1 
Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Philippines 
TWENTIETH CONGRESS 
First Regular Session 
House Bill No. _____ 
___________________________________________________________________________ 
Introduced by HON. NICANOR M. BRIONES 
Representative, AGAP Party List 
___________________________________________________________________________ 
EXPLANATORY NOTE 
Since its enactment, the Cooperative Code of 2008 has helped thousands 
of cooperatives organize and flourish in their respective undertakings and 
enterprises. Seventeen years later, however, many social and economic changes 
have occurred which now call for concomitant amendments to the existing Code. 
President Ferdinand Marcos Jr. himself, during his second State of the 
Nation Address, called for the timely and much-needed amendment of the 
Cooperative Code. At present, the impact of the pandemic, geopolitical conflicts, 
and global economic slowdown led to rising costs of goods and services. Such 
economic barriers thus hinder the different sectors, especially the agricultural 
sector, from maximizing production. 
The framework of cooperatives makes it a perfect vehicle to empower 
people to start and continue their enterprises amidst economic crisis. 
Cooperatives are more resilient. The self-help principle in cooperatives allows 
them to sustain their business with members patronizing their own products 
and services. Moreover, cooperatives as an entity can easily facilitate availment 
of grants and other assistance offered by the government to support their 
economic activities. 
The 1987 Constitution recognizes cooperatives as instruments of social 
justice and economic development. As such, it is only proper to ensure that the 
laws governing the organization and regulation of cooperatives are streamlined 
and responsive to the sector’s present needs. 
September 11, 2025
1:52 pm
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Hence, this representation re-files this Revised Cooperative Code bill 
which has been passed on third reading during the 19th Congress, with minor 
amendments. With the foregoing premises considered, the swift passage of this 
bill is thus earnestly sought. 
NICANOR M. BRIONES 
Representative 
AGAP Partylist 


3 
Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Philippines 
TWENTIETH CONGRESS 
First Regular Session 
House Bill No. _____ 
___________________________________________________________________________ 
Introduced by HON. NICANOR M. BRIONES 
Representative, AGAP Party List 
___________________________________________________________________________ 
AN ACT 
1 
PROVIDING FOR THE REVISED COOPERATIVE CODE 
2 
OF THE PHILIPPINES 
3 
Be it enacted by the Senate and House of Representatives of the Philippines in 
congress assembled: 
CHAPTER I. GENERAL PROVISIONS 
4 
SECTION 1. Title. - This Code shall be known as the "Revised 
5 
Cooperative Code of the Philippines”. 
6 
SEC. 2. Declaration of Policy. - It is hereby declared the policy of the 
7 
State to foster the creation and growth of cooperatives as a practical vehicle for 
8 
promoting self-reliance and harnessing people power towards the attainment 
9 
of economic development and social justice. The State shall encourage the 
10 
private sector to undertake the actual formation and organization of 
11 
cooperatives and shall create an atmosphere that is conducive to the growth 
12 
and development of these cooperatives. 
13 
Towards this end, the State shall, through the different branches, 
14 
subdivisions, instrumentalities, and agencies of the government, regulate the 
15 
conduct of cooperatives and support their growth and development in 
16 
partnership with the private sector. The State shall also ensure the provision 
17 
of technical and financial assistance, and other services to enable the 
18 
cooperatives to develop into viable and responsive economic enterprises 
19 
towards a strong cooperative movement, free from conditions that infringe upon 
20 
the objectives and character of cooperatives. 
21 
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Further, the State recognizes the principle of subsidiarity under which 
1 
the cooperative sector initiates and fosters, within their own ranks, cooperative 
2 
promotion, organization, training, information gathering, audit, and support 
3 
services, with government assistance if necessary. 
4 
SEC. 3. General Concepts. - 
5 
a. A cooperative is an autonomous and duly registered association of persons 
6 
with a common bond of interest who have voluntarily joined together to 
7 
achieve their social, economic, and cultural needs and aspirations by 
8 
making equitable contributions to the capital required, patronizing their 
9 
products and services, and accepting a fair share of the risks and benefits 
10 
of the undertaking in accordance with universally accepted cooperative 
11 
principles; 
12 
b. Cooperative principles - Every cooperative shall conduct its affairs in 
13 
accordance with Filipino culture, good values, and experiences, and the 
14 
following universally accepted principles of cooperation: 
15 
(1) Voluntary and Open Membership - Cooperatives are voluntary 
16 
organizations, open to all persons able to use their services and willing 
17 
to accept the responsibilities of membership, without gender, social, 
18 
racial, cultural, political, or religious discrimination.  
19 
(2) Democratic Member Control - Cooperatives are democratic organizations 
20 
that are controlled by their members who actively participate in setting 
21 
their policies and making decisions. Elected representatives, directors 
22 
or officers are accountable to the membership. In primary cooperatives, 
23 
members have equal voting rights of one member-one vote. Cooperatives 
24 
at other levels are organized in the same democratic manner. 
25 
(3) Members' Economic Participation - Members contribute equitably to, and 
26 
democratically control, the capital of their cooperative. At least part of 
27 
that capital is the common property of the cooperative. Members shall 
28 
receive limited interest, if any, on capital subscribed and paid as a 
29 
condition of membership. Members allocate surpluses for any or all of 
30 
the following purposes: developing their cooperative by setting up 
31 
reserves, part of which should at least be indivisible; benefiting 
32 
members in proportion to their patronage of the cooperative’s business; 
33 
and supporting other activities approved by the membership. 
34 
(4) Autonomy and Independence - Cooperatives are autonomous, self-help 
35 
organizations controlled by their members. If cooperatives enter into 
36 
agreements with other organizations, including government, or raise 
37 
capital from external sources, they do so on terms that ensure 
38 
democratic control by their members and maintain their cooperative 
39 
autonomy. 
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(5) Education, Training, and Information - Cooperatives shall provide 
1 
education and training for their members, elected and appointed 
2 
representatives, managers, and employees so that they can contribute 
3 
effectively and efficiently to the development of their cooperatives.  
4 
(6) Cooperation Among Cooperatives - Cooperatives serve their members 
5 
most effectively and strengthen the cooperative movement by working 
6 
together through local, national, regional, and international structures. 
7 
(7) Concern for Community - Cooperatives work for the sustainable 
8 
development of their communities through policies approved by their 
9 
members.  
10 
c. Cooperative Values – Cooperatives are based on the values of self-help, 
11 
self-responsibility, 
democracy, 
equality, 
equity, 
and 
solidarity. 
12 
Cooperative members believe in the ethical values of honesty, openness, 
13 
social responsibility and caring for others. 
14 
SEC. 4.  Definition of Terms. - The following terms shall mean: 
15 
a. Area of Operation refers to the place where the cooperative operates and 
16 
conducts its business, as provided for in its articles of cooperation and 
17 
bylaws; 
18 
b. Articles of cooperation refers to the document registered with the Authority, 
19 
including its amendments, that defines and regulates the relations 
20 
between the cooperative and the State; 
21 
c. Asset Development – refers to engaging in growth and improvement 
22 
activities, with targeted goals and objectives, of resources such as but not 
23 
limited to land, buildings, equipment, and machinery; 
24 
d. Authority refers to the Cooperative Development Authority; 
25 
e. Board of Directors refers to the collegial body responsible for the strategic 
26 
planning, direction-setting, and policy-formulation activities of the 
27 
cooperative; 
28 
f. Branch-lite unit refers to a cooperative bank that performs limited banking 
29 
activities and records its transactions in the books of the head office or 
30 
the branch to which it is annexed; 
31 
g. Bylaws refers to the document registered with the Authority, including its 
32 
amendments, that defines and regulates the operations of the cooperative 
33 
and governs the relations between the cooperative and its members and 
34 
among themselves; 
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h. Clustering refers to the grouping together of cooperatives under finance, 
1 
marketing, public utilities, education and advocacy, agriculture, and 
2 
human services; 
3 
i. Committees refers the mandatory committees under this Code entrusted 
4 
with specific functions and responsibilities and such other committees 
5 
that the Board of Directors deem necessary for the governance of the 
6 
business affairs of the cooperative; 
7 
j. Compensation refers to a broad term that includes all forms of 
8 
remuneration given for services rendered, like salary which is paid 
9 
regularly or is defined under Article 97 of the Labor Code of the 
10 
Philippines; 
11 
k. Cooperative Bank refers to a bank organized under this Act and prior laws, 
12 
for the primary purpose of providing a wide range of financial services to 
13 
cooperatives and their members and the public, licensed by the Bangko 
14 
Sentral ng Pilipinas (BSP) to operate as such, the majority shares of which 
15 
are owned and controlled by cooperatives; 
16 
l. Cooperative Union refers to a cooperative whose members are registered 
17 
cooperatives, federations, or both, organized purposely to protect and 
18 
represent the interest and welfare of all types of cooperatives at the city, 
19 
provincial, regional, national, and sectoral levels; 
20 
m. Federation of Cooperatives refers to a cooperative whose members are 
21 
registered primary and/or secondary cooperatives, registered with the 
22 
Authority to undertake business activities in support of its member 
23 
cooperatives to address common needs; engage in capacity-building 
24 
activities and delegated supervision; and exercise self-regulation among 
25 
its members, organized at the municipal, city, provincial, regional, 
26 
national, special metropolitan political subdivision, or economic zones 
27 
created by law; 
28 
n. General Assembly refers to the full membership of the cooperative duly 
29 
assembled, physically and/or via video conferencing, for the purpose of 
30 
exercising all the rights and performing all the obligations pertaining to 
31 
cooperatives, as provided by this Code, its articles of cooperation, and 
32 
bylaws; 
33 
o. Honorarium refers to a token of appreciation granted for gratuitous 
34 
services rendered on account of one’s broad and superior knowledge or 
35 
expertise in a specific field for which, going by custom, tradition or 
36 
propriety, no fixed price is set; 
37 
p. Investment refers to equity participation in any enterprise formed, 
38 
organized or existing under the laws of the Philippines; 
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q. Interest on Share Capital refers to the amount earned by the members on 
1 
their investment in the cooperative. The interest on share capital and the 
2 
patronage refund shall be determined at the end of the calendar year after 
3 
the net surplus shall have been distributed in accordance with the articles 
4 
of cooperation and bylaws or by the Board of Directors; 
5 
r. Laboratory Cooperative refers to a cooperative affiliated with and registered 
6 
by a primary cooperative and whose membership consists of minors; 
7 
s. Member refers to a person either natural or juridical, who has been 
8 
approved and admitted by the Board of Directors of the cooperative, 
9 
federation, or union, after undergoing the Pre-Membership Education 
10 
Seminar and has vowed to adhere to the articles of cooperation and its 
11 
bylaws. Members shall be classified as regular or associate, as qualified 
12 
by the cooperative; 
13 
t. Member entitled to vote refers to a regular member who has complied with 
14 
all the membership requirements of the cooperative, fulfilled all of their 
15 
duties and obligations, and possesses none of the disqualifications as 
16 
provided by the articles of cooperation and bylaws of the cooperative, as 
17 
declared by the Board of Directors; 
18 
u. Patronage Refund refers to the payment to the members of a percentage 
19 
or portion of the amount availed of, the interest on loans paid, or other 
20 
services availed from the cooperative. The amount will be determined at 
21 
the end of the fiscal year after the distribution of the net surplus. The 
22 
percentage of the allocation will be in accordance with the provisions in 
23 
its articles of cooperation, the bylaws, or by the Board of Directors. The 
24 
formula and basis for the computation of the rate of patronage refund will 
25 
be determined by the Authority. 
26 
v. Per diem refers to the allowance given as reimbursement for extra 
27 
expenses incurred by one in the performance of his duties; 
28 
w. Performance Audit refers to an audit conducted by the Authority on the 
29 
efficiency, efficacy, and effectiveness of the cooperative’s overall 
30 
performance as a whole, its management and officers, and its various 
31 
responsibility centers as basis for improving individual, team, or overall 
32 
performance, and for objectively informing the general membership of the 
33 
cooperative on such performance; 
34 
x. Primary Cooperative refers to a cooperative, registered with the Authority, 
35 
the members of which are natural persons; 
36 
y. Registration refers to the operative act granting juridical personality to a 
37 
proposed cooperative and is evidenced by a Certificate of Registration; 
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8 
z. Representative Assembly refers to the full membership of a body of 
1 
representatives elected by each of the sectors, chapters, or districts of the 
2 
cooperative duly assembled for the purpose of exercising such powers in 
3 
accordance with its bylaws; 
4 
aa. Samahang Nayon and Municipal Katipunan ng mga Samahang Nayon 
5 
refers to pre-cooperative organizations established under Presidential 
6 
Decree No. 175, entitled “Strengthening the Cooperative Movement”; 
7 
bb. Secondary Cooperative refers to a cooperative, the members of which are 
8 
primary cooperatives; 
9 
cc. Single-Purpose Cooperative refers to a cooperative that undertakes only 
10 
one economic activity, except one that is allowed to undertake allied 
11 
economic activities; 
12 
dd. Share Capital refers to the equitable contribution of a member to the 
13 
cooperative fund, the working capital fund of the cooperative, which shall 
14 
have a par value of at least One Hundred Pesos (Php100.00) and issued 
15 
as common or preferred shares depending on the type of membership with 
16 
the cooperative; 
17 
ee. Social Audit refers to an audit to assess the social impact of the cooperative 
18 
and its ethical performance vis-â-vis its stated mission, vision, goals, and 
19 
code of social responsibility. It is a mechanism whereby it can account for 
20 
the social performance of the cooperative and evaluate its impact on the 
21 
community, making the cooperative accountable for its decisions and 
22 
actions to its members; 
23 
ff. Subscription Agreement refers to the document executed by a member to 
24 
signify the amount that the member intends to contribute to the 
25 
cooperative fund; 
26 
gg. Subsidiary Cooperative refers to a cooperative, all or majority of whose 
27 
members or shareholders come from a parent cooperative, organized for 
28 
any other purpose different from that of, and receives technical, 
29 
managerial, and financial assistance from the latter, in accordance with 
30 
the rules and regulations of the Authority; 
31 
hh. Tertiary Cooperative refers to a cooperative whose members are 
32 
secondary cooperatives; 
33 
ii. Video conferencing refers to a conference between two (2) or more 
34 
participants at different sites by using computer networks to transmit 
35 
audio and video data; and 
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jj. Worker Beneficiary refers to a natural person who renders service for value 
1 
as an employee or laborer in an agricultural enterprise or farm within an 
2 
agrarian reform cooperative; 
3 
 
CHAPTER II. PURPOSES AND ORGANIZATION 
4 
SEC. 5. Goals and Objectives of a Cooperative. - The primary objective 
5 
of every cooperative is to help improve the quality of life of its members. 
6 
Towards this end, the cooperative shall aim to: 
7 
a. Increase income, savings, investments, productivity, and purchasing 
8 
power of its members, and promote among themselves equitable 
9 
distribution of net surplus through maximum utilization of economies of 
10 
scale, cost sharing and risk-sharing; 
11 
b. Provide optimum social and economic benefits to its members; 
12 
c. Provide trainings for its members on the efficient ways of processing tasks 
13 
in a cooperative manner; 
14 
d. Propagate best practices, innovative ideas in business undertakings and 
15 
management through the utilization of new technologies; 
16 
e. Empower the marginalized sector to gain opportunities through education 
17 
and skills training;  
18 
f. Actively collaborate with the government, other cooperatives and people-
19 
oriented organizations to promote cooperatives as a practical means 
20 
towards sustainable socio-economic development; 
21 
g. Adopt membership expansion mechanism to ensure the growth of the 
22 
cooperative movement; 
23 
h. Implement policy guidelines that will ensure transparency, accountability 
24 
and equitable access to its resources and services, and promote the 
25 
interests of the members; 
26 
i. Advance the sustainability, competitiveness, and innovativeness of 
27 
cooperatives in the various industries; 
28 
j. Coordinate with other cooperatives through learning, information 
29 
exchange to foster sustainable development;  
30 
k. Advocate legal framework and enabling policies appropriate for the 
31 
development of cooperatives; 
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l. Be the voice and the institution of the marginalized for purposes of 
1 
promoting people-centered development; 
2 
m. Encourage thrift and savings mobilization among the members; 
3 
n. Generate funds and extend credit to the members for productive and 
4 
provident purposes; 
5 
o. Encourage among members systematic and market-oriented production; 
6 
p. Provide goods and services and other requirements to the members; 
7 
q. Develop expertise and skills among its members; 
8 
r. Acquire lands and provide housing benefits for the members; 
9 
s. Provide insurance programs to cover the risk of financial losses in the 
10 
operations of a cooperative; 
11 
t. Promote and advance the economic, social and educational status of the 
12 
members; 
13 
u. Establish, own, lease or operate cooperative banks, cooperative wholesale 
14 
and retail complexes, insurance and agricultural/industrial processing 
15 
enterprises, and public markets; 
16 
v. Coordinate and facilitate the activities of cooperatives; 
17 
w. Advocate for the cause of the cooperative movements; 
18 
x. Ensure the viability of cooperatives through the utilization of new 
19 
technologies; 
20 
y. Encourage and promote self-help or self-employment as an engine for 
21 
economic growth and poverty alleviation; 
22 
z. Adopt such other plans which may help foster the welfare of the members, 
23 
their families and the community; and 
24 
aa. Undertake any activity stated in the articles of cooperation and bylaws of 
25 
the cooperative. 
26 
SEC. 6.  Cooperatives Not in Restraint of Trade. - No cooperative or 
27 
method or act thereof which complies with this Code shall be deemed a 
28 
conspiracy, combination in restraint of trade, an illegal monopoly, or an 
29 
attempt to lessen competition or fix prices arbitrarily in violation of any laws of 
30 
the Philippines. 
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11 
This notwithstanding, fair competition between cooperatives is 
1 
paramount in their collective growth. Cooperatives shall support and foster a 
2 
level playing field in their industries. Accordingly, Sections 6, 7, 21, and 110 
3 
of this Code shall be in consonance with Republic Act (RA) No. 10667, 
4 
otherwise known as the “Philippine Competition Act”.  
5 
SEC. 7. Cooperative Powers and Capacities. - A cooperative registered 
6 
under this Code shall have the following powers, rights and capacities: 
7 
a. To the exclusive use of its registered name,  
8 
b. To sue and be sued; 
9 
c. Of succession; 
10 
d. To amend its articles of cooperation in accordance with the provisions of 
11 
this Code; 
12 
e. To adopt bylaws not contrary to law, morals or public policy, and to amend 
13 
and repeal the same in accordance with this Code; 
14 
f. To purchase, receive, take or grant, hold, convey, sell, lease, pledge, 
15 
mortgage, and otherwise deal with such real and personal property as the 
16 
transaction of the lawful affairs of the cooperative may reasonably and 
17 
necessarily require, subject to the limitations prescribed by law and the 
18 
Constitution; 
19 
g. To enter into joint venture agreement and partnership, or any other 
20 
commercial activity with other cooperatives; 
21 
h. To enter into division, merger or consolidation, as provided in this Code; 
22 
i. To form subsidiary cooperatives and join federations, unions, and/or 
23 
Credit Surety Fund Cooperatives, as provided in this Code; 
24 
j. To avail of loans, be entitled to credit, and to accept and receive grants, 
25 
donations, and assistance from foreign and domestic sources, subject to 
26 
the conditions of said loans, credits, grants, donations or assistance that 
27 
will not undermine the autonomy of the cooperative; 
28 
k. To avail of preferential rights granted to cooperatives under Republic Act 
29 
No. 7160, otherwise known as the Local Government Code, and other 
30 
laws, particularly the grant of franchises to establish, construct, operate 
31 
and maintain ferries, wharves, markets or slaughterhouses and lease 
32 
public utilities, including access to extension and on-site research services 
33 
and facilities related to agriculture and fishery activities; 
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l. To establish and operate schools in all levels of the education system, 
1 
subject to the rules and regulations of the Department of Education, 
2 
Commission on Higher Education, and Technical Education and Skills 
3 
Development Authority; 
4 
m. To operate branch, satellite, and liaison offices within its area of operation, 
5 
subject to the rules and regulation on such issued by the Authority in 
6 
consultation with the sector; 
7 
n. To provide training for their officers and members for continued 
8 
development and personal improvement.  
9 
If a cooperative is unable to provide training for its members, it may engage 
10 
the services of a union or federation. Government agencies, local 
11 
cooperative development officers,  and experts from the private sector are 
12 
authorized to assist in the organization, training, and development of a 
13 
cooperative and its members if the cooperative wishes to do so. In this 
14 
regard, cooperatives and other institutions shall be accredited as Training 
15 
Service Providers by the Authority: Provided, that a federation shall only 
16 
provide training in accordance with its business or specialization for their 
17 
members, while a union shall provide basic and other training that 
18 
benefits the sector; Provided further, that government agencies and experts 
19 
from the public sector assisting in the organization, training, and 
20 
development of a cooperative and its members shall coordinate with 
21 
federations and unions; and 
22 
o. To exercise such other powers granted in this Code as shall be necessary 
23 
to carry out its purposes stated in its articles of cooperation. 
24 
SEC. 8. Organizing a Primary Cooperative. – At least twenty-five (25) 
25 
natural persons who are Filipino citizens, of legal age, having a common bond 
26 
of interest, and are residing or working in the intended area of operation, may 
27 
organize a primary cooperative under this Code. The cooperators must have 
28 
attended and completed a Pre-Registration Seminar (PRS) as a prerequisite for 
29 
registration. The details and requisites of the PRS shall be included in the 
30 
implementing rules and regulations of this Code. 
31 
No primary cooperative, except for agricultural cooperatives, shall be 
32 
organized as a multi-purpose cooperative unless it has been in operation for at 
33 
least two (2) years and shall have complied with the minimum requirements for 
34 
multi-purpose cooperatives as prescribed by the Authority. 
35 
To encourage and develop cooperativism among the youth, a primary 
36 
cooperative may organize a laboratory cooperative. A laboratory cooperative 
37 
shall be supervised by the primary cooperative which created it, and shall 
38 
exercise all the rights, privileges, and duties of a regular cooperative, as 
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13 
governed by the guidelines to be promulgated by the Authority in consultation 
1 
with the cooperative sector. 
2 
SEC. 9. Mandatory Personnel of the Cooperative. - All cooperatives 
3 
shall have a General Manager and a Bookkeeper to be authorized to operate. 
4 
SEC. 10. Liability of the Cooperative. – A cooperative duly registered 
5 
under this Code shall have limited liability 
6 
SEC. 11. Term of existence of cooperative. - A cooperative shall have 
7 
perpetual existence from the date of registration unless voluntarily dissolved or 
8 
the Certificate of Registration is cancelled for reasons provided under this Code 
9 
and its Implementing Rules and Regulations. 
10 
SEC. 12. Articles of cooperation. - All primary cooperatives applying 
11 
for registration shall present to the Authority the Certificate of Pre-Registration 
12 
Seminar and the articles of cooperation, signed by all cooperators and 
13 
acknowledged by them before a notary public.  
14 
In case of cooperative banks, insurance cooperatives, federations, 
15 
unions, tertiary cooperatives, or special types of cooperatives, the articles of 
16 
cooperation shall be acknowledged by its chairpersons and cooperative 
17 
secretaries before a notary public. The articles of cooperation shall contain the 
18 
following provisions: 
19 
a. Name of the cooperative which shall include the word "Cooperative", 
20 
“Coop”, “Koop”, or “Kooperatiba” and shall likewise specify the type of 
21 
cooperative; 
22 
b. Purpose or purposes and the economic activities for which the cooperative 
23 
is to be registered; 
24 
c. Powers and capacities; 
25 
d. Area of operation, the postal address of its principal office, and the official 
26 
electronic mail address of the cooperative; 
27 
e. Names, nationality, and the postal addresses of the cooperators; 
28 
f. Common bond of membership; 
29 
g. List of names of the directors;  
30 
h. Amount of authorized, subscribed, and paid-up share capital, the number 
31 
of shares, and the par-value of each share, and the names of the 
32 
cooperators, except for cooperative unions; 
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14 
i. A statement as to whether the cooperative is a primary, secondary, 
1 
tertiary, or special type of cooperative; 
2 
j. Certificate of Authority from the appropriate government agency; and 
3 
k. Other provisions consistent with this Code or any related law. 
4 
SEC. 13. Bylaws. – Every cooperative to be registered under this Code 
5 
shall adopt bylaws consistent with the provisions of this Code which shall be 
6 
filed together with the articles of cooperation. The bylaws of each cooperative 
7 
shall provide: 
8 
a. The qualifications for admission to membership;  
9 
b. The equitable contribution or interest to be acquired as a condition 
10 
precedent for the exercise of the right of membership; 
11 
c. The rights, privileges, duties, responsibilities, and liabilities of 
12 
membership; 
13 
d. The circumstances under which membership is acquired, maintained, and 
14 
terminated, and the procedure to be followed; 
15 
e. The conditions under which the transfer of a share or interest of the 
16 
members shall be permitted; 
17 
f. The general conduct of the affairs of the cooperative relative to  agenda, 
18 
time, place and manner of calling, convening, and conducting meetings, 
19 
quorum requirements, voting systems of the General Assembly, the Board 
20 
of Directors, committees and the officers, including their qualifications, 
21 
disqualifications, powers, duties, and responsibilities; 
22 
g. The manner in which the capital, may be raised and the purposes for 
23 
which it can be utilized; 
24 
h. The accounting and auditing systems; 
25 
i. The manner of contracting loans and borrowings including the limitations 
26 
thereof; 
27 
j. The allocation and distribution of net surplus; 
28 
k. The manner of adopting and amending bylaws; 
29 
l. The institution of a conciliation or mediation mechanism for the amicable 
30 
settlement of disputes among members, directors, officers and committee 
31 
members of the cooperative; and 
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15 
m. Other matters incident to the purposes and activities of the cooperative.   
1 
 
CHAPTER III. REGISTRATION 
2 
SEC. 14. Requirements for Registration. - The proposed articles of 
3 
cooperation, bylaws, and such other required documents shall be submitted in 
4 
accordance with the rules and regulations to be prescribed by the Authority. 
5 
Except for cooperative unions as described under Section 31 hereof, no 
6 
cooperative shall be registered unless the articles of cooperation is 
7 
accompanied with the bonds of the accountable officers and a sworn statement 
8 
of the treasurer showing that at least twenty-five per centum (25%) of the 
9 
authorized share capital has been subscribed and at least twenty-five per 
10 
centum (25%) of the total subscription has been paid.  
11 
The Authority shall initially fix the minimum paid-up share capital in the 
12 
Implementing Rules and Regulations of this Code, periodically assess the 
13 
required paid-up share capital, and may increase or decrease it through 
14 
subsequent regulation whenever necessary upon consultation with the 
15 
cooperative sector. 
16 
The Authority may prescribe such other registration requirements as it 
17 
may deem necessary, in consultation with the cooperative sector. 
18 
SEC. 15. Registration. - A cooperative formed and organized under this 
19 
Code acquires juridical personality from the date the Authority issues a 
20 
Certificate of Registration under its official seal. All applications for registration 
21 
shall be finally disposed of by the Authority within a period of fifteen (15) days 
22 
from the filing of the complete documentary requirements, both in form and in 
23 
substance, otherwise the application is deemed approved, unless the cause of 
24 
the delay is justified as the case may be: Provided, That in case of a denial of 
25 
the application for registration, the applicant may file a Motion for 
26 
Reconsideration within five (5) days from receipt of such denial. An appeal to 
27 
the Board of Directors of the Authority may be filed within fifteen (15) days from 
28 
receipt of notice of denial of the Motion for Reconsideration. The decision of the 
29 
Board of Directors shall be final and executory but may be elevated to the Court 
30 
of Appeals through a Petition for Review. 
31 
The grounds for denial of the registration shall be prescribed in the 
32 
Implementing Rules and Regulations of this Code. 
33 
SEC. 16. Certificate of Registration. - A Certificate of Registration 
34 
issued by the Authority under its official seal shall be conclusive evidence that 
35 
the cooperative therein mentioned is duly registered unless it is proved that the 
36 
registration thereof has been cancelled or revoked.  
37 


 
16 
SEC. 17. Amendment of articles of cooperation and bylaws. - Unless 
1 
otherwise prescribed by this Code and for legitimate purposes, any provision 
2 
or matter stated in the articles of cooperation and bylaws may be amended by 
3 
two-thirds (⅔) vote of all the members entitled to vote, present and constituting 
4 
a quorum, without prejudice to the right of the dissenting members to exercise 
5 
their right to withdraw their membership under Section 38 of this Code. 
6 
Subject to the guidelines to be issued by the Authority, a cooperative may 
7 
opt to amend its articles of cooperation and bylaws through a referendum by a 
8 
vote of two-thirds (⅔) of all the members entitled to vote. 
9 
Both the original and amended articles of cooperation and/or bylaws 
10 
shall contain all provisions required by law. Amendments shall be indicated by 
11 
underscoring or otherwise appropriately indicating the change or changes 
12 
made and a copy of the amended articles of cooperation or bylaws duly certified 
13 
under oath by the cooperative secretary and a majority of the directors stating 
14 
the fact that the amendment or amendments to the Articles of cooperation 
15 
and/or bylaws have been duly approved by the required vote of the members. 
16 
All amendments to the articles of cooperation and/or bylaws shall be submitted 
17 
to the Authority. 
18 
An application for amendments shall be deemed approved by the 
19 
Authority within a period of thirty (30) days from the filing thereof: Provided, 
20 
That the documentary requirements are complete in form and substance, 
21 
unless the cause of the delay is justified. 
22 
SEC. 18. Contracts Executed Prior to Registration and Effects 
23 
Thereof. - Subject to the execution of a formal written contract made in the 
24 
cooperative's name or on its behalf prior to its registration, all contracts 
25 
executed prior to its registration between private persons and the cooperative 
26 
shall remain valid and binding between the parties in so far as it redounds to 
27 
the benefit of the cooperative. 
28 
SEC. 19. Effects of Failure to Operate or Comply with Conditions 
29 
on Registration. – In case the cooperative fails to commence its authorized 
30 
business activity within three (3) years from the issuance of its Certificate of 
31 
Registration, its Certificate of Registration shall be deemed cancelled and it 
32 
shall be delisted from the registry of cooperatives. 
33 
SEC. 20. Division of Cooperatives. - A registered cooperative, through 
34 
a resolution approved by a vote of two-thirds (⅔) of all the members entitled to 
35 
vote, present and constituting a quorum, may divide itself into two (2) or more 
36 
cooperatives. Such division of the cooperative shall be valid: Provided, That the 
37 
purpose of the division is not to defraud the creditors: Provided further, that 
38 
the division shall ensure the continuity of the existing government programs 
39 
and projects participated in by the cooperative. 
40 


 
17 
The dissenting members shall have the right to exercise their right to 
1 
withdraw their membership pursuant to Section 38. 
2 
The Authority shall prescribe the rules and regulations for the division 
3 
of the cooperative: Provided, That all the requirements set forth in this Code 
4 
have been complied with by the newly-formed cooperatives.  
5 
 
CHAPTER IV. MERGER AND CONSOLIDATION OF COOPERATIVES 
6 
SEC. 21. Merger or Consolidation of Cooperatives. – 
7 
a. Two (2) or more cooperatives may merge into a single cooperative. 
8 
b. No merger or consolidation shall be valid unless approved by a two-thirds 
9 
(⅔) vote of all the members entitled to vote, present and constituting a 
10 
quorum of each of the constituent cooperatives at separate General 
11 
Assembly meetings. The dissenting members shall have the right to 
12 
exercise their right to withdraw their membership pursuant to Section 38. 
13 
c. The Authority shall issue the guidelines governing the procedure of merger 
14 
or consolidation of cooperatives. The merger or consolidation shall be 
15 
effective upon the issuance by the Authority of the Certificate of Merger, 
16 
or in the case of a consolidation of cooperatives, a new Certificate of 
17 
Registration. 
18 
SEC. 22. Effects of Merger and Consolidation. - The merger and 
19 
consolidation of cooperatives shall have the following effects: 
20 
a. In case of merger of cooperatives, the constituent cooperatives shall 
21 
become a single cooperative or, in the case of consolidation of 
22 
cooperatives, the consolidated cooperative shall be the new cooperative. 
23 
b. The single cooperative and the consolidated cooperative, as the case may 
24 
be, shall possess all the assets, rights, privileges, immunities, and 
25 
franchises and assume all the liabilities and obligations of each of the 
26 
constituent cooperatives. 
27 
c. Any claim, action, or proceeding instituted by or against the constituent 
28 
cooperatives may be continued by the single or consolidated cooperative, 
29 
as the case may be.  
30 
d. The merger or consolidation shall not impair the rights of creditors nor 
31 
any lien upon the property of the constituent cooperatives. 
32 
 


 
18 
CHAPTER V. TYPES AND CATEGORIES OF COOPERATIVES 
1 
SEC. 23. Clusters and Categories of Cooperatives. - 
2 
a. Clusters of Cooperatives - Cooperatives may fall under any of the following 
3 
clusters based on their business activity: 
4 
(1) Credit, Finance, Banking, and Insurance Cluster refers to cooperatives 
5 
organized for the promotion of financial freedom and literacy among its 
6 
members, and undertakes savings, lending, and other financial services 
7 
to its members, such as: 
8 
i. Cooperative Banks – organized for the primary purpose of providing 
9 
a wide range of financial services to cooperatives and their 
10 
members; 
11 
ii. Credit Cooperatives – engaged solely in lending services; 
12 
iii. Credit and Savings Cooperatives -  promote and undertake savings 
13 
and lending services among its members. They generate a common 
14 
pool of funds in order to provide financial assistance to their 
15 
members for productive and provident purposes; 
16 
iv. Credit Surety Fund Cooperatives – in partnership with local 
17 
government units (LGUs), comprised of well-capitalized and well-
18 
managed member-cooperatives or non-government organizations 
19 
that meet the criteria and qualifications prescribed by the 
20 
Authority, LGUs, government financial institutions, and other 
21 
government agencies; 
22 
v. Insurance Cooperatives – engaged in the business of providing 
23 
health, life, and non-life insurance, as well as pre-need plans 
24 
(education, pension, and memorial plans) of cooperatives and their 
25 
members; 
26 
vi. Savings and Deposits Cooperatives -  engaged solely in promoting 
27 
and encouraging savings among its members; and 
28 
vii. Other cooperatives as may be determined by the Authority under 
29 
this cluster, in consultation with the sector. 
30 
(2) Consumers, Marketing, Producers, and Logistics Cluster refers to 
31 
cooperatives organized for the supply, procurement, transport, storage, 
32 
distribution, and marketing of products of its members, industrial 
33 
production, and non-agricultural business activity for the production 
34 
and processing of raw materials or goods or its derivative, such as: 
35 


 
19 
i. Consumers Cooperatives – engaged primarily in procuring and 
1 
distributing commodities to members and non-members; 
2 
ii. Marketing Cooperatives -  engaged in the supply of production 
3 
inputs to members and markets their products, including trading 
4 
and processing; 
5 
iii. Logistics Cooperatives -  engaged in operations involving facilities 
6 
and supplies whose business is related to the supply chain; 
7 
iv. Producers Cooperatives -  engaged in joint production whether 
8 
agricultural or industrial. They are formed and operated by the 
9 
members to undertake the production and processing of raw 
10 
materials or goods produced by the members into finished or 
11 
processed products for sale by the cooperative. Any end product or 
12 
its derivative arising from the raw materials produced by the 
13 
members, sold in the name and for the account of the cooperative, 
14 
shall be deemed a product of the cooperative and its members; and 
15 
v.  Other cooperatives as may be determined by the Authority under 
16 
this cluster, in consultation with the cooperative sector. 
17 
(3) Human Services, Health, Housing, Workers, and Labor Service Cluster 
18 
refers to cooperatives organized for providing employment and business 
19 
opportunities to its members, housing, and services related to medical, 
20 
dental, health and wellness and death care, real estate, technology, 
21 
including digital payment services, such as: 
22 
(a) Health Services Cooperatives – organized for the primary 
23 
purpose of providing medical, dental, paramedic, diagnostic 
24 
and other health services, including cooperative health 
25 
organizations, 
hospitals, 
clinics, 
pharmacies, 
and 
26 
transporting of patients; 
27 
(b) Housing Services Cooperatives – organized to assist or 
28 
provide access to socialized housing for the benefit of 
29 
members who actively participate in the savings program for 
30 
housing; 
31 
(c) Labor Services Cooperatives – engaged in providing specific 
32 
services to a principal under a legitimate contracting or 
33 
subcontracting agreement, as defined under existing laws, 
34 
and in accordance with the cooperative principles set forth 
35 
in this Code; 
36 
(d) Real Estate Services Cooperatives -  organized to provide 
37 
members with services related to real estate activities such 
38 


 
20 
as the development, management, buying, selling, and 
1 
leasing of land and other properties, including commercial, 
2 
residential, industrial, and institutional properties, and 
3 
intermediary services related to real estate, such as 
4 
financing investment, among others; 
5 
(e) Technology Service Cooperatives -  organize to provide the 
6 
members with services that are designed to facilitate the use 
7 
of Information Technology by end users, electronic money 
8 
issuers licensed by BSP, or provide specialized technology-
9 
oriented solutions by combining the processes and functions 
10 
of software, hardware, networks, telecommunications, and 
11 
electronics, among others; 
12 
(f) Workers Cooperatives -  organized by workers including the 
13 
self-employed who are at the same time the members and 
14 
owners of the enterprise. The principal purpose of these 
15 
cooperatives is to provide employment and business 
16 
opportunities to the members and manage them in 
17 
accordance with cooperative principles; and 
18 
(g) Other cooperatives as may be determined by the Authority 
19 
under this cluster, in consultation with the cooperative 
20 
sector. 
21 
(4) Education and Advocacy Cluster refers to cooperatives organized for the 
22 
promotion and advocacy of cooperativism among its members and the 
23 
public through socially-oriented projects, education and training, 
24 
research and communication, such as: 
25 
(a) Advocacy Cooperatives - promote cooperativism and 
26 
advocate policies for the general interest and welfare of the 
27 
members, the sector, the movement, and the public through 
28 
socially-oriented projects, education and training, research 
29 
and communication, campaigns, lobbying, and other similar 
30 
activities to reach out to intended beneficiaries; 
31 
(b) Education Cooperatives – organized for the primary purpose 
32 
of owning and operating licensed educational institutions, 
33 
subject to existing laws, rules and regulations; and 
34 
(c) Other cooperatives as may be determined by the Authority 
35 
under this cluster, in consultation with the cooperative 
36 
sector. 
37 
(5) Agriculture, Agrarian, Aquaculture, Farmers, Dairy, and Fisherfolk 
38 
Cluster refers to cooperatives engaged in the raising or culture of plants 
39 


 
21 
and animals, including the production and processing of agricultural 
1 
produce and its derivatives, and includes cooperatives organized for 
2 
developing a sustainable system of land tenure, and land development, 
3 
consolidation or management, such as: 
4 
(a) Agrarian reform cooperatives – organized by marginal 
5 
farmers, majority of whom are agrarian reform beneficiaries, 
6 
for the purpose of developing an appropriate system of land 
7 
tenure, land development, land consolidation, or land 
8 
management of areas covered by agrarian reform; 
9 
(b) Agricultural cooperatives – comprised of farmers, fisherfolk, 
10 
agrarian reform beneficiaries, dairy farmers, community 
11 
forestry farmers, aquaculture farmers, and other individuals 
12 
engaged in agricultural activities who voluntarily organized 
13 
themselves as agricultural-based economic enterprises 
14 
established through joint investment, joint ownership, and 
15 
joint management for the purpose of improving agricultural 
16 
production 
capacity, 
agro-industry, 
agri-business, 
or 
17 
services related to agricultural production. Also included are 
18 
consumers, marketing, producers, and multi-purpose 
19 
cooperatives whose primary business activity is at least fifty 
20 
percent (50%) related to agricultural production, agro-
21 
industry, agri-business, or services related to agricultural 
22 
production. Agricultural activities include production, 
23 
processing, logistics, distribution of products, and other 
24 
allied activities such as savings and credit, marketing, 
25 
agricultural extension, farm education, and agri-tourism; 
26 
(c) Dairy cooperatives -  engaged in the production and 
27 
marketing of fresh milk which may be processed or marketed 
28 
as dairy products; 
29 
(d) Farmers cooperatives – organized by marginalized farmers, 
30 
majority of whom are not agrarian reform beneficiaries, for 
31 
the purpose of supporting their products, either fresh or 
32 
processed; 
33 
(e) Fisherfolk 
cooperatives 
– 
organized 
by 
marginalized 
34 
fisherfolk whose products are marketed either as fresh or 
35 
processed, for the mobilization of capital in the procurement 
36 
of fishing boats, nets, gears, and accessories, production of 
37 
aquatic products, and access to storage and agricultural 
38 
facilities; 
39 


 
22 
(f) Irrigators cooperatives – engaged in providing sustainable 
1 
irrigation services for farmers; 
2 
(g) Other cooperatives as may be determined by the Authority 
3 
under this cluster, in consultation with the cooperative 
4 
sector. 
5 
(6) Public Utilities Cluster refers to cooperatives organized for the purpose 
6 
of undertaking electricity generation, utilizing renewable energy sources 
7 
including hybrid systems, acquisition and operation of sub-
8 
transmission or distribution; operation and management of water 
9 
systems; 
land, 
air, 
and 
sea 
transportation 
services; 
and 
10 
communications 
services 
including 
telephone 
and 
digital 
11 
communications, for which a franchise or certificate of public 
12 
convenience and necessity has been duly issued by the appropriate 
13 
government agency; 
14 
(a) Communications cooperatives – organized to own, operate, 
15 
and manage communication structures and arrangements, 
16 
such as radio, cable TV, newspaper, and related industries, 
17 
for the widespread dissemination of information for the 
18 
members and the public; 
19 
(b) Transport Service cooperatives – organized to render public 
20 
land, water, or air transportation for the safe conveyance of 
21 
passengers or cargoes, or are engaged in providing related or 
22 
auxiliary services to the transport industry; 
23 
(c) Water Service cooperatives – organized to own, operate, and 
24 
manage water systems for the provision and distribution of 
25 
potable water for the members and households in 
26 
communities where they operate; 
27 
(d) Electric cooperatives – organized for the primary purpose of 
28 
undertaking power generation, utilizing renewable energy 
29 
sources, 
including 
hybrid 
systems, 
acquisition 
and 
30 
operation of sub-transmission or distribution to the 
31 
household members; 
32 
(e) Other cooperatives as may be determined by the Authority 
33 
under this cluster, in consultation with the cooperative 
34 
sector. 
35 
(7) Multi-purpose cooperative refer to a cooperative which combines two (2) 
36 
or more of the business activities of the different types of cooperatives. 
37 
 
38 
b. Categories of Cooperative. Cooperatives shall be categorized as follows: 
39 


 
23 
(1) In terms of membership, cooperative may be categorized into: 
1 
i. Primary - The members of which are natural persons; 
2 
ii. Secondary - The members of which are primary cooperatives;  
3 
iii. Tertiary - The members of which are secondary cooperatives; 
4 
iv. Special - The membership of which does not fall under the preceding 
5 
categories, as determined and approved by the Authority under this 
6 
Code and its Implementing Rules and Regulations 
7 
(2) In terms of territory, cooperatives shall be categorized according to 
8 
areas of operations. 
9 
(3) In terms of assets, cooperatives shall adhere to the categorization of 
10 
enterprises as provided under Section 3 of Republic Act No. 6977, as 
11 
amended. 
12 
SEC. 24. Apex of Cooperatives. – The Apex of Cooperatives refers to the 
13 
singular cooperative vested with a juridical personality and the mandate to 
14 
represent the cooperative sector at the national and international levels, fully 
15 
and voluntarily organized by the members of the cooperative sector. It shall 
16 
have the mandate to engage in discussions and advise the appropriate 
17 
authorities on all matters relating to cooperatives, as well as to promote the 
18 
cooperative identify and culture. 
19 
CHAPTER VI. FEDERATION OF COOPERATIVES 
20 
SEC. 25. Area of Coverage. - A federation of cooperatives may be 
21 
organized at the municipal/city, district or provincial level, regional, inter-
22 
regional or national levels. 
23 
SEC. 26. Members of a Federation of Cooperatives. - Members of a 
24 
federation of cooperatives shall consist of cooperatives with common needs or 
25 
purposes: Provided, that a member cooperative may freely withdraw 
26 
membership from the federation. 
27 
The minimum number of members shall be at least ten (10) primary or 
28 
secondary cooperatives for a federation of cooperatives. 
29 
SEC. 27. Authorized, Subscribed, and Paid-Up Capital of a 
30 
Federation. - The authorized share capital of a cooperative shall be provided 
31 
for in its articles of cooperation where at least twenty-five (25%) of the 
32 
authorized share capital shall be subscribed to by the members and at least 
33 
twenty-five per centum (25%) of the subscribed share capital shall be paid prior 
34 
to its registration. 
35 


 
24 
The minimum paid-up share capital for a federation of cooperatives shall 
1 
be One Million Pesos (P1,000,000.00).  
2 
SEC. 28. Registration of Federation of Cooperatives. – A federation 
3 
of cooperatives shall be registered with the Authority.  
4 
SEC. 29. Functions of a Federation of Cooperatives. - A federation of 
5 
cooperatives shall undertake the following functions: 
6 
a. To carry on any cooperative enterprise authorized under Section 5 that 
7 
complements, augments, or supplements but does not conflict, compete 
8 
with, nor supplant the business or economic activities of its members; 
9 
b. To carry on, encourage, and assist educational and advisory work relating 
10 
to the business activities of its members;  
11 
c. To render services designed to encourage simplicity, efficiency, and 
12 
economy in the conduct of the business of its member cooperatives and to 
13 
facilitate the implementation of their bookkeeping, accounting, and other 
14 
systems and procedures; 
15 
d. To print, publish, and circulate any newspaper or other publication in the 
16 
interest of its member-cooperatives and enterprises; 
17 
e. To coordinate and facilitate the activities of its member-cooperatives; 
18 
f. To enter into joint ventures with local or international cooperatives in the 
19 
manufacture and sale of products in the Philippines and abroad;  
20 
g. To mandatorily act as conciliator-mediator in inter-intra cooperative 
21 
disputes among and between the members and officers of primary 
22 
cooperatives; 
23 
h. To assist members in the submission of the required reports and other 
24 
compliances to the Authority and other government or regulatory bodies;  
25 
i. To assist in the liquidation of the remaining assets of dissolved/cancelled 
26 
primary cooperative members; 
27 
j. To develop programs on education, training, monitoring, coaching, 
28 
research, and advocacy which complements, augments, and supplements 
29 
the businesses of their members; and 
30 
k. To conduct trainings to member-cooperatives as an accredited training 
31 
provider; 
32 
l. To promote the knowledge of cooperative principles and practices; 
33 


 
25 
m. To conduct studies in the economic, legal, financial, social, and other 
1 
phases of cooperation, and public the results thereof; and 
2 
n. To assist the Authority in ensuring the compliance of its member-
3 
cooperatives 
with 
the 
laws, 
regulations, 
policies, 
and 
4 
inspection/examination findings of government regulatory agencies. 
5 
SEC. 30. Special Types of Federations. – A special type of federation 
6 
may be organized and registered by primary cooperatives who may not 
7 
necessarily be in the same line of business but who wish to offer and are able 
8 
to cater their members the following exclusive services: 
9 
a. Water supply system services; 
10 
b. Healthcare services; 
11 
c. Deathcare services; 
12 
d. Technology services; 
13 
e. Real estate services; 
14 
f. Digital payment services; 
15 
g. Deposit insurance services; and 
16 
h. Such other services as may be determined by the Authority. 
17 
Primary cooperatives who federate under this Section are prohibited from 
18 
engaging in any business activity not related to their original line of business 
19 
or not authorized under their articles of cooperation and bylaws or under this 
20 
Code. 
21 
 
CHAPTER VII. COOPERATIVE UNIONS 
22 
SEC. 31. Organization and Purposes of a Cooperative Union. - All 
23 
registered cooperatives may organize or join cooperative unions to protect, 
24 
promote, and represent the interest and welfare of all types of cooperatives: 
25 
Provided, That a member cooperative may freely withdraw membership 
26 
therefrom. 
27 
Cooperative unions shall represent the constituent cooperatives at the 
28 
appropriate level and exercise the following duties and functions: 
29 
a. To represent its member organizations; 
30 


 
26 
b. To acquire, analyze, and disseminate, economic, statistical, and other 
1 
information relating to its members and to all types of cooperatives within 
2 
its area of operation; 
3 
c. To sponsor studies in the economic, legal, financial, social and other 
4 
phases of cooperation, and publish the results thereof; 
5 
d. To conduct trainings to member-cooperatives as an accredited training 
6 
provider; 
7 
e. To promote the knowledge of cooperative principles and practices in their 
8 
respective jurisdictions; 
9 
f. To develop the cooperative movement; 
10 
g. To assist the national and local government units in cooperative 
11 
development activities within their respective jurisdiction; 
12 
h. To assist in the dissemination and monitoring of the Philippine 
13 
Cooperative Development Plan; 
14 
i. To assist members in the submission of the required reports and other 
15 
compliances to the Authority and other government or regulatory bodies; 
16 
j. Upon written request of the Authority, to assist the Authority in the 
17 
performance of its power of inspection/examination by way of providing 
18 
relevant information, such as, but not limited to, research, reports, and 
19 
financial records; 
20 
k. To advise the appropriate authorities on all questions relating to 
21 
cooperatives; 
22 
l. To act as liquidators or render assistance in the liquidation of the 
23 
remaining assets of dissolved/cancelled primary cooperative members; 
24 
m. To do and perform such other non-business activities as may be 
25 
necessary, and such other allied services incidental to attaining the 
26 
foregoing objectives, such as but not limited to, the maintenance of 
27 
training centers, catering, lease of venue, lodging, publication, and 
28 
reproduction and sale of training and research materials. 
29 
SEC. 32. Sources of Funds for Cooperative Unions. - The funds of a 
30 
cooperative union shall be sourced from the membership fees, dues and 
31 
contributions, remitted cooperative education and training fund (CETF) from 
32 
member-cooperatives, training fees, fundraising activities, donations/grants, 
33 
and subsidies from local and foreign sources, whether private or public. 
34 


 
27 
CHAPTER VIII. MEMBERSHIP 
1 
SEC. 33. Membership. – A cooperative shall have regular members or 
2 
associate members. 
3 
A regular member is a person who has complied with all the membership 
4 
requirements including the Pre-Membership Education Seminar and shall be 
5 
entitled to all the rights and privileges of membership. An associate member is 
6 
one who has no right to vote nor be voted upon and shall be entitled only to 
7 
such rights and privileges as the bylaws may provide; Provided, that an 
8 
associate member who meets all the requirements of regular membership, 
9 
continues to patronize the cooperative for two (2) years, and signifies intention 
10 
to remain a member shall be considered a regular member. 
11 
In water service cooperatives, institutional users may be accepted as 
12 
associate members. 
13 
SEC. 34. Qualifications of Membership. – Members of registered 
14 
primary cooperatives must be natural persons, Filipino citizens, or former 
15 
natural-born Filipino citizens, of legal age, with capacity to enter into a contract, 
16 
within the common bond of membership and area of operation, and must 
17 
possess the qualifications and none of the disqualifications as provided for in the 
18 
bylaws of the cooperative: Provided, that in case of former natural-born Filipino 
19 
citizens, they must comply with Philippine taxation laws: Provided, further, that 
20 
the age requirement shall not apply to laboratory cooperatives as defined in 
21 
Section 4. A member must have completed the Pre-Membership Education 
22 
Seminar. 
23 
SEC. 35. Government Officers and Employees. – 
24 
a. All elective officials of the Government shall be ineligible to become officers 
25 
of cooperatives: Provided, That the disqualification does not extend to a 
26 
party list representative who represents the cooperative sector: Provided, 
27 
further, that nothing precludes cooperatives from engaging in activities in 
28 
support of party lists representing the sector, such as but not limited to, 
29 
campaigning or donating funds; 
30 
b. Employees of the Authority are allowed to become a member of any 
31 
cooperative. However, they shall be disqualified to be elected or appointed 
32 
as an officer, except for cooperatives organized among themselves;  
33 
c. Any government employee or official may, in the discharge of his/her 
34 
duties as a member in the cooperative, be allowed by the head of office 
35 
concerned to use official time for attendance at the General Assembly, 
36 
Board, and committee meetings including cooperative seminars, 
37 
conferences, workshops, technical meetings, and training courses locally 
38 
or abroad. 
39 


 
28 
SEC. 36. Processing of Applications for Membership. - An application 
1 
for membership shall be acted upon by the Board of Directors within the period 
2 
fixed in the bylaws but not later than thirty (30) days. Otherwise, the 
3 
application for membership shall be deemed approved, subject to the condition 
4 
that the applicant has submitted his/her duly accomplished application and 
5 
has paid the membership fees to the cooperative. 
6 
In case membership is denied by the Board of Directors, an appeal may 
7 
be made to the Election Committee, sitting as the appeals and grievance body, 
8 
within fifteen (15) days after receipt of the notice of denial and the latter's 
9 
decision shall be final. 
10 
If the committee fails to decide within the prescribed period, the appeal 
11 
is deemed approved in favor of the applicant. 
12 
SEC. 37. Liability of Members. - A member shall be liable for the debts 
13 
of the cooperative to the extent of his subscription to the share capital of the 
14 
cooperative. 
15 
SEC. 38. Termination of Membership. – 
16 
a. A member of a cooperative may withdraw membership from the 
17 
cooperative by giving written notice to the Board of Directors which shall 
18 
be acted upon within thirty (30) days from receipt of said notice: Provided, 
19 
that such withdrawal of membership follows the bylaws of the cooperative; 
20 
b. The death or insanity of a member in a primary cooperative, and the 
21 
insolvency or dissolution/cancellation of the certificate of registration of a 
22 
member in a secondary or tertiary cooperative shall be considered valid 
23 
grounds for termination of membership: Provided, That in the case of 
24 
death or insanity of an agrarian reform beneficiary-member of a 
25 
cooperative, the qualified next-of-kin may assume the duties and 
26 
responsibilities of the original member; 
27 
c. Termination of membership in the cooperative shall be initiated through 
28 
the filing of a complaint before the ethics committee of the cooperative. 
29 
The committee shall recommend to the Board of Directors the termination 
30 
of membership for any of the following causes: 
31 
(1) Failure to patronize any services of the cooperative for an unreasonable 
32 
period of time as provided in the bylaws; 
33 
(2) Failure to comply with the other obligations as provided for in the 
34 
bylaws; 
35 
(3) Violation of the bylaws and the policies of the cooperative; 
36 


 
29 
(4) Any act or omission injurious or prejudicial to the interest or the welfare 
1 
of the cooperative; and 
2 
(5) Others, as may be provided in the bylaws of the cooperative. 
3 
A member whose membership is subject for termination shall be 
4 
informed of such intended action in writing and shall be given an opportunity 
5 
to be heard by the grievance committee. The grievance committee shall conduct 
6 
an investigation accordingly and the results therefrom shall be referred to the 
7 
Board of Directors for its consideration. The Board of Directors may terminate 
8 
membership in the cooperative by a majority vote. The decision of the Board 
9 
shall be in writing and shall be communicated either in person or by registered 
10 
or electronic mail and shall be appealable to the General Assembly within thirty 
11 
(30) days from receipt thereof. 
12 
The General Assembly shall decide within thirty (30) days after receipt of 
13 
the appeal. Failure of the General Assembly to decide within the prescribed 
14 
period shall be deemed approval in favor of the member. Pending a final 
15 
decision, the membership shall remain in force. 
16 
SEC. 39. Refund of Interests. - All sums computed in accordance with 
17 
the bylaws due from a cooperative to a former member shall be paid to the 
18 
member by the cooperative, in accordance with this Code and as prescribed in 
19 
the Implementing Rules and Regulations: Provided, that if upon such payment, 
20 
the value of the assets of the cooperative would be less than the aggregate 
21 
amount of its debts and liabilities exclusive of the members’ share capital 
22 
contribution, such refund shall not be made. 
23 
In the computation of the interest due to the former member, the current 
24 
balance of such member in the ledger of accounts of the cooperative shall be 
25 
taken into account. 
26 
  
CHAPTER IX. ADMINISTRATION 
27 
SEC. 40. Composition of the General Assembly/Representative 
28 
Assembly. - The General Assembly shall be composed of the full membership 
29 
of the cooperative duly assembled, exercising all the rights and performing all 
30 
the obligations pertaining to cooperatives, as provided in this Code, and in its 
31 
articles of cooperation and bylaws. 
32 
For cooperatives with numerous and dispersed membership, the General 
33 
Assembly shall delegate the exercise of its powers to a Representative 
34 
Assembly, the members of which shall be elected by each of the sector, chapter, 
35 
or district of the cooperative, in accordance with its articles of cooperation and 
36 
bylaws: Provided, that in cases provided under this Code for the call of a regular 
37 


 
30 
or special General Assembly, or the approval or confirmation thereof, the 
1 
Representative Assembly shall also suffice, where applicable. Such delegation 
2 
shall be in accordance with the rules and regulations of the Authority. 
3 
SEC. 41. Powers of the General Assembly/Representative Assembly. 
4 
- The General Assembly shall be the highest policy-making body of the 
5 
cooperative and shall exercise such powers as are stated in this Code, and in 
6 
the articles of cooperation and bylaws of the cooperative. The General 
7 
Assembly, through its members entitled to vote, shall have the following 
8 
exclusive powers which cannot be delegated: 
9 
a. Determine and approve amendments to the articles of cooperation and 
10 
bylaws; 
11 
b. Elect or appoint the members of the Board of Directors, and to remove 
12 
them for cause. However, in the case of the electric cooperatives registered 
13 
under this Code, election of the members of the Board shall be held in 
14 
accordance with the bylaws or election guidelines of such electric 
15 
cooperative; and 
16 
c. Approve developmental and annual plans, and budget of the cooperative; 
17 
d. Approve or disapprove proposals from the Board of Directors pertaining to 
18 
all external borrowings, investments, grants, donations and other 
19 
financial assistance; and 
20 
e. Decide membership issues within the cooperative. 
21 
Subject to such other provisions of this Code and only for purposes of 
22 
prompt and intelligent decision-making, the General Assembly may, by a three-
23 
fourths (3/4) vote of all its members entitled to vote, present and constituting 
24 
a quorum, delegate some of its powers to the Board of Directors. These powers 
25 
shall be enumerated under the bylaws of the cooperative. 
26 
SEC. 42.  Meetings. – 
27 
a. The General Assembly shall conduct a regular annual meeting on a date 
28 
fixed in the bylaws, which shall be within ninety (90) days and within one 
29 
hundred eighty (180) days for after the close of each calendar year, for 
30 
primary and secondary cooperatives respectively: Provided, That notice of 
31 
regular meetings shall be sent in writing, by posting or publication, or 
32 
through other electronic means to all members of record. 
33 
b. Whenever necessary, a special meeting of the General Assembly may be 
34 
called at any time by a majority vote of the Board of Directors, or upon 
35 
petition of at least ten percent (10%) of the total members who are entitled 
36 
to vote, or as provided for in the bylaws: Provided, That a notice in writing 
37 
shall be sent one (1) week prior to the meeting to all members who are 
38 
entitled to vote.  
39 


 
31 
If the Board fails to call a regular or a special meeting within the given 
1 
period, the Authority, upon petition of ten per centum (10%) of members 
2 
entitled to vote constituting a quorum or the quorum as stated in their 
3 
bylaws, and for good cause shown, shall issue an order to the petitioners 
4 
directing them to call a meeting of the General Assembly by giving proper 
5 
notice as required in this Code or in the bylaws; 
6 
c. In the case of a newly registered cooperative, a special General Assembly 
7 
meeting shall be called within sixty (60) days from such approval of its 
8 
registration, for the following purposes: 
9 
(1) Presentation of approved articles of cooperation and bylaws; 
10 
(2) Approval of business plans and annual budget; and 
11 
(3) Other matters, as may be determined by the cooperative. 
12 
d. The Authority shall compel the cooperative to call a General or 
13 
Representative Assembly for the purpose of reporting to the members the 
14 
result of any examination or other investigation of the cooperative affairs; 
15 
and 
16 
e. Notice of any meeting may be waived, expressly or impliedly, by any 
17 
member. 
18 
SEC. 43. Mode of Conducting Regular or Special Assembly Meetings. 
19 
- Regular and special assembly meetings may be conducted in any of the 
20 
following manner: 
21 
a. Duly assembled in one venue, wherein the meetings are held on the same 
22 
day; or 
23 
b. Simultaneously, wherein the meetings are held on the same day. 
24 
As a general rule, assembly meetings shall be conducted in a manner 
25 
provided in the cooperative’s bylaws. However, due to technological 
26 
advancement, public health and safety measures, increased level of 
27 
participation of members and other equally important considerations in favor 
28 
of the viability and growth of cooperatives, cooperatives are allowed to conduct 
29 
their assembly meetings through videoconferencing or a combination of 
30 
physical attendance and videoconferencing, except for electric cooperatives: 
31 
Provided, That cooperatives who opt to conduct General Assembly meetings 
32 
through videoconferencing or a combination of physical attendance and 
33 
videoconferencing as an alternative mode shall amend their bylaws adopting 
34 
the same: Provided, further, That cooperatives shall adopt policies and 
35 
procedures sufficiently addressing administrative, technical, and logistical 
36 
concerns for an effective and efficient video conference meeting. 
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32 
SEC. 44.  Quorum. - Unless a higher requirement is provided in the 
1 
bylaws of the cooperative, a quorum shall consist of at least twenty-five per 
2 
centum (25%) of all the members entitled to vote: Provided, That special types 
3 
of cooperatives regulated by other agencies shall follow the minimum quorum 
4 
requirement as may be prescribed by pertinent laws: Provided, further, That the 
5 
quorum for Representative Assembly shall be in no case lower than twenty-five 
6 
per centum (25%) as provided for in the bylaws of the cooperative approved as 
7 
the Authority. 
8 
In the case of federations of cooperatives and cooperative unions, the 
9 
quorum requirement shall be fifty per centum (50%) of the total number of 
10 
members entitled to vote. 
11 
SEC. 45. Voting System. - Each member of a primary cooperative shall 
12 
have only one (1) vote regardless of the amount of member’s share capital. In 
13 
the case of members of secondary, tertiary or special types of cooperatives, one 
14 
(1) member-coop, one (1) vote system applies, regardless of the cooperatives’ 
15 
share capital.  
16 
However, the bylaws of a cooperative, other than a primary cooperative, 
17 
may provide for voting by proxy. Voting by proxy means allowing a delegate of 
18 
a cooperative to represent or vote on behalf of another delegate of the same 
19 
cooperative. 
20 
SEC. 46.  Composition and Term of the Board of Directors. – Unless 
21 
otherwise provided in the bylaws, the direction and management of the affairs 
22 
of a cooperative shall be vested in a board of directors. The Board of Directors 
23 
shall be composed of not less than five (5) nor more than fifteen (15) members 
24 
elected by the General Assembly for a term of two (2) years, but not to exceed 
25 
three (3) consecutive terms. The Board shall hold office until their successors 
26 
are duly elected and qualified, or until duly removed for cause.  
27 
Registered cooperatives whose operations are supervised by other 
28 
regulatory agencies must comply with the governance requirements of said 
29 
agency. 
30 
For federations, a member-cooperative shall have only one representative 
31 
eligible to run and be voted upon as a member of the Board irrespective of the 
32 
member-cooperative’s share capital holdings. 
33 
SEC. 47. Powers of the Board of Directors. - The Board of Directors 
34 
shall be responsible for the strategic planning, direction-setting and policy-
35 
formulation activities of the cooperatives. 
36 
SEC. 48.  Directors. – 
37 


 
33 
a. Any member of a cooperative who has the right to vote and be voted upon 
1 
who possesses all the qualifications and none of the disqualifications 
2 
provided in this Code or in its bylaws shall be eligible for election as 
3 
director. 
4 
b. The cooperative may, by resolution of its Board of Directors, admit as an 
5 
ex officio director, or committee member one appointed by any financing 
6 
institution from which the cooperative received financial assistance, solely 
7 
for the purpose of providing technical knowledge not available within its 
8 
membership. Such director or committee member need not be a member 
9 
of the cooperative and shall have no powers, rights, nor responsibilities 
10 
except to provide technical assistance as required by the cooperative. 
11 
c. The members of the Board of Directors shall not hold any other position 
12 
directly involved in the day to day operation and management of the 
13 
cooperative. 
14 
d. Any person engaged in a business similar to that of the cooperative or who 
15 
in any way has a conflict of interest with it, is disqualified from election as 
16 
a director of said cooperative. 
17 
SEC. 49. Meeting of the Board and Quorum Requirement. – 
18 
a. In the case of primary cooperatives, regular meetings of the Board of 
19 
Directors shall be held at least once a month. Special meetings of the 
20 
Board of Directors may be held at any time upon the call of the chairperson 
21 
or a majority of the members of the Board. In case a special meeting is 
22 
called by the Chairperson, written notice shall be given three (3) days prior 
23 
the date of said meeting. On the other hand, if the special meeting is called 
24 
by a majority of the Board, a prior written notice to other members of the 
25 
Board at least one (1) day before the intended date of the special meeting 
26 
will suffice. Only two (2) special meetings may be held in one (1) month. 
27 
Notices may be sent through electronic means or to the official contact 
28 
number or email account of the officers. 
29 
 
30 
b. A majority of the members of the Board shall constitute a quorum or the 
31 
conduct of business, unless the bylaws provides otherwise. 
32 
c. Each member of the Board shall only have one (1) vote, whether it be a 
33 
primary or secondary cooperative, irrespective of the share capital 
34 
holdings of the member-cooperative. 
35 
d. Directors cannot attend or vote by proxy at Board meetings. 
36 
e. Cooperatives may opt to allow meetings of the Board of Directors and 
37 
members of the different committees of cooperatives may be conducted 
38 
either through physical attendance or videoconferencing, subject to the 
39 


 
34 
rules on sending of notices, quorum, and voting requirements as provided 
1 
for in the bylaws. In the conduct of meetings through videoconferencing, 
2 
cooperatives shall adopt their own policies and procedures which shall be 
3 
included in their bylaws. 
4 
SEC. 50. Vacancy in the Board of Directors. - Any vacancy in the 
5 
Board of Directors, other than by expiration of term or an increase in the 
6 
number of Board of Directors, may be filled by the vote of at least a majority of 
7 
the remaining directors, if still constituting a quorum; otherwise, the vacancy 
8 
must be filled by the General Assembly in a special meeting called for the 
9 
purpose which must be held not later than thirty (30) days from the time the 
10 
vacancy occurs or during the regular meeting, whichever comes earlier. The 
11 
director so elected shall possess all of the qualifications and none of the 
12 
disqualifications as prescribed under this Code and the bylaws of the 
13 
cooperative and shall serve only the unexpired term of his/her predecessor in 
14 
office.  
15 
In case of vacancy of the entire Board of Directors or failure of the 
16 
General Assembly to fill the vacancy, the Authority shall compel the cooperative 
17 
through the Election Committee to call for a special General Assembly meeting 
18 
for purposes of electing a new set of Board of Directors. In the absence of the 
19 
Election Committee, the General Assembly may appoint an Ad Hoc Committee 
20 
who shall be responsible in conducting a special General Assembly meeting.  
21 
SEC. 51. Officers of the Cooperative. - The officers of the cooperative 
22 
shall include the members of the Board of Directors, members of the different 
23 
committees, General Manager or Chief Executive Officer, Secretary, Treasurer, 
24 
and other officers as may be provided for in their bylaws. As such, they shall 
25 
exercise their duties and responsibilities within the scope of their defined 
26 
functions. 
27 
The Board of Directors shall elect from among themselves the 
28 
Chairperson and Vice-Chairperson, and elect or appoint other officers of the 
29 
cooperative from outside of the Board in accordance with their bylaws.  
30 
The Board of Directors is prohibited from appointing any person within 
31 
the fourth civil degree of consanguinity or affinity of the members of the Board 
32 
as officers. Neither shall the appointive officers be related to each other up to 
33 
the fourth civil degree of consanguinity or affinity. Further, no officer shall 
34 
engage in a business similar to that of the cooperative nor in any other manner 
35 
have interests in conflict with the cooperative. 
36 
SEC. 52. Committees of Cooperatives. – 
37 
a. The bylaws may create an executive committee to be appointed by the 
38 
Board of Directors with such powers and duties as may be delegated to it 
39 


 
35 
in the bylaws or by a majority vote of all the members of the Board of 
1 
Directors. 
2 
b. The bylaws shall provide for the creation of an audit, election, conciliation-
3 
mediation, ethics, gender and development, education, and such other 
4 
committees as may be necessary for the conduct of the affairs of the 
5 
cooperative. The members of the audit, election, conciliation-mediation, 
6 
and ethics committee shall be elected by the General Assembly and the 
7 
rest shall be appointed by the Board. 
8 
Unless otherwise provided in the bylaws, the Board, in case of a vacancy 
9 
in the committees, may call an election or appoint a person to fill the vacancy 
10 
subject to the provision that the person elected or appointed shall serve only 
11 
for the unexpired portion of the term. 
12 
SEC. 53. Functions, Responsibilities and Training Requirements of 
13 
Directors, Officers and Committee Members. – The functions and 
14 
responsibilities of directors, officers and committee members, as well as their 
15 
training requirements, shall be prescribed in the bylaws of the cooperative, in 
16 
accordance with the rules and regulations issued by the Authority. 
17 
SEC. 54. Liability of Directors, Officers and Committee Members. - 
18 
Directors, officers and committee members, who willfully and knowingly vote 
19 
for or assent to patently unlawful acts or who are guilty of gross negligence or 
20 
bad faith in directing the affairs of the cooperative or acquire any personal or 
21 
pecuniary interest in conflict with their duty as such directors, officers or 
22 
committee members shall be liable jointly and severally for all damages or 
23 
profits resulting therefrom to the cooperative, members, and other persons. 
24 
When a director, officer or committee member attempts to acquire or 
25 
acquires, in violation of his/her duty, any interest or equity adverse to the 
26 
cooperative in respect to any matter which has been reposed in him/her in 
27 
confidence, he shall, as a trustee for the cooperative, be liable for damages and 
28 
shall be accountable for double the profits which otherwise would have accrued 
29 
to the cooperative. 
30 
SEC. 55. Compensation and Other Emoluments. – 
31 
a. In the absence of any provisions in the bylaws fixing their compensation, 
32 
the directors shall not receive any compensation except for reasonable 
33 
honorarium/per diems: Provided, That no additional compensation other 
34 
than honorarium/per diems shall be paid during the first year of existence 
35 
of any cooperative: Provided, further, That only the General Assembly shall 
36 
approve any additional honorarium/per diem or the increase thereof. 
37 


 
36 
b. Directors and officers shall not be entitled to any honorarium/per diem if 
1 
the cooperative reported a net loss in the preceding calendar year or had 
2 
a dividend rate less than the official rate for the same year. 
3 
c. Unless already fixed in the bylaws, the compensation of all other 
4 
employees shall be determined by the Board of Directors in accordance 
5 
with the Regional Tripartite Wages and Productivity Board. 
6 
SEC. 56.  Dealings of Directors, Officers, or Committee Members. - 
7 
A contract entered into by the cooperative with one (1) or more of its directors, 
8 
or their spouses and relatives within the third civil degree of consanguinity or 
9 
affinity, is voidable, at the option of the cooperative, unless the following 
10 
conditions are present: 
11 
a. The presence of such director in the Board meeting wherein contract was 
12 
approved was not necessary to constitute a quorum for such meeting; 
13 
b. The vote of such director was not necessary for the approval of the 
14 
contract; 
15 
c. The contract is fair, reasonable, and beneficial to the cooperative under 
16 
the circumstances; and 
17 
That in the case of a contract entered into between the cooperative and its 
18 
officer or committee member, or their spouses and/or relatives within the third 
19 
civil degree of consanguinity or affinity, such contracts are voidable, at the 
20 
option of the cooperative, unless it has been previously authorized by the 
21 
General Assembly or by the Board of Directors, and the contract is fair, 
22 
reasonable, and beneficial to the cooperative under the circumstances. 
23 
The Board of Directors shall report any such contract to the General 
24 
Assembly during its regular meeting for ratification. 
25 
Where any of the first two conditions set forth in the preceding paragraph 
26 
is absent, in the case of a contract with a director, such contract may be ratified 
27 
by a three-fourths (3/4) vote of all the members entitled to vote, present and 
28 
constituting a quorum in a meeting called for the purpose: Provided, That full 
29 
disclosure of the adverse interest of the directors involved is made at such 
30 
meeting, and that the contract is fair and reasonable under the circumstances. 
31 
SEC. 57. Disloyalty of a Director and Other Officers of the 
32 
Cooperative. - A director or other officers of the cooperative who, by virtue of 
33 
such office, directly or indirectly acquires for themselves an opportunity which 
34 
should belong to the cooperative shall be liable for damages and must account 
35 
for double the profits that otherwise would have accrued to the cooperative by 
36 
refunding the same. This provision shall be applicable, notwithstanding the 
37 


 
37 
fact that the director or other officers of the cooperative used their own funds 
1 
to acquire such opportunity. 
2 
SEC. 58. Illegal Use of Confidential Information. – 
3 
a. A director or officer, or any person conspiring or conniving with that 
4 
director or officer, who, for his/her benefit or advantage or that of an 
5 
associate, makes use of confidential information that, if generally known, 
6 
might reasonably be expected to adversely affect the operation and 
7 
viability of the cooperative, shall be held: 
8 
(1) Liable to compensate the cooperative for the direct losses suffered by 
9 
the cooperative as a result of the illegal use of information; and 
10 
(2) Accountable to the cooperative for any direct benefit or advantage 
11 
received or yet to be received by him/her or his/her associate, as a 
12 
result of the transaction. 
13 
b. The cooperative shall take the necessary steps to enforce the liabilities 
14 
described in paragraph (a). 
15 
SEC. 59.  Removal. – No officer may be removed, except for cause, after 
16 
due notice and hearing as provided in the bylaws and internal rules of the 
17 
cooperative. Loss of trust and confidence in the performance of their duties 
18 
shall be a valid ground for removal. 
19 
All complaints for the removal of any elected officer shall be filed with the 
20 
Board of Directors for investigation. Upon finding prima facie evidence of guilt, 
21 
the Board shall give due notice to the officer concerned and present its 
22 
recommendation for removal in a regular or special General Assembly called 
23 
for the purpose. The officer concerned shall be given an opportunity to be heard 
24 
at said assembly. 
25 
Removal of an officer may be done by a three-fourths (¾) votes of the 
26 
members entitled to vote present and constituting a quorum, in a regular or 
27 
special General Assembly meeting called for the purpose.  
28 
In cases involving the removal of a member of the Board of Directors or 
29 
any appointive officer, a complaint shall be filed with the ethics and grievance 
30 
committee of the cooperative. The concerned director or officer shall also be 
31 
afforded the opportunity to be heard. The ethics and grievance committee shall 
32 
conduct its investigation, during which the officer concerned may be placed 
33 
under preventive suspension by a majority vote of either the Board of Directors 
34 
or the ethics and grievance committee. After the investigation, the Board of 
35 
Director shall decide on the matter based on the recommendation of the ethics 
36 
and grievance committee. The decision of the Board of Directors may be 
37 


 
38 
appealed to the General Assembly. The decision of the General Assembly may 
1 
be further appealed to the Authority. 
2 
 
CHAPTER X. RESPONSIBILITIES, RIGHTS AND PRIVILEGES OF 
3 
COOPERATIVES 
4 
SEC. 60. Address. - Every cooperative shall have an official postal 
5 
address where the principal office is located and an electronic mail address to 
6 
which all communications, reports, notices, and summons may be served, and 
7 
where all other documents required by the Authority shall be submitted. The 
8 
articles of cooperation and the bylaws shall be amended accordingly should 
9 
there be a change in the official postal and electronic mail addresses of the 
10 
cooperative. 
11 
For this purpose, an electronic mail registry shall be created in 
12 
accordance with the guidelines to be promulgated by the Authority.    
13 
SEC. 61. Books to be Kept Open. – 
14 
a. Every cooperative shall have the following documents ready and accessible 
15 
to its members and representatives of the Authority for inspection, 
16 
examination, and investigation during reasonable office hours at its 
17 
registered principal office: 
18 
(1) A copy of this Code and all other laws pertaining to cooperatives; 
19 
(2) A copy of the Implementing Rules and Regulations of the Authority; 
20 
(3) A copy of the articles of cooperation and bylaws of the cooperative; 
21 
(4) A registry of members; 
22 
(5) The books of the minutes of the meetings of the General Assembly, 
23 
Board of Directors, and committees; 
24 
(6) a share and transfer book, except for cooperative unions; 
25 
(7) Financial statements and other financial records; and 
26 
(8) Such other documents as may be prescribed by the Authority, laws, and 
27 
the bylaws. 
28 
b. The accountant or the bookkeeper of the cooperative shall be responsible 
29 
for the maintenance and safekeeping of the books and records of accounts 
30 
of the cooperative in accordance with generally accepted accounting 
31 


 
39 
practices. He/she shall also be responsible for the production of the same 
1 
at the time of audit, inspection, examination, or investigation. 
2 
The audit committee shall be responsible for the continuous and 
3 
periodic review of the books and records of accounts to ensure that these 
4 
are in accordance with generally accepted accounting practices. It shall 
5 
also be responsible for the production of the same at the time of audit or 
6 
inspection. 
7 
c. Each cooperative shall maintain records of accounts such that the true 
8 
and correct condition and the results of the operation of the cooperative 
9 
may be ascertained therefrom at any time. The financial statements, 
10 
audited according to generally accepted auditing standards, principles 
11 
and practices, may be published annually and shall be kept posted in 
12 
conspicuous places in the principal office of the cooperative, its branches, 
13 
and satellite offices. 
14 
d. Subject to the pertinent provisions of the National Internal Revenue Code, 
15 
as amended, and other laws, a cooperative may dispose, by burning or any 
16 
method of complete destruction, any document, record or book pertaining 
17 
to its financial and non-financial operations which are already more than 
18 
five (5) years old except those relating to transactions which are the 
19 
subject of civil, criminal, and administrative proceedings. An inventory of 
20 
the audited documents, records and books to be disposed of shall be 
21 
drawn up and certified to by the Cooperative Secretary and the Chairman 
22 
of the audit committee and presented to the Board of Directors which may 
23 
thereupon approve the disposition of said records. 
24 
e. The processing of information of the cooperative which may contain 
25 
confidential matters or privileged communication shall adhere with 
26 
Republic Act No. 10173, otherwise known as the “Data Privacy Act of 
27 
2012”. 
28 
SEC. 62. Reports. - Every cooperative shall prepare an annual progress 
29 
report with the necessary attachments as may be prescribed by the Authority 
30 
at the end of every calendar year. The reports shall be made accessible to its 
31 
members, and copies thereof shall be available upon request of members on 
32 
record and authorized government agencies during reasonable office hours. 
33 
These reports shall be filed with the Authority within one hundred twenty (120) 
34 
days from the end of the calendar year. The form and contents of the reports 
35 
shall be as prescribed by the rules of the Authority. Failure to file the required 
36 
reports on time shall subject the accountable officer to fines and penalties as 
37 
may be prescribed by the Authority. Failure to file the required reports despite 
38 
notice shall be a ground for the suspension/cancellation of the Certificate of 
39 
Registration of the cooperative, subject to the guidelines to be issued by the 
40 
Authority. 
41 


 
40 
If a cooperative fails to make and file the reports required herein, or fails 
1 
to include therein any matter required by the Code, the Authority shall, within 
2 
thirty (30) days from the expiration of the prescribed period, send such 
3 
cooperative a notice stating its non-compliance and the commensurate fines 
4 
and penalties that will be imposed until such time that the cooperative has 
5 
complied with the requirements. 
6 
SEC. 63. Registry of Members as Prima Facie Evidence. - A registry 
7 
of members kept by any registered cooperative shall be prima facie evidence of 
8 
the following particulars entered therein: 
9 
a. The date on which the name of any person was entered in such registry or 
10 
list of members; and 
11 
b. The date on which any such person ceased to be a member. 
12 
However, other information may be required in accordance with the 
13 
guidelines that shall be prescribed by the Authority. 
14 
SEC. 64. Probative Value of Certified Copies of Entries. - A copy of 
15 
any entry in any book, registry or list regularly kept in the course of business 
16 
of the cooperative shall, if duly certified in accordance with the rules of 
17 
evidence, be admissible as evidence of the existence of entry and prima facie 
18 
evidence of the matters and transactions therein recorded. 
19 
No cooperative or person in possession of the books of such cooperative 
20 
shall, in any legal proceedings to which the cooperative is not a party, be 
21 
compelled to produce any of the books of the cooperative, unless ordered by 
22 
the Authority in the exercise of its adjudicatory powers or a competent court. 
23 
SEC. 65. Bond of Accountable Officers. - Every director, officer, and 
24 
employee handling funds, securities or property on behalf of any cooperative 
25 
shall be covered by a surety bond to be issued by a duly registered insurance 
26 
or bonding company for the faithful performance of their respective duties and 
27 
obligations. The Board of Directors shall determine the adequacy of such 
28 
bonds. However, the cooperative is not precluded from securing other 
29 
insurance policies to protect from losses of monies, securities, and other 
30 
property from employees who have a manifest intent to cause the cooperative 
31 
loss. 
32 
Within thirty (30) days upon approval of the registration of a cooperative, 
33 
the bonds of the accountable officers shall be submitted to the Authority. The 
34 
bond for the cooperative’s Treasurer shall be ten per centum (10%) of the sum 
35 
of the initial paid-up capital and membership fees. The bonds for all 
36 
accountable officers shall be renewed annually and adjusted accordingly. 
37 
SEC. 66.  Preference of Claims. – 
38 


 
41 
a. Notwithstanding the provisions of existing laws, rules and regulations to 
1 
the contrary, any debt due to the cooperative from the member shall 
2 
constitute a first lien upon any raw materials, production, inputs, and 
3 
products produced; or any land, building, facilities, equipment, goods or 
4 
services acquired and held by such member through the proceeds of the 
5 
loan or credit granted by the cooperative to him/her for as long as the 
6 
same is not fully paid. 
7 
b. No property or interest on property which is subject to a lien under 
8 
paragraph (a) shall be sold nor conveyed to third parties without the prior 
9 
permission of the cooperative. The lien upon the property or interest shall 
10 
continue to exist even after the sale or conveyance thereof until such lien 
11 
has been duly extinguished. 
12 
c. Notwithstanding the provisions of any law to the contrary, any sale or 
13 
conveyance made in contravention of paragraph (b) hereof shall be void. 
14 
SEC. 67. Instrument for Salary or Wage Deduction. – 
15 
a. A member of a cooperative shall, notwithstanding the provisions of 
16 
existing laws to the contrary, execute an instrument in favor of the 
17 
cooperative authorizing his/her employer to deduct from his/her salary or 
18 
wages, commutation of leave credits and any other monetary benefits 
19 
payable to him/her by the employer and remit such amount as maybe 
20 
specified in satisfaction of a debt, share capital contribution, or other 
21 
demand due from the member to the cooperative. 
22 
b. Upon the execution of such instrument and as may be required by the 
23 
cooperative contained in a written request, the employer shall make the 
24 
deduction in accordance with the agreement and deduction in accordance 
25 
with the agreement and remit forthwith the amount so deducted within 
26 
ten (10) days after the end of the payroll month to the cooperative. The 
27 
employer shall make the deduction for as long as such debt or other 
28 
demand remains unpaid by the employee. 
29 
c. The term “employer” as used in this Section shall include all private firms, 
30 
national and local governments, government-owned and controlled 
31 
corporations, government instrumentalities with corporate powers, 
32 
government corporate entities, or government financial institutions that 
33 
employ a member of a cooperative and have agreed to carry out the terms 
34 
of the instrument mentioned in paragraphs (a) and (b) of this Section. 
35 
d. The provisions of this Section shall apply to all similar agreements referred 
36 
to in paragraph (a) and were enforced prior to the approval of this Code. 
37 
e. Notwithstanding the provisions of existing laws to the contrary, the 
38 
responsibilities of the employer under this Section shall be mandatory and 
39 


 
42 
without the need for any prior conditions, accreditation or other similar 
1 
processes to facilitate or implement the deductions. Provided, That in the 
2 
case of a private employer, the actual and reasonable cost for deducting 
3 
and remitting may be collected. 
4 
f. The member may withdraw such consent at any time and for any reason, 
5 
which shall be put in writing. Any person who acts contrary to this 
6 
provision shall be held liable under this Code and other laws, as the case 
7 
may be. 
8 
SEC. 68. Primary Lien. – Notwithstanding the provision of any law to 
9 
the contrary, a cooperative shall have primary lien upon the capital, deposits, 
10 
or interests of a member for any debt due to the cooperative from such member. 
11 
SEC. 69. Tax Treatment of Cooperatives. – Duly registered 
12 
cooperatives under this Code which do not transact any business with non-
13 
members or the general public shall not be subject to any taxes, fees, and 
14 
charges imposed under the internal revenue laws and other tax laws. 
15 
Cooperatives not falling under this Section shall be governed by the succeeding 
16 
provisions. 
17 
SEC. 70. Tax and Other Exemptions. - Duly registered cooperatives 
18 
transacting business with both members and non-members shall not be 
19 
subjected to tax on their transactions with members. In relation to this, the 
20 
transactions of members with the cooperative shall not be subject to any taxes, 
21 
fees, and charges, including but not limited to final taxes on members’ share 
22 
capital and deposits and corresponding documentary stamp tax. 
23 
Notwithstanding the provisions of any law or regulation to the contrary, 
24 
such cooperatives dealing with non-members shall enjoy the following tax 
25 
exemptions: 
26 
a. Duly 
registered 
agricultural 
cooperatives 
and 
non-agricultural 
27 
cooperatives whose Reserve Funds have an existing balance of One 
28 
Hundred Million pesos (P100,000,000.00) and below shall be exempt from 
29 
all national internal revenue taxes, fees, and charges of whatever name 
30 
and nature. 
31 
Such cooperatives shall be exempt from customs duties, advance sales or 
32 
compensating taxes on their importation of machineries, equipment, 
33 
batteries, accessories, and spare parts used by them and which are not 
34 
available locally certified by the DTI. All tax- and duty-free imports shall 
35 
not be sold nor the beneficial ownership thereof be transferred to any 
36 
person until after five (5) years, otherwise, the cooperative and the 
37 
transferee or assignee shall be solidarily liable to pay twice the amount of 
38 
the imposed tax and / or duties. 
39 


 
43 
b. Duly registered non-agricultural cooperatives whose Reserve Funds have 
1 
an existing balance of more than One Hundred Million pesos 
2 
(P100,000,000.00) shall pay the following taxes at the full rate: 
3 
(1) Special Income Tax of ten percent (10%) of net surplus: Provided, That 
4 
the same tax is not consequently imposed on interest individually 
5 
received by members. The tax base for all cooperatives liable to pay 
6 
income tax shall be the income directly related from the business 
7 
transactions with non-members after deducting the amounts for the 
8 
statutory funds. 
9 
(2) Value-Added Tax (VAT) on transactions with non-members: Provided, 
10 
however, That duly registered cooperatives shall be exempt from the 
11 
imposition of VAT, namely the following: 
12 
(i) Sales by Agriculture Cooperatives duly registered with the Authority 
13 
to their members as well as sale of their produce, whether in its 
14 
original state or processed form, to non-members; their importation 
15 
of direct farm inputs, machineries and equipment, including spare 
16 
parts thereof, to be used directly and exclusively in the production 
17 
and/or processing of their produce, and their resale to other 
18 
Agriculture Cooperatives; 
19 
(ii) Gross receipts from lending activities by credit or multi-purpose 
20 
cooperatives duly registered with the Authority; 
21 
(iii) Sales by non-agricultural, non-electric and non-credit cooperatives 
22 
duly registered with the Authority: Provided, That the share capital 
23 
contribution of all members does not exceed One hundred thousand 
24 
pesos (P100,000) each and regardless of the aggregate capital and net 
25 
surplus ratably distributed among the members; and 
26 
Provided, That the exempt transactions in the foregoing shall include 
27 
sales made by cooperatives duly registered with the Authority 
28 
organized and operated by their members to undertake the 
29 
production and processing of raw materials or of goods produced by 
30 
their members into finished or processed products for sale by the 
31 
cooperatives to their members and non-members: Provided, however, 
32 
That any processed product or its derivative arising from the raw 
33 
materials produced by their members, sold in the name and for the 
34 
account of the cooperative shall be deemed a product of the 
35 
cooperative and its members: Provided, further, That at least twenty-
36 
five per centum (25%) of the net income of the cooperatives is 
37 
returned to the members in the form of interest and/or patronage 
38 
refunds: Provided, finally, That VAT and e-VAT shall not be imposed 
39 
for the purchase of modernized vehicles under the Public Utility 
40 


 
44 
Vehicle Modernization Program, machineries, equipment, batteries, 
1 
accessories, spare parts, petroleum products, and/or motor fuels by 
2 
transport cooperatives whether imported, locally manufactured, or 
3 
produced; and 
4 
(3) All sales of goods and/or services rendered for non-members shall be 
5 
subject to the applicable percentage taxes except sales made by 
6 
commodities or service cooperatives; and 
7 
(4) All other taxes unless otherwise provided herein. 
8 
Donations to duly accredited charitable, research and educational 
9 
institutions and reinvestment to socioeconomic projects within the area 
10 
of operation of the cooperative may be tax deductible. 
11 
c. All duly registered cooperatives shall be exempt from payment of local 
12 
taxes, fees and charges whether barangay, municipal, city, or provincial 
13 
taxes and taxes on transactions with banks and insurance companies. 
14 
The Authority shall furnish the Municipal, City, or Provincial Assessor’s 
15 
Office a certified list of duly registered cooperatives as basis of their 
16 
removal from the Assessment Rolls; 
17 
d. In areas where there are no available notaries public, the judge, exercising 
18 
his/her ex-officio capacity as notary public, shall render service, free of 
19 
charge, to any person or group of persons requiring the administration of 
20 
oath or the acknowledgment of articles of cooperation and instruments of 
21 
loan from cooperatives not exceeding Five Hundred Thousand Pesos 
22 
(P500,000.00). 
23 
e. Any register of deeds shall accept for registration, free of charge, any 
24 
instrument relative to a loan made under this Code which does not exceed 
25 
Two Hundred Fifty Thousand Pesos (P250,000.00) or the deeds of title of 
26 
any property acquired by the cooperative or any paper or document drawn 
27 
in connection with any action brought by the cooperative or with any court 
28 
judgment rendered in its favor or any instrument relative to a bond of any 
29 
accountable officer of a cooperative for the faithful performance of his/her 
30 
duties and obligations. 
31 
f.  Cooperatives shall be exempt from the payment of all court and sheriff’s 
32 
fees payable to the Philippine Government for and in connection with all 
33 
actions brought under this Code, or where such action is brought by the 
34 
Authority before the court, to enforce the payment of obligations 
35 
contracted in favor of the cooperative. 
36 
g. All cooperatives shall be exempt from putting up a bond for bringing an 
37 
appeal against the decision of an inferior court or for seeking to set aside 
38 
any third party claim: Provided, That a certification of the Authority 
39 


 
45 
showing that the net assets of the cooperative are in excess of the amount 
1 
of the bond required by the court in similar cases shall be accepted by the 
2 
court as a sufficient bond. 
3 
h.   Any security issued by cooperatives shall be exempt from the provisions 
4 
of the Republic Act No. 8799, otherwise known as “The Securities 
5 
Regulation Code”, provided, such security shall not be speculative. 
6 
Any public official or employee who violates or in any manner 
7 
circumvents this provision shall be dealt with in accordance with the penal 
8 
provisions of this Code. 
9 
SEC. 71. Issuance of Certificate of Tax Exemption for Cooperatives. 
10 
- The Authority shall furnish the Bureau of Internal Revenue (BIR) a certified 
11 
endorsement of a list of cooperatives in good standing and compliant with the 
12 
reportorial requirements of the Authority that serves as basis for the motu 
13 
proprio issuance of a Certificate of Tax Exemption. The BIR shall formulate the 
14 
necessary guidelines in streamlining the issuance of Certificate of Tax 
15 
Exemption for cooperatives: Provided, that individual tax identification number 
16 
(TIN) of members of the cooperative should not be a requirement in the 
17 
processing of application and renewal of Certificate of Tax Exemption. 
18 
SEC. 72. Privileges of Cooperatives. - Cooperatives registered under 
19 
this Code, notwithstanding the provisions of any law to the contrary, be also 
20 
accorded the following privileges: 
21 
a. Cooperatives shall enjoy the privilege of depositing their sealed cash boxes 
22 
or containers, documents or any valuable papers in the safes of the 
23 
municipal, city, or provincial treasurers and other government offices free 
24 
of charge, and the custodian of such articles shall issue a receipt 
25 
acknowledging the articles received duly witnessed by another person; 
26 
b. Cooperatives organized among government employees, notwithstanding 
27 
any law or regulation to the contrary, shall enjoy the free use of any 
28 
available space in their agency, whether owned or rented by the 
29 
Government; 
30 
c. Cooperatives rendering special types of services and facilities such as cold 
31 
storage, ice plant, electricity, transportation, water, communications, and 
32 
similar services and facilities shall be given preference in the grant of a 
33 
franchise or certificate therefor: Provided, That such cooperatives shall 
34 
open their membership to all persons qualified in their areas of operation. 
35 
In case there are two (2) or more applicants for the same public service 
36 
franchise or certificate of public convenience and necessity, all things 
37 
being equal, preference shall be given to a cooperative engaged in public 
38 
services; 
39 


 
46 
d. In areas where there are agricultural cooperatives, at least fifty per centum 
1 
(50%) of the supply of the government institutions, LGUs, and agencies, 
2 
which includes but is not limited to rice, corn, grains, fish and other 
3 
marine products, meat, eggs, milk, vegetables, and other agricultural 
4 
commodities such as fertilizers, seeds and other agricultural inputs and 
5 
implements, shall be sourced from such cooperatives; 
6 
e. Preferential and equitable treatment in the allocation or control of 
7 
bottomries of commercial shipping vessels in connection with the 
8 
shipment of goods and products of cooperatives; 
9 
f. Cooperatives and their federations engaged in the production and/or the 
10 
marketing 
of 
products 
from 
agriculture, 
fisheries 
and 
small 
11 
entrepreneurial industries, shall have exclusive preferential rights in the 
12 
management of public markets and lease of public market facilities, stalls 
13 
or spaces, slaughterhouses, and/or cold storage facilities: Provided, That 
14 
these rights shall only be utilized exclusively by cooperatives: Provided, 
15 
further, That no cooperative forming a joint venture, partnership or any 
16 
other similar arrangement with a non-cooperative entity can utilize these 
17 
rights; 
18 
g. Cooperatives engaged in credit services shall be entitled to loans, credit 
19 
lines, rediscounting of their loan notes, and other eligible papers with the 
20 
Development Bank of the Philippines (DBP), the Land Bank of the 
21 
Philippines (LBP), and other financial institutions except BSP; 
22 
The Philippine Deposit Insurance Corporation (PDIC) and other 
23 
government agencies, government-owned and controlled corporations, 
24 
and government financial institutions shall provide technical assistance 
25 
to registered federations of cooperatives which have significant 
26 
engagement in savings and credit operations in order for these federations 
27 
to establish and strengthen their own cooperative deposit insurance 
28 
systems; 
29 
h. Public transport service cooperatives shall be entitled to financing support 
30 
for the acquisition and/or maintenance of land, sea, and air transport 
31 
equipment, facilities and parts through the program of the Government 
32 
Financial Institutions. It shall have the preferential right to the 
33 
management and operation of public terminals and ports whether land, 
34 
sea, or air transport, wharves, including arrastre and stevedoring services, 
35 
where the cooperative operates and on securing a franchise for active or 
36 
potential routes for the public transport; 
37 
i. Cooperatives transacting business with the Government of the Philippines 
38 
or any of its political subdivisions or any of its agencies or 
39 
instrumentalities, 
including 
government-owned 
and 
controlled 
40 


 
47 
corporations shall be given preference in the procurement of government 
1 
projects subject to existing procurement laws, rules and regulations. 
2 
j. Cooperative shall enjoy the privilege of being represented by the provincial 
3 
or city fiscal or the Office of the Solicitor General, free of charge, except 
4 
when the adverse party is the Republic of the Philippines; 
5 
k. Cooperatives organized by faculty members and employees of educational 
6 
institutions shall have the preferential right to manage the school canteen 
7 
and other services related to the operation of the educational institution 
8 
where they are employed: Provided, That such services are operated within 
9 
the premises of the said educational institution; 
10 
l. The relevant regulatory agencies and LGUs shall not discriminate against 
11 
duly registered cooperatives seeking accreditation as service providers, or 
12 
seeking to engage in a particular business: Provided, that they possess all 
13 
other qualifications and none of the disqualifications under the law. Any 
14 
person who acts contrary to this provisions may be held liable under this 
15 
Code and all other relevant laws and issuances; 
16 
m. Cooperatives shall be entitled to financing support from the relevant 
17 
government agencies that shall allocate funds for the establishment of 
18 
projects and programs for the development and promotion of cooperatives; 
19 
and 
20 
n. The relevant government agencies and government financial institutions 
21 
shall create a special window for financing  to qualified cooperatives 
22 
engaged in housing projects, with interest rates and terms equal to, or 
23 
better than those given for socialized housing projects. This financing shall 
24 
be in the form of blanket loans or long-term wholesale loans to qualified 
25 
cooperatives, without need for individual processing.  
26 
The Authority, in consultation with appropriate government agencies 
27 
and the cooperative sector, shall issue rules and regulations on all matters 
28 
concerning housing cooperatives and socialized housing projects. 
29 
  
CHAPTER XI. INSOLVENCY OF COOPERATIVES 
30 
SEC. 73. Proceeding Upon Insolvency. - In case a cooperative is unable 
31 
to fulfill its obligations to creditors due to insolvency, such cooperative may 
32 
apply for such remedies as it may deem fit under the provisions of Republic Act 
33 
10142, otherwise known as the “Financial Rehabilitation and Insolvency Act” 
34 
(FRIA). 
35 


 
48 
Nothing in this Section, however, precludes creditors from seeking 
1 
protection from said insolvency law. 
2 
SEC. 74. Effect of Declaration of Insolvency by a Competent Court. 
3 
-  Should a cooperative be declared insolvent by the court, its Certificate of 
4 
Registration shall be cancelled and it shall be delisted from the registry of 
5 
cooperatives of the Authority. 
6 
 
CHAPTER XII. SUSPENSION OF COOPERATIVES 
7 
SEC. 75. Suspension of Certificate of Registration. - A penalty of 
8 
suspension shall be imposed on a cooperative, after due process, on any of the 
9 
following grounds: 
10 
a. Willful failure to submit annual progress reports with the necessary 
11 
attachments within the period mandated by this Code: Provided, That in 
12 
the case of newly-registered cooperatives, this provision shall only apply 
13 
to them three (3) years after their registration; or 
14 
b. Willful failure or refusal to comply with an interlocutory order or a final 
15 
and executory decision or award of the CDA Board of Directors, any of its 
16 
Regional Offices, adjudication officer, or voluntary arbitrator by reason of 
17 
or as a consequence of an investigation, voluntary arbitration, or 
18 
adjudication. 
19 
The Authority shall commence suspension proceedings in accordance 
20 
with the procedure provided in the Implementing Rules and Regulations of this 
21 
Code. 
22 
 
CHAPTER XIII. VOLUNTARY DISSOLUTION OF COOPERATIVES 
23 
SEC. 76. Voluntary Dissolution Where no Creditors are Affected. - 
24 
If the dissolution of a cooperative does not prejudice the rights of any creditor 
25 
having a claim against it, the dissolution may be effected by a majority vote of 
26 
the Board of Directors, and by a resolution duly adopted by the affirmative vote 
27 
of at least three-fourths (3/4) of all the members entitled to vote, present and 
28 
constituting a quorum at a meeting to be held upon call of the directors: 
29 
Provided, That the notice of time, place and object of the meeting shall be 
30 
posted for three (3) consecutive weeks in the principal office of said cooperative, 
31 
and a copy shall likewise be posted for three (3) consecutive weeks in three (3) 
32 
public places in the municipality or city where the cooperative’s office is located 
33 
and through its official website and social media accounts.  
34 


 
49 
The notice of such meeting is sent to each member of record either by 
1 
registered mail, by personal delivery or through other electronic means at least 
2 
thirty (30) days prior to said meeting. A copy of the resolution authorizing the 
3 
dissolution shall be certified to by a majority of the Board of Directors and 
4 
countersigned by the Cooperative Secretary.  
5 
Upon compliance with all the requisites for voluntary dissolution, The 
6 
Authority shall thereupon issue the Certificate of Dissolution. 
7 
SEC. 77. Voluntary Dissolution Where Creditors Are Affected. - 
8 
Whenever there are creditors affected, the petition for dissolution shall be filed 
9 
with the Authority. The petition shall be signed by a majority of its Board of 
10 
directors or other officers managing its affairs, verified by its chairperson or 
11 
Cooperative Secretary or one of its directors and shall set forth all claims and 
12 
demands against it and that its dissolution was resolved upon by the 
13 
affirmative vote of at least three-fourths (3/4) of all the members entitled to 
14 
vote, present and constituting a quorum at a meeting called for that purpose. 
15 
If the petition is sufficient in form and substance, the Authority shall 
16 
issue an order reciting the purpose of the petition and shall fix a date which 
17 
shall not be less than thirty (30) nor more than sixty (60) days after the entry 
18 
of the order. Before such date, a copy of the order shall be published at least 
19 
once in a newspaper of general circulation published in the municipality or city 
20 
where the principal office of the cooperative is situated or in the absence of 
21 
such local newspaper, in a newspaper of general circulation in the Philippines 
22 
at the expense of the cooperative, and a copy shall likewise be posted for three 
23 
(3) consecutive weeks in three (3) public places in the municipality or city where 
24 
the cooperative’s office is located.  
25 
Upon expiry of the five (5) day notice to file objections, the Authority shall 
26 
proceed to hear the petition and try any issue raised in the objection filed. If 
27 
there is no objection or the objection is insufficient and the material allegations 
28 
are proven, it shall issue a Certification of Dissolution and direct the disposition 
29 
of its assets in accordance with existing rules and regulations. The Certificate 
30 
of Dissolution shall set forth therein: 
31 
a. The assets and liabilities of the cooperative; 
32 
b. The claim of any creditor; 
33 
c. The number of members; 
34 
d. The nature and extent of the interests of the members of the cooperative; 
35 
and 
36 
e. The appointment of liquidators. 
37 


 
50 
The Authority shall issue a Certificate of Cancellation of Registration upon 
1 
approval of the final report of the liquidators. 
2 
 
CHAPTER XXIV. INVOLUNTARY DISSOLUTION OF COOPERATIVES  
3 
SEC. 78. Cancellation by Order of the Authority. - The Authority may 
4 
cancel, after due notice and hearing, the cooperative’s Certificate of 
5 
Registration on any of the following grounds: 
6 
a. Having obtained its registration by fraud; 
7 
b. Engaging in an illegal and/or unauthorized purpose; 
8 
c. Willful violation, despite written notice by the Authority, of the provisions 
9 
of this Code or its Implementing Rules and Regulations and all other 
10 
issuances of the Authority or bylaws of the cooperative; 
11 
d. Willful refusal to comply with an order or written instructions or directives 
12 
issued or given by the Authority; 
13 
e. Willful failure to operate on a cooperative basis; and 
14 
f. Failure to meet the required minimum capital and minimum number of 
15 
members in the cooperative; and 
16 
g. If a cooperative has not commenced business operations within three (3) 
17 
years after the issuance of its Certificate of Registration. 
18 
The decision of the Authority on the cancellation of the Certificate of 
19 
Registration of a cooperative may be appealed to the Authority’s Board of 
20 
Directors within thirty (30) days from the receipt of the Order of the Authority. 
21 
The decision of the Authority’s Board of Directors shall be final and executory. 
22 
SEC. 79. Cancellation by Failure to Operate. - If a cooperative has not 
23 
commenced operations within three (3) years after the issuance of its Certificate 
24 
of Registration, or has not carried on its business for three (3) consecutive 
25 
years, the Authority shall send a show cause order for the cooperative to 
26 
explain its failure to operate. Failure to provide justifiable cause shall authorize 
27 
the Authority, after due notice, to cancel the Certificate of Registration and 
28 
delist it from the registry. 
29 
 
CHAPTER XV. LIQUIDATION OF COOPERATIVES 
30 


 
51 
SEC. 80. Liquidation of a Cooperative. - Every cooperative whose term 
1 
of existence expires by its own limitation or whose existence is terminated by 
2 
voluntary dissolution or cancellation of its Certificate of Registration by the 
3 
Authority shall cease to operate. However, it can continue to exist for three (3) 
4 
years after the time it is dissolved or cancelled, not to continue the business 
5 
for which it was established but for the purpose of prosecuting and defending 
6 
suits by or against it, settlement and closure of its affairs, disposition, 
7 
conveyance and distribution of its properties and assets.  
8 
The cooperative is authorized to convey all of its interests in the 
9 
properties to trustees for the benefit of its members, creditors, and other 
10 
persons in interest, after which, all interests which the cooperative had in the 
11 
properties are terminated. 
12 
Upon the winding up of the cooperative affairs, any asset distributable 
13 
to any creditor, shareholder or member who is unknown or cannot be found 
14 
shall be given to the federation or union to which the cooperative is affiliated 
15 
with. 
16 
A cooperative shall only distribute its assets or properties upon lawful 
17 
dissolution and after payment of all its debts and liabilities, except in the case 
18 
of decrease of share capital of the cooperative and as otherwise allowed by this 
19 
Code. 
20 
In case of voluntary dissolution, the Authority shall issue a Certificate of 
21 
Cancellation upon the approval of the final report of the liquidators. 
22 
 
CHAPTER XVI. DELISTING OF COOPERATIVES 
23 
SEC. 81. Delisting of Cooperatives. - Cooperatives may be delisted 
24 
from the Registry of Cooperatives due to the following causes: 
25 
a. Voluntary Dissolution; 
26 
b. Involuntary Dissolution; 
27 
c. Cancellation by Order of the Authority; 
28 
d. Cancellation by Failure to Operate; and 
29 
e. Merger and Consolidation 
30 
 
CHAPTER XVII. CAPITAL, PROPERTY, AND FUNDS 
31 


 
52 
SEC. 82. Capital and Funds. – The capitalization of cooperatives and 
1 
federations, or funds in the case of unions, shall be governed by the provisions 
2 
of this Code and the regulations which shall be issued in consultation with the 
3 
cooperative sector. 
4 
SEC. 83. Capital Sources. - Cooperatives registered under this Code 
5 
may derive their capital from any or all of the following sources: 
6 
a. Member’s share capital; 
7 
b. Loans and borrowings;  
8 
c. Deposits from members only, except for cooperative banks which accepts 
9 
deposits from both members and non-members or the general public; 
10 
d. Revolving capital which consists of the deferred payment of patronage 
11 
refunds, or interest on share capital; 
12 
e. Joint venture partners; 
13 
f. Subsidies, donations, legacies, grants, aids and such other assistance 
14 
from any local or foreign institution whether public or private: Provided, 
15 
That capital coming from such subsides, donations, legacies, grants, aids 
16 
and other assistance shall not be divided into individual share capital 
17 
holdings at any time but shall instead form part of the donated capital or 
18 
fund of the cooperative. Upon dissolution or cancellation of the 
19 
cooperative, such donated capital shall be subject to escheat; and 
20 
g. Reserve funds utilized for investment and as capital for the operations of 
21 
the cooperative as approved by the General Assembly. 
22 
SEC. 84. Limitation on Share Capital Subscription - No member of 
23 
primary cooperative other than the cooperative itself shall own or hold more 
24 
than twenty per centum (20%) of the subscribed share capital of the 
25 
cooperative. 
26 
Where a member of a cooperative dies, his heir shall be entitled to the 
27 
shares of the decedent:  Provided, That the total shareholding of the heir does 
28 
not exceed twenty per centum (20%) of the share capital of the cooperative:  
29 
Provided, further, That the heir qualifies and is admitted as a member of the 
30 
cooperative:  Provided, finally, That where the heir fails to qualify as a member 
31 
or where his total shareholding exceeds twenty per centum (20%) of the share 
32 
capital, the shares in excess will revert to the cooperative upon payment to the 
33 
heir of the value of such shares. 
34 


 
53 
For federations, the share capital holdings of any one member-
1 
cooperative shall not exceed forty per centum (40%) of the subscribed share 
2 
capital of the federation. 
3 
SEC. 85. Assignment of Share Capital Contribution or Interest. - 
4 
Subject to the provisions of this Code and the approval of the majority of the 
5 
Board of Directors, no member shall transfer his/her shares or interest in the 
6 
cooperative or any part thereof unless: 
7 
a. The member has held such share capital contribution or interest for more 
8 
than one (1) year. 
9 
b. The assignment is made to the cooperative or to a member of the 
10 
cooperative or to a person who falls within the field of the membership of 
11 
the cooperative; and 
12 
c. The Board of Directors has approved such an assignment. 
13 
SEC. 86. Capital Build-Up. - The bylaws of every cooperative, except for 
14 
cooperative unions, shall provide for a reasonable and realistic member capital 
15 
build-up program to allow the continuing growth of the members’ contribution 
16 
to their cooperative as their economic conditions continue to improve. The 
17 
cooperative shall execute a subscription agreement upon approval of their 
18 
membership. Upon full payment thereof, the member may apply for an 
19 
additional share capital subscription, and execute a new subscription 
20 
agreement. 
21 
SEC. 87. Shares. - The term “share” refers to a unit of capital in a 
22 
cooperative, except for cooperative unions,  the par value of which may be fixed 
23 
at any figure not less than One hundred pesos (P100.00) but not more than 
24 
One thousand pesos (P1,000.00). The share capital of the cooperative is the 
25 
money paid or required to be paid by the members for the operations of the 
26 
cooperative.  
27 
 Unless otherwise provided for in its policies, the cooperative shall issue 
28 
Share Certificates at the end of the calendar year based on the number of 
29 
shares fully paid for the said period. 
30 
Cooperatives are prohibited from issuing multiple types of shares with 
31 
different par values and from increasing or decreasing the par value of the 
32 
share capital without amending their articles of cooperation and bylaws. 
33 
A share can either be a common and/or preferred share issued to a 
34 
regular member as defined in the cooperative’s articles of cooperation and 
35 
bylaws. 
36 


 
54 
SEC. 88. Fines. – The policies of a cooperative may prescribe a fine on 
1 
unpaid subscribed share capital. Provided, That such fine is fair and 
2 
reasonable under the circumstances. 
3 
SEC. 89. Investment of Capital. – A cooperative upon approval of at 
4 
least three-fourths (¾) of all members entitled to vote, present and constituting 
5 
a quorum, may invest its capital in any of the following: 
6 
a. Any reputable bank; 
7 
b. Securities issued or guaranteed by the Government; 
8 
c. Real estate primarily for the use of the cooperative or its members; or 
9 
d. Any other manner authorized in the bylaws. 
10 
SEC. 90. Revolving Capital. - The General Assembly of any cooperative 
11 
may authorize the Board of Directors to raise a revolving capital from the 
12 
proceeds of products sold or services rendered, or per unit of product or 
13 
services handled, to strengthen its capital structure.  
14 
 
 CHAPTER XVII. AUDIT, INQUIRY, AND MEMBERS’ RIGHT TO 
15 
EXAMINE 
16 
SEC. 91. Audit of Cooperatives. - Cooperatives registered under this 
17 
Code shall be subject to an annual audit of its financial and social performance 
18 
in accordance with the Implementing Rules and Regulations to be promulgated 
19 
by the Authority. The financial audit shall be conducted by an external auditor 
20 
who shall independent from the cooperative or any of its subsidiaries, and must 
21 
be a member in good standing of the Philippine Institute of Certified Public 
22 
Accountants (PICPA), and is accredited by both the Board of Accountancy and 
23 
the Authority. 
24 
The social performance audit may be conducted by the audit committee, 
25 
by the internal auditor of the cooperative, or by an independent auditor 
26 
engaged by the cooperative. 
27 
SEC. 92. Audit Report. - The complete audit reports shall be submitted 
28 
to the Board of Directors, which shall be presented to the General Assembly in 
29 
its next meeting for approval and adoption. The Board of Directors shall be 
30 
liable under Section 175 of this Code should it fail to present such reports to 
31 
the General Assembly. 
32 
SEC. 93. Non-Liability for Defamations. - The auditor shall not be held 
33 
liable to any person in an action for defamation for acts done or for any 
34 


 
55 
statement made by him/her in good faith in connection with the conduct of 
1 
audit of the cooperative. 
2 
SEC. 94. Right to Examine. - All members shall have the right to 
3 
examine the records of the cooperative under Section 61 of this Code at any 
4 
time during reasonable hours of the operating days of the cooperative: Provided, 
5 
That the member submits a letter request three (3) days prior to the date of his 
6 
demand to examine the records and stating therein the purpose of the request. 
7 
The Board of Directors shall consider the purpose and reason for the 
8 
request to examine the records to determine its propriety. The Board of 
9 
Directors shall have the right to refuse the request after proper consultation 
10 
with the requesting member, upon the following grounds: 
11 
a. The member has improperly used any information secured through any 
12 
prior examination of the records of such cooperative or of any other 
13 
cooperative; or 
14 
b. The member is not acting in good faith or for a legitimate purpose in 
15 
making the demand to examine records. 
16 
If the request to examine is denied based on the aforementioned grounds, 
17 
the member shall have the burden of proving to the Board that such request is 
18 
made in good faith and for a legitimate purpose. If the denial is made in bad 
19 
faith, the directors who voted for such refusal shall be penalized under Section 
20 
175 of this Code. 
21 
SEC. 95. Safety of Records. - Every cooperative shall, at its principal 
22 
office, keep and carefully preserve the records required by this Code to be 
23 
prepared and maintained. The bylaws shall also provide the condition and the 
24 
accountable person/s for the safekeeping of the records in accordance with 
25 
applicable laws on data privacy. The cooperative shall take all necessary 
26 
precautions to prevent its loss, destruction, or falsification. 
27 
 
CHAPTER XIX. ALLOCATION AND DISTRIBUTION OF NET SURPLUS 
28 
SEC. 96. Net Surplus. - Notwithstanding the provisions of existing laws, 
29 
the net surplus of cooperatives shall be determined in accordance with its 
30 
bylaws. Every cooperative shall determine its net surplus at the close of every 
31 
fiscal year.  
32 
Any provision of law to the contrary notwithstanding, the net surplus 
33 
shall not be construed as profit but as an excess of payments made by the 
34 
members for the loans borrowed, or the goods and services availed by them 
35 
from the cooperative or the difference of the rightful amount due to the 
36 


 
56 
members for their products sold or services rendered to the cooperative 
1 
including other inflows of assets resulting from its other operating activities 
2 
and which shall be deemed to have been returned to them if the same is 
3 
distributed as prescribed herein. 
4 
SEC. 97. Net Surplus Allocation and Statutory Funds. - The net 
5 
surplus shall be subject to the allocation of the following statutory funds, which 
6 
shall be recorded in the books of account, for the cooperative’s growth and 
7 
development: 
8 
a. The reserve fund which shall be at least ten per centum (10%) of the net 
9 
surplus for the stability of the cooperative and to cover net losses in its 
10 
operations, including losses incurred during a pandemic, state of 
11 
emergency, and other such force majeure: Provided, that if any of the 
12 
aforementioned events occur, necessitating the use of the reserve fund, 
13 
as may be approved or confirmed by the General Assembly, as the case 
14 
may be.  Any sum recovered on items previously charged to the reserve 
15 
fund shall be credited to such fund. 
16 
 
17 
The fund shall be recorded in the books of account of the cooperative, and 
18 
earmarked as such, and can be made available for investment to enhance 
19 
the growth and development of the cooperative; Provided, That the 
20 
utilization of the reserve fund for investment shall be at the option of the 
21 
General Assembly; Provided, further, that the liquidity of the cooperative 
22 
shall be taken into account when utilizing a portion of the reserve fund for 
23 
investment. However, for cooperatives in their first five (5) years of 
24 
operation, the amount allocated shall not be less than thirty per centum 
25 
(30%) of the net surplus. 
26 
 
27 
The general assembly may decrease the amount allocated to the reserve 
28 
fund when the reserve fund already exceeds the share capital.  
29 
 
30 
Upon the dissolution of the cooperative, the reserve fund shall be 
31 
distributed in accordance with the rules and regulations on liquidation to 
32 
be issued by the Authority. 
33 
 
34 
b. The Cooperative Education and Training Fund (CETF) which shall not 
35 
exceed ten per centum (10%) of the net surplus, shall be used for the 
36 
training, development and similar other cooperative activities geared 
37 
towards the growth of the cooperative movement: 
38 
(1) Half of the CETF shall be used to provide for the education and training 
39 
of its officers, members, and employees; while the other half shall be 
40 
remitted to a federation and/or union that the cooperative opted to join, 
41 
which must redound to the benefit and development of the member-
42 


 
57 
cooperatives, such as, but not limited to trainings, seminars, and other 
1 
related activities.  
2 
 
3 
Should a cooperative have multiple affiliations, it shall have the discretion 
4 
on how to allocate the CETF. 
5 
 
6 
(2) Upon the dissolution of the cooperative, the unexpended balance of the 
7 
CETF shall be utilized within the succeeding calendar year following its 
8 
allocation. 
9 
 
10 
c. The Community Development Fund (CDF) which shall not be less than 
11 
three per centum (3%) of the net surplus shall be used for projects or 
12 
activities that will benefit the community where the cooperative operates. 
13 
However, the cooperative may extend assistance to marginalized 
14 
communities or affected areas outside its area of operation in times of 
15 
calamities, disaster, or national emergency and allocate percentage of 
16 
such fund for climate resiliency programs, environmental programs, and 
17 
support for insuring crops and related agri-agra products of cooperative, 
18 
subject to the discretion of the General Assembly. 
19 
In the case of cooperatives whose common bond of membership is 
20 
institutional, the community refers to the institution where the 
21 
cooperative is operating. 
22 
The allocation for the CDF for the current year shall be fully utilized in the 
23 
following year unless the projects or activities as approved by a majority 
24 
of the members entitled to vote, present and constituting a quorum in a 
25 
General Assembly meeting, require multi-year utilization. For multi-year 
26 
projects/programs, the allocation shall be fully utilized within the period 
27 
as stated in the plan. 
28 
d. The optional fund in the amount of seven per centum (7%) shall be used 
29 
for the acquisition of land and construction of building, and any other 
30 
expenses anent to it, Provided, it is approved by at least three-fourths (¾) 
31 
of all members entitled to vote, present and constituting a quorum, which 
32 
shall be in accordance with the Implementing Rules and Regulations to be 
33 
promulgated by the Authority. 
34 
This fund may also be used for the benefit of its members and employees 
35 
under exceptional circumstances such as the occurrence of a pandemic, 
36 
crisis, or force majeure. However, if the optional fund is insufficient, the 
37 
cooperative may charge any deficiency to direct expenses. 
38 
 
39 
e. The remaining net surplus shall be made available in full to the members 
40 
in the form of interest on share capital following the formula for 
41 


 
58 
computation as provided by the Authority: Provided, That a majority of the 
1 
members entitled to vote, present and constituting a quorum, approves.  
2 
f. The sum allocated for patronage refunds shall be made available at the 
3 
same rate to all patrons of the cooperative in proportion to their individual 
4 
patronage: Provided, That: 
5 
(1) In the case of a member patron with paid-up share capital contribution, 
6 
his/her proportionate amount of patronage refund shall be paid to 
7 
him/her unless he agrees to credit the amount to his/her account as 
8 
additional share capital contribution; 
9 
(2) In the case of a member patron with unpaid share capital contribution, 
10 
his/her proportionate amount of patronage refund shall be credited to 
11 
his/her account until his/her account until his/her share capital 
12 
contribution has been fully paid; 
13 
(3) In the case of a non-member patron, his/her proportionate amount of 
14 
patronage refund shall be set aside in a fund created for the purpose 
15 
and shall be allocated to individual non-member patrons only upon 
16 
request and presentation of evidence of the amount of his/her 
17 
patronage. The amount so allocated shall be credited to such patrons 
18 
toward payment of the minimum capital contribution for membership. 
19 
When a sum equal to this amount has accumulated at any time within 
20 
two (2) years from the start of his/her patronage, such patron shall be 
21 
deemed and become a member of the cooperative if he so agrees or 
22 
requests and complies with the provisions of the bylaws for admission 
23 
to membership; and 
24 
(4) Any non-member patron who has accumulated the sum necessary for 
25 
membership but who does not request nor agree to become a member 
26 
or fails to comply with the provisions of the bylaws for admission to 
27 
membership, the amount so accumulated or credited to their account 
28 
together with any part of the general fund for non-member patrons shall 
29 
be credited to any of the statutory funds as approved by a majority of 
30 
the members entitled to vote, present and constituting a quorum. 
31 
 
CHAPTER XX. AGRICULTURE COOPERATIVES 
32 
SEC. 98. Definition and Coverage. - This Chapter shall apply to all 
33 
agricultural cooperatives, as defined in this Code: Provided, That the provisions 
34 
of the other chapters of this Code shall apply suppletorily except insofar as this 
35 
Chapter otherwise provides. 
36 


 
59 
SEC. 99. Cooperative Business Activities and Allied Services. - A 
1 
duly registered agriculture cooperative may engage in all or any of the following 
2 
activities: 
3 
a. Raising and/or culture of plants, high-value crops, animals, fish, poultry, 
4 
livestock, and other agri-products as source of food, feed, and fiber; 
5 
b. Marine and inland fishing; 
6 
c. Production of salt; 
7 
d. Community and social forestry; 
8 
e. Provision of credit facilities for marginal farmers and fishermen; 
9 
f. Facilitating the production, procurement, marketing, and distribution of 
10 
farm inputs/implements for its members such as but not limited to, meat-
11 
type and dairy animals, planting materials, semen, silage, feeds, 
12 
veterinary supplies, seeds, fertilizers and chemicals, farm equipment, food 
13 
processing and engineering supplies/equipment, and other inputs as may 
14 
be needed by the agricultural industry; 
15 
g. Propagation, production, harvest, postharvest, processing, packing, 
16 
repacking, marketing, exportation, and sale of members’ agri-products 
17 
and by-products, and/or produce; 
18 
h. Maintenance and management of irrigation systems, water impounding, 
19 
and other agricultural facilities; 
20 
i. Other allied services such as but not limited to warehousing, cold storage, 
21 
and other post-harvest services, hauling, and transport of members’ 
22 
products/produce and such other similar business services and activities 
23 
that will reduce cost and/or value addition of output; and 
24 
j. Learning site entrepreneurship for extension, technology demonstration, 
25 
agri-tourism, and farm business schools. 
26 
SEC. 100. Pre-Cooperative Agricultural Organization. – Prior to 
27 
registration with the Authority, a group of natural persons intending to form 
28 
an agriculture cooperative may voluntarily form a Pre-Cooperative Agricultural 
29 
Organization (PCAO) that shall have its own juridical personality to undertake 
30 
activities that shall determine the viability of the creation of a cooperative under 
31 
this Code. Prior to registration, the PCAO must be accredited as such with the 
32 
Cooperative Development Office of the LGU created pursuant to RA 11535. 
33 
The Department of Agriculture (DA) and the Authority, in coordination 
34 
with the CDOs, shall assist PCAOs so that they can formally organize as 
35 


 
60 
cooperatives under this Code; Provided, that should the PCAO decide to 
1 
formally organize into a cooperative, it must comply with the provisions of 
2 
Sections 8 and 14 of this Code. Further, Section 18 shall apply to all contracts 
3 
executed by pre-cooperative organizations prior to registration under this Code. 
4 
The DA, Department of Interior and Local Government (DILG), and the 
5 
Authority shall jointly issue guidelines on the mechanisms for PCAOs. 
6 
SEC. 101. Registration of Agricultural Cooperatives. - Agricultural 
7 
cooperatives shall file their application for registration with the regional office 
8 
of the Authority that has jurisdiction over its area of operation. The 
9 
requirements and procedure for registration of agricultural cooperatives shall 
10 
be in accordance with the rules and regulations to be promulgated by the 
11 
Authority. 
12 
No fees shall be assessed or charged to any agriculture cooperative by 
13 
any government entity, national or local, at any stage of its organization and 
14 
registration process. 
15 
SEC. 102. Capital Requirements of Agriculture Cooperatives. - The 
16 
authorized share capital of an agriculture cooperative shall be stated in its 
17 
articles of cooperation and that prior to its registration, at least twenty five per 
18 
centum (25%) of the authorized share capital shall be subscribed to by the 
19 
members and at least twenty five (25%) of the subscribed share capital shall 
20 
be paid-up: Provided, That the paid-up capitalization requirement for primary 
21 
cooperatives shall not be less than Fifteen Thousand Pesos (P15,000.00). 
22 
SEC. 103. Bond of Membership. - The bond of membership of 
23 
agriculture cooperatives shall be any of the following: 
24 
a. Residential – members are farmers, farm workers, fisherfolk who are 
25 
actually and physically residing within the area of operation. 
26 
b. Occupational – members are those who are engage in raising, culture of 
27 
plants, animals, as well as those from the technical and scientific 
28 
communities of the agriculture sector 
29 
c. Associational – members are from registered associations, groups, clubs,  
30 
cultural and other similar aggrupation of farmers, farm workers, and 
31 
fisherfolk. 
32 
d. Institutional - members consist of employees, workers and/or officers of a 
33 
particular institution who will undertake or are undertaking agricultural 
34 
projects.  
35 
SEC. 104. Clustering and Consolidation - In order to pool their 
36 
resources for increased viability and market competitiveness, the DA, DAR, 
37 


 
61 
DTI, and CDA shall jointly establish a program that will promote, encourage 
1 
agricultural cooperatives and facilitate their cooperation into clusters that will 
2 
encompass the whole agricultural value chain, including but not limited to land 
3 
consolidation, postharvest processing, distribution, logistics, marketing, and 
4 
promotions. 
5 
Within sixty (60) days from the effectivity of this Code, The DA, DAR, DTI 
6 
and CDA, in consultation with the sector, shall jointly issue the guidelines for 
7 
the implementation of the foregoing program, and shall provide the necessary 
8 
assistance at every step of the clustering and consolidation process, including 
9 
the formulation of cluster development plans.  
10 
SEC. 105. Partnership and Joint Venture with Private Entities. - 
11 
Duly registered private entities may enter into a partnership or joint venture 
12 
with agricultural cooperatives in order to provide the latter with investments 
13 
and technical support, such as, but not limited to technological, logistics, and 
14 
facilities support, among others. Such partnership or joint venture shall be 
15 
registered with the necessary regulatory authorities, including the CDA, and 
16 
enjoy the relevant exemptions and privileges under this Code. 
17 
This notwithstanding, the equity or contribution of such private entity 
18 
shall not exceed forty per centum (40%) of the partnership or joint venture. 
19 
SEC. 106. Commitment of Financial Portfolio. – Federations and shall 
20 
reserve not less than fifteen per centum (15%) of their financial portfolio for the 
21 
extension of loans, credit, savings facilities, and others, to agricultural 
22 
cooperatives; Provided, that any federation that shall willfully misrepresent 
23 
facts or circumstances in order to circumvent compliance with this provision 
24 
shall be held liable under this Code and all other applicable laws, rules, and 
25 
regulations. Cooperative banks shall comply with the thresholds set by the 
26 
BSP. 
27 
Credit and Credit and Savings cooperatives shall reserve not less than 
28 
ten per centum (10%) of their portfolio for the extension of loans, credit, saving 
29 
facilities, and others to cooperative members in relation to agricultural 
30 
purposes. 
31 
SEC. 
107. 
Role 
of 
National 
Coordinating 
Committee 
on 
32 
Cooperatives Development. - The Authority shall mobilize the National 
33 
Coordinating Committee on Cooperative Development (NCC-CD) for the 
34 
promotion of the growth, viability, and development of Agricultural 
35 
cooperatives. 
36 
SEC. 108. Role of LGUs. - The Local Government Units shall: 
37 
a. Ensure the appointment of Cooperative Development Officers, in 
38 
compliance with Republic Act No. 11535; 
39 


 
62 
b. Legislate necessary ordinances for the promotion and development of 
1 
agriculture cooperatives; 
2 
c. Disseminate information to people and facilitate the establishment and 
3 
development of the management and operations of agriculture 
4 
cooperatives in their respective localities; 
5 
d. Expedite the issuance of the necessary permits for the implementation of 
6 
programs and projects of the Authority and other national government 
7 
agencies for the benefit of agriculture cooperatives; 
8 
e. Upon written request of the Authority, assist in the resolution of inter-
9 
cooperative disputes among agriculture cooperatives operating within 
10 
their localities; 
11 
f. Facilitate and conduct free and regular seminars, trainings, and/or 
12 
conferences necessary for the organization, registration, management and 
13 
operations of agriculture cooperatives; 
14 
g. Provide technical assistance and skills training for farmers, farm workers, 
15 
and fisherfolk to engage in income-generating activities. 
16 
h. Provide access to land for agricultural and fisheries cooperatives for 
17 
farming and other purposes which include leasing or allocating public 
18 
lands for cooperatives use; 
19 
i. Offer financial support to agricultural and fisheries cooperatives through 
20 
grants, subsidies, or low-interest rates; and 
21 
j. Facilitate linkage between agricultural and fisheries cooperatives and 
22 
other institutions offering assistance/services. 
23 
SEC. 109. Role of Cooperative Development Councils. - The Authority 
24 
shall, in collaboration with the LGUs through the Municipal and/or City 
25 
Cooperative Development Councils and the Cooperative Development Officers, 
26 
facilitate programs and policies affecting agriculture cooperatives in 
27 
accordance with a Joint Memorandum Circular to be promulgated by the 
28 
Authority and the LGU. 
29 
SEC. 110. Benefits and Privileges of Agriculture Cooperatives. - An 
30 
agriculture cooperative shall enjoy the following benefits and privileges: 
31 
a. Taxes, Duties, and Liens: 
32 
(1) All benefits, privileges, and tax treatments of cooperatives as defined 
33 
and enumerated under Chapter X of this Code shall apply to agriculture 
34 
cooperatives; 
35 


 
63 
(2) Agriculture cooperatives shall be exempt from customs duties, advance 
1 
sales or compensating taxes on their importation and local purchase of 
2 
machineries, equipment, accessories, batteries, and spare parts used 
3 
by them; Provided, That all tax- and duty-free imports and local 
4 
purchases shall not be sold nor the beneficial ownership thereof be 
5 
transferred to any person until after five (5) years, otherwise, the 
6 
cooperative and the transferee or assignee shall be solidarily liable to 
7 
pay twice the amount of the imposed tax and/or duties; and 
8 
(3) All real properties owned, and those directly used for the operations, 
9 
management, and maintenance of agriculture cooperatives shall be 
10 
exempt from the payment of real property taxes imposed under existing 
11 
laws. 
12 
b. Trainings and Conferences - All training and/or conferences necessary for 
13 
the organization, registration, management and operations of an 
14 
agriculture cooperative shall be given free of charge, including costs of 
15 
venue, training materials, speakers and resource persons. The cooperative 
16 
development officers shall be primarily responsible for these trainings and 
17 
conferences within their respective localities.  
18 
c. Consolidation - Agricultural cooperatives may consolidate agricultural 
19 
lands owned by its members within in a contiguous area for purposes of 
20 
agricultural development; 
21 
d. Direct Purchase by National and Local Government Agencies – To promote 
22 
and support agricultural cooperatives, national and local government 
23 
agencies shall directly purchase agricultural products from accredited 
24 
agricultural cooperatives; Provided, that said products are necessary in 
25 
the performance of their respective mandates. 
26 
For the purposes of this Code, the procurement by national and local 
27 
government agencies of said agricultural products shall be exempt from the 
28 
application of the bidding process prescribed under relevant government 
29 
procurement laws; Provided, that said agencies shall undergo a negotiated 
30 
procurement under the applicable guidelines of the Government 
31 
Procurement Policy Board. 
32 
 
33 
e. Loans and Grants: 
34 
(1) All loans applied for by agriculture cooperatives in any government-
35 
owned or -controlled banks or government financial institutions shall 
36 
enjoy preferential treatment as to the requirements, rates, securities, 
37 
and collaterals; and   
38 
(2) The Authority shall coordinate with the BSP to lower the thresholds for 
39 
all loans applied for and granted to agriculture cooperatives. 
40 


 
64 
SEC. 111. Merger and Consolidation of Agriculture Cooperatives. - 
1 
Notwithstanding the provisions of this Code, the merger and consolidation of 
2 
agriculture cooperatives shall be in accordance with the Implementing Rules 
3 
and Regulations to be promulgated by the Authority. 
4 
SEC. 
112. 
Inter-Cooperative 
Arrangements 
of 
Agriculture 
5 
Cooperatives. - Agriculture cooperatives shall be allowed to enter into inter-
6 
cooperative arrangements with and among other cooperatives and other 
7 
entities to pursue value and supply chain solutions and other agribusiness 
8 
development programs, subject to the guidelines to be promulgated by the 
9 
Authority. 
10 
SEC. 113. Local Development Hubs. - Local Development Hub (LDH) 
11 
refers to a farming zone or transport infrastructure, which is generally far from 
12 
formal markets, and serves a minimum of one hundred (100) farmers, linking 
13 
them to buyers, who may be, among others, traders, processors, and export 
14 
companies. The DA, DTI and the Authority shall jointly establish LDHs to 
15 
strengthen market linkages between farmers and buyers, fostering agricultural 
16 
development and economic growth at the local level. Further, they shall jointly 
17 
issue the guidelines for the operations and maintenance thereof. 
18 
SEC. 114. Annual Trade Fair and Awards. - The DA, in coordination 
19 
with the Authority, and in partnership with the cooperative sector, shall 
20 
establish and hold the Annual Agricultural Cooperatives Trade Fair and 
21 
Awards, and other development-oriented projects and activities to showcase 
22 
the exemplary business achievement, latest innovations, and other emerging 
23 
trends in the sector. 
24 
 
CHAPTER XXI. AGRARIAN REFORM COOPERATIVES 
25 
SEC. 115. Coverage. - The provisions of this Chapter shall primarily 
26 
govern agrarian reform cooperatives, including Agrarian Reform Beneficiaries 
27 
(ARBs) Cooperative as defined in Department of Agrarian Reform (DAR) 
28 
Administrative Order No. 05, Series of 2009: Provided, That the provisions of 
29 
the other chapters of this Code shall apply suppletorily except insofar as this 
30 
Chapter otherwise provides. 
31 
SEC. 116. Definition and Purpose. - An agrarian reform cooperative as 
32 
defined shall be organized for any or all of the following purposes: 
33 
a. To develop an appropriate system of land tenure, land development, land 
34 
consolidation or land management in areas covered by agrarian reform; 
35 


 
65 
b. To coordinate and facilitate the dissemination of scientific methods of 
1 
production, and provide assistance in the storage, transport, and 
2 
marketing of farm products for ARBs and their immediate family; 
3 
c. To provide financial facilities to ARBs for provident or productive purposes 
4 
at reasonable costs; 
5 
d. To arrange and facilitate the expeditious transfer of appropriate and 
6 
suitable technology to beneficiaries and marginal farmers at the lowest 
7 
possible cost; 
8 
e. To provide social security benefits, health, medical and social insurance 
9 
benefits and other social and economic benefits that promote the general 
10 
welfare of the ARBs and marginal farmers; 
11 
f. To provide non-formal education, vocational/technical training, and 
12 
livelihood programs to ARBs and marginal farmers; 
13 
g. To act as conduits for external assistance and services to the ARBs and 
14 
marginal farmers; 
15 
h. To undertake a comprehensive and integrated development program in 
16 
agrarian reform and resettlement areas with special concern for the 
17 
development of agro-based, marine-based, and cottage-based industries; 
18 
i. To represent the ARBs on any or all matters that affect their interest; and 
19 
j. To undertake such other economic or social activities as may be necessary 
20 
or incidental in the pursuit of the foregoing purposes. 
21 
SEC. 117. Cooperative Estate. - Landholdings like plantations, estates 
22 
or haciendas acquired by the State for the benefit of the workers in accordance 
23 
with the Comprehensive Agrarian Reform Program shall be collectively owned 
24 
by the worker-beneficiaries under a cooperative set-up. 
25 
SEC. 118.  Infrastructure. - In agrarian reform and resettlement areas, 
26 
the Government shall grant to agrarian reform cooperatives preferential 
27 
treatment in the construction, maintenance and management of roads, 
28 
bridges, canals, wharves, ports, reservoirs, irrigation systems, waterworks 
29 
systems, and other infrastructures with government funding. For this purpose, 
30 
the Government shall provide technical assistance, facilities, and equipment to 
31 
such agrarian reform cooperatives. 
32 
SEC. 119. Lease of Public Lands. - The Government may lease public 
33 
lands to any agrarian reform cooperative for a period not exceeding twenty-five 
34 
(25) years, subject to renewal for another twenty-five (25) years only: Provided, 
35 
That the application for renewal shall be made one (1) year before the expiration 
36 


 
66 
of the lease: Provided, further, That such lease shall be for the exclusive use 
1 
and benefit of the beneficiaries and marginal farmers subject to the provisions 
2 
of the Comprehensive Agrarian Reform Program, as amended. 
3 
SEC. 120.  Preferential Right. - In agrarian reform areas, an agrarian 
4 
reform cooperative shall have the preferential right in the grant of franchise 
5 
and certificate of public convenience and necessity for the operation of public 
6 
utilities and services: Provided, That it meets the requirements and conditions 
7 
imposed by the appropriate government agency granting the franchise or 
8 
certificate of public convenience and necessity. In cases where there is an 
9 
electric service provider in the area, it shall upon the request of an agrarian 
10 
reform cooperative, immediately provide electric services to the agrarian reform 
11 
areas. If the electric service provider fails to provide the services requested 
12 
within a period of one (1) year, the agrarian reform cooperative concerned may 
13 
undertake to provide the electric services in the area through its own resources. 
14 
All investments made by the said agrarian reform cooperative for the 
15 
electrification of the agrarian reform resettlement areas shall be the subject of 
16 
sale to the electric service provider once it takes on the service. 
17 
SEC. 121. Special Privileges. - Subject to such reasonable terms and 
18 
conditions as the DAR and the Authority may impose, agrarian reform 
19 
cooperatives may be given the exclusive right to do any or all of the following 
20 
economic activities in agrarian reform and resettlement areas; 
21 
a. Supply and distribution of consumer, agricultural, aquacultural, and 
22 
industrial goods, production inputs, and raw materials and supplies, 
23 
machinery, equipment, facilities and other services and requirements of 
24 
the beneficiaries and marginal farmers at reasonable prices; 
25 
b. Marketing of the products and services of the ARBs in local and foreign 
26 
markets; 
27 
c. Processing of the members’ products into finished consumer or industrial 
28 
goods for domestic consumption or for export; 
29 
d. Provision of essential public services at cost such as power, irrigation, 
30 
potable water, passenger and/or cargo transportation by land or sea, 
31 
communication services, and public health and medical care services; 
32 
e. Management, conservation, and commercial development of marine, 
33 
forestry, mineral, water, and other natural resources subject to 
34 
compliance with the laws and regulations on environmental and ecological 
35 
controls; and 
36 
f. Provision of financial, technological, and other services and facilities 
37 
required by the ARBs in their daily lives and livelihood. 
38 


 
67 
The Government shall provide the necessary financial and technical 
1 
assistance to agrarian reform cooperatives to enable them to discharge 
2 
effectively their purposes under this Chapter. The DAR, the Authority and the 
3 
BSP shall draw up a joint program for the organization and financing of the 
4 
agrarian reform cooperatives subject of this Chapter. The joint program shall 
5 
be geared towards the ARBs gradual assumption of full ownership and 
6 
management control of the agrarian reform cooperatives. 
7 
SEC. 122. Organization and Registration. - Agrarian reform 
8 
cooperatives may be organized and registered in accordance with the 
9 
requirements of this Code only upon prior certification by the DAR that said 
10 
proposed cooperative is needed and that its organization is feasible and will be 
11 
economically viable in its operations. 
12 
The Authority, in consultation with the concerned government agencies 
13 
and cooperative sector, shall issue appropriate rules and regulations pertaining 
14 
to the provisions of this Chapter. 
15 
  
CHAPTER XXII. COOPERATIVE BANKS 
16 
SEC. 123. Organization, Registration, and Membership. - The 
17 
organization and membership of a Cooperative Bank shall be governed by the 
18 
following provisions: 
19 
a. Organization - At least fifteen (15) cooperatives duly established and 
20 
registered under this Code may register a cooperative bank with the 
21 
Authority. 
22 
b. Registration - The application for the registration of the articles of 
23 
cooperation and bylaws, including its amendments, by a cooperative bank 
24 
with the Authority shall be accompanied by a Certificate of Authority 
25 
issued by the BSP. 
26 
c. Membership - Membership in a cooperative bank shall be open to:  
27 
(1) cooperatives of all types and categories;  
28 
(2) natural persons who are members of a cooperative; 
29 
(3) foreign cooperatives; 
30 
(4) pre-cooperative organizations established under Presidential Decree No. 
31 
175; and 
32 
(5) individuals. 
33 


 
68 
Membership in a cooperative bank is either regular or associate. Regular 
1 
membership shall be limited to cooperative organizations, individuals who are 
2 
members of a domestic cooperative, or a foreign cooperative. Associate 
3 
members shall be pre-cooperative organizations established under Presidential 
4 
Decree No. 175, as well as individuals who are subscribing and holding 
5 
preferred shares only.  
6 
The common shareholdings of a local cooperative shall at all times be at 
7 
least sixty per centum (60%) of the total outstanding voting shares of the 
8 
cooperative bank.  
9 
Common shares held by individuals who are members of a cooperative, 
10 
and foreign cooperatives shall not be more than forty per centum (40%) of the 
11 
total outstanding voting shares: Provided, That the common shareholdings of 
12 
each individual who is a member of a cooperative shall not be more than five 
13 
per centum (5%) of the total outstanding voting shares.  
14 
SEC. 124. Powers and Functions of Cooperative Banks. - Cooperative 
15 
banks shall primarily provide a wide range of financial services to cooperative 
16 
organizations, their members, and to the public. A cooperative bank may 
17 
perform any or all of the following banking services: 
18 
a. Extend loans and advances primarily for the purpose of meeting the 
19 
normal credit needs of cooperatives as well as farmers, farm workers, 
20 
fisherfolks, or their families, merchants, and private and public 
21 
employees: Provided, That loans and advances granted to cooperatives 
22 
shall not be subject to individual ceilings on loans to directors, officers, 
23 
stockholders, and related interests (DOSRI);  
24 
b. Accept savings and time deposits;  
25 
c. Act as a correspondent bank of other financial institutions;  
26 
d. Discount and Rediscount paper with the Land Bank of the Philippines, 
27 
Development Bank of the Philippines or any other bank, including its 
28 
branches and agencies. Said banks shall specify the nature of paper 
29 
deemed acceptable for rediscounting, as well as the rediscount rate to be 
30 
charged by any of these banks; 
31 
e. Act as collection agent; 
32 
f. Act as official depository bank of Local Government Units and other 
33 
government agencies or instrumentalities; 
34 
g. Acquire readily marketable bonds and other debt securities; 
35 
h. Buy and sell foreign exchange;  
36 


 
69 
i. Acquire shares of publicly listed companies; 
1 
j. Act as conduit bank for the disbursement of government funds intended 
2 
for lending to agriculture, small-medium enterprises (SMEs) and projects 
3 
for local economic development; 
4 
k. Eligible to participate in government program allocations for agricultural 
5 
lending, social housing, loans to rural micro enterprises and other 
6 
initiatives towards inclusive growth; 
7 
l. Offer financial technology services, such as digital lending and payment, 
8 
and digital wealth management, among others, subject to prior approval 
9 
of the BSP; 
10 
m. Participate in treasury and money market operations such as: 
11 
a. Repurchase Agreements with the BSP; 
12 
b. Reverse Repurchase Agreements with the BSP; 
13 
c. Overnight Lending Facility of the BSP; 
14 
d. Overnight Deposits with the BSP; 
15 
e. Term Deposit Facility with the BSP; and 
16 
f. Sales and Marketing of Financial Products; 
17 
n. Offer credit card services; 
18 
o. Act as lending banks for credit surety fund cooperatives, as provided 
19 
under Republic Act No. 10744, otherwise known as the “Credit Surety 
20 
Fund Cooperative Act of 2015”; 
21 
p. Act as depository bank of cooperatives with regard to their reserve funds, 
22 
if such banks exist in their area of operations; and 
23 
q. Offer other banking services as provided in Section 53 of Republic Act No. 
24 
8791. 
25 
In addition to the powers granted to cooperative banks by this Code and 
26 
other existing laws, any cooperative bank may perform any or all of the banking 
27 
services offered by other types of banks subject to the prior approval of the 
28 
BSP. 
29 
SEC. 125. Establishment of Branches and Other Offices. - The 
30 
establishment of branches, branch-lite units, or other banking offices by 
31 
cooperative banks shall be governed by the rules and regulations of the BSP. 
32 
The cooperative bank shall furnish the Authority with a copy of the Certificate 
33 
of Authority issued by the BSP. In no case shall a cooperative bank be 
34 


 
70 
prohibited or restricted from establishing a branch in a province, city, or 
1 
municipality, solely on the ground that another cooperative bank already exists 
2 
in the same area. 
3 
SEC. 126. Management of Cooperative Banks. - The management of 
4 
the cooperative banks shall be governed by the rules and regulations to be 
5 
promulgated by the BSP, in consultation with the Authority. To maintain the 
6 
quality of bank management and accord appropriate protection to depositors 
7 
and the public in general, the BSP shall prescribe the fit and proper 
8 
qualifications of bank directors and officers for the purposes of this Section, 
9 
giving due recognition to the unique nature and character of cooperative banks. 
10 
The number, composition, and term of the Board of Directors shall be defined 
11 
in the articles of cooperation and bylaws of the cooperative bank, in accordance 
12 
with the following guidelines: 
13 
a. Board and Committees. - The cooperative bank shall constitute, at a 
14 
minimum, the Board of Directors, Election Committee, and Audit 
15 
Committee. 
16 
The Board of Directors shall be composed of at least five (5) but not more 
17 
than fifteen (15) members, at least one (1) of whom is an independent 
18 
director. It shall be entrusted with the management of the affairs of the 
19 
cooperative bank. It shall be responsible for the strategic planning, 
20 
direction-setting and policy formulation activities of the cooperative bank. 
21 
The members of the Board of Directors shall be elected by the General 
22 
Assembly or Representative Assembly.  
23 
The Election Committee shall be responsible for the formulation and 
24 
implementation of election rules and guidelines. It shall supervise the 
25 
conduct of election, election-related activities, canvass and certify the 
26 
results of the election, and decide cases relative to such election, except 
27 
those involving the committee itself or its members. The members of the 
28 
Election Committee shall be elected by the General Assembly or 
29 
Representative Assembly.  
30 
The Audit Committee is a Board-level committee whose composition, 
31 
functions and responsibilities shall be in accordance with the existing 
32 
regulations of the BSP; Provided, That the Audit Committee shall have at 
33 
least one-third (1/3) but not less than two (2) members of the Board of 
34 
Directors as independent directors. Other board-level committees may be 
35 
created as may be directed by the BSP. 
36 
Other committees may be created by the Board of Directors with powers, 
37 
functions, and responsibilities which shall be defined in the bylaws; and 
38 
b. Key Management Officers. - The key management officers shall be 
39 
appointed by the Board and shall include the President, Treasurer, 
40 


 
71 
Internal Auditor, and Compliance Officer, or their equivalent ranks. The 
1 
BSP shall prescribe the qualifications and disqualifications of the key 
2 
management officers. 
3 
SEC. 127. Vacancy in the Board and Committees. - In case of vacancy 
4 
in the Board of Directors, such vacancy may be filled by a vote of at least a 
5 
majority of the remaining directors, if still constituting a quorum; otherwise, 
6 
said vacancy must be filled by the general assembly in a regular or special 
7 
meeting called for that purpose. A director so elected to fill a vacancy shall serve 
8 
only the unexpired term of the predecessor in office. 
9 
In case of vacancy in the committees, the Board of Directors, unless 
10 
otherwise provided in the bylaws, will appoint a person to fill the same, subject 
11 
to the provision that the person appointed shall serve only for the unexpired 
12 
portion of the term.  
13 
SEC. 128. Compensation of Directors. - In the absence of any 
14 
provision in the bylaws fixing their compensation, the directors shall not 
15 
receive any compensation except for reasonable per diems: Provided, however, 
16 
That the directors and officers shall not be entitled to any per diem when, in 
17 
the preceding calendar year, the cooperative bank reported a net loss or had a 
18 
dividend rate less than the official inflation rate for the same year. Any 
19 
compensation other than per diems may be granted to directors by a majority 
20 
vote of the members with voting rights at a regular or special general assembly 
21 
meeting specifically called for the purpose: Provided, That no additional 
22 
compensation other than per diems shall be paid during the first year of 
23 
existence of the Cooperative Bank. 
24 
In no case shall the total yearly compensation of directors exceed ten per 
25 
centum (10%) of the net income of the cooperative bank during the preceding 
26 
year. 
27 
SEC. 129. Dealings of Directors, Officers, Stockholders, and 
28 
Related Interests (DOSRI). - Dealings with directors and officers of the 
29 
Cooperative Bank shall comply with the provisions of Section 36 of R.A. No. 
30 
8791, otherwise known as General Banking Law (GBL) of 2000. However, the 
31 
limits on loans to dealings of directors, officers, stockholders, and related 
32 
interests shall not apply to loans, other credit accommodations, or guarantees 
33 
extended by the cooperative bank to its member primary cooperatives. 
34 
SEC. 130. Composition of the General Assembly. - The General 
35 
Assembly shall be composed of regular members who are entitled to vote under 
36 
the articles of cooperation and bylaws of the cooperative bank.  
37 
SEC. 131. Powers of the General Assembly. - The General Assembly 
38 
shall be the highest policy-making body of the cooperative bank and shall 
39 
exercise the same powers as enumerated in Section 41 of this Code. The 
40 


 
72 
General Assembly, however, shall have the following exclusive powers which 
1 
cannot be delegated: 
2 
a. To determine and approve amendments to the articles of cooperation 
3 
and bylaws; 
4 
b. To elect or appoint the members of the board of directors and to remove 
5 
them for cause; 
6 
c. To approve developmental plans of the cooperative bank; 
7 
d. To approve or disapprove proposals from the Board of Directors 
8 
pertaining to external borrowings, investments, grants, donations, and 
9 
other forms of financial assistance, when the amounts involved are 
10 
material or if they exceed one hundred percent (100%) of the cooperative 
11 
bank’s equity; and 
12 
e. To serve as the final arbiter in resolving all issues and dispute 
13 
pertaining to membership within the cooperative bank. 
14 
Subject to such other provisions of this Code and only for the purposes 
15 
of prompt and intelligent decision-making, the general assembly may, by a 
16 
three-fourths. (3/4) vote of all its members with voting rights present and 
17 
constituting a quorum, delegate some of its powers to a smaller body of the 
18 
cooperative bank. These powers shall be enumerated under the bylaws of the 
19 
cooperative bank. 
20 
SEC. 132. Meetings. - The conduct of meetings of the General Assembly 
21 
of cooperative banks shall adhere to the provisions specified in Section 42 of 
22 
this Code. 
23 
SEC. 133. Quorum and Voting System. – (a) In case of primary 
24 
cooperatives, regular meetings of the Board of Directors shall be held at least 
25 
once a month, Special meetings may be held at any time: 
26 
i. At the call of the Chairperson, upon prior written notice given at 
27 
least three (3) days prior to the date of said meeting; 
28 
ii. Or at the call of a majority of the members of the Board, upon prior 
29 
written notice given at least one (1) days before said meeting: 
30 
Provided, That only two (2) special meetings may be held in one (1) 
31 
month. Notices may be sent through electronic means, to the 
32 
official contact number or email account of the officers. 
33 
 
34 
(b) A majority of the members of the Board shall constitute a quorum for the 
35 
conduct of business. 
36 
 
37 
(c) Each member of the Board shall only have one (1) vote, whether it be a 
38 
primary or secondary cooperative, irrespective of the share capital 
39 
holdings of the member-cooperative. 
40 
 
41 


 
73 
(d) Directors cannot attend by proxy at Board meetings. 
1 
 
2 
(e) Cooperatives may opt to allow meetings of the Board of Directors and 
3 
members of the different committees of the cooperative to be conducted 
4 
either through physical attendance or videoconferencing, or both, subject 
5 
to the rules on sending notices, quorum, and voting requirements as 
6 
provided for in the bylaws. In the conduct of meetings through 
7 
videoconferencing, cooperatives shall adopt their own policies and 
8 
procedures which shall be included in their bylaws. 
9 
SEC. 134. Investment in Allied Undertakings. - Subject to the 
10 
requirements and restrictions as may be imposed by the Monetary Board under 
11 
its existing rules and regulations, Cooperative Banks may invest in equities of 
12 
allied undertakings which may include, but are not limited to the following:  
13 
a. Banks, financial institutions and non-bank financial intermediaries, 
14 
including but not limited to insurance cooperatives and trust banks;  
15 
b. Warehousing and other post-harvest facilities; 
16 
c. Fertilizers, agricultural chemicals, and pesticides distribution;  
17 
d. Farm equipment distribution;  
18 
e. Trucking and transportation of agricultural products;  
19 
f. Marketing of agricultural products;  
20 
g. Leasing;  
21 
h. Automated teller machine (ATM) networks; 
22 
i. Public transportation;  
23 
j. Financial technology; and 
24 
k. Other undertakings as may be determined by the Monetary Board.  
25 
SEC. 135. Limitations on Lending Authority. - Except as the 
26 
Monetary Board may otherwise prescribe, the direct indebtedness to 
27 
Cooperative Banks of any person, company, corporation, or firm, including the 
28 
indebtedness of members of a partnership and association, for money 
29 
borrowed, shall in no time exceed twenty five per centum (25%) of unimpaired 
30 
capital and surplus of the cooperative bank. However, the direct indebtedness 
31 
mentioned shall exclude loans secured by obligations of the BSP; loans fully 
32 
guaranteed by the Government as to the payment of principal and interest; 
33 
loans to the extent covered by the hold-out on, or assignment of, deposits 
34 


 
74 
maintained in the lending cooperative bank and held in the Philippines; and 
1 
other loans or credits as the Monetary Board may, from time to time, specify 
2 
non-risk assets. 
3 
SEC. 136. Capital Requirement for Cooperative Banks. - A 
4 
cooperative bank shall have a minimum paid-up capital in such amount as 
5 
may be required by the BSP. The BSP may prescribe rules and regulations on 
6 
the types of shares a cooperative bank may issue, including the terms thereof 
7 
and rights appurtenant thereto to determine compliance with laws and 
8 
regulations governing capital and equity structure of banks. Provided, That 
9 
Cooperative Banks shall issue par value shares only. 
10 
SEC. 137. Barrio Savings Fund (BSF), Barrio Guarantee Fund (BGF), 
11 
Cooperative Development Loan Fund (CDLF), Cooperative Marketing 
12 
Program (CMP), and other funds administered by CDA. - In order to 
13 
augment the capitalization of cooperative banks, the aforementioned funds 
14 
collected or deducted by various cooperative banks throughout the country 
15 
from the loan proceeds of farmer borrowers in compliance with P.D. 175, which 
16 
are still floating and outstanding either as active or dormant accounts in the 
17 
books of those banks, shall be converted as capital of the cooperative bank 
18 
located in the province where the depository banks of the BSF and BGF are 
19 
located.  
20 
SEC. 138. Samahang Nayon and Municipal Katipunan ng mga 
21 
Samahang Nayon. - Samahang Nayon (SN) and Municipal Katipunan ng mga 
22 
Samahang Nayon (MKSN) which held common shares of cooperative banks 
23 
prior to the effectivity of R.A. No. 9520 shall apply for conversion to cooperatives 
24 
in order to maintain their status as regular members of cooperative banks: 
25 
Provided, That the cooperative banks shall exert efforts to inform and assist the 
26 
SN and MKSN to convert within a period of five (5) years from the effectivity of 
27 
this Code. Upon failure of the SN and MKSN to finally convert to a cooperative 
28 
within said period, the funds held in the name of such SN and MKSN shall be 
29 
considered as preferred shares and shall remain as capital of the cooperative 
30 
bank. Within six (6) months from the conversion of preferred shares, the 
31 
cooperative bank may, at its option, reclassify such shares as treasury shares 
32 
at the same value at which they were liquidated. 
33 
SEC. 139. Additional Source of Capital of the Cooperative Banks. - 
34 
The funds or common shares in cooperative banks held in the name of 
35 
cooperatives whose Certificates of Registration have already been cancelled by 
36 
the Authority and which failed to liquidate such funds or shares during its 
37 
liquidation shall remain as capital in said cooperative banks and shall be 
38 
treated as preferred shares. 
39 
SEC. 140. Supervision and Regulation of Cooperative Banks. - All 
40 
cooperative banks shall be under the supervision of the BSP: Provided, 
41 


 
75 
however, that the Authority shall monitor the cooperative banks' compliance 
1 
with cooperative laws, rules, and regulations. With respect to the governance 
2 
of the cooperative banks, the provisions of the banking laws, rules, and 
3 
regulations shall prevail, notwithstanding Section 71 of R.A. No. 8791.  
4 
SEC. 141. Promulgation of Guidelines. – The BSP and the Authority 
5 
may formulate guidelines to implement or clarify the provisions of this Chapter. 
6 
Provided, That the BSP, as the regulator of banks, shall be the primary 
7 
regulator of cooperative banks consistent with the provisions of Republic Act 
8 
No. 8971: Provided, further, That in order to minimize the burden of dually-
9 
regulated entities, the BSP shall, in consultation with the Authority, in its 
10 
promulgation of rules and regulations, to the extent allowed in banking and 
11 
other relevant laws, and insofar as consistent with the BSP’s exercise of 
12 
supervisory and regulatory powers over banks, in its promulgation of rules and 
13 
regulations, consider the requirements of this Code and the Authority for 
14 
cooperatives in general.  
15 
SEC. 142. Privileges of Cooperative Banks. - Cooperative banks 
16 
registered under this Code shall have the following privileges and incentives:  
17 
a. Those privileges and incentives accorded to cooperatives under this Code 
18 
and other prior laws including exemption from all national, provincial, 
19 
city, municipal or barangay taxes, fees, and charges of whatever nature 
20 
and description. Provided, however, That when a cooperative bank has 
21 
reached an undivided net savings of more than One Hundred Million Pesos 
22 
(P100,000,000.00), transactions to non-members shall be taxable. 
23 
b. The foreclosure of mortgages covering loans granted by cooperative banks 
24 
and executions of judgment thereon involving real properties levied upon 
25 
by sheriff shall be exempt from the publications in newspapers where the 
26 
total amount of loan, excluding interests due and unpaid, does not exceed 
27 
One Million Pesos (P1,000,000.00) or such amount as the Monetary Board 
28 
may prescribe as may be warranted by prevailing economic conditions. It 
29 
shall be deemed sufficient publication in such cases where the notices of 
30 
foreclosure and execution of judgment are posted in the most conspicuous 
31 
areas such as the municipal building, the municipal public market, the 
32 
cooperative bank, and the barangay hall where the land mortgaged is 
33 
situated during the period of sixty (60) days immediately preceding the 
34 
public auction or execution of judgment. Proof of publication as required 
35 
herein shall be accomplished via an affidavit of the sheriff or officer 
36 
conducting the foreclosure sale or execution of judgment and shall be 
37 
attached with the records of the case;  
38 
c. A cooperative bank shall be allowed to foreclose lands mortgaged to it 
39 
subject to the provisions of Republic Act No. 6657, as amended. For 
40 
agrarian lands foreclosed by a cooperative bank, the disposal of the same 
41 


 
76 
to another qualified beneficiary under R.A. 6557, as amended, shall be 
1 
made through the same cooperative bank. Further, the amortization of the 
2 
beneficiary in favor of DAR shall be coursed through the servicing 
3 
cooperative bank: Provided, however, that cooperative banks shall be 
4 
exempt from the landholding limits as prescribed by DAR or any other law 
5 
requiring the same.  
6 
d. For cooperative banks granted by the BSP, with accreditation as Rural 
7 
Financial Institution (RFI) under Republic Act No. 10000, the following 
8 
privileges shall be awarded: 
9 
(1) Unrestricted branching rights to set-up agriculture-oriented branches 
10 
in 
unbanked 
municipalities 
and 
predominantly 
agricultural 
11 
communities, subject to existing regulations on minimum capitalization 
12 
for banks and the size of branch network; 
13 
(2) Automatic eligibility with Philippine Guarantee Corporation (with 
14 
respect to agricultural credit guarantee), Philippine Crop Insurance 
15 
Corporation (PCIC), and governmental agencies providing services 
16 
towards risk-mitigation in the agriculture sector;  
17 
(3) Priority status as credit delivery partner or conduit of government-
18 
directed programs for agricultural through the Department of 
19 
Agriculture and other government agencies; and  
20 
(4) Entitlement to participate free of charge in capability-building activities 
21 
in agriculture lending such as, but not limited to, exchange of best-
22 
practice experiences, study tour, technology transfer among ASEAN 
23 
member-states and other fora of international cooperation; and 
24 
e. Notwithstanding the provisions herein, privileges and incentives granted 
25 
to rural banks pursuant to Republic Act No. 7353, or the “Rural Act of 
26 
1992”, shall also be granted to cooperative banks duly registered under 
27 
this Act.   
28 
 
CHAPTER XXIII. INSURANCE COOPERATIVES 
29 
SEC. 143. Insurance Cooperative. - Existing cooperatives may organize 
30 
themselves into an insurance cooperative for the purpose of engaging in the 
31 
business of insuring life, non-life, pre-need (life plan, education, and pension) 
32 
health, and property of cooperatives and their members. 
33 
SEC. 144. Types of Insurance Provided. - Under the cooperative 
34 
insurance program established and formed by the virtue of the provisions of 
35 
this Code, the insurance cooperative shall provide its constituting cooperatives 
36 
and their members different types of insurance coverage consisting of, but not 
37 


 
77 
limited to, life insurance with special group coverage, loan protection, 
1 
retirement plans, endowment, health and accident coverage, pre-need plans, 
2 
fire insurance, marine insurance, motor vehicle coverage, bonding, crop and 
3 
livestock protection and equipment insurance, among others. 
4 
SEC. 145. Applicability of Insurance Laws. - The provisions of the 
5 
Insurance Code and all other laws and regulations relative to the organization 
6 
and operation of an insurance company shall apply to insurance cooperatives 
7 
organized under this Code. The requirements on capitalization, investments, 
8 
and reserves of insurance firms may be liberally modified upon consultation 
9 
with the Authority and the cooperative sector, but in no case may the 
10 
requirement be reduced to less than half of those provided for under the 
11 
Insurance Code and other related laws. 
12 
Other provisions of this Code shall apply suppletorily insofar as they are 
13 
not inconsistent with this Chapter. In case of conflict, the Insurance Code shall 
14 
prevail. 
15 
SEC. 146. Implementing Rules. -– The Insurance Commission and the 
16 
Authority, in consultation with the concerned cooperative sector, shall issue 
17 
the appropriate rules and regulations implementing the provisions of this 
18 
Chapter. 
19 
 
CHAPTER XXIV. COOPERATIVES ENGAGED IN PUBLIC SERVICES  
20 
SEC. 147. Definition and Coverage. - A cooperative engaged in public 
21 
services refers to one organized to render public services, as authorized under 
22 
a franchise, certificate of public convenience, certificate of public convenience 
23 
and necessity, concession, or any other appropriate form of authorization or 
24 
permit duly issued by the appropriate government agency. Such services may 
25 
include but is not limited to the following: 
26 
a. Health services; 
27 
b. Power generation, transmission, and/or distribution; 
28 
c. Ice plants and cold storage services; 
29 
d. Communication services including telephone and digital communications; 
30 
e. Land, water, and air transportation services for passengers and/or 
31 
cargoes; 
32 
f. Public markets, slaughterhouses, management of land transport 
33 
terminals and ports, and other similar services; 
34 


 
78 
g. Water supply and distribution system services; and 
1 
h. Such other types of public services as may be engaged in by any 
2 
cooperative.  
3 
Such cooperatives shall be primarily governed by this Chapter and the 
4 
general provisions of this Code insofar as they may be applicable unless they 
5 
are inconsistent herewith. 
6 
SEC. 148. Registration Requirements. - In addition to the 
7 
requirements provided under Section 14 of this Code, no cooperative engaged 
8 
in public services shall be registered unless it satisfies the following 
9 
requirements: 
10 
a. Its articles of cooperation and bylaws provide for the membership of the 
11 
users and/or producers of the service of such cooperatives; and 
12 
b. Such other requirements as may be imposed by the other pertinent 
13 
government agencies concerned.  
14 
SEC. 149. Regulation of Cooperatives Engaged in Public Services. - 
15 
The internal affairs of cooperatives engaged in public services such as the rights 
16 
and privileges of members; the rules and procedures for meetings of the 
17 
General Assembly, Board of Directors and committees; the election and 
18 
qualifications of officers, directors, and committee members; allocation and 
19 
distribution of surpluses; and all other matters relating to their internal affairs 
20 
shall be governed by this Code. 
21 
All matters relating to the franchise, certificate of public convenience, 
22 
certificate of public convenience and necessity, concession, or any other 
23 
appropriate form of authorization or permit of cooperatives engaged in public 
24 
services such as capitalization and investment requirements, equipment and 
25 
facilities, frequencies, rate-fixing and such other matters affecting their public 
26 
service operations shall be governed by the proper government agency 
27 
concerned. 
28 
The Authority together with other concerned government agencies shall 
jointly issue rules and regulations necessary to implement this Chapter. 
 
29 
CHAPTER XXV. TRANSPORT SERVICE COOPERATIVES 
30 
SEC. 150. Definition and Coverage. – This Chapter shall govern 
31 
transport service cooperatives as defined in this Code, including those 
32 
organized under the provisions of Executive Order No. 898, series of 1983 and 
33 


 
79 
by vehicle operators defined or provided for under the Public Utility Vehicles 
1 
Modernization Program (PUVMP) of the Department of Transportation. 
2 
SEC. 151. Engagement in Allied Business by Transport Service 
3 
Cooperatives. - Subject to pertinent national laws and local ordinances, 
4 
primary transport service cooperatives including federations of cooperatives, 
5 
may engage in a business related to transportation service, including but not 
6 
limited to: 
7 
a. Importation, distribution, and marketing of petroleum products in 
8 
accordance with existing laws; 
9 
b. Operation of gasoline stations, automotive service centers, and 
10 
management of land transport terminals and ports; 
11 
c. Importation, distribution, marketing, and sale of spare parts, automotive 
12 
supplies, and accessories; 
13 
d. Marketing of vehicle/drivers insurance policies as an agent or liaison of a 
14 
licensed insurance company; 
15 
e. Establishment and operation of fleet management services; and 
16 
f. Automotive maintenance credit facilities for the purpose of extending 
17 
loans for the maintenance and repair of public utility vehicles. 
18 
SEC. 152. Registration, Regulation, and Supervision of Transport 
19 
Service Cooperatives. - The Authority shall have jurisdiction over the 
20 
registration, regulation, and supervision of transport service cooperatives  with 
21 
regard to its organization and management as a cooperative. This 
22 
notwithstanding, the relevant regulatory agencies shall have jurisdiction over 
23 
the technical operations of such cooperatives as transport service entities. 
24 
SEC. 153. Renewal of Franchise and Vehicle Registration. - 
25 
Renewals of franchise and vehicle registration shall be granted to transport 
26 
service cooperatives: Provided, That such cooperative presents Certificates of 
27 
Good Standing and Compliance issued by the Authority, Office of Transport 
28 
Cooperatives of the Department of Transportation (DOTr), and LGU concerned 
29 
as proof of its continuous operation and provision of public transportation 
30 
services. 
31 
The Authority, in consultation with the concerned government agencies 
32 
and cooperative sector, shall issue appropriate rules and regulations pertaining 
33 
to the provisions of this Chapter. 
34 
SEC. 154. Oversight Committee. A multi-sectoral committee on 
35 
transport service cooperatives, composed of representatives from the Authority, 
36 


 
80 
the DOTr the DILG, the Land Transportation Franchising and Regulatory Board 
1 
(LTFRB), the Land Transportation Office (LTO), other concerned government 
2 
agencies, as may be necessary, and the federation of transport service 
3 
cooperatives, the regional clustered organizations, and the national alliance of 
4 
cooperatives, shall be established and thereafter be charged with the 
5 
monitoring, recommendation of policies and programs affecting the operations 
6 
of transport service cooperatives, and such other functions. 
7 
A regional monitoring committee shall likewise be established at the 
8 
regional offices of the Authority for the same purpose. 
9 
The functions of the monitoring committees shall be prescribed in the 
10 
Implementing Rules and Regulations to be promulgated by the Authority. 
11 
 
CHAPTER XXVI. CREDIT AND SAVINGS COOPERATIVES  
12 
AND CREDIT COOPERATIVES 
13 
SEC. 155. Coverage. - This Chapter shall apply to credit cooperatives 
14 
and credit and savings cooperatives, including multi-purpose cooperatives and 
15 
federations. The provisions of the other chapters of this Code shall apply 
16 
suppletorily except insofar as this Chapter otherwise provides. 
17 
SEC. 156. Purposes and Objectives. - Cooperatives engaged solely in 
18 
credit or in both credit and savings services, owned and operated by its 
19 
members, shall have the following purposes and objectives: 
20 
a. To encourage savings among its members; 
21 
b. To provide loans for productive or provident purposes to its members and 
22 
related services to enable its members to maximize the benefit from such 
23 
loans. 
24 
c. To promote the cooperatives engaged in credit and/or credit and savings 
25 
as preferred financial institutions among Filipinos; and 
26 
d. To promote the safe, sound, stable, and sustainable operations of 
27 
cooperatives engaged in credit and/or  credit and savings by regulating 
28 
and supervising their operations and curtailing or preventing any act or 
29 
practice which is prejudicial to the interests of their members and the 
30 
general public. 
31 
SEC. 157. Regulation and Supervision of Cooperatives Engaged in 
32 
Credit and/or Credit and Savings. - Pursuant to its powers, functions, and 
33 
responsibilities under Republic Act No. 11364, the Authority shall exercise 
34 


 
81 
regulatory powers and supervision over the operations of the cooperatives 
1 
engaged in credit and/credit and savings. 
2 
The Authority shall, in consultation with the concerned government 
3 
agencies and cooperative sector, issue appropriate rules and regulations 
4 
pertaining to the provisions of this Chapter. 
5 
 
CHAPTER XXVII. ELECTRIC COOPERATIVES 
6 
SEC. 158. Coverage. - The provisions of this Code shall apply to all 
7 
electric cooperatives registered with the Authority. This shall also cover new 
8 
distribution utilities that will register with the Authority. 
9 
Electric cooperatives may undertake power generation utilizing 
10 
renewable energy sources, including hybrid systems, acquisition and operation 
11 
of subtransmission or distribution as its primary purposes. 
12 
SEC. 159. Registration of Electric Cooperatives. - The registration of 
13 
an electric cooperative with the Authority under this Code shall be submitted 
14 
to the members for approval through a referendum, wherein the required 
15 
number of votes for registration with the Authority shall be twenty per centum 
16 
(20%) of all members entitled to vote. 
17 
SEC. 160. Voting Requirement for Registration. – In compliance with 
18 
the referendum as a voting procedure, the required number of votes for 
19 
registration with the Authority shall be a majority of all members entitled to 
20 
vote. 
21 
SEC. 161. Documents to be Submitted for Registration with the 
22 
Authority. - For purposes of registration with the Authority, electric 
23 
cooperatives registered with other regulatory agencies shall submit the 
24 
following documents: 
25 
a. Copy of the Board Resolution certifying to the result of the vote approved 
26 
through a referendum approving the registration of such entities with the 
27 
Authority in compliance with Section 159; 
28 
b. Certified copy of the articles of cooperation and bylaws as required by the 
29 
Authority; 
30 
c. Duly audited financial statements for the past two (2) years; 
31 
d. List of names of the incumbent Board of Directors and their addresses 
32 
certified by the Board Secretary and attested by the Chairperson; 
33 


 
82 
e. Within six (6) months from the registration, the Treasurer shall submit a 
1 
sworn statement of the authorized share capital, the subscribed share 
2 
capital of members, and the amount of paid-up share capital received by 
3 
the Treasurer; and 
4 
f. Bonds of accountable officers. 
5 
SEC. 162. Registration Options of Electric Cooperatives. - Electric 
6 
Cooperatives registered with the National Electrification Administration (NEA) 
7 
under Presidential Decree No. 269, as amended, which opt not to register with 
8 
the Authority are allowed to retain the word “cooperative” in their registered 
9 
names: Provided, that they shall not be entitled to the benefits and privileges 
10 
under this Code. 
11 
SEC. 163. Role of the Energy Regulatory Commission. - All rates and 
12 
tariffs of electric cooperatives registered under the Authority shall be subject to 
13 
the rules on application and approval of the Energy Regulatory Commission for 
14 
distribution utilities. 
15 
SEC. 164. Effects of Registration with the Authority. - 
16 
a. Upon the effectivity of this Code, electric cooperatives that are duly 
17 
registered with the Authority, and issued a Certificate of Registration, shall 
18 
be covered by the provisions of this Code as well as future rules and 
19 
issuances of the Authority; Provided, that electric cooperatives shall 
20 
remain under the supervisory powers of the NEA, pursuant to Presidential 
21 
Decree (PD) No. 269, as amended, and other existing laws; Provided, 
22 
further, that provisions of this Code consistent with PD No. 269, as 
23 
amended, shall apply suppletorily. 
24 
 
25 
b. Electric cooperatives registered with the Authority are entitled to 
26 
congressional allocations, grants, subsidiaries, and other financial 
27 
assistance for rural electrification which can be coursed through the 
28 
Department of Energy, National Electrification Administration, or local 
29 
government units, as may be appropriate. The electric cooperatives 
30 
registered under this Code can avail of the financial services and technical 
31 
assistance provided by government financial institutions and technical 
32 
development agencies on terms respecting their independence as 
33 
autonomous cooperatives; 
34 
c. All condoned loans, subsidies, grants, and other assistance shall form part 
35 
of the donated capital and funds of the electric cooperatives and, as such, 
36 
it shall not be sold, traded, nor be divided into shareholdings at any time. 
37 
The donated capital/fund shall be valuated for the sole purpose of 
38 
determining the equity participation of the members: Provided, That in the 
39 


 
83 
case of dissolution of the cooperative, said donated capital shall be subject 
1 
to escheat; and 
2 
d. Electric cooperatives registered and confirmed with the Authority under 
3 
Republic Act No. 6938, Republic Act No. 6939, and Republic Act No. 9520 
4 
are hereby deemed registered under this Code. 
5 
SEC. 165. Share Capital in the Electric Cooperatives. - The electric 
6 
cooperatives shall issue and distribute share certificates under the name of 
7 
each of their members, taking into consideration their previous equity 
8 
contributions, the amortization component through the payments made, 
9 
capital build-up, and other capital contributions. 
10 
The NEA shall, within ten (10) days upon final completion of 
11 
reconciliation of relevant loan accounts with the electric cooperative concerned, 
12 
issue a certification on the aggregate amount of payments made on the 
13 
principal component of the amortizations, as the basis for the issuance of 
14 
equity share certificates by the electric cooperatives to its Member-Customer-
15 
Owners (MCOs) on record. 
16 
The ERC shall, within forty-five (45) days from the close of each fiscal 
17 
year, issue a certificate to the electric cooperative concerned on the total 
18 
amount collected for capital contributions from the MCOs for such period, for 
19 
which equity share certificate will be issued. 
20 
No share capital certificate shall be issued to a subscriber until the full 
21 
amount of his/her subscription together with interest and expenses, if any is 
22 
due, has been paid. The distribution of share capital certificates shall be done 
23 
annually preferably during the General Assembly meeting.  
24 
In case of loss or destruction, the electric cooperative may issue a 
25 
duplicate certificate, if such certificate is proven to have been lost, destroyed, 
26 
defaced, mutilated, torn or is surrendered to the electric cooperative upon 
27 
execution and submission by a member of an Affidavit of Loss or such other 
28 
documents evidencing defacement/mutilation or surrender of such share 
29 
capital certificate.  
30 
 
CHAPTER XXVIII. FOREIGN PARTNERSHIPS 
31 
SEC. 
166. 
Engagement 
of 
Foreign 
Cooperatives 
in 
Local 
32 
Cooperatives. - Foreign cooperatives may invest, partner with, or enter into 
33 
joint ventures with local federations: Provided, that they are recognized by 
34 
international coalitions of cooperatives or by the relevant authority in the 
35 
country of origin, as well as registered with the Authority: Provided, further,  
36 
that they comply with all relevant laws allowing them to do business in the 
37 


 
84 
Philippines: Provided, finally, that their engagement with local cooperatives 
1 
shall be subject to an agreement which shall be submitted for the approval of 
2 
the Authority, pursuant to its implementing rules and regulations. 
3 
Foreign cooperatives shall transact with local cooperatives must comply 
4 
with Philippine taxation laws, the Anti-Money Laundering Act, and other 
5 
pertinent laws. Further, foreign cooperatives shall not interfere, directly or 
6 
indirectly, in the management and internal affairs of the local cooperatives in 
7 
accordance with the generally accepted cooperative principles of independence 
8 
and autonomy, notwithstanding that local cooperatives shall be one hundred 
9 
per centum (100%) wholly owned and controlled by Filipinos. 
10 
SEC. 167. Limitations. – The equity or share capital of the foreign 
11 
cooperative shall not exceed forty per centum (40%) of the total equity or 
12 
subscribed share capital of the partnership or federation, as the case may be. 
13 
 
CHAPTER XXIX. MISCELLANEOUS PROVISIONS 
14 
SEC. 168. Compliance With Other Laws. – All cooperatives duly 
15 
registered under this Code shall, at all times, be subject to all relevant laws, 
16 
rules and regulations, as well as issuances and directives issued by a duly 
17 
authorized government regulatory body in exercise of its jurisdiction. 
18 
This notwithstanding, cooperatives that are registered or applying for 
19 
specific licenses with other regulatory agencies must comply with the 
20 
governance requirements of said agency to operate or function as such. 
21 
SEC. 169. Registry of Cooperatives. - The Authority shall keep a 
22 
registry which shall contain a chronological entry of the name of every 
23 
cooperative registered, suspended, dissolved, or cancelled under this Code 
24 
together with its relevant information. The Authority shall publish and post on 
25 
its website a list of existing cooperatives, cooperatives under dissolution, 
26 
cooperatives under suspension, and those whose registration are cancelled 
27 
during the year together with such information on each of them, as may be 
28 
prescribed in the rules and regulations. 
29 
SEC. 170. Settlement of Disputes, Conciliation, Mediation, and 
30 
Arbitration Proceedings. - Disputes among members, officers, directors, and 
31 
committee members, and intra-cooperative, inter-cooperative, intra-federation 
32 
or inter-federation disputes shall, as far as practicable, be settled amicably in 
33 
accordance with the conciliation or mediation mechanisms embodied in the 
34 
bylaws of cooperatives and in such other applicable laws. 
35 


 
85 
The Conciliation-Mediation Committee of the cooperative shall facilitate 
1 
the amicable settlement of intra-cooperative disputes or disputes among 
2 
members, officers, directors, and committee members. 
3 
Should such conciliation or mediation proceeding fail, the party may 
4 
settle the dispute through arbitration or adjudication: Provided, however, That 
5 
before any party can validly file a complaint with the Authority for voluntary 
6 
arbitration or adjudication, it must first secure a certification from its 
7 
Conciliation-Mediation Committee and from the cooperative union or 
8 
federation to which it is affiliated that despite all efforts to settle the issues, the 
9 
conciliation-mediation proceeding failed. 
10 
Once the arbitrators or the appropriate adjudication division acquires 
11 
jurisdiction over the case, it shall have exclusive jurisdiction. The decision of 
12 
the arbitrator shall be final and executory. For this purpose, the Authority shall 
13 
create a database of qualified arbitrators which shall also be posted in its 
14 
official website 
15 
Decisions rendered by the Authority in the exercise of its adjudicatory 
16 
powers shall be appealable to the Court of Appeals in accordance with the 
17 
applicable rules.  
18 
In case of election-related issues, the aggrieved party may elevate the 
19 
case for adjudication to the proper regional office of the Authority in accordance 
20 
with the CDA Omnibus Rules of Procedure without undergoing alternative 
21 
dispute resolution. 
22 
Settlement of disputes of electric cooperatives shall be governed by the 
23 
provisions of PD No. 269, as amended, and other applicable laws. 
24 
SEC. 171. Joint Congressional Oversight Committee on Cooperative 
25 
(JCOCC). - There is hereby created a Joint Congressional Oversight Committee 
26 
composed of the Chairperson of the Senate Committee on Cooperatives and the 
27 
Chairperson of the House Committee on Cooperatives Development, with four 
28 
(4) members each from both Houses. The said members shall be duly appointed 
29 
by the Senate President and the Speaker of the House of Representatives from 
30 
the members of the respective committee.  
31 
The Joint Oversight Committee shall monitor the proper implementation 
32 
of the rules and regulations of this Code. 
33 
SEC. 172. Appropriations. – The amount necessary to carry out the 
34 
provisions of this Code shall be included in the annual General Appropriations 
35 
Act. 
36 
SEC. 173. Issuance of Injunctive Relief on the Authority. - No 
37 
restraining order or injunction shall be issued by the court, other than the 
38 


 
86 
Court of Appeals or Supreme Court, enjoining the Authority from examining 
1 
and investigating cooperatives subject to supervision or examination by the 
2 
Authority.  
3 
 
CHAPTER XXX. FINAL PROVISIONS 
4 
SEC. 174. Implementing Rules and Regulations. – Within ninety (90) 
5 
days from the effectivity of this Act, the Authority, in coordination with relevant 
6 
government agencies, shall issue the rules and regulations to implement this 
7 
Code. 
8 
SEC. 175. Penal Provisions. - The following acts or omissions affecting 
9 
cooperatives are hereby prohibited: 
10 
a. The use of the word “cooperative” shall not be allowed unless authorized 
11 
under this Code. However, organizations registered with other government 
12 
agencies are allowed to retain the word “cooperative” in their registered 
13 
names: Provided, that said organizations have interests, affiliation, 
14 
collaboration, and/or partnership with a cooperative or the cooperative 
15 
sector; Provided, further, that if said organizations shall register with the 
16 
Securities and Exchange Commission (SEC), it should register as a non-
17 
stock, non-profit entity and shall affix the word “Incorporated” or “Inc.” to 
18 
its business name; Provided, finally, that these organizations shall not be 
19 
entitled to the benefits and privileges under this Code. 
20 
In case of violation, the penalty of imprisonment of not less than two (2) 
21 
years nor more than five (5) years and a fine not exceeding Two hundred 
22 
thousand pesos (P200,000.00) or both at the discretion of the court, shall 
23 
be imposed, upon conviction, on the individual(s) or, in the case of an 
24 
organization, its officers and directors. 
25 
The Authority may, motu proprio, file complaints for violation of this 
26 
provision. 
27 
b. Any person who willfully attempts in any manner to evade or defeat tax in 
28 
violation of Sections 69 and 70 of this Code shall, in addition to the 
29 
payment of double the amount of the tax due, be punished by a fine of not 
30 
less than Five hundred thousand pesos (P500,000.00) but not more than 
31 
Ten million pesos (P10,000,000.00) and suffer imprisonment of not less 
32 
than six (6) years but not more than ten (10) years: Provided, That the 
33 
conviction or acquittal obtained under this Section shall not be a bar to 
34 
the filing of a civil suit for the collection of taxes; 
35 
c. Direct or indirect violation or circumvention of the provisions of Sections 
36 
69 and 70 of this Code committed by any public official or employee of any 
37 


 
87 
bureau, office or agency of the government that deprives, diminishes or in 
1 
any manner hinders or restricts any duly registered cooperative from the 
2 
full enjoyment of the exemption from the payment of the taxes, fees and 
3 
charges enumerated therein, shall upon conviction, suffer a penalty of not 
4 
less than seven (7) years but not more than twelve (12) years 
5 
imprisonment or a fine in the amount of not less than Five hundred 
6 
thousand pesos (P500,000.00) but not more than One million pesos 
7 
(P1,000,000.00) or both at the discretion of the court and shall further be 
8 
disqualified to hold any other office; 
9 
d. Direct or indirect interference or intervention by any public official or 
10 
employee in the internal affairs of a cooperative of which he is not a 
11 
member, such as, but not limited to, the following: 
12 
(1) Influencing the election or appointment of officers, directors, committee 
13 
members and employees through public or private endorsement or 
14 
campaign for or against any person or group of persons; 
15 
(2) Requiring prior clearance for any policy or decision within the 
16 
cooperative; 
17 
(3) Requesting or demanding for the creation of positions or organizational 
18 
units, or recommending any person for appointment, transfer, or 
19 
removal from his/her position; or 
20 
(4) Any other acts inimical or adverse to the autonomy and independence 
21 
of cooperatives. 
22 
e. A director, officer or committee member who violated the provisions of 
23 
Section 54 on the Liability of Directors, Officers and Committee Members, 
24 
Section 55 on the Disloyalty of a Director, and Section 56 on the Illegal 
25 
Use of Confidential Information shall upon conviction suffer a fine of not 
26 
less than Five hundred thousand pesos (P500,000.00) nor more than One 
27 
million pesos (P1,000,000.00) or imprisonment of not less than five (5) 
28 
years but not more than ten (10) years or both at the court’s discretion; 
29 
f. The following are considered offenses punishable by a penalty of 
30 
imprisonment of not less than one (1) year nor more than five (5) years or 
31 
a fine of not more than One hundred thousand pesos (P100,000.00) or 
32 
both at the discretion of the court: 
33 
(1) Omission or refusal to furnish any information, report or other 
34 
document that is required under this Code; 
35 
(2) Providing information, reports or other documents to the Authority that 
36 
are required under this Code which the person knows to be false or 
37 
misleading; 
38 


 
88 
(3) Omission or refusal to keep a book or registry under this Code or to 
1 
make the required entry therein; 
2 
(4) Making an entry required under this Code in a book or registry, which 
3 
the person knows to be false or misleading; 
4 
(5) Hindering an authorized person from making an inspection, audit, 
5 
examination or investigation required under this Code; 
6 
(6) Failure to comply with an order or written instructions issued or given 
7 
by the Authority; 
8 
(7) Violation of the provisions regarding transactions with a restricted 
9 
party; and 
10 
(8) Abetting, counseling, allowing, authorizing or commanding another 
11 
person to commit an offense punishable by this Code: Provided, That in 
12 
case the violator is a cooperative or juridical person, the penalty shall 
13 
be imposed on its directors and officers. 
14 
g. Any violation of any provision of this Code for which no penalty is imposed 
15 
shall be punished by imprisonment of not less than six (6) months nor 
16 
more than one (1) year and a fine of not less than Ten thousand pesos 
17 
(P10,000.00), or both at the discretion of the court. 
18 
In case of violation of any provision of this Code, the individual or 
19 
individuals, and in the case of organizations or government agencies, its 
20 
officers, and directors shall, upon conviction by a Court, each suffer a penalty 
21 
of not less than two (2) years but not more than five (5) years imprisonment or 
22 
a fine in the amount of not less than Fifty thousand pesos (P50,000.00), or both 
23 
at the discretion of the court. In the case of a public official or employee, the 
24 
offender shall upon conviction, suffer the accessory penalty of temporary 
25 
absolute disqualification. 
26 
SEC. 176. Administrative Sanctions. - The Authority shall conduct 
27 
investigations, file necessary charges, discipline, suspend and/or remove 
28 
erring officers and members of the cooperative for violation of cooperative laws, 
29 
rules, regulations, issuances of the Authority, the articles of cooperation, and 
30 
bylaws, after due process, and direct the General Assembly to replace the 
31 
suspended or removed officers. 
32 
Any violations on the procedures of the rules on adjudication shall 
33 
likewise be penalized under this Section. Such administrative sanctions shall 
34 
be implemented in accordance with the rules and regulations to be 
35 
promulgated by the Authority. 
36 


 
89 
SEC. 177. Printing and Distribution. - The National Printing Office 
1 
shall publish this Code in the Official Gazette in full within sixty (60) days from 
2 
the date of approval thereof. Copies of this Code shall be given to every 
3 
department, agency, and instrumentality of the National Government, 
4 
including regional, provincial offices, and local governments including 
5 
government-owned and controlled corporations. 
6 
SEC. 178. Interpretation and Construction. - In case of doubt as to 
7 
the meaning of any provision in this Code or the regulations issued in 
8 
pursuance thereof, the same shall be resolved liberally in favor of the 
9 
cooperatives and their members. 
10 
SEC. 179. Repealing Clause. - Except as expressly provided by this 
11 
Code, Presidential Decree No. 175, Republic Act No. 6938, Republic Act No. 
12 
9520, and all other laws, or parts thereof, inconsistent with any provision of 
13 
this Code shall be deemed repealed: Provided, That the provisions of Revenue 
14 
Regulation No. 20-2001, and all laws, decrees, executive orders, implementing 
15 
rules 
and 
regulations, 
BIR 
circulars, 
CDA 
memorandum 
circulars, 
16 
memorandum orders, letters of instructions, local government ordinances, or 
17 
parts thereof inconsistent with any of the provisions of this Act are hereby 
18 
repealed, amended, or modified accordingly; Provided, further, that nothing in 
19 
this Code shall eliminate, diminish, or reduce the powers, functions, authority, 
20 
and responsibilities of the NEA over electric cooperatives under PD No. 269, as 
21 
amended, and other existing laws; Provided, finally, that nothing in this Act 
22 
shall be construed or interpreted as diminishing the jurisdiction of the 
23 
Philippine Competition Commission under the PCA to conduct inquiry, 
24 
investigate, and hear and decide on cases involving any violation of the PCA 
25 
and other existing competition laws motu proprio or upon receipt of a verified 
26 
complaint from an interested party or upon referral by the concerned regulatory 
27 
agency. 
28 
SEC. 180. Transitory Provisions. – 
29 
a. All cooperatives registered with the Authority under Republic Act No. 
30 
6938, as amended by RA 9520, are hereby deemed registered under this 
31 
Code. 
32 
b. Registration of electric cooperatives with the Authority shall not be 
33 
considered as a transfer of ownership of its assets and liabilities nor shall 
34 
it constitute a change in the nature, structure, and status of the 
35 
cooperative. Said registration shall not result in the revocation of the 
36 
condoned loans under Republic Act No. 9136, otherwise known as the 
37 
Electric Power Industry Reform Act: Provided, That electric cooperatives 
38 
with existing loans shall not be subject to the control and supervision of 
39 
its creditors and shall only be limited to the fulfillment of each civil 
40 
obligations. 
41 


 
90 
c. The authority granted to non-cooperatives as training service providers 
1 
shall continue to be effective until their expiration or six (6) months from 
2 
the promulgation of the implementing rules and regulations of this Code, 
3 
whichever comes later. 
4 
SEC. 181. Ipso-Facto Clause. – Except as may be inconsistent with the 
5 
provisions of this Code, cooperatives are entitled to all privileges, benefits, and 
6 
exemptions granted to the cooperatives by prior laws, including R. A. No. 7160, 
7 
R.A. No. 6938 as amended, R.A. No. 9520, and other existing laws. 
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SEC. 182. Separability Clause. - Should any part of this Code be 
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declared unconstitutional, the validity of remaining provision hereof shall 
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remain in full effect. 
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SEC. 183. Effectivity Clause. - This Code shall take effect fifteen (15) 
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days from its publication in the Official Gazette or in a newspaper of general 
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circulation. 
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Approved, 
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