The Philippine

Cooperative Movement:
Problems and Prospects
(1986 present)
Prof. Jorge V. Sibal
UP-Diliman
<sibal_jorge@yahoo.com>

People Empowerment and

Cooperative Movement
People

empowerment is the correct path in

solving the problems of poverty and income
inequity.
It is the process of transferring economic and
social power from one center to another
and/or the creation of a new center
complementary to or in competition with the
traditional center (H. Morales).

People Empowerment and

Cooperative Movement
Cooperatives

and other labor enterprises are

among the major pillars of the people
empowerment movement (Sibal, 1991).
This movement aspires for a strong propeople mixed economic society where the
state, private and civil society sectors are
harnessed in the development efforts of the
society.

Brief History of the Philippine

Cooperative Movement
The first stage (1896 to 1941) Pre-formation- germination of coops by
revolutionary illustrados
Formation- Raiffeisen-type agri-based coops
introduced by U.S. missionaries and teachers
and western-educated Filipinos
State-initiated farmers coops by the American
colonial administrators.

Second stage (1941 to 1986),

5 phases
1st

phase (Japanese occupation)- rapid

increase in cooperatives as a result of food
shortages
2nd phase- Rehabilitation period after WW II
3rd phase- Resurgence of the state-initiated
coops)

Second stage (1941 to 1986),

5 phases
4th

phase- Introduction
and rise of the nonagricultural coops
5th phase- Martial law
period and the
politization of the coop
movement.

3rd stage of the Philippine coop

movement (1986 to present)
Emerged

as a potent political force

1998 party list elections, elected 3 sectoral

representatives
2010, 5 Party list representatives in the Philippine
Congress

Various

cooperative laws were codified under

RA 6938 in 1990 and amended by RA 9520
in 2009.

3rd stage of coop movement

(1986 to present)- Highlights
The

coop movements
involvement in parliamentary
struggle avoided politization and
too much state intervention under
the principle of subsidiarity.
Operating coops increased by 393
percent from 1983 to 1993, and by
540 percent from 1993 to 2009.

3rd stage of coop movement

(1986 to present)- Highlights
The

coops businesses shifted to higher value

added multi-purpose coops and its total
assets leaped from a measly P1.05 Billion in
1985 to P176 Billion in 2009.
The movements contribution to the countrys
GDP has reached 5.14 percent in 2007.

Pres. Pnoys Path of

Inclusive Growth
The

focus of President PNoy Aquinos

Philippine Development Plan is an inclusive
growth strategy.
It means active participation of the citizenry in
the countrys growth and a major beneficiary
at the same time (ILO, 2010).
It is focused in maximizing job creation in
reducing poverty. Hence, the role of the
cooperative sector is a vital component in this
national endeavor.

Table 1. Philippine
Cooperatives, 1939-2009
1939

1969

1977

1980

1985

1993

2009

Number

570

1,530

1,897

2,941

3,350

25,125

78,611

No. (Confirmed)

--

--

--

--

1,142

4,494

23,836

Membership
(000s)

105

Year

Assets (million)

Capital (million)

3.4

n.a.

555

460

223

337

30

129

280

1,503

129

194

627

n.a.

Sources: 1939-1985- Gray Wine Think Tank, 1993- CDA, 2009- CDA & DOF
*1993 (Braid) & 2009 membership covers only confirmed coops

3,200

5,856*

118,400

176,020

--

--

Chart 1- Phil. Cooperatives-1939-2009

(Number, No. Confirmed, Members and
Assets)

3rd stage of coop movement

(1986 to present)- Highlights
The

total registered
cooperatives increased
dramatically by 7.5 times
from 1985 to 1993
compared to an increase of
only a little over 3 times
from 1993 to 2009 (Table 1
& Chart 1).

3rd stage of coop movement

(1986 to present)- Highlights
The

performance of operating
cooperatives increased by 3.9
times from 1985 to 1993, and 5.3
times from 1993 to 2009.
This means that more cooperatives
are becoming viable after they are
registered in 1993-2009 compared
to those registered in 1985-1993.

3rd stage of coop movement

(1986 to present)- Highlights
The

increases in the number of operating

cooperatives were bigger in multipurpose
cooperatives at 790 percent in 2009, followed
by services at 448 percent, producers at 316
percent and marketing at 235 percent. Credit
was steady at 157 percent in 2009 (Table 1).
Cooperatives now engage in higher value
processes compared to lower value
processes involved in credit and consumer
store operations.

3rd stage of coop movement

(1986 to present)- Highlights
Compared

to the first and second stages of

the coop movement where the government
initiated and organized coops for political and
anti-insurgency purposes, the third stage of
the coop movement avoided these past
mistakes with the government supporting the
movement with emphasis on the principle of
subsidiarity or non-interference on internal
coop affairs.

3rd stage of coop movement

(1986 to present)- Highlights
Cooperatives

during the third stage of the

coop movement became more viable and
productive. There were lesser coop
failures. The operating coops grew rapidly
since the total assets of the coop
movement leaped from a measly P1.05
Billion in 1985 to P118.4 Billion in 1995,
and to P176 Billion in 2009.

Table 4. Total Assets of Operating Cooperatives

(2009)
Category of
Coop

No. of
Coops

% to
Assets
Total No.
of Coops

% to
Total
Assets

Micro (up to P3 19,961

Million)

83.7%

P 7.88 Billion

4.5%

Small (P3 to
P15 Million)

2,594

10.9%

P 17.59 Billion

10.0%

Medium (P15
to P100
Million)

1,015

4.4%

P 37.83 Billion

21.5%

Large (Over
P100 Million)

230

1.0%

P112.71 Billion

64.0%

23,836

100.0%

P176.02 Billion

100.0%

Totals
Source: CDA and DOF

3rd stage of coop movement

(1986 to present)- Highlights
Micro

coops dominate the coop sector at 84

percent. If combined with small coops, their
numbers reach up to 95 percent. Their assets
however total only 14.5 percent compared to
the large coops which number only 1 percent
but own 64 percent of the total assets.

3rd stage of coop movement

(1986 to present)- Highlights
The

good thing about this is

that micro coops, even with
small capitalization, are able to
provide more jobs to the poor.
Large coops, on the other
hand are able to engage in
higher value production
processes as shown in Tables
3 and 4.

3rd stage of coop movement

(1986 to present)- Highlights
The

concept of big brother, small brother

cooperation among cooperatives is
necessary.
Federation and union work has now become
very crucial in furthering the growth of the
coop movement.
Big coop primaries and federations need to
merge or consolidate like the NATCCOMASS-SPECC consolidation plan in 2012.

3rd stage of coop movement

(1986 to present)- Highlights
The

big coops, acting as big brothers, need

to harness the capabilities of micro and small
coops by technology transfers and joint
cooperative business ventures like the
MICOOP program of the NATCCO.
Other new trends in coop business ventures
include branding of coop products and
services, franchising or networking
arrangements, or even outsourcing.

Performance of coops in the

regions
Davao

(Region XI) highlights the coop

movements successes in the regions.

leads in coop membership at 54.4% of the

population of 19 years old and above.
with 1.2 million members, it has an average coop
membership of 523 per cooperative
contributed nine percent to the regions GDP,
following Socsargen (Region XII) at 12%
contribution to the regional GDP and Western
Visayas (Region VI) at 4.5% contribution to the
regional GDP (Tables 5 and 6).

Performance of coops in the

regions
Bicol

(Region V) and Southern Tagalog

(Region IV) are the least performers in coop
membership and in regional contribution to
GDP.
Region IV is a fast growing region in
manufacturing and services, hence coops
cannot compare with the output of big
manufacturing enterprises.
Bicol region, being a depressed region in
terms of manufacturing, needs more intense
coop development to help empower the poor.

Table 5- Membership of Operating Cooperatives by

Source: CDA and DOF
* Population of 19 years old and above
Region, 2009 (Top 5 and Bottom 3)
Member-ship

Membership/
Coop
(Ave.)

% of Coop
Membership vs
Population

Rank
Highest/
(lowest)

1,201,830

523

54.5%

IX- Zamboanga

321,917

321

20.6%

II- Cagayan

245,640

283

14.64%

CAR

124,130

166

14.61%

NCR

780,555

297

13.95%

V- Bicol

145,440

195

5.55%

VII- Western Visayas

238,770

124

6.37%

IV- Southern Tagalog

497,085

234

6.80%

5,856,074

246

13.04%

Region

Top 5

XI- Davao

Lowest 3

Philippines

(1)

Table 6- Cooperative Contribution to the GDP, 2007 using the

income approach
Region

Percent contribution to
regional GDP

Rank

XII- Socsargen

11.91%

VI- Western Visayas

11.49%

XI- Davao

9.07%

X- Northern Mindanao

8.89%

CARAGA

7.45%

V- Bicol

1.43%

IV- Southern Tagalog

1.55%

Cordillera Administrative Region (CAR)

1.84%

Philippines
Source: CDA and DOF

5.14%

Top 5 Regions

Lowest 3 Regions

Problems of the Coop Movement

1. Lack of education and training[1]

2. Lack of capital
3. Inadequate volume of business
4. Lack of loyal membership support
5. Vested interest and graft and corruption
among coop leaders
6. Weak leadership and mismanagement
7. Lack of government support
*From more than 80 researches which assessed the growth and

development of coops which included the studies of Emmanuel

Velasco, the Cooperative Foundation of the Philippines, Inc.
(CFPI) and Leandro Rola (1989).

Challenges for the coop

movement (NATCCO)

Quality growth
Consolidation
Differentiation
Social relevance
National, market presence
Poor image- The image of coops is small,
inefficient, individual performers with low
standard of service, or an image of a
jeepney.

Problems of the cooperative

movement
1.

A large number of cooperatives remain

unviable. Only 23,836 or 30 percent of the
78,611 registered coops in 2009 are
reporting/operating.

There is a need to further strengthen coop

education and training through the coop
federations, councils and unions, NGO training
centers, state colleges and universities, etc.

Problems of the cooperative

movement
Under

RA 9520, all officers (including directors)

are required to undergo training conducted by
cooperatives, federations and/or other trainers
or training institutions duly accredited by CDA.

The training modules/curricula prescribed by CDA

are: Basic Cooperative Course; Cooperative
Management and Governance; Policy Development;
Financial Management; Parliamentary Procedure;
Leadership and Values Re-Orientation; Strategic
Planning; and Labor and Other Related Laws.

Problems of the cooperative

movement
2. With globalization, small, medium and big
coops are exposed to strong competition.
Electric coops are threatened by private
electric utility distributors for possible buyins. Coop rural banks have not grown, some
are in difficult situation and have not coped
up with the trends in the banking industry.
Consumers coops (mostly university and
institution-based) are caught in a competitive
squeeze.

Problems of the cooperative

movement
3. Unionization in some medium and big size
coops continues. This implies that the coop
management practices in some
cooperatives are still very reactive and less
participative.
This has affected some electric coops and
large producer coops in Batangas. RA 9520
mandates additional committees of
Mediation and Conciliation, and Ethics.

Problems of the cooperative

movement
4. Agri-based cooperatives like those in the
agrarian reform communities and
plantations are not showing improvement in
productivity.
Some are mismanagement. Strong support
services are needed in order to preserve the
gains of the coop movement under the
Comprehensive Agrarian Reform Law
(CARL).

Problems of the cooperative

movement
5. The mentality of relying state protectionism,
parochialism and close-doorism still prevails
among many cooperatives.
The present policies of the state have
changed and subsidies are being done
away with especially during these times of
fiscal deficits and global financial crisis.
Those that will be affected are the electric,
transport, water and irrigation coops.

Prospects of the cooperative

movement
1. President PNoy Aquino is cooperative friendly.
Some key players in the administration are
advocates of cooperativism. President PNoy
pledged to continue the revolution that my
mother (President Cory) and others started in
making entrepreneurship among the poor a
strategy for poverty alleviation".

Planning Secretary Cayetano Paderanga- Cooperative

development would create jobs and spread wealth. The
coop movement can capitalize on the current boom in the
microfinancing business.

DSWD Secretary Dinky Soliman is on top of the anti-poverty

program of the government.

Prospects of the cooperative

movement
2. Operating coops increased 4 times from
1985 -1993 and 53 times from 1993-2009.
Coops engaged in high value operations
increased higher than credit coops.
Multi-purpose coops increased by 8 folds,
service coops by 4.5 folds, and coop
federation by 4 folds. Marketing coops
increased by 3 folds and producers coops
by 2 folds.

Prospects of the cooperative

movement
3. The total assets of the coop movement
increased by 78 times in 9 years from P1
Billion in 1985 to P118 Billion in 1993, and
117 times in 2009 at P176 Billion.
Researches and documentation of the good
cooperative practices should be intensified
and disseminated to other coops.

Prospects of the cooperative

movement
4. Coop membership increased by almost 10 times
from1985-1993 and 17 times to 5.8 million in 2007.
The family beneficiaries are around 19.2 million in
1993.
In Davao region, coop members account for more
than half (54.5%) of the regions population of 19
years and older and contributed 9% to the regions
contribution to the regional GDP.
Socsargen and Western Visayas contributed to
their respective regional GDP at 12% and 11.5%
respectively.

Prospects of the cooperative

movement
6. Big brother, small brother cooperation among
cooperatives will further the growth of the coop
sector. This means more intensive Federation
and union work and advocacy that will not
compete but will strengthen the operations of the
primary coops.

Big coop primaries and federations need to merge or

consolidate like the NATCCO-MASS-SPECC
consolidation plan in 2012.

The big coops should harness the capabilities of

micro and small coops through technology transfers
and joint business ventures like the MICOOP
program of the NATCCO.

Prospects of the cooperative

movement
7. The coop group within the party list bloc in
Congress should play its cards well. Although
in the minority bloc, the coop legislators are
actually representatives of the marginalized
sectors of society which comprise the majority
of the countrys population.
The coop representatives in Congress, aside from
their legislative work, should also be active in
further uniting and consolidating the coop
movement. They should lead the coop movement
nationwide together with other coop legislatoradvocates:

Prospects of the cooperative

movement

Strengthen all LGU Development

Councils and exhort strong coop
participation;
Work for the creation of Cooperative
Development Offices in all LGUs that
have not yet created said office and the
corresponding appointments of the LGU
Cooperative Development Officers ideally
coming from the coop sector;

Prospects of the cooperative

movement
Strengthen the Cooperative Development
Councils at the national, regional, provincial,
municipal and barangay levels;
Participate in LGU affairs through involvement
in the LGU Pre-Bids and Awards Committees
(PBAC), the Local Health and School Boards, to
participate in future elections of sectoral
representatives for workers, women and other
sectors in the LGU councils, and to lobby for the
creation of committees on cooperatives in said
councils if not yet created.

References:

Barce, Jo Anne, 1995, The Effects of Education in Membership

Participation in Cooperative Activities, QC: UP SOLAIR (unpublished
paper).
Borja, Ignacio, 1996, Cooperative Education: Problem or Answer,
paper presented at the first National Convention of the National
Association for Cooperative Education (NACE), August 8-9, 1996, Hotel
Danarra and Resort, QC.
Braid, Rosario (Ed), 1993, Political Parties, Programs and Platforms for
Cooperatives as a Third Sector, Sustainable Development Through
Cooperatives, Manila: Asian Institute of Journalism, p. 136.
COOP NATCCO, 2007, website- : http://www.natcco.coop , (opened
August 4, 2011)
Coloma, Teresita, 1996 The Cooperative Development Framework: A
Blueprint for People Empowerment and Global Competitiveness, paper
presented at the National Conference Workshop on Strengthening
Cooperative Banks, February 21-22, 1996 at Great Eastern Hotel, QC.

References:

Cooperatives Philippines, 2011,

http://cooperatives-society.blogspot.com/2011/03/p-noys-govts-developme
nt-plan-lists.html
Gonzales, Araceli, The NGOs, their Impact to the IR Environment, UP
SOLAIR, QC (unpublished paper).
ILO, 2010, Overcoming the jobs crisis and shaping an inclusive
recovery: the Philippines in the aftermath of the global economic turmoil
(forthcoming).
Moralez, Horacio, Strategies and Mechanisms for Empowerment of
People in the Rural Sector, Lambatlaya, QC: UP ISWD, p. 2.
Ong, Jose, 1997, Market Projects Financed by Municipal Development
Fund: An Evaluation, Philippine Womens University-Quezon City,
September 1997 (masteral thesis).
Paderanga, Cayetano, 2011, Keynote Speech, PICPA's "Cooperative
Forum Day," July 22, 2011, Hotel Intercontinental, Makati City,

References:

Remo, Amy, 2011, NEA, DBP to finance co-ops fund requirements, Philippine
Daily Inquirer, July 11, 2011.
Rola, Leandro, 1989 Cooperative Education and Training Issues/Problems and
Recommendations, The State of Cooperative Development in the Philippines,
QC: Cooperative Foundation of the Philippines, Inc.
Santiaguel, Mannie, 2011, The Role of Cooperative in Poverty Reduction,
cooperativeunionofcavite.com/.../The%20Role%20of%20Cooperatives%20In
%20Global%20Poverty... (opned Aug. 201)
Scott, William, 1992, The Union Obrera Democratica: The First Filipino Labor
Union, QC: New Day Publishers.
Sibal, Jorge, 1991, The Self-managed Enterprises and the Vision of a Mixed
Economy, paper read at the PEDF Seminar-Workshop on Issues in Community
Enterprise Management, August 16-18, 1991, Pansol, Laguna sponsored by
Peoples Enterprise Development Council.
Sibal, Jorge, 2001, A Century of the Philippine Cooperative Movement, Co-op
News from UWCC, University of Wisconsin Center for Cooperatives, August
2001, http://www.wisc.edu/uwcc
Wikipedia, 2011, Fiscal Policy in the Philippines, http://
en.wikipedia.org/wiki/Fiscal_policy_of_the_Philippines (Opened Aug. 2011)