FOURTEENTH CONGRESS OF THE 
1 
REPUBLIC OF THE PHILIPPINES 
1 
First Regular Session 
1 
7 SEP I 1 X1 :(j i 
S.B. No. 15 
introduced bv Senator JUAN MlGUEL F. ZUBlRl 
EXPLANATORY NOTE 
A significant amount of time already elapsed since the Cooperatives Code 
of the Philippines became a law. To be truly relevant, its provisions must: be 
amended to keep pace with the changes in the social and political environment. 
Cooperatives are social tools to empower the marginalized. Their collective 
voice reverberates in the halls of government institutions in a gallant effort to be 
heard. As a registered organization, they enjoy being recognized as juridical 
entities. With this come the benefits accorded by law, such as exemption from 
certain taxes. Some laws even mandate banks to appfopriate a certain percent of 
their loan portfolio to cooperatives. 
Cooperatives have also taken various forms. There are electric and 
transport cooperatives for instance which occupied the center stage recently. 
They, as entities, must be regulated by the government in order to protect the 
interest of the public. 
Attention must be given, more particularly, to the indigenous peoples (IPS) 
whose rights are often trampled upon in the name of development, mining, and 
tourism. While the IPRA Law provides procedure protective of their rights, it needs 
to be strengthened through the institutionalization of a legal entity such as the 
cooperative. 
Thus, it is imperative to synthesize the interests of various sectors claiming 
as cooperatives. As partners of economic, political and social development, 
cooperatives must be given more of what the present regime of laws offers. 
In view of the foregoing, immediate enactment of this bill is earnestly 


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FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
) 
SENATE 
S. No. 1 
Introduced by Senator JUAN MIGUEL F. ZUBlRl 
AN ACT 
AMENDING THE COOPERATIVE CODE OF THE PHILIPPINES TO BE KNOWN AS 
THE “PHILIPPINE COOPERATIVE CODE OF 2007” 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Articles 1, 3, 4 and 5 of Chapter I on General Concepts and 
Principles of Republic Act No. 6938, otherwise known as the “Cooperative Code of the 
Philippines” are hereby amended to read as follows 
“ARTICLE 1, Title - This Act shall be known as the [“Cooperative Code of the 
Philippines”.] PHILIPPINE COOPERATIVE CODE OF 2007.” 
ART. 2. Declaration of Policy. - x x x 
ART. 3. General Concepts - A cooperative is a duly registered association of 
persons, with a common bond of interest, who have voluntarily joined together to 
achieve [a] lawful [common] social or economic [end,] AND CULTURAL NEEDS 
making equitable contributions to the capital required, PATRONIZING THEIR 
PRODUCTS AND SERVICES and accepting a fair share of the risks and benefits of the 
undertaking in accordance with universally accepted cooperative principles.” 
EVERY COOPERATIVE SHALL ALSO KEEP FAITH WITH THE BASIC 
COOPERATIVE VALUES OF SELF-HELP, DEMOCRACY, EQUALITY, EQUITY AND 
SOLIDARITY, HONESTY, OPENNESS, SOCIAL RESPONSIBILITY AND 
FOR OTHERS. 
ART. 4. 
CARING 
Cooperative Principles. - Every cooperative shall conduct its affairs in 
accordance with Filipino culture, GOOD VALUES and experience and the universally 
accepted principles of cooperation which include BUT ARE NOT LIMITED TO the 
following: 


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(1) [Open and Voluntary] VOLUNTARY AND OPEN Membership - [Membership 
in a cooperative shall be voluntary and available to all individuals regardless of their 
social, political, racial or religious background or beliefs.] 
COOPERATIVES ARE 
VOLUNTARY ORGANIZATIONS, OPEN TO ALL PERSONS ABLE TO USE THEIR 
SERVICES AND WILLING TO ACCEPT THE RESPONSIBILITIES OF MEMBERSHIP, 
WITHOUT GENDER, SOCIAL, RACIAL, CULTURAL, POLITICAL, OR RELIGIOUS 
DISCRIMINATION. 
(2) Democratic MEMBER Control - Cooperatives are democratic organizations[.] 
[Their affairs shall be administered by persons elected or appointed in a manner agreed 
upon by the members. Members of primary cooperatives shall have equal voting rights 
on a one-member-one-vote principle: Provided, however, That in the case of secondary 
and tertiary cooperatives, the provisions of Article 37 of this Code shall apply.] THAT 
ARE CONTROLLED BY THEIR MEMBERS WHO ACTIVELY PARTICIPATE IN 
SETTING THEIR POLICIES AND MAKING DECISIONS. 
MEN AND WOMEN 
SERVING AS ELECTED REPRESENTATIVES, DIRECTORS AND OFFICERS ARE 
ACCOUNTABLE TO THE MEMBERSHIP. IN PRIMARY COOPERATIVES, MEMBERS 
HAVE EQUAL VOTING RIGHTS (ONE-MEMBER, ONE-VOTE). COOPERATIVES AT 
OTHER LEVELS ARE ORGANIZED IN A DEMOCRATIC MANNER. 
(3) [Limited lnterest on Capital - 
Share capital 
shall 
receive a strictly 
limited rate of interest.] MEMBER ECONOMIC PART/CIPATION. - MEMBERS 
CONTRIBUTE EQUITABLY TO, AND DEMOCRATICALLY CONTROL, THE CAPITAL 
OF THEIR COOPERATIVE. AT LEAST PART OF THAT CAPITAL IS THE COMMON 
PROPERTY 
OF 
THE 
COOPERATIVE. THEY 
SHALL 
RECEIVE 
LIMITED 
COMPENSATION OR LIMITED INTEREST, IF ANY, ON CAPITAL SUBSCRIBED 
AND PAID AS A CONDITION OF MEMBERSHIP. MEMBERS ALLOCATE 
SURPLUSES FOR ANY OR ALL OF THE FOLLOWING PURPOSES: DEVELOPING 
THE COOPERATIVE, BY SETTING UP RESERVES, PART OF WHICH AT LEAST 
SHOULD BE INDIVISIBLE; BENEFITING MEMBERS IN PROPORTION TO THEIR 
PATRONAGE OF THE COOPERATIVE'S BUSINESS, AND SUPPORTING OTHER 
ACTIVITIES APPROVED BY THE MEMBERSHIP. 
(4) [Division Of Net Surplus - Net surplus arising out 
of the operations 
of a 
cooperative belongs to its members and shall be equitably distributed for 
cooperative development, common services, indivisible reserve fund, and for limited 
interest on capital and/or patronage refund in the manner provided in this Code and in 
the articles of cooperation and by-laws.] 
AUTONOMY AND INDEPENDENCE. - 
COOPERATIVES 
ARE 
AUTONOMOUS, 
SELF-HELP 
ORGANIZATIONS 
CONTROLLED BY THEIR MEMBERS. IF THEY ENTER INTO AGREEMENTS WITH 
OTHER ORGANIZATIONS INCLUDING GOVERNMENT, OR RAISE CAPITAL FROM 
L 


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EXTERNAL SOURCES, THEY SHALL DO SO ON TERMS THAT ENSURE 
DEMOCRATIC CONTROL OF THEIR 
MEMBERS AND 
MAINTAIN THEIR 
COOPERATIVE AUTONOMY. 
(5) [Cooperative Education - 
All cooperatives shall make provision for the 
education of their members, officers and employees and of the general public based on 
the principles of cooperation.] 
EDUCATION, TRAlNlNG AND INFORMATION. - 
COOPERATIVES SHALL PROVIDE EDUCATION AND TRAINING FOR THEIR 
MEMBERS, ELECTED AND APPOINTED REPRESENTATIVES, MANAGERS, AND 
EMPLOYEES SO 
THAT 
THEY 
CAN 
CONTRIBUTE 
EFFECTIVELY AND 
EFFICIENTLY TO THE DEVELOPMENT OF THEIR COOPERATIVES. 
(6) Cooperation Among Cooperatives - [All cooperatives, in order to best serve 
the interest of their members and communities, shall actively cooperate with other 
cooperatives at local, national and international levels.] 
COOPERATIVES SERVE 
THEIR MEMBERS MOST EFFECTIVELY AND STRENGTHEN THE COOPERATIVE 
MOVEMENT BY WORKING TOGETHER THROUGH LOCAL, NATIONAL, REGIONAL 
AND INTERNATIONAL STRUCTURES. 
(7) CONCERN FOR COMMUNITY. - COOPERATIVES WORK FOR THE 
SUSTAINABLE DEVELOPMENT OF THEIR COMMUNITY THROUGH POLICIES 
APPROVED BY THEIR MEMBERS. 
ART. 5. Definition of Terms -- The following terms shall mean: 
(1) x x x  
(2) General Assembly shall mean the full membership of the cooperative duly 
assembled for the purpose of exercising all the rights and performing all the obligations 
pertaining to cooperatives, as provided by this Code, its articles of cooperation and by- 
laws[;]: 
PROVIDED, THAT FOR COOPERATIVES WITH NUMEROUS AND 
DISPERSED MEMBERSHIP, THE GENERAL ASSEMBLY MAY BE COMPOSED OF 
DELEGATES ELECTED BY EACH SECTOR, CHAPTER OR DISTRICT OF THE 
COOPERATIVE IN ACCORDANCE WITH THE RULES AND REGULATION OF THE 
AUTHORITY. 
(3) x x x  
(4) x x x  
(5) x x x  
(7) x x x  
(6) x x x  
(8) Cooperative Development Authority means the government agency in 
charge of the 
registration [and], regulation AND 
PROMOTION FOR THE 
DEVELOPMENT of cooperatives as such, hereinafter referred to as the Authority; 
(9) x x x 
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(IO) OFFICERS OF THE COOPERATIVES SHALL INCLUDE THE MEMBERS 
OF THE BOARD OF DIRECTORS, MEMBERS OF THE DIFFERENT COMMITTEES 
CREATED BY THE GENERAL ASSEMBLY, GENERAL MANAGER OR CHIEF 
EXECUTIVE OFFICER, SECRETARY, TREASURER AND SUCH OTHERS AS MAYBE 
PROVIDED FOR IN THE BY-LAWS. 
(11) SOCIAL AUDITSHALL REFER TO AN AUDIT INTENDED TO DETERMINE 
HOW WELL THE COOPERATIVE WAS ABLE 
TO 
FULFILL 
ITS SOCIAL 
RESPONSIBILITIES. 
(12) PERFORMANCE AUDIT SHALL REFER TO AN AUDIT ON THE 
EFFICIENCY AND EFFECTIVENESS OF THE COOPERATIVE AS A WHOLE, ITS 
MANAGEMENT, THE OFFICERS AND/OR ITS VARIOUS RESPONSIBILITY 
CENTERS AS BASIS FOR IMPROVING INDIVIDUAL, TEAM OR OVER-ALL 
PERFORMANCE AND 
FOR 
OBJECTIVELY 
INFORMING 
THE 
GENERAL 
MEMBERSHIP ON SUCH PERFORMANCE; 
(1 3) 
A SINGLE-LINE OR SINGLE-PURPOSE COOPERATIVE SHALL 
INCLUDE A COOPERATIVE UNDERTAKING ACTIVITIES WHICH ARE RELATED 
TO ITS MAIN LINE OF BUSINESS OR PURPOSE. 
(14) SUBSIDIARY REFERS TO ANY ORGANIZATION ALL OR MAJORITY OF 
WHOSE MEMBERSHIP OR SHAREHOLDERS COME FROM A COOPERATIVE, 
ORGANIZED FOR ANY OTHER PURPOSE DIFFERENT FROM THAT OF, AND 
RECEIVES TECHNICAL, MANAGERIAL AND FINANCIAL ASISTANCE FROM A 
COOPERATIVE, IN ACCORDANCE WITH THE RULES AND REGULATIONS OF 
THE AUTHORITY. 
SEC. 2. Articles 6, 7, 9, I O ,  11, 12, 14, 16, 18, 20, 23 and 24 of Chapter II on 
Organization and Registration of the same Code are hereby amended as follows: 
ART. 6. [Organization] PURPOSES of Cooperatives. - A cooperative may be 
organized and registered [by at least fifteen (15) persons] for any or all of the following 
purposes: 
(1) x x x  
(2) x x x  
(3) x x x  
(4) x x x  
(5) x x x  
(7) x x x  
(9) x x x  
(IO) x x x  
(6) x x x  
(8) x x x  
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(11) X X X "  
Art. 7. Objectives AND GOALS of a Cooperative. - (I) The primary objective of 
every cooperative is HUMAN BETTERMENT. TOWARDS THIS END, THE 
COOPERATIVE SHALL AIM to: 
(A) 
provide goods and services to its members and thus enable them 
to attain increased income and savings, investments, productivity, 
and purchasing power, and promote among them equitable 
distribution of net surplus through 
maximum utilization of 
economies of scale, 
cost-sharing 
and risk-sharing; [without, 
however, 
conducting the 
affairs 
of 
the 
cooperative for 
eleemosynary or charitable purposes.] 
[A cooperative shall] (B) provide [maximum] OPTIMUM SOCIAL AND 
economic 
benefits to its members[,]; 
(C) 
teach them efficient ways of doing things in a cooperative 
manner[,]; [and] 
(D) 
propagate cooperative practices and new ideas in business and 
management; [and] 
(E) 
allow the lower income AND LESS PRIVILEGED groups to 
increase their ownership in the wealth of the nation[.]; AND 
(F) 
COOPERATE 
WITH 
THE 
GOVERNMENT, 
OTHER 
COOPERATIVES AND PEOPLE-ORIENTED ORGANIZATIONS 
TO FURTHER THE ATTAINMENT OF ANY OF THE FOREGOING 
OBJECTIVES. 
(2) 
EVERY COOPERATIVE SHALL HAVE AT LEAST ONE (1) MAJOR 
SOCIAL GOAL, AND IN ORDER TO CONTINUE TO BE ENTITLED TO THE RIGHTS 
AND PRIVILEGES GRANTED TO COOPERATIVES, MUST HAVE A POSITIVE 
IMPACT ON SUCH SOCIAL CONCERNS AS: 
MEMBERSHIP EDUCATION, 
ENVIRONMENT, HEALTH, DEMOCRACY AND/OR SUCH OTHER ASPECTS OF 
HUMAN BETTERMENT OR EMPOWERMENT. 
ART. 8. Cooperative Not in Restraint of Trade. - X X X 
ART. 9. Cooperative Powers and Capacities. - A cooperative registered under 
this Code shall have the following powers, RIGHTS and capacities: 
(1) TO THE EXCLUSIVE USE OF ITS REGISTERED NAME, [TJto sue and be 
sued [in its cooperative name] ; 
(2) x x x  
(3) x x x  
(4) x x x  
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(5) x x x  
(6) x x x  
(7) To FORM SUBSIDIARIES AND join federations or unions, as provided in this 
(8) To AVAIL OF LOANS, BE ENTITLED TO CREDIT AND TO accept and 
receive grants, donations and assistance from foreign and domestic sources [;and ] 
SUBJECT TO CONDITIONS OF SAID LOANS, CREDITS, GRANTS, DONATIONS 
OR ASSISTANCE, AND BE PROVIDED ASSISTANCE BY THE AUTHORITY UPON 
WRITTEN 
REQUEST TO 
BE ABLE 
TO 
FULFILL THE 
DOCUMENTARY 
REQUIREMENTS FOR THE SAID LOANS, CREDIT , GRANTS, DONATIONS AND 
SIMILAR ASS ISTAN CE. 
Code; 
(9) TO AVAIL OF PREFERENTIAL RIGHTS GRANTED TO COOPERATIVES 
UNDER REPUBLIC ACT NO. 7160, OTHERWISE KNOWN AS THE LOCAL 
GOVERNMENT CODE, PARTICULARLY THOSE IN THE GRANT OF THE 
FRANCHISE TO ESTABLISH, CONSTRUCT, OPERATE AND MAINTAIN FERRIES, 
WHARVES, MARKETS OR SLAUGHTERHOUSES AND TO LEASE PUBLIC 
UTILITIES; 
(IO) TO AVAIL OF BASIC SERVICES AND FACILITIES UNDER REPUBLIC 
ACT NO. 7160, OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE, 
PARTICULARLY THOSE IN THE EXTENSION AND ON-SITE RESEARCH 
SERVICES AND FACILITIES RELATED TO AGRICULTURE AND FISHERY 
ACTIVITIES; 
(11) 
TO 
PROVIDE 
CONTINUITY 
FOR 
THE 
COOPERATIVES 
BY 
INCULCATING 
COOPERATIVISM 
THROUGH 
TRAINING, 
SEMINARS 
ON 
COOPERATIVE KNOW-HOW AND SIMILAR OTHER COOPERATIVE ACTIVITIES 
WHICH ARE GEARED TOWARDS THE ADVANCEMENT OF THE MOVEMENT. 
(12) TO ORGANIZE AND OPERATE SCHOOLS IN ACCORDANCE WITH THE 
EDUCATION ACT OF 1982 AND OTHER PERTINENT LAWS. 
[9] (13) To exercise such other powers granted by this Code necessary to carry 
ART. 10. Organizing a Primary Cooperative. - Fifteen (15) or more natural 
persons[,] who are [citizens of the Philippines] AT LEAST EIGHTEEN (18) YEARS 
OF AGE, WHO ARE FILIPINO CITIZENS, having a common bond of interest and are 
ACTUALLY residing [or], working OR STUDYING in the intended area of operation 
may organize a PRIMARY cooperative under this Code, PROVIDED THAT WITHIN 
TWO (2) YEARS AFTER REGISTRATION IT SHALL HAVE THIRTY (30) MEMBERS. 
ANY NEWLY ORGANIZED PRIMARY COOPERATIVE MAYBE REGISTERED AS 
out its purpose or purposes as stated in its articles of cooperation. 
MULTI-PURPOSE COOPERATIVE ONLY AFTER COMPLIANCE WITH THE 
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MINIMUM REQUIREMENTS FOR MULTIPURPOSE COOPERATIVES TO BE SET 
BY THE AUTHORITY. 
A SINGLE-PURPOSE COOPERATIVE MAY TRANSFORM 
INTO A MULTI-PURPOSE COOPERATIVE OR MAY CREATE SUBSIDIARIES ONLY 
AFTER AT LEAST TWO (2) YEARS OF OPERATIONS. 
ART. 11. Economic Survey. - Every group of individuals or cooperatives 
intending to form a cooperative under this Code shall submit to the [Cooperative 
Development] Authority a general statement describing, AMONG OTHERS the 
structure[,] AND purposes [and economic feasibility] of the proposed cooperative [,I : 
PROVIDED, THAT THE STRUCTURE AND ACTUAL STAFFING PATTERN OF THE 
COOPERATIVE SHALL INCLUDE A BOOKKEEPER. PROVIDED, FURTHER, THAT 
THEY SHALL NOT BE ALLOWED TO OPERATE WITHOUT THE NECESSARY 
PERSONNEL AND SHALL ALSO SUBMIT A FEASIBILITY STUDY, indicating therein 
the area of operation, the size of membership, THE PROJECTED CAPITAL 
REQUIREMENT, SOURCE OF CAPITAL, EXPENSES AND 
INCOME, AND 
ORGANIZATIONAL AND OTHER REQUIREMENTS OF ITS BUSINESS and other 
pertinent data. THE AUTHORITY SHALL ISSUE THE NECESSARY GUIDELINES 
FOR THE PREPARATION OF THE FEASIBILITY STUDY REQUIRED HEREIN 
WITHIN SIX (6) MONTHS FROM THE APPROVAL OF THIS ACT. 
ART. 12. Liability.- A cooperative [shall be] DULY registered under this Code[,] 
ART. 13. Term. - x x x 
ART. 14. Articles of Cooperation. - (1) All cooperatives applying for registration 
shall file with the [Cooperative Development] Authority the articles of cooperation which 
shall be signed by each of the organizers and acknowledged by them if natural 
persons, and by the [presidents] CHAIRPERSONS or secretaries, if juridical person, 
before a notary public. 
(a) x x x  
(b) x x x  
(c) x x x  
(d) x x x  
(e) x x x  
(f) x x x 
(9) x x x  
[with] SHALL HAVE limited liability. 
(2) x x x  
(h) x x x  
(3) x x x  
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(4) Four (4) copies of each of the proposed articles of cooperation, by-laws, and 
the general statement required under Article 11 of this Code shall be submitted to the 
[Cooperative Development] Authority. 
(5) No cooperative OTHER THAN A COOPERATIVE UNION AS DESCRIBED 
UNDER ARTICLE 25 HEREOF, shall be registered unless the articles of cooperation 
is accompanied with the bonds of the accountable officers and a sworn statement of the 
treasurer elected by the subscribers showing that at least twenty-five per centum (25%) 
of the authorized share capital has been subscribed and at least twenty five per 
centurn (25%) of the total subscription has been paid: Provided, That in no case shall 
the paid-up share capital be less than [two thousand pesos (P2,OOO.OO)j THIRTY 
THOUSAND PESOS (P30,OOO.OO). 
ART. 15. By-laws. - x x x 
ART. 16. Registration. - A cooperative formed or organized under this Code 
acquires juridical personality from the date the [Cooperative Development] Authority 
issues a certificate of registration under its official seal. All applications for registration 
shall be finally disposed of by the [Cooperative Development] Authority within a period 
of [thirty (30)] SIXTY (60) days from the filing thereof, otherwise the application is 
deemed approved, unless the cause of the delay is attributable to the applicant: 
Provided, That in case of a denial of the application for registration, an appeal shall lie 
with the Office of the President within ninety (90) days from receipt of notice of such 
denial: Provided further, That failure of the Office of the President to act on the appeal 
within ninety (90) days from the filing thereof shall mean approval of said application[.]: 
PROVIDED, FINALLY, THAT NO COOPERATIVE SHALL BE REGISTERED UNLESS 
THE ORGANIZERS AND 
FOUNDING MEMBERS HAVE ATTENDED AND 
COMPLETED A PRE-MEMBERSHIP SEMINAR CONDUCTED BY COOPERATIVES 
AND 
EDUCATIONAL INSTITUTIONS WITH COOPERATIVE 
DEVELOPMENT 
PROGRAMS DULY ACCREDITED BY THE AUTHORITY IN CONSULTATION WITH 
THE NATIONAL COOPERATIVE FEDERATIONS AND UNIONS, AND HAVE 
SUBMITTED THE FEASIBILITY STUDY AND OTHER DOCUMENTS AS PROVIDED 
FOR IN THIS CODE. 
ART. 17. Certificate of Registration. - x x x 
ART. 18. Amendment of Articles of Cooperation and Bylaws. - Unless otherwise 
prescribed by this Code and for legitimate purposes, any provision or matter stated in 
the articles of cooperation AND BYLAWS may be amended by [two-thirds (2/3)] A 
THREE-FOURTHS (3/4) vote of all the members with voting rights[,] PRESENT AND 
CONSTITUTING A QUORUM without prejudice to the right of the dissenting members 
to exercise the right to withdraw their membership under Articles 31 and 32. 
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The original and amended articles AND/OR BYLAWS together shall contain all 
provisions required by law to be set out in the articles of cooperation [.I AND BYLAWS. 
Amendments shall be indicated by underscoring or otherwise appropriately indicated 
the change or changes made and a copy [thereof] OF THE AMENDED ARTICLES OR 
AMENDED BYLAWS duly certified under oath by the cooperative secretary and a 
majority of the directors stating the fact that said amendment or amendments TO THE 
ARTICLES OF COOPERATION AND/OR BYLAWS have been duly approved by the 
required vote of the members. All amendments to the articles of cooperation AND/OR 
BYLAWS shall be submitted to the [Cooperative Development] Authority. 
The 
amendments shall take effect upon its approval by the [Cooperative Development] 
Authority or within thirty (30) days from the date of filing thereof if not acted upon by the 
Authority for a cause not attributable to the cooperative. 
ART. 19. Contracts Executed Prior to Registration and Effect Thereof. - x x x 
ART. 20. Division of Cooperatives. -- Any registered cooperative may by a 
resolution approved by a vote of [two-thirds (2/3) of the members eligible to vote at a 
general assembly meeting,] THREE-FOURTHS (3/4) OF ALL THE MEMBERS WITH 
VOTING RIGHTS, PRESENT AND CONSTITUTING A QUORUM, resolve to divide 
itself into two (2) or more cooperatives. The procedure for such division shall be 
prescribed in the regulations of the [Cooperative Development] Authority. The new 
cooperatives shall become legally established upon registration with the Authority: 
Provided, That all the requirements set forth in this Code have been complied with by 
the new cooperatives: Provided further, That no division of a cooperative in fraud of 
creditors shall be valid. 
ART. 21. Merger and Consolidation of Cooperatives. - (1) Two (2) or more 
cooperatives may merge into [a] ONE cooperative[s] or may consolidate into a new 
single cooperative which shall be the consolidated cooperative. 
(2) No merger or consolidation shall be valid unless approved by [two-thirds 
(2/3)] VOTE of all the members eligible to vote] A THREE-FOURTHS (3/4) WITH 
VOTING RIGHTS, PRESENT AND CONSTITUTING A QUORUM [of] IN each of the 
constituent cooperatives at separate general assembly meetings. The dissenting 
members shall have the right to exercise their right to withdraw their membership 
pursuant to Articles 31 and 32. 
(3) The [Cooperative Development] Authority shall issue the guidelines governing 
the procedure of merger or consolidation of cooperatives. In any case, the merger or 
consolidation shall be effective upon the issuance of the certificate of merger or 
consolidation by the [Cooperative Development] Authority. 
ART. 22. Effects of Merger and Consolidation. - x x x 
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ART. 23. Types and Categories of Cooperatives. - (1) Types of Cooperatives. - 
Cooperatives may fall under any of the following types: 
(a) Credit AND/OR FlNANClAL SERVlCE Cooperative is one which promotes 
thrift AND SAVINGS among its members [and create] TO GENERATE funds in order to 
PROVIDE CREDIT OR OTHER RELATED FINANCIAL SERVICES TO THEIR 
MEMBERS [grant loans] for productive and provident purposes; 
(b) x x x  
(c) x x x  
(d) x x x  
(e) x x x  
(f) x x x 
(2) x x x  
(a) x x x  
(i) x x x  
(ii) x x x 
(iii) x x x 
(b) x x x 
ART. 24. Federation of Cooperatives. - (1) A federation of cooperatives, whose 
members are primary andlor secondary cooperatives [with single line or multi-purpose 
business activities] OF ONE TYPE OR SEVERAL TYPES, may be registered under this 
Code TO UNDERTAKE A SINGLE LINE OF BUSINESS ACTIVITY for any or all of the 
following purposes: 
(a) Primary Purpose - To carry on any cooperative enterprise authorized under 
Article 6[;] THAT COMPLEMENTS, AUGMENTS, OR SUPPLEMENTS BUT DOES 
NOT CONFLICT WITH NOR SUPPLANT THE BUSINESS OR ECONOMIC 
ACTIVITIES OF ITS MEMBERS; 
(b) x x x  
(i) 
x x x  
(ii) x x x  
(iii) x x x  
(iv) x x x  
(v) x x x  
(vi) x x x 
(2) Registered cooperatives may organize a federation WITH FIFTEEN (15) 
MEMBERS at the MUNICIPAL, provincial, city, SPECIAL METROPOLITAN 
POLITICAL SUBDIVISION, ECONOMIC ZONES CREATED BY LAW OR FIVE (5) 
MEMBERS ON THE regional, and national levels according to the type of business 
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ACTIVITY carried on [.I BY THE COOPERATIVES AND SHALL BE REGISTERED 
WITH THE AUTHORITY. 
ART. 25. Cooperative Unions. - x x x 
SEC. 3. Articles 26, 28, 29 and 31 of Chapter 111 on Membership of the same 
Code are hereby amended to read as follows: 
ART. 26. Who May Be Members of Cooperatives. - Any natural person[,] who is 
[a citizen of the Philippines,] AT LEAST EIGHTEEN (18) YEARS OF AGE, CAPABLE 
AND WILLING TO PERFORM THE RESPONSIBILITIES OF A MEMBER, a 
cooperative, or ANY non-profit 
PEOPLE-ORIENTED organization 
OR NON- 
GOVERNMENTAL ORGANIZATION with juridical personality shall be eligible for 
membership in a cooperative [if]: PROVIDED, THAT the applicant FOR MEMBERSHIP 
IN THE COOPERATIVE meets the qualifications prescribed in the bylaws: Provided, 
[That] FURTHER, that only natural persons may be admitted as members of a primary 
cooperative[.]: 
PROVIDED, FINALLY THAT PROSPECTIVE MEMBERS OF A 
PRIMARY COOPERATIVE MUST HAVE COMPLETED A PRE-MEMBERSHIP 
EDUCATION SEMINAR (PMES) CONDUCTED BY 
COOPERATIVES, OR 
EDUCATIONAL INSTITUTIONS WITH COOPERATIVE DEVELOPMENT PROGRAMS 
ACCREDITED BY THE AUTHORITY IN CONSULTATION WITH THE NATIONAL 
COOPERATIVE FEDERATIONS AND UNIONS. 
THE FOREGOING PROVISIONS NOTWITHSTANDING, A DULY REGISTERED 
COOPERATIVE, REPRESENTED BY ITS GENERAL MANAGER OR CHIEF 
EXECUTIVE OFFICER OR CHAIRPERSON, MAY BE ADMITTED AS A MEMBER OF 
A PRIMARY SUBSIDIARY COOPERATIVE THAT IT HELPED ORGANIZE. 
ART. 27. Kinds of Membership. - x x x 
ART. 28. Government Officers and Employees. -(I) Any officer or employee of 
the [Cooperative Development] Authority shall be disqualified to 
be elected or 
appointed to any position 
in a cooperative[;]: 
PROVIDED, THAT THE 
DISQUALIFICATION DOES NOT EXTEND TO A COOPERATIVE ORGANIZED BY 
THE OFFICERS OR EMPLOYEES OF THE AUTHORITY. 
(2) ALL [Elelective officials of the Government[,] [except barangay officials,] 
shall be ineligible to become officers and directors of cooperatives; PROVIDED, THAT 
THE 
DISQUALIFICATION 
DOES 
NOT 
EXTEND 
TO 
A 
PARTY 
LIST 
REPRESENTATIVE BEING AN OFFICER OF A COOPERATIVE HE OR SHE 
REPRESENTS; AND 
(3) Any government employee OR OFFICIAL may, in the discharge of his duties 
as member in the cooperative, be allowed by the head of office concerned to use 
official time for attendance at the general assembly, 
board 
and 
committee 
meetings 
of 
cooperatives as well 
as cooperative 
seminars, 
conferences, 
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workshops, 
technical meetings, and training courses locally or abroad: Provided, 
That the operations of the office concerned are not adversely affected. 
ART. 29. Application. - An applicant for membership shall be deemed a member 
after approval of his membership by the board of directors and shall exercise the rights 
of members after having made such payments to the cooperative in respect to 
membership or acquired interest in the cooperative as may be prescribed in the 
bylaws. In case membership is refused or denied by the board of directors, an appeal 
may be made to the general assembly and the latter’s decision shall be final. THE 
GENERAL ASSEMBLY MAY CREATE AN APPEAL AND GRIEVANCE COMMITTEE 
WHOSE MEMBERS SHALL SERVE FOR A PERIOD OF ONE (1) YEAR AND SHALL 
DECIDE APPEALS ON MEMBERSHIP APPLICATION. THE COMMITTEE IS GIVEN 
THIRTY (30) DAYS FROM RECEIPT THEREOF TO DECIDE ON THE APPEAL. IF 
THE COMMITTEE FAILS TO DECIDE WITHIN THE PRESCRIBED PERIOD, THE 
APPEAL IS DEEMED APPROVED IN FAVOR OF THE APPLICANT. 
ART. 30. Liability of Members.- x x x 
ART. 31. Termination of Membership. - (I) A member of a cooperative may, for 
any VALID reason, withdraw his membership from the cooperative by giving a sixty 
(60) day notice to the board of directors. SUBJECT TO THE BYLAWS OF THE 
COOPERATIVE, [Tlthe withdrawing member shall be entitled to a refund of his share 
capital contribution and all other interests in the cooperative: Provided, That such 
refund shall not be made if upon such payment the value of the assets of the 
cooperative would be less than the aggregate amount of its debts and liabilities 
exclusive of his share capital contribution. 
(2) The death[,] OR insanity[,] [insolvency or dissolution] of a member [shall be 
considered an 
automatic termination of 
membership.] 
IN A 
PRIMARY 
COOPERATIVE, AND THE INSOLVENCY OR DISSOLUTION OF A MEMBER IN A 
SECONDARY OR TERTIARY COOPERATIVE SHALL BE CONSIDERED VALID 
GROUNDS FOR TERMINATION OF MEMBERSHIP. HOWEVER, IN THE CASE OF 
THE DEATH OR INSANITY OF AN AGRARIAN REFORM BENEFICIARY-MEMBER 
OF A COOPERATIVE, THE NEXT OF KIN SHALL ASSUME THE DUTIES AND 
RESPONSIBILITIES OF THE ORIGINAL MEMBER. 
(3) [A member] MEMBERSHIP IN THE COOPERATIVE may be terminated by a 
vote of the majority of all the members of the board of directors for any of the following 
causes: 
When a member has not patronized ANY OF the services of the 
cooperative for an unreasonable period of time as may be fixed 
BEFOREHAND by the board of directors; 
(a) 
(b) 
x x x  
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(c) 
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(d) 
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A member whose membership the board of directors may wish to terminate shall 
be informed of such intended action in writing and shall be given an opportunity to be 
heard before the said board makes its decision. The decision of the board shall be in 
writing and shall be communicated in person or by registered mail to the member and 
shall be appealable within thirty (30) days FROM RECEIPT OF [after] the decision [is] 
AS promulgated, to the general assembly whose decision therein, whether in a general 
or special session, shall be final. THE GENERAL ASSEMBLY MAY CREATE AN 
APPEAL AND GRIEVANCE COMMITTEE WHOSE MEMBERS SHALL SERVE FOR A 
PERIOD OF ONE (1) YEAR AND SHALL DECIDE APPEALS ON MEMBERSHIP 
TERMINATION. THE COMMITTEE IS GIVEN THIRTY (30) DAYS FROM RECEIPT 
THEREOF TO DECIDE ON THE APPEAL. IF THE COMMITTEE FAILS TO DECIDE 
WITHIN THE PRESCRIBED PERIOD, THE APPEAL IS DEEMED APPROVED IN 
FAVOR OF THE MEMBER. Pending a decision by the general assembly, the 
membership remains in force. 
ART. 32. Refund of Interests. - x x x 
SEC. 4. Articles 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 48, 49, 50 and 
51 of Chapter IV on Administration of the same Code are hereby amended to read as 
follows: 
ART. 33. Composition of the General Assembly. - x x x 
ART. 34. Powers of the General Assembly. - x x x 
(1) x x x  
(2) To elect or appoint the members of the board of directors, and to 
remove 
them for cause[;]. HOWEVER, IN THE CASE OF THE ELECTRIC COOPERATIVES 
REGISTERED UNDER THIS CODE, ELECTION OF THE MEMBERS OF THE 
BOARD SHALL BE HELD IN ACCORDANCE WITH THE ADOPTED BY-LAWS OR 
ELECTION GUIDELINES OF SUCH ELECTRIC COOPERATIVE; AND 
(3) To approve developmental plans of the cooperative[; and]. 
[(4) Such other matters requiring a two-thirds (2/3) of all the members of the 
general assembly, as provided in this Code.] 
SUBJECT TO OTHER PROVISIONS OF THIS CODE AND ONLY FOR 
PURPOSES OF PROMPT AND INTELLIGENT DECISION-MAKING, THE GENERAL 
ASSEMBLY MAY, BY A THREE-FOURTHS (3/4) VOTE OF ALL ITS MEMBERS WITH 
VOTING RIGHTS, PRESENT AND CONSTITUTING A QUORUM, DELEGATE SOME 
OF ITS POWERS TO A SMALLER BODY OF THE COOPERATIVE OR TO THE 
REPRESENTATIVE ASSEMBLY. 
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ART. 35. Meetings. - (1) A regular meeting shall be held annually by the general 
assembly on the date fixed in the by-laws, or if not so fixed, on any date within ninety 
(90) days after the close of each fiscal year: Provided, That written notice of regular 
meetings shall be sent to all members [of record] WHO ARE ENTITLED TO VOTE at 
their official addresses at least two (2) weeks prior to the meeting, unless a different 
period is required in the by-laws. 
(2) 
Whenever necessary, a special meeting of the general assembly may be 
called at any time by a majority vote of the board of directors or [in the cases specified] 
AS PROVIDED FOR in the bylaws: Provided, That at least one (1) week written 
notice shall be sent to all members WHO ARE ENTITLED TO VOTE. However, a 
special meeting shall be called by the board of directors after compliance with the 
required notice within one (1) month after receipt of a request in writing from at least 
ten per centurn (10%) of the total members WHO ARE ENTITLED TO VOTE to 
transact specific business covered by the call. 
If the board fails to call a regular or a special meeting within the given period, the 
[Cooperative 
Development] Authority, upon petition of ten percent (10%) of all the 
members of the cooperative WHO ARE ENTITLED TO VOTE, and for good cause 
shown, [may] SHALL issue an order to the petitioners directing them to call a meeting 
of the general assembly by giving proper notice required by this Code or by the bylaws. 
(3) In the case of a newly approved cooperative, a special general assembly 
shall be called, AS FAR AS PRACTICABLE, within ninety (90) days from such 
approval. 
(4) The Authority may call a special meeting of the cooperative[:] [(a)] [Flfor the 
purpose of reporting to the members the result of any [audit,] examination, or other 
investigation of the cooperative affairs ordered or made by Ihim; or] THE AUTHORITY. 
[(b) When the cooperative fails to hold an annual general assembly during the 
period required for the purpose of enabling the members to secure any information 
regarding the affairs of the cooperative and benefits that they are entitled to receive 
pursuant to this Code.] 
(5) x x x 
ART. 36. Quorum - [Unless otherwise provided in the by-laws,] [a] A quorum 
shall consist of AT LEAST twenty-five per centurn (25%) of all the members entitled 
to Vote. IN THE CASE OF ELECTRIC COOPERATIVES REGISTERED UNDER THIS 
CODE, A QUORUM, UNLESS OTHERWISE PROVIDED IN THE BY-LAWS, SHALL 
CONSIST OF FIVE PER CENTUM (5%) OF ALL THE MEMBERS ENTITLED TO 
VOTE 
ART. 37. Voting System. - (1) Each member of a primary cooperative shall have 
only one (1) vote. A MEMBER OF A secondary or tertiary cooperative [shall] WHO 
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have voting rights as delegate of members-cooperatives, [but such cooperatives shall 
have only five (5) votes] SHALL HAVE ONE (1) BASIC VOTE AND AS MANY 
INCENTIVE VOTES AS PROVIDED IN THE BYLAWS BUT NOT TO EXCEED A 
MAXIMUM OF FIVE (5) VOTES. The votes cast by the delegates shall be deemed as 
votes cast by the members thereof. 
(2) IN A PRIMARY COOPERATIVE, [Nlno voting agreement, [or other device] 
IN WHATEVER FORM SHALL BE ALLOWED to evade the one-member-one-vote 
provision except as provided under subsection (1) hereof [shall be valid]. [3) No 
member of a primary cooperative shall be permitted to vote by proxy [unless provided 
for specifically in the bylaws of the cooperative]. 
However, the bylaws of a cooperative other than a primary may provide for voting 
by proxy. Voting by proxy means allowing a delegate of a cooperative to represent or 
vote in behalf of another delegate of the same cooperative. 
ART. 38. Composition AND TERM of the Board of Directors. - The [conduct] 
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. [However, no director shall 
serve for more than three (3) consecutive terms.] 
ART. 39. Powers of the Board of Directors. - The board of directors OF 
COOPERATIVES SHALL BE RESPONSIBLE FOR THE STRATEGIC PLANNING, 
DIRECTION-SETTING AND POLICY-FORMULATION ACTIVITIES. [shall direct and 
supervise the business, manage the property 
may, by 
resolution, exercise all such powers of the cooperative as are not reserved for the 
general assembly under this Code and the bylaws.] 
of the cooperative and 
ART. 40. Directors. - (1) x x x 
(2) x x x  
(3) THE MEMBERS OF THE BOARD OF DIRECTORS SHALL NOT HOLD ANY 
OTHER POSITION DIRECTLY INVOLVED IN THE DAY TO DAY OPERATION AND 
MANAGEMENT OF THE COOPERATIVE. 
ART. 41. Meeting of the Board, Quorum. - (1) IN THE CASE OF PRIMARY 
COOPERATIVES, [Rlregular meetings of the board of directors [of every cooperative] 
shall be held monthly [unless the by-laws provide otherwise]. 
(2) Special meetings of the board of directors may be held at any time upon the 
call of the [President] CHAIRPERSON OR A MAJORITY OF THE MEMBERS OF THE 
BOARD [or as provided in the bylaws], PROVIDED THAT NOTICES OF MEETING 
SPECIFYING THE AGENDA OF THE SPECIAL MEETING SHALL BE GIVEN TO ALL 
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MEMBERS OF THE BOARD AT LEAST ONE (1) WEEK BEFORE THE SAID 
MEETING. 
(3) x x x  
(4) x x x  
ART. 42. Vacancy in the Board of Directors.- x x x 
ART. 43. Officers of the Cooperative. - The Board of Directors shall elect from 
among themselves [only the chairman and vice-chairman] THE CHAIRPERSON AND 
VICE-CHAIRPERSON, and elect or appoint other officers of the cooperative from 
outside of the board in accordance with [their] the by-laws[.] OF THE COOPERATIVE. 
All officers shall serve during good behavior and shall not be removed except for a 
cause afler due hearing. Loss of confidence shall not be a valid ground for removal 
unless evidenced by acts or omission causing loss of confidence in the honesty and 
integrity of such officer. No two (2) or more persons with relationships up to the [third] 
SECOND civil degree of consanguinity or affinity NOR SHALL ANY PERSON 
ENGAGED IN A BUSINESS SIMILAR TO THAT OF THE COOPERATIVE OR WHO IN 
ANY OTHER MANNER HAS INTERESTS IN CONFLICT WITH THE COOPERATIVE 
shall serve as elective or appointive officer[s] in the same [board] COOPERATIVE. 
ART. 44. Committees of Cooperatives. - (1) x x x 
(2) 
The bylaws shall provide for the creation of an audit committee, AN 
ELECTION COMMITTEE, A MEDIATION AND CONCILIATION COMMITTEE, AND 
AN ETHICS COMMITTEE, THE MEMBERS OF WHICH SHALL BE ELECTED BY THE 
GENERAL ASSEMBLY, and such other committees as may be necessary for the 
proper conduct of the affairs of the cooperative. THE AUDIT COMMITTEE SHALL BE 
DIRECTLY ACCOUNTABLE AND RESPONSIBLE TO THE GENERAL ASSEMBLY 
WITH THE POWER AND DUTY TO CONTINUOUSLY MONITOR THE ADEQUACY 
AND EFFECTIVENESS OF THE COOPERATIVE’S MANAGEMENT CONTROL 
SYSTEM AND AUDIT THE PERFORMANCE OF THE COOPERATIVE AND ITS 
VARIOUS RESPONSIBILITY CENTERS. 
Unless otherwise provided in the by-laws, the board in case of A vacancy in 
[said] IN THE committees, may [cause] CALL an election to fill the vacancy or appoint 
a person to fill the same subject to the provision that the person elected or appointed 
shall serve only for the unexpired portion of the term. 
ART. 45. Functions, [and] Responsibilities AND TRAINING REQUIREMENTS of 
Directors, Officers and Committee Members. - The functions and responsibilities of the 
directors, officers and committee members shall be IN ACCORDANCE WITH THE 
RULES AND REGULATIONS ISSUED BY THE AUTHORITY OR as prescribed in 
detail in the bylaws of a cooperative. 
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WITHIN NINETY (90) DAYS FROM REGISTRATION AND IN NO CASE LATER 
THAN NINETY (90) DAYS AFTER HAVING BEEN APPOINTED OR ELECTED, ALL 
DIRECTORS, OFFICERS AND COMMITTEE MEMBERS AND MANAGEMENT STAFF 
SHALL BE REQUIRED TO UNDERGO TRAININGS TO BE CONDUCTED BY DULY 
ACCREDITED 
COOPERATIVES 
OR 
TRAINORS, 
AND 
EDUCATIONAL 
INSTITUTIONS WITH COOPERATIVE DEVELOPMENT PROGRAMS. 
ART. 46. Liability of Directors, Officers and Committee Members. - x x x 
When a director, officer or committee members attempts to acquire or acquires, 
in violation of his duty, any interest or equity adverse to the cooperative in respect to 
any matter which has been reposed in him in confidence, he shall, as a trustee for the 
cooperative, be liable for damages and SHALL BE ACCOUNTABLE for double the 
profits which otherwise would have accrued to the cooperative. 
ART. 47. Compensation. - x x x 
ART. 48. Dealings of Directors, Officers or Committee Members. - A contract of 
the cooperative with one (1) or more of its directors, officers, committee is voidable, at 
the option of [such] THE cooperative, unless all the following conditions are present: 
That the presence of such director in the board meeting [in which] WHEREIN 
(1) 
the contract was approved was not necessary to constitute a quorum for such meeting, 
(2) 
x x x  
(3) 
x x x  
(4) 
x x x  
Where any of the first two conditions set forth in the preceeding paragraph is 
absent in the case of a contract with a director, such contract may be ratified by a [two- 
thirds (2/3)] THREE-FOURTHS (3/4) vote of all the members with voting rights, 
PRESENT AND CONSITUTING A QUORUM in a meeting called for the purpose; 
Provided, That full disclosure of the adverse interest of the directors involved is made at 
such meeting, and that the contract is fair and reasonable under the circumstances. 
ART. 49. Disloyalty of a Director. - A  director who, by virtue of his office, acquires 
for himself an opportunity which should belong to the cooperative shall be liable for 
damages and must account for double the profits that otherwise would have accrued to 
the cooperative by refunding the same, unless his act has been ratified by a [two-thirds 
(2/3)] THREE-FOURTHS (314) vote of all the members with voting rights PRESENT 
AND CONSTITUTING A QUORUM. This provision shall be applicable, notwithstanding 
fact that the director used his own funds in the venture. 
ART. 50. Illegal Use of Confidential Information. - (1) A director or officer, or an 
associate of a director or officer, who, [in connection with a transaction relating to 
shares of a cooperative or a debt obligation of a cooperative and] for his benefit or 
advantage or that of an associate, makes use of a confidential information that, if 
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generally known might reasonably be expected to ADVERSELY affect THE 
OPERATION AND VIABILITY OF THE COOPERATIVE [materially the value of the 
share or the debt obligation], shall be held: 
(a) 
direct 
Liable to compensate THE COOPERATIVE [any person] for [a] 
IossES suffered by that [person as a result of the transaction unless 
the information was known or reasonably should have been known 
to the person at the time of the transaction] COOPERATIVE AS A 
RESULT OF THE ILLEGAL USE OF INFORMATION; and 
(b) 
x x x  
(2) x x x  
Art. 51. 
Removal. - 
ACTIONS FOR THE REMOVAL OF ANY OFFICER 
ELECTED BY THE GENERAL ASSEMBLY MAY BE INITIATED BY THE MAJORITY 
OF THE BOARD OF DIRECTORS, AUDIT COMMITTEE, ELECTION COMMITTEE, 
ETHICS COMMITTEE OR TEN PERCENT (10%) OF ALL THE MEMBERS WITH 
VOTING RIGHTS. ANY MEMBER OF A COOPERATIVE IN GOOD STANDING MAY, 
FOR JUST AND VALID GROUNDS, FILE A WRITTEN COMPLAINT FOR REMOVAL 
WITH ANY ONE OF THE AFOREMENTIONED BODIES. 
SUBJECT TO THE 
PROVISIONS OF ARTICLE 43, ALL OTHER OFFICERS ELECTED OR APPOINTED 
OTHER THAN BY THE GENERAL ASSEMBLY MAY BE REMOVED BY THE BODY 
THAT ELECTED OR APPOINTED THEM OR BY SUCH BODY AS MAY BE 
PROVIDED IN THE BYLAWS. An [elective] officer [, director, or committee member] 
ELECTED BY THE GENERAL ASSEMBLY may be removed by a MAJORITY vote [of 
two-thirds (213) of the voting] OF THE members present and constituting a quorum, in a 
regular or special general assembly meeting called for the purpose. 
The person 
involved shall be given an opportunity to be heard at said assembly. 
IN THE ABSENCE OF A GENERAL ASSEMBLY MEETING, AN OFFICER 
ELECTED BY THE GENERAL ASSEMBLY MAY BE REMOVED THROUGH A 
RESOLUTION OF THE MAJORITY MEMBERS OF THE AUDIT COMMITTEE 
RATIFIED BY WRITTEN ASSENT OF A MAJORITY OF ALL THE MEMBERS WITH 
VOTING RIGHTS. 
NO SUCH AUDIT COMMITTEE RESOLUTION SHALL BE 
PASSED UNTIL THE PERSON INVOLVED HAS BEEN GIVEN AN OPPORTUNITY 
TO BE HEARD BEFORE THE SAID COMMITTEE. 
SEC. 5. Articles 53, 54, 57, 58, 59, 62 and 63 of Chapter V on Responsibilities, 
Rights and Privileges of Cooperatives of the same code are hereby amended to read 
as follows: 
ART. 52. Address. - x x x 
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ART. 53. Books to be Kept Open. - (1) 
Every cooperative shall have the 
following [open] DOCUMENTS READY AND ACCESSIBLE to its members and 
representatives of the Authority for inspection during reasonable office hours at its 
official address: 
(a) x x x  
(b) x x x  
(d) x x x  
(e) x x x  
(c) x x x  
(f) x x x 
(9) x x x  
(h) x x x  
(2) The [chairman of the audit committee of a cooperative] ACCOUNTANT OR 
THE BOOKKEEPER OF THE COOPERATIVE shall be responsible for THE 
MAINTENANCE AND SAFEKEEPING OF THE books and records of account of the 
cooperative in accordance with generally accepted accounting practices. He shall also 
be responsible for the production of the same at the time of audit or inspection. 
THE AUDIT COMMITTEE SHALL BE RESPONSIBLE FOR THE CONTINUOUS 
AND PERIODIC REVIEW OF THE BOOKS AND RECORDS OF ACCOUNT TO 
ENSURE THAT THESE ARE IN ACCORDANCE WITH THE COOPERATIVE 
PRINCIPLES AND GENERALLY ACCEPTED ACCOUNTING PRACTICES. 
(3) Each cooperative shall maintain records of accounts such that the true and 
correct condition and the results of the operation of the cooperative may be 
ascertained therefrom at any time. The financial statements, audited according to 
generally accepted auditing standards, principles and practices, shall be published 
annually[.] AND SHALL BE KEPT POSTED IN A CONSPICUOUS PLACE IN THE 
PRINCIPAL OFFICE OF THE COOPERATIVE. 
(4) Subject to the pertinent provisions of the National Internal Revenue Code and 
other laws, a cooperative may dispose by way of burning or other method of complete 
destruction any document, record or book pertaining to its financial and non-financial 
operations which are already more than five (5) years old except those relating to 
transactions which are the subject of civil, criminal and administrative proceedings. An 
inventory of the audited documents, records, and books to be disposed of shall be 
drawn up and certified to by the [cooperative] secretary OF THE COOPERATIVE and 
the chairman of the audit committee [of the cooperative] and presented to the board of 
directors which may thereupon approve the disposition of the said records. 
ART. 54. [Annual] Reports. - (1) Every cooperative shall draw up [an annual] 
REGULAR reports of its [affairs] ACTIVITIES AND PROGRAMS INCLUDING THOSE 
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IN PURSUANCE OF SOCIAL GOALS SHOWING THEIR PROGRESS AND 
ACHIEVEMENTS as of the end of every fiscal year. THE REPORT SHALL BE MADE 
ACCESSIBLE TO ITS MEMBERS, and COPIES OF SUCH REPORTS SHALL BE 
FURNISHED [publish the same furnishing copies] to all its members of record. A copy 
thereof shall be filed with the [Cooperative Development] Authority within [sixty (60)] 
ONE HUNDRED TWENTY (120) DAYS from the end of [every fiscal] OF THE 
CALENDAR year. The form and contents of the [annual] reports shall be prescribed by 
the rules of the Authority UPON CONSULTATION WITH THE SECTOR. Failure to file 
the required [annual] reports shall SUBJECT THE ACCOUNTABLE OFFICER(S) TO 
FINES AND PENALTIES AS MAYBE PRESCRIBED BY THE AUTHORITY, AND 
SHALL be a ground for THE revocation of authority of the cooperative to operate as 
such. The fiscal year of every cooperative shall be the calendar year, except [as may 
be otherwise provided in the bylaws] FOR THOSE THAT MAYBE ALLOWED BY THE 
AUTHORITY. 
(2) If any cooperative fails to make, publish and file the report required herein, or 
fails to include therein any matter required by this Code, the [Cooperative Development] 
Authority shall, within fifteen (15) days from the expiration of the prescribed period, 
send such cooperative a [registered] WRITTEN notice, [directed to its official postal 
address] stating [the] ITS NON-COMPLIANCE AND THE COMMENSURATE FINES 
AND PENALTIES THAT WILL BE IMPOSED UNTIL SUCH TIME THAT THE 
COOPERATIVE HAS COMPLIED WITH THE REQUIREMENTS. [delinquency and its 
consequences. If the cooperative fails to make, publish or file a copy of the report within 
thirty (30) days from receipt of such notice, any member of the cooperative or the 
Government may petition the court for mandamus to compel the cooperative and its 
officers to make, publish and file such report, as the case may be, and require the 
cooperative or the officers at fault to pay all the expenses of the proceeding, including 
counsel fees when the filing is made by a member.] 
ART. 55. Register of Members as Prima Facie Evidence.- x x x 
ART. 56. Probative Value of Certified Copies of Entries. - x x x 
ART. 57. Bonding of Accountable Officers. - Every director, officer and employee 
handling funds, securities or property on behalf of the cooperative shall BE COVERED 
BY A SURETY BOND TO BE ISSUED BY A DULY REGISTERED INSURANCE OR 
BONDING COMPANY [execute and deliver adequate bonds] for the faithful 
performance of [his] THEIR RESPECTIVE duties and obligations. 
The board of 
directors shall determine the adequacy of such bonds. 
UPON FILING OF THE APPLICATION FOR REGISTRATION OF A 
COOPERATIVE, THE BONDS OF THE ACCOUNTABLE OFFICERS SHALL BE 
REQUIRED BY THE AUTHORITY. SUCH BONDS SHALL BE RENEWED ANNUALLY 
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AND THE AUTHORITY SHALL ACCORDINGLY BE INFORMED OF SUCH 
RENEWAL. 
ART. 58. Preference of Claims. - 
(1) 
Notwithstanding the provisions of existing laws, rules and regulations to 
the contrary, but subject to the prior claim of the [Cooperative Development] Authority, 
any debt due a cooperative from a member shall CONSTITUTE [be] A first lien upon 
any raw materials, production inputs, and products produced; or any land, building, 
facilities, equipment, goods or services acquired and held, by such member through 
the proceeds of the loan or credit granted by the cooperative to him for as the same is 
not fully paid. 
(2) x x x  
(3) x x x  
ART. 59. Instrument for Salary or Wage Deduction. - (1) x x x 
(2) Upon the execution of such instrument and as may be required by the 
cooperative contained in a written request, the employer shall make the deduction in 
accordance with the agreement and remit forthwith the amount so deducted WITHIN 
TEN (IO) DAYS AFTER THE END OF THE PAYROLL MONTH to the cooperative. The 
employer shall make the deduction for as long as such debt or other demand or any 
part of it remains unpaid by the employee. 
(3) x x x  
(4) The provisions of this Article shall also apply to all such agreements of the 
nature referred to in paragraph (1) as were in force on the date of the approval of this 
Code. 
(5) NOTWITHSTANDING THE PROVISIONS OF EXISTING LAWS TO THE 
CONTRARY, 
THE RESPONSIBILITIES OF THE EMPLOYER AS STATED IN 
PARAGRAPHS (1) AND (2) OF THIS ARTICLE SHALL BE MANDATORY: 
PROVIDED, THAT IN THE CASE OF A PRIVATE EMPLOYER, THE COOPERATIVE 
MAY AGREE TO REIMBURSE THE 
EMPLOYER OF THE ACTUAL AND 
REASONABLE COSTS OF DEDUCTING AND REMITTING. 
ART. 60. Primary Lien - x x x 
ART. 61. Tax Treatment of Cooperatives. - x x x 
ART. 62. Tax and Other Exemptions. - x x x 
(1) x x x  
(2) x x x  
(a) x x x  
(b) x x x  
(d) x x x  
(c) x x x  
(3) x x x  
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(4) Any judge in his capacity as notary public, ex-officio, shall render service, free of 
charge, to any person or group of persons requiring either the administration of oath or the 
acknowledgment of articles of cooperation of a cooperative applicant for registration and 
instruments of loan from cooperative not exceeding [fifty thousand pesos (P 50,000.00)] TWO 
HUNDRED FIFTY THOUSAND PESOS (P 250,000.00). 
(5) 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 [fifty thousand pesos (P 
50,000.00)] TWO HUNDRED FIFTY THOUSAND PESOS (P 250,000.00) or the deeds of title 
or 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 its duties and obligations. 
(6) x x x  
(8) x x x  
ART. 63. Privileges of Cooperatives. - x x x 
(7) x x x  
(1) x x x  
(2) x x x  
(3) x x x  
(4) In areas where appropriate cooperatives exist the [preferential right] RIGHT 
OF FIRST REFUSAL to supply government institutions and agencies rice, corn and 
other grains, fish and other marine products, meat, eggs, milk, vegetables, tobacco and 
other agricultural commodities produced by their members shall be granted to the 
cooperatives concerned; 
(5) [Preferential treatment] THE RIGHT OF NRST REFUSAL in the allocation of 
fertilizers and in rice distribution shall be granted to cooperatives by the appropriate 
government agencies; 
(6) x x x 
(7) Cooperatives and their federations, such as FARM AND FISHERY 
PRODUCERS AND SUPPLIERS, market vendor AND OTHER cooperatives[,] WHICH 
HAVE FOR THEIR PRIMARY PURPOSE PRODUCTION AND/OR THE MARKETING 
OF 
PRODUCTS 
FROM 
AGRICULTURE, 
FISHERIES 
AND 
SMALL 
ENTREPRENEURIAL INDUSTRIES AND FEDERATIONS THEREOF, shall have 
[preferential rights] THE RIGHT OF FIRST REFUSAL in THE management of public 
markets and/or lease of public market facilities, stalls or spaces[;]: PROVIDED, THAT 
THE COOPERATIVES THEMSELVES UTILIZE THESE RIGHTS AND NOT 
THROUGH A MIDDLE-MAN NOR A PERSON NOT CONNECTED WITH NOR A 
MEMBER OF THE COOPERATIVE. 
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(8) [Credit] [cICooperatives ENGAGED IN CREDIT SERVICES and/or 
federations shall be entitled to loans, credit lines, rediscounting of their loan notes, and 
other eligible papers with the Development Bank of the Philippines, [the Philippine 
National Bank,] the Land Bank of the Philippines and other financial institutions except 
the [Central Bank of the Philippines] BANGKO SENTRAL NG PILIPINAS. 
(9) PUBLIC TRANSPORT SERVICE COOPERATIVES SHALL BE ENTITLED 
TO FINANCING SUPPORT FOR THE ACQUISITION AND/OR MAINTENANCE OF 
LAND, SEA AND AIR TRANSPORT EQUIPMENT, 
FACILITIES 
AND PARTS, 
THROUGH THE PROGRAM OF DEVELOPMENT BANK OF THE PHILIPPINES, 
LAND BANK OF THE PHILIPPINES AND OTHER GOVERNMENT FINANCING 
INSTITUTIONS; AND SHALL HAVE THE RIGHT OF FIRST REFUSAL 
ON THE 
FOLLOWING: 
(A) 
MANAGEMENT AND OPERATION OF PUBLIC TERMINALS AND 
PORTS WHETHER LAND, SEA OR AIR TRANSPORT WHERE 
THE COOPERATIVE OPERATES; AND 
SECURING FRANCHISE FOR ACTIVE OR POTENTIAL ROUTE 
FOR PUBLIC TRANSPORT; 
(B) 
[(9)1(10) x x x 
[10](11) x x x  
(12) 
COOPERATIVES ORGANIZED BY FACULTY MEMBERS AND 
EMPLOYEES OF EDUCATIONAL INSTITUTIONS SHALL HAVE THE RIGHT OF 
FIRST REFUSAL IN THE MANAGEMENT OF THE CANTEEN AND OTHER 
SERVICES RELATED TO THE OPERATION OF THE EDUCATIONAL INSTITUTION 
WHERE THEY ARE EMPLOYED: PROVIDED, THAT SUCH SERVICES ARE 
OPERATED WITHIN THE PREMISES OF THE SAID EDUCATIONAL INSTITUTIONS. 
THE FACULTY MEMBERS AND EMPLOYEES, IN THE DISCHARGE OF THEIR 
DUTIES AS OFFICERS OR MEMBERS OF THE COOPERATIVE, SHALL BE 
ALLOWED BY THE OWNERS AND/OR ADMINISTRATORS OF THE EDUCATIONAL 
INSTITUTION CONCERNED TO USE OFFICIAL TIME FOR ATTENDANCE AT THE 
GENERAL ASSEMBLY MEETINGS, BOARD AND COMMITTEE MEETINGS OF 
COOPERATIVES AS WELL AS COOPERATIVE SEMINARS, CONFERENCE, 
WORKSHOPS, TECHNICAL MEETINGS, AND TRAINING COURSES LOCALLY OR 
ABROAD: PROVIDED, THAT A WRITTEN REQUEST IS MADE AT LEAST TEN ( I O )  
DAYS PRIOR TO THE ACTIVITY. 
SEC. 6. Article 64 of Chapter VI on Insolvency of Cooperatives of the same Code 
is hereby amended to read as follows: 
ART. 64. Proceedings Upon Insolvency. - In case a cooperative is unable to 
fulfill its obligations to creditors due to insolvency, such cooperative may apply such 
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remedies as it may deem fit under the provisions of [the Insolvency Law][( ] Act No. 
1956 [)I, as amended [)I OTHERWISE KNOWN AS THE INSOLVENCY LAW. x x x 
SEC. 7. Articles 65, 66, 69, and 70 of Chapter VI1 on Dissolution of Cooperatives 
of the same Code are hereby amended to read as follows: 
ART, 65. Voluntary Dissolution Where No Creditors Are Affected. - If the 
dissolution of a cooperative does not prejudice the rights of any creditor having a claim 
against it, the dissolution may be effected by a majority vote of the board of directors, 
and by a resolution duly adopted by the affirmative vote of at least [two-thirds (2/3)] 
THREE-FOURTHS (3/4) of all the members with voting rights, PRESENT AND 
CONSTITUTING A QUORUM at a meeting to be held upon call of the directors: 
Provided, That notice of time, place and object of the meeting shall be published for 
three (3) consecutive weeks in a newspaper published in the place where the principal 
office of said cooperative is located, or if no newspaper is published in such place, in a 
newspaper of general circulation in the Philippines: Provided further, That notice of 
such meeting is sent to each stockholder or member either by registered mail or by 
personal delivery at least thirty (30) days prior to said meeting. A copy of the resolution 
authorizing the dissolution shall be certified by a majority of the board of directors and 
countersigned by the secretary of the cooperative. The [Cooperative Development] 
Authority shall thereupon issue the certificate of dissolution. 
ART. 
66. Voluntary Dissolution Where Creditors Affected. - Where the 
dissolution of a cooperative may prejudice the rights of any creditor, the petition for 
dissolution shall be filed with the [Cooperative Development] Authority. The petition 
shall be signed by a majority of its board of directors or other officers managing its 
affairs, shall be verified by its [president] CHAIRPERSON or secretary or one of its 
directors and shall set forth all claims and demands against it and that its dissolution 
was resolved upon by the affirmative vote of at least [two-thirds (2/3)] THREE- 
FOURTHS (3/4) of all the members with voting rights, PRESENT AND 
CONSTITUTING QUORUM at a meeting called for that purpose. 
x x x  
ART. 67. Involuntary Dissolution.- x x x 
ART. 68. Dissolution by Order of the Authority. - x x x 
ART. 69. Dissolution by Failure to Organize and Operate. - If a cooperative has 
not commenced business and operation within two (2) years after the date shown on 
its certificate of registration or has not carried on A business for two (2) consecutive 
years, the Authority shall send A formal inquiry to the said cooperative as to the status 
of its operation. Failure of the cooperative to promptly provide justifiable cause for its 
failure to operate shall warrant the Authority to strike off its name from the register and, 
for all intents and purposes, the cooperative shall be deemed dissolved. 
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ART. 70. Cooperative Liquidation. - Every cooperative whose charter expires 
by its own limitation or whose cooperative existence is terminated by voluntary 
dissolution or is terminated by appropriate judicial proceedings shall nevertheless be 
continued as a body cooperative for three (3) years after the time [when it would have 
been so] IT IS dissolved, for the purpose of prosecuting and defending suits by or 
against it; and enabling it to settle and close its affairs, to dispose of and convey its 
property and to distribute its assets, but not for the purpose of continuing the business 
for which it was established. 
At any time during THE said three (3) years, [said] THE cooperative is authorized 
and empowered to convey all of its property to trustees for the benefit of members, 
creditors and other persons in interest. From and after any such conveyance by the 
cooperative of its property in trust for the benefit of its members,~creditors and others in 
interest, all interest which the cooperative had in the property terminates the legal 
interest vested in the trustees and the beneficial interest vested in the members, 
creditors, or other persons in interest. x x x 
ART. 71. Rules and Regulations on Liquidation.- x x x 
SEC. 8. Articles 73, 74, 76, 77, 78 and 80 of Chapter Vlll on Capital, Property 
and Funds of the same Code are hereby amended to read as follows: 
ART. 72. Capital. - x x x 
ART. 73. Capital Sources. - x x x 
(1) x x x  
(2) x x x  
(3) x x x  
(4) Subsidies, d nati ns, legacies, grants, aids and such 0th 
assistance from 
any local or foreign institution whether public or private[.]: 
PROVIDED, THAT 
CAPITAL COMING FROM SUCH SUBSIDIES, DONATIONS, LEGACIES, GRANTS, 
AIDS AND OTHER ASSISTANCE SHALL NOT BE DIVIDED INTO INDIVIDUAL 
SHARE CAPITAL HOLDINGS AT ANYTIME BUT SHALL INSTEAD FORM PART OF 
THE DONATED CAPITAL OR FUND OF THE COOPERATIVE. 
ART. 74. Limitation on Share Capital Holdings. - No member of a cooperative 
other than a cooperative shall own or hold more than [twenty percent (20%)] TEN PER 
CENTUM (10%) of the share capital of the cooperative. Where a member of a 
cooperative dies, his heir shall be entitled to the shares of the decedent: Provided, That 
the total share holding of the heir does not exceed [twenty percent (20%)] TEN PER 
CENTUM (10%) of the share capital of the cooperative: Provided, further, That the heir 
qualify and is admitted as member of the cooperative: Provided, finally, That where the 
heir fails to qualify as such member or where his total share holding exceeds [twenty 
percent (20%)] TEN PER CENTUM (10%) of the share capital, the share or shares in 
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excess will revert to the cooperative upon payment to the heir of the value of such 
shares. 
ART. 75. Assignment of Share Capital Contribution or Interest.. x x x 
ART. 76. [Interest on Share Capital.] CAPITAL BUILD-UP. - [Interest on share 
capital shall not exceed the normal rate of return on investments as determined by the 
Cooperative Development Authority and such interest shall be non-cumulative.] THE 
BYLAWS OF EVERY COOPERATIVE SHALL PROVIDE FOR A REASONABLE AND 
REALISTIC 
MEMBER CAPITAL 
BUILD-UP 
PROGRAM 
TO 
ALLOW 
THE 
CONTINUING 
GROWTH 
OF 
THE 
MEMBERS' 
INVESTMENT 
IN 
THEIR 
COOPERATJVE AS THEIR OWN ECONOMIC CONDITIONS CONTINUE TO 
IMPROVE. 
ART. 77. Shares. -- The term "share" refers to a unit of capital the par value of 
which may be fixed at any figure but not less than one peso (P1.00) NOR MORE 
THAN FIVE THOUSAND PESOS (P5,OOO.OO). The share capital of a cooperative is 
the money paid or required to be paid for to conduct its operations. The method of 
issuing the share certificates may be prescribed in the bylaws of cooperative. 
ART. 78. Fines. -- The bylaws of a cooperative may prescribe a fine on unpaid 
subscribed share capital [subject to the guidelines which the Cooperative Development 
Authority may issue.]: PROVIDED, THAT SUCH FINE IS FAIR AND REASONABLE 
UNDER THE CIRCUMSTANCES. 
ART. 79. Investment of Capital. - x x x 
ART. 80. Revolving Capital. - The general assembly of any cooperative may 
authorize the board of directors to raise a revolving capital to strengthen its capital 
structure by deferring the payment of patronage refunds and interest on share capital 
or by the authorized deduction of a percentage from the proceeds of products sold OR 
SERVICES RENDERED, or per unit of product OR SERVICES handled. The board of 
directors shall issue revolving capital certificates with serial number, name, amount, 
and rate of interest to be paid and shall distinctly set forth that the time of retirement 
[by] OF such certificates and the amounts to be returned are at the discretion of the 
board of directors. 
SEC. 9. Article 81 and 82 of Chapter IX on Audit, Inquiry and Members' Right to 
ART. 81. Annual Audit. - Cooperatives under this Code shall be subject to an 
annual FINANCIAL, PERFORMANCE AND SOCIAL audit [by an auditor]. 
THE 
FINANCIAL AUDIT SHALL BE CONDUCTED BY AN EXTERNAL AUDITOR who 
satisfies all the following qualifications: 
Examine of the same Code are hereby amended to read as follows: 
(1) He is independent of the cooperative being audited and of any subsidiary of 
the cooperative; and 
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(2) He is a member [of any recognized professional accounting or cooperative 
auditors' association with similar qualifications] IN GOOD STANDING OF THE 
PHILIPPINE INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS (PICPA) AND IS 
ACCREDITED BY THE BOARD OF ACCOUNTING AND THE AUTHORITY. 
ART. 82. Audit Report. - The auditor shall submit to the BOARD OF DIRECTORS 
AND TO THE audit committee THE [a report of the] FINANCIAL audit [which shall 
contain a statement of the assets and liabilities of the cooperative, including earnings 
and expenses, amount of net surplus as well as losses and bad debts, if any.] 
REPORT WHICH SHALL BE IN ACCORDANCE WITH THE GENERALLY 
ACCEPTED 
AUDITING 
STANDARDS 
FOR 
COOPERATIVES AS 
JOINTLY 
PROMULGATED BY THE PHILIPPINE INSTITUTE OF CERTIFIED PUBLIC 
ACCOUNTANTS (PICPA) AND THE AUTHORITY. 
PERFORMANCE AND SOCIAL AUDIT REPORTS WHICH CONTAIN THE 
FINDINGS AND RECOMMENDATIONS OF THE AUDITOR SHALL LIKEWISE BE 
SUBMITTED TO THE BOARD OF DIRECTORS. 
[The audit committee shall forthwith furnish the board of directors a copy of the audit 
report.] Thereafter, the board of directors shall present the complete audit report [of[ 
TO the general assembly in its next meeting. 
SOCIAL 
AND 
PERFORMANCE 
AUDITS 
SHALL 
BE 
CONDUCTED 
INTERNALLY BY THE AUDIT COMMITTEE OR PAID STAFF OR VOLUNTEER 
MEMBERS OF THE COOPERATIVE OR EXTERNALLY, BY QUALIFIED EXTERNAL 
AUDITORS. 
ART. 83. Non-liabiltiy for Defamation. - x x x 
ART. 84. Right to Examine.- x x x 
ART. 85. Safety of Records . x x x 
SEC. 10. Articles 86 and 87 of Chapter X on Allocation and Distribution of 
Surplus of the same Code are hereby amended to read as follows: 
ART. 86. Net Surplus. - Notwithstanding the provisions of existing laws, the 
surplus of cooperatives shall be determined in accordance with its by-laws. Every 
cooperative shall determine its net surplus at the close of every fiscal year and at such 
other time as may be prescribed by the by-laws. 
ANY PROVISION OF LAW TO THE CONTRARY NOTWITHSTANDING, [Tlthe 
net surplus shall not be construed as profit but as excess of payments made by the 
members for the loans borrowed, or the goods and services bought by them from the 
cooperative OR THE BALANCE OF THE RIGHTFUL AMOUNT DUE TO THE 
MEMBERS FOR THEIR PRODUCTS SOLD OR SERVICES RENDERED TO THE 
COOPERATIVE and which shall be deemed to have been returned to them if the same 
is distributed as prescribed herein. 
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ART. 87. Order of Distribution. - The net surplus of every cooperative shall be 
distributed as follows: 
(1) x x x  
(a) 
The reserve fund shall be used for the stability of the cooperative 
and to meet net losses in its operations. The general assembly may 
decrease the amount allocated to the reserve fund when THE 
reserve fund already exceeds the share capital. x x x 
(b) x x x  
(c) x x x  
(i) x x x 
(ii) x x x 
(2) An amount for the education and training fund, [which] shall [be] not [more] 
BE LESS than ten per centurn (10%) of net surplus. The bylaws may provide that 
certain fees [or fines] or a portion thereof be credited to such fund. THE FUND SHALL 
PROVIDE FOR THE TRAINING, PROVISION FOR WORK EXPERIENCE AND 
SIMILAR 
OTHER 
COOPERATIVE ACTIVITIES 
GEARED 
TOWARDS THE 
ACHIEVEMENT OF THE GOALS OF THE MOVEMENT. 
THE INDIVIDUAL 
COOPERATIVE MAY DECIDE TO SET ASIDE A PARTICULAR PORTION OF THEIR 
RESOURCES FOR THIS PROGRAM. 
(a) 
Half of the amounts transferred to the education and training fund 
annually under this subsection may be spent by the cooperative for 
education and training and other purposes; while the other half 
shall be [credited] REMITTED to the [cooperative education and 
training fund of the respective] apex organization of which the 
cooperative is a member. IF THE COOPERATIVE IS NOT A 
MEMBER OF ANY APEX ORGANIZATION, IT SHALL REMIT 
HALF OF ITS COOPERATIVE EDUCATION AND TRAINING 
FUND (CETF) TO THE APEX ORGANIZATION CHOSEN BY ITS 
BOARD OF DIRECTORS FROM AMONG THE EXISTING APEX 
ORGANIZATIONS REGISTERED WITH THE 
AUTHORITY: 
PROVIDED, THAT THE APEX ORGANIZATION CHOSEN SHALL 
SUBMIT THE FOLLOWING SCHEDULES: (I) COOPERATIVES 
WHICH HAVE REMITTED TO THEM THEIR RESPECTIVE 
COOPERATIVE EDUCATION AND TRAINING FUNDS (CETF); (11) 
BUSINESS CONSULTANCY ASSISTANCE TO INCLUDE THE 
NATURE AND COST; AND (Ill) OTHER TRAINING ACTIVITIES 
UNDERTAKEN 
SPECIFYING 
THEREIN 
THE 
NATURE, 
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PARTICIPANTS AND COST OF EACH ACTIVITY. An apex 
organization may be a federation or union. 
(b) 
x x x  
(3) AN AMOUNT FOR THE COMMUNITY DEVELOPMENT FUND, WHICH 
SHALL NOT BE LESS THAN THREE PER CENTUM (3%) OF THE NET SURPLUS. 
THE COMMUNITY DEVELOPMENT FUND SHALL BE USED FOR PROJECTS OR 
ACTIVITIES THAT BENEFIT THE COMMUNITY OR COMMUNITIES WHERE THE 
COOPERATIVE OPERATES. 
[(3)](4) An optional fund, a land and building, [community development,] and any 
other necessary fund the total of which [may] SHALL not exceed [ten per centurn 
(IO%)] SEVEN PER CENTUM (7%). 
[“(4)](5) The remaining net surplus shall be made available to the members in the 
form of interest not to exceed the normal rate of return on investments and patronage 
refunds[.]: PROVIDED, THAT ANY AMOUNT REMAINING AFTER THE ALLOWABLE 
INTEREST AND THE PATRONAGE REFUND HAVE BEEN DEDUCTED SHALL BE 
CREDITED TO THE RESERVE FUND AND/OR THE COMMUNJTY DEVELOPMENT 
FUND. x x x 
SEC. 11. Articles 89 and 94 of Chapter XI on the Special Provisions Relating to 
Agrarian Reform Beneficiaries of the same Code are hereby amended to read as 
follows: 
ART. 88. Coverage. - x x x 
ART. 89. Definition and Purpose - An agrarian reform cooperative within the 
meaning of this Code is one where the majority of the members are agrarian reform 
beneficiaries [and marginal farmers and organized for any or all of the following 
purposes :] AND FARMERS WHOSE LEVEL OF INCOME ARE MARGINAL AT THE 
TIME THEY JOINED THE COOPERATIVE. 
AN 
AGRARIAN 
REFORM COOPERATIVE AS 
DEFINED 
SHALL 
BE 
ORGANIZED FOR ANY OR ALL OF THE FOLLOWING PURPOSES: x x x 
ART. 90. Cooperative Estates.- x x x 
ART. 91. Infrastructure .- x x x 
ART. 92. Lease of Public Lands.- x x x 
ART. 93. Preferential Right. - x x x 
ART. 94. Privileges. - x x x 
(1) x x x  
(2) x x x  
(3) x x x  
(4) x x x  
(5) x x x  
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(6) x x x  
The Government shall provide the necessary financial and technical assistance 
to agrarian reform cooperatives to enable them to discharge effectively their purposes 
under this Article. [The Department of Agrarian Reform, the Cooperative Development 
Authority and the Central Bank of the Philippines shall draw up a joint program for the 
organization and financing of the agrarian reform cooperatives subject to this Chapter. 
The joint program shall be geared towards the beneficiaries gradual assumption of full 
ownership and management control of the agrarian reform cooperatives within ten (IO) 
years from the date of registration of said cooperatives.] 
ART. 95. Organization and Registration.- x x x 
SEC. 12 . Articles 96, 97 and 98 of Chapter XI1 on Special Provisions on Public 
Service Cooperatives of the same Code is hereby placed under a new Subsection A 
entitled, General Provisions. Under the same Chapter XII, a new Subsection B and C 
were inserted to contain the Articles on the Special Provisions on Transport Service 
Cooperatives and the Special Provisions on Electric Cooperatives, respectively. Thus, 
Chapter XI1 as reformatted shall now read as follows: 
CHAPTER XI1 
SPECIAL PROVISIONS ON PUBLIC SERVICE COOPERATIVES 
A. GENERAL PROVISIONS 
ART. 96. Definition and Coverage. - A public service cooperative, within the 
meaning of this Code, is one organized to render public service as authorized under a 
franchise or certificate of public convenience and necessity duly issued by the 
appropriate government agency. Such services may include the following: 
(1) Power generation, transmission, and/or distribution; 
(2) Ice plants and cold storage services. Electric 
cooperatives created under 
Presidential Decree No. 269 shall be governed by this Chapter if they qualify as 
cooperative under the provisions of this Code; 
(3) 
Communications 
services 
including 
telephone, 
telegraph, 
and 
telecommunications; 
(4) Land, sea, and air transportation cooperatives for passenger andlor cargo. 
Transport cooperatives organized under the provisions of Executive Order No. 898, 
Series of 1983, shall be governed by this Chapter: 
(5) Public markets, slaughterhouses and other similar services; and 
(6) 
Such other types of public service as may be engaged in by any 
cooperative. Such cooperative shall be primarily governed by this Chapter and the 
general 
provisions of this Code insofar as they may be applicable unless they are 
inconsistent herewith. 
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ART. 97. Registration Requirements. - No public service cooperative shall be 
registered unless it satisfies the following requirements: 
(1) 
It has the favorable endorsement of the proper government agency 
(2) Its articles of cooperation and by-laws provide for the membership of the 
(3) It satisfies such other requirements as may be imposed by the other pertinent 
government agencies concerned. In case there are two (2) or more applicants for the 
same public service franchise or certificate of public convenience and necessity, all 
things being equal, preference shall be given to a public service cooperative. 
authorized to issue the franchise or certificates of public convenience and necessity; 
users and/or producers of the service of such cooperatives; and 
ART. 98. Regulation of Public Service Cooperatives. 
(1) The internal affairs of public service cooperatives such as the rights and 
privileges of members, the rules and procedures for meetings of the general assembly, 
board of directors and committees; for the election and qualifications of officers, 
directors, and committee members, allocation and distribution of surpluses, and all 
other matters relating to their internal affairs, shall be governed by this Code. 
(2) All matters relating to the franchise or certificate of public convenience and 
necessity of public service cooperatives such as capitalization and investment 
requirements, equipment and facilities, frequencies, rate-fixing and such other matters 
affecting their public service operations shall be governed by the proper government 
agency concerned. 
(3) [The Cooperative Development] Authority and the proper government agency 
concerned shall jointly issue the necessary rules and regulations to implement this 
Chapter. 
B. SPECIAL PROVISIONS ON 
TRANSPORT SERVICE COOPERATIVES 
ART. 99. DEFINITION. - TRANSPORTATION SERVICE COOPERATIVES 
INCLUDE LAND, SEA AND AIR TRANSPORTATION FOR PASSENGER OR CARGO 
ORGANIZED UNDER THE PROVISIONS OF THIS CODE. 
A 
TRANSPORTATION 
SERVICE 
COOPERATIVE 
REFERS 
TO 
AN 
ORGANIZATION REGISTERED WITH THE 
COOPERATIVE DEVELOPMENT 
AUTHORITY COMPOSED OF GROUPS OF PERSONS INCLUDING DRIVERS, 
PILOTS, AIRPLANE OR SHIP CREW, INVESTORS OR OWNERS OF VEHICLES, 
AIRCRAFT OR SEA VESSELS, AND ALL ALLIED WORKERS OF THE PUBLIC 
TRANSPORT INDUSTRY WHO HAVE VOLUNTARILY AGREED TO POOL THEIR 
SKILLS, 
RESOURCES, SAVINGS, AND 
OTHER 
RESOURCES INCLUDING 
VEHICLES, AIRCRAFT/AIRPLANES OR SEA VESSELS/SHIPS TO OPERATE A 
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COOPERATIVE BUSINESS ENTERPRISE THAT SHALL PROVIDE ITS MEMBERS 
AND THE PUBLIC AT LARGE THE NECESSARY FACILITIES AND SERVICES FOR 
THE ECONOMIC AND EFFICIENT CARRIAGE OF PASSENGERS AND GOODS. 
ART. 100. COVERAGE. - A TRANSPORTATION SERVICE COOPERATIVE, 
WITHIN THE MEANING OF THIS CODE, IS ONE ORGANIZED TO RENDER PUBLIC 
TRANSPORTATION SERVICE AS AUTHORIZED UNDER A FRANCHISE OR 
CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY DULY ISSUED BY THE 
APPROPRIATE GOVERNMENT AGENCY. 
ART. 101. REGISTRATION REQUIREMENTS. IN ADDITION TO THE 
REGISTRATION REQUIREMENTS FOR COOPERATIVES UNDER THIS CODE, NO 
PUBLIC TRANSPORTATION SERVICE COOPERATIVES SHALL BE REGISTERED 
UNLESS IT COMPLIES WITH THE FOLLOWING REQUIREMENTS: 
(1) 
THAT IT HAS SECURED A FAVORABLE ENDORSEMENT FROM THE 
PROPER GOVERNMENT AGENCY AUTHORIZED TO ISSUE THE 
FRANCHISE OR THE CERTIFICATES OF PUBLIC CONVENIENCE AND 
NECESSITY; 
FOR THE MEMBERSHIP OF THE USERS AND/OR PRODUCERS; 
(3) 
THAT IT SATISFIES SUCH OTHER REQUIREMENTS AS MAYBE 
IMPOSED BY 
OTHER 
PERTINENT GOVERNMENT AGENCIES 
CONCERNED; 
(2) 
THAT ITS ARTICLES OF COOPERATION AND BY-LAWS PROVIDE 
ART. 102. MEMBERSHIP. - MEMBERSHIP IN A TRANSPORTATION SERVICE 
COOPERATIVE SHALL BE OPEN TO OPERATORS AND/OR INVESTORS OF 
PUBLIC TRANSPORTATION VEHICLES, DRIVERS, PILOT, AIRPLANE OR SHIP 
CREW, 
ALLIED 
WORKERS 
SUCH 
AS 
CONDUCTORS, 
DISPATCHERS, 
MECHANICS, AMONG OTHERS, AND IN APPROPRIATE CASES, USERS OR 
COMMUTERS/PASSENGERS. 
ART. 103. PREFERENTIAL TREATMENT IN AWARDING OF PUBLIC 
SERVICE FRANCHISE OR BUSINESS FRANCHISE/PERMIT TO TRANSPORTATION 
COOPERATIVES.- IN CASES WHERE THERE ARE TWO (2) OR MORE 
APPLICANTS FOR A PUBLIC SERVICE FRANCHISE OR FOR A CERTIFICATE OF 
PUBLIC CONVENIENCE AND 
NECESSITY, ALL 
THINGS 
BEING EQUAL, 
PREFERENTIAL TREATMENT SHALL BE GIVEN TO TRANSPORTATION SERVICE 
COOPERATIVES. 
ART. 104. ENGAGEMENT IN ALLIED BUSINESSES BY TRANSPORTATION 
SERVICE COOPERATIVES. - SUBJECT TO PERTINENT NATIONAL LAWS AND 
LOCAL ORDINANCES, PRIMARY TRANSPORTATION SERVICE COOPERATIVES 
INCLUDING SECONDARY AND TERTIARY FEDERATION OF COOPERATIVES MAY 
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ENGAGE IN A BUSINESS RELATED TO TRANSPORTATION SERVICES, 
INCLUDING BUT NOT LIMITED TO: 
(1) 
IMPORTATION, DISTRIBUTION AND MARKETING OF PETROLEUM 
PRODUCTS IN ACCORDANCE WITH THE EXISTING LAW(S); 
(2) 
OPERATION OF GASOLINE STATIONS AND TRANSPORTATION 
SERVICE CENTERS; 
IMPORTATION, DISTRIBUTION AND MARKETING OF AUTO PARTS 
AND SUPPLIES; 
IMPORTATION, DISTRIBUTION AND MARKETING OF VEHICLES; 
OPERATION OF MANUFACTURING AND/OR ASSEMBLY PLANT OF 
VEHICLES; 
OPERATION OF MANUFACTURING OF AUTO PARTS AND SUPPLIES; 
MARKETING OF VEHlCLElDRlVERS INSURANCE POLICIES; 
OTHER PRODUCTS AND SERVICES FOR USE AND CONSUMPTION 
OF ITS MEMBERS. 
(3) 
(4) 
(5) 
(6) 
(7) 
(8) 
ART. 105. REGULATION OF TRANSPORT SERVICE COOPERATIVES. - THE 
REGULATION OF TRANSPORTATION SERVICE COOPERATIVES SHALL BE IN 
ACCORDANCE WITH EXISTING LAWS IMPLEMENTED BY THE APPROPRIATE 
GOVERNMENT AGENCIES SUBJECT TO THE PRIVILEGES ACCORDED TO 
COOPERATIVES UNDER THIS CODE AND OTHER RELEVANT RULES AND 
REGULATIONS. 
ART. 106. MONITORING, - THE AUTHORITY SHALL ESTABLISH A 
COMMITTEE 
FOR 
THE 
MONITORING OF 
TRANSPORTATION 
SERVICE 
COOPERATIVES COMPOSED OF REPRESENTATIVES FROM THE COOPERATIVE 
DEVELOPMENT AUTHORITY, THE LAND TRANSPORTATION AND FRANCHiSE 
REGULATORY BOARD, THE LAND TRANSPORTATION OFFICE AND THE 
NATIONAL FEDERATION OF TRANSPORTATION COOPERATIVES. A LOCAL 
MONITORING COMMITTEE SHALL LIKEWISE BE ESTABLISHED AT THE 
EXTENSION OFFICES OF THE AUTHORITY TO FACILITATE THE MONITORING OF 
TRANSPORTATION COOPERATIVES. 
ART. 107. RENEWAL OF FRANCHISE AND REGISTRATION. - RENEWALS 
OF 
FRANCHISE AND 
REGISTRATION SHALL 
NOT 
BE 
GRANTED TO 
TRANSPORTATION SERVICE COOPERATIVES UNLESS SUCH COOPERATIVE 
PRESENTS A CERTIFICATE OF GOOD STANDING ISSUED BY THE AUTHORITY 
AS PROOF THAT SAID TRANSPORTATION SERVICE COOPERATIVE HAS 
CONTINUOUSLY PROVIDED THE 
REQUIRED PUBLIC TRANSPORTATION 
SERVICES. 
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ART. 
108. 
SPECIAL 
PLATE. - 
SUBJECT 
TO 
THE 
FAVORABLE 
ENDORSEMENT FROM THE NATIONAL FEDERATION OF TRANSPORTATION 
COOPERATIVES, SPECIAL PLATES SHALL BE ISSUED BY THE LAND 
TRANSPORTATION 
OFFICE 
TO 
ALL 
VEHICLES 
AFFILIATED 
WITH 
TRANSPORTATION SERVICE COOPERATIVES FOR PROPER IDENTIFICATION 
AND MONITORING. 
ART. 
109. 
- 
ASSISTANCE 
TO 
TRANSPORTATION 
SERVICE 
COOPERATIVES.- 
TRANSPORTATION SERVICE COOPERATIVES MAY BE 
GRANTED FINANCIAL ASSISTANCE AND TECHNICAL ASSISTANCE BY THE 
GOVERNMENT AND/OR PRIVATE INSTITUTIONS SUBJECT TO THE RULES AND 
REGULATIONS OF THE AGENCY CONCERNED. 
C. SPECIAL PROVISIONS ON ELECTRIC COOPERATIVES 
ART. 110. COVERAGE. - THESE PROVISIONS SHALL APPLY TO ALL 
COOPERATIVES TO BE REGISTERED WITH THE AUTHORITY, UNDERTAKING 
ELECTRIC POWER GENERATION, TRANSMISSION AND DISTRIBUTION AS ITS 
PRIMARY PURPOSES; PROVIDED, THAT EXISTING ELECTRIC COOPERATIVES 
PREVIOUSLY 
REGISTERED 
WITH 
THE 
NATIONAL 
ELECTRIFICATION 
ADMINISTRATION, 
AND HAVE OPTED TO BE REGISTERED WITH THE 
AUTHORITY, SHALL BE COVERED BY THESE PROVISIONS ONLY AFTER 
FULFILLING THE 
REQUIREMENTS SET 
FORTH 
IN 
THE 
TRANSITORY 
PROVISIONS OF THIS CODE. 
ART. 111. REGISTRATION. - 
IN ADDITION TO THE REGISTRATION 
REQUIREMENTS LISTED HEREIN, THE PROPOSED ELECTRIC COOPERATIVE 
SHALL SUBMIT AN ENDORSEMENT FROM THE PROPER GOVERNMENT AGENCY 
AUTHORIZED TO ISSUE THE FRANCHISE OR CERTIFICATE OF PUBLIC 
CONVENIENCE AND NECESSITY FOR THE GENERATION, TRANSMISSION OR 
DISTRIBUTION OF 
ELECTRIC POWER. THE ELECTRIC COOPERATIVE MAY 
ALSO UNDERTAKE SUCH ALLIED UNDERTAKINGS THAT ARE CONSISTENT WITH 
THEIR PRIMARY PURPOSES. 
ART. 112. EXEMP TI0NS.- UNDER RULES AND REGULATIONS TO BE SET 
BY THE AUTHORITY, AND IN CONSULTATION WITH THE DEPARTMENT OF 
ENERGY, 
ELECTRIC COOPERATIVES MAY 
BE EXEMPTED FROM THE 
PROVISIONS OF THIS CODE WHICH MAY DIRECTLY AFFECT THE INTERNAL 
STRUCTURE AND THE MANAGEMENT OF SUCH ELECTRIC COOPERATIVES. 
ART.113. 
REGULATION OF ELECTRIC COOPERATIVES.- (1) 
THE 
REGULATION 
OF 
ELECTRIC 
COOPERATIVES 
IN 
REGARD 
TO 
THEIR 
CAPITALIZATION AND 
INVESTMENT REQUIREMENTS, 
EQUIPMENT AND 
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FACILITIES, 
RATE-FIXING AND SUCH OTHER MATTERS AFFECTING THEIR 
OPERATIONS SHALL BE SUPERVISED BY THE DEPARTMENT OF ENERGY. 
(2) THE INTERNAL AFFAIRS OF THE ELECTRIC COOPERATIVE SHALL BE 
GOVERNED BY THIS CODE AND ITS IMPLEMENTING AGENCY. 
(3) THE AUTHORITY AND THE DEPARTMENT OF ENERGY SHALL JOINTLY 
ISSUE THE 
RULES AND 
REGULATIONS ON 
THE 
REGULATION AND 
SUPERVISION OF ELECTRIC COOPERATIVES. 
ART. [122]114. [Electric Cooperatives] ADMINISTRATIVE SUPERVISION, 
TECHNICAL AND FINANCIAL ASSISTANCE TO ELECTRIC COOPERATIVES. - 
UPON THE EFFECTIVITY OF THIS ACT, ALL [Elelectric cooperatives shall be 
covered by this Code. IN CASE THE ELECTRIC COOPERATIVE SHOULD OPT TO 
REGISTER WITH THE [COOPERATIVE DEVELOPMENT] AUTHORITY [However], 
there shall be a transition period of [three (3) years] TWO (2) YEARS within which the 
[Cooperative Development] Authority and the National Electrification Administration 
shall help and assist THESE electric cooperatives to qualify FOR REGISTRATION 
under this Code[.]: PROVIDED, THAT WHILE THE AUTHORITY WILL HAVE 
GENERAL 
SUPERVISION 
OVER 
THE 
ELECTRIC 
COOPERATIVES, 
PARTICULARLY WITH THEIR INTERNAL AND INSTITUTIONAL CONCERNS, THE 
NATIONAL ELECTRIFICATION ADMINISTRATION MAY CONTINUE ITS FINANCIAL 
AND TECHNICAL SUPERVISION OF THE ELECTRIC COOPERATIVES. 
The 
[Cooperative Development] Authority and the National Electrification Administration 
shall jointly promulgate rules and regulations to the end that the provisions of this law 
are EFFECTIVELY IMPLEMENTED AND ARE harmonized with the provisions of 
Presidential Decree No. 269[.] WHICH HAVE NOT BEEN AMENDED BY THIS ACT. 
SEC. 13. Articles 99, 100, 101, 102, 103, 104, 105, 106, 107, 108 and 109 of 
Chapter Xlll on the Special Provisions Relating to Cooperative Banks are hereby re- 
numbered and amended to read as follows: 
ART. I99J115. Governing Law. - [(I)] 
The provisions of this Chapter shall 
primarily govern cooperative banks registered under this Code and the other provisions 
of this Code shall apply to them only insofar as they are not inconsistent with the 
provisions contained in this Chapter. 
Cooperatives duly established and registered under the provisions of this 
Code may organize among themselves a cooperative bank which shall likewise be 
considered a cooperative registerable under the provisions of this Code subject to the 
requirements of and requisite authorization from the Central Bank.] 
ART. [7OOj7 16. [Definition, Classification and Functions. - A cooperative bank is 
one organized by the majority shares of which is owned and controlled by 
cooperatives primarily to provide financial and credit services 
to cooperatives. The 
["(Z) 
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term "cooperative bank" shall include cooperative rural banks. A cooperative bank may 
perform the following functions: 
(1) To carry on banking and credit services for the cooperatives; 
(2) To receive financial aid or loans from the Government and the Central Bank 
of the Philippines for and in behalf of the cooperative banks and primary cooperatives 
and their federations engaged in business and to supervise the lending and collection 
of loans; 
(3) 
To mobilize savings of its members for the benefit of the cooperative 
(4) To act as a balancing medium for the surplus funds of cooperatives and their 
(5) To discount bills and promissory notes issued and drawn by cooperatives; 
(6) To issue negotiable instruments to facilitate the activities of cooperatives; 
(7) 
To issue debentures subject to the approval of and under conditions and 
(8) To borrow money from banks and other financial institutions within the limit to 
be prescribed by the Central Bank; and 
(9) To carry out all other functions as may be prescribed by the Authority: 
Provided, That the performance of any banking function shall be subject to prior 
approval by the Central Bank of the Philippines.] DECLARATION OF POLICY. - IN 
ADDITION TO THE DECLARATION OF POLICIES STATED UNDER ARTICLE 2 OF 
THIS CODE, IT IS HEREBY DECLARED THE POLICY OF THE STATE TO: 
movement; 
federations; 
guarantees to be prescribed by the Government; 
(1) ENCOURAGE THRIFT AND SAVINGS MOBILIZATION FOR THE 
ACHIEVEMENT OF SUSTAINABLE ECONOMIC DEVELOPMENT, EQUITY AND 
SOCIAL JUSTICE PRIMARILY AMONG COOPERATIVES AND THEIR MEMBERS; 
AND 
(2) 
REGULATE AND SUPERVISE THE ACTIVITIES OF COOPERATIVE 
BANKS IN ORDER TO ACHIEVE SOUND, STABLE AND EFFICIENT OPERATIONS 
FOR THE PROTECTION OF THE PUBLIC INTEREST. 
ART. [101]117. [Registration Requirements. - No entity shall be registered by the 
Cooperative Development Authority as a cooperative bank unless the articles of 
cooperation and by-laws thereof as well as its establishment and operation as a 
cooperative bank have been approved by the Central Bank of the Philippines and it 
satisfies all requirements for registration as a cooperative,] DEFINITION OF TERMS. - 
THE FOLLOWING DEFINITIONS SHALL APPLY IN THIS CHAPTER: 
(1) COOPERATWE BANK SHALL REFER TO A BANK ORGANIZED UNDER 
THIS CODE, THE MAJORITY SHARES OF WHICH ARE OWNED AND 
CONTROLLED BY COOPERATIVE ORGANIZATIONS, THE PURPOSE OF WHICH 
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IS PRIMARILY TO 
PROVIDE FINANCIAL AND 
CREDIT 
SERVICES TO 
COOPERATIVES AND 
THEIR 
MEMBERS. 
IT 
SHALL ALSO 
INCLUDE 
COOPERATIVE RURAL BANKS; 
(2) BANGKO SENTRAL SHALL REFER TO THE BANGKO SENTRAL NG 
PILIPINAS (BSP) CREATED UNDER REPUBLIC ACT NO. 7653; 
BANGKO SENTRAL NG PILIPINAS; 
(3) MON€TARY BOARD SHALL MEAN THE MONETARY BOARD OF THE 
(4) COOPERATIVE ORGANlZATlON SHALL REFER TO ANY COOPERATIVE 
WHETHER PRIMARY, SECONDARY OR TERTIARY, REGISTERED UNDER THE 
PROVISIONS OF THIS CODE AND WITH THE AUTHORITY. 
ART. [I0211 18. ORGANIZATION, Membership AND ESTABLISHMENT OF 
COOPERATIVE BANK . - [Membership of a cooperative bank shall include only 
cooperatives and federations of cooperatives.] (1) COOPERATIVE ORGANIZATIONS 
DULY ESTABLISHED AND REGISTERED UNDER THIS CODE MAY ORGANIZE A 
COOPERATIVE 
BANK, 
WHICH 
SHALL 
LIKEWISE 
BE 
CONSIDERED A 
COOPERATIVE REGISTERABLE UNDER THE PROVISIONS OF THIS CODE 
SUBJECT TO THE REQUIREMENTS AND REQUISITE AUTHORIZATION FROM 
THE BANGKO SENTRAL. 
(2) 
MEMBERSHIP IN A COOPERATIVE BANK SHALL EITHER BE 
REGULAR OR ASSOCIATE. REGULAR MEMBERSHIP SHALL BE OPEN ONLY TO 
COOPERATIVE ORGANIZATIONS WHICH ARE HOLDERS OF COMMON SHARES 
OF THE BANK. 
ASSOCIATE MEMBERS ARE THOSE SUBSCRIBING AND 
HOLDING PREFERRED SHARES OF THE BANK, WHICH MAY INCLUDE BUT ARE 
NOT LIMITED TO THE FOLLOWING: 
(A) 
INDIVIDUAL MEMBERS OF THE BANKS MEMBER-PRIMARY 
COOPERATIVES; AND 
SAMAHANG NAYONS AND MUNICIPAL KATIPUNANS NG MGA 
SAMAHANG NAYONS (MKSNS) WHICH HELD COMMON 
SHARES 
OF 
COOPERATIVE 
BANKS 
PRIOR 
TO 
THE 
EFFECTIVITY OF THIS ACT SHALL APPLY FOR CONVERSION 
(B) 
TO FULL-PLEDGED COOPERATtVES IN ORDER TO MAINTAIN 
THEIR STATUS AS REGULAR MEMBERS OF COOPERATIVE 
BANKS: 
PROVIDED, THAT THEY SHALL NOTIFY THE 
COOPERATIVE BANK CONCERNED OF THEIR INTENTION TO 
CONVERT WITHIN A PERIOD OF NINETY (90) DAYS FROM THE 
EFFECTIVITY OF THIS ACT. 
SAMAHANG NAYONS AND 
MKSNS ARE HEREBY GIVEN A PERIOD OF ONE (1) YEAR 
FROM THE EFFECTIVITY OF THIS ACT TO COMPLETE THEIR 
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CONVERSION TO COOPERATIVES. 
COOPERATIVE BANKS 
SHALL EXERT REASONABLE EFFORTS TO INFORM THEIR 
MEMBER SAMAHANG NAYONS AND MKSNS TO FINALLY 
CONVERT OR TO GIVE THE NOTICE OF CONVERSION WITHIN 
THE PRESCRIBED PERIODS. THE COOPERATIVE BANK 
CONCERNED MAY CONVERT THE COMMON SHARES HELD 
BY SUCH ASSOCIATIONS TO PREFERRED SHARES. 
(3) 
THE ARTICLES OF COOPERATION AND 
BYLAWS OF ANY 
COOPERATIVE BANK, OR ANY AMENDMENT THERETO, SHALL BE REGISTERED 
ONLY WHEN ACCOMPANIED BY A CERTIFICATE OF AUTHORITY ISSUED BY 
THE MONETARY BOARD, UNDER ITS OFFICIAL SEAL. 
SUCH CERTIFICATE 
SHALL BE ISSUED ONLY IF THE MONETARY BOARD IS SATISFIED FROM THE 
EVIDENCE SUBMITTED THAT: 
(A) 
ALL 
THE 
REQUIREMENTS OF 
EXISTING 
LAWS 
AND 
REGULATIONS TO ENGAGE IN BUSINESS FOR WHICH THE 
APPLICANT IS PROPOSED TO BE REGISTERED HAVE BEEN 
COMPLIED WITH; 
(B) PUBLIC INTEREST AND ECONOMIC CONDITIONS, BOTH 
GENERAL AND 
LOCAL, JUSTIFY THE AUTHORIZATION, 
DIRECTION AND ADMINISTRATION; AND 
(C) THE AMOUNT OF CAPITAL, THE FINANCING ORGANIZATION, 
DIRECTION AND ADMINISTRATION, AS WELL AS THE 
INTEGRITY AND RESPONSIBILITY OF THE ORGANIZERS AND 
ADMINISTRATORS REASONABLY ASSURE THE SAFETY OF 
THE INTEREST WHICH THE PUBLIC MAY ENTRUST TO THEM. 
ART. [103]119. [Board of Directors. - The number, composition, and voting 
rights of the board of directors shall be defined in the articles of cooperation and by- 
laws of the cooperative bank, notwithstanding provisions of this Code to the contrary.] 
ADMINISTRATION OF COOPERATIVE BANKS. - (1) TO MAINTAIN THE QUALITY 
OF BANK MANAGEMENT AND ACCORD BETTER PROTECTION TO DEPOSITORS 
AND THE PUBLIC IN GENERAL, THE MONETARY BOARD MAY PASS UPON AND 
REVIEW THE QUALIFICATIONS OF PERSONS WHO ARE ELECTED OR 
APPOINTED BANK DIRECTORS AND OFFICERS INCLUDING EX OFFICIO BOARD 
MEMBERS, AND DISQUALIFY THOSE UNFIT. THE MONETARY BOARD SHALL 
PRESCRIBE THE QUALIFICATIONS OF BANK DIRECTORS AND OFFICERS FOR 
THE PURPOSES OF THIS SECTION, GIVING DUE RECOGNITION TO THE UNIQUE 
COOPERATIVE NATURE AND CHARACTER OF COOPERATIVE BANKS. 
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(2) NOTWITHSTANDING THE PROVISIONS OF THIS CODE, THE NUMBER, 
COMPOSITION, TERM AND VOTING RIGHTS OF THE MEMBERS OF THE BOARD 
OF DIRECTORS AS WELL AS THE VOTING RIGHTS OF THE SHAREHOLDERS 
SHALL BE DEFINED IN THE ARTICLES OF COOPERATION AND BYLAWS OF THE 
COOPERATIVE BANK. 
EX-OFFICIO MEMBERSHIP IN THE BOARD OF DIRECTORS OF A 
COOPERATIVE BANK SHALL BE ALLOWED SUBJECT TO THE PROVISIONS OF 
ARTICLE 40 (2) OF THIS CODE. 
ART. [104]120. [Loans. - Cooperatives may obtain loans from a cooperative 
bank. Loans granted by a cooperative bank shall be reported to the Central Bank of the 
Philippines.] 
POWERS, 
FUNCTIONS 
AND 
ALLIED 
UNDERTAKINGS 
OF 
COOPERATIVE BANKS. - COOPERATIVE BANKS SHALL PRIMARILY PROVIDE 
FINANCIAL, 
BANKING 
AND 
CREDIT 
SERVICES 
TO 
COOPERATIVE 
ORGANIZATIONS AND THEIR MEMBERS. HOWEVER, THE MONETARY BOARD 
MAY PRESCRIBE APPROPRIATE CEILINGS AND CONDITIONS ON BORROWINGS 
OF A COOPERATIVE ORGANIZATION FROM A COOPERATIVE BANK. 
(1) SUBJECT TO SUCH GUIDELINES AS MAY BE ESTABLISHED BY THE 
MONETARY BOARD, A COOPERATIVE BANK MAY: 
(A) 
(B) 
MOBILIZE 
SAVINGS 
FOR 
THE 
BENEFIT 
OF 
THE 
COOPERATIVE 
ACCEPT SAVINGS AND TIME DEPOSITS; 
MOVEMENT; 
RECEIVE FINANCIAL AID OR LOANS FROM ANY 
INSTITUTION AND THE BANGKO SENTRAL FOR AND IN 
BEHALF PRIMARILY OF THE COOPERATIVE BANKS AND 
COOPERATIVE ORGANIZATIONS ENGAGED IN BUSINESS 
AND SUPERVISE THE LENDING AND COLLECTION OF LOANS; 
ACT AS A BALANClNG MEOIUM FOR THE SURPLUS FUNDS 
(C) 
(D) 
OF 
COOPERATIVE ORGANIZATIONS; 
ISSUE NEGOTIABLE INSTRUMENTS TO FACILITATE THE 
ACTIVITIES OF COOPERATIVE ORGANIZATIONS; 
ISSUE DEBENTURES SUBJECT TO THE APPROVAL OF AND 
UNDER CONDITIONS AND GUARANTEES TO BE PRESCRIBED 
BY THE GOVERNMENT; 
OPEN DOMESTIC LETTERS OF CREDIT AND BANK DRAFTS; 
BORROW MONEY FROM BANKS AND OTHER FINANCIAL 
(E) 
(F) 
(G) 
(H) 
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INSTITUTIONS WITHIN THE LIMIT TO BE 
THE BANGKO SENTRAL; 
DISCOUNT AND REDISCOUNT PAPER WITH PRIVATE OR 
GOVERNMENT FINANCIAL INSTITUTIONS; 
ISSUE REAL ESTATE MORTGAGE AND CHATTEL MORTGAGE 
CERTIFICATES, BUY AND SELL THEM FOR ITS OWN 
ACCOUNT OR FOR THE ACCOUNT OF OTHERS, OR ACCEPT 
OR RECEIVE THEM IN PAYMENT FOR OR AMORTIZATION OF 
ITS LOAN; 
PURCHASE, HOLD AND CONVEY REAL ESTATE UNDER 
THE CONDITIONS PROVIDED IN SECTIONS 51 AND 52 OF 
REPUBLIC ACT NO. 8791, OTHERWISE KNOWN AS THE 
GENERAL BANKING LAW OF 2000; 
PRESCRIBED BY 
(I) 
(J) 
(K) 
(L) 
ENGAGE IN QUASI-BANKING MONEY MARKET OPERATIONS; 
(M) 
EXTEND CREDIT AGAINST THE SECURITY OF JEWELRY, 
PRECIOUS STONES AND ARTICLES OF SIMILAR NATURE, 
SUBJECT TO SUCH RULES AND REGULATIONS AS THE 
MONETARY BOARD MAY PRESCRIBE. 
THE POWERS AND FUNCTIONS UNDER ITEMS (E), (F), (G), (J), (K), AND (L) 
OF THIS SUBSECTION MAY BE PERFORMED BY A COOPERATIVE BANK 
SUBJECT TO SUCH RULES AND REGULATIONS AS MAY BE PROMULGATED BY 
THE MONETARY BOARD. 
IN ADDITION TO THE POWERS GRANTED BY THIS CODE AND OTHER 
EXISTING LAWS, ANY COOPERATIVE 
BANK MAY PERFORM ANY OR ALL OF 
THE SERVICES OFFERED BY RURAL BANKS UPON PRIOR APPROVAL OF THE 
MONETARY BOARD, AND THE FOLLOWING: 
(I) 
OFFER CURRENT OR CHECKING ACCOUNTS SUBJECT TO 
SUCH 
GUIDELINES AS MAY BE ESTABLISHED BY THE PHILIPPINE 
CLEARING HOUSE CORPORATION; 
ACT AS CORRESPONDENT FOR OTHER FINANCIAL 
INSTITUTIONS; 
ACT AS COLLECTION AND/OR WITHHOLDING AGENT FOR 
GOVERNMENT ENTITIES, INCLUDING BUT NOT LIMITED TO 
THE 
BUREAU OF 
INTERNAL REVENUE, THE 
SOCIAL 
SECURITY SYSTEM AND THE BUREAU OF CUSTOMS; 
(11) 
(Ill) 
(IV) 
ACT AS OFFICIAL DEPOSITORY OF NATIONAL AGENCIES, 
AND OF MUNICIPAL, CITY OR PROVINCIAL GOVERNMENT 
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UNITS IN THE MUNICIPALITY, CITY OR PROVINCE WHERE 
THE COOPERATIVE BANK IS LOCATED, SUBJECT TO SUCH 
GUIDELINES AS MAY BE ESTABLISHED BY THE MONETARY 
BOARD AND THE DEPARTMENT OF FINANCE; 
EXTEND CREDIT FACILITIES TO PRIVATE AND GOVERNMENT 
EMPLOYEES: 
PROVID€D, THAT IN THE CASE OF A 
BORROWER WHO IS A PERMANENT EMPLOYEE OR WAGE 
EARNER, THE TREASURER, CASHIER OR PAYMASTER OF 
THE 
OFFICE 
EMPLOYING 
HIM 
IS 
AUTHORIZED, 
NOTWITHSTANDING THE PROVISIONS OF ANY EXISTING 
LAW, RULES OR REGULATIONS TO THE CONTRARY, TO 
MAKE DEDUCTIONS FROM HIS SALARY, WAGE OR INCOME 
PURSUANT TO THE TERMS OF HIS LOAN, TO REMIT 
DEDUCTIONS TO THE COOPERATIVE BANK CONCERNED, 
AND 
COLLECT 
SUCH 
REASONABLE 
FEES 
FOR 
HIS 
SERVICES; 
(V) 
NOTHING IN THIS ARTICLE SHALL BE CONSTRUED AS PRECLUDING A 
COOPERATIVE BANK FROM PERFORMING, WITH PRIOR APPROVAL OF THE 
MONETARY BOARD, THRIFT BANKING SERVICES, COMMERCIAL BANKING 
SERVICES, OR FROM OPERATING UNDER AN EXPANDED BANKING AUTHORITY, 
OR FROM EXERCISING, WHENEVER APPLICABLE AND NOT INCONSISTENT 
WITH THE PROVISIONS OF THIS ACT AND BANGKO SENTRAL REGULATIONS, 
SUCH OTHER POWERS INCIDENT TO A CORPORATION. 
(2) SUBJECT TO SUCH GUIDELINES AS MAY BE ESTABLISHED BY THE 
MONETARY BOARD, COOPERATIVE BANKS MAY INVEST IN EQUITIES OF 
ALLIED UNDERTAKINGS AS HEREINAFTER ENUMERATED: PROVIDED, THAT: 
(A) 
THE TOTAL INVESTMENT IN EQUITIES SHALL NOT EXCEED 
TWENTY-FIVE PER CENTUM (25%) OF THE NET WORTH OF 
THE COOPERATIVE BANK; 
(6) 
THE EQUITY INVESTMENT IN ANY SINGLE ENTERPRISE 
SHALL BE LIMITED TO FIFTEEN PER CENTUUM (15%) OF THE 
NET WORTH OF THE COOPERATIVE BANK; AND 
(C) 
THE EQUITY INVESTMENT IN OTHER BANKS SHALL BE 
SUBJECT TO THE SAME PROVISIONS GOVERNING SIMILAR 
INVESTMENTS OF RURAL BANKS AND SHALL BE DEDUCTED 
FROM THE INVESTING BANKS NET WORTH FOR THE 
PURPOSE OF COMPUTING THE PRESCRIBED RATIO AS 
PROVIDED IN SUBARTICLE 2, ARTICLE 
106 HEREOF: 
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PROVIDED, FURTHER, THAT EQUITY INVESTMENTS SHALL 
NOT BE PERMITTED IN NON-RELATED ACTIVITIES. WHERE 
THE ALLIED ACTIVITY IS A WHOLLY OR MAJORITY-OWNED 
SUBSIDIARY OF THE COOPERATIVE BANK, THE BANGKO 
SENTRAL MAY SUBJECT IT TO EXAMINATION. 
INVESTMENT IN ALLIED UNDERTAKINGS SHALL MEAN INVESTING IN 
INSTITUTIONS ENGAGED IN THE FOLLOWING ACTIVITIES: 
(I) 
BANKING AND FINANCING; 
(11) 
WAREHOUSING AND OTHER POST-HARVEST ACTIVITIES; 
(Ill) 
FERTILIZER AND AGRICULTURAL CHEMICAL AND PESTICIDE 
DISTRIBUTION; 
(IV) 
FARM EQUIPMENT DISTRIBUTION; 
(V) 
TRUCKING AND TRANSPORTATION OF AGRICULTURAL 
PRODUCTS; 
(VI) 
MARKETING OF AGRICULTURAL PRODUCTS; 
(VII) LEASING; 
(VIII) COOPERATIVE INSURANCE; AND 
(IX) 
OTHER UNDERTAKINGS AS MAY BE DETERMINED BY THE 
MONETARY BOARD. 
(3) 
LOANS 
THAT 
A 
COOPERATIVE 
BANK 
MAY 
EXTEND 
TO 
COOPERATIVE ORGANIZATIONS, THEIR MEMBERS, AND TO ITS BANK'S 
DEPOSITORS SHALL BE SUBJECT TO SUCH LIMITATIONS AS MAY BE PROVIDED 
FOR BY THE BANGKO SENTRAL. 
EXCEPT AS THE MONETARY BOARD MAY OTHERWISE PRESCRIBE FOR 
REASONS OF NATIONAL INTEREST, THE TOTAL AMOUNT OF LOANS, CREDIT 
ACCOMMODATIONS AND GUARANTEES AS MAY BE DEFINED BY THE 
MONETARY BOARD, THAT MAY BE EXTENDED BY A COOPERATIVE BANK TO 
ANY PERSON, PARTNERSHIP, ASSOCIATION SHALL AT NO TIME EXCEED 
TWENTY PER CENTUM (20%), OF THE NETWORTH OF SUCH BANK. THE BASIS 
FOR DETERMINING COMPLIANCE WITH SINGLE-BORROWER LIMIT IS THE 
TOTAL CREDIT COMMITMENT OF THE BANK TO THE BORROWER. 
THE DIRECT INDEBTEDNESS TO A COOPERATIVE BANK BY ANY PERSON 
OR ASSOCIATION, FOR MONEY BORROWED, SHALL EXCLUDE: 
(A) 
(B) 
LOANS SECURED BY OBLIGATIONS OF THE BANGKO SENTRAL; 
LOANS FULLY GUARANTEED BY THE GOVERNMENT AS TO THE 
PAYMENT OF PRINCIPAL AND INTEREST; 
(C) 
LOANS TO THE EXTENT COVERED BY THE HOLD-OUT, OR 
ASSIGNMENT OF, DEPOSITS MAINTAINED IN THE PHILIPPINES; 
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(D) 
LOANS TO COOPERATIVE ORGANIZATIONS OF THEIR MEMBERS 
FROM FUNDS PASSED THROUGH THE COOPERATIVE BANK AS A 
CONDUIT IN ANY PRIVATE OR GOVERNMENT LENDING PROGRAM; 
AND 
(E) 
OTHER LOANS OR CREDITS AS THE MONETARY BOARD MAY, 
FROM TIME TO TIME, SPECIFY AS NON-RISK ASSETS. 
NOTWITHSTANDING THE PROVISIONS OF THE PRECEDING PARAGRAPH 
AND SUBJECT TO SUCH REGULATIONS THAT THE MONETARY BOARD MAY 
PRESCRIBE, THE TOTAL INDEBTEDNESS OF ANY BORROWER TO THE 
COOPERATIVE BANK MAY AMOUNT TO A FURTHER TEN PERCENT (10%) OF 
THE NET WORTH OF THE BANKS UNIMPAIRED CAPITAL AND SURPLUS: 
PROVIDED, THAT THE ADDITIONAL INDEBTEDNESS IS FOR THE PURPOSE OF 
FINANCING A SUBDIVISION OR HOUSING DEVELOPMENT, MEDIUM-INCOME OR 
LOW-INCOME BORROWERS, OR AGRICULTURE, ON A FULLY SECURED BASIS. 
THE MONETARY BOARD MAY REGULATE THE AMOUNT OF CREDIT, 
ACCOMMODATIONS THAT MAY BE EXTENDED DIRECTLY OR INDIRECTLY, BY 
COOPERATIVE BANKS TO THEIR DIRECTORS, OFFICERS OR SHAREHOLDERS. 
HOWEVER, THE OUTSTANDING CREDIT ACCOMMODATIONS WHICH A 
COOPERATIVE BANK MAY EXTEND TO EACH OF ITS DIRECTORS, OFFICERS 
OR SHAREHOLDERS, EXCEPT MEMBER COOPERATIVE-SHAREHOLDERS, 
SHALL BE LIMITED TO AN AMOUNT EQUIVALENT TO THE RESPECTIVE 
UNENCUMBERED DEPOSITS AND BOOK VALUE OF THEIR PAID-UP CAPITAL 
CONTRIBUTION IN THE BANK. 
ART. [I051 121. 
Supervision - The cooperative banks registered under this 
Code shall be under the supervision of the [Central Bank] BANGKO SENTRAL. The 
[Central Bank] BANGKO SENTRAL upon consultation with the agency and the 
cooperative movement shall formulate guidelines regarding the operations and banking 
transactions of cooperative banks. These guidelines shall give due recognition to the 
unique cooperative nature and character of cooperative banks. To this end, 
cooperative banks may be exempted from [Central Bank] BANGKO SENTRAL rules 
and regulations, applicable to other types of banks, which would impede the 
cooperative rural bank from performing legitimate financial and banking services to its 
members. 
ART. 
[106]122. - Capitalization AND CAPITAL REQU(REMENTS OF 
COOPERATIVE BANKS. - 
1) A national OR LOCAL cooperative bank shall have a 
minimum [authorized share capital of two hundred million pesos (P200,000,000.00) in 
relation to Art. 14 (5).] 
PAID-UP CAPITAL IN SUCH AMOUNT AS MAYBE 
REQUIRED BY THE MONETARY BOARD IN CONSULTATION WITH AND AS MAY 
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BE PRESCRIBED BY THE SECTOR CONCERNED. The authorized share capital 
shall be divided into such number of shares with a minimum par value of one thousand 
pesos 
(P1,OOO.OO) 
per share. 
For the purpose of primarily determining the 
permanency of equity, the types of shares a cooperative bank may issue, including the 
terms thereof and the rights appurtenant thereto, shall be subject to such rules and 
regulations as the [Central Bank] BANGKO SENTRAL may prescribe. 
(2) x x x  
(3) THE LAND BANK OF THE PHILIPPINES (LBP) MAY SUBSCRIBE TO AT 
LEAST TWENTY PER CENTUM (20%) OF THE PREFERRED SHARES OF A 
COOPERATIVE BANK. OTHER GOVERNMENT-OWNED AND CONTROLLED 
FINANCIAL INSTITUTIONS MAY ALSO SUBSCRIBE TO THE PREFERRED 
SHARES OF A COOPERATIVE BANK. HOWEVER, SUCH SUBSCRIPTIONS OF 
THE LBP AND OTHER GOVERNMENT-OWNED AND CONTROLLED FINANCIAL 
INSTITUTIONS SHALL BE SUBJECT TO THE APPROVAL OF THE BOARD OF 
DIRECTORS OF THE COOPERATIVE BANK. SUCH CAPITAL INFUSION SHALL BE 
CONSIDERED AS PARTIAL COMPLIANCE BY THE GOVERNMENT-OWNED AND 
CONTROLLED FINANCIAL INSTITUTIONS CONCERNED WITH THE PROVISIONS 
OF PRESIDENTIAL DECREE NO. 717 OTHERWISE KNOWN AS THE AGRI-AGRA 
LAW. THE SHARES HELD BY GOVERNMENT FINANCIAL INSTITUTIONS SHALL 
BE PAID OFF AT PAR AND RETIRED IN WHOLE OR IN PART WHEN THE 
COOPERATIVE BANK HAS ACQUIRED ENOUGH CAPITAL STRENGTH TO 
PERMIT RETIREMENT OF SHARES. 
(4) THE MONETARY BOARD SHALL PRESCRIBE THE MINIMUM RATIO WHICH THE 
NET WORTH OF A BANK MUST BEAR TO ITS TOTAL RISK ASSETS WHICH MAY INCLUDE 
CONTINGENT ACCOUNTS. FOR PURPOSES OF THIS SECTION, THE MONETARY 
BOARD MAY REQUIRE THAT SUCH RATIO BE DETERMINED ON THE BASIS OF THE 
NET WORTH AND RISK ASSETS OF A BANK AND ITS SUBSIDIARIES, FINANCIAL OR 
OTHERWISE, AS WELL AS PRESCRIBE THE COMPOSITION AND THE MANNER OF 
DETERMINING THE NET WORTH AND TOTAL RISK ASSETS OF BANKS AND THEIR 
SUBSIDIARIES: PROV/DED, THAT IN THE EXERCISE OF THIS AUTHORITY, THE 
MONETARY BOARD SHALL, TO THE EXTENT FEASIBLE, CONFORM TO 
INTERNATIONALLY ACCEPTED STANDARDS, INCLUDING THOSE OF THE BANK 
FOR INTERNATIONAL SETTLEMENTS (BIS), RELATING TO RISK-BASED CAPITAL 
REQUIREMENTS: PROV/D€D, FURTH€R, THAT IT MAY ALTER OR SUSPEND 
COMPLIANCE WITH SUCH RATIO WHENEVER NECESSARY FOR A MAXIMUM PERIOD OF 
ONE (1) YEAR: PROV/D€D, FINALLY; THAT SUCH RATIO SHALL BE APPLIED UNIFORMLY 
TO BANKS OF THE SAME CATEGORY. 
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IN CASE A BANK DOES NOT COMPLY WITH THE PRESCRIBED MINIMUM RATIO, THE 
MONETARY BOARD MAY LIMIT OR PROHIBIT THE DISTRIBUTION OF NET PROFITS BY 
SUCH BANK AND MAY REQUIRE THAT PART OR ALL OF THE NET PROFITS BE USED 
TO INCREASE THE CAPITAL ACCOUNTS OF THE BANK UNTIL THE MINIMUM 
REQUIREMENT HAS BEEN MET. THE MONETARY BOARD MAY, FURTHERMORE, 
RESTRICT OR PROHIBIT THE ACQUISITION OF MAJOR ASSETS AND THE MAKING OF 
NEW INVESTMENTS BY THE BANK, WITH THE EXCEPTION OF PURCHASES OF 
READILY MARKETABLE EVIDENCES OF INDEBTEDNESS OF THE REPUBLIC OF THE 
PHILIPPINES AND OF THE BANGKO SENTRAL AND ANY OTHER EVIDENCES OF 
INDEBTEDNESS OR OBLIGATIONS THE SERVICING AND REPAYMENT OF WHICH ARE 
FULLY GUARANTEED BY THE REPUBLIC OF THE PHILIPPINES, UNTIL THE MINIMUM 
REQUIRED CAPITAL RATIO HAS BEEN RESTORED. 
IN CASE OF A BANK MERGER OR CONSOLIDATION, OR WHEN A BANK IS 
UNDER REHABILITATION UNDER A PROGRAM APPROVED BY THE BANGKO 
SENTRAL, THE MONETARY BOARD MAY TEMPORARILY RELIEVE THE SURVIVING BANK, 
CONSOLIDATED 
BANK, OR CONSTITUENT BANK OR CORPORATIONS UNDER 
REHABILITATION FROM FULL COMPLIANCE WITH THE REQUIRED CAPITAL RATIO 
UNDER SUCH CONDITIONS AS IT MAY PRESCRIBE. 
BEFORE THE EFFECTIVITY OF THE RULES WHICH THE MONETARY 
BOARD IS AUTHORIZED TO PRESCRIBE UNDER THIS PROVISION, SECTION 22 OF 
THE GENERAL BANKING ACT, AS AMENDED, SECTION 9 OF THE THRIFT BANKS ACT, 
AND ALL PERTINENT RULES ISSUED PURSUANT THERETO, SHALL CONTINUE TO BE 
IN FORCE. 
ART. [107]123. [Distribution of Net Surplus. - The provisions of this Code on the 
allocation and distribution of net surplus shall apply.] PROHIBITED ACT. - ANY BANK 
NOT ORGANIZED AND REGISTERED UNDER THIS CODE, AND ANY PERSON, 
ASSOCIATION, OR CORPORATION DOING THE BUSINESS OF BANKING, NOT 
AUTHORIZED UNDER THIS CODE OR EXISTING LAWS, WHICH SHALL USE THE 
WORDS “COOPERATIVE BANK AS PART OF ITS NAME OR TITLE AS SUCH BANK 
OR SUCH PERSON, ASSOCIATION OR CORPORATION, SHALL BE PUNISHED BY 
A FINE OF NOT LESS THAN ONE THOUSAND PESOS (P1,OOO.OO) BUT IN NO 
CASE TO EXCEED THIRTY THOUSAND PESOS (P30,OOO.OO) FOR EACH DAY 
DURING WHICH THE SAID WORDS ARE SO USED. 
ART. [108]124. Privileges AND INCENTIVES OF COOPERATIVE BANKS. - 
[Cooperative banks shall have the following privileges subject to the approval of the 
Central Bank and compliance with applicable banking laws, rules and regulations:] 
(1) The cooperative banks registered under this Code shall be given the same 
privileges AND INCENTIVES granted to the rural banks, private development banks, 
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commercial banks, and all other banks to rediscount notes with the [Central Bank] 
BANGKO SENTRAL, the Land Bank of the Philippines, and other government banks 
without affecting in any way the provisions of this Code; [and] 
(2) 
[To act 
as a depository of government funds. For this purpose, all 
government departments, agencies and units of the national and local governments 
including government-owned and controlled corporations are hereby authorized to 
deposit their funds in any cooperative bank.]SUBJECT TO THE APPROVAL OF THE 
MONETARY BOARD, A COOPERATIVE BANK SHALL PUBLISH A STATEMENT OF ITS 
FINANCIAL CONDITION, INCLUDING THOSE OF ITS SUBSIDIARIES AND AFFILIATES, 
IN SUCH TERMS UNDERSTANDABLE TO THE LAYMAN AND IN SUCH FREQUENCY AS 
MAY BE PRESCRIBED BY THE BANGKO SENTRAL, IN ENGLISH OR FILIPINO, AT LEAST 
ONCE EVERY QUARTER IN A NEWSPAPER OF GENERAL CIRCULATION IN THE CITY OR 
PROVINCE WHERE THE PRINCIPAL OFFICE, IN THE CASE OF A DOMESTIC INSTITUTION, 
OR THE PRINCIPAL BRANCH OR OFFICE IN THE CASE OF A FOREIGN BANK, IS LOCATED, 
BUT IF NO NEWSPAPER IS PUBLISHED IN THE SAME PROVINCE, THEN IN A NEWSPAPER 
PUBLISHED IN METRO MANILA OR IN THE NEAREST CITY OR PROVINCE. 
HOWEVER, IN CASES OF FORECLOSURE OF MORTGAGES COVERING 
LOANS GRANTED BY A 
COOPERATIVE BANK AND 
EXECUTIONS OF 
JUDGMENTS THEREON INVOLVING REAL PROPERTIES AND LEVIED UPON BY 
A SHERIFF SHALL BE EXEMPT FROM PUBLICATION REQUIREMENT WHERE 
THE TOTAL AMOUNT OF THE LOAN, EXCLUDING INTEREST AND OTHER 
CHARGES DUE AND UNPAID, DOES NOT EXCEED FIVE HUNDRED THOUSAND 
PESOS (P500,OOO.OO) OR SUCH AMOUNT AS THE MONETARY BOARD MAY 
PRESCRIBE, AS MAY BE WARRANTED BY THE PREVAILING ECONOMIC 
CONDITIONS AND BY THE NATURE AND CHARACTER OF COOPERATIVE 
BANKS. 
IT SHALL BE SUFFICIENT PUBLICATION IN SUCH CASES IF THE 
NOTICE OF FORECLOSURE AND EXECUTION OF JUDGMENT ARE POSTED IN 
CONSPICUOUS AREAS OF THE COOPERATIVE BANKS PREMISES, THE 
MUNICIPAL HALL, THE MUNICIPAL PUBLIC MARKET, THE BARANGAY HALL, OR 
THE BARANGAY PUBLIC MARKET, IF THERE BE ANY, WHERE THE LAND 
MORTGAGED IS SITUATED, WITHIN A PERIOD OF SIXTY (60) DAYS 
IMMEDIATELY PRECEDING THE PUBLIC AUCTION OR THE EXECUTION OF 
JUDGMENT. 
PROOF OF PUBLICATION AS REQUIRED HEREIN SHALL BE 
ACCOMPLISHED 
BY AN 
AFFIDAVIT 
OF 
THE 
SHERIFF 
OR 
OFFICER 
CONDUCTING THE FORECLOSURE SALE OR EXECUTION OF JUDGMENT, AND 
SHALL BE ATTACHED TO THE RECORD OF THE CASE. 
A COOPERATIVE BANK SHALL BE ALLOWED TO FORECLOSE LANDS 
MORTGAGED TO IT SUBJECT TO THE PROVISIONS OF REPUBLIC ACT. NO. 
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6657, OTHERWISE KNOWN AS THE COMPREHENSIVE AGRARIAN REFORM LAW 
OF 1988. 
(3) IN ADDITION TO THE PRIVILEGES GENERALLY GRANTED TO 
COOPERATIVES UNDER THIS CODE, A COOPERATIVE BANK SHALL ALSO BE 
ENTITLED TO TAX EXEMPTION PRIVILEGES AS MAY BE APPLICABLE UNDER 
ARTICLE 61 OF THIS CODE. 
ART. [I091 125. Assistance to [a] Cooperative Banks. - 
IN ACCORDANCE 
WITH EXISTING POLICIES, GOVERNMENT AGENCIES, GOVERNMENT-OWNED 
OR CONTROLLED CORPORATIONS AND FINANCIAL INSTITUTIONS SHALL 
PROVIDE ASSISTANCE, TECHNICAL OR OTHERWISE, TO COOPERATIVE BANKS 
TO PERMIT THEM TO GROW, DEVELOP AND PERFORM THEIR ROLE IN 
COUNTRYSIDE DEVELOPMENT AND TOWARDS A SUSTAINABLE NATIONAL 
ECONOMIC DEVELOPMENT. Whenever a cooperative bank organized under this 
Code is distressed or may need assistance in the rehabilitation of its financial condition 
or to avoid bankruptcy, the Monetary Board of the [Central Bank of the Philippines] 
BANGKO SENTRAL 
shall designate an official of the [Central Bank] BANGKO 
SENTRAL or a person of recognized competence [in], PREFERABLY WITH 
EXPERIENCE IN COOPERATIVE banking [or] AND finance, as conservator of the 
said bank pursuant to the provisions of Section 29 of [Republic Act No. 265, as 
amended] 
REPUBLIC ACT NO. 7653, OTHERWISE KNOWN AS THE NEW 
CENTRAL BANK ACT. 
SEC. 14. A new Article is inserted in Chapter Xlll on the Special Provisions 
Relating to Cooperative Banks of the same Code, and shall read as follows: 
ART. 126. SETTLEMENT OF DISPUTES. - IN CASES OF BANKING-RELATED 
CONFLICTS, PROVISIONS OF THE GENERAL BANKING ACT AND THE RULES 
AND REGULATIONS OF THE MONETARY BOARD SHALL PREVAIL. 
SEC. 15. Articles 1 IO, 11 1, 112 and 114 of Chapter XIV on Special Provisions 
Relating to Credit Cooperatives of the same Code are hereby amended. Article 113 on 
Organizational Linkages of the same Chapter is hereby deleted. 
New Articles 131, 132, 133, 134, 135, 136, 137 and 138 have been inserted to 
form part of the amended Chapter XIV which is now re-titled as Special Provisions 
Relating to Credit Cooperatives and/or Financial Service Cooperatives. Chapter XIV 
as amended shall now read as follows: 
CHAPTER XIV 
SPECIAL PROVISIONS RELATING TO 
CREDIT COOPERATIVES AND/OR FINANCIAL SERVICE COOPERATIVES 
ART. [I101 127. 
Coverage. - This Chapter shall apply [only] to credit 
cooperatives AND TO ALL OTHER COOPERATIVES, INCLUDING MULTI-PURPOSE 
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COOPERATIVES, THAT PROVIDE SAVINGS, CREDIT OR OTHER RELATED 
FINANCIAL SERVICES TO THEIR MEMBERS, WHICH, FOR THE PURPOSES OF 
THIS CHAPTER, SHALL HEREINAFTER BE REFERRED TO AS FINANCIAL 
SERVICE COOPERATIVES. [and the] THE rest of the provisions of this Code shall 
apply to them insofar as the same are not inconsistent with the provisions of this 
Chapter. 
ART. [Ill] 
128. Definition and [Objectives] FUNCTIONS. - 1. A [credit] 
FINANCIAL SERVICE cooperative is a financial organization owned and operated by its 
members AUTHORIZED TO ACCEPT SAVINGS AND TIME DEPOSITS AND OTHER 
FUNDS FROM ITS MEMBERS AND TO ENGAGE IN THE EXTENSION OF LOANS 
AND OTHER CREDIT ACCOMODATIONS TO ITS MEMBERS. [ with the following 
objectives: 
(1) To encourage savings among its members; 
(2) To create a pool of such savings for which loans for productive or provident 
(3) To provide related services to enable its members to maximize the benefit 
from such loans.] 
2. UPON PRIOR APPROVAL BY THE AUTHORITY AND SUBJECT TO SUCH 
CONDITIONS AND RULES THAT MAY BE SET BY THE AUTHORITY, A FINANCIAL 
SERVICE COOPERATIVE THAT HAS ONE HUNDRED FIFTY (150) MEMBERS OR 
purposes may be granted to its members; and 
MORE AND FIVE MILLION PESOS (P5,000,000.00) OR MORE IN PAID-UP SHARE 
CAPITAL MAY, IN ADDITION TO THE FUNCTIONS ENUMERATED UNDER 
PARAGRAPH 1, PERFORM ANY OF THE FOllOWlNG: 
ACT AS FINANCIAL AGENT AND BUY AND SELL, BY ORDER 
AND FOR THE ACCOUNT OF THEIR MEMBERS, SHARES, 
EVIDENCES OF 
INDEBTEDNESS AND ALL TYPES OF 
SECURITIES; 
MAKE COLLECTIONS AND PAYMENTS AND PERFORM SUCH 
OTHER SERVICES FOR THEIR MEMBERS AS ARE NOT 
INCOMPATIBLE WITH THEIR FINANCIAL INTERMEDIATION 
BUSINESS; 
EXTEND AND PROVIDE OTHER FINANCIAL PRODUCTS AND 
SERVICES TO ITS MEMBERS. 
OFFER CURRENT OR CHECKING ACCOUNTS OR ACCEPT 
DEMAND DEPOSITS NOTWITHSTANDING SECTION 33 OF 
REPUBLIC ACT NO. 8791, OTHERWISE KNOWN AS THE 
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GENERAL BANKING ACT OF 2000, AND ANY 
OTHER 
PROVISION OF LAW TO THE CONTRARY; 
(E) 
ACT 
AS 
CORRESPONDENT 
FOR 
OTHER 
FINANCIAL 
INSTITUTIONS; AND 
CARRY ON THE ACTIVITIES THAT A TRUST ENTITY MAY 
UNDERTAKE 
UNDER 
REPUBLIC 
ACT 
NO. 
8791, 
NOTWITHSTANDING SECTION 79 OF THE SAID ACT. 
(F) 
THE AUTHORITY SHALL, FIVE (5) YEARS AFTER THE EFFECTIVITY OF 
THIS ACT AND EVERY TWO (2) YEARS THEREAFTER, ADJUST THE REQUIRED 
MINIMUM NUMBER OF MEMBERS AND MINIMUM AMOUNT OF PAID-UP CAPITAL 
NECESSARY FOR COOPERATIVES TO QUALIFY FOR THESE ADDITIONAL 
POWERS 
3. A PRIMARY FINANCIAL SERVICE COOPERATIVE IS EMPOWERED TO 
PURSUE ITS ACTIVITIES IN THE CITY OR PROVINCE THAT THE COOPERATIVE 
HAS DESIGNATED AS ITS PRINCIPAL OFFICE, AND TO OPERATE BRANCHES 
WITHIN THE CITY OR PROVINCE WHERE ITS PRINCIPAL OFFICE IS LOCATED. 
PROVIDED, THAT THE OPENING OF BRANCHES MUST HAVE THE PRIOR 
APPROVAL OF THE FINANCIAL SERVICE COOPERATIVE FEDERATION OF 
WHICH IT IS A MEMBER. OPENING OR SETTING UP OF BRANCHES IN A CITY OR 
PROVINCE OTHER THAN WHERE THE PRINCIPAL OFFICE IS LOCATED SHALL 
REQUIRE THE APPROVAL OF THE FINANCIAL SERVICE COOPERATIVE 
FEDERATION AND THE AUTHORITY. 
4. A FINANCIAL SERVICE COOPERATIVE FEDERATION SHALL HAVE THE 
FOLLOWING FUNC 
TIONS: 
(A) 
DEVELOP AND PROVIDE SERVICES FOR THE BENEFIT OF ITS 
AFFILIATES AND THEIR MEMBERS, INCLUDING THOSE 
FUNCTIONS/SERVICES ENUMERATED UNDER PARAGRAPH 2 
HEREOF; 
SEE TO THE ORDERLY DEVELOPMENT OF ITS NETWORK; 
ESTABLISH AND ADMINISTER FUNDS SUCH AS LIQUIDITY 
FUND, LOAN FUND, INVESTMENT FUND, STABILIZATION 
(B) 
(C) 
FUND 
AND OTHER FUNDS; 
(D) 
DEFINE COMMON OBJECTIVES FOR THE NETWORK AND TO 
COORDINATE ITS ACTIVITIES; AND 
ACT AS A SUPERVISORY BODY OVER FINANCIAL SERVICE 
COOPERATIVES THAT ARE ITS MEMBERS, TO THE EXTENT 
PROVIDED FOR IN THIS ACT. 
(E) 
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NOTWITHSTANDING ARTICLE 24 OF THIS CODE, A MINIMUM OF FIFTY (50) 
MEMBER PRIMARY FINANCIAL SERVICE COOPERATIVES WITH FIVE MILLION 
(P5,000,000.00) PESOS PAID-UP CAPITAL IS REQUIRED FOR A FINANCIAL 
SERVICE COOPERATIVE FEDERATION TO BE REGISTERED: PROVIDED, THAT A 
FEDERATION MUST HAVE AT LEAST ONE HUNDRED (P100,OOO.OO) MILLION 
PESOS IN TOTAL ASSETS WITHIN THREE (3) YEARS AFTER ITS REGISTRATION. 
PROVIDED, FURTHER, THAT COOPERATIVE FEDERATIONS ENGAGED IN 
SAVINGS, CREDIT AND OTHER RELATED FINANCIAL SERVICES ALREADY 
REGISTERED AT THE TIME OF THE APPROVAL OF THIS ACT SHALL BE GIVEN 
THREE (3) YEARS FROM SUCH APPROVAL TO COMPLY WITH THE REQUIRED 
MINIMUM NUMBER OF MEMBERS, PAID-UP CAPITAL AND TOTAL ASSETS. 
EXCEPT WHERE INCOMPATIBLE, THE PROVISIONS OF THIS CHAPTER AND THE 
REGULATIONS MADE THEREUNDER SHALL LIKEWISE APPLY TO FINANCIAL 
SERVICE COOPERATIVE FEDERATIONS. 
5. NOTHING IN THIS ARTICLE SHALL BE CONSTRUED AS PRECLUDING A 
FINANCIAL SERVICE COOPERATIVE OR A FINANCIAL SERVICE COOPERATIVE 
FEDERATION FROM PROVIDING FOR THEIR 
MEMBERS, 
UPON PRIOR 
APPROVAL OF THE AUTHORITY AND, IF NECESSARY, THE MONETARY BOARD, 
FINANCIAL SERVICES THAT ARE PERFORMED BY BANKS. 
ART. [I 
12.1 129. 
Organization and Registration. - FINANCIAL SERVICE 
[credit] cooperatives shall be organized and registered in accordance with the general 
provisions of this Code[.] AND SHALL INDICATE IN THEIR APPLICATION FOR 
REGISTRATION IF THEY WILL ENGAGE IN SAVINGS AND CREDIT AND OTHER 
RELATED FINANCIAL SERVICE OPERATIONS. 
COOPERATIVES, INCLUDING 
CREDIT AND MULTI-PURPOSE COOPERATIVES EXISTING AT THE TIME OF THE 
EFFECTIVITY OF THIS ACT THAT INTEND OR WISH TO CONTINUE THEIR 
SAVINGS AND CREDIT AND OTHER RELATED FINANCIAL SERVICE OPERATIONS 
SHALL FORMALLY INFORM THE AUTHORITY OF SUCH OPERATIONS WITHIN 
ONE (1) YEAR FROM THE EFFECTIVITY OF THIS ACT. ALL FINANCIAL SERVICE 
COOPERATIVES SHALL SUBMIT A SEPARATE ANNUAL AUDITED FINANCIAL 
REPORT FOR THEIR FINANCIAL SERVICE OPERATIONS TO THE AUTHORITY. 
OTHERWISE, THE AUTHORITY SHALL ORDER THE SUSPENSION OF THE 
FINANCIAL SERVICE OPERATIONS OF THE COOPERATIVE: PROVIDED, THAT IN 
THE CASE OF A COOPERATIVE OTHER THAN A FEDERATION, IT MUST ALSO 
SUBMIT A CERTIFIED COPY OF THE RESOLUTION OF THE BOARD OF 
DIRECTORS OF A NATIONAL FEDERATION COMMITTING TO ACCEPT THE 
COOPERATIVE AS A MEMBER. 
AT THE ORGANIZATIONAL MEETING, THE 
FOUNDING MEMBERS OF A COOPERATIVE OR LOCAL FEDERATION MUST PASS 
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A RESOLUTION RATIFYING THE MEMBERSHIP OF THE COOPERATIVE WITH THE 
FINANCIAL SERVICE COOPERATIVE FEDERATION THAT HAS UNDERTAKEN TO 
ACCEPT IT AS A MEMBER: PROVIDED, FURTHER, THAT IN THE CASE OF A 
FEDERATION, IT MUST ALSO SUBMIT A CERTIFIED COPY OF THE RESOLUTION 
OF EACH OF THE FOUNDING COOPERATIVES. THE AUTHORITY MAY REQUIRE 
REASONABLE ADDITIONAL 
DOCUMENTS 
OR 
INFORMATION 
FOR 
THE 
EXAMINATION OF THE APPLICATION. 
[ART. 11 3. Organizational Linkage. - Credit cooperatives may organize chapters or 
subsidiaries, or join leagues and federations for the purpose of providing commonly 
needed essential services including but not limited to the following: 
(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; and 
(9) 
Other services needed to improve their performance. 
Existing support organizations such as federations of credit cooperatives, credit 
cooperatives at the provincial, regional and national levels may continue as such under 
this Code.] 
SERVICE COOPERATIVE MAINTAINS TWO TYPES OF MEMBERS: 
Art. [I131 130. MEMBERSHIP AND AFFILIATION. - (1) A FINANCIAL 
(A) 
(B) ASSOCIATE MEMBERS, WHO ARE NATURAL PERSONS NOT 
COMPLYING WITH THE REQUIREMENTS FOR MEMBERSHIP OR THE 
COMMON CHARACTERISTICS SET OUT IN THE ARTICLES OF 
COOPERATION ANF BYLAWS OR WHO ARE LEGAL PERSONS. ALL 
ASSOCIATE MEMBERS SHALL ONLY HAVE THE RIGHT TO MAKE 
DEPOSITS AND TO BORROW TO THE EXTENT OF THEIR 
SHAREHOLDINGS AND DEPOSITS. 
REGULAR MEMBERS, WHO ARE NATURAL PERSONS; AND 
MINORS AND PERSONS WITHOUT THE LEGAL CAPACITY TO 
CONTRACT 
MAY 
ONLY 
BECOME 
ASSOCIATE 
MEMBERS: 
PROVIDED, THAT MINORS WHO ARE MEMBERS MAY OPEN 
ACCOUNTS, 
DEPOSIT FUNDS IN AND WITHDRAW FROM THEIR 
ACCOUNT, SUBJECT TO THE BY-LAWS AND RULES OF THE 
COOPERATIVE 
AND 
THE 
FEDERATION 
OF 
WHICH 
THE 
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COOPERATIVE IS A MEMBER, AND THE RULES AND REGULATIONS 
OF THE AUTHORITY, NOTWITHSTANDING THE PROVISIONS OF 
EXISTING LAWS TO THE CONTRARY. 
(2) 
ONLY FINANCIAL SERVICE COOPERATIVES MAY BE REGULAR 
MEMBERS OF A FINANCIAL SERVICE COOPERATIVE FEDERATION. ANY OTHER 
COOPERATIVE OR ANY NON-STOCK, NON-PROFIT ORGANIZATION AS MAY BE 
RECOMMENDED BY A MEMBER COOPERATIVE MAY ALSO BE ADMITTED AS AN 
ASSOCIATE MEMBER OF A FINANCIAL SERVICE COOPERATIVE FEDERATION. 
(3) EVERY FINANCIAL SERVICE COOPERATIVE MUST BE A MEMBER OF 
ONLY ONE (1) FINANCIAL SERVICE COOPERATIVE FEDERATION: PROVIDED, 
THAT ALL UNAFFILIATED FINANCIAL SERVICE COOPERATIVES ALREADY 
REGISTERED AT THE TIME THIS LAW TAKES EFFECT SHALL BE GIVEN TWO (2) 
YEARS WITHIN WHICH TO BECOME A MEMBER OF ONE (1) FINANCIAL SERVICE 
COOPERATIVE FEDERATION: PROVIDED, FURTHER, THAT ALL REGISTERED 
FINANCIAL SERVICE COOPERATIVES, WHICH ARE MEMBERS OF MORE THAN 
ONE (1) FINANCIAL SERVICE FEDERATION SHALL BE GIVEN TWO (2) YEARS 
WITHIN WHICH TO CHOOSE ONE (I) FINANCIAL SERVICE COOPERATIVE 
FEDERATION OF WHICH IT SHALL CONTINUE TO BE A MEMBER: PROVIDED, 
FINALLY, THAT OTHER REGISTERED COOPERATIVES COVERED BY THIS 
CHAPTER MAY STILL AFFILIATE WITH FEDERATIONS OTHER THAN FINANCIAL 
SERVICE COOPERATIVE FEDERATIONS. 
ART. 131. 
REGULATION AND SUPERVISION OF FINANCIAL SERVICE 
COOPERATIVES. - THE AUTHORITY SHALL HAVE OVERALL SUPERVISION OVER 
THE OPERATIONS AND EXERCISE REGULATORY POWERS OVER FINANCIAL 
SERVICE COOPERATIVES AS FOLLOWS: 
1. ISSUE RULES AND REGULATIONS FOR THE SAFE AND SOUND 
CONDUCT OF OPERATIONS OF FINANCIAL SERVICE COOPERATIVES; 
2. PRESCRIBE RATIOS, CEILINGS, LIMITATIONS, OR OTHER FORMS OF 
REGULATION ON THE DIFFERENT TYPES OF ACCOUNTS AND PRACTICES OF 
FINANCIAL SERVICE COOPERATIVES WHICH SHALL, UP TO THE EXTENT 
POSSIBLE, CONFORM TO INTERNATIONALLY ACCEPTED STANDARDS; 
3. ESTABLISH STANDARDS OF OPERATION FOR UNIFORM APPLICATION 
TO ALL FINANCIAL SERVICE COOPERATIVES; 
4. CONDUCT REGULAR EXAMINATION OF THE BOOKS OF ACCOUNTS, 
RECORDS AND OTHER DOCUMENTS OF FINANCIAL SERVICE COOPERATIVES; 
5. OVERSEE TO ASCERTAIN THAT EXISTING LAWS AND REGULATIONS 
ARE COMPLIED WITH; 
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6. INVESTIGATE TO DETERMINE WHETHER A FINANCIAL SERVICE 
COOPERATIVE IS CONDUCTING ITS BUSINESS ON A SAFE AND SOUND BASIS; 
7. INQUIRE INTO THE SOLVENCY AND LIQUIDITY OF A FINANCIAL 
SERVICE COOPERATIVE; 
8. SELECT, DESIGNATE AND DEPUTIZE FEDERATIONS, THROUGH AN 
APPROVED ACCREDITATION CRITERIA, THAT WILL SUPERVISE PRIMARY 
FINANCIAL SERVICE 
COOPERATIVES AND 
ISSUE 
BASIC 
GUIDELINES 
THEREFOR; 
9. ACCREDIT EXTERNAL AUDITORS AND ISSUE GUIDELINES FOR AUDIT; 
I O .  PROVIDE 
REMEDIAL 
MEASURES 
IN 
THE 
OPERATIONS 
OF 
DISTRESSED PRIMARY FINANCIAL SERVICE COOPERATIVES AT THE REQUEST 
OF THE DEPUTIZED SUPERVISOR OR WHEN THE DEPUTIZED SUPERVISOR 
FAILS TO PERFORM ITS FUNCTIONS; AND 
11. REQUIRE THE SUBMISSION OF RELEVANT REPORTS FROM THE 
DEPUTIZED SUPERVISOR. 
THE AUTHORITY MAY ORDER A COOPERATIVE OR FEDERATION TO 
CEASE AND DESIST FROM TAKING ANY ACTION THAT DOES NOT ADHERE TO 
SOUND AND PRUDENT MANAGEMENT PRACTICES OR ARE INCONSISTENT 
WITH THE PROVISIONS OF THIS CODE, TO OTHER APPLICABLE COOPERATIVE 
LAWS, RULES, REGULATIONS, CIRCULARS OR ORDERS AS MAY BE ISSUED BY 
THE AUTHORITY. THE AUTHORITY SHALL REQUIRE THE COOPERATIVE 
CONCERNED TO 
UNDERTAKE CORRECTIVE OR REMEDIAL MEASURES 
RELATIVE THERETO. 
ART. 132. FEDERATIONS AS DEPUTIZED SUPERVISORS. - SUBJECT TO 
THE RULES AND REGULATIONS AS MAY ISSUED BY THE AUTHORITY, 
FINANCIAL SERVICE COOPERATIVE FEDERATIONS MAY BE DEPUTIZED BY THE 
AUTHORITY TO SUPERVISE, EXAMINE AND REGULARLY MONITOR THE 
FINANCIAL PERFORMANCE OF AND COMPLIANCE BY THEIR MEMBER 
FINANCIAL SERVICE COOPERATIVES WITH THE PROVISIONS OF THIS CODE, 
OTHER COOPERATIVE LAWS AND THE RULES AND REGULATIONS, CIRCULARS, 
ORDERS AND LEGAL ISSUANCES AS MAY BE ISSUED BY THE AUTHORITY: 
PROVIDED, THAT SUCH FEDERATION HAS DIRECT ACCESS TO THE PRIMARY 
FINANCIAL SERVICE COOPERATIVE: PROVIDED, FURTHER, THAT SUCH 
FEDERATION HAS PASSED THE AUTHORITY'S ACCREDITATION CRITERIA FOR 
DEPUTIZED SUPERVISORS. 
ALL FINANCIAL SERVICE COOPERATIVES, INCLUDING MULTI-PURPOSE 
AND OTHER COOPERATIVES ENGAGED IN SAVINGS, CREDIT AND OTHER 
RELATED FINANCIAL SERVICES MUST BE A MEMBER OF ONLY ONE (1) 
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DEPUTIZED 
FEDERATION: 
PROVIDED, 
THAT 
ALL 
UNAFFILIATED 
COOPERATIVES, ALREADY REGISTERED AT THE TIME THIS LAW TAKES 
EFFECT SHALL BE GIVEN TWO (2) YEARS WITHIN WHICH TO BECOME A 
MEMBER OF A FEDERATION THAT HAS BEEN DEPUTIZED AS SUPERVISOR BY 
THE AUTHORITY: PROVIDED, FURTHER, THAT ALL REGISTERED FINANCIAL 
SERVICE 
COOPERATIVES, 
INCLUDING 
MULTI-PURPOSE 
AND 
OTHER 
COOPERATIVES ENGAGED IN SAVINGS, CREDIT AND OTHER RELATED 
FINANCIAL SERVICES THAT ARE MEMBERS OF MORE THAN ONE (1) DEPUTIZED 
FEDERATION SHALL BE GIVEN TWO (2) YEARS TO CHOOSE ONLY ONE (1) 
DEPUTIZED FEDERATION OF WHICH IT SHALL CONTINUE TO BE A MEMBER. 
ART. 133. FUNCTIONS AND POWERS OF DEPUTIZED COOPERATIVE 
FEDERATIONS. - IN ADDITION TO THE POWERS IT MAY EXERCISE UNDER THIS 
ACT, A COOPERATIVE FEDERATION THAT HAS BEEN DEPUTIZED AS 
SUPERVISOR BY THE AUTHORITY MAY: 
(1) ISSUE ADDITIONAL STANDARDS FOR ITS MEMBER-COOPERATIVES IN 
ACCORDANCE WITH THE RULES, REGULATIONS AND STANDARDS TO BE 
ISSUED BY THE AUTHORITY; 
(2) EXERCISE BOTH ON-SITE AND OFF-SITE SUPERVISORY POWERS 
OVER THE MEMBER-COOPERATIVES; 
(3) PROVIDE REMEDIAL ASSISTANCE IN THE OPERATIONS AND 
MANAGEMENT OF THE MEMBER FINANCIAL SERVICE COOPERATIVE WHEN IT 
FAILS TO PERFORM AS DESIRED; 
(4) PROVIDE COMPTROLLERSHIP AND RECEIVERSHIP FUNCTION WHEN 
NECESSARY UPON THE AUTHORITY OF AND WHEN SO APPOINTED BY THE 
AUTHORITY; 
(5) ACT, UPON THE APPROVAL OF THE AUTHORITY, AS THE TEMPORARY 
OR PROVISIONAL ADMINISTRATOR OR AS THE LIQUIDATOR OF A MEMBER 
COOPERATIVE; 
(6) 
ACT AS THE LIQUIDATOR OR SEQUESTRATOR FOR THE 
PERFORMANCE OF AN OBLIGATION SECURED BY A MORTGAGE UPON THE 
AUTHORITY OF AND WHEN SO APPOINTED BY THE AUTHORITY; AND 
(7) TRANSMIT RELEVANT AND REQUIRED INFORMATION REGARDING 
THE OPERATIONS AND PERFORMANCE OF MEMBER-COOPERATIVES TO THE 
AUTHORITY. 
SUBJECT TO THE APPROVAL OF THE AUTHORITY, THE DEPUTIZED 
FEDERATION SHALL IMPOSE REASONABLE FEES TO DEFRAY COST OF 
SUPERVISION AND EXAMINATION. A COOPERATIVE IS BOUND TO PAY THE 
ASSESSMENTS OF THE FEDERATION OF WHICH 
IT IS A 
MEMBER. 
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COOPERATIVES SHALL FURNISH TO THE FEDERATION OF WHICH THEY ARE A 
MEMBER ANY REPORT THAT THE FEDERATION MAY REQUIRE PURSUANT TO 
ITS STANDARDS TO DETERMINE THE AMOUNT OF ASSESSMENTS. 
THE AUTHORITY SHALL ISSUE THE NECESSARY GUIDELINES FOR THE 
OPERATIONS 
OF 
FEDERATIONS 
THAT 
HAVE 
BEEN 
DEPUTIZED 
AS 
SUPERVISORS. THE FEDERATIONS IN THE EXERCISE OF THEIR SUPERVISORY 
POWERS AND FUNCTIONS SHALL FOLLOW SUCH GUIDELINES. 
THE AUTHORITY SHALL CONDUCT MONITORING AND EVALUATION OF 
THE 
PERFORMANCE 
AND 
OPERATIONS 
OF 
FINANCIAL 
SERVICE 
COOPERATIVES SUBJECT TO SUPERVISION BY A DEPUTIZED SUPERVISOR TO 
DETERMINE COMPLIANCE BY SUCH DEPUTIZED SUPERVISOR TO THE 
ESTABLISHED GUIDELINES AND PROCEDURES FOR SUPERVISION. 
ART. 
134. CREATION OF A FINANCIAL SERVICE COOPERATIVE 
REGULATORY AND SUPERVISION OFFICE. - WITHIN SIX (6) MONTHS FROM 
THE APPROVAL OF THIS ACT, THE APPROPRIATE OFFICE OR DEPARTMENT 
WITHIN THE 
AUTHORITY SHALL BE CREATED FOR THE 
EFFECTIVE 
REGULATION AND SUPERVISION OF FINANCIAL SERVICE COOPERATIVES. 
SAID OFFICE SHALL IMPLEMENT THE REGULATIONS, RULES, POLICIES, 
GUIDELINES AND STANDARDS APPLICABLE SOLELY TO FINANCIAL SERVICE 
COOPERATIVES AND DEPUTIZED FEDERATIONS INSOFAR AS THEIR SAVINGS, 
CREDIT AND OTHER RELATED FINANCIAL SERVICES ARE CONCERNED. 
THE REGULATION AND SUPERVISION OFFICE SHALL, AT LEAST ONCE A 
YEAR, INSPECT OR COMMISSION THE INSPECTION OF THE INTERNAL AFFAIRS 
AND THE ACTIVITIES OF THE DEPUTIZED FEDERATIONS. 
THE PURPOSE OF THE ANNUAL INSPECTION IS TO EVALUATE THE 
OPERATIONS AND PRACTICES AND THE INTERNAL CONTROL SYSTEMS OF 
THE FINANCIAL SERVICE COOPERATIVES AND DEPUTIZED FEDERATIONS, TO 
VERIFY THE ACCURACY OF THEIR FINANCIAL STATEMENTS AND TO ENSURE 
THAT THEY ARE COMPLYING WITH THIS ACT, THE REGULATIONS, THE BY- 
LAWS, THE STANDARDS AND THE WRITTEN INSTRUCTIONS APPLICABLE TO 
THEM UNDER THIS CHAPTER. 
ART. 
135. 
SAVINGS 
GUARANTEE. - 
ALL 
FINANCIAL 
SERVICE 
COOPERATIVES SHALL BE REQUIRED TO ESTABLISH A SAVINGS GUARANTEE 
SYSTEM FOR THE PROTECTION OF THEIR MEMBER-DEPOSITORS WITHIN 
THREE (3) YEARS FROM THE APPROVAL OF THIS ACT. 
THE PHILIPPINE DEPOSIT INSURANCE CORPORATION (PDIC), THE 
AUTHORITY AND OTHER GOVERNMENT AGENCIES, GOVERNMENT OWNED OR 
CONTROLLED CORPORATIONS AND GOVERNMENT FINANCIAL INSTITUTIONS 
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SHALL PROVIDE TECHNICAL AND OTHER ASSISTANCE, AS MAY BE ALLOWED 
BY THEIR CHARTERS, TO FINANCIAL SERVICE COOPERATIVE FEDERATIONS IN 
ORDER FOR THESE FEDERATIONS TO JOINTLY OR SINGLY ESTABLISH AND/OR 
STRENGTHEN THEIR OWN COOPERATIVE SAVINGS GUARANTEE SYSTEM. THE 
TECHNICAL ASSISTANCE TO BE PROVIDED SHALL INCLUDE TRAINING ON 
SUPERVISION AND EXAMINATION. 
ART. 136. 
AMENDMENTS OF 
BY-LAWS OF COOPERATIVES AND 
FEDERATIONS - ALL FINANCIAL SERVICE COOPERATIVES, FINANCIAL SERVICE 
COOPERATIVE FEDERATIONS AND OTHER COOPERATIVES COVERED BY THIS 
ACT SHALL, WITHIN TWO (2) YEARS FROM ITS APPROVAL, AMEND THEIR 
ARTICLES OF COOPERATION AND BY-LAWS TO CONFORM TO THIS ACT, AND 
SUBMIT THE SAME TO THE AUTHORITY AND TO THE NATIONAL FEDERATION 
OF WHICH THEY ARE A MEMBER. 
ART. 137. JURISDICTION OVER FINANCIAL SERVICE COOPERATIVES - 
COOPERATIVES COVERED BY THIS ACT AS DEFINED UNDER ARTICLE 127 
HEREOF ARE NOT COVERED BY REPUBLIC ACT NO. 8791, OTHERWISE KNOWN 
AS THE GENERAL BANKING LAW OF 2000, AND OTHER BANKING LAWS AND 
ARE NOT UNDER THE REGULATION AND SUPERVISION OF THE BANGKO 
SENTRAL NG PILIPINAS. 
ART. [I141 138. Prohibition. - The term “credit cooperative”, “SAVINGS AND 
CREDIT COOPERATIVE”, AND “FINANCIAL SERVICE COOPERATIVE” shall be used 
exclusively by those who are duly registered under this Chapter, and no person or 
group of persons, or organizations shall use the said term unless duly registered herein. 
SEC. 16. Articles 115, 116, 117 and 118 of Chapter XV on Special Provisions 
Relating to Cooperative Insurance Societies of the same Code are hereby re-numbered 
as follows: 
CHAPTER XV 
SPECIAL PROVISIONS RELATING TO COOPERATIVE INSURANCE SOCIETIES 
ART. [I151 139. Cooperative Insurance Societies. - x x x 
ART. [I161 140. Types of Insurance Provided. - x x x 
ART. [I 
171 141. Applicability of Insurance Laws. - x x x 
ART. [I181 142. Implementing Rules. - x x x 
SEC. 17. 
Chapter XVI on Miscellaneous Provisions of the same 
Code is hereby re-titled as Special Provisions Relating to Housing Cooperatives, and 
shall now read as follows: 
CHAPTER XVI 
SPECIAL PROVISIONS RELATING TO HOUSING COOPERATIVES 
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ART. 143. COVERAGE - THIS CHAPTER SHALL APPLY ONLY TO HOUSING 
COOPERATIVES AND THE REST OF THE PROVISIONS OF THIS CODE SHALL 
APPLY TO THEM INSOFAR AS THE SAME ARE NOT INCONSISTENT WITH THE 
PROVISIONS OF THIS CHAPTER. 
ART. 144. DEFINITION AND OBJECTIVES. - HOUSING COOPERATIVES ARE 
SERVICE COOPERATIVES ENGAGED IN ASSISTING OR PROVIDING ACCESS TO 
HOUSING FOR THE BENEFIT OF ITS REGULAR MEMBERS WHO ACTIVELY 
PARTICIPATE IN THE SAVINGS PROGRAM FOR HOUSING. IT IS OWNED AND 
DEMOCRATICALLY CONTROLLED BY ITS MEMBERS. A COOPERATIVE IS 
DISTINGUISHED FROM OTHER HOUSING ASSOCIATIONS BY ITS OWNERSHIP 
STRUCTURE AND 
ITS COMMITMENT TO THE UNIVERSALLY ADOPTED 
COOPERATIVE PRINCIPLES AND VALUES. 
HOUSING COOPERATIVES AIM TO MEET THEIR MEMBERS' NEEDS FOR 
AFFORDABLE AND GOOD QUALITY HOUSING, SECURITY OF TENURE, AND 
SAFE, 
SECURE 
NEIGHBORHOODS. 
THEY 
ALSO 
WORK 
TO 
CREATE 
ENVIRONMENTS WHERE MEMBERS GIVE AND RECEIVE SUPPORT BEYOND 
THEIR SHELTER NEEDS AND TREAT EACH OTHER WITH RESPECT AND 
TOLERANCE. 
ART. 145. ORGANIZATION AND REGISTRATION. - 
(1) A PRIMARY 
HOUSING COOPERATIVE MAY BE ORGANIZED AND REGISTERED BY AT LEAST 
FIFTEEN (15) NATURAL PERSONS. A PRIMARY HOUSING COOPERATIVE 
GUARANTEES ITS MEMBERS THROUGH A CERTIFICATE OR TITLE OF PART- 
OWNERSHIP, PERPETUAL LIVING RIGHTS IN A DWELLING HOUSE OR UNIT 
OWNED BY THE PRIMARY. ONLY MEMBERS OF THE PRIMARY COOPERATIVE 
CAN ACQUIRE SUCH LIVING RIGHTS. 
(2) A HOUSING COOPERATIVE FEDERATION MAY BE ORGANIZED AND 
REGISTERED BY AT LEAST FIVE (5) PRIMARY HOUSING COOPERATIVES. 
(3) HOUSING COOPERATIVES, BOTH PRIMARIES AND FEDERATIONS, 
MAY BE ORGANIZED FOR ANY OR ALL OF THE FOLLOWING PURPOSES: 
(A) 
INITIATE AND DEVELOP A SAVINGS PROGRAM TO ENABLE 
MEMBERS TO SAVE FOR THEIR HOUSING NEEDS; 
(B) PROVIDE FOR MEMBERS' NEEDS FOR AFFORDABLE AND 
GOOD QUALITY HOUSING, SECURITY OF TENURE AND SAFE 
NEIGHBORHOODS; 
(C) 
ACQUIRE, OWN AND DEVELOP LAND, BUILDINGS AND 
PROPERTIES IN FURTHERANCE OF ITS OBJECTIVES; 
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ENTER INTO CONTRACTS WITH GOVERNMENT AND OTHER 
PRIVATE 
ENTITIES FOR FINANCING AND CONSTRUCTING 
THE HOUSING PROJECT; 
SUSTAIN 
THE 
HOUSING 
PROJECT 
AND 
UNDERTAKE 
COMMUNITY-BUILDING AND SITE-DEVELOPMENT ACTIVITIES; 
UNDERTAKE EDUCATION, TRAINING AND INFORMATION 
COMMUNICATION ACTIVITIES TO HELP THE MEMBERS 
DEEPEN THEIR COMMITMENT TO COOPERATIVISM, FULFILL 
THEIR RESPONSIBILITIES AND DEVELOP THE COOPERATIVE 
ADVOCATE AND 
PROMOTE HOUSING COOPERATIVES, 
ESPECIALLY IN THE AREA WHERE THE COOPERATIVE IS 
OPERATING; AND 
PERFORM 
SUCH 
OTHER 
FUNCTIONS 
AS 
MAY 
BE 
NECESSARY TO ATTAIN ITS OBJECTIVES. 
15 
(4) 
HOUSING COOPERATIVE FEDERATIONS MAY BE ORGANIZED FOR 
16 
ANY OR ALL OF THE FOLLOWING ADDITIONAL PURPOSES: 
FORM AND REGISTER PRIMARIES FOR HOUSING PROJECTS 
THAT THE FEDERATION IS DEVELOPING; 
CARRY OUT, ENCOURAGE AND ASSIST EDUCATIONAL 
AND 
ADVISORY 
WORK 
RELATING TO 
ITS 
MEMBER 
COOPERATIVES; 
PROVIDE TECHNICAL AND OTHER SERVICES DESIGNED TO 
ENCOURAGE EFFECTIVENESS, EFFICIENCY AND ECONOMY 
IN THE CONDUCT OF THE BUSINESS OF ITS MEMBER 
COOPERATIVES; 
COORDINATE AND FACILITATE THE ACTIVITIES OF ITS 
MEMBER ORGANIZATIONS; AND 
REPRESENT THEIR MEMBER- COOPERATIVES AND 
INDIVIDUAL MEMBERS ON MATTERS THAT AFFECT THEIR 
INTERESTS. 
31 
ART. 146. MEMBERSHIP IN A FEDERATION. - INDIVIDUAL PERSONS ARE 
32 
ALLOWED 
TO 
BECOME MEMBERS OF 
THE 
HOUSING 
COOPERATIVE 
33 
FEDERATION: PROVIDED, THAT THEY ACTIVELY PARTICIPATE IN THE SAVINGS 
34 
PROGRAM FOR HOUSING OF THE FEDERATION. 
35 
ART. 147. TYPES OF HOUSING COOPERATIVES AND CERTIFICATES OF 
36 
PART OWNERSHIP. - HOUSING COOPERATIVES MAY BE OF TWO (2) TYPES: 
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(1) 
A HOUSING COOPERATIVE THAT ALLOWS INDIVIDUAL OWNERSHIP 
OF HOUSING UNITS AND MAINTAINS OWNERSHIP ONLY OF THE 
COMMON AREAS. 
A HOUSING COOPERATIVE THAT MAINTAINS OWNERSHIP OF THE 
HOUSING UNITS INCLUDING THE COMMON AREAS. IN THIS TYPE, 
THE COOPERATIVE GRANTS AND GUARANTEES ITS MEMBERS, 
(B) 
THROUGH A CERTIFICATE OF PART-OWNERSHIP, PERPETUAL 
OCCUPANCY RIGHT IN A DWELLING HOUSE OR UNIT OWNED BY 
THE PRIMARY. ONLY 
MEMBERS 
OF 
THE 
PRIMARY 
CAN 
ACQUIRE 
SUCH 
OCCUPANCY 
RIGHT. 
SUCH 
RIGHT 
AND 
CERTIFICATE OF PART-OWNERSHIP SHALL BE TRANSFERABLE 
SUBJECT TO THE BY-LAWS AND RULES OF THE HOUSING 
COOPERATIVE. THE PROVISIONS ON CO-OWNERSHIP IN THE CIVIL 
CODE SHALL NOT APPLY TO HOUSING COOPERATIVES OF THIS 
TYPE. 
UPON REGISTRATION OF AN INSTRUMENT COVERING THE GRANT OF 
SUCH OCCUPANCY RIGHT, THE REGISTER OF DEEDS SHALL, UPON PAYMENT 
OF THE PROPER FEES, ENTER AND ANNOTATE THE GRANT ON THE 
CERTIFICATE OF TITLE COVERING THE LAND ON WHICH THE HOUSING UNIT IS 
LOCATED, AND THE GRANTEE SHALL BE ENTITLED TO THE ISSUANCE OF A 
"HOUSING COOPERATIVE MEMBER'S" COPY OF THE PERTINENT PORTION OF 
SUCH CERTIFICATE OF TITLE. A COPY OF THE DESCRIPTION OF THE LAND, A 
BRIEF DESCRIPTION OF THE HOUSING UNIT, THE NAME AND PERSONAL 
CIRCUMSTANCES OF THE HOUSING COOPERATIVE MEMBER SHALL BE 
SUFFICIENT FOR THE 
PURPOSES OF THE 
"HOUSING 
COOPERATIVE 
MEMBER'S" COPY OF THE CERTIFICATE OF TITLE. NO SUBSEQUENT 
CONVEYANCE OF THE HOUSING UNIT OR PART THEREOF SHALL BE 
REGISTERED UNLESS ACCOMPANIED BY A CERTIFICATE OF APPROVAL FROM 
THE MANAGEMENT OF THE HOUSING COOPERATIVE. 
ART. 148. PREFERENTIAL RIGHTS. - A DULY REGISTERED HOUSING 
COOPERATIVE SHALL HAVE THE FOLLOWING PREFERENTIAL RIGHTS IN 
ADDITION TO THOSE PROVIDED IN THIS CODE: 
(1) 
TO AVAIL OF THE 
COMMUNITY MORTGAGE PROGRAM AS A 
LEGALLY ORGANIZED ASSOCIATION WITH UNDERPRIVILEGED AND 
HOMELESS CITIZENS AS COOPERATIVE MEMBERS OR ON BEHALF 
OF SAID CITIZENS IN THE COMMUNITY THE COOPERATIVE SERVES 
PURSUANT TO THE PERTINENT PROVISIONS OF REPUBLIC ACT 
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NO. 7279, OR THE URBAN DEVELOPMENT AND HOUSING ACT OF 
1992; 
TO AVAIL OF THE GROUP LAND ACQUISITION DEVELOPMENT 
PROGRAM (GLADP) OF THE PAG-IBIG FUND THAT PROVIDES 
ORGANIZED GROUPS OF 
PAG-IBIG FUND MEMBERS FOR THE 
ACQUISITION AND DEVELOPMENT OF RAW OR PARTIALLY 
DEVELOPED LAND WHICH SHALL SERVE AS THE SITE FOR THEIR 
HOUSING UNITS; 
ALL 
PROJECTS 
OF 
HOUSING 
COOPERATIVES 
PRIMARILY 
INTENDED FOR UNDERPRIVILEGED AND HOMELESS MEMBERS 
SHALL BE CONSIDERED TO BE IN COMPLIANCE WITH THE 
PROVISION UNDER SEC. 20 OF REPUBLIC ACT NO. 7279, THE 
URBAN DEVELOPMENT AND HOUSING ACT, ON BALANCED 
HOUSING DEVELOPMENT, REGARDLESS OF THE COST; 
HOUSING COOPERATIVES SHALL HAVE PREFERENTIAL RIGHT TO 
ACQUIRE, LEASE, DEVELOP AND MANAGE IDLE GOVERNMENT 
LANDS AND BUILDINGS IDENTIFIED FOR HOUSING WITHIN ITS 
AREA OF OPERATIONS; 
HOUSING COOPERATIVE PROJECTS SHALL BE RECOGNIZED AS 
UNITS FOR LIVELIHOOD AND PRODUCTIVITY UNDER REPUBLIC 
ACT NO. 6657, OTHERWISE KNOWN AS THE COMPREHENSIVE 
AGRARIAN REFORM LAW OF 1988, FOR MEMBERS WHO ARE 
AGRARIAN REFORM GRANTEES/BENEFICIARIES; AND 
HOUSING COOPERATIVES SHALL HAVE THE RIGHT TO AVAIL OF 
GOVERNMENT 
TECHNICAL 
ASSISTANCE, 
FACILITIES 
AND 
EQUIPMENT FOR THE CONSTRUCTION AND MAINTENANCE OF THE 
COOPERATIVE-OWNED HOUSING PROJECT, 
149. 
SPECIAL 
FINANCING 
WINDOW 
FOR 
HOUSING 
COOPERATIVES.- THE APPROPRIATE HOUSING AGENCIES AND GOVERNMENT 
FINANCIAL INSTITUTIONS SHALL CREATE A SPECIAL WINDOW FOR FINANCING 
HOUSING PROJECTS UNDERTAKEN BY HOUSING COOPERATIVES, WITH 
INTEREST RATES AND TERMS EQUAL TO, OR BETTER THAN THOSE GIVEN FOR 
SOCIALIZED HOUSING PROJECTS. THIS FINANCING SHALL BE IN THE FORM OF 
BLANKET LOANS OR LONG-TERM WHOLESALE LOANS TO QUALIFIED 
COOPERATIVES, WITHOUT NEED FOR INDIVIDUAL PROCESSING. A NEW 
HOUSING COOPERATIVE MAY AVAIL OF LOANS FROM THIS FINANCING 
WINDOW IF IT IS GUARANTEED BY A HOUSING COOPERATIVE FEDERATION OR 
ANOTHER PRIMARY HOUSING COOPERATIVE THAT IS FINANCIALLY STABLE. 
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ART. 150. ORGANIZATIONAL LINKAGES. - HOUSING COOPERATIVES MAY 
JOIN OR ORGANIZE CHAPTERS, SUBSIDIARIES, LEAGUES OR FEDERATIONS, 
FOR THE PURPOSE OF PROVIDING COMMONLY NEEDED ESSENTIAL 
SERVICES SUCH AS: 
(1) 
INTER-LENDING OF SURPLUS FUND; 
(2) 
DEVELOPMENT ACTIVITIES; 
(3) 
PROFESSIONAL AND TECHNICAL ASSISTANCE; 
(4) 
RESEARCH AND DEVELOPMENT; 
(5) 
REPRESENTATION; AND 
(6) 
OTHER SERVICES NEEDED TO CONTINUOUSLY IMPROVE THEIR 
PERFORMANCE. 
ART. 151. PROHIBITION. - THE TERM "HOUSING COOPERATIVE SHALL 
BE USED EXCLUSIVELY BY COOPERATIVES DULY REGISTERED UNDER THE 
PROVISIONS OF THIS CHAPTER. NO PERSON, GROUP OF PERSONS OR 
ORGANIZATIONS SHALL USE SAID TERM UNLESS DULY REGISTERED HEREIN. 
A HOUSING COOPERATIVE IS PROHIBITED FROM TRANSFORMING INTO AND 
REGISTERING AS A MULTI-PURPOSE COOPERATIVE. 
SEC. 18. The present Chapter XVI on Miscellaneous Provisions is hereby 
renumbered as Chapter XVII. Articles 119 and 120 therein are hereby re-numbered. 
Article 121 of the same Chapter is likewise re-numbered and amended. The new 
Chapter XVII on Miscellaneous Provisions shall now read as follows: 
CHAPTER [XVI] XVll 
MISCELLANEOUS PROVISIONS 
ART. [119]152. Compliance with Other Laws. - (1) x x x 
(2) x x x  
(3) x x x  
ART. [120]153. Register of Cooperatives. - x x x 
ART. [121]154. Settlement of Disputes[.], CONCILIATION, AND MEDIATION 
PROCEEDINGS. - 
Disputes among members, officers, directors, and committee 
members, [and] intra-cooperative, INTER-COOPERATIVE, INTRA-FEDERATION OR 
INTER-FEDERATION disputes shall, as far as practicable, be settled amicably in 
accordance with the conciliation or mediation mechanisms embodied in the bylaws of 
cooperative and in applicable laws. 
THE CONCILIATION AND MEDIATION COMMITTEE OF THE COOPERATIVE 
SHALL FACILITATE THE AMICABLE SETTLEMENT OF DISPUTES AMONG 
MEMBERS, OFFICERS, DIRECTORS, AND COMMITTEE MEMBERS, AND INTRA- 
COOPERATIVE DISPUTES. 
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Should such conciliation I/] OR mediation proceeding fail, the matter shall be 
settled in a court of competent jurisdiction[.]: PROVIDED, HOWEVER, THAT THE 
CONCILIATION AND MEDIATION COMMITTEE OF THE COOPERATIVE AND THE 
APEX ORGANIZATIONIS TO WHICH THE COOPERATIVE BELONGS SHALL ISSUE 
A CERTIFICATION THAT, AFTER DUE EFFORT, THE CONCILIATION OR 
MEDIATION PROCEEDINGS HAVE FAILED BEFORE ANY PARTY CAN VALIDLY 
FILE A COMPLAINT WITH THE APPROPRIATE BODY. 
SEC. 19. Chapter XVll on Final Provisions of the same Code is hereby re- 
Article 122 thereof is deleted from the Chapter and is transposed to the Special 
Provisions on Electric Cooperatives as Article 114 under Chapter XII, Subsection C on 
Special Provisions on Electric Cooperatives. 
numbered as Chapter XVIII. 
Articles 123, 124, 125, 126, 127, 128, 129, and 130 of this Chapter are hereby 
re-numbered and amended, and shall now read as follows: 
CHAPTER [XVII] XVlll 
FINAL PROVISIONS 
[ART. [122]. Electric Cooperatives. - Electric cooperatives shall be covered by 
this Code. However, there shall be a transition period of three (3) years within which 
the Cooperative 
Development Authority 
and the National Electrification 
Administration shall help and assist electric cooperatives to qualify under this Code. 
The Cooperative Development Authority and the National Electrification Administration 
shall jointly promulgate rules and regulations to the end that the provisions of this law 
are harmonized with the provisions of Presidential Decree No. 269.1 
ART. [123]155. Regulations. - (1) The [Cooperative Development] Authority 
[may] SHALL issue regulations to implement [those] THE provisions of this Code. 
[which expressly call for the issuance thereof. This paragraph shall not apply to those 
cases wherein a specific provision of this Code expressly designates particular 
government agencies which shall issue the regulations called for by any provision of 
this Code.] 
[(2) Where a provision of this Code does not expressly call for nor authorize the 
issuance of regulation, no regulation shall be issued thereon. Any regulation issued 
in violation of this paragraph shall be null and void ab initio.] 
[(3)1(2) x x x 
(a) x x x  
(b) x x x  
(d) x x x  
(c) x x  x 
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ART. [124]156. Penal Provisions. - The following acts or omissions affecting 
(1) 
The use of the word "cooperative" by any person or of persons or 
organizations, domestic or foreign, unless duly registered as a cooperative under this 
Code. In case of violation hereof, 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 [for one (1) year] OF NOT LESS THAN TWO (2) YEARS 
NOR MORE THAN FIVE (5) YEARS and a fine not exceeding [one thousand pesos 
(Pl,OOO.OO)] TWENTY THOUSAND PESOS (P20, 000.00) or both at the discretion of 
the court; 
(2) 
cooperatives are hereby prohibited: 
ANY PERSON WHO WILLFULLY ATTEMPTS IN ANY MANNER TO 
EVADE OR DEFEAT TAX IN VIOLATION OF THE PROVISIONS OF ARTICLES 61 
AND 62 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 THOUSAND PESOS (P30,OOO.OO) BUT NOT MORE THAN ONE 
HUNDRED THOUSAND PESOS (PlOO,OOO.OO) AND SUFFER IMPRISONMENT OF 
NOT LESS THAN TWO (2) YEARS BUT NOT MORE THAN FOUR (4) YEARS: 
PROVIDED, THAT THE CONVICTION OR ACQUITTAL OBTAINED UNDER THIS 
SECTION SHALL NOT BE A BAR TO THE FILING OF A CIVIL SUIT FOR THE 
COLLECTION OF TAXES. 
[(2)1(3) x x x 
(a) x x x 
(b) x x x 
(c) x x x 
(d) x x x  
In case of violation of any provision of this [subsection] ARTICLE, the individual 
or individuals, and in the case of organizations, its officers, and directors shall, upon 
conviction by a court, each suffer a penalty of not less than [one (I) year] TWO (2) 
YEARS but not more than five (5) years imprisonment or a fine in the amount of not 
less than [five thousand pesos (P5,OOO.OO)J TWENTY THOUSAND PESOS 
(P20,000.00), or both at the discretion of the court. IN THE CASE OF A PUBLIC 
OFFICIAL OR EMPLOYEE, THE OFFENDER SHALL UPON CONVICTION, SUFFER 
THE ACCESSORY PENALTY OF TEMPORARY ABSOLUTE DISQUALIFICATION. 
[(3)] (4) A director, officer or committee member who violates the provisions of 
Article [47] 46 ON THE [(I [IILiability of [dIDirectors, [o]Officers and [cICommittee 
[mIMernbers, Article [50] 49 ON THE [(J[d]Disloyalty of a [dIDirector), and Article [51] 
50 ON THE [(I 
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[illllegal [u]Use of [cIConfidential [i]lnformation) shall upon conviction suffer a fine of not 
less than five thousand pesos (P5,OOO.OO) nor more than five hundred thousand pesos 
(P500,OOO.OO) or imprisonment of not less than five (5) years but not more than tell 
(1 0) years or both at the court's discretion; 
[(4)1(5) x x x 
THE FOLLOWING ARE CONSIDERED OFFENSES PUNISHABLE BY THE 
PENALTY OF IMPRISONMENT OF NOT LESS THAN ONE (1) YEAR NOR MORE 
THAN FIVE (5) YEARS OR A FINE OF NOT MORE THAN FIFTY (P50,OOO.OO) 
THOUSAND PESOS OR BOTH AT THE DISCRETION OF THE COURT: 
OMISSION OR REFUSAL TO FURNISH ANY INFORMATION, REPORT 
OR OTHER DOCUMENT THAT IS REQUIRED TO BE FURNISHED 
UNDER THIS CODE; 
PROVIDING TO THE AUTHORITY 
INFORMATION, REPORTS OR 
OTHER DOCUMENTS THAT ARE REQUIRED UNDER THIS CODE 
WHICH THE PERSON KNOWS TO BE FALSE OR MISLEADING; 
OMISSION OR REFUSAL TO KEEP A BOOK OR REGISTER 
REQUIRED UNDER THIS ACT OR TO MAKE A REQUIRED ENTRY 
THEREIN; 
MAKING AN ENTRY REQUIRED UNDER THIS CODE IN A BOOK OR 
REGISTER, WHICH THE PERSON KNOWS TO BE FALSE OR 
MISLEADING; 
HINDERING A PERSON WHO, AS PART OF THE PERSON'S DUTIES, 
MAKING AN INSPECTION, AN AUDIT, AN EXAMINATION OR AN 
INVESTIGATION UNDER THIS CODE; 
FAILURE 
TO 
COMPLY 
WITH 
AN 
ORDER 
OR 
WRITTEN 
INSTRUCTIONS 
ISSUED OR GIVEN BY THE AUTHORITY; 
(G) 
VIOLATION OF THE PROVISIONS REGARDING TRANSACTIONS 
WITH A RESTRICTED PARTY; AND 
(H) 
ABETTING, 
COUNSELING, 
ALLOWING, 
AUTHORIZING 
OR 
COMMANDING ANOTHER PERSON TO COMMIT AN OFFENSE 
PUNISHABLE BY THIS CODE: PROVIDED, THAT, IN CASE THE 
VIOLATOR IS A COOPERATIVE OR JURIDICAL PERSON, THE 
PENALTY SHALL BE IMPOSED ON ITS DIRECTORS AND OFFICERS. 
ART. [125]157. Printing and Distribution. - (1) x x x 
(2) x x x  
ART. [126]158. Interpretation and Construction. - x x x 
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ART. [127]159. Repeals. - 
Except as expressly provided by this Code, 
Presidential Decree No. 175 and all other laws, or parts thereof, inconsistent with any 
provision of this Code shall be deemed repealed: Provided, however, That nothing in 
this Code shall be interpreted to mean the amendment or repeal of any provision of 
Presidential Decree No. 269 WITH REGARD TO THE ORGANIZATION AND 
STRUCTURE OF THE NATIONAL ELECTRIFICATION ADMINISTRATION (NEA): 
Provided, further, That the electric cooperatives which qualify as such under this Code 
shall fall under the coverage thereof. 
CHAPTER XVlI 
Special Provisions Relating to Electric Cooperatives 
Art. 160. 
This Chapter shall apply to all electric cooperatives. Electric Cooperatives 
are those registered under the Authority including those registered under the 
National Electrification Administration. 
Art. 161. 
Period within Which to Register in the Authority. 
Electric Cooperatives not yet registered with the Authority are hereby 
given a period of two (2) years from the effectivity of this act to register with the 
Authority. However, the Authority may grant an extension of one (1) year to 
electric cooperatives to register with the Authority for reasonable causes. The 
Board of Administrators may grant another extension for meritorious causes. 
Art. 162. 
For purposes of registration electric cooperatives shall submit the following 
Registration Documents to be Submitted: 
documents: 
(a) Certified copy of the Articles of Incorporation and By-laws filed with the 
NEA; 
(b) Copy of the resolution filed by the General Assembly approving the 
registration of then cooperative with the Authority. 
The quorum 
requirement shall be as prescribed in the current by-laws of the 
cooperative. 
(c) Copy of the Certificate of Registration with NEA (Franchise Certificate 
issued by the National Electrification Commission-Technical Staff 
(NEC-TS); 
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(d) Duly audited financial statements for the past two (2) years; 
(e) List of names of incumbent Board of Directors and their addresses 
certified by the Board Secretary and attested by the Chairman; 
(f) Within six (6) months from the registration, the Treasurer in a sworn 
statement state the authorized share capital, the subscribed share 
capital of members, the paid-up share capital of member and the 
amount of paid-up share capital received by the Treasurer; and 
(9) Bond of Accountable officer. 
Art. 163. 
Nature of Registration with the Authority 
The cooperative shall comply with the provisions of this Chapter and its 
by-laws, particularly, but not limited to the following: 
(a) Rights, privileges and responsibilities of members whether regular or 
(b) Rules and procedures of meetings of the General Assembly, Board of 
(c) Qualifications and disqualification for the election of directors, officers 
associate; 
Directors and Committee; 
and committee members; 
(d) Election of Directors, Officers and Committee members shall be by 
(e) Allocation and distribution of surplus. 
District and shall have a term of three (3) years; 
Art. 164. 
Matters Pertaining to the Franchise. 
The existing franchise issued to electric cooperative by the National 
Electrification Commission shall be transferred to the electric cooperatives registered 
by the Authority. An EC heretofore registered with the Authority shall retain its 
franchise rights. All existing franchise shall be allowed to their full term. 
Art. 165. 
Share Capital in the Electric Cooperatives (ECs). 
The amount of share capital, the names and residences of its members, 
taking into account their previous equity contributions in their amortization from 
the time said member-consumer had started paying his electric bill wherein is 
included a certain amount as contribution to the amortization of loan paid to the 
NEA up to time said loan has been condoned in June 26, 2001, further 
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3a 
including the equity contribution of each member-consumer based on the 
proportionate share in the 5% reinvestment fund of the ECs. 
That said fact should be set forth in the following Articles of Cooperation 
to be submitted by the EC within the time enunciated under Article 154 hereof. 
Art. 166. 
Effects of Registration of ECs under Republic Act 6938 
ECs that have been duly registered with the CDA and issued a 
Certificate of Registration shall, from the date of Registration be covered by 
the provisions of the Cooperative Code of the Philippines and these Chapter 
as well as future rules and other issuances. Provided however, that the 
security of tenure of management and employees shall be respected; including 
their current terms of employment and compensation and that there will be no 
diminution of their salaries and benefits. 
By virtue of the principle of non-interference in the mamagement and 
operation of cooperatives enshrined in Section 1 of R.A 6939 and the 
underlying principle enshrined in Article 4 (2) of R.A 6938 sayng that 
cooperatives are democratic organizations and that their affairs shall be 
administered by persons elected or appointed in a manner agreed upon by the 
members, EC's registered under this code, the President does not have the 
authority to appoint or remove members of the Board of Directors of all 
cooperatives including Electric Cooperatives registered under this Code. 
Furthermore, upon the registration of an Electric Cooperative in the Authority, 
the power of regulation, control and supervision of the NEA shall cease to 
exist. 
Art. 167. 
Tax Exemption. 
Electric Cooperatives registered with the Authority shall not be subject to 
any government taxes or fees, whether local or national as well those imposed 
under the Internal Revenue laws and other tax laws, including but not limited to 
the Value Added Tax. 
Art. 168. 
Existing Rights and Interests: 
Existing rights and interests of electric cooperatives shall not be adversely 
affected by registration with the Authority and shall continue to be in full force 
and effect. 
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General Provisions 
The Registration of ECs under R.A. 6938 shall not be considered 
as a change in the nature of the ECs, nor any change in the 
ownership of the assets of said ECs. 
ECs registered by the CDA shall be given a period of two (2) 
years from the date of registration to file their Articles of 
Cooperation and By-laws in conformity with the provisions of R.A. 
6938. 
However, should the ECs fail to comply within two (2) years, they may 
be given another year within which to comply submission of requirements, 
given meritorious reason and duly supported by Board Resolution. The Board 
of Administrators may grant another extension. 
Failure to comply with the 
requirements above shall be a ground for the cancellation of the registration. 
(c) 
ECs are hereby given two (2) years from the effectivity of this Act 
to register with the Authority under R.A. 6938. After the lapse of 
the aforecited period, such cooperative shall undergo the 
required procedure for Registration of a new cooperative, 
including the submission of an economic survey. 
Art. 170. 
Cooperative Name 
Electric Cooperatives not registered with the Authority under this Chapter shall 
be barred from using the word “cooperative”. 
Art. 171. 
Issuance of RuleslGuidelines. 
The Authority after consultation with duly registered electric cooperatives, may 
issue such rules/guidelines as may be necessary under this Chapter 
ART. 
[I281 172. Transitory Provisions. - 
(1) ALL 
COOPERATIVES 
PREVIOUSLY REGISTERED WITH THE AUTHORITY UNDER REPUBLIC ACTS 
NUMBERED 6938 AND 6939 SHALL BE DEEMED REGISTERED UNDER THIS ACT: 
PROWDED, HOW€VER, 
THAT THEY SHALL SUBMIT TO THE NEAREST 
EXTENSION OFFICE OF THE AUTHORITY A COPY OF THEIR CERTIFICATE OF 
REGISTRATION OR CONFIRMATION, THE ARTICLES OF COOPERATION, BY- 
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LAWS AND THE LATEST DULY AUDITED FINANCIAL STATEMENT WITHIN ONE (1) 
YEAR FROM THE EFFECTIVITY OF THIS ACT, OTHERWISE THEY WILL NOT BE 
CONSIDERED AS REGISTERED. 
(2) ALL ELECTRIC COOPERATIVES REGISTERED UNDER PRESIDENTIAL 
DECREE NO. 269, AS AMENDED, ARE GIVEN 
TWO (2) YEARS FROM THE 
EFFECTIVITY OF THIS ACT WITHIN WHICH TO REGISTER WITH THE AUTHORITY: 
PROVIDED, THAT THE EXISTING FRANCHISES ISSUED TO THE ELECTRIC 
COOPERATIVES BY THE NATIONAL ELECTRIFICATION COMMISSION SHALL BE 
TRANSFERRED 
TO 
THOSE 
ELECTRIC 
COOPERATIVES 
REGISTERED: 
PROVIDED, HOW€ VER, THAT ELECTRIC COOPERATIVES WHICH HAVE NOT 
REGISTERED WITH THE AUTHORITY AT THE END OF THE TWO-YEAR PERIOD 
SHALL BE PROHIBITED FROM USING THE WORD "COOPERATIVE IN THEIR 
BUSINESS NAMES, AND SHALL BE REFERRED TO AS "ELECTRIC ENTITIES" AS 
DEFINED UNDER SECTION 3 OF PRESIDENTIAL DECREE NO. 269, AS AMENDED: 
PROVIDED, FURTHER, 
THAT SHOULD ELECTRIC COOPERATIVES OPT TO 
REGISTER WITH THE AUTHORITY AFTER THE TWO-YEAR PERIOD GRANTED 
UNDER THIS PROVISION SHALL DO SO UNDER RULES AND REGULATIONS TO 
BE PROMULGATED BY THE AUTHORITY: PROVIDED, FURTHERMORE, THAT 
THE REGISTRATION OF THE ELECTRIC COOPERATIVE UNDER THIS CODE 
SHALL NOT BE CONSIDERED AS A TRANSFER OF OWNERSHIP OF ITS ASSETS 
AND LIABILITIES NOR A CHANGE IN THE NATURE AND STRUCTURE OF THE 
COOPERATIVE AS A CONDITION FOR THE CONDONATION OF THEIR LOANS 
UNDER THE ELECTRIC POWER INDUSTRY REFORM ACT; AND PROVIDED, 
FINALLY, THAT UPON THEIR REGISTRATION WITH THE AUTHORITY, THE 
PROVISIONS OF SECTIONS 3 AND 5 OF PRESIDENTIAL DECREE NO. 1645 SHALL 
NO LONGER BE APPLICABLE TO SAID COOPERATIVES. 
ART. [129]173. Separability. - x x x If any provision of this Act is subsequently 
declared unconstitutional, the validity of the remaining provisions hereof shall remain in 
full force and effect. 
ART. [166]174. Repealing Clause. - The pertinent provisions of the National 
Internal Revenue Code, and Sections 33 and 79 of RA 8791, E.0 623, Sections 3,5,7 
and 17 of 
P.D 269 as amended by PD and all other laws, decrees, orders or 
regulations or parts thereof, that are inconsistent with this Act are hereby repealed or 
modified accordingly. 
Art. 175. Effectivity Clause. - This Act shall take effect upon its approval. 
Approved, 
69