Section 71 of Republic Act No. 8791.
28 
Sec. 143. Promulgation of Guidelines. - The BSP and the Authority may
29 
formulate guidelines to implement or clarify the provisions of this Chapter: Provided,
30 
That the BSP, as the regulator of banks, shall be the primary regulator of
31 
cooperative banks consistent with the provisions of R.A. No. 8791: Provided, further,
32 
That in order to minimize the burden of dually-regulated entities, the BSP, in
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1 
consultation with the Authority and the cooperative banks, shall consider the
2 
requirements for cooperatives provided in this Code and by the Authority to the
3 
extent allowed in banking and other relevant laws in its promulgation of rules and
4 
regulations.
5 
Sec. 144. Privileges and Incentives of Cooperative Banks. - Cooperative banks
6 
registered under this Code shall have the following privileges and incentives:
7 
a) Those privileges and incentives accorded to cooperatives under this Code
8 
and other laws including exemption from all national, provincial, city,
9 
municipal or barangay taxes, fees, and charges of whatever nature and
10 
description: Provided, That when a cooperative bank has reached an
11 
undivided net savings of more than One hundred million pesos
12 
(P100,000,000.00), transactions to non-members shall be taxable;
13 
b) The foreclosure of mortgages covering loans granted by cooperative banks
14 
and executions of judgment involving real properties levied upon by sheriff
15 
shall be exempt from publication in newspapers where the total amount of
16 
loan, excluding due and unpaid interests, does not exceed One million
17 
pesos (P1,000,000.00) or such amount as the Monetary Board may
18 
prescribe as may be warranted by prevailing economic conditions. It shall
19 
be deemed sufficient publication in such cases if the notices of foreclosure
20 
and execution of judgment are posted in the most conspicuous areas such
21 
as the municipal building, the municipal public market, the cooperative
22 
bank, and the barangay hall where the land mortgaged is situated sixty
23 
(60) days immediately preceding the public auction or execution of
24 
judgment. Proof of publication as required herein shall be accomplished
25 
via an affidavit of the sheriff or officer conducting the foreclosure sale or
26 
execution of judgment and shall be attached with the records of the case;
27 
c) A cooperative bank shall be allowed to foreclose lands mortgaged to it
28 
subject to the provisions of Republic Act No. 6657, otherwise known as
29 
"The Comprehensive Agrarian Reform Law of 1988", as amended. For
30 
agrarian lands foreclosed by a cooperative bank, the disposal of the same
31 
to another qualified beneficiary under Republic Act No. 6657, as amended,
32 
shall be made through the same cooperative bank. The amortization of the
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1 
beneficiary in favor of DAR shall be coursed through the servicing
2 
cooperative bank: Provided, That cooperative banks shall be exempt from
3 
the landholding limits as prescribed by DAR or any other law requiring the
4 
same;
5 
d) For cooperative banks granted by the BSP with accreditation as Rural
6 
Financial Institution (RFI) under Republic Act No. 10000, otherwise known
7 
as "The Agri-Agra Reform Credit Act of 2009", the following privileges shall
8 
be awarded:
9 
1) Unrestricted branching rights to set-up agriculture-oriented branches in
10 
unbanked municipalities and predominantly agricultural communities,
11 
subject to existing regulations on minimum capitalization for banks and
12 
the size of branch network;
13 
2) Automatic eligibility with Philippine Guarantee Corporation (with respect to
14 
agriculturai credit guarantee), Philippine Crop Insurance Corporation
15 
(PCIC), and governmentai agencies providing services towards risk-
16 
mitigation in the agriculture sector;
17 
3) Priority status as credit delivery partner or conduit of government-
18 
directed programs for agricultural through the DA and other government
19 
agencies;
20 
4) Entitlement to participate free of charge in capability-building activities in
21 
agriculture lending such as, but not limited to, exchange of best-practice
22 
experiences, study tour, technology transfer among ASEAN member-states
23 
and other fora of international cooperation; and
24 
e) Notwithstanding the provisions herein, privileges and incentives granted to
25 
rural banks pursuant to Republic Act No. 7353, otherwise known as the
26 
"Rural Act of 1992," shall also be granted to cooperative banks duiy
27 
registered under this Act.
28 
CHAPTER XVIII
29 
INSURANCE COOPERATIVES
30 
Sec. 145. Insurance Cooperatives. - Existing cooperatives may organize
31 
themselves into an insurance cooperative for the purpose of engaging in the
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1 
business of insuring life, non-life, pre-need (life plan, education, and pension)
2 
health, and property of cooperatives and their members.
3 
Sec. 146. Types of Insurance Coverage. - Under the cooperative insurance
4 
program established and formed by the virtue of the provisions of this Code, the
5 
insurance cooperative shall provide its constituting cooperatives and their members
6 
different types of insurance coverage consisting of life insurance with special group
7 
coverage, loan protection, retirement plans, endowment, health and accident
8 
coverage, pre-need plans, fire insurance, marine insurance, motor vehicle coverage,
9 
bonding, crop and livestock protection, and equipment insurance, among others.
10 
Sec. 147. Applicability of Insurance Laws. - The provisions of the Insurance
11 
Code and all other laws, rules and regulations relative to the organization and
12 
operation of an insurance company shall apply to insurance cooperatives organized
13 
under this Code. The requirements on capitalization, investments and reserves of
14 
insurance firms may be liberally modified upon consultation with the Authority and
15 
the cooperative sector, but in no case may the requirement be reduced to less than
16 
half of those provided for under the Insurance Code and other related laws.
17 
Other provisions of this Code shall apply suppletorily insofar as they are not
18 
inconsistent with this Chapter.
19 
In case of conflict of law, the Insurance Code shall prevail.
20 
Sec. 148. Implementing Rules and Regulations for Insurance Cooperatives. -
21 
The Insurance Commission and the Authority, in consultation with the concerned
22 
cooperative sector, shall issue the appropriate rules and regulations implementing
23 
the provisions of this Chapter.
24 
CHAPTER XIX
25 
COOPERATIVES ENGAGED IN PUBLIC SERVICE
26 
Sec. 149. Definition and Coverage. - A cooperative engaged in public service
27 
refers to one organized to render public service, authorized under a franchise,
28 
certificate of public convenience, certificate of public convenience and necessity,
29 
concession, or any other appropriate form of authorization or permit duly issued by
30 
the appropriate government agency. Such public service include, but is not limited,
31 
to the following:
32 
a) Health services;
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1 
b) Power generation, transmission, and/or distribution;
2 
c) Ice plants and cold storage services;
3 
d) Communication services including telephone and digital communications,
4 
and other value-added services;
5 
e) Land, water, and air transportation services for passengers and/or
6 
cargoes;
7 
f) Public markets, slaughterhouses, management of land transport terminals
8 
and ports, and other similar services;
9 
g) Water supply and distribution system services; and
10 
h) Such other types of public service as may be engaged in by any
11 
cooperative.
12 
Such cooperatives shall be primarily governed by this Chapter and the general
13 
applicable provisions of this Code.
14 
Sec. 150. Registration Requirements. - In addition to the requirements
15 
provided under Section 14 of this Code, no cooperative engaged in public service
16 
shall be registered unless it satisfies the following requirements:
17 
a) Its articles of cooperation and bylaws provide for the membership of the
18 
users and/or producers of the service of the cooperative; and
19 
b) Such other requirements as may be imposed by the other concerned
20 
government agencies.
21 
Sec. 151. Reguiation of Cooperatives Engaged in Public Service. - The
22 
internal affairs of cooperatives engaged in public service, such as:
23 
a) the rights and privileges of members;
24 
b) the rules and procedures for meetings of the General Assembly, Board of
25 
Directors and committees;
26 
c) the election and qualifications of officers, directors, and committee
27 
members;
28 
d) allocation and distribution of surpluses; and
29 
e) all other such matters, shall be governed by this Code.
30 
All matters relating to the franchise. Certificate of Public Convenience,
31 
Certificate of Public Convenience and Necessity, concession, or any other appropriate
32 
form of authorization or permit of cooperatives engaged in public service such as
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capitalization and investment requirements, equipment and facilities, frequencies,
2 
rate-fixing and such other matters affecting public service operations of cooperatives
3 
shall be governed by the proper government agency concerned.
4 
The Authority, together with other concerned government agencies, shall
5 
jointly issue rules and regulations necessary to implement this Chapter.
6 
CHAPTER XX
7 
TRANSPORT SERVICE COOPERATIVES
8 
Sec. 152. Proceeding. - This Chapter shall govern transport service
9 
cooperatives as defined in this Code, including cooperatives organized under the
10 
provisions of Executive Order No. 898, series of 1983 and by vehicle operators
11 
defined under the Public Utility Vehicle Modernization Program (PUVMP) of the
12 
Department of Transportation (DOTr).
13 
Sec. 153. Proceeding. - Subject to pertinent national laws and local
14 
ordinances, primary transport service cooperatives including federations of
15 
cooperatives, may engage in businesses related to transportation service, including
16 
but not limited to:
17 
a) Importation, distribution, and marketing of petroleum products in
18 
accordance with existing laws;
19 
b) Operation of gasoline stations, automotive service centers, and
20 
management of land transport terminals and ports;
21 
c) Importation, distribution, marketing, and sale of spare parts, automotive
22 
supplies, and accessories;
23 
d) Marketing of vehicle and drivers insurance policies as an agent or liaison
24 
of a licensed insurance company;
25 
e) Establishment and operation of fleet management services; and
26 
f) Automotive maintenance credit facilities for the purpose of extending
27 
loans for the maintenance and repair of public utility vehicles.
28 
Sec. 154. Proceeding. - The DOTr-Office of Transport Cooperatives shall have
29 
jurisdiction over the registration, regulation, and supervision of transport service
30 
cooperatives.
31 
Sec. 155. Proceeding. - Renewals of franchise and vehicle registration shall
32 
be granted to transportation service cooperatives: Provided, That such cooperative
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presents a certificate of good standing issued by the Office of Transport
2 
Cooperatives of the DOTr, and the concerned LGU as proof that it has continuously
3 
provided the required public transportation services.
4 
The Office of Transport Cooperatives of the DOTr, in consultation with the
5 
concerned government agencies and cooperative sector, shall issue appropriate rules
6 
and regulations pertaining to the provisions of this Chapter.
7 
Sec. 156. Proceeding. - A multi-sectoral committee on transport service
8 
cooperatives composed of representatives from the DOTr, the Department of the
9 
Interior and Local Government, the Land Transportation Franchising and Regulatory
10 
Board, the Land Transportation Office, other concerned government agencies, as
11 
may be necessary, the federation of transport service cooperatives, the regional
12 
clustered organizations, and the national alliance of cooperatives shall be established
13 
and thereafter shall be charged with the monitoring, recommendation of policies and
14 
programs affecting the operations of transport service cooperatives, and such other
15 
functions.
16 
A regional monitoring committee shall likewise be established at the regional
17 
offices of the Authority for the same purpose.
18 
The functions of the monitoring committees shall be prescribed in the
19 
implementing rules and regulations to be promulgated by the DOTr, in coordination
20 
with the relevant government agencies.
21 
CHAPTER XXI
22 
CREDIT AND SAVINGS COOPERATIVES AND CREDIT COOPERATIVES
23 
Sec. 157. Coverage. - This Chapter shall apply to credit cooperatives and
24 
credit and savings cooperatives, including multi-purpose cooperatives and
25 
federations. The provisions of the other chapters of this Code shall apply suppletorily
26 
except insofar as this Chapter otherwise provides.
27 
Sec. 158. Purposes and Objectives. - Cooperatives engaged solely in credit or
28 
in both credit and savings services, owned and operated by its members, shall have
29 
the following purposes and objectives:
30 
a) To encourage savings among its members;
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b) To provide loans for productive or provident purposes to its members and
2 
related services to enable its members to maximize the benefit from such
3 
loans;
4 
c) To promote the cooperatives engaged in credit and credit and savings as
5 
preferred financial institutions among Filipinos; and
6 
d) To promote the 
safe, sound, stable, and sustainable operations of
7 
cooperatives engaged in credit and credit and savings by regulating and
8 
supervising their operations and curtailing or preventing any act or
9 
practice which is prejudicial to the interests of their members and the
10 
general public.
11 
Sec. 159. Regulation and Supervision of Cooperatives Engaged in Credit and
12 
Credit and Savings. - Pursuant to its powers, functions, and responsibilities under
13 
Republic Act No. 11364, 
otherwise known as the "Cooperative Development
14 
Authority Charter of 2019", the Authority shall exercise regulatory powers and
15 
supervision over the operations of the cooperatives engaged in credit and credit and
16 
savings.
17 
The Authority shall, in consultation with the concerned government agencies
18 
and cooperative sector, issue appropriate rules and regulations pertaining to the
19 
provisions of this Chapter.
20 
CHAPTER XXII
21 
ELECTRIC COOPERATIVES
22 
Sec. 160. Coverage. - Unless otherwise provided, the provisions of this Code
23 
shall not apply to electric cooperatives. The registration, regulation, and supervision
24 
over electric cooperatives shall solely be under the National Electrification
25 
Administration (NEA).
26 
Upon the effectivity of this Act, all CDA-registered electric cooperatives shall
27 
be deemed registered with the NEA without the need of further act from the
28 
Authority. The benefits under Sections 69 to 72 of this Code shall be extended to all
29 
electric cooperatives: Provided, That the existing share capital of electric
30 
cooperatives registered with the Authority upon effectivity of this Act shall be held in
31 
trust by the respective electric cooperative.
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Sec. 161. Role of the Energy Regulatory Commission. - All rates and tariffs of
2 
electric cooperatives registered with the Authority shall be subject to the rules on
3 
application and approval of and by the Energy Regulatory Commission (ERC) for
4 
distribution utilities.
5 
CHAPTER XXIII
6 
FOREIGN PARTNERSHIPS
7 
Sec. 162. Engagement of Foreign Cooperatives with Local Cooperatives. -
8 
Foreign cooperatives may invest, partner with, or become members of local
9 
federations: Provided, That they are recognized by international coalitions of
10 
cooperatives or by the relevant authority in the country of origin, as well as
11 
registered with the Authority: Provided, further, That they comply with all relevant
12 
laws allowing them to do business in the Philippines: Provided, finally. That their
13 
engagement with the local cooperatives shall be subject to an agreement which shall
14 
be submitted for the approval of the Authority, pursuant to its implementing rules
15 
and regulations.
16 
Foreign cooperatives that shall transact with local federations must comply
17 
with Philippine taxation laws, the Anti-Money Laundering Act, and other pertinent
18 
laws, classified under the Philippines' foreign investment negative list for foreign
19 
equity restrictions under the Philippine Constitution and specific laws, and shall be
20 
under the regulation of the pertinent agencies for the duration of their engagement
21 
with the federations. Foreign cooperatives shall not interfere, directly or indirectly, in
22 
the management and internal affairs of the federations in accordance with the
23 
generally accepted cooperative principles of independence and autonomy,
24 
notwithstanding that local cooperatives shall be one hundred percent (100%) wholly
25 
owned and controlled by Filipinos.
26 
Sec. 163. Limitations. - The equity or share capital of the foreign cooperative
27 
shall not exceed forty percent (40%) of the total equity or subscribed share capital
28 
of the partnership or federation, as the case may be.
29 
CHAPTER XXIV
30 
MISCELLANEOUS PROVISIONS
31 
Sec. 164. Compliance With Other Laws. - All cooperatives duly registered
32 
under this Code shall, at all times, be subject to all relevant laws, rules and
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1 
regulations, as well as issuances and directives issued by a duly authorized
2 
government regulatory body in exercise of its jurisdiction.
3 
This notwithstanding, cooperatives that are registered or applying for specific
4 
licenses with other regulatory agencies must comply with the governance
5 
requirements of said agency to operate or function as such.
6 
Sec. 165. Registry of Cooperatives. - The Authority shall keep a registry
7 
which shall contain a chronological entry of the name of every cooperative
8 
registered, suspended, dissolved, or cancelled under this Code together with other
9 
relevant information. The Authority shall publish and post on its website a list of
10 
existing cooperatives, cooperatives under dissolution or suspension, and
11 
cooperatives whose registration have been cancelled, together with other relevant
12 
information, as may be prescribed in the implementing rules and regulations of this
13 
Code.
14 
Sec. 166. Settiement of Disputes, Conciiiation, Mediation, and Arbitration
15 
Proceedings. - Disputes among members, officers, directors, and committee
16 
members, and intra-cooperative, inter-cooperative, intra-federation or inter-
17 
federation disputes shall, as far as practicable, be settled amicably in accordance
18 
with the conciliation or mediation mechanisms embodied in the bylaws of
19 
cooperatives and in other applicable laws.
20 
The Conciliation-Mediation Committee of the cooperative shall facilitate the
21 
amicable settlement of intra-cooperative disputes or disputes among members,
22 
officers, directors, and committee members.
23 
Should such conciliation or mediation proceeding fail, the party may settle the
24 
dispute through arbitration or adjudication: Provided, however, That before any
25 
party can validly file a complaint with the Authority for voluntary arbitration or
26 
adjudication, it must first secure a certification from its Conciliation-Mediation
27 
Committee and from the cooperative union or federation to which it is affiliated that
28 
despite all efforts to settle the issues, the conciliation-mediation proceeding failed.
29 
Once the arbitrators or the appropriate adjudication division acquires
30 
jurisdiction over the case, it shall have exclusive jurisdiction. The decision of the
31 
arbitrator shall be final and executory. For this purpose, the Authority shall create a
32 
database of qualified arbitrators which shall also be posted in its official website
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Decisions rendered by the Authority in the exercise of its adjudicatory powers
2 
shall be appealable to a regular court in accordance with the applicable rules.
3 
In case of election-related issues, the aggrieved party may elevate the case
4 
for adjudication to the proper regional office of the Authority in accordance with the
5 
Authority's Omnibus Rules of Procedure without undergoing alternative dispute
6 
resolution.
7 
Sec. 167. Joint Congressional Oversight Committee on Cooperatives (JCOCC).
8 
- There is hereby created a Joint Congressional Oversight Committee which shall be
9 
composed of the Chairperson of the Senate Committee on Cooperatives and the
10 
Chairperson of the House Committee on Cooperatives Development and four (4)
11 
members each from both Houses duly appointed by the Senate President and the
12 
Speaker of the House of Representatives from the members of the respective
13 
committees.
14 
Sec. 168. Issuance of Injunctive Relief on the Authority. - Only the Court of
15 
Appeals or Supreme Court shall issue a restraining order or injunction enjoining the
16 
Authority from examining and investigating cooperatives subject to its supervision or
17 
examination.
18 
CHAPTER XXV
19 
FINAL PROVISIONS
20 
Sec. 169. Pena! Provisions. - The following acts or omissions affecting
21 
cooperatives are hereby prohibited:
22 
a) The use of the word "cooperative" shall not be allowed unless authorized
23 
under this Code. However, organizations registered with other
24 
government agencies are allowed to retain the word "cooperative" in their
25 
registered names: Provided, That these organizations shall not be entitled
26 
to the benefits and privileges under this Code. In case of violation, the
27 
penalty of imprisonment of not less than two (2) years but not more than
28 
five (5) years or a fine not exceeding Two hundred thousand pesos
29 
(P200,000.00), or both, at the discretion of the court, shall be imposed,
30 
upon conviction, on the individual or, in the case of an organization, its
31 
officers and directors. The Authority may, motu proprio, file complaints for
32 
violation of this provision.
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3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
b) Any person who willfully attempts in any manner to evade or defeat tax in 
violation of Sections 69 and 70 of this Code shall, in addition to the 
payment of double the amount of the tax due, be punished by a fine of at 
least Five hundred thousand pesos (P500,000.00) but not exceeding Ten 
million pesos (P10,000,000.00) and suffer imprisonment of not less than 
six (6) years but not more than ten (10) 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;
c) Direct or indirect violation or circumvention of the provisions of Sections 
69 and 70 of this Code committed by any public official or employee of 
any bureau, office or agency of the government that deprives, diminishes 
or in any manner hinders or restricts any duly registered cooperative from 
the full enjoyment of the exemption from the payment of the taxes, fees 
and charges enumerated therein, shall upon conviction, suffer a penalty of 
imprisonment of not less than seven (7) years but not more than twelve 
(12) years or a fine of at least Five hundred thousand pesos 
(P500,000.00) but not exceeding One million pesos (P1,000,000.00), or 
both, at the discretion of the court and shall further be disqualified to hold 
any other office;
d) Direct or indirect interference or intervention by any public official or 
employee in the internal affairs of a cooperative of which he is not a 
member, including, but not limited to, the following:
1) Influencing the election or appointment of officers, directors, 
committee members and employees through public or private 
endorsement or campaign for or against any person or group of 
persons;
2) Requiring prior clearance for any policy or decision within the 
cooperative;
3) Requesting or demanding for the creation of positions or 
organizational units, or recommending any person for appointment, 
transfer, or removal from position; or
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2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
4) Any other acts inimical or adverse to the autonomy and 
independence of cooperatives.
e) A director, officer or committee member who violates the provisions of 
Section 54 on the Liability of Directors, Officers and Committee Members, 
Section 57 on the Disloyalty of a Director, and Section 58 on the illegal 
Use of Confidential Information shall upon conviction suffer a fine of at 
least Five hundred thousand pesos (P500,000.00) but not exceeding One 
million pesos (P1,000,000.00) or imprisonment of not less than five (5) 
years but not more than ten (10) years or both at the court's discretion;
f) The following are considered offenses punishable by a penalty of 
imprisonment of not less than one (1) year but not more than five (5) 
years or a fine of not more than One hundred thousand pesos 
(P100,000.00), or both, at the discretion of the court:
1) Omission or refusal to furnish any information, report or other 
document that is required under this Code;
2) Providing information, reports or other documents to the Authority 
that are required under this Code which the person knows to be 
false or misleading;
3) Omission or refusal to keep a book or registry under this Code or to 
make the required entry therein;
4) Making an entry required under this Code in a book or registry, 
which the person knows to be false or misleading;
5) Hindering an authorized person from making an inspection, audit, 
examination or investigation required under this Code;
6) Failure to comply with an order or written instructions issued or 
given by the Authority;
7) Violation of the provisions regarding transactions with a restricted 
party; and
8) 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.
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The cooperative or any of its members can file a case against any officer or
2 
employee of the BIR or of any other government agency with the Ombudsman, the
3 
Civil Service Commission, other appropriate government agency or the courts.
4 
In case of violation of any provision of this Code, the individual or individuals,
5 
and in the case of organizations or government agencies, its officers, and directors
6 
shall, upon conviction by a court, each suffer a penalty of not less than two (2) years
7 
but not more than five (5) years imprisonment or a fine of at least Fifty thousand
8 
pesos (P50,000.00), or both, at the discretion of the court. In the case of a public
9 
official or employee, the offender shall upon conviction, suffer the accessory penalty
10 
of temporary absolute disqualification.
11 
Sec. 170. Administrative Sanctions. - The Authority shall conduct
12 
investigations, file necessary charges, discipline, suspend or remove erring officers
13 
and members of the cooperative for violation of cooperative laws, rules, regulations,
14 
issuances of the Authority, its articles of cooperation, and bylaws, after due process,
15 
and direct the General Assembly to replace the suspended or removed officers. Any
16 
violation of the rules on adjudication shall likewise be penalized under this Section.
17 
Such administrative sanctions shall be imposed by the Authority in accordance with
18 
its rules and regulations.
19 
Sec. 171. Interpretation. - Any doubt in the interpretation of any provision of
20 
this Act shall be liberally interpreted in favor of the cooperatives and its members.
21 
Sec. 172. Ipso-Facto Cause. - Unless otherwise provided by law,
22 
cooperatives are entitled to the privileges, benefits, and exemptions granted by R.A.
23 
No. 7160, and other existing laws.
24 
Sec. 173. Transitory Provisions.-
25 
a) All cooperatives registered with the Authority under Republic Act no. 6938,
26 
otherwise known as the "Cooperative Code of the Philippines", as amended,
27 
are hereby deemed registered under this Code; and
28 
b) The authority granted to non-cooperatives as Training Service Providers shall
29 
continue to be effective until its expiration or six (6) months from the
30 
effectivity of the implementing rules and regulations of this Code, whichever
31 
comes later.
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Sec. 174. Printing and Distribution. - The National Printing Office shall publish
2 
this Code in the Official Gazette in full within sixty (60) days from the date of
3 
approval thereof. Copies of this Code shall be given to every department, agency,
4 
and instrumentality of the National Government, including regional, provincial
5 
offices, and local governments including government-owned and controlled
6 
corporations by the Authority.
7 
Sec. 175. Impiementing Ruies and Reguiations. - Within ninety (90) days
8 
from the effectivity of this Act, the Authority shall promulgate rules and regulations
9 
to implement the provisions of this Act. Within the same period, the particular
10 
government agencies expressly designated under specific provisions in this Code,
11 
after prior consultation with the cooperative sector, shall issue the regulations called
12 
for by such respective provisions.
13 
Sec. 176. Appropriations. - The amount necessary to carry out the provisions
14 
of this Code shall be included in the annual General Appropriations Act.
15 
Sec. 177. Separability Clause. - If any provision of this Act is declared
16 
unconstitutional, the remainder thereof not otherwise affected shall remain in full
17 
force and effect.
18 
Sec. 178. Repealing Cause. - R.A. No. 6938, as amended, is hereby repealed.
19 
All other laws, presidential decrees, executive orders, letters of instruction,
20 
proclamations or administrative regulations that are inconsistent with the provisions
21 
of this Act are hereby repealed, amended, or modified accordingly.
22 
Sec. 179. Effectivity Cause. - This Act shall take effect after fifteen (15) days
23 
upon publication in a newspaper of general circulation.
Approved,
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