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NINETEENTH CONGRESS OF THE    ) 
REPUBLIC OF THE PHILIPPINES      ) 
Second Regular Session      
 ) 
HOUSE OF REPRESENTATIVES 
H.B. NO. _____ 
INTRODUCED BY REPRESENTATIVE EMMARIE “LOLYPOP” OUANO-
DIZON 
AN ACT  
AMENDING CERTAIN PROVISIONS OF REPUBLIC ACT NO. 9520, 
OTHERWISE KNOWN AS THE PHILIPPINE COOPERATIVE CODE OF 
2008 
EXPLANATORY NOTE 
This bill seeks to amend certain provisions of Republic Act No. 9520, 
otherwise known as the Philippine Cooperative Code of 2008 to further allow 
cooperatives in the country to flourish and be more productive.   
The contribution of cooperatives in promoting social justice and economic 
development cannot be denied. As partners of the State in socio-economic 
development and nation building, it is imperative that the State grants essential 
privileges to cooperatives to ensure their sustainability, growth, and development. 
This bill proposes to grant the most needed privilege of cooperatives – tax 
exemption, among others. Under Section 61 of Republic Act No. 9520, otherwise 
known as the “Philippine Cooperative Code of 2008” only cooperatives dealing with 
non-members and with accumulated reserves and undivided net earnings of not more 
than Ten Million Pesos are exempt from paying taxes. Cooperatives with 
accumulated reserves and undivided net earnings of more than Ten Million Pesos 
are still required to pay certain taxes. This proposal aims to remove the Ten Million 
Pesos threshold. 
August 31, 2023
12:42 pm
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The tax exemption and other policies proposed in this measure will surely 
bring the needed development not only of the cooperatives and their members but 
also of the community where they operate. 
This measure seeks to address the various concerns that constrict the growth 
and development of cooperatives. The cooperatives are indispensable partners of the 
government in the socio-economic development of the country, and their 
contributions are undeniable. It is therefore right and just to continue to support 
them. 
In view of the foregoing, the early passage of this bill is earnestly sought. 
EMMARIE “LOLYPOP” OUANO-DIZON 


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Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
NINETEENTH CONGRESS 
Second Regular Session 
House Bill No. _____ 
INTRODUCED BY REPRESENTATIVE EMMARIE “LOLYPOP” OUANO-
DIZON 
AN ACT  
AMENDING CERTAIN PROVISIONS OF REPUBLIC ACT NO. 9520, 
OTHERWISE KNOWN AS THE PHILIPPINE COOPERATIVE CODE OF 
2008 
Be it enacted by the Senate and the House of Representatives of the 
Philippines in Congress assembled: 
Section 1. Article 14 of Republic Act No. 9520 is hereby amended to read as follows: 
“Art. 14. Articles of Cooperation. – (1) xxx; 
(2) xxx;
(3) xxx;
(4) xxx;
(5) No cooperative, other than a cooperative union as described under Article
25 hereof, shall be registered unless the Articles of Cooperation is accompanied with 
the bonds of the accountable officers and a sworn statement of the Treasurer elected 
by the subscribers showing that at least twenty-five per centum (25%) of the 
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authorized share capital has been subscribed and at least twenty-five per centum 
(25%) of the total subscription has been paid: Provided, That in no case shall the 
paid-up share capital be less than Fifteen Thousand Pesos (Php15,000.00) for 
Agricultural Cooperatives and Twenty-Five Thousand Pesos (Php25,000.00) 
for Non-Agricultural Cooperatives. 
 
xxx” 
 
Section 2. Article 16 of the same Act is hereby amended to read as follows: 
 
 
“Art. 16. Registration. – A cooperative formed and organized under this Code 
acquires juridical personality from the date the Authority issues a Certificate of 
Registration under its official seal. All applications for registration shall be finally 
disposed of by the Authority within a period of [sixty (60)] THIRTY (30) days from 
the filing thereof, otherwise the application is deemed approved, unless the cause of 
the delay is attributable to the applicant: Provided, That in case of a denial of the 
application for registration, an appeal shall lie with the Office of the President within 
[ninety (90)] SIXTY (60) days from receipt of notice of such denial: Provided, 
further, That failure of the Office of the President to act on the appeal within [ninety 
(90)] SIXTY (60) days from the filing thereof shall mean approval of said 
application.” 
 
Section 3. Article 23 of the same Act is hereby amended to read as follows: 
 
 
“Art. 23. Type and Categories of Cooperatives. – (1) Types of Cooperatives – 
Cooperatives may fall under any of the following types: 
(a) x x x; 
(b) x x x; 
(c) x x x; 
(d) x x x; 
(e) Service Cooperative is one which engages in medical and dental care, 
hospitalization, transportation, insurance, housing, labor, WATER, 
electric light and power, communication, professional and other services; 
(f) x x x; 
(g) Advocacy Cooperative  is a [primary] cooperative which promotes and 
advocates cooperativism among its members and the public through 
socially-oriented projects, education and training, research, and 
communication, and other similar activities to reach out to its intended 
beneficiaries; 
(h) x x x; 
xxx     
xxx 
 
 
xxx.” 


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(2) Categories of Cooperatives – Cooperatives shall be categorized according 
to membership and territorial considerations as follows: 
(a) In terms of membership, cooperatives shall be categorized into: 
 
(i) Primary – The members of which are natural persons 
 
(ii) Secondary – The members of which are primaries; and 
(iii)Tertiary – The members of which are PRIMARY AND secondary 
cooperatives; and 
(b)x x x;” 
 
Section 4. Article 26 of the same Act is hereby amended to read as follows: 
 
 
“Art. 26. Kinds of Membership – A cooperative may have two (2) kinds of 
members, to wit: (1) regular members and (2) associate members. 
 
 
“A regular member is one who has complied with all the membership 
requirements and entitled to all the rights and privileges of membership. An 
Associate member is one who has no right to vote nor be voted upon and shall be 
entitled only to such rights and privileges as the by-laws may provide: Provided, 
That an associate who meets ALL the [minimum] requirements of regular 
membership, continues to patronize to cooperative for two (2) years, and signifies 
[hi/her] the intention to remain a member shall be considered a regular member.  
 
 
xxx.” 
 
Section 5.  Article 35 of the same Act is hereby amended to read as follows: 
 
 
 
“Art. 35. Quorum. A quorum shall consist of at least twenty-five per centum 
(25%) of all the members entitled to vote. FOR PRIMARIES Requirement SHALL 
BE BASED ON THE NUMBER OF MEMBERS IN GOOD STANDING: 
 
(1) BELOW 10,000 – 25% 
(2) UP TO 25,000 – 20% 
(3) UP TO 50,000 – 15% 
(4) MORE THAN 50,000 MEMBERS – 10% 
FURTHER, THE QUORUM FOR REPRESENTATIVE ASSEMBLY SHALL 
BE IN NO CASE BE LOWER THAN TEN PERCENT (10%) OR AS 
PROVIDED FOR IN THE BY-LAWS OF THE COOPERATIVE APPROVED 
BY THE AUTHORITY.  
 
In the case of cooperative banks, the quorum shall be as provided in Article 
99 of the Code. In the case of electric cooperatives registered under this Code, a 


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quorum, unless otherwise provided in the bylaws, shall consist of five per centum 
(5%) of all the members entitled to vote.” 
 
Section 6. Article 60 of the same Act is hereby amended to read as follows: 
 
 
“Art. 60. Tax treatment of Cooperatives AND COOPERATIVE 
MEMBERS’ BENEFITS FROM COOPERATIVES. 
 
 
x  
x 
x 
 
 
PATRONAGE REFUNDS AND INTEREST ON SHARE CAPITAL 
DISTRIBUTED BY THE COOPERATIVE TO ITS MEMBERS SHALL 
LIKEWISE NOT BE SUBJECT TO ANY TAX AND FEES IMPOSED 
UNDER THE INTERNAL REVENUE LAWS AND OTHER TAX LAWS.” 
 
Section 7. Article 61 of the same Act is hereby amended and Subsection 3 is now 
denominated as Subsection 2 and Subsection 4,5,6,7, and 8 are renumbered as 
Subsection 2,3,4,5,6,7, and shall now read as follows: 
 
 
“Art. 61 Tax and Other Exemptions. – x x x 
 
“(1) Cooperatives [with accumulated reserves and undivided net savings of 
not more than Ten Million Pesos (Php10,000,000.00) shall be] ARE exempt from 
all national, city, provincial, municipal, or barabgay taxes of whatever name and 
nature. [Such] Cooperatives [shall be] ARE LIKEWISE exempt from customs 
duties, advance sales or compensating taxes on their importation of machineries, 
equipment and spare parts used by them and which are not available locally as 
certified by the Department of Trade and Industry PDTI). COOPERATIVES ARE 
ALSO EXEMPT FROM ANY TAX ON LOCALLY PURCHASED 
MACHINES, EQUIPMENT, AND SPARE PARTS. All tax-free importations 
AND THOSE PUCHASED LOCALLY 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 solidarily liable to pay twice 
the amount of the imposed tax and/or duties.” 
 
 
[“(2) Cooperatives with accumulated reserves and undivided net savings of 
more than Ten Million Pesos (Php10,000,000.00) shall pay the following taxes at 
the full rate: 
 
(a) Income Tax –  x 
x 
x 
 
(b)Value-Added Tax -  
x 
x 
x 
 
(c)  
x 
x 
x 


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(d) 
x 
x 
x]” 
 
 
“([3]2) All cooperatives [, regardless of the amount of accumulated reserves 
and undivided net saving shall be] ARE exempt from payment of local taxes and 
taxes on transactions with banks and insurance companies: Provided, That all sales 
or services rendered for non-members shall be subject to the applicable percentage 
taxes except sales made by producers, marketing or service cooperatives: Provided 
further, That nothing in this article shall preclude the examination of the books of 
accounts or other accounting records of the cooperative by duly authorized internal 
revenue offices.” 
 
 
 
“Art. 72. Capital Sources. -  x x 
x 
(1) xxx; 
(2) Loans and borrowings including deposits FROM MEMBERS; 
(3) xxx; 
(4) xxx. 
 
Section 8. Article 75 of the same Act is hereby amended to read as follows: 
 
 
 
“Art. 75. Capital Build-Up. – The bylaws of every cooperative shall be 
provided for a reasonable and realistic member capital build-up AND/OR 
DEPOSITS BUILD-UP program to allow the continuing growth of the members’ 
investment AND SAVINGS DEPOSITS in their cooperative as their economic 
conditions continue to improve.” 
 
Section 9. Article 86 of the same Act is hereby amended to read as follows: 
 
 
“Art. 86. Order of Distribution. – The net surplus of every cooperative shall 
be distributed as follows: 
 
“(1) xxx 
 
 
(a)The reserve fund shall be used for the stability of the cooperative, 
and to meet net losses in its operations INCLUDING LOSSES INCURRED 
DURING A PANDEMIC, A STATE OF EMERGENCY AND OTHER SUCH 
FORCE MAJEURE. The general assembly may decrease the amount allocated to 
the reserve fund when the reserve fund already exceeds the share capital. 
 
x 
x 
x 
 
 
(b) xxx; 
 
 
(c) xxx; 
officers for internal revenue for tax purposes only, after previous authorization by 
the Authority. 


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([4]3) xxx 
 
([5]4) xxx 
 
([6]5) xxx 
([7]6) xxx 
([8]7) xxx. 
 
Section 10. Article 67 of the same Act is hereby amended to read as follows: 
 
 
“Art. 67. Dissolution by Order of the Authority. – The Authority may suspend 
or revoke, after due notice and hearing, the certificate of registration of a cooperative 
on any of the following grounds: 
 
(1)xxx; 
 
xxx; 
 
xxx; 
 
(5)xxx. 
 
“THE DECISION OF THE AUTHORITY ON THE SUSPENSION OR 
REVOCATION OF THE CERTIFICATE OF REGISTRATION OF A 
COOPERATIVE MAY BE APPEALED TO THE OFFICE OF THE 
SECREATARY OF DEPARTMENT OF TRADE AND INDUSTRY (DTI) 
WITHIN THIRTY (30) DAYS FROM THE RECEIPT OF THE ORDER OF 
THE AUTHORITY. THE DECISION OF THE OFFICE OF THE 
SECRETARY OF DTI IS FINAL AND EXECUTORY.” 
 
Section 11. Article 72 of the same Act is hereby amended to read as follows: 
 
 
“(i)xxx; and 
 
  (ii) xxx. 
 
(2)xxx 
(a) Half of the amounts transferred to the education and training fund annually 
under this subsection shall be spent by the cooperative for education and training 
purposes; while the other half [may] SHALL be remitted to a union or federation 
shall submit to the Authority and to its contributing cooperatives the following 
schedules: 
(i) xxx; 
xxx 
 
(b) xxx 
 


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(3) An amount for the community development fund, which shall not be less 
than three per centum (3%) of the net surplus. The community development fund 
shall be used for projects or activities that will benefit a community [where the 
cooperative operates] IN THE PHILIPPINES, BUT PRIORITY MUST BE 
GIVEN 
TO 
THE 
COMMUNITY 
WHERE 
THE 
COOPERATIVE 
OPERATES. THE COMMUNITY DEVELOPMENT FUND MUST BE 
UTILIZED WITHIN ONE YEAER FROM THE DISTRIBUTION OF NET 
SURPLUS. 
(4) An optional fund, a land and building, and any other necessary fund the 
total of which shall not exceed seven per centum (7%). 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. 
 
Section 12. Article 109 of the same Act is hereby amended with the insertion of a 
new subsection 1 and 2, and the renumbering of subsection 1,2,3,4,5,6,7, and 8 as 
subsection 3,4,5,6,7, and 8. Article 109 shall now read as follows: 
 
 
“Art. 109. Definition and Coverage. – xxx 
(1) Water Supply or Distribution; 
(2) Health Services; 
([1]3) xxx; 
([2]4) xxx; 
([3]5) xxx; 
([4]6) xxx; 
([5]7) xxx; 
([6]8) xxx. 
 
Section 13. Article 115 of the same Act is hereby amended to read as follows: 
 
 
“Art. 115. Definition and Objectives. – A credit cooperative is a financial 
organization OR INTERMEDIARY owned and operated by its members with the 
following objectives: 
 
 
x 
x 
x” 
 


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Section 14. This Act shall take effect fifteen (15) days after its publication in the 
Official Gazette or in a newspaper of general circulation. 
 
Approved,