Eulogio T. Castillo, PhD, Professor
Administrator, Cooperative Development Authority
Co-operatives in the Philippines can still be generally categorized as in the state towards building institutional viability. While there are some large operating cooperatives, the over-all picture of success remains wanting. In December, 2005, only 41% of the 71,248 registered cooperatives were operating. Of the operating cooperatives, 20% were able to submit the required annual reports and 7% did not have financial statements at all (Table 1). Ten years after, in December, 2015, of the more than 24,000 registered co-operatives, only 9.826 co-operatives complied with the reportorial requirements of the Cooperative Development Authority (CDA). Of the compliant co-operatives, 81% were in the micro and small categories. The large co-operatives which comprised 4% in number, controls 72% of the combined assets of the reporting co-operatives (Table 2 and Figures 1 and 2).
In addition, the spirit of co-operative although is engrained in the culture as exemplified by the practice of the pristine “bayanihan” system of doing farm, household, and community chores, co-operatives have yet to demonstrate considerable influence in promoting national social and economic development.
A lot of reasons had been advanced as to the causes of the state of cooperativism ranging from political, social, economic, cultural, to business in nature. Careful analysis of the situation, however, would lead one to conclude that the real culprit is the absence of a clear understanding of the fundamentals and importance of cooperatives as an institution of change for national social and economic development due to lack of an organized and systematic national education system on cooperatives.
2.0 IMPORTANCE OF EDUCATION IN CO-OPERATIVE DEVELOPMENT
The importance of education in co-operative development is well-articulated in the literature. In 1828, Dr. William King in the Cooperator argued that the first and last step to make a co-operative successful is to remove the ignorance of members by every means in their power. He considered the acquisition of knowledge as the first principle of cooperation (1). The Rochdale Society of Equitable Pioneers (RSEP) of 1844, the recognized first successful cooperative society in the world, included in its rules that a certain percentage of the Society’s profit should be allocated to education. In 1853, under the Industrial and Provident Societies Act of England, cooperative societies were required to allot 10% of their profit to education. This amount, however, was modified to 2.5% with the objection of the Registrar (2).
A century after the RSEP was organized, the rules and order of the Society were reformulated during the Congress of International Alliance (ICA) which lead to the re-statement of the Society’s co-operative principles of 1844 and the declaration of ICA cooperative principles of 1937 (2). The reformulation included the promotion of education as one of the principles of co-operation. The subsequent reformulations of the principles by the ICA in 1966 (4) and 1995 (6), maintained the emphasis on education and training. The ICA Congress of 1995 declared that “co-operatives should provide education and training for their member, elected representatives, managers and employees so they can effectively contribute to the development of their co-operatives; co-operatives should also inform the general public, particularly the young people and opinion leaders about the nature and benefits of co-operation.”
3.0 THE PHILIPPINE PROGRAMS ON CO-OPERATIVE EDUCATION
The importance of education in co-operative development is also well-recognized in the Philippines. The current practice of allocating 10% of the net surplus of primary cooperatives for co-operative education and training fund (CETF) is parallel to the initial practice of RSEP (1844) of allocating 10% of Society’s profit to education. The education and training program of British Co-operation, however, has evolved into a unified effort under the Co-operative College, an educational institution run by the Co-operative Union. The Philippines has yet to evolve a similar unified and integrated system of co-operative education as shown by the disjointed education and training program under various legal frameworks on co-operatives.
3.1 Under Republic Act (RA) 821 (1952)
RA 821 (6) created the Agricultural Credit and Co-operative Financing Administration (ACCFA) to promote, organize, supervise, and finance the Farmers Co-operative Marketing Associations (FACOMAs), among others. The law granted special powers to ACCFA “to take charge of all government activities relating to the promotion, organization and supervision of co-operative associations in rural areas particularly to promote education in the principles and practices of co-operative production, marketing and credit, among farmers.”
3.2 Under RA 2023 (1957)
Under RA 2023 (7), Non-Agricultural Co-operative Law, a Central Co-operative Education Fund (CCEF) was established to support the education, training, and promotion of non-agricultural co-operatives such as credit unions. Member co-operatives then were required to contribute 5% of their net savings to CCEF. The Fund was administered by the Central Co-operative Education Board (CCEB) composed of Administrator of the Co-operative Administration Office (CAO), as chairman and representatives from Agricultural Credit and Cooperatives Institute, University of the Philippines, Los Baños (ACCI-UPLB), Philippine National Co-operative Bank (PNCB), and six cooperative societies and federations, as members.
3.3 Under ACCI (1960)
In 1960, by virtue of the Far East Agricultural Credit Workshop Resolution attended by delegates from Cambodia, China, Indonesia, Japan, Korea, Thailand, Vietnam and the Philippines held in Baguio City on June 8, 1956 (8), ACCI-UPLB was organized as a regional center for the training of officials and employees of government agencies dealing with the promotion and supervision of agricultural credit and co-operative organizations; for the holding of seminars and workshops to discuss operations, management and problems of these organizations; for the conduct of scientific research specifically directed towards solving current problems of credit and cooperative agencies and organizations; and for providing extension services, including advisory and consultative services to co-operatives and credit organizations in the rural area. It was then a semi-autonomous institution headed by a Director and was placed under the University of the Philippines for supervision. Policy matters over the Institute were exercised by an Advisory Council, except with respect to academic polices of the University of the Philippines. The Advisory Council then was composed of the Dean of the College of Agriculture as Chairman, and six representatives from Central Bank of the Philippines (CBP), Philippine National Bank (PNB), Development Bank of the Philippines (DBP), ACCFA, Department of Agriculture and National Resources (DANR), and other interested institutions, as members
Since 1960 ACCI has been conducting various training, instruction, research, extension (including training) on co-operatives and agricultural credit.
In 1960-2004, ACCI-UPLB was able to conduct 744.32 man-years of training for about 20,655 participants or an average training session of 16.92 man-years per year for the said period (Table 3) for various sectors such as government, banking, co-operative, and international.
b. Instruction Program.
ACCI has been offering Master’s degree programs in co-operatives; Master of Management major in Co-operative Management (MM-CM) (see Appendix 1 for the Curriculum), and Master of Public Affairs major in Co-operative Management (MPAf-CM) starting 1998 (see Appendx 2 for the Curriculum). The MM-CM was a two-year non-thesis program with 42 units of course works including the three units of field studies. It was offered in 1990 until 2001. MPAf-CM, on the other hand, is a one-year program (two semesters and one summer) with 31 units of course requirement. The enrollment in the masteral degree programs, however, has not been very encouraging due to various reasons such as the perception on the market for graduates, admission hurdles, and cost of education.
Research is a major concern of ACCI-UPLB. Research activities support the instruction, training, and the extension programs of the Institute. For the period 1960-2004, ACCI had conducted about 90 research programs/projects/studies in the fields of cooperatives, agricultural credit, rural banking, and co-operative rural banking.
3.4 Under Martial Law Period (1972-1986)
During martial law period, Presidential Decree (PD) 175 (9) and Letter of Instruction (LOI) 23 (10) called for the strengthening of co-operative movement in the Philippines. A pillar of the strengthening program was a continuous education and training for Samahang Nayon (SN) and cooperative members. The program together with the disciplinary measures and the capital build-up programs through the Barangay Guarantee Fund (BGF) and Barangay Savings Fund (BSF) formed the foundation of the co-operative development initiatives.
The education and training aspect of the program under PD 175 and LOI 23 included seminars for government officials, trainors, fieldworkers, Samahang Nayon (SN) officers, agricultural counselors, and co-operative members.
Under Phase I of the SN Education and Training Program (SN-ETP) seminars on the Co-operative Development Program were conducted for Regional Directors and staff; provincial officials, church leaders, and civic organizations; and municipal officials and barangay captains. Trainings were conducted for provincial trainors, field workers, and volunteer barrio workers. Pre-membership education program were conducted for barrio residents. For the target audience, at least one (1) day was allotted for seminars, 16 days for trainings, and pre-membership education program within three-week time for barrio residents (11).
Under Phase II of SN-ETP, trainings were conducted for provincial trainors, field workers, SN officers, and agricultural counselor; seminars for provincial and municipal rural development councils and continuing education for members of the SN through the Pamantasan sa Nayon and School-on-the-Air programs. The education and training program had a total duration of 107 weeks (12).
All the education and training programs under PD 175 and LOI 123 were discontinued with the passage of RA 6938 and RA 6936.
3.5 Under RA 6938 and 6939 (1990)
The current legal frameworks for the development of co-operatives are RAs 6938 (13) and 6939 (14). RA 6938 (Article 87) provides that not more that 10% of the net surplus shall be allocated to co-operative education and training fund (CETF). One-half of this amount may be retained by the co-operative for its education and training activities while the other half shall be remitted to the apex organization of which the co-operative is a member.
RA 6939 (Section 11) provides, among others, that the history, philosophy, principles and practices of co-operatives and their role as a factor in the national economy shall be disseminated both in the formal and non-formal education and that SCUs shall provide technical assistance and guidance to co-operatives in the communities where they operate, upon request.
3.6 Under RA 9520 (2008) and Revised IRR of 2014
Republic Act (RA 9250), the Cooperative Code of 2008, and its Revised Implementing Rules and Regulation (IRR) provide for the training requirements for officers of the cooperative (Article 44, RA 9520). The IRR of RA 9520 specified the training requirements of Board of Directors, Secretary, Treasurer, Election Committee, Audit Committee, Ethics Committee, Mediation and Conciliation Committee, the General Manager or Chief Executive Officer, and other committees created by the General Assembly (Rule 7, Section 5 of RA 9520 Revised IRR).
The implementation of such training requirements is enforced by Cooperative Development Authority under Memorandum Circular (CDA MC 2015-09).
The required training requirements for micro-cooperatives (with total assets of ₱3 Million and less, and for all other categories of cooperatives with assets of more than ₱3 Million) were specified. For micro-coops, the officers are required to undergo training on Fundamentals of Cooperatives (at least 8 hours) and Governance and Management of Cooperatives (at least 8 hours). All other cooperatives with total assets of more than ₱3 Million are required to undergo training on the two modules mentioned above of at least 16 hours for each module.
Additional trainings are required for officers of co-operatives engaged in savings and credit with deposit liabilities of at least ₱5 Million on Financial Management (at least 8 hours), Risk Management (at least 4 hours), and Credit Management (at least 4 hours).
The content of the training program is prescribed by the CDA in consultation with accredited training service providers. The CDA accredits training service providers which include co-operative federations and unions, local co-operative development offices, training institutions, and national government agencies with programs on cooperative.
Advocacy co-operative which promote and advocate co-operativism through socially – oriented projects, education, training, research, communication and other similar activities may also be accredited as training service providers.
It is noted that the range of background of accredited training service providers (TSPs) yielded variability in the depth and width in the conduct of the training services. Such phenomena points to the need of a more homogenous and systematic conduct of training on co-operatives for effective and efficient co-operative management and governance.
4.0 THE STATE OF EDUCATION SYSTEM FOR CO-OPERATIVES
After about a century of experience in co-operativism and having enacted about six major laws on co-operatives, the country is still in search for an effective system of co-operative education for an accelerated co-operative development. The current practice of conducting education and training for co-operatives is characterized by the presence of a disjointed conduct of education at various levels of concerns.
41. At the National Level
The responsibility of promotion and education of the public on co-operative at the national level rests primarily on the national agency on co-operative, and to certain extent on the secondary and tertiary co-operative organizations. It has been observed that the responsibility of administering cooperative education and training, on the part of government, moves from one government agency to another as a new legal framework is passed into law as in the case of ACCFA, Agricultural Credit Administration (ACA), and Cooperative Administration Office (CAO) in the 1950s and 1960s; the Ministry of Local Government and Community Development (MLGCD) and Department of Agriculture (DA) in the 1970s and 1980s; and the CDA in the 1990s up to present. With this movement of responsibility and the wide scope of co-operatives ranging from banks, insurance, credit, agriculture, agrarian reform, labor, housing, transport, electric power, to a few, one can imagine the difficulty the government would encounter in establishing and managing an efficient and effective system of co-operative education and training on a nationwide scale. Besides, there is no apex co-operative organization to partner with government on co-operative education, training, research and extension services. The Cooperative Union of the Philippines (CUP), the former apex organization, had met serious organizational and financial problems and became ineffective to carry out a national program on co-operative education and training.
4.2 At the Co-operative Level
The primary responsibility of educating and training members is vested on the co-operatives themselves. The responsibility is founded on the principle that cooperative educates its members, staffs and officers. While the principle encourages co-operative to innovate and design education system best suited to their cases, the leeway given to co-operatives to design and conduct the education programs as they see them fit for their concerns and situations creates a wide variability of the delivery of education and training programs to target clients.
As mentioned earlier, co-operatives support their education and training activities by allocating at most 10% of their net surplus to CETF, 5% of which is intended for their own education and training programs and the other 5% for crediting to the CETF of the secondary and tertiary organizations in which the co-operative is a member. Observations show that, in general, that CETF is also used for administrative purposes.
4.3 At the Level of Program Implementors
The training of government officials involved in the promotion, regulation, program monitoring and evaluation, and policy formulation on co-operatives requires advance levels of training on co-operatives. Highly trained trainors with advanced degrees in the fields of specializations are required for the conduct of education and training. As observed, there is dearth of qualified educators and trainors who can execute the appropriate education and training for officials to prepare them for responsibilities to oversee the functioning of co-operatives at the micro and macroeconomic levels.
5.0 A NEED FOR AN EDUCATION SYSTEM FOR CO-OPERATIVES
A system proposed to address the need for an effective and efficient conduct of education and training for co-operative is a Cooperative College, a virtual institution of higher learning for co-operatives. It is virtual because there is no defined site or campus of the institution. The college shall be composed of education and training institutions including state and private colleges and universities, co-operatives, and other training institutions with academic programs, faculty, infrastructure, and resources for the conduct of education, training, research, and extension of technical services to cooperatives. The College shall have a central administrative unit (CAU) and a network of participating academic institutions which shall be mobilized according to their areas of expertise and specialization. For example, a state college and university (SCU) in North Luzon with expertise, resources, faculty, and programs on agriculture may be mobilized for the conduct of education and training on agricultural co-operatives in Northern Philippines.
a. Central Administrative Unit (CAU)
The CAU shall be the nerve center of the system for coordinating the academic program, and administering the budgetary and logistical supports for the College.
The CAU shall be the only element of the system that will require infrastructure investment in instituting the College. The faculty and other infrastructure requirements shall be drawn from the existing and participating educational institutions. As such the bulk of the expenditures of the College shall be on maintenance and operating expenses.
5.1 Elements of the System
The system shall be composed of a network of educational institutions with faculty, logistics, curricular offerings, teaching materials to con duct education, training, and research on co-operatives.
a. Network of Educational Institution
A viable network of education institutions for the system is the network of state colleges and universities (SCUs) in the Philippines. As of 2017, there were 116 SCUs strategically located in various parts of the country (Table 3). RA 6938 provides that SCUs shall assist co-operatives in the conduct of education and training on the area of their domicile upon request. The provision of law should be harnessed by co-operatives to the fullest to take advantage of the technical expertise, faculty, and instruction facilities available in them.
An institution of the network shall be designated to serve as the temporary coordinating body until Cooperative College is established.
A standard curricular offerings appropriate to the nature and operations of co-operatives as social and business organizations shall be developed. The curricula shall be broad enough to accommodate the various types of co-operatives, but shall be focussed to equip the human resources with the knowledge, attitude, and skills required to enhance their competitiveness in the local and international markets.
c. Central Library and Teaching Materials
A central library for information repository and teaching materials development shall be installed by the system. The facility shall be available to all participating educational institutions, students, researchers, program implementors, and policy makers on co-operatives. The accessibility of the facility shall be provided in a manner that would enhance the security and integrity of the information and materials.
A regular budget to support the operations of the system shall be put in place. It is envisioned that there be joint undertaking of the government and the co-operative sector as far as budget is concerned. The allocation and use of CETF of co-operatives maybe amended to serve as a source of the regular budget. A policy support by the authorities in the installation of a regular budget shall be sought by the system.
5.2 Function of the System
The system shall serve, among others, as the national body mandated to assist the government and the co-operative sector in planning, formulating, implementing, monitoring and evaluating education policies and programs on co-operatives in the country. Among its primary functions are to identify participating educational institutions, administer funds to participating institutions and programs, and develop teaching materials and curricular programs for co-operatives, administer research and extension programs, establish data/information banking facility, facilitate or extend to technical services to co-operatives, and serve as advocate of co-operatives development in the country.
5.3 Management of the System
A governing body composed of representatives from the participating educational institutions, co-operative sector, and government shall be formed to serve as the policy-making body and administrator of the system.
6.0 CONCLUDING REMARKS
Cooperativism in the Philippines is developing towards institutional viability. Although some billionaire cooperatives exist, on the whole, there is still much to be desired regarding the success of co-operatives. As such, there is a need to preserve and enhance patches of success by creating a pool of manpower who have the knowledge, skills, and attitude, and appreciation of the fundamentals and importance of co-operatives as instrument of change for national social and economic development to carry on the development process. A creation of a system of education for cooperative is in order to develop the manpower needed to efficiently and effectively manage co-operatives, implement national programs, and regulate cooperatives. The institution of a Cooperative College is proposed to serve as a national facility for co-operative education and training in the country.