The Philippine Cooperative Code

of 2008
Signed by the President into
law on February 17, 2009
and effective fifteen (15)
days after its publication in
the Official Gazette or in a
newspaper of general
circulation (March 7, 2009)
 Cooperative
An autonomous and duly registered
association of persons, with a common
bond of interest, who have voluntarily joined
together to achieve their social, economic
and cultural needs and aspirations by
making equitable contributions to the capital
required, patronizing their products and
services, and accepting a fair share of the
risks and benefits of the undertaking in
accordance with universally accepted
cooperative principles.
 Cooperative Principles
Patterned after the Principles as
formulated by the International
Cooperative Alliance (ICA)

 Voluntary and Open Membership

 Democratic Member Control
 Member Economic Participation
 Autonomy and Independence
 Education, Training and Information
 Cooperation Among Cooperatives
 Concern for Community
1. Voluntary and Open Membership

 open to all persons able to use

their services and willing to accept the
responsibilities of membership without
gender, social, racial, cultural, political
and religious discrimination
 2. Democratic Member Control
 that are controlled by their members who
actively participate in setting their policies and
making decisions. Men and women serving as
elected representatives, directors or officers are
accountable to the membership. In primary
cooperatives, members have equal voting rights
of one-member, one-vote. Cooperatives at other
levels are organized in the same democratic
manner
3. Member Economic Participation

 Members contribute to, and democratically

control, the capital of their cooperative. At least
part of that capital is the common property of
the cooperative.
 They shall receive limited compensation or
limited interest, if any, on capital subscribed
and paid as a condition of membership.
 Members allocate surpluses for any or all of
the following purposes: developing the
cooperative by setting up reserves, part of
which should at least be indivisible; benefiting
members in proportion to their patronage of
the cooperative’s business, and, supporting
other activities approved by the membership.
4. Autonomy and Independence

Cooperatives are autonomous,

self-help organizations controlled by
their members. If they enter into
agreements with other organizations,
including government, or raise capital
from external sources, they shall do
so on terms that ensure democratic
control of their members and
maintain their cooperative autonomy.
5. Education, Training and Information

Cooperatives shall provide education

and training for their members,
elected and appointed
representatives, managers, and
employees, so that they can
contribute effectively and efficiently to
the development of their cooperative
MC 2013-02 | Supplemental Rules on the
Training Requirements of Cooperative
Directors, Officers and Committee
Members
MC 2012-07 | Addendum to Memorandum
Circular No. 2011-27 on the
Implementation of the Training
Requirements for Cooperative Officers
MC 2011-27 | Implementation of Training
Requirements for Coop Officers
MC 2011-26 | Guidelines on the
Submission of Cooperative List of
Officers and Training Undertaken

MC 2011-14 | Standard Training

Curricula for Cooperative Officers
 6. Cooperation Among
Cooperatives

Cooperatives serve their members

most effectively and strengthen the
cooperative movement by working
together through local, national,
regional, and international structures.
 7. Concern for Community

Cooperatives work for the

sustainable development of their
communities through policies
approved by their members.
 New Terms in the Code

Representative Assembly means the full

membership of a body of
representatives elected by each of the
sectors, chapters or district of that
cooperative duly assembled for the
purpose of exercising such powers
lawfully delegated unto them by the
general assembly in accordance with its
bylaws;
MC 2011-12 | Members of the Local
Election Committee Under the
Representative Assembly Termed as
Election Deputies
Officers of the Cooperatives shall
include the members of the board of
directors, members of the different
committees created by the general
assembly, manager or chief executive
officer, secretary, treasurer, and members
holding other positions as may be
provided for in their cooperative
MC 2011-04 | Legal Interpretation of Article 42
of the RA9520

A. Officers of the Cooperative as provided under

Art. 5 (11) of RA9520:
B. Officers elected by the General Assembly:

C,Officers appointed by the Board of Directors:

 Relationship by Consanguinity

First Degree - Parent to Child

Second Degree
- Grandparent to Grandchild,
Brother to Sister
Third Degree - Uncle to child, aunt to child,
Greatgrandparents to
Greatgrandchild
 Relationship by Affinity
First Degree - Parent-in-Law to
Daughter/Son-in-Iaw
Second Degree - Brother-in-Law to Sister-in-
Law
Third Degree - Great-Grandparent-in-Iaw to
Great, Granddaughter/Great
Grandson-in-Law,Uncle/Aunt
in- law to Niece/Nephew in-
law
 Social Audit is a procedure wherein the
cooperative assesses its social impact and ethical
performance vis-a-viz its stated mission, vision,
goals and code of social responsibility for
cooperatives to be established by the Authority in
consultation with the cooperative sector

• Enables the cooperatives to develop a process

whereby it can account for its social performance
and evaluate its impact in the community and be
accountable for its decisions and actions to the
regular members;
MC 2013-16 | Guidelines on Social
Audit of Cooperatives |Social Audit
Tools
Performance Audit shall refer to an audit
on the efficiency and effectivity of the
cooperative as a whole; its management
and officers; and its various
responsibility centers as basis for
improving individual, team or overall
performance and for objectively
informing the general membership on
such performance
MC 2013-15 | Performance Report
Standards for Cooperatives

MC 2013-18 | Submission of
Performance and Social Audit Reports
Subsidiary Cooperatives refers to any
organization all or majority of whose
membership or shareholders come from
a cooperative, organized for any other
purpose different from that of, and
receives technical, managerial and
financial assistance, from a cooperative,
in accordance with the rules and
regulations of the Authority
MC 2013-09 | Policy on Networth
Requirement for the Organization of
a Subsidiary Cooperative Pursuant
to Section 2 (2), Rule II of Rules and
Regulations Implementing Certain
Provisions of R.A. 9520
Organization and Registration
 Completed a Pre-Membership Education
Seminar (PMES)
 Newly organized primary coop may only be
registered as an MPC after compliance with
the minimum requirements for MPCs to be set
by the CDA
 Submission of Economic Survey with staffing
pattern which includes at least a bookkeeper
 Articles of Cooperation
At least 15 members of legal age
Minimum Capitalization of PhP 15,000
Organization and Registration

 CDA to periodically assess the required paid-up capital

of coops and may increase it every five (5) yrs when
necessary upon consultation with the coop sector and
National Economic Development Authority (NEDA)
(Guidelines to be drafted)
(NEDA FUNCTIONS-It provides high-level policy advice to the Executive and
Legislative branches of government. Undertake critical analyses of
development issues and provide policy alternatives to decision-makers.)
 Any merger, consolidation and division of cooperatives
require 3/4 affirmative votes of all members with voting
rights present and constituting a quorum
MC 2011-07 | Organizational
Structure of Cooperatives
under RA 9520
MC 2010-05 | Policy Guidelines in the
Mandatory Amendments of Articles of
Cooperation and By-Laws of Cooperatives
and Prescribing the Registration Thereof
to Conform with RA 9520
MC 2009-02 | Guidelines in the Issuance of
New Certificate of Registration Under the
Philippine Cooperative code of 2008
(RA9520)
MC 2009-01 | Guidelines for the Re-
Registration of Cooperatives
 From RA 6938 six (6) types: Credit, Consumers,
Marketing, Producer, Service, and Multi
Purpose
 To RA 9520 types namely: Credit, Consumers,
Marketing, Producer, Service, Multi Purpose,
Advocacy Cooperative, Agrarian Reform
Cooperative, Cooperative Bank, Dairy
Cooperative, Education Cooperative, Electric
Cooperative, Financial Service Cooperative,
Fishermen Cooperative, Health Services
Cooperative, Housing Cooperative, Transport
Cooperative, Water Service Cooperative
Workers Cooperative, and others
• MC 2011-15 | Revised Guideline for the
Registration of Primary Cooperatives
• MC 2011-18 | Revised Guidelines in the
Registration of Cooperative Federation
and Union
• MC 2011-17 | Policy and Guidelines on
the Establishment of Cooperative Branch
• MC 2012-17 | Policy Guidelines for the
Establishment of Cooperative's Satellite
Office
MC 2012-14 | Guidelines for the
Registration of Small-Scale Mining
Cooperative
MC 2012-13 | Guidelines for the
Registration of Health Service
Cooperatives
MC 2012-12 | Revised Guidelines in
the Registration of Labor Service and
Workers Cooperatives
MC 2011-25 | Policy Guidelines
on Job Contracting Worker
Service Cooperative
MC 2011-24 | Policy Guidelines
on Workers Cooperatives
 Membership

 Legal age, Filipino citizen

 An associate member who meets the
minimum requirements of regular
membership, continues to patronize the
cooperative for two (2) years, and
signifies to remain a member shall be
considered a regular member
MC 2012-16 | Policy Guidelines
Prescribing the Minimum
Information in the Membership
Registry of Cooperatives
 Ineligible to be Officers

All elective officials are ineligible to be

officers or directors of a cooperative
except a party-list representative being an
officer of a cooperative he/she represents
MC 2012-19 | Prohibition on the
Election and Appointment of Elective
Officials as Officers of the
Cooperative
 Federation
 To carry on coop enterprise that
complements, augments or supplements but
does not conflict, compete with, nor supplant
the business or economic activities of its
members.
 Registered cooperatives may organize a
federation according to the type of business
activity which they are engaged in
 Grievance Committee
 The general assembly may opt to
create an appeal or grievance
committee to serve for one (1) year to
decide on appeals on membership
application; and if they fail to decide
within thirty (30) days upon receipt
thereof, the appeal is deemed
approved in favor of the applicant
 Administration
 The general assembly may by 3/4 votes of all
its members with voting rights present and
constituting a quorum, delegate some powers
to a representative assembly
 Written notices to regular meetings shall be
sent in writing, by posting or publication or
through other electronic means to all
members of record
 Notice to special meetings to be sent 1 week
prior to the meeting to all members entitled to
vote
 Voting in primary cooperatives is strictly
one-member - one vote no proxies allowed
except for representative assembly
 Quorum shall consist of 25% of all the
members entitled to vote. However in case
of coop banks, quorum shall be as
provided in Art. 99 of the Code; In
electric coops, 5% of all members entitled
to vote unless otherwise provided in the
by-laws
 Board of Directors
 The BOD are responsible for strategic
planning, direction-setting and policy-
formulation
 Their term still not to exceed two (2) years but
no limitation as to number of consecutive
terms to hold office
 Prohibition against holding any other position
involved in day-to-day operations and
management
 Disqualification of persons engaged in
business similar to the cooperative
 Committees and Officers

 Additional committees

 Mediation and Conciliation

 Ethics
 Gender and Development

Members of Audit and Election Committees

shall be elected by the general assembly,
and the rest shall be appointed by the
board
Audit Committee shall be directly
accountable to the general
assembly and shall have the power
and duty to monitor the adequacy
and effectiveness of the coop’s
management control system
 Committees and Officers
 All coop officers and committee members
required to undergo trainings conducted by
accredited institutions by the CDA
 No compensation except for per diems, but
if cooperative reports a net loss for the
preceding year, officers are not entitled to
per diems
 Removal of officers may now be done by
3/4 votes of the regular members present
and constituting a quorum in a regular or
special assembly meeting
MC 2013-22 | Guidelines on
Mainstreaming Gender and
Development (GAD) in
Cooperatives
 Responsibilities
 Accountant or bookkeeper is responsible for
maintenance and safekeeping of books of
accounts
 Audit committee responsible for continuous
and periodic review of books of accounts;
monitor adequacy and effectiveness of
management’s control system and audit the
performance of the cooperative
 Audited financial statements required to be
posted in principal office
MC 2012-09 | Policy
Clarification Re-Accountable
Officers
 Annual Reports

 Filed within 120 days from the close of the

calendar year
 Should include regular activities including
socio-civic undertakings
 Must show their progress and achievements
 Liability for non-submission are commensurate
fines and penalties imposable until the
cooperative has complied
 Tax Privileges
 Coops transacting with both members and
non members shall not be subject to taxes
and fees imposed under NIRC and other
tax laws on their transactions with their
members
 Transactions of members with the coop
shall not be subject to taxes and fees,
including final tax on members’ deposits
and documentary stamp tax
 Capital
 Subsidies, donations, legacies, grants, and
aids shall not be divided into individual share
capital holdings anytime but subject to
escheat proceedings upon dissolution
 Limitation on share capital held by one
member reduced from 20% to 10%
 By-laws to provide reasonable and realistic
member capital build-up program
MC 2013-04 | Clarificatory
Policy on Share Capital
MC 2011-05 | Limitation
on Share Capital
Holdings
 Tax Exemptions
 Non-members will pay VAT; coop will
collect and remit to BIR
 25% of net surplus is returned to
members as interest and patronage
refund
 Cooperative is responsible for collection
and remittance of individual withholding
taxes (interest on share capital)
 Additional Privileges

 Faculty cooperatives have right of first

refusal in management of canteen and
other services related to the operations of
educational institutions
 Housing agencies and financial institutions
shall create a window for financing housing
projects
 Audit

 Financial audit conducted by external

auditor in good standing with PICPA and
accredited by Board of Accountancy and
CDA
 Social and performance audits may be
conducted internally by audit committee,
paid staff, volunteer members, or by
qualified external auditors
 Social Auditing
 Based on the 7th Cooperative Principle –
Concern for Community
 Defined as “the systematic review and
appraisal of the cooperative in relation to
the development of its most essential
building blocks-its members, its people,
and its distinctive contribution to the
development of its community and society
as a whole”.
 Distribution of Net Surplus

 Provide at least ten (10%) for the reserve

fund. Provided that, in the first five (5) years
after registration, the reserve fund shall not be
less than fifty percent (50%) of the net surplus

 Provide not more than 10% for CETF; half

may be spent by the coop for education and
training while other half may be remitted to the
federation/union chosen by the cooperative;
 Distribution of Net Surplus
The federation/union chosen shall submit to
the CDA:

(a) list of contributing cooperatives;

(b) business consultancy assistance with

its nature and cost; and

(c) training activities specifying the

nature, participants, and cost of each
activity
 Distribution of Net Surplus
 Not less than 3% for community
development fund for projects/activities
that will benefit the community where the
cooperative operates
 Not more than 7% for optional fund, land
and building, and other funds
 Other Provisions
 Special Provisions for:
 Transportation Cooperatives
 Electric Cooperatives
 Cooperative Banks
 Credit Cooperatives
 Financial Service Cooperatives
 Housing Cooperatives
 CDA allowed to formulate rules on
certain provisions of the Code
 Other Provisions
 Mediation and Conciliation Committee to
facilitate settlement of intra-coop disputes &
among members, officers etc. before
submitting the case to CDA for voluntary
arbitration (procedure in accordance with
ADR Act of 2004)
 Joint Congressional Oversight Committee
on Cooperatives to review and approve the
implementing rules and regulations of the
Code and monitor proper implementation
MC 2010-07 | Guidelines on the Procedure
for Voluntary Arbitration in the Cooperative
Development Authority (CDA)
MC 2013-21 | Revised Guidelines Governing
the Conduct of Conciliation-Mediation
Proceedings Before The Cooperative
Development Authority (CDA)
MC 2013-20 | Revised Guidelines Governing
The Conduct of Conciliation-Mediation
Proceedings At The Primary and
Union/Federation Level
 Other Provisions
Additional Penal Provisions:
Liability of public officials or employees of
any government agency who deprive,
diminish, hinder or restrict coops from the full
employment of their privilege under Article
60 & 61 of the Code

 The CDA may motu proprio, initiate

complaints against person(s),
organizations using the word “cooperative”
not duly registered as a coop under the
Code
 Other Provisions

The coop or any of its members can file

a case against any officer or employee
of the Bureau of Internal Revenue (BIR)
or of any other government agency with
the Ombudsman, Civil Service
Commission, other appropriate
government agency or the courts of law
 Other Provisions
Offenses punishable by a penalty of
imprisonment of not less than 1 year nor
more than 5 years or a fine not more than
P50,000 or both:
 Providing information, reports or other
documents to the CDA that are required
under this Code which the person knows
to be false or misleading
 Omission or refusal to furnish any
information, report or other document
that is required under the Code
 Other Provisions
Making an entry required under the
Code in a book or register, which the
person knows to be false or misleading
Hindering an authorized person from
making an inspection, audit,
examination or investigation required
under the Code
Failure to comply with an order or
written instructions issued or given by
the CDA
 Other Provisions
Re-registration of all cooperatives within
one (1) year from effectivity of this Code to
confirm their status by submitting: (a)
Certificate of Registration/Confirmation; (b)
Articles of Cooperation; (c) by-laws; and (d)
latest audited financial statement

Must secure Certificate of Tax Exemption

from BIR (valid for 5 years from issue)
following the issuance of the new
Certificate of Registration
 Status of Amendments

The amended provisions shall be

applicable only after the confirmation of
the coops’ status thru their re-registration
under the New Code.
MC 2011-20 | Guidelines on
the Registration of
Amendment of Articles of
Cooperation and By-laws
By Substitution
Joint Congressional Oversight
Committee on Cooperatives to
review and approve the
implementing rules and
regulations of the Code and
monitor proper implementation