NATIONAL TEACHERS COLLEGE

MANILA

A WRITTEN REPORT

IN PARTIAL FUFILLMENT

OF THE REQUIREMENTS

IN COOPERATIVE MANAGEMENT

BY

BORJA, JESTER JING D.

CAYANAN, MA. KATRINA V.

SUBMITTED TO

ENGR. BERNARD EVAN V. JAMON, MBA

FEBRUARY 17, 2020

UNIT IV – A CENTURY OF PHILIPPINE COOPERATIVE MOVEMENT

HISTORY AND ASSESSMENT OF PHILIPPINE COOPERATIVE MOVEMENT

According to Jorge V. Sibal, Cooperatives are compatible with the Filipino culture whose

concepts and practices of "bayanihan" (cooperation) preceded the coming of the Spaniards.

After the Spaniards colonized the country and transformed the economy from subsistence

agriculture to a feudal and commercialized economy, illustrados of the middle class or the

professionals, merchants, and artisans emerged. The illustrados were the organizers of the

"gremios" or the local crafts unions and guilds which were the forerunners of cooperatives.

The Cooperative Movement in the Philippines can be divided into 3 stages. The following is the

Stage One of Philippine Cooperative Movement (1896-1941):

The Pre-formation Period – Spanish Period

In 1896, Dr. Jose Rizal established an Agricultural Marketing Cooperative while on exile in

Dapitan. He put up a school on a purely cooperative basis for the poor community, and with the

help of his pupils he also set up a cooperative shop. One noteworthy group that Dr. Jose Rizal

established was the La Sociedad de los Abacaleros (Society of Abaca Producers) that only last

for one year and he returned the share capital of the members without any loss. In 1898, Emilio

Jacinto established a Commercial Marketing Cooperative in San Pedro, Laguna but it failed. In

1902, Isabelo de los Reyes was asked to head a group of printers ' cooperative association and

this became the Union Obrero Democrata, the first Philippine labor federation. The cooperatives

were recognized as instruments of social justice and economic development by Jose Rizal,

Emilio Jacinto and Isabelo de los Reyes.

In 1900-1913, the Irish-American missionaries and teachers set up a Raiffeisen-type rural

agricultural cooperatives in the Philippines, with the help of local organizers. Raiffeisen’s idea is

linked with the cooperative principles of self-help, self-administration, self-responsibility and the

potential to work to create a better world to all. In 1906, the Corporation Law (PA No. 1459)

provided the legal framework for all private organizations including the cooperatives. In 1907,

the first attempt to pass the Rural Credit Cooperative Bill was introduced by Governor Teodoro

Sandiko of Bulacan and Representative Alberto Barreto of Zambales, its goal is to protect and

developed the agricultural interest of the country, it was passed by the Philippine Assembly but

unfortunately it was disapproved by the Philippine Commission. After 8 years In 1915, the Rural

Credit Cooperative Association Act (Act No.2508) passed, appropriated 1million pesos through

its associations and rural cooperatives to a fund for farmers ' credit for the rice and corn

production. In 1916, the first rural credit cooperative association was established in

Cabanatuan, Nueva Ecija with the help of the government. The first consumer cooperative was

established at the College of Agriculture, Losbaños, Laguna. By 1926, 541 credit cooperatives

already existed in 42 provinces nationwide.

State- initiated Cooperative

In 1927, the Cooperative Marketing Law (Act No. 3425) was introduced, which promoted the

establishment of the state-initiated farmers' marketing cooperatives, the cooperatives are

allowed to organize farmers to have better sales of their products. By 1938, there were 560

Cooperative Marketing Associations but unfortunately the cooperatives failed due to the lack of

educations of members, leaders and also the government in cooperative principles. In 1940, the

Commonwealth Act 565 (Cooperative Act) that provided for all types of cooperatives and

organization, established the National Trading Corporation (NTC) to regulate the cooperatives

and to grant them an taxes and fees exemption for the first five years of their operation. In 1941,
the National Cooperative Administration (NCA) was established and the functions of National

Trading Corporation were transferred to it but unfortunately the World War II occurred and this

law were not implemented.

Privately-initiated Cooperative

In 1938 Rev. Allen R. Huber (American Minister of the Church of Christ) organized the church

members in Vigan, Ilocos Sur into the country’s first privately-initiated credit union. The first

cooperative federation was established. It was known as the Consumers Cooperative League of

the Philippines. The government passed the Commonwealth Act No. 287 to improve the

cooperatives. By 1939, there were 570 credit cooperatives, 150 farmers’ cooperatives and 48

consumers’ cooperative and out of these cooperatives only 20% are active. By 1941, 30 private

credit unions had already been established having 2,000 members in the northern region.

Rural West Germany's Raiffeisen-type cooperatives are suited to the Philippine rural

populations as solution to the capital needs of poor farmers. However, middle-class efforts

illustrados in the development of cooperatives failed because of the revolutionary situation in

those years. As the Americans were able to pacify the Filipinos, in 1907, American and Filipino

missionaries and teachers introduced private-initiated cooperatives of the Raiffeisen style into

the region. Such cooperatives acted as the stable foundation for the cooperative movement in

the Philippines. Due to corrupt and incompetent management, lack of expertise, education,

training, money and technical know-how, the state-initiated cooperatives that is introduced by

American colonial administrators in 1927 failed.

UNIT IV – A CENTURY OF PHILIPPINE COOPERATIVE MOVEMENT

1-4. Give the 4 period Stage One of Philippine Cooperative Movement.

5. La Sociedad de los Abacaleros is also known as ______________?

6. What is the first Philippine labor federation?

7. Where did the first rural cooperative association established?

8-9. What are NTC and NCA stands for?

10. Who established the first privately-initiated credit union?

ANSWERS

1-4. The Pre-formation Period – Spanish Period,

The Formative Years – American Colonial Period

State- initiated Cooperative

Privately-initiated Cooperative

5. Society of Abaca Producers

6. Union Obrero Democrata

7. Cabanatuan, Nueva Ecija.

8-9. National Trading Corporation, National Cooperative Administration

10. Rev. Allen R. Huber

Bitonio, Jo Balucana. 2012. “The Cooperative Movement in the Philippines”.

https://www.slideshare.net/jobitonio/the-cooperative-movement-in-the-philippines

Cooperative Development Authority. (n.d.). “History”.

https://www.cda.gov.ph/transparency/overview/historical-background

Toti Patrimonio. (n.d.). “A Century of the Philippine Cooperative Movement”.

https://philippinecooperative.blogspot.com/2008/09/century-of-philippine-cooperative.html?m=1

Sibal, Jorge 2011. “The Philippine Cooperative Movement: Problems and Prospects”.

http://nepa1934.org/articles-and-statements/papers/the-philippine-cooperative-movement