FIFTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
Third Regular Session 
) 
SENATE 
"'13 0 
S.B.No.~ (w 
Introduced By Senator Manuel "Lito" M. Lapid 
EXPLANATORY NOTE 
'1" 
HUV' 
The spirit of cooperativism runs contrary to any prolonged and extended 
discord within its ranks. As such, an efficient mechanism for settling disputes 
within and between cooperatives is necessary. The Philippine Cooperative Code of 
2008 ("Cooperative Code") institutes arbitration at the level of the Cooperative 
Development Authority ("CDA") as a dispute resolution mechanism thereby 
ensuring a quick process and a final and binding award. 
The method of arbitration implemented under the Cooperative Code is in 
accordance with the Alternative Dispute Resolution Act of 2004 (" ADR Act"). 
However, unlike the ADR Act where arbitral awards are final, executory, and non-
appealable, there is an express provision in the Cooperative Code allowing the 
appeal of an arbitral award before the Office of the President. 
This provision 
prolongs the process of resolution and, as such, runs contrary to both the spirit of 
cooperativism and the goals of arbitration as a method of dispute resolution. 
The present measure proposes the deletion of the appeal process to the Office 
of the President. This amendment will not prejudice the rights of the disputants 
because under the ADR Act there is a provision as to the method and grounds for 
how an arbitral award may be vacated. It should also be kept in mind that the 
arbitral award at the CDA level should be given great weight considering that the 
. voluntary arbiters are not only the persons familiar with the dispute but they are 
also the experts in the field of cooperatives. It is these experts who are equipped to 
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resolve disputes in a manner that will safeguard both the cooperatives' present 
concern and their long-term interests. 
Finally, the proposed amendment does not run contrary to the Chief 
Executive's power of supervision and control over the CDA. Arbitration and the 
supervision of voluntary arbiters at the CDA level is not one of the main powers, 
functions, and responsibilities of the CDA under its Charter. This function is only 
upon request of affected cooperatives and provided under the Cooperative Code -
not under the CDA Charter. Thus the Office of the President's power of supervision 
and control over the CDA's main duties, as defined under its Charter, is not 
diminished by this proposed measure. 
Hence, the undersigned sponsor urges the passage of the present measure. 
c;;A-O 
MANUEL "LITO" M. LAPID 
Senator 
[ 
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FIFTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
Third Regular Session 
) 
SENATE 
S.B. No. 
Introduced By Senator Manuel "Lito" M. Lapid 
AN ACT AMENDING ARTICLE 137 OF REPUBLIC ACT NO. 9520 
OTHERWISE KNOWN AS "AN ACT AMENDING THE COOPERATIVE CODE 
OF THE PHILIPPINES TO BE KNOWN AS THE 'PHILIPPINE COOPERATIVE 
CODE OF 200S'" 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
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SECTION 1. Article 137 of Republic Act No. 9520 otherwise known as " An 
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Act Amending the Cooperative Code of the Philippines to be known as the 
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Philippine Cooperative Code of 2008" is hereby amended to read as follows: 
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"ART. 
137. Settlement of Disputes, 
Conciliation, 
and 
Mediation 
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Proceedings. -
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xxx 
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"The jurisdiction of the voluntary arbitrators shall be exclusive and 
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original and their decisions [shall be appealable to the Office of the 
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President.] SHALL BE IMMEDIATELY FINAL AND EXECUTORY. 
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The Authority shall issue and adopt the proper rules of procedure 
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governing arbitration as the primary and exclusive mode for dispute 
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resolution in accordance with the Alternative Dispute Resolution Act 
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of 2004. 
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"For this purpose, the Authority shall constitute a list of qualified 
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voluntaryarbih·ators." 
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SEC. 
2. 
The Cooperative Development Authority shall formulate the 
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necessary, rules and regulations for the effective implementation of this Act. 
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SEC. 3. If any provision or part of this Act shall be declared invalid or 
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unconstitutional, the remaining parts or provisions not affected shall remain in full 
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force and effect. 
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SEC. 4. All laws, decrees, executive orders, issuances, rules and regulations 
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or parts thereof inconsistent with the provisions of this Act are hereby repealed or 
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modified accordingly. 
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SEC. 5. This Act shall take effect fifteen (15) days after its publication in the 
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Official Gazette or in at least two (2) newspapers of general circulation. 
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Approved, 
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