SIXTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
) 
) 
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'13 Jill -1 
All :46 
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--------------------------------------------
SENATE 
S.B. No. B 3 
Introduced by Senator Manuel "Lito" M. Lapid 
EXPLANATORY NOTE 
The ever-developing state of the cooperative sector brings forth the need 
for adaptive change in the Cooperative Development Authority ("CDN). The CDA 
needs a more responsive mandate and a stronger workforce in order to address 
the needs of the cooperative sector. 
Thus, there is a need to amend and 
strengthen Republic Act No. 6939, otherwise known as the "Cooperative 
Development Authority Charter." 
Among the important changes that are envisioned in the proposed 
amendment of the CDA Charter are the clear definition of the agency's regulatory 
and supervisory powers; the definition of its developmental functions; and the 
amendment of the CDA Board's composition. 
The cooperative sector is an important agent in the Philippines because it 
empowers individuals and small-scale players to participate in the present market. 
The spirit of cooperativism unites like-minded and similarly-situated individuals 
giving them the needed momentum for capital and industry growth. 
Hence, the undersigned sponsor urges the immediate passage of the 
proposed measure. 
MAN 
L "LITO" M. LAPID 
Senator r 


SIXTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
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Introduced by Senator Manuel "Lito" M. Lapid 
, . 
'~~ 
S,B. No. 0 ' 
"AN ACT REORGANIZING THE COOPERATIVE DEVELOPMENT 
AUTHORITY, REPEALING FOR THE PURPOSE REPUBLIC ACT NO. 6939, 
CREATING THE COOPERATIVE DEVELOPMENT AUTHORITY" 
1 
SECTION 1. Short Title. - This Act shall be known as the "Cooperative 
2 
Development Authority Charter Act." 
3 
SEC. 2. Declaration of Policy. - It is hereby declared the policy of the 
4 
State to promote the viability and growth of cooperatives as instruments of 
5 
equity, social justice and economic development and to create an agency, in 
6 
fulfillment of the mandate in Section 15, Article XII of the 1987 Constitution. 
7 
Toward this end, the State shall recognize cooperatives as associations 
8 
organized for the economic and social betterment of their members, operating 
9 
business enterprises based on mutual aid, and founded upon internationally 
10 
accepted cooperative principles and practices. The State recognizes the 
11 
Cooperative Development Authority as primarily responsible for the institutional 
12 
development of cooperatives. Accordingly, the State recognizes the rights of the 
13 
cooperatives to initiate and foster within their own ranks cooperative promotion, 
14 
organization, training, information gathering, audit and support services, with 
15 
government assistance where necessary. 
In furtherance of this policy, the 
16 
National Economic and Development Authority shall include the promotion of 
17 
growth and expansion of cooperatives as major and indispensable components 
18 
of national development plans. 
19 
The government and all its branches, subdivisions, instrumentalities and 
20 
agencies shall ensure the provision of technical guidance, financial assistance 
21 
and other services to enable the cooperatives to develop into viable and 
1 


1 
responsive economic enterprises towards a strong cooperative movement free 
2 
from any condition which infringes upon the objectives and character of 
3 
cooperatives. The State shall, except as provided in this Act, maintain the policy 
4 
of non-interference in the management and operation of cooperatives. 
5 
SEC. 3. 
Cooperative Development Authority. -
The Cooperative 
6 
Development Authority created under Republic Act No. 6939, hereinafter referred 
7 
to as the Authority, is hereby reorganized to carry out the provisions of this Act 
8 
and those of Republic Act No. 9520, otherwise known as the "Philippine 
9 
Cooperative Code of 2008". 
The Authority shall have its principal place of 
10 
business in Metro Manila, and shall maintain offices and branches in such other 
11 
places as the proper conduct of its business shall require. The Authority shall be 
12 
an agency attached to the Office of the President for policy and program 
13 
coordination. 
14 
SEC. 4. Powers, Functions and Responsibilities. - The Authority shall 
15 
have the following powers and functions: 
16 
a) Exercise supervision and jurisdiction over all types and categories of 
17 
cooperatives registered with the Authority; 
18 
b) Register all types of cooperatives including amendments to its by-laws; 
19 
division, merger, consolidation, dissolution and liquidation of cooperatives 
20 
as well as the transfer of all or substantially all of their assets and 
21 
liabilities; 
22 
c) Order the cancellation or revocation of the Certificate of Registration after 
23 
due notice and hearing pursuant to Articles 67 & 68 of the Philippine 
24 
Cooperative Code of 2008 and the by-laws of the cooperative; 
25 
d) Formulate, adopt, and implement integrated plans and programs on 
26 
cooperative 
development consistent with the national policy on 
27 
cooperatives, and establish an integrated framework on cooperative 
28 
development for a/l government agencies; 
2 


1 
e) Develop and formulate, in consultation with the cooperative sector, and 
2 
issue appropriate regulations, standards, rules, orders, guidelines and/or 
3 
circulars to implement the Cooperative Code to ensure the sound 
4 
operation of cooperatives; 
5 
f) Establish a consultative mechanism in order to provide the cooperative 
6 
sector a system for maximum participation on matters of government 
7 
plans, projects and policies related to cooperatives. 
8 
The cooperative sector shall undertake the organization/streamlining or 
9 
rationalization of an apex body, representing all types and categories of 
10 
cooperatives under the Philippine Cooperative Code of 2008, which shall function 
11 
as the overall consultative and coordinating body with the Authority. 
12 
The Authority, in consultation with the cooperative sector, shall promulgate 
13 
the guidelines for the implementation of the consultative mechanism; 
14 
g) Establish, operate and maintain an institute to enhance the knowledge 
15 
and technical skills of the Authority and cooperatives; 
16 
h) Require the submission of annual reports, audited financial statements, 
17 
and such reports in compliance with the Philippine Cooperative Code of 
18 
2008, in such forms as may be prescribed by the Authority; 
19 
i) Conduct regular inspection or examination of a cooperative in accordance 
20 
with rules and regulations promulgated by the Authority and when deemed 
21 
necessary, conduct a special inspection and investigation to protect the 
, 
22 
interest and welfare of the members of cooperatives. However, the 
23 
Authority may delegate this power to accredited federations and unions in 
24 
accordance with the Philippine Cooperative Code of 2008 and the 
25 
implementing rules and regulations issued for this purpose; 
26 
j) Compel the cooperative to call a General Assembly under the supervision 
27 
of the Authority, subject to the criteria or condition/s to be defined in the 
28 
implementing rules and regulations issued for this purpose; 
3 


1 
In case a cooperative fails to call and conduct a General Assembly, 
2 
the Authority shall, on its own, call a general assembly meeting to address 
3 
and settle the issues. The Authority may enlist the aid and support of 
4 
and/or deputize any and all enforcement agencies of the government and 
5 
federations and unions for the implementation of its orders; 
6 
k) Impose sanctions for non-compliance with lawful orders, rules and 
7 
regulations of the Authority, including the Articles of Cooperation and the 
8 
By-Laws of the cooperative subject to conditions as defined in the 
9 
implementing rules and regulations of this Act; 
10 
I) Collect reasonable fees, fines or charges in the performance of its 
11 
registration and regulatory functions; 
12 
m) Establish 
and 
strengthen 
extension 
offices 
in 
all 
political 
and 
l3 
administrative regions in the country and such other places as may be 
14 
determined by the Authority; 
15 
n) Hear, decide and settle disputes between and among members, officers, 
16 
and directors of cooperatives, and between and among cooperatives in 
17 
accordance with Article 137 of the Philippine Cooperative Code of 2008; 
18 
0) Implement and enforce its decision with the assistance of deputized law 
19 
enforcement agencies or the local govemment unit concerned as may be 
20 
necessary; and 
21 
p) Exercise such other powers and functions as may be necessary to 
22 
implement the provisions of the Philippine Cooperative Code of 2008. 
23 
SEC. 5. 
Organizational Structure. - The Authority shall have a Board of 
24 
Directors and an Office of the Administrator. 
25 
The Board of Directors, hereinafter referred to as the Board, shall be the 
26 
collegial policy-making body of the Authority which shall be composed of the 
27 
Chairperson and six (6) members of the Board of Directors, all of whom shall be 
28 
chosen from among the nominees of the cooperative sector, with two (2) 
29 
representatives each from Luzon, Visayas and Mindanao. They shall be 
4 


I 
appointed by the President of the Philippines and shall serve for a term of six (6) 
2 
years without reappointment. Except for the Chairperson, the Members of the 
3 
Board shall serve on a part-time basis only: Provided, That any vacancy in the 
4 
Board shall be filled-up by appointment of the President in accordance with the 
5 
provisions of this section: Provided, further, That a member so appointed shall 
6 
serve only for the unexpired term: 
Provided, finally, That the incumbent 
7 
Chairperson and members of the Board shall continue to serve and act as 
8 
chairperson and members of the present Board up to the end of their term under 
9 
Republic Act No. 6939. 
10 
Except forthe Chairperson, the members of the Board shall be entitled to per 
II 
diem and actual travel expenses. 
12 
The Office of the Administrator shall be headed by the Chairperson of the 
13 
Board who shall exercise over-all supervision on the operations of the Authority. 
14 
SEC. 6. 
Powers and Functions of the Board. - The Board as the policy 
15 
making body shall have the following powers and functions: 
16 
a) Formulate policies, rules and regulations consistent with the provisions of 
17 
the Philippine Cooperative Code of 2008; 
18 
b) Adopt implementing rules and regulations for the conduct of the internal 
19 
operations of the Authority; 
20 
c) Organize the operating structure and functions of the Authority. No 
21 
changes in the approved organizational structure shall be effected without 
22 
the approval of the Board; and 
23 
d) Approve and adopt the annual budget of the Authority. 
24 
SEC. 7. Qualifications of Members of the Board. - The Chairperson or a 
25 
Member of the Board who shall be" appointed must possess the following 
26 
qualifications: 
27 
a) Must not be more than sixty (60) years old at the time of the appointment 
28 
and must be in good health; 
29 
b) A natural born Filipino citizen; 
5 


1 
c) A holder of at least a bachelor's degree and five (5) years of experience as 
2 
an official or officer of a cooperative, government agency, or non-
3 
government organization engaged in cooperative development or, in the 
4 
absence of the bachelor's degree, at least seven (7) years of experience in 
5 
cooperatives either as an officer of a cooperative or a government agency 
6 
or non-government organization engaged in cooperative development; 
7 
d) Except the Chairperson who should be a resident of the Philippines, the 
8 
other Members of the Board must be a resident of the region represented 
9 
for at least five (5) years; and 
10 
e) Must be recommended and endorsed by a federation and/or union of 
II 
cooperatives operating in good standing under the provisions of this Act and 
12 
the Philippine Cooperative Code of 2008. 
13 
Any person appointed as Chairperson or regular member of the Board 
14 
shall, upon appointment, divest himself of any direct or indirect pecuniary interest 
15 
or dealings with any cooperative. 
16 
SEC. 8. 
Removal of a Member of the Board. - The President of the 
17 
Philippines may remove any member of the Board for any of the following 
18 
reasons: 
19 
20 
21 
22 
23 
24 
a) 
b) 
c) 
If the member is subsequently disqualified under the provisions of 
this Act; 
If the member becomes physically or mentally incapacitated to 
properly discharge the duties and responsibilities of the position 
and such incapacity has lasted more than six (6) months; and 
If the member is guilty of acts or omissions which are fraudulent or 
25 
illegal in character or which are manifestly opposed to the aims, 
26 
objectives and interests of the Authority and the cooperative sector. 
27 
SEC. 9. 
Meetings of the Board. - The Board shall meet at least once a 
28 
month for the transaction of its regular business. Special meetings may be called 
29 
by the chairperson or majority of the members to consider specific matters. A 
6 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
majority vote by the entire Board of Directors shall be required for a decision. All 
regular and special meetings of the Board shall be held at the head office in 
Metro Manila. 
SEC. 10. Administrator. - The Chairperson shall be the Administrator of 
the Authority and shall have the rank and privileges of an Undersecretary. The 
Administrator shall be assisted by five (5) directors who will be assigned to the 
following specific concerns: 
a. 
Support Services; 
b. 
Institutional Development; 
c. 
d. 
e. 
Legal Affairs & Registration; 
Supervision and Examination; and 
Field Operations 
13 
In the absence of the Administrator, the Board shall appoint from among 
14 
the five (5) the Officer-In-Charge of the Authority who shall exercise the powers 
15 
and duties of the administrator. 
16 
SEC. 11. 
Powers and Functions of the Administrator. -
The 
17 
Administrator of the Authority shall have the following powers and functions: 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
a) 
b) 
c) 
d) 
e) 
f) 
Preside over the meetings of the Board; 
Supervise the over-all operations of the Authority; 
Prepare, 
consolidate and submit periodic reports 
for the 
consideration of the Board; 
Implement a human resource management system consistent with 
the Civil Service Code that will promote professionalism and 
excellence in accordance with sound principles of management; 
Prepare the proposed annual and supplemental budgets of the 
Authority for the consideration and approval of the Board; 
Report to the President of the Philippines and Congress on the 
performance and accomplishment of the Authority on a periodic 
basis; 
7 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
g) 
Represent the Authority in all undertakings where its presence is 
required; and 
h) 
Perform such other functions as may be required by law. 
SEC. 12. Deputy Administrators. - The Board shall appoint the deputy 
administrators in accordance with the Civil Service Laws and must possess the 
following qualifications: 
a) 
A natural·born Filipino citizen; 
b) 
Must not be more than 60 years old at the time of the appointment 
and must be in good health; 
c) 
d) 
A holder of a bachelor's degree and five (5) years of experience as 
an official or officer of a cooperative, government agency, or non· 
government organization engaged in cooperative development; and 
A career executive service officer. 
14 
SEC. 13. 
Power to Register Cooperatives. - The power to register 
15 
cooperatives shall be vested solely on the Authority pursuant to the provisions of 
16 
the Philippine Cooperative Code of 2008. 
17 
All cooperatives duly registered with the Authority shall present their 
18 
Certificate of Registration to the nearest Bureau of Internal Revenue office and 
19 
the latter shall within ten (10) days issue the Certificate of Tax Exemption. 
20 
Any provision of law, executive order, rule or regulation to the contrary 
21 
notwithstanding, the certificate of registration issued by the Authority to a duly 
22 
registered cooperative shall ipso facto constitute as the sole legal basis or 
23 
requirement for the full enjoyment of the tax exemption granted under Articles 60 
24 
and 61 of the Philippine Cooperative Code of 2008. 
Any public official or 
25 
employee who violates or in any manner circumvents this provision shall be dealt 
26 
with under Article 140 of Philippine Cooperative Code of 2008. The Authority 
27 
shall cite this provision in the certificate of registration. 
28 
SEC. 14. Prohibition. - Except as provided for under Article 130 of the 
29 
Philippine Cooperative Code of 2008, the use of the word "cooperative" by any 
8 


1 
person or organization unless duly registered with the Cooperative Development 
2 
Authority shall be prohibited and shall be penalized under Article 140 of the 
3 
Philippine Cooperative Code of 2008. 
4 
SEC. 15. 
Settlement of Disputes. -
Disputes within or between 
5 
cooperatives, or disputes within or between federations or unions shall be 
6 
mediated, conciliated or settled in accordance with this Act, Article 137 of the 
7 
Philippine Cooperative Code of 2008 and its implementing rules and regUlations 
8 
or Republic Act No. 9285, otherwise known as the Alternative Dispute Resolution 
9 
Act of 2004. 
10 
SEC. 16. 
Cooperatives in the Education System. -
The history, 
11 
philosophy, concepts, values, principles and practices of cooperatives and their 
12 
role as a factor in the national economy shall be disseminated both in formal and 
13 
non-formal education. 
14 
Notwithstanding existing laws, memorandum orders and directives, 
15 
cooperatives development and administration as a field of study may be offered 
16 
as a baccalaureate, post baccalaureate or masteral program in state universities 
17 
and colleges (SUCs) in accordance with the standards, rules and regulations 
18 
promulgated by their respective Board of Regents, the Commission on Higher 
19 
Education (CHED) or the Authority in consultation with the cooperative sector as 
20 
necessary: 
Provided, That SUCs shall provide for equivalency credit and 
21 
accreditation of work experiences and non-formal education and training of 
22 
cooperative leaders, managers and members: Provided further, That in cases 
23 
where the SUCs do not offer a separate academic program in cooperatives 
24 
development and administration, the SUCs shall be encouraged to include a 3-
25 
unit subject in the curricula of accountancy, agribusiness, agriculture, agricultural 
26 
economics, business, community development, economics, education, forestry, 
27 
social sciences, and other curricula that can be instrumental in the development 
28 
of cooperatives. Special incentives including scholarships shall be formulated by 
9 


1 
the Authority for students taking up degree courses on cooperatives development 
2 
and administration. 
3 
The role of non-governrnent organizations, not registered as cooperatives 
4 
but duly registered under Philippine laws and engaged in cooperative promotion, 
5 
organization, research and education, shall be recognized. The Authority may 
6 
accredit such 
non-government organizations 
as 
non-academic training 
7 
organizations. The training courses offered by them may be eligible as credits 
8 
for the purposes of academic, professional and career advancements of their 
9 
trainees. 
Existing training centers for cooperatives may qualify as non-
10 
government organizations under this Act. 
11 
Upon request of cooperatives, State colleges and universities shall 
12 
provide technical assistance and guidance to cooperatives in the communities 
13 
where they are located. 
14 
SEC. 17. Cooperatives in the Banking System. - The promotion and 
15 
development of cooperative banks as part of the banking system and of financial 
16 
service cooperatives as defined in the Philippine Cooperative Code of 2008 shall 
17 
be a major concern of the Authority which shall undertake the necessary program 
18 
towards this end in collaboration with the Bangko Sentral ng Pilipinas (BSP) and 
19 
the cooperative sector concerned. 
20 
SEC. 18. Cooperatives Engaged in Services Covered by Other Laws. 
21 
- Registered cooperatives may engage in business endeavors in accordance 
22 
with its approved articles of cooperation provided they acquire the necessary 
23 
licenses, franchises, certificates of authority and permits from the appropriate 
24 
agencies governing their type of cooperatives such as those providing manpower 
25 
services, construction services, professional services, health care services, 
26 
security services, SOCial welfare services, research development, related health 
27 
services, ecological and environmental services, farmers and fisherfolk 
28 
cooperatives and services to indigenous cultural minorities. 
10 


1 
SEC. 19. Reorganization of the Authority. - The Authority shall be 
2 
reorganized within one hundred twenty (120) days from the effectivity of this Act. 
3 
SEC. 20. Transitory Provisions. - Upon the effectivity of this Act, the 
4 
personnel of the Cooperative Development Authority shall, unless removed for 
5 
cause and after due process, continue to perform their duties and responsibilities 
6 
and shall receive their corresponding salaries and benefits. 
7 
In the reorganization and staffing of the Authority, these personnel shall be given 
8 
preference subject to civil service rules and regulation and rules of the 
9 
Classification Compensation Bureau of the Department of Budget and 
10 
Management (DBM); Provided, that those who shall not be absorbed by the 
11 
organization shall be given separation pay computed at 1.5 months' salary for 
12 
every year of service. The fraction of six months shall be considered as one (1) 
13 
year in computing years of service for severance pay and whatever applicable 
14 
retirement benefit under existing laws. 
15 
SEC. 21. 
Appropriations. -
The amount necessary for the 
16 
implementation of this Act shall be included in the annual General Appropriations 
17 
Act. 
18 
SEC. 22. Transfer of Funds and Programs. - The Cooperative 
19 
Development Loan Fund and the Fund for Management Training and Assistance 
20 
Program created under Presidential Decree No. 175, as amended, and the 
21 
Cooperative Marketing Project created under loan agreements, all granted to the 
22 
Department of Agriculture, is hereby transferred to the Authority which shall be 
23 
used for the development and strengthening of cooperatives. 
24 
SEC. 23. Joint Congressional Oversight Committee on Cooperatives 
25 
(JCOCC). - The Joint Congressional Oversight Committee created under Article 
26 
138 of Philippine Cooperative Code of 2008 shall review and monitor the 
27 
implementation of this Act. 
28 
SEC. 24. Implementing Rules and Regulations. - The Board shall, in 
29 
consultation with the cooperative sector, formulate the implementing rules and 
11 


1 
regulations for the effective implementation of the provisions of this Act. The 
2 
implementing rules and regulations shall take effect within fifteen (15) days after 
3 
publication in the Official Gazette or in two (2) newspapers of general circulation. 
4 
All subsequent amendments to the implementing rules and regulations shall also 
5 
be published before taking effect. 
6 
SEC. 25. 
Information Campaign. -
The Cooperative Development 
7 
Authority is mandated to conduct an information campaign for six (6) months on 
8 
the provisions of this Act from its effectivity. 
9 
SEC. 26. 
Repealing Clause. -
Republic Act No. 6939, creating the 
10 
Cooperative Development Authority, is hereby repealed. All other laws, decrees, 
11 
executive orders, rules and regulations or parts thereof inconsistent with the 
12 
provisions of this Act are hereby amended or modified accordingly. 
13 
SEC. 27. Separability Clause. - If for any cause, any part of this Act is 
14 
declared unconstitutional, the rest of the provisions shall remain in force and 
15 
effect. 
16 
SEC. 28. Effectivity Clause. - This Act shall take effect fifteen (15) days 
17 
after its publication in the Official Gazette or in at least two (2) national 
18 
newspapers of general circulation. 
Approved, 
12