NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session
)
J&niaip
o( tiie
23 AUG -1 PI 23
SENATE
s. No. 2378
RITEiVED 3V.
Introduced by Senator Jinggoy Ejercito Estrada
AN ACT
AMENDING REPUBLIC ACT. NO. 6938, OTHERWISE KNOWN AS THE 
"COOPERATIVE CODE OF THE PHILIPPINES", AS AMENDED, AND FOR 
OTHER PURPOSES
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 wili 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, there are 18,848 operating cooperatives in the country 
as of 2020. In terms of location, Region III has the most number of cooperatives 
and according to type, majority of them are multipurpose cooperatives. The 10,900 
reporting cooperatives has a total of 11.5 million members and has generated 
364,700 employment.2 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.
This bill seeks to amend Republic Act No. 6938, as amended by Republic Act 
No. 9520, 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 amend 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.
JINGGOY EJERCITO ESTRADA
1 COOPERATIVISM: THE URGENT CALL OF THE TIMES I CDA
2 FY 2020 Cooperative Statistics I CDA


.rV ' rvv
’ If " r
NINETEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
Second Regular Session 
)
SENATE 
S. No. 2378
Stub it'
of tljc
23 RUG-1 PI 23
RtCElVtD BV.
Introduced by Senator Jinggoy Ejercito Estrada
AN ACT
AMENDING REPUBLIC ACT. NO. 6938, OTHERWISE KNOWN AS THE 
"COOPERATIVE CODE OF THE PHILIPPINES", AS AMENDED, AND FOR 
OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assem bled:
1 
Section 1. Article 10 of Republic Act No. 6938, as amended by Republic Act
2 
No. 9520, is hereby amended to read as follows:
3 
"ART. 10. Organizing a Primary Cooperative. -
4 
Fifteen (15) or more natural persons who are [Filipine
5 
citizens], of legal age, having a common bond of interest
6 
and are actually residing or working in the intended area of
7 
operation FOR AT LEAST SIX (6) MONTHS, may organize
8 
a primary cooperative under this Code: Provided, That a
9 
prospective member of a primary cooperative must have
10 
completed a Pre-Membership Education Seminar (PMES):
11 
PROVIDED FURTHER, THAT MAJORITY OF SUCH
12 
SHALL BE FILIPINO CITIZENS.
13 
"X X X."
14 
Sec. 2. Article 14 of Republic Act No. 6938, as amended by Republic Act No.
15 
9520, is hereby amended to read as follows:
16 
"ART. 14. Articles of Cooperation. -(1) x x x


1 
"(2) XXX
2 
"(3) XXX
3 
"(4) XXX
4 
"(5) No cooperative, other than a cooperative union
5 
as described under Articie 25 hereof, shail be
6 
registered unless the articles of cooperation is
7 
accompanied with the bonds of the accountable
8 
officers and a sworn statement of the treasurer
9 
elected by the subscribers showing that at least
10 
twenty-five per centum (25%) of the authorized share
11 
capital has been subscribed and at least twenty-five
12 
per centum (25%) of the total subscription has been
13 
paid: Provided, JhdX. in no case shall the paid-up
14 
share capital be less than Fifteen thousand pesos
15 
(P15,000.00) 
FOR 
AGRICULTURAL
16 
COOPERATIVES AND TWENTY-FIVE THOUSAND
17 
PESOS (P25,000.00) FOR NON-AGRICULTURAL
18 
COOPERATIVES.
19 
"X X X."
20 
Sec. 3. Article 16 of Republic Act No. 6938, as amended by Republic Act No.
21 
9520, is hereby amended to read as follows:
22 
"ART. 16. Registration. - A cooperative formed or
23 
organized under this Code acquires juridical personality from
24 
the date the Authority issues a certificate of registration
25 
under Its official seal. All applications for registration shall be
26 
finally disposed of by the Authority within a period of [sixty
27 
(60)] THIRTY (30) days from the filing thereof, otherwise
28 
the application is deemed approved, unless the cause of the
29 
delay is attributable to the applicant: Provided, That in case
30 
of a denial of the application for registration, an appeal shall
31 
lie with the Office of the President within [ninety (90)]
32 
SIXTY (60) days from receipt of notice of such


1 
denial: Provided, further, That failure of the Office of the
2 
President to act on the appeal within [ninety (90)] SIXTY
3 
(60) days from the filing thereof shall mean approval of said
4 
application.
5 
Sec. 4. Article 23 of Republic Act No. 6938, as amended by Republic Act No.
6 
9520, is hereby amended to read as follows:
7 
"ART. 23. Types and Categories of Cooperatives. -(1)
8 
Types of Cooperatives - Cooperatives may fall under any of
9 
the following types"
10 
"(a) X X x;
11 
"(b) X X x;
12 
"(c) X X x;
13 
"(d) X X x;
14 
'\e) Service Cooperative-\s one which engages in medical
15 
and dental care, hospitalization, transportation, insurance,
16 
housing, labor, WATER, electric light and power,
17 
communication, professional and other services;
18 
"(f) x x x;
19 
"(g) Advocacy Cooperative - is a [primary] cooperative
20 
which promotes and advocates cooperativism among its
21 
members and the public through socially-oriented projects,
22 
education and training, research and communication, and
23 
other similar activities to reach out to its intended
24 
beneficiaries;
25 
"(h) X X x;
26 
"x x x
27 
"(2) Categories of Cooperatives - Cooperatives shall be
28 
categorized according to membership and territorial
29 
considerations as follows:
30 
"(a) In terms of membership, cooperative shall be
31 
categorized into:
32 
"(i) Primary - Jhe members of which are natural persons;


1 
"(ii) Secondary -l\\e members of which are primaries; and
2 
"(iii) Tertiary-Jhe members of which are PRIMARY AND
3 
secondary cooperatives; and
4 
"(b) In terms of territory, cooperatives shall be categorized
5 
according to areas of operations which may or may not
6 
coincide with the political subdivisions of the country.
7 
Sec. 5. Article 26 of Republic Act No. 6938, as amended by Republic Act No.
8 
9520, is hereby amended to read as follows:
9 
"ART. 26. Kinds of Membership. - A cooperative may
10 
have two (2) kinds of members, to wit: (1) regular members
11 
and (2) associate members.
12 
"A regular member is one who has complied with all the
13 
membership requirements and entitled to all the rights and
14 
privileges of membership. An associate member is one who
15 
has no right to vote nor be voted upon and shall be entitled
16 
only to such rights and privileges as the bylaws may
17 
provide: Provided, an associate member who meets
18 
ALL the [minimum] requirements of regular membership,
19 
continues to patronize the cooperative for two (2) years, and
20 
signifies [his/her] THE intention to remain a member shall
21 
be considered a regular member: PROVIDED FURTHER,
22 
THAT MAJORITY OF ALL MEMBERS, WHETHER
23 
REGULAR OR ASSOCIATE, SHALL BE FILIPINO
24 
CITIZENS.
25 
"X X X."
26 
Sec. 6. Article 35 of Republic Act No. 6938, as amended by Republic Act No.
27 
9520, is hereby amended to read as follows:
28 
"ART. 35. Quorum. - A quorum shall consist of at
29 
least twenty-five per centum (25%) of all the members
30 
entitled to vote.
31 
"FOR PRIMARIES, REQUIREMENT SHALL 
BE BASED
32 
ON THE NUMBER OF MEMBERS IN GOOD STANDING:


1 
"(1) below 10,000 - 25%
2 
"(2) UP TO 25,000 - 20%
3 
"(3) UP TO 50,000 - 15%
4 
"(4) MORE THAN 50,000 MEMBERS - 10%
5 
"FURTHER, THE QUORUM 
FOR
6 
REPRESENTATIVE ASSEMBLY SHALL BE IN NO CASE
7 
BE LOWER THAN TEN PERCENT (10%) OR AS
8 
PROVIDED FOR IN THE BY-LAWS OF THE
9 
COOPERATIVE APPROVED BY THE AUTHORITY.
10 
"x X X."
11 
Sec. 7. Article 36 of Republic Act No. 6938, as amended by Republic Act No.
12 
9520, is hereby amended to read as follows:
13 
"ART. 36. Voting System. - EXCEPT FOR PRIMARY
14 
COOPERATIVES WITH NUMEROUS AND DISPERSED
15 
MEMBERSHIP, [E] each member of a primary cooperative
16 
shall have only one (1) vote. In the case of members of
17 
secondary or tertiary cooperatives, they shall have one (1)
18 
basic vote and as many incentive votes as provided for In
19 
the bylaws but not TO exceed five (5) votes. The votes cast
20 
by the delegates THROUGH A REPRESENTATIVE
21 
ASSEMBLY shall ALSO be deemed as votes cast by the
22 
members thereof.
23 
"[However], THE bylaws of [a cooperative other than
24 
a-------primary] TERTIARY AND SECONDARY
25 
COOPERATIVES, AND PRIMARY COOPERATIVES
26 
WITH NUMEROUS AND DISPERSED MEMBERSHIP AS
27 
DETERMINED AND CERTIFIED BY THE AUTHORITY,
28 
may provide for voting by proxy. Voting by proxy means
29 
allowing a delegate of a cooperative to represent or vote on
30 
behalf of another delegate of the same cooperative OR IN
31 
THE CASE OF A PRIMARY COOPERATIVE WITH
32 
NUMEROUS AND DISPERSED MEMBERSHIP,


1 
ALLOWING A MEMBER OF THE COOPERATIVE TO
2 
REPRESENT OR VOTE ON BEHALF OF ANOTHER
3 
MEMBER OF THE SAME COOPERATIVE.
4 
"AS USED IN THIS ACT, PRIMARY COOPERATIVES
5 
WITH NUMEROUS AND DISPERSED MEMBERSHIP
6 
REFER TO COOPERATIVES WITH OVER 10,000
7 
MEMBERS OR WITH GEOGRAPHICALLY DISPERSED
8 
MEMBERS SUCH AS IN THE CASE OF 
THE
9 
UNIFORMED PERSONNEL, OVERSEAS FILIPINO
10 
WORKERS, AND SUCH OTHER COOPERATIVES
11 
WHOSE MEMBERS ARE LIKEWISE GEOGRAPHICALLY
12 
DISPERED AS SHALL BE DETERMINED 
AND
13 
CERTIFIED TO BY THE AUTHORITY."
14 
Sec. 8. Article 60 of Republic Act No. 6938, as amended by Republic Act No.
15 
9520, is hereby amended to read as follows:
16 
"ART. 60. Tax Treatment of Cooperatives 
AND
17 
COOPERATIVE MEMBERS' BENEFITS FROM
18 
COOPERATIVES. - Duly registered cooperatives under this
19 
Code which do not transact any business with non-members
20 
or the general public shall not be subject to any taxes and
21 
fees imposed under the internal revenue laws and other tax
22 
laws. Cooperatives not falling under this article shall be
23 
governed by the succeeding section.
24 
"PATRONAGE REFUNDS AND INTEREST ON SHARE
25 
CAPITAL DISTRIBUTED BY THE COOPERATIVE TO ITS
26 
MEMBERS SHALL LIKEWISE NOT BE SUBJECT TO ANY
27 
TAX AND FEES IMPOSED UNDER THE INTERNAL
28 
REVENUE LAWS AND OTHER TAX LAWS."
29 
Sec. 9. Article 61 of Republic Act No. 6938, as amended by Republic Act No.
30 
9520, is hereby amended to read as follows:
31 
"ART. 61. Tax and Other Exemptions. - x x x


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"(1) Cooperatives [with accumulated reserves and undivided 
oet—savings—of—net—mere—than—Ten—million—pesos
(PTQtOOQ.OOO.OO) shall be] ARE exempt from all national, 
city, provincial, municipal or barangay taxes of whatever 
name and nature. [Sueh] [e] 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 (DTI). COOPERATIVES ARE ALSO EXEMPT 
FROM ANY TAX ON LOCALLY PURCHASED 
MACHINERIES, EQUIPMENT, AND SPARE PARTS. All 
tax-free importations AND THOSE PURCHASED 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 (P10,000,00QDO)
shall -pay-thc following taxes-at the full rate:
xy(a) Income Tax—On the amount allocated for interest on
capitals: Provided, the same tax is not consequently
imposed------ on-----interest-----individually------received----- by
members: Provided, further, That cooperativesT-r-egardless
of classification, are exempt from income tax from the date
of registration with the Author4ty7
u(b) Value-Added—Tax----- On—transactions—with—non-
members: Provided, however-,—That—cooperatives—duly
registered with the Authority, are exempt from the payment
of value-added tax-subject-to-Section 109, sub-sections L, M
and N of Republic Act No. 9337, the National Internal


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Revenue Code, as amended:- Provided, That the exempt
transaction under Section 109-(L) shall include sales made
by-eeoperatives duly registered-with-the Author-Hy-organized
and operated-by its members to undertake the production
and processing of raw materials or of goods -produced by its
members into finished or processed products for sale by-the
cooperative------ to-------fts-------members------ afid-------noft-
members: Provided, further, That any processed product or
its derivative arising from the raw materials produced by its
members, sold in the name and for the account of the
cooperative,—sM—be—deemed—a—product—et—the
cooperative: -Provided/ /7/?^///,-That at least twenty-five per
centum-(25%) of -the net income of the cooperatives -is
returned
'Xc) All -other taxes-unless otherwise provided herein;-and
xXd)-Donations- to—charitable,—research and—educetionet
institutions and reinvestment to socioeconomic projects
within the area of operation of the cooperative may be tax
deductible.]
"[(^] (2) All cooperatives[, regardless of the amount of 
accumulated reserves and undivided-net savings 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 officers for internal revenue tax 
purposes only, after previous authorization by the Authority. 
"[(4)] (3) XXX.


1 
"[(^] (4) XXX.
2 
"[{€)] (5) XXX.
3 
"[{^] (6) XXX.
4 
"[{«)] (7) X X X."
5 
Sec. 10. Article 67 of Republic Act No. 6938, as amended by Republic Act No.
6 
9520, is hereby amended to read as follows:
7 
"ART. 67. Dissolution by Order of the Authority. -The
8 
Authority may suspend or revoke, after due notice and
9 
hearing, the certificate of registration of a cooperative on
10 
any of the following grounds:
11 
"(1) X X x;
12 
"(2) X X x;
13 
"(3) X X x;
14 
"(4) X X x;
15 
"(5) XXX.
16 
"THE DECISION OF THE AUTHORITY ON THE
17 
SUSPENSION OR REVOCATION OF THE CERTIFICATE
18 
OF REGISTRATION OF A COOPERATIVE MAY BE
19 
APPEALED TO THE OFFICE OF THE SECRETARY OF
20 
DEPARTMENT OF TRADE AND INDUSTRY (DTI)
21 
WITHIN THIRTY (30) DAYS FROM THE RECEIPT OF
22 
THE ORDER OF THE AUTHORITY. THE DECISION OF
23 
THE OFFICE OF THE DTI SECRETARY IS FINAL AND
24 
EXECUTORY."
25 
Sec. 11. Article 72 of Republic Act No. 6938, as amended by Republic Act No.
26 
9520, is hereby amended to read as follows:
27 
"ART. 72. Capital Sources. -Cooperatives registered
28 
under this Code may derive their capital from any or all of
29 
the following sources:
30 
"(1) X X x;
31 
"(2) Loans and borrowings including deposits FROM
32 
MEMBERS;


1 
"(3) X X x;
2 
"(4) XXX.
3 
"X X X."
4 
Sec. 12. Article 73 of Republic Act No. 6938, as amended by Republic Act No.
5 
9520, is hereby amended to read as follows:
6 
"ART. 73. Limitation on Share Capitai Hoidings. - No
7 
member of a primary cooperative other than a cooperative
8 
itself shall own or hold more than [ten] FORTY per centum
9 
[(10%)] (40%) of the share capital of the cooperative."
10 
Sec. 13. Article 75 of Republic Act No. 6938, as amended by Republic Act No.
11 
9520, is hereby amended to read as follows:
12 
"ART. 75. CapitalBuiid-Up. -The bylaws of every
13 
cooperative shall provide for a reasonable and realistic
14 
member capital build-up AND/OR DEPOSITS BUILD-UP
15 
program to allow the continuing growth of the members'
16 
investment AND SAVINGS DEPOSITS in their cooperative
17 
as their own economic conditions continue to improve."
18 
Sec. 14. Article 86 of Republic Act No. 6938, as amended by Republic Act No.
19 
9520, is hereby amended to read as follows:
20 
"ART. 86. Order of Distribution. -The net surplus of
21 
every cooperative shall be distributed as follows:
22 
"(1) X X x:
23 
"(a) The reserve fund shall be used for the stability of the
24 
cooperative and to meet net losses in its operations
25 
INCLUDING LOSSES INCURRED DURING A
26 
PANDEMIC, A STATE OF EMERGENCY AND OTHER
27 
SUCH FORCE MAJEURE. The general assembly may
28 
decrease the amount allocated to the reserve fund when the
29 
reserve fund already exceeds the share capital.
30 
"x X X.
31 
"(b) XXX.
32 
"(c) XXX.
10


1 
"(2) XXX
2 
"(a) Half of the amounts transferred to the education and
3 
training fund annually under this subsection shall be spent
4 
by the cooperative for education and training purposes;
5 
while the other half [may] SHALL be remitted to a union or
6 
federation chosen by the cooperative or of which it is a
7 
member. The said union or federation shall submit to the
8 
Authority and to its contributing cooperatives the following
9 
schedules:
10 
"x X X.
11 
"(3) An amount for the community development fund, which
12 
shall not be less than three per centum (3%) of the net
13 
surplus. The community development fund shall be used for
14 
projects or activities that will benefit the community IN THE
15 
PHILIPPINES, BUT PRIORITY MUST BE GIVEN TO
16 
THE COMMUNITY where the cooperative operates. THE
17 
COMMUNITY DEVELOPMENT FUND MUST BE
18 
UTILIZED WITHIN ONE (1) YEAR FROM THE
19 
DISTRIBUTION OF NET SURPLUS.
20 
"(4) An optional fund, a land and building, and any other
21 
necessary fund the total of which shall not exceed seven per
22 
centum (7%). THIS FUND MAY ALSO BE USED FOR
23 
THE BENEFIT OF ITS MEMBERS AND EMPLOYEES
24 
UNDER EXCEPTIONAL CIRCUMSTANCES SUCH AS
25 
THE OCCURRENCE OF A PANDEMIC, CRISIS OR
26 
FORCE MAJEURE.
27 
"HOWEVER, IF THE OPTIONAL FUND IS
28 
INSUFFICIENT, THE COOPERATIVE MAY CHARGE
29 
ANY DEFICIENCY TO DIRECT EXPENSES.
30 
"(5) X X X."
31 
Sec. 15. Article 109 of Republic Act No. 6938, as amended by Republic Act
32 
No. 9520, is hereby amended to read as follows:
11


1 
"ART. 109. Definition and Coverage. - A public
2 
service cooperative, within the meaning of this Code, is one
3 
organized to render public services as authorized under a
4 
franchise or certificate of public convenience and necessity
5 
duly issued by the appropriate government agency. Such
6 
services may include the following:
7 
"(1) WATER SUPPLY OR DISTRIBUTION;
8 
"(2) HEALTH SERVICES;
9 
"[(i)] (3) X X x;
10 
"[{2)] (4) X X x;
11 
"[{5)] (5) X X x;
12 
"[(4)] (6) X X x;
13 
"[(M] (7) X X x;
14 
"[(6)] (8) X X X."
15 
Sec. 16. Article 115 of Republic Act No. 6938, as amended by Republic Act
16 
No. 9520, is hereby amended to read as follows:
17 
"ART. 115. Definition and Objectives. - A credit
18 
cooperative is a financial organization OR INTERMEDIARY
19 
owned and operated by its members with the following
20 
objectives:
21 
"x X X."
22 
Sec. 17. Separability Cause. - If any provision or part hereof is held invalid
23 
or unconstitutional, the remainder of the law or the provision or part not otherwise
24 
affected shall remain valid and subsisting.
25 
Sec. 18. Repealing Cause. - All laws, decrees, orders, rules and regulations
26 
or parts thereof inconsistent with this Act are hereby repealed or amended
27 
accordingly.
28 
Sec. 19. Effectivity. - This Act shall take effect fifteen (15) days after its
29 
publication in the Official Gazette or in two (2) newspapers of general circulation.
Approved,
12