CDA | Press Room "Isulong ang Kilusang Kooperatiba sa Kanayunan, Tungo sa Matatag at Masiglang Lipunang Kooperatiba!"

Mr. Speaker, my dear colleagues, it is an honor to stand before you today. As you may already know, we are launching the 2012 International Year of Cooperatives through a series of preparatory activities this month of October.

The Cooperative Development Authority is spearheading the preparation on the Philippines’ behalf. CDA has been busy involving a good number of stakeholders, even within the House of Representatives, to ensure that the IYC celebration in the Philippines will be substantive and memorable.

For this Representation, the International Year of Cooperatives 2012 is truly significant because of the degree of recognition that cooperatives are receiving is justly deserved. Karapatdapat na ang mga kooperatiba ay magkaroon ng ganitong pagkilala dahil sa malaking papel na ginampanan nito sa kasaysayan upang mapaunlad ang mga mahihirap at walang kapangyarihan. Power to the powerless, hope for the poor. Lakas sa walang kapangyarihan, at pag-asa para sa mga mahihirap.

The Philippine history is replete with accounts of cooperatives and their contributions to movements at ending poverty and societal change. Cooperatives through the country’s history silently contributed in alleviating rural and urban poverty. Since Dr. Jose P. Rizal organized the first marketing organization in Dapitan, four (4) laws were passed to focus s on rural organization and the provision of financial assistance namely the Rural Credit Act, Act 2818, Cooperative Marketing Law and the Commonwealth Act 116, all enacted from the period covering 1915 to 1927. These events were followed in 1938 by the organization of church – based cooperatives led by Fr. Allen Huber of the Church of Christ that eventually led government to support and strengthen other types of cooperatives; (1) inspired the government to establish the National Cooperative Fund; (2) exempted cooperatives from paying taxes for the first five (5) years of its operation; and, (3) created a national regulatory body to administer cooperatives and their funds.

However during the time of Dr. Jose Rizal, a Filipino, Teodoro Sandiko, in his travels in Europe, must have had a close contact with the cooperative movement in Germany where he came across with the Raiffeisen movement. May it be destiny, Sandiko had his chance of doing cooperatives when he was appointed one of the early governors of the Civil Government, under the Americans, was established.

When World War II broke-out, cooperatives played the important role of distributing relief goods to victims. In 1947, and as an attempt at consolidating cooperatives that folded – up during the war, government created the Cooperative Office Administration (COA) to administer large non-collateral loans with USAID funding counterpart through the Agricultural Credit and Cooperative Financing Administration (ACCFA) and the Farmers Cooperative Marketing (FACOMA). By 1952, 455 Farmers Marketing Cooperatives were organized, representing about 300,000 farmers in 50 provinces nationwide. The FACOMA however suffered low repayment of loans leaving behind about P500 million in unpaid loans.

This event triggered the need to amend laws and define clearly the government’s involvement in the cooperative movement, that led to the enactment of the Philippine Non-Agricultural Cooperative Law that separates administration of agricultural to non-agricultural cooperatives such as credit, multi-purpose and the like. The Philippine National Bank then was established to provide credit to non-agricultural cooperatives, but closed down after ten (10) years due to mismanagement.

Responding to the call of the Vatican, cooperatives were formed in parishes as a measure to alleviate poverty. Thousands of primary cooperatives were formed that were later integrated into secondary level cooperatives, the latter integrated to form tertiary federation of cooperatives. In 1969, Republic Act 6389 or the Code of Agrarian Reform was passed mandating the utilization of cooperatives as primary conduits for credit, supply and marketing cooperatives to agrarian reform beneficiaries. But the enactment of RA 6389 was met by resistance by advocates of a more cooperative-friendly legislation. Pursuant to this, they found an ally in the person of Sen. Pelaez that joined them in creating an alternative legislation. Due recognition must be afforded to Sen. Pelaez for his distinguished work with the cooperative movement and also for leading in the passage of the Rural Electrification Law.

When martial law was imposed on September 1972, cooperatives were then made main instruments in the promotion of a New Society or the Bagong Lipunan. The Cooperatives Administration Office was abolished and the Bureau of Cooperatives Development (BCOD) was organized under the Department of Local Government and Community Development (DLGCD). A month later, the Agrarian Reform Decree (PD 27) was declared and consequently, PD 175 and Letter of Implementation 23 in support of the agrarian reform. These saw the expansion – overnight – of Samahang Nayons (SNs) and Kilusang Bayans (KBs) when Area Marketing Cooperatives and Cooperative Banks were in full-support in providing for marketing assistance and credit, through the Cooperative Development Fund.

But cooperatives during that time did not last. Of the 22,000 Samahang Nayons organized, only 5% remained until 1986. The failure was attributed to mounting conflicts between the government and cooperatives due to the forcible investment of cooperatives’ savings as a measure to bail-out Cooperative Rural Banks without the members’ consent. Survival became a buzz word for cooperatives that led to their consolidation into national networks.

But a polarization resulted from the event, whereby agricultural cooperatives such as the Samahang Nayons and Cooperative Banks bonded together under the leadership of the late Butil Farmers Party Representatives Benjamin Cruz, also founder of Sanduaguan and Leonila Chavez. On the other hand are the equally strong credit and non-agricultural cooperatives under the leadership of NATCCO Representatives Cresente Paez and Guillermo Cua.

Despite the odds, cooperatives continued to struggle to find its place in the society. Fruits of its struggles ripen with the resurgence of the democratic space in 1986. By 1990, President Corazon Aquino enacted into law Republic Act 6938 or the Cooperatives Code of the Philippines and created the Cooperatives Development Authority (CDA) by virtue of Republic Act 6939. Again I will be committing a sin of omission if I do not afford proper recognition to Sen. Aquilino Pimentel and Sen. Butch Aquino for championing the cause of cooperatives in the Philippines.

Until the enactment of Republic Act 9520 on February 17, 2009, cooperatives continue to make history. Its history and its hitherto struggle attest to the fact that its decisive role as catalysts of change remain.

I believe that no amount of suppression could negate the cooperative movement from performing its historical mandate to change lives of the poor because the cooperative movement is nonetheless the movement of peoples.

Today cooperatives remain decisive vehicles at ending poverty, and its decisive role in nation building could not be overemphasized. The cooperative movement continues to gather strength. As of the moment, the CDA reports of about 18,484 cooperatives in its list with a total membership of 6,526,230 combined assets of about P72,564,532,491.74. There are 2,154 classified as farmers cooperatives with assets amounting to 4,309,247,279.90 and a total membership of 226,751; 228 as multi-purpose cooperatives with total assets amounting to P1,195,981,207.02, and 44 cooperative banks with 7,532 member cooperatives and assets amounting to an estimated P12,616,572,660.71 scattered nationwide.
According to the National Statistical Coordinating Body (NSCB 2010) cooperatives contributed to about P1,417,087,459.00 in the Gross Regional Domestic Product (at constant 1985 prices) and about P83,043,820.20 in the Cooperative Regional Domestic Product (at constant 1985 prices) representing 5.86% contribution of cooperatives to regional GRDP. In 2007 alone, cooperative’s contribution to the Gross National Product (GNP) accounted for about 16%.

Labis ko pong ikinatutuwa na sa Pilipinas, malaki ang naging papel ng kooperatiba sa pag-unlad sa kanayunan. As an active participant in the cooperative movement through the years, I have witnessed how people’s lives improved by involvement in cooperatives. The sense of empowerment is very evident. Damang dama ng mga tao ang pagiging ganap sapagkat matapos ang panahong halos wala silang pag-asang makaahon sa kahirapan, ang mga kooperatiba ay nagsilbing tulay upang makilahok sa proseso ng pagbabago at pagunlad sa lipunan.

Cooperatives, as economic enterprises and as self-help organizations, play a meaningful role in uplifting the socio-economic conditions of their members and their local communities. Over the years, cooperative enterprises have successfully operated locally owned people-centered businesses while also serving as catalysts for social organization and cohesion. With their concern for their members and communities, they represent a model of economic enterprise that places high regard for democratic and human values and respect for the environment.

As a matter of fact, our own experiences in the country’s agrarian reform program is distinctive in the sense that a feature of it is to mandate the development of farmers' cooperatives. As the foundation of the agrarian reform program, cooperatives are recognized as playing a key role in the emancipation of the farmer from agricultural bondage. Its overall objective is to maximize farm income, thus promoting the welfare of the tillers.

That is why aside from economic empowerment and participation in governance, cooperatives have been instrumental in forging peace in the countryside.

Cooperatives in general also provide organizational framework which enables the members of the community to handle tasks that enhance production and productivity, marketing and value addition, employment creation thus enhancing incomes and meeting social needs, which in effect enhances their personal appreciation of their worth.

These are the biggest contribution of cooperatives whether internationally or locally. To give voice to those who have been denied the opportunity to be heard; to harness collective action towards a single purpose.

With this recognition, Mr. Speaker, I also am aware that our work is not yet done as poverty still resides in the country with 70% of them in the rural areas. Cooperatives need to expand their support in terms of increasing productivity of small farmlands and graduate the small farmers from subsistence producers to entrepreneurs. As legislators we must push for the following steps:

We need to strengthen credit guarantee mechanisms to protect the creditors, as well as climate-based crop insurance to reflect our understanding of how climate change is affecting agriculture. With the present spread and depth of organization, cooperatives can be effective vehicles and implementors of climate change mitigation and in the matter of attaining readiness and preparedness in the grassroots. Communities provide the essence and strength to national preparedness during disasters and calamities.
Mr. Speaker, I urge the Cooperative Development Authority to be more effective and efficient in its effort to promote and organize agricultural cooperatives and cooperatives in agrarian reform communities. By their own data, there is a need to deepen organization of agrarian reform cooperatives all over the country. Maybe some have been converted to multipurpose credit cooperatives, but the point is that there are still other ARCs that would need the credit and extension services that cooperatives may offer.
I also urge the immediate passage of legislative measures supportive of the cooperative movement in general. There is a need to strengthen regulatory powers of the Cooperative Development (CDA) for it to effectively strengthen cooperatives such as the formation of a governance audit mechanism, among others..

Developmental programs must be undertake, for example, in areas of developmental communications and the use of the media in further popularizing cooperatives. Moreover, cooperative banks are unique in the sense that it caters to high-risk clients or creditors, or the ones commercial banks call the “un-bankable” segments of the society and thus, an alternative regulatory mechanism apart from the Bangko Sentral must be studied. Also, government must allocate more of its resources to Cooperatives and cooperative banks as means to spur countryside development.

In order to afford the farmers full benefit and protection to the small farmers, fisherfolk and farm workers, probably this August Chamber might want to contemplate on the creation of a National Cooperative Banking Act is in order.

Agriculture and agrarian reform cooperatives need help in providing extension services to their respective communities. We therefore urge the Department of Agrarian Reform (DAR) and the Cooperative Development Authority to review its current level assistance to extension work, and provide for effective measures at tooling or re-tooling cooperatives as partners in bringing modern and state-of-the art technology and knowhow in communities, especially in missionary areas.

The 2012 International Year of Cooperatives is a momentous occasion worthy of our support. Let us therefore embody the cooperative spirit as we rise as one nation through the cooperative movement, towards the creation of cooperative communities and a Cooperative Society.

Isulong ang kilusang kooperatiba! Itaguyod ang isang Kooperatibang Lipunang Pilipino!