Republic of the Philippines
HOUSE 0F REPRESENTATIVES
Quezon City, Metro Manila
NINETEENTII CONGRESS
Second Regular Session
fiouseBi||No.    9159
INTRODUCED BY REPRESENTATIVES RALPH WENDEL P. TULFO, .
TOCELYN P. TULFO, ERWIN T. TULFO, EDVIC G. YAP, AND ERIC GO YAP
AN ACT AMENDING CERTAIN PROVISIONS OF REPUBLIC ACT NO. 9520,
OTHERVISE KNOWN AS THE ``PHILIPPINE COOPERATIVE CODE OF 2008",
T0 FURTHER STRENGTHEN THE COOPERATIVE MOVEMENT IN THE
COUNTRY AND FOR OTHER PURPOSES
EXPLANATORY NOTE
The cooperative movement embodies principles of scx:ial responsibility, solidarity,
and  sustainable  development in fostering a  more  equitable  and  inclusive  society
toward collective progress.
Cooperatives have been instrumental in providing a collective voice and power to
advocate for the rights and interests of marginalized groups, serving as vehicles for
the  self-reliance,  autonomy,  and  socio-economic  empowerment  of  communities.
Republic Act No.  9520, otherwise known as the ``Philippine Cooperative Code of
2008", recognizes the vital role of cooperatives in the country, and provides legal
framework on their establishment, cooperation, and organization.
To further strengthen the evolving economic interests and social conditions of the
cooperative sector in the country, this proposed measure seeks to comprehensively
amend the existing law. Among others, the proposed amendment includes the tax
exemption of cooperatives with accumulated reserves and undivided net savings of
not  more  than  Ten  Million  Pesos  (Php10,000,000.00),  in  order  to  alleviate  their
financial burden, exacerbated by the COVID-19 pandemic. This bill also includes the
expansion of the use of the reserve fund to ensure the stability and community
development  of  cooperatives,  as  well  as  the  optional  fund  for  the  benefit  of
cooperatives members under exceptional circumstances.
In its contribution to social empowerment, the cooperative movement serves as a
critical instrument of social change in the country, which remains vital to nation-
building and democratic governance.
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In vie
e foregoing, the urgent passing of this bill is earnestly
RALPH VVENDEL P.
Rapresentative
I..i-3`._--..-.
ACT-CIS Partyitst
2
epresent,
ERIC G0 YAP
Representative
Lone District Of Benguet
ULFO


Republic of the Philippines
HOUSE 0F REPRESENTATIVES
Quezon City, Metro Manila
NINETEENTII CONGRESS
Second Regular Session
6-`'HouseBi||No.9159
INTRODUCED 8¥ REPRESENTATIVES RALPH WrENDEL P. TULFo,
|0CELYN P. TULFO, ERWIN T. TULFO, EDVIC G. YAP, AND ERIC GO YAP
1        AN ACT AMENDING CERTAIN PROVISIONS OF REPUBLIC ACT NO. 9520,
2       OTHERWISE KNOWN AS THE ``PHILIPPINE COOPERATIVE CODE OF 2008",
3           TO FURTIIER STRENGTHEN THE COOPERATIVE MOVEMENT IN THE
4                                        COUNTRY AND FOR OTHER PURPOSES
Be it enacted by the Senate and the House Of Rapresentatives Of the Philippines, in Congress
assembled:
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6           SECTION 1. Articles 1 and 5 of Chapter I on General Concepts and Principles of
7      Republic Act No. 6938, as amended, are hereby further amended to read as follows -
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``ART.1. Tz.fze.  -This Act shall be known as the [``Philippinc Coopemtivc
code Of 2Orre".I ``plHI.IpplNE cOOpERATTVE CODE OF 2023''.
XXX
A;RI . 5. Definition of Terms. - x x x.
(17)  Federation  of  Cooperatives       [rcfcro  to  three  or  more  primary
-+-+A+-+^ `, )   -`^`` , -`,tJr+,|,`-^`~+^  `` +`,-` `,-``---`-`..``,--`'J   ``,  _-`_--_.`--_` ,---- `,`, _---` `-._`,
in oupport of its mcmber coopcrativco.I RHERS TO A COOPERATIVE, TIH
MEMEMBERS   oF   i^rlllcI+   ARE   PRIMARY   CooPERATlvES   AND/oR
COOPERATIVE FEDERATIONS, ORGANIZED TO CONDUCT BUSINESS,
UUNDERTAKE ENABLING OR CAPACITY~BUILDING  ACTIVITIES,  AND
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DELEGATED     SUPERVISION     IN     SUPPORT     OF     ITS     MEMBER-
COOPERATIVES, AT THE MUNICIPAL, CITY, PROVINCIAL, REGIONAL,_
AND NATloNAL LEVErs.
(18)  COOPERATIVE  UNION  -  REFERS  TO  A  COOPERATIVE,  THE
MEMBERS OF VVHICII ARE REGISTERED COOPERATIVES, ORGANIZED
puRposELy To REPRESENT Tlm INTEREST  AND WELFARE oF  ALL
TYPES OF COOPERATIVES AT THE MUNICIPAL,  CITY,  PROVINCIAL,
REGIONAL, AND NATIONAL LEVEI.S.
(19)  APEX  OF  COOPERATIVES  -  THE  SINGULAR  COOPERATIVE
VESTED WITH THE JURIDICAL PERSONALITY AND TIIE MANDATE TO
REPRESENT THE SECTOR AT THE NATIONAL AND INTERNATIONAL
LEVELS, FULLY AND VOLUNTARILY ORGANIZED BY THE MEMBERS
OF  THE  SECTOR.  IT  SHALL  HAVE  THE  MANDATE  TO  ENGAGE  IN
DISCUSSIONS AND ADVISE THE APPROPRIATE AUTHORITIES ON ALL
MATTERsREELATINGToCoopERA'ITVE7Es,ASi^rELLAsTopROMOTE
TH13 COOPERATIVE IDENTITY AND CULTURE."
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20           SEC. 2.  Articles  9,10,11,14,16, 23,  and 24 of Chapter 11  on Organization and
21      Registration of the same code are hereby further amended to read as follows:
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``ALRT.  9.  Cooperative  Powers  and  Capacities.  -  A  cooperative  registered
under this Code shall have the following powers, rights, and capacities:
XXX
(5) To purchase, receive, take or grant, hold, convey, sell, lease, pledge,
mortgage, and otherwise deal with such real and personal property as the
transaction  of  the  lawful  affairs  of  the  cooperative  may  reasonably  and
necessarily  require,  subject to the  limitations  prescribed  by  Flat,A,7 arLd]  the
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Constitution;  PROVIDED,  TIIAT  COOPERATIVES  SHALL  BE  EXEMPT
FROM    THII    LANDHOLDING    LIMITS    AS    PRESCRIBED    BY    THE
DEPARTMENT   OF   AGRARIAN   REFORM   OR   ANY   OTI+ER   LAW
RRECHJIRINGTHESAME;
XXX
ART. 10. Orgr7ii.zjng A Prl.i'r{¢ry Cdyft.tre. -  H]iftcon (15)] TVVENTY-FIVE
(2§} or more natural persons who are Filipino citizens, of legal age, having a
common bond of interest, and are actually residing or working in the intended
area  of operation,  may  organize  a  primary  cooperative  under  this  Code:
PiiorJided, That a prospective member of a primary cooperative must have
completed  a  Pre-Membership  Education  Seminar  (ENus).   PROVIDED,
FLIRTH£R,  TIIAT  ONLY  THE  FOLLOWING  MAY  BE  MEMBEIRS  OF  A
PRIMARY COOPERATIVE:
(A) FILIPINO CITIZENS LIVING IN TH13 PHILIPPINES; AND
(8\   FORMER  NATURAL-BORN   FILIPINO  CITIZENS,   WIIO   MUST
coMPL¥ i/\rlTII PHILIPPINE TAXATloN LAi^rs.
Any   newly   organized   primary   cooperative   may   be   registered   as
multipurpose   cooperative   only   after   compliance   with   the   minimum
requirements for multipurpose cooperatives to be set by the Authority. A
single purpose cooperative may transform into a multipurpose or may create
subsidiaries only after at least two (2) years of operations.
EVERY PRIMARY COOPERATIVE MUST BECOME A MEMBER OF A
FEDERATION  AND/OR  UNION  WITIIIN  TIIREE  (3)  YEARS  OF  TIIE
rssuANCE   OF   ITs   cERTIFlcATE   OF   REGlsTRATION   FROM   THE
AUTIIORITY. FAILURE OF TIIE COOPERATIVE TO COITLY WITII TIIIS
REQUIREMENT SIIALL RESULT IN APPROPRIATE SANCTIONS, SUCII
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AS   SUSPENSION   OF   PRIVILEGES   OR   NON-ISSUANCE   OF   THE
cERTIFlcATE   OF   cohAI>LIANCE,   AMONG   OTHErs,   As   MAT   BE
DECIDED BY TIIE AUTHORI'IY.
ALRT.  11.  Economic  Survey  OR  FEASIBILITY  STUDY.  -  Every  group  Of
individuals or cooperatives intending to form a cooperative under this Code
shall submit to the Authority a general statement describing, among others
the structure and purposes of the proposed cooperative; Proz%.did, That the
structure  and  actual  staffing  pattern  of  the  cooperative  shall  include  a
bookkeeper:  P7ioz7£ded, ¢7'thc7`,  That  they  shall  not  be  allowed  to  operate
without the necessary personnel, and shall also submit an economic survey
OR A FEASIBILITY S'ITUDY, indicating therein the area of operatiorty the size
of the membership, and other pertinent data in a format provided by the
Authority.
THE ECONOMIC SURVEY OR FEASIBILITY STUDY SHALL BE SUBJECT
To   THE   REVIEl^r   OF   TIIE   AUTHORITY.   BOTII   r\4UST   INCLUDE
INFORMATION ON EXISTING COOPERATIVIS IN THE SAME LINE OF
BUSINESS  AND  PROVIDING  SIMILAR  SERVICES  IN  THE  PROPOSED
AREA 0F OPERATION, IF ANY, AND ANY PREVIOUS COOPERATIVES
ORGANIZED oR OPERATED 8¥ TrlE coopERATORs. TIIE AUTrloRIT¥
SHALL   THOROUGHLY   EXAMINE   THE   ECONOMIC   SURVEY   OR
FEAslBILITy     STUDY     IN     ORDER     To     DETERMINE     IF     TrlE
ESTABLISHMENT OF A NEW COOPERATIVE IN TIIE PROPOSED AREA
OF  OpERATloN  Is  ACTUALLy  FEAslBLE  OR  VIABLE.  IF  Nor,  THE
AUTHORITY SHALL DENY THE APPLICATION FOR REGISTRATION.
A;RT.   11.-A.   BRANCH,__S_AITE_I_L±T_E,   ALND   LIAISON   OFFICES.   -    A
COOPERATIVE  MAY  OPERATE  BRANCH,  SATELLITE,  AND  LIAISON
oFFlcEs i^rlTrllN ITs AREA oF opERATloN, SUBTECT To REGULATloN
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BY THE AUTHORITY. THE AUTHORITY AND THE SECTOR SHALL ISSUE
RULES REGARDING TIIE CREATION AND OPERATION OF BRANCH
SATELLITE, AND LIAlsoN OFFICES OF COOPERATIVES.
A;RT.12. Liabitity. -x x x.
ART. 13. Tcri?1.  - x x x.
A;RT 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] ABE
accompanied  with  the  bonds  of  the  accountable  officers  and  a  sworn
statement of the treasurer elected by the subscribers showing that at least
twenty-five  per  centum  (25%)  of  the  authorized  share  capital  has  been
subscribed and at least twenty-five per centum (25%) of the total subscription
has been paid: ProzJfded, That in no case shall the paid-up share capital be less
tthan  Fifteen |Hhousand  E[plesos  (PE±IIP15,000.00)  FOR  AGRICULTURAL
COOPERATIVES, AND TVVENTY-FIVE THOUSAND PESOS ffHP25,000.00)
FOR NON-AGRICULTURAL COOPERATIVES.
The Authority shall periodically assess the required paid-up share capital
and may increase it every five (5) years when necessary upon consultation
with the cooperative sector and the National Economic and Development
Authority (NEDA).
ART. 15. ByzflztJs.  -  x x x.
ART. 16. Rear.sfr#fro7z.  -  A cooperative formed and organized under this
Code  acquires juridical  personality  from  the  date  the  Authority  issues  a
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certificate of registration under its official seal. All applications for registration
shall be finally disposed of by the Authority within a period of Esixty (69)I
THIRTY (30\ days from the filing thereof, otherwise the application is deemed
approved,  unless  the  cause  of  the  delay  is  attributable  to  the  applicant:
Proz)i.did, That in case of a denial of the application for registration, an appeal
shall lie with the [Officc of the Prcoident] DEPARTMH\IT OF TRADE AND
INDUSTRY apTI) within [ninrty (90)] SD(TY (60) days from receipt of notice
of such denial: Pror7z.did, rtyrfher, That failure of the [Officc of the Prcoidcnt]
E2|E to act on the appeal within [nincty (90)I SIXTY (60) days from the filing
thereof shall mean approval of said application. THE DECISION OF THE DTI
SIIALL  BE  FINAL  AND  EXECUTORY,  UNLESS  APPEALED  TO  THE
COURT  OF   APPEAI.S  UNDER  RULE  43  0F  TIIE  RULES  OF  CIVIL
PRCX=EDURE.
A;KI . T7 . Certificate of Registration. - x x x.
A;RI .18. AL:nendment of ALrticles Of Ccoperation and Bylaws. - x x x.
A;RI . T9. Contracts Executed Prior to Regivtration and Effocts Thereof. - x x x.
A:RF . 2JO. Division of Cooperatives. - x x x.
A;RI . 21. Merger and Consolidation of Cooperatives. - x x x.
A;B{I . 22„ Effocts Of Merger and Consotidalcm. - x x x.
ALRT. Z3. Types and Categories Of Cooperatives.  -  (1) Types o£ Cooperatves
-   BASED   ON   TIIEIR  BUSINESS  UNDERTAKINGS   AND   RELATED
ACTIVITIES, cooperatives may fall under any of the following types:
(a) [Crcdit Coopcmtivc   is one that promotes and undcrtckes oavingr and
to its mcrmbero for productive aLnd provident purpoceo;] AGRICULTURAL
COOPERATIVES      -      COOPERATIVIS     i/VHOSE     MEMBERSIIIP
CONSISTS  OF  INDIVIDUALS  ENGAGED  IN  'ITH  AGRICULTURAL
INDUSTRY,   SUCH   AS   FARMERS   AND   FISHERFOLK,   AMONG
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OTHERS,  AND  i^rHoSE  LINE  oF  BUSINESs  IS  RELATED  To  TIIE
AGRICULTURAL     VALUE     CHAIN,     SUCII     AS     PRODUCING,
PROCESSING,   AND   MARKETING   AGRICULTURAL   PRODUCTS.
AGRICULTURAL COOPERATIVES INCLUDE :
(i\  AGRARIAN  REFORM  COOPERATIVE  -  ONE  ORGANIZED  BY
MARGINAL  FARMERS,  MATORITy  oF  wlllcll  ARE  AGRARIArN
REFORM BENEFlaARrEs, FOR THE puRpOsE OF DEVELOpING AN
APPROPRIATESYSTEMOFLANDTENUIREI,LANDDEVELOPMENT,
LAND  CONSOLIDATION,  OR  LAND  MANAGERENT  OF  AREAS
COVERED BY AGRjARIAN REFORM;
(ii)  DAIRY    COOPERATIVE     -     ONE    VVI.IOSE    MEMBERS    ARE
ENGAGED  IN  TIIE  PRODUCTION  AND  MARKETING  OF  FRESIH
MMILK,WIIICIIMAYBEPROCESSEDAND/ORMARKETEDASDAIRY
IPRODUCTS;
(iii) FARMERS COOPERATIVE  -  ORGANIZED BY MARGINALIZED
FARMERS FOR THE PURPOSE OF SUPPORTING THEIR PRODUCTS,
EITIIERFRESHORPROCESSED;
(iv \       FISHERFOLK       COOPERATIVE        -        ORG ANIZED       BY
MMARGINALIZEDFISHERFOLKIIVIIOSEPRODUCTSAREMARKETED
AS  EITIIER  FRESH  OR  PROCIESSSSED,  FOR  TIIE  MOBILIZATION  OF
CAPITAL IN TH13 PROCUREMENT OF FISHING BOATS, NETS, GEARS,
AND    ACCESSORIES,    FOR    TIIE    PRODUCTION    OF    AQUATIC
PRODUCTS, AND FOR ACCESS TO STORAGE AND AGRICULTURAL
FACILITIES;
/vt IRRIGATORS COOPERATIVE - ENGAGED IN THE PROVISION OF
IRRIGATION SERVICES TO AGRICULTURAL
AND
(`vi)  OTHERS,  AS  MAY  BE  DETERMINED  BY  THE  AUTHORITY  IN
CONSULTATION VITII THE SECTOR.
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i ®) |CfrourTicrs Coopcrative| COMMODITIES COOPERATIVES.  -  +3sr-
COOPERATIVES ENGAGED IN TIIE PROCESS OF PRODUCING AND
PROVIDING commodities to members and non-members[;I. THESE MAY
INCLUDE:
/i\  CONSUMERS COOPERATIVE - IIAS TIIE PRIMARY PURPOSE OF
PROCURING  AND  DISTRIBUTING  COMMODITIES  TO  MEMBERS
ANDNON-MEMBEIRS;
(ii) MARKETING CoopERATlvE  -  ENGAGES IN Tlm SuppLy oF
PRODUCTION   INPUTS   TO   MEMBE+RS,   ANTD   MiARKETS   THEIR
PRODUCTS, INCLUDING TRADING AND PROCESSING;
(iii)   I..OGISTICS   COOPERATIVE   -   ENGAGES   IN   OPERATIONS
[NVOLvrNGFAC]L]TTESANDSUPPL[ES,THEBUS[NESSOFWrHrc±+H
rs RELATED TO THE suppLy cHjAIN;
{±][)Eel Producers Cooperative - [io one thnt] undertakes joint production
whether  agricultural  or  industrial.  It  is  formed  and  operated  by  its
members to undertake the production and processing of raw materials or
goods produced by its members into finished or processed products for
ssale  by  the  cooperative  to  its  members  and  non-members.  Any  end
product or its derivative arising from the raw materials produced by its
members, sold in the name and for the account of the cooperative, shall be
deemed a product of the cooperative and its members; Ab|E2
(v\  OTHERs,  As  MAy  BE  DETERr\AINED  By  TIIE  AUTHORITy  IN
CoNsuLTATloN i^rlTTI TIIE SECTOR.
/(`c)   EDUCATION       AND       ADVOCACY       COOPERATIVES        -
COOPERATIVES   THAT   ARE   ENGAGED   IN   DEVELOPING   AND
IMPROVING  THE  EDUCATION  SECTOR,  AND  PROMOTING  AND
ADVOCATING    FOR   THE    COOPERATIVE    AGENDA    AND    ITS
INTERESTS   FOR   THE    ADVANCEMENT   OF   THE   SECTOR    IN
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PARTICULAR AND TIIE COOPERATIVE MOVEMENT IN GENERAL.
TIIESE MAY INCLUDE:
(i\  ADVOCACY  COOPERATIVE  -  PROMOTES  AND  ADVOCATES
cOOpERATlvlsM AND ADvOcATEs roLlclEs FOR THE GENERAL
INTEREST AND VVELFARE OF ITS MEMBERRS, THE SECTOR AND THE
MOVIMENT,  ANTD THE PUBLIC THROUGH SOCIALLYORIENTED
PROTECTS,    EDUCATION    AND    TRAINING,    RESEARCII    AND
cOMMUNlcATION,     cAnAI>AIGNs,     LOBBylNG,     AND     OTHER
slMILAR    ACTIVITIES    To    REAcll    OUT    To    ITS    n\ITENDED
BENEFlaARus;
(ii) EDUCATION COOPERATIVE - ORGANIZED FOR THE PRIMARY
puRposE      oF      oi^rNI NG      AND      OPERATING      LlcENSED
EDucATloNAL     INSTITUTloNS,     NOTHi^rlTI+THssTANDING     THE
pROvlsloNs  OF  R.A.   NO.   9155,  OTHERvvlsE  KNoi^rN  As  THE
GOVERNANCE OF BASIC EDUCATION ACT OF 2001; AND
(iii)  OTHERS,  AS  MAY  BE  DETERMINED  BY  THE  AUTHORITY  IN
CONSULTATION l^7ITH TIIE SECTOR.
FINANCE
COOPERATIVES - COOPERATIVES WHOSE PURPOSE IS TO EXTEND
FINANCIAL     SERVICES     TO     ITS     MEMBERS     AND     OTliER
COOPERATIVES, SUCII AS:
(i)           COOPERATIVE  BANK  T  ORGANIZED  FOR TIH  PRIMARY
puRpOsE OF pRovlDING A wlDE RANGE oF FINANaAL sERvlcEs
TQ;. COOPERATIVES AND TIIEIR MEMBERS;
(ii)             CREDIT   SURVEY   FUND   COOPERATIVE    -    A   LOCAL
GOVERNMENT        UNIT        (LGU)-PARTNERED        COOPERATIVE
COMPRISED    OF    WELI.CAPITALIZED    AND    WELL-MANAGED
MFMBER{OOPERATIVES/ NON-GOVERNMENT  ORGANIZATIONS
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TIIAT MEET TIIE CRITERIA AND QUALIFICATIONS PRESCRIBED BY
THI]        AUTHORITy ,        LGus ,       GOVIRNMENT       FIN ANa AL
INSTITUTIONS,     AND     OTIIER     INSTITUTIONS/GOVERNMENT
AGENCIEES;
(iii\   FINANaAL sERvlcE cOOpERATlvE - ORGANlzED FOR TIIE
PRIMARY  PURPOSE  OF  ENGAGING  IN  SAVINGS  AND  CREDIT
SERVICES, AS VVELL AS OTHER FINANCIAL SERVICES;
(iv)   INSURANCE COOPERATIVE - ENGAGED IN THE BUSINESS OF
INSURING  TIIE  LIFE  AND  PROPERTY  OF  COOPERATIVES  AND
TTfflR REREERS;
fy)        SAVINGS AND  CREDIT COOPERATIVE  -PROMOTES AND
uNDERTAKEs  sAVINGs  AND  LENDING  sERvlcEs  AMONG  Irs
MEMBERS. IT GENERATES A COMMON PcOL OF FUNDS IN ORDER
TO  pROvlDE  FINANaAL  AsslsTANCE  AND  OTHER  RELATED
FINANaAL sERvlcEs TO ITs MEMBERs FOR pRODucTlvE  AND
PROVIDENT PURPOSES; ..AND
(vi)  OTIIERS,  AS  MAY  BE  DETERMINED  BY  TIIE  AUTHORITY  IN
CONSULTATION VITII THE SECTOR.
/ (e) PUBLIC UTILITIES COOPERATIVES - COOPERATIVES ENGAGED
|N TH13 PROVISION OF PUBLIC UTILITIES TO ITS MEMBERS OR THE
PUBLIC, SUCH AS:
{i:)_ .... COMMUNICATIONS  COOPERATIVE  -  ORGANIZED  TO  OWN,
OPERATE,  AND  MANAGE  COMMUNICATION  STRUCTURES  AND
A.RRANGEMENTS, SUCII AS RADIO, CABLE TV, NEWSPAPER, AND
BF|.ATED INDUSTRIES, FOR THE WIDESPREAD DISSEMINATION OF
INFORMATION To ITs MEMBERs AND Tlm puBLlc;
(ii) EljECTRlc cOopmATlvE  -  ORGANlzED FOR TIH pRIMAR¥
PURPOSE  OF  UNDERTAKING  POWER  GENERATION,  UTILIZING
BFNEWABLE  ENERGY  SOURCES,  INCLUDING  HYBRID  SYSTEMS,
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AcoulsmoN   AND   opERATloN   oF   suBTRANSMlssloN   OR
DISTRIBUTION TO ITS HOUSEHOLD MEMBEIRE;
(iii\ TRANSPORT COOPERATIVE  -  ONE l^7HICII INCLUDES LAND
AND  SEA  TRANspoRTATloN,  LIMITED  To  SMALL  vEssErs,  As
DEFINED   OR  CLASSIFIED   UNDER  TIIE   PIIILIPPINE   MARITIMEME
LAWS,  OR  IS  ENGAGED  IN  THIE  PROVISION  OF  RELATED  OR
AUXILljARY SERVICES TO THE TRANSPORT INDUSTRY;
(iv\  WATER  SERVICE  COOPERATIVE   -   ORGANIZED  TO  OVVN,
OpERATE,ANDMANAGEwATERsysTEnMh4sFOR'ITmpROvlsloN
AND DlsTRIBUTION OF roTABLE WATER TO ITs MEMBERs AND
TIIEIR HOUSEHOLDS; AND
(v)   OTHERS,   AS  MAY  BE   APPROVED  BY  THE   AUTHORITY  IN
CoNSULTAT[oN Wr[T±+ T±+E SECTOR.
(f)  {e}  Service  Cooperative  -
PROVISION  OF  VARIOUS  KINDS  OF
ngageHD  IN  THE
MEMBEIRS OR NON-MEMBERS, AS THE CASE MAY BE. TIIESE MAY
INCLUDE:
(i)  IIEALTli  SERVICES  COOPERATIVE   -   ORGANIZED  FOR  TIIE
PRIMARY     PURPOSE     OF     PROVIDING     MEDICAL,     DENTAL,
PARAMEDIC,   DIAGNOSTIC,   AND   OTIIER   IIEALTII   SERVICES,
INCLUDING   BUT   NOT   LIMITED   TO   COOPERATIVE   IIEALTII
QRGA,r`JlzATIor\rs,    I+OsplTAljs,    cLINlcs,    pllARMAclEs,    AND
TRANSPORTING OF PATIENTS;
(ii) IIOUSING SERVICES COOPERATIVE  -  ORGANIZED TO ASSIST
OR  pROvlDE  AccEss  TO  HOusING  FOR  TIIE  BENEFIT  OF  Irs
REGULAR   MEMBERS   WIIO   ACTIVELY   PARTICIPATE   IN   THE
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SAVINGS   PROGRAM   FOR   HOUSING.   IT   IS   CO-Ol/VNED   AND
CONTROLLEDBYITSMEMBERRS;
(iii) LABOR SERVICES COOPERATIVE  -  ENGAGED IN PROVIDING
SPECIFIC   SERVICES   TO   A   PRINCIPAL   UNDER   A   LEGITIMATE
CONTRACTING OR SUBCONTRACTING ARRANGEMENT, AS MAY
BE DEFINED UNDER EXISTING LAVVS, AND IN ACCORDANCE i/VITIH
TIIE COOPERATIVE PRINCIPLES SET FORTH UNDER THIS CODE;
(iv\  PROFESSIONAL  SERVICES  COOPERATIVE  -  ORGANIZED  BY
MEMEr\4BERsi^7IIOAREENGAGEDINpROvlDINGpROFEssloNAL
SERVICES TO ITS MEMBEIRS OR NON-MEMBERRS, AS TIIE CASE MAY
BE.  ITS PRINCIPAL PURPOSE IS TO PROVIDE EMPLOYMENT AND
BuslNEss oproRTUNITIEs TO ITs MEMBERs, AND MANAGE IT IN
AccORDANCE i^rlTII cOOpERATlvE pRINclpLEs;
(v\ REAL ESTATE DEVELOPMENT AND PROPERTY MANAGEMENT
COOPERATIVE  -  ORGANIZED TO ENGAGE IN THE BUSINESS OF
DEVELOPING    REAL    E+STATE    AND    PROPERTY,    INCLUDING
OFFERING   THE   PROPERTY   FOR  SALE  OR   LEASE.   IT   IS  AI.SO
ENGAGED  IN PROPERTY MANAGEMENT AND OTHER SERVICES
PROVIDED BY A PROPERTY MANAGER, AS STIPULATED IN R.A. NO.
2ffi
(vi)  TECHNOLOGY  SERVICE  COOPERATIVE   -   ORGANIZED  TO
pROvlDE ITs MEMBERs i^rlTII sERvlcEs THAT ARE DEslGNED TO
FACILITATE THE USE OF INFORMATION TECHNOLOGY BY END-
I+sERs,  oR TO pRovlDE  spEclALlzED  TECHNOLcray-ORIENTED
SOLUTIONS BY COMBINING THE PROCESSES AND FUNCTIONS OF
SOFTWARE,  IIARDWARE,  NE`IwORKs,  TELEcOMMUNlcATIor`Ts,
AND ELECTRONlcs, AMONG OTIIEFrs;
fyij). WORKERS   COOPERATIVE   -ORGANIZED   BY   WORKERS,
I.NCLUDING THE SELF-EMPLOYED, WI.IO ARE AT TIIE SAhAI TIME
THE MEMBERS AND OWNERS OF TIIE ENTERTRISE. ITS PRINCIPAL
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PURPOSE    IS    TO    PROVIDE    EMPLOYMENT    AND    BUSINESS
OproRTUNITIEs    TO    ITs    hAI3MBERRs,    AND    MANAGE    IT    IN
ACCORDANCEIEWITIICOOPERATIVEPRINCIPLES;AND
(viii)  OTTIERS,  AS MAY BE DETERMINED BY THE  AUTHORITY IN
CONSULTATION l^7ITII THE SECTOR.
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(2)   Cdtego7.£es   q/  Cappertztr.zres    -   Cooperatives   shall   be   categorized
[according to membership and trfutorial conoidemtione] as fouows:
(a) In terms of membership, cooperative shall be categorized into:
(I.) Pn.#c¢ry -ffl|he members of which are natural persons;
(z.z.)    Seco#drry    -    [I]|The    members    of    which    are    prinar[ies]¥
COOPERATIVES AND / OR FEDERATIONS; and
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APEX  OF  COOPERATIVES  -   THE  MEMBERS  OF  l^7I+ICH  SHALL
INCLUDE ALL TYPES AND CATEGORIES OF COOPERATIVES DULY-
REGISTERED UNDER THIS CODE.
rb) IN TERMs OF BuslNEss, cOOpERATlvEs sllALL BE cLAsslFIED
INTO:
(i\ SINGLE-PURPOSE  - COOPERATIVES l^7ITII ONE MAIN LINE OF
BUSINEESSORPURPOSE,VVHICIISHALLINCLUDEUNDERTAKIKINGS
OR ACTIVITIEES RELATED TO SUCII BUSINESS OR PURPOSE; AND
(ii) MULTI-PURPOSE  -  COOPERATIVES ENGAGED IN TWO (2) OR
MORE SEPARATE AND DISTINCT LINES OF BUSINESS.
/c\  IN  TERMS OF  ASSETS,  COOPERATIVES SIIALL  BE  CLASSIFIED
INTO:
(i\ MlcRO  -  cOOpERATlvEs wlTrl TOTAL AssETs up TO TIIREE
MILLION PESOS ffHP3,000,000.00);
(ii\ SMALL - cOOpERATlvEs i^7ITI-I TorAL AssETs GREATER TIIArN
TIIREE  MILLION  PESOS  fl?I+P3,000,000.00\  TO  FIFTEEN  MILLION
PESOS fl'IIfl5,000,000.00);
(iii\  MEDluM  -  cOOpERATlvEs i/vlTII TorAL  AssETs GREATER
TII"AN   FIFTEEN   MILLION   PESOS    ffllp15,000,000.00\    TO   ONE
HUNDRED MILLION PESOS ffHP100,000,000.00\; AND
(iv\  LARGE  -   cOOpERATlvEs  i^7ITII  TorAL  AssETs  GREATER
THAN ONE HUNDRED NILLION PESOS ffHP100,000,000.00).
{d} [{b)1 In terms of territory, cooperatives shall be categorized according
to areas of operation[s] which may or may not coincide with the political
subdivisions of the country.
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ALRT.  24.  Functions  Of A  Federation  Of  Cooperatives.   -   A  federatLon  Of
cooperatives shall undertake the following functions:
(a)    xxx
®xxx
(c)     xxx
(d)    xxx
(e)    xxx
(f)     xxx
(g)    xxx
A  federation  of  cooperatives  may  be  registered  by  carrying  out  the
formalities for registration of a cooperative.
Registered cooperatives may organize OR TOIN a federation [according to
the  type  of  busincoo  cictivity  cngagcd  in  by  th
ESSENTIAL To TrlEIR BuSINESS opERATloNS.
THAT  IS
AR:I.     Z4-A.     MEMBERSHIP     OF     FOREIGN     COOPERATIVES     IN
F£D£RAHONS.  -  FOREIGN COOPERATIVES MAY INVEST, PARTNER
VI+^rlTH,oRBEcoMEMEMBERsoFFEDERATloNs;pRovTD£D,TIIAT
THEY   ARE   RECOGNIZED   BY   INTERNATIONAL   COALITIONS   OF
COOPERATIVES   OR   BY   TIIE   RELEVANT   AUTHORI'IY   IN   TIIEIR
COUNTRY   OF   ORIGIN,    AS   1/VELL    AS   REGISTERED   1^7ITH   TIIE
AUTIIORITy; pROvlD£D, FLrRTH£R, THAT TIIEy cOMPLy i^rlTII ALL
RELEVANT   LAiIVS   ALLoVvING   TIIEn4   To   Do   BuslNEss   IN   TIIE
PHILIPPINES. THE DETAILS OF TIIEIR INVESTMENT, PARTICIPATION,
oR MEMBERSIIIp SHALL BE LEFT To TIIE DISCRETloN oF TIH LacAL
FEDERATION.  FURTHER  DETAII.S  SHALL  BE  LAID  Dol^7N  IN  THE
IMPLEMENTING RULES AND REGULATIONS (IRR) OF THIS CODE.
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FOREIGN  COOPERATIVES  VVHO SHALL  TRANSACT  VITH  LOCAL
FEDERATIONS MUST COMPLY VVITH PHILIPPINE TAXATION LAWS.
XXX
SEC. 3. Article 26 of Chapter Ill on Membership of the same Code is hereby further
amended to read as follows:
``ART 26. K{.7ids a/Membcrsfez.p.  - 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
aassociate 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 bylaws may provide:
P7ior7l.did,   That   an  associate   member  who   meets  ALE   [the   minimum]
requirements of regular membership, continues to patronize the cooperative
for two (2) years, and signifies this/her] RE intention to remain a member
shall be considered a regular member.
Hoi^rEVER,  IN  TrlE CASE oF FORMER NATURAL-BORN  FILlpINo
CITIZENS  VVHO  AIRH  ASSOCIATE  MEMBERS,  TIIEIR  ELEVATION  TO
REGULAR  MEMBERSIIIP  SIIALL  BE  LEFT  TO  TIIE  BYLAl^7S  OF  THE
INDIVIDUAL COOPERATIVES.
A  cooperative  organized  by  minors  shall  be  considered  a  laboratory
cooperative and must be affiliated with a registered cooperative. A laboratory
cooperative shall be governed by special guidelines to be promulgated by the
Authority.
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XXX
SEC. 4. Articles 35, 36, 37, 39, 40, and 44 of Chapter IV on Administration of the
same Code, are hereby further 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.
In the case of cooperative banks, the quorum shall be as provided in Article 99
of this Code.  In the case of electric cooperatives registered under this Code, a
quorum, unless otherwise provided in the bylaws, shall consist of five per centum
(5°/o) of all the members entitled to vote.
THE ANNUAL GENERAL ASSEMBLY h4EETING MAY BE CONDUCTED
TI+ROUGH A FACE-TO-FACE OR VIRTUAL MEETING, OR A COMBINATION
OF  BOTH,  SUBJECT  TO  TIIE  RULES  ON  TIIE  SENDING  OF  NOTICES,  AS
PROVIDED IN TIIE COOPERATIVE'S BYLAWS.
ART. 36. Vote.7ig Sysfe7#. - Each member of a primary cooperative shall have only
one  (1)  vote.  In  the  case  of  members  of  [cecondary  or  tcndary  coopcrativco]
COOPERATIVE   FEDERATIONS,   they   shall   PROVIDE   IN   TIIEIR   BYLAWS
IIVIIETHER TO IMPLEMENT INCENTIVE VOTING OR SIIARE VOTING.
|N T|IE CASE oF INcm`ITIVE VoTING, MEMBER-CoopERATlvES SI+ALL
hhave one (1) basic vote and as many incentive votes as provided for in the bylaws,
WIIICII IN N0 CASE, SHALL [Tb'jit I.ct tc] exceed five (5) votes.
IN  THE  CASE  OF  SHARE  VOTING,  THE  VOTING  RIGHTS  OF  THE
MEMBER-COOPERATIVES SHALL BE PROPORTIONATE TO THE NUMBER OF
THEIR PAID-UP SHARES, SUBJECT TO THE LIMITATION IMPOSED UNDER
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ART. 73, AND PROVJD£D, THAT AT LEAST ONE-TIIIRD (1/3\ OF THE SEATS
IN  TIIE  BOARD  SHALL  BE  RESERVED  FOR SMALL SHAREHOLDERS.  The
votes cast by the delegates shall be deemed as votes cast by the members thereof.
A;RT. 87.  Composition and Term of the Board Of Directors.  -Urhess oth!e:rwise
provided  in  the  bylaws,  the  direction  and  management  of  the  affairs  of  a
cooperative shall be vested in a board of directors which shall be composed of not
less  than  five  (5)  nor  more  than  fifteen  (15)  members  elected  by  the  general
assembly for a term fixed in the bylaws but not exceeding a term of two (2) years
and shall hold office until their successors are duly elected and qualified, or until
duly removed for cause.
FOR COOPIERATIVE FEDERATIONS, A MEMBER{OOPERATIVE SHALL
IIAVE  ONLY  ONE  REPRESENTATIVE  ELIGIBLE  TO  RUN  AND  BE  VOTED
uupON  as  DIRECTOR,  IRREspECTlvE  OF  THE  MEMBER{OOpERATlvE's
SIIARE CAPITAL HOLDINGS UNDER THE TIIIRD PARAGRAPH OF ART. 73.
A;RF . 98. Powers Of the Board of Directors. - x x x.
ART.  39.  D!.recfo7's.  -  (1)  Any  member  of the  cooperative who,  under  the
bylaws  of  the  cooperative,  has  the  right  to  vote  and  who  possesses  all  the
qualifications and none of the disqualifications provided in the laws or the bylaws
shall be eligible for election as director, SUBTECT TO THE LIMITATION IhffosED
BY TIIE SECOND PARAGRAPH OF ART. 37.
(2) x x x
(3) x x x
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(4) x x x
AR:I. 40. Meeting Of the Board and Quorum Requirement. -
(1) x x x
(2) x x x
(3) x x x
(4) x x x
(5) EACII DIRECTOR SIIALL ONLY IIAVI ONE VOTE IN THE  BOARD,
i^rllETHER  IT  BE  A  PRIMARy  COOPERATlvE  oR  A  COopERATlvE
FFEDERATION,   IRRESPECTIVE   OF   TIIE   MEMBER{OOPERATIVE'S
SI-IARE  CAPITAL  HOLDINGS  UNDER  TIIE  TIIIRD  PARAGRAPII  OF
ART. 73.
A;RT. 41. Vacaney in the Board Of Directors. -x x x.
A:RT . q2. Officers of the Cooperative. - x x x.
A;RI . 4:3. Committees Of Cooperatives. - x x x.
A;B:I.  44.  Functions,  Respons{bihiies,  and  Training  Requirements  Of  Directors,
Officers, and Committee Members. - x x x.
A;RT . 44-A. MANDATORY TRAINING AND ACCREDITATION OF TRAINING
S£Rvrc£    PROVIDERS.     -     IT    SHALL    BE    MANDATORY    FOR    ALL
COOPERATIVES   TO   PROVIDE   TRAINING   FOR   THEIR   OFFICERS   AND
MEMBERS   FOR   THEIR   CONTINUED   DEVELOPMENT   AND   PERSONAL
INIROVEMENT.   IN   THIS   REGARD,   ONLY   COOPERATIVES   MAY   BE
ACCREDITED  BY  TIIE  AUTHORITY  AS  TRAINING  SERVICE  PROVIDERS
(TSPs). IN THE EVENT TIIAT THE COOPERATIVE IS UNABLE TO PROVIDE
SUCII  TRjAINING  ON  ITS  Ol^7N,  IT  MAY  ENGAGE  TIIE  SERVICES  OF  A
FEDERATION oR UNION DULy AccREDITED By TIIE AUTIIORITy As A rsp;
PROVIDED,  THAT  A FEDERATION SIIALL ONLY  PROVIDE TRAINING  IN
ACCORDANCE WITH ITS BUSINESS OR SPECIALIZATION, A UNION SIIALL
PROVIDE  BASIC  AND  O`IHER  TRAINING  THAT  BENEFITS  THE  SECTOR;
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pRovrD£D, FURTH£R, TrlAT NOTHING PRECLUDEs FEDERATloNs FROM
OFFERING BASIC AND OTHER TRAINING PROGRAMS TO THEIR MEMBEIRS,
OR FROM COLLABORATING l^7I'ITI UNIONS AND OTIIER FEDERATIONS IN
THIS REGARD.
UPON TIIE EFFECTIVITY OF THIS ACT, THE AUTHORITY SHALL CEASE
TO ACCREDIT NON{OOPERATIVE ORGANIZATIONS AS TSPs.
XXX
SEC 5. Articles 58, 60, 61, and 62 of Chapter V on Responsibilities, Rights, and
Privileges of Cooperatives of the same Code, are hereby further amended to read
as follows:
`` A;RI . 58. Instrument f tor Sedry or Wage Deduction. -
(1) A member of a cooperative may, notwithstanding the provisions of existing
laws  to  the  contrary,  execute  an  instrument  in  favor  of  the  cooperative
authorizing his employer to deduct from his/ her salary or wages, commutation
of  leave  credits,  and  any  other  monetary  benefits  payable  to  him  by  the
employer and remit such amount as may be specified AS SAID MEMBER'S
CONTRIBUTION   TO  THE   CAPITAL  OF   THE   cOOpERATlvE,   OR   in
satisfaction of a debt or other demand due from the member to the cooperative.
(2) x x x
(3) x x x
(4) x x x
(5) x x x
(6) TIIE MEMBER MAY VITHDRAW SUCII CONSENT AT ANY TIME AND
FOR ANT REAsoN, wlllcll sllALL Arso BE PUT IN WRITING.  ANT
PERSON VVHO ACTS CONTRARY TO TIIIS PROVISION SHALL BE IIELD
LIABLE UNDER THIS CODE AND OTIIER LAWS, AS TIIE CASE MAY BE.
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2           ALRI. 59. Primary Lien. -x x x.
3           ART.  60.  Tax  Treatment  of  Cooperatives  AND  COOPERATIVE  MEMBERS'
4      BENEFITS FROM COOPERATIVES. -Duly registered cooperatives under this cede
5     which do not transact any business with non-members or the general public shall not
6      be sutryect to any taxes and fees imposed under the internal revenue laws and other
7      tax  laws.  Cooperatives  not  falling  under  this  article  shall  be  governed  by  the
8      succeeding section.
9
10           PATRONAGE REFUNDS AND INTEREST ON SHARE CAPITAL DISTRIBUTED
11      8¥  TIIE  cooPERATlvE  TO  ITS  MEMBERS,  AND  n`ITEREST  ON  MEMBERS'
12      DEPOSITS SHALL LIKEWISE NOT BE SUBTECT TO ANY TAX AND FEES IMPOSED
13UNDERTIIENATIONALINTERNALREVEEVENUECODE,ASAMENDED,AND
14      o'ITmR TAX LAws.
15
16           ART.   60-A.    C£RTIFTCIAT£   OF   TAX   £X£JVIPTTON.    -    THE   BUREAU   OF
17      INTENAL REVENUE roIR) SHALL IMMEDIATELy IssuE TrlE CERTIFlcATE OF
18      TAX EXEMPTION (CTh) UPON SUBMISSION, UNDER OATH BY WAY OF  AN
19AFFIDAVIT,OFTHEFOLLol^/INGDOCUMEMENTS:
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a.   COOPERATIVE CERTIFICATE OF COITLliANCE;
b.   REGISTRATION CERTIFICATE;
c.   ARTICLES OF COOPERATION AND BY-LAWS; ANND
d.  PRECEDING yEAR's FINANaAL sTATEMENTs, DULy CERTIFIED By A
LICENSED CERTIFIED PUBLIC ACCOUNTANT.
IN  NO  CASE  SHALL  TI+E  SUBMISSION  OF  TIIE  TAX  IDENTIFICATION
29      NUMBERs  oF  THE  MEMBERs  BE  REQulRED  As  A  cONDmoN  FOR  TI-IE
30      ISSUANCEOFTHECTE.
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2           ART. 61. TAX AND OTHER £X£MPTTONS.  -Cooperatives transacting business
3      with both members and non-members shall not be sutryect to tax on their transactions
4     with members. In relation to this, the transactions of members with the cooperative
5      shall not be subject to any taxes and fees, including but not limited to final taxes on
6     members' deposits and dc"mentary sTAMp tax. Notwithstanding the provisions of
7     any law or regulation to the contrary, such cooperatives dealing with non-members
8      shall enjoy the following tax exemptions:
9
4EE exempt from all
10           (1) Cooperatives
11                      ifLcrc  +uT`Lfu-I  T{
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national, city, provincial, municipal, or barangay taxes of whatever name and
nature.  Such cooperatives  [shall  bc]  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  AI.SO  EXEMPT  FROM  ANY  TAX  ON  I.OCALLY
PURCHASED MACIIINERIES, EQUIPMENT, AND SPARE PARTS.  All tax-
free importations AND THOSE PURCIIASED 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.
rates
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clcissificati:
AIJithcrity;
coopcmtive rmy bc ta.t dcductiblc.
{3](2} All cooperativesL rcgardlcoo of the amount of ciccunuhated rcocrvca and
undivided not mvingr oha]l bc] ABE exempt from payment of local taxes and
ttaxes on transactions with banks and insurance companies: Prods.did, That all
ssales or services rendered for non-members shall be sutryect to the applicable
percentage  taxes  except  sales  made  by  producers,  marketing,  or  service
cooperatives: Proz7£ded, ¢rfher, That nothing in this article shall preclude the
examination  of  the  books  of  accounts  or  other  accounting  records  of  the
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cooperative by duly authorized internal revenue officers for internal revenue
tax purposes only, after previous authorization by the Authority.
(3) In areas where there are no available notaries public, the judge, exercising his
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
acknowledgement of articles of cooperation and  instruments of loan from
cooperatives    not    exceeding    Five    E]]Hundred    [q_Thousand    [p]Eesos
(PE500,000.00).
(4) 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
[h]Hundred fflEifty ffl_Thousand tp|Eesos (P±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 his duties
and obligations.
(5) Cooperatives shall be exempt from the payment of all court and sheriff's fees
payable to the Philippine Government for and in connection with all actions
brought under this Code,  or where  such actions [is| ABE brought by  the
Authority before the court, to enforce the payment of obligations contracted in
favor of the cooperative.
(6) 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: Pror7i.did, That a certification of the Authority showing that the net
assets of the cooperative are in excess of the amount of the bond required by
the court in similar cases shall be accepted by the court as a sufficient bond.
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(7) Any security issued by cooperatives shall be exempt from the provisions of the
Securities Act provided such security shall not be speculative.
ART. 62. PRIVILEGES OF COOPERATIVES. - Cooperatives registered under this
Code shall, notwithstanding the provisions of any law to the contrary, SI]ALL AI]SO
be [alse| accorded the following privileges:
(1) x x x
(2) x x x
(3) x x x
(4) x x x
(5) x x x
(6) x x x
(7) x x x
(8) x x x
(9) x x x
(10)            Cooperatives
irmtnimcntalitico, including govcrnmcnt owned and controHcd corpomtione
Bhall be exempt from prcquaJificcLtion bidding requirement8, notwithotanding
the provioione of Republic Act No. 9184, othcowioc lenoim ao the Government
Procurcmont  Act]  SIIALL  BE  CONSIDERED  AS  A  SPEaAL  CLASS  OF
BIDDERS UNDER R.A. NO. 9184, OR THE GCIVERNMENT PROCUREMENT
REFORMATION  ACT  (GPRA\,  WIIO  SHALL  BE  PREFERRED  IN  THE
PROCUREMENT OF GOVERNMENT PROTECIS: PROVTD£D, TIIAT TIIEY
ARE  QUALIFIED  TO  PERFORM  TI+E  SERVICES  NEEDED  AND  FULLY
cOMPLy i^rlTII TIIE pROcuREMENT pROcEss UNDER TIIE LAw.
TAKING   INTO   CONSIDERATION    THE    SPECIAL   NATURE    OF
cOOpERATlvEs  AND  TrlE  puBLlc  roLlcy  OF  suppORTING  TI+E
28


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7
8
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25
26
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28
29
30
COOPERATIVE          MOVEMENT,          GOVERNMENT          EMPLOYEES'
COOPERATIVES SHALL NOT BE DISQUALIFIED FROM PARTICIPATING
IN PROCUREMENT PROTECTS WITHIN TIIEIR MOTIIER AGENCIES, AS
LONG AS THEY ARE QUALIFIED TO PROVIDE SUCH SERVICES.
FURTHER, IN RELATION TO SECTIONS 43 AND 48 0F R.A. NO. 9184,
AS    MAY    BE    APPLICABLE,    REGARDING    THE    PURCHAASE    OF
DDOMESTlcALLy-pRODucED      AND      -MANUF ACTu+uREro      GOODs,
SUPPLIEES,  AND  MATERIAI.S,  THE  PROCURING  ENTITY  SHALL  GIVE
FURTHI]R PREFERENCE TO DULY REGISTERED COOPERATIVES UNDER
TIIIS   CoDE;   PRovrD£D,   TIIAT   TIIE   CooPERATlvE   MEETs   THE
ELIGIBILITY REOUIREMEI\ITS OF TIH PROCURING ENTTTY, AS WELL AS
TIIE OUALI'IY AND QUANTITY REQUIRED FOR SUCII PROCUREMENT;
(11)             xxx
(12)             xxx
(13)             x x x
(14)  TIIE  RELEVANT  REGULATORY  BODIES,  GOVERNMENT  AGENCIES,
AND  LGus  srlALL  Nor  DlscRn\4INATE  AGAINST  DULy  REGlsTERED
COOPERATIVES SEEKING  ACCREDITATION  AS SERVICE PROVIDERS, OR
SEEKING  TO  ENGAGE  IN  A  PARTICULAR  BUSINESS:  PROVIDED,  THAT
TIIEY POSSESS ALL OTIIER OUALIFICATIONS UNDER THE LAW.
ANY  PERSON  VVHO  ACTS  CONTRARY  TO  TIIIS  PROVISION  MAY  BE
HELD LIABLE UNDER THIS CODE AND ALL OTHER RELEVANT LAWS AND
ISSUANCES; AND
/15`   COOPERATIVES   SHALL   IIAVI   THE   RIGIFT   TO   EFFECTIVE   AND
REASONABLE    PARTICIPATION    IN     DECISION-MAKING    PROCESSES,
INCLUDING REPRESENTATION IN TI+E GOVERNMENT."
XXX
29


1
2          SEC 6. Article 67 of chapter VII on Dissolution of cooperatives of the same code,
3      is hereby further amended to read as follows:
4
5           `` ALRT. 67. Dissolution by order of the Authority.  -The ALuthorrty rr\ay suspend or
6      revoke, after due notice and hearing, the certificate of registration of a cooperative on
7      any of the following grounds:
8            (1)xxx
9            (2)xxx
10            (3) xxx
11             (4) xxx
12          (5) Failure to meet the required minimum number of members in the cooperative.
13
14          TIIE    DEclsloN    OF    TrlE    AUTHORITy    ON    THE    suspENsloN    OR
15      REVOCATION OF THE CERTIFICATE OF REGISTRATION OF A COOPERATIVE
16      MAY BE APPEALED TO THE OFFICE OF TIIE SECRETARY OF THE DTI VVITIIIN
17      THIRTY (30\ DAYS FROM THE RECEIPT OF THE ORDER OF THE AUTIIORITY.
18      THE DECISION OF THE DTI SECRETARY IS FINAL AND EXECUTORY."
19                                                                                       xxx
20
21
22          SEC. 7. Articles 72, 73, and 75 of chapter VIII on capital, Property, and Funds of
23      the same code, are hereby further amended to read as follows:
24
25           ``ART. 72. Cdy.£¢Z Sowrces.  -Cooperatives registered under this code may derive
26      their capital from any or all of the following sources:
27           (1) Members' share capital
28           (2) Loans and borrowings including deposits FROM MEMBERS;
29            (3) xxx
30            (4) xxx
30


1
2          Upon dissolution, such donated capital shall be sutyect to escheat.
3
4           ALRT.  73.  Lindtations  on  Share  Capital  Holdings.   -   No  rmerriber  of  a  prirmary
5      cooperative other than a cooperative itself shall own or hold more than ten per centum
6      (10%) of the share capital of the cooperative.
7
8          Where a member of a cooperative dies, his heir shall be entitled to the shares of the
9      decedent prirfu.deb, That the total [charc holding] SHARHioLDINGS of the heir does
10      not exceed ten per centum (10%) of the share capital of the cooperative: Proz71.did,
11     rty7.#ie7., That the heir qualif[]q!E§ and is admitted as A member of the cooperative:
12      P7ioz7£ded, f7t¢Zzy, That where the heir fails to qualify as a member or where his total
13      [oharc  holding]  SI-IAREIIOLDINGS  exceed[s]  ten  per  centum  (10%)  of  the  share
14      capital, the share or shares in excess will revert to the cooperative upon payment to
15      the heir of the value of such shares.
16
17           FOR ALL COOPERATIVE FEDERATIONS, THE SHjARE CAPITAL HOLDINGS
18      OF  ANT  MEMBER  sllALL  Nor  ExcEED  FORTy  PERCENT  (40%\  OF  THE
19      SUBSCRIBED SHARE CAPITAL OF THE COOPERATIVE FEDERATION.
20
21           A:RI. 74. Assigri:rent of share capital contribution or Interest. -x x x
22
23           ART. 75. Cdy.£¢Z Bw!.Zd-Llp.  -The bylaws of every cooperative shall [providc for]
24      REQUIRE a reasonable and realistic capital build-up AND/OR DEPOSITS BUILD-UIP
25      program to allow the continuing growth of the members' investment AND SAVINGS
26      DEPcrslrs  in  their  cooperative  as  their  own  economic  conditions  continue  to
27      improve."
XXX
31


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2
3
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5
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7
8
9
10
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12
13
14
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26
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30
SEC. 8. Article 86 of Chapter X on Allocation and Distribution of Net Surplus of the
same Code, is hereby further amended to read as follows:
``ART. 86.  Order a/ D!.sfro.bwfl.o".  -  The net surplus of every cooperative shall be
distributed as follows:
(1) An amount for the reserve fund which shall be at least ten per centum (10%) of
net surplus: Proui.did, THAT LARGE COOPERATIVES MUST SECURE ONE
HUNDRED PER CENTUM /100%\ OF TIIEIR RESERVE FUNDS IN DEPOSIT
INSTRUMENTs,  AT  LEAsr EIGHTy PER CENTUM  (8o%)  FOR  MEDluM
COOPERATIVES, AND AT LEAST FIFTY PER CENTUM (50%\ FOR NICRO
AND SMALL COOPERATIVES: PROVIDED, FURTH£R, That, in the first five
(5) years of operation after registration, this amount shall not be less than fifty
per centum (50%) of the net surplus:
(a) The reserve fund shall be used for the stability of the cooperative and to meet
net losses in its operations, INCLUDING LOSSES INCURRRED DURING A
pANDENIc, A STATE OF EnmRGENcy, AND OTHER sucll FORCE
MATEURE:  pROvTD£D,  TIIAT  IF  AI\nf  oF  TIH  AFOREMENTIONED
EVENTs oCCuR, NECESSITATING TI-IE USE oF Hm RERERVE FUND,
COOPERATIVES   MAY   USE   NOT   GREATER   THAN   FIFTEEN   PER
CENTUM
OF   THE   LATTER   TO   MITIGATE   THE   LOSSES
INCURRED,   AS   MAY   BE   APPROVIED   OR   CONFIRMED   BY   THE
GENERAL ASSEMBLY OF TI-IE COOPERATIVE, AS THE CASE MAY BE.
Thegeneralassemblymaydecreasetheamountallocatedtothereservefund
when the reserve fund already exceeds the share capital.
Any sum recovered on items previously charged to the reserve fund shall be
credited to such fund.
a) x x x
(c)  x x x
32


(i)  x x x
(ii) x x x
3
4          (2) An  amount  for  the  CcOPERATIVE  E[e|ducation  and  THraining  F[flund
5
6
7
8
9
(CETF), shall not be more than ten per centum (10%) BUT NOT LESS TITAN
HVE PER CENTUM (5%) of the net surplus. The bylaws may provide that
certain fees or a portion thereof be credited to such fund. The fund shall provide
for the training, development, and OTHER similar [ether] cooperative activities
geared towards the growth of the cooperative movement:
10
11          ``(a) Half of the amounts transferred to the [cducation and training fund] or
12      annually under this subsection shall be spent by the cooperative for education and
13      training purposes; while the other half [Hray] SHALL be remitted to a union A}[E2£or
14     federation chosen by the cooperative or of which it is a member, OF WHICH, NOT
15      MORE TITAN EIGI+Ty PER CENTUM  (8o%\  BUT NOT LEss TrlAN FIFTy PER
16      CENTUM (50%) MUST REDOUND TO TIIE BENEFIT AND DEVELOPMENT OF
17      SAID MEMBER COOPERATI+VES, SUCH AS, BUT NOT LIMITED TO TRAININGS,
18      SEMINARS, AND OTIIER REELATED ACTIVITIES. FAILU+RE OF THE MEMBER-
19      COOPERATIVE TO REMIT SUCII  AMOUNT TO THE  FEDERATION  AND/OR
20      UNION SHALL RESULT IN APPROPRIATE SANCTIONS, SUCH AS SUSPENSION
21      0F PRIVILEGES OR NON-ISSUANCE OF TIIE CERTIFICATE OF COMPLIANCE,
22      AMONG OTHERS, AS MAY BE DEaDED BY THE AUTHORITY. The said union or
23      federation shall  submit to the  Authority  and  to  its contributing cooperatives  the
24      following schedules:
25          (i)        List  of  cooperatives  which  have  remitted  their  respective  [Coopcmtivc
26                      Education and Training Funds ocEIFD];
27           (ii)       Business consultancy assistance to include the nature and cost;
28          (iii)     Other   training   activities   undertaken   specifying   therein   the   nature,
29                       participants, and cost of each activity.
30
33


1            (b)xxx
2
3           (3) An amount for the [e]C_ommunity [d]E2evelopment [flEund (£E2E} which shall
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
not be less than three per centum (3%) of the net surplus. The  [ccrruTL.Eriity
devdopment fund] QE shall be used for projects or activities that will benefit
[thc  community  whcrc  the  cooperative  operatco]  OR  AID:  0  DIFFERENT
COMMUNITIES  AROUND  TIIE  PHILITPINES,  ESPECIALLY  THOSE  IN
NEED  DUE  TO  NATURAL  DISASSTERS,  STATES  OF  EMERGENCY,  OR
OTHER slMILAR clRcuMSTANCEs; OR un PARTNER INTERNATIONAL
COOPERATIVES.   HOWEVVIR,   PRIORITY   MUST   BE   GIVEN   TO   THE
COMMUNITY      i/VIIERE      TIIE      COOPERATIVE      OPERATES.      THE
COOPERATIVES SHALL HAVE FULL AUTIIORITY TO DECIDE ON VVHICH
PROTECTS  THE  CDF  SI-IALL  BE  UTILIZED,  BASED  ON  TIIE  NEEDS OF
TIIEIR  corm4uNITIEs  OR  O'IHER  pARTNERs.  THE  CDF  MusT  BE
UTILIZED l^7ITHIN ONE (1) YEAR FROM THE DISTRIBUTION OF THE NET
SURPLUS.  FAILURE  TO  DO  SO  VVILL  SUBJECT  THI=  COOPERATIVE  TO
APPROPRIATE    PENALTIES,    AS    MAY    BE    DETERMINED    BY    THE
AUTHORITY.
19
20          (4) An optional fund, a land and building, and any other necessary fund the total
21      of which shall not exceed seven per centum 7%). THIS FUND MAY ALsO BE USED
22      FOR TIIE BENEFIT OF ITS MEMBERS AND EMproyEEs UNDER ExcEprloNAL
23      CIRCUMSTANCES SUCH AS TIIE OCCURRRENCE OF A PANDEMIC, CRISIS, OR
24      FORCEMA|EURE,
25
26          HOvvEVER, IF THE OprloNAL FUND Is INsuFFlclENT, THE cOOpERATlvE
27      MAY CHARGE ANY DEFICIENCY TO DIRECT EXPENSES.
28
29             ``(5) xxx
30
34


1            (a) xxx
2          ® xxx
3            (c) xxx
4           (d) xxx
5
6          SEC. 9. Article 109 of the same Act is hereby amended with the insertion of a new
7      subsection 1  and 2, and the renumbering of subsections 1, 2, 3, 4, 5, 6, 7 and 8 as
8      subsections 3, 4, 5, 6, 7 and 8. Article 109 shall now read as follows:
9
10          ``ART.109.  De¢"z.fro# nd  change.  -A public service cooperative, within the
11      meaning of this code, is one organized to render public services as authorized under
12      a franchise  or certificate  of public  convenience  and  necessity  duly  issued  by  the
13      appropriate government ageney. Such services may indude the following:
14           ``(1) WATER SUPPLY OR DISTRIBUTION;
15            `` (2) HEALTH SERVICES;
16           `` ([1]3) Power generation, transmissiorty and/ or distributioru
17           ``(I?]4) Ice plants and cold storage services;
18          ``([3]5)     Communication     services,     including     telephone,     telegraph,     and
19      telecommunications, AND OTHER VALUE-ADDED SERVICES;
20          ``([4]6)  Land  and  sea  transportation  cooperatives  for  passenger  and/or  cargo.
21      Transport cooperatives organized under the provisions of Executive order No. 898,
22      Series of 1983, shall be governed by this chapter;
2 3           `` ([5]7) Public markets, slaughterhouses, and other similar services; and
24           ``([6]8) Such other types of public service as may be engaged in by any cooperative.
25      Such  cooperative  shall  be  primarily  governed  by  this  Chapter  and  the  general
26      provisions of this code insofar as they may be applicable unless they are inconsistent
2 7      herewith.
XXX
35


1          SEC.10. Articles 115 and 117 of chapter xv on credit cooperatives of the same
2      Code, are hereby further amended to read as follcIVs:
3
4            ``ART.   115.   De¢7".fro7t   ¢7id   Oky.ec fr.tres.   -   A   credit  cooperative   is   a   financial
5      organization OR INTERMEDIARY owned and operated by its members with the
6      following otryectives:
7
8
9
10
11
12
(1)  x x x.
(2) x x x.
(3) x x x.
ALRT . T16. Organization and Registration. - x x x.
ART. 117. Org¢7il.zafl.o7z¢Z L{.7ihage.  -  Credit cooperatives may organize chapters or
13      subsidiaries, or join leagues and federations for the purpose of providing commonly
14      needed essential services including but not limited to the following:
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
(1) Interlending of surplus fund;
(2) Mutual benefits;
(3) Deposit guarantee;
(4) Bonding;
(5) Education and training;
(6) Professional and technical assistance;
(7) Research and development;
(8) Representation; H
(9) STABHJITY FUND; AND
(10) Other services needed to improve their performance.
XXX
36


1           SEC.11. Article 130 of chapter XVII on Electric cooperatives of the same code, is
2      hereby amended to read as follows:
3
4             "ART.130.   TLPw^z+Cfr##+c#   O##+ctif  €f  EL^£fr±.Li   r'^^--A-.~A.~4        H.r`r+Tif  f-.ttftr.^r_r`rf`_7_~_
5
6
7
8
}: LL'7t#a^£,  i L[`Lft +LLr`Lcy s.hifil riot
+ B_OLE OF THE NATIONAL
9      ELECTRIFlcATloN   ADMINlsTRATION.   -   ALLL   ELECTRIc   coom:RAmvErs
10      MUST REGISTER WITH THE AUTHORITY, AS REQUIRED UNDER THIS CODE_.
11      THIS        NOTWITHSTANDING,        THE        NATIONAL        ELECTRIFICATION
12      ADMINISTRATION  (`NEA)  RETAINS  JURISDICTION  WITH  REGARD  TO  THE
13      AUTHORITY  AND  REGULATION  OVIR  TIIE  TECHNICAL  ASPECTS  OF  AN
14      ELECTRIC COOPERATIVE.
15
XXX
16
17           SEC.12.  Article 135 of Chapter XVIII on Miscellaneous Provisions of the same
18      Code, is hereby further amended to read as follows:
19
20            ``ART.135. GoapJiericc l^ff£Ji ofha ljzT{Js.      [Thc Labor code and all other laLbor hw6,
21
22      other lawo and exccutivc  ordcm ohall apply to]A±[ cooperatives duly registered
23      under this code[] SIIALL, AT ALL TIMES, BE SUBJECT TO ALL RELEVANT LAWS,
24      RULES  AND  REGULATIONS,  AS  WELL  AS  ISSUANCES  AND  DIRECTIVES
25      IssuED  By  A  DULy  AUTHORlzED  GOvERNMEr`IT  REGULATORy  BODy  IN
26     EXERclsE   OF    ITs   TURlsDlclloN.   uNLEss   OTrlERwlsE   spEclFlcALLy
27      COVERED BY PROVISIONS OF THIS CODE.
28
29           THIS  NOTl^7ITHSTANDING,  COOPERATIVES  THAT  A+RE  REGISTEIRED  OR
30      APPLYING FOR SPECIFIC LICENSES WITH OTHER REGULATORY AGENCIES
37


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2
3
4
5
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26
27
28
29
The Authority may motu proprio, initiate complaints for violations of
this provision.
(2) Any person who willfully attempts in any manner to evade or defeat tax in
violation of the provisions of Articles 60 and 61 of this Code shall, in addition
to other penalties provided by law, upon conviction thereof, be punished by a
fine of not less than Thirty |Hhousand P[p]esos (E±±P30,000.00) but not more
than  [Onc  Hundred  Thoumnd  Pccoo  (PhFT00,000.00)I  TlmEE  HUNDRED
THOUSAND PESOS fl?hp300,000.00` and suffer imprisonment of not less than
two (2) years but not more than four (4) years: Probe.did, That the conviction or
acquittal obtained under this article shall not be a bar to the filing of a civil suit
for the collection of taxes;
(3) x x x
(4) x x x
(5) x x x
(6) x x x
Oxxx
The cooperative or any of its members can file a case against any officer
or  employee  of  the  H3urenu  of  Interrml  Rcvcnue]  BIB  or  of  any  other
governmentageneywiththeOmbudsman,theCivilServiceCommission,other
appropriate government agency or the courts of law.
In case of violation of any provision of this Code, the individual or
individuals,  and  in  the  case  of  organizations  or  government  agencies,  its
officers, and directors shall, upon conviction by a Court, each suffer a penalty
of not less than two (2) years but not more than five (5) years QE imprisonment
or  a  fine  in  the  amount  of  not  less  than  Twenty  |[qhousand  Etl?]esos
q?EE20,000.00), or both at the discretion of the court. In the case of a public
39


1     MUIr. cOMPLy wlTH TIH GOvERNANCE REOulREMENTs OF SAID AGENc¥
2      TO OPERATE OR FUNCTION ASSUCH.''
3xxx
4
5           SEC.13. Articles 139,140,141, and 144 of chapter XIX on Final provisions of the
6     same code, are hereby further amended to read as follows:
7
8            ``ART.139.  J7#pzcme7ife.ng RWJcs  ¢7!d RcgrtJ¢froHs.   -WITHIN  NINETY  (90)  DAY_§
9      FROM THE EFFECTIVITY OF THIS ACT, ffithe  Authority shall issue rules and
10      regulations  to  implement
11      AMENDMENTS  THERETO
12       paraf=ci3rL £1:all rLct aDDlt,' t{
this  Code,  INCLUDING  THE
13      cxprco8Iy dcoigrmtco particular govcmment oigoncica which ohall frouc the rcgulatione
14      called  for  by  any  provision  of  this  Cede.I  WITIEN  TTH  SARI  PERIOD,  TTH
15      PARTICULAR  GOVERNMENT  AGENCIES  EXPRESSLY  DESIGNATED  UNDER
16      SPECIFIC PROVISIONS IN THIS CODE SHALL ALsO ISSUE THE REGULATIONS
17      CALLED FOR BY SUCH RESPECTIVE PROVISIONS.
18
19           ART.140. Pc7[¢Z prow.sg.o7ts. -The following acts or omissions affecting cooperatives
20      are hereby prohibited:
21           (1) The use of the word `cooperative' by any person or of persons or organizations,
22
23
24
25
26
27
28
29
unless duly registered as a cooperative under this Code except as provided f or
under Article 130 hereof.  In case of violation, the individual  or individuals
concerned, or in the case of an organization, its officers and directors shall, upon
conviction, each suffer the penalty of imprisonment of not less than two (2)
years nor more than five (5) years and a fine not exceeding ITwenty Thoumnd
pcsOO prLo,ooo)I Two IIUNDRED THOusAND pEsOs Q>hp2cO,ooo.co) Or hath
at the discretion of the Court.
38


1
2
3
4
5
6
7
8
9
10
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12
13
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15
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20
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23
24
25
26
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28
29
30
official or employee, the offender shall, upon conviction, suffer the accessory
penalty of temporary absolute disqualification.
A;RT .141. Printing and Distribution. -
(1) [Thc Natioml Pinting Office ohall publish t]_This Cede, AS AMENDED, SIIALL
BE PUBLISHED in the Official Gazette in full within sixty (60) days from the
dateofapprovalthercof.CopiesofthisCodeshallbegiventoeverydepartment,
ageney, and instrumentality of the National Government, including regional,
provincial offices, and local governments including governmenfrowned and
controlled corporations.
(2) x x x
ART. 142. Interpretation and Construction. - x x x.
ART. 143. Repealing Clause. - x x x.
ART. 144. Transitory Provisions. -
(1) x x x
(2) x x x
(3) x x x
/4\   TO  ENSURE   A  SMOOTH   INILEMENTATION  OF  THIS  CODE,   THE
AUTHORITY GRANTED  TO  NON{OOPERATIVES AS TRAINING SERVICE
pRovlDERS    SHALL    CONTINUE    To    BE    EFFECTlvE    ur`ITIL    THEIR
Ei(plRATloN oR Slx (6\ MONTIIS FROM TrlE pROMULGATloN oF THE IRR
TO BE ISSUED PURSUANT TO ART. 139 0F THIS CODE, l^7IIICIIEVER COMES
LATER.
(5\    PRIMARY    COOPERATIVES    ALREADY    EXISTING    MUST    BECOME
MEMBERS OF A FEDERATION AND/OR UNION WITIIIN SIX (6) MONTIIS
FROM  THE  EFFECTIVITlf  OF  TI+IS  ACT,  IN  COMPLIANCE  VVITII  ART.  10
-.
XXX
40


I
1           SEC.14.  Separability Clause.  -If any  provision contained  herein is  declared
2      unconstitutional, invalid, illegal, or unenforceable in any respect, the validity, legality,
3      and enforceability of the remaining provisions shall not be affected or impaired in any
4      way.
5
6          SEC.15. Repealing clause.  -All provisions, laws, rules and regulations, orders,
7      decrees,   and   issuances,   insofar   as   they   are   inconsistent  with   the   foregoing
8      amendments  and  provisions,  are  hereby  repealed  or  modified  accordingly.  The
9      remaining provisions of R.A. No. 6938, as amended, are hereby adopted as part of the
10      Code.
11
12           SEC.  16.  Effectivity.   -   This  Act  shall  take  effect  fifteen  (15)  days  after  the
13      completion of its publication in the Official Gazette or in two  (2)  newspapers  of
14      general circulation.
15
16           Approved ,
41