REPUBLIC ACT 9520 – PHILIPPINE COOPERATIVE CODE ACT OF 2008

What is cooperative? oriented organizations to further

the attainment of any of the
 According to Article 3 of the Republic
foregoing objectives
Act No. 9520 (RA 9520), a cooperative
is an autonomous and duly registered What are the types of cooperatives?
association of persons, with a common
1. Credit Cooperative – one that
bond of interest, who have voluntarily
promotes and undertakes savings and
joined together to achieve their social,
lending services among its members.
economic, and cultural needs and
It generates a common pool of funds
aspirations by making equitable
in order to provide financial assistance
contributions to the capital required,
to its members for productive and
patronizing their products and services
provident purposes;
and accepting a fair share of the risks
2. Consumers Cooperative – is one of
and benefits of the undertaking in
the primary purposes of which is to
accordance with universally accepted
procure and distribute commodities to
cooperative principles.
members and non-members;
What are the objectives and goals of a 3. Marketing Cooperative – one which
cooperative? engages in the supply of production
inputs to members and markets their
 Article 7, RA 9520 provides that the
products;
primary objective of every cooperative
4. Producers Cooperative – is one that
is to help improve the quality of life of
undertakes joint production whether
its members. Towards this end, the
agricultural or industrial. It is formed
cooperative shall aim to:
and operated by its members to
a. Provide goods and services to
undertake the production and
its members to enable them to
processing of raw materials or goods
attain increased income,
produced by its members into finished
savings, investments,
or processed products for sale by the
productivity, and purchasing
cooperative to its members and non-
power, and promote among
members. Any end product or its
themselves equitable
derivative arising from the raw
distribution of net surplus
materials produced by its members,
through maximum utilization of
sold in the name and for the account
economies of scale, cost-sharing
of the cooperative, shall be deemed a
and risk-sharing;
product of the cooperative and its
b. Provide optimum social and
members;
economic benefits to its
5. Service Cooperative – one which
members;
engages in medical and dental care,
c. Teach them efficient ways of
hospitalization, transportation,
doing things in a cooperative
insurance, housing, labor, electric light
manner;
and power, communication,
d. Propagate cooperative practices
professional and other services;
and new ideas in business and
6. Multipurpose Cooperative – one
management;
which combines two (2) or more of the
e. Allow the lower income and less
business activities of these different
privileged groups to increase
types of cooperatives;
their ownership in the wealth of
7. Advocacy Cooperative – a primary
the nation; and
cooperative which promotes and
f. Cooperate with the government,
advocates cooperativism among its
other cooperatives and people-
members and the public through
 socially oriented projects, education to housing for the benefit of its regular
and training, research and members who actively participate in
communication, and other similar the savings program for housing. It is
activities to reach out to its intended co owned and controlled by its
beneficiaries; members;
8. Agrarian Reform Cooperative – one 17.Insurance Cooperative – one
organized by marginal farmers engaged in the business of insuring
majority of which are agrarian reform life and poverty of cooperatives and
beneficiaries for the purpose of their members;
developing an appropriate system of 18.Transport Cooperative – one which
land tenure, land development, land includes land and sea transportation,
consolidation or land management in limited to small vessels, as defined or
areas covered by agrarian reform; classified under the Philippine
9. Cooperative Bank – one organized maritime laws, organized under the
for the primary purpose of providing a provisions of this Code;
wide range of financial services to 19.Water Service Cooperative – one
cooperatives and their members; organized to own, operate and
10.Dairy Cooperative – one whose manage waters systems for the
members are engaged in the provision and distribution of potable
production of fresh milk which may be water for its members and their
processed and/or marketed as dairy households;
products; 20.Workers Cooperative – one
11.Education Cooperative – one organized by workers, including the
organized for the primary purpose of self-employed, who are at same time
owning and operating licensed the members and owners of the
educational institutions enterprise. Its principal purpose is to
notwithstanding the provisions of provide employment and business
Republic Act No. 9155, otherwise opportunities to its members and
known as the Governance of Basic manage it in accordance with
Education Act of 2001; cooperative principles; and
12.Electric Cooperative – one organized 21.Other types of cooperatives, as
for the primary purposed of may be determined by the Authority.
undertaking power generations,
What are the benefits and privileges of
utilizing renewable energy sources,
a cooperative?
including hybrid systems, acquisition
and operation of subtransmission or 1. Cooperatives shall enjoy the privilege
distribution to its household members; of depositing their sealed cash boxes
13.Financial Service Cooperative – or containers, documents or any
one organized for the primary purpose valuable papers in the safes of the
of engaging in savings and credit municipal or city treasurers and other
services and other financial services; government offices free of charge, and
14.Fishermen Cooperative – one the custodian of such articles shall
organized by marginalized fishermen issue a receipt acknowledging the
in localities whose products are articles received duly witnessed by
marketed either as fresh or processed another person;
products; 2. Cooperatives organized among
15.Health Services Cooperative – one government employees,
organized for the primary purpose of notwithstanding any law or regulation
providing medical, dental and other to the contrary, shall enjoy the free
health services; use of any available space in their
16.Housing Cooperative – one agency, whether owned or rented by
organized to assist or provide access the Government;
3. Cooperatives rendering special types 10.Cooperatives shall enjoy the privilege
of services and facilities such as cold of being represented by the provincial
storage, ice plant, electricity, or city fiscal or the Office of the
transportation, and similar services Solicitor General, free of charge,
and facilities shall secure a franchise except when the adverse party is the
therefor, and such cooperatives shall Republic of the Philippines.
open their membership to all persons 11.Cooperatives shall have the
qualified in their areas of operation; preferential right in the management
4. In areas where appropriate of the canteen and other services
cooperatives exist, the preferential related to the operation of the
right to supply government institutions educational institution where they are
and agencies rice, corn and other employed: Cooperatives organized by
grains, fish and other marine products faculty members and employees of
meat, eggs, milk, vegetables, tobacco educational institutions Provided, that
and other agricultural commodities such services are operated within the
produced by their members shall be premises of the said educational
granted to the cooperatives institution; and
concerned; 12.The appropriate housing agencies and
5. Preferential treatment in the allocation government financial institutions shall
of fertilizers and in rice distribution create a special window for financing
shall be granted to cooperatives by housing projects undertaken by
the appropriate government agencies; cooperatives, with interest rates and
6. Preferential and equitable treatment in terms equal to, or better than those
the allocation or control of bottomries given for socialized housing projects.
of commercial shipping vessels in This financing shall be in the form of
connection with the shipment of goods blanket loans to qualified
and products of cooperatives; cooperatives, without need for
7. Cooperatives and their federations, individual processing.
such as market vendor cooperatives,
Who can be a member of a cooperative?
shall have preferential rights in
management of public markets and/or  Any natural person, who is a citizen of
lease of public market facilities, stall or the Philippines and is of legal age or a
spaces; juridical person like a cooperative or
8. Credit cooperatives and/or federations non-profit organization is qualified to
shall be entitled to loans, credit lines, be a member of a cooperative,
rediscounting of their loan notes, and provided further that the person meets
other eligible papers with the the qualifications prescribed in the
Development Bank of the Philippines, bylaws of the cooperative he/she
the Philippine National Bank, the Land wishes to be a member of (Article 26,
Bank of the Philippines and other RA 6938). However, minors may
financial institutions except the organize laboratory cooperatives
Central Bank of the Philippines; (Article 26, RA 9520).
9. Cooperatives transacting business
with the Government of the Philippines What are the kinds of membership in a
or any of its political subdivisions or cooperative?
any of its agencies or a. A regular member is one who has
instrumentalities, including complied with all the membership
government-owned and controlled requirements and entitled to all the
corporations shall be exempt from pre- rights and privileges of membership as
qualification bidding requirements; stated in the Cooperative Code and
and the cooperative by laws.
 b. An associate member has no right to  Yes. Under Article 30, RA 9520, a
vote and be voted upon and is entitled member may withdraw his
only to such rights and privileges membership from a cooperative by
provided by the cooperative's bylaws. giving a 60-day notice to the board of
directors.
When does the applicant for
membership in a cooperative acquire How to organize a cooperative?
his right as a member?
1st: Get organized.
 An applicant becomes a cooperative
 You must have at least 15 members to
member when his application is
do that. At once determine the
approved by the board of directors. He
common problems you would want
may exercise his rights as a member
solved and the basic needs you would
after he makes the payments that are
want provided for through a
due to the cooperative, as set forth by
cooperative. You may want to include
Article 28, RA 9520.
increasing your production, marketing
How is membership in a cooperative your produce, credit assistance, power
terminated? generation, banking or insurance and
other similar needs. Determining your
1. As provided under Article 30, RA 9520,
problems and needs will also help you
membership in a cooperative may be
classify the kind of cooperative you
terminated by reason of death or
will be organizing. Even before a
insanity of a member in a primary
cooperative is set up, a dedicated core
cooperative, or the insolvency or
group people who will do all the
dissolution of a member in a
organizational and paper works is a
secondary or tertiary cooperative.
must. From this core group, working
2. Membership may be terminated by a
communities may be formed to set
vote of the majority of all the
things moving. These committees may
members of the board of directors for
include membership, finance,
the following causes:
executive, secretariat to name a few.
a. When a member has not
patronized any of the services of 2nd: Reserve your proposed
the cooperative for an cooperative name.
unreasonable period of time as
 Secure and fill up Cooperative Name
may be previously determined by
Reservation Request Form (CNRRF).
the board of directors;
This must be submitted to CDA Central
b. When a member has continuously
Office or any of its Extension Office. A
failed to comply with his
reservation fee shall apply.
obligations;
c. When a member has acted in 3rd: Prepare a general statement
violation of the bylaws and the called an Economic Survey.
rules of the cooperative; and
d. For any act or omission injurious or  Economic Survey is a general
prejudicial to the interest or the statement describing, among others,
welfare of the cooperative. the structure and purposes of the
 In the above scenarios, such member proposed cooperative. The structure
shall be informed of the intended and actual staffing pattern shall
termination in writing and shall be include a bookkeeper. This should
given an opportunity to be heard indicate the area of operation, the size
before the board makes its decision. of membership and other pertinent
data in a format provided by the
May a member withdraw his Authority.
membership from a cooperative?
 4th: Prepare the cooperatives by (25%) of the authorized share capital
laws. has been subscribed, and at least
twenty-five per centum (25%) of the
 The by-laws contain the rules and
total subscription has been paid
regulations governing the operation of
should be executed and to be attached
the cooperative
to the articles of cooperation. The
5th: Prepare the articles of paid-up share capital shall not be less
cooperation. than fifteen thousand pesos
(P15,000.00).
 Mandatory contents of the articles of
cooperation are the following: 8th: Complete the Pre-Membership
(a) the name of the cooperative, which Education Seminar (PMES).
must include the word "cooperative";
 A prospective member of a primary
(b) the purpose or purposes and scope
cooperative must have completed a
of business for which the cooperative
Pre-Membership Education Seminar
is to be registered;
(PMES). You may contact the Regional
(c)the term of existence of
or Extension Office which has
cooperative;
jurisdiction over your proposed
(d) the area of operation and the
cooperative for technical assistance.
postal address of its principal office;
(e)the names, nationality and the 9th: Register your cooperative with the
postal addresses of the registrants; Cooperative Development Authority
(f) the common bond of membership; (CDA).
(g) The list of names of the directors
 Submit the following required
who shall manage the cooperative;
documents in four (4) copies:
and
1. Economic Survey;
(h)The amount of its share capital, the
2. Articles of Cooperation and By-
names and residences of its
Laws;
contributors, and a statement of
3. Surety bond of accountable officers;
whether the cooperative is primary,
4. Treasurer's Affidavit;
secondary or tertiary. The articles of
5. Approved Cooperative Name
cooperation shall be signed by each of
Reservation Slip; and
the organizers and acknowledged by
6. Certificate of PMES
them if natural persons, and by the
chairpersons or secretaries, if juridical Which government agency is charged
persons, before a notary public. with the promotion and development of
cooperative?
6th: Secure bond of accountable
officer(s).  The Cooperative Development
Authority (CDA) which was created by
 A surety bond should be secured from
RA 6939 is the government agency
a duly registered insurance or bonding
that has the obligation to promote and
company. Every director, officer and
help develop cooperatives. It is the
employee handling funds, securities or
government agency in charge of the
property on behalf of the cooperative
registration and regulation of
shall be covered by this. The board of
cooperatives (Article 5, par. 8, RA
directors shall determine the
9520).
adequacy of such bonds.
How many persons are needed to
7th: Execute Treasurer’s Affidavit.
organize a cooperative?
 A sworn statement of the treasurer
 Article 10, RA 9520 requires not less
elected by the subscribers showing
than fifteen (15) natural persons, who
that at least twenty-five per centum
 are Filipino citizens, and of legal age determined by the CDA, as provided
are needed to organize and register a under Article 13, RA 9520.
cooperative. They must also have a
common bond of interest and are
actually residing or working in the
intended area of operation.
What is the remedy of an applicant for
his registration if his application for
registration is denied by the CDA?
 The remedy provided under Article 16,
RA 9520 is for the applicant to appeal
to the Office of the President within 90
days from receipt of the notice of
denial, provided that failure on the
part of the Office of the President to
act on the appeal within 90 days from
filling thereof shall mean the approval
of the application.
How to run a cooperative?
 Article 37, RA 9520 dictates that the
direction and management of the
affairs of a cooperative shall be vested
in a board of directors.
What is the composition of BOD?
 According to Article 37, RA 9520, the
board is composed of not less than
five (5) nor more than fifteen (15)
members elected by the general
assembly.
What is the life term of cooperative?
 The life term of a cooperative is found
under Article 13, RA 9520. The
provision states that a cooperative has
a basic term of fifty (50) years from
the date of registration unless sooner
dissolve or unless said period is
extended.
May the term of a cooperative be
extended?
 Yes, the term may be extended for
another fifty (50) years provided that
no extension may be made earlier
than 5 years prior to the original or
subsequent expiry date of the term or
unless there are justifiable reasons for
an earlier extension as may be