Life Worth While

“Only a life lived for others is the life worth while.”

  • Albert Einstein, quoted in New York Times, 20 June 1932


In the matter of the two sets of guidelines prepared by the Cooperative Development Authority (CDA) and the Philippine Cooperative Center (PCC) pertaining to the organization and registration of apex cooperative, the following are mere thoughts that are the author’s own and not of the organizations that he is affiliated with.

1. The 04 July 2016 House Resolution Nr 44 sponsored by the Hon. ANTHONY M BRAVO (Representative, COOP-NATCCO Party List), Hon. SABINIANO S CANAMA (Representative, COOP-NATCCO Party List) and Hon. RICO B GERON (Representative, AGAP Party List), recognizes that RA 9520 “has no provision governing the establishment of an apex body.” Such being the case, this would create the presumption that any action on the part of the Cooperative Development Authority (CDA) in coming up with the guidelines for the creation of such apex cooperative could face the issue of legality since there is no basis in law for the creation of such an apex organization. Thus, there might be a need to amend the law to address such deficiency. HR 44 cannot be used as the legal basis since the House Resolution is directed to its Committee on Cooperative Development to conduct an inquiry in aid of legislation concerning the subject.

2. On the draft prepared by the Philippine Cooperative Center (PCC), it would appear that the 2014 declaration by billionaire and millionaire cooperatives of PCC as the apex cooperative may have caused it to lose its focus on what it is expected to accomplish when it spearheaded the drafting of the guidelines in lieu of the one prepared by CDA.

3. From its comments submitted to CDA on 05 FEB 18, it would appear that PCC considered itself as the apex organization based on PCC’s recognition by billionaire coops as the apex coop in 2014 during the Cooperative Convergence in Palawan. Such declaration, however, should not mean an unbridled abbreviation of the guidelines being drafted to its favor. The guidelines, if it is to withstand the test of time, should be blind on the existence of PCC or any other particular cooperative.

4. From its assertion of getting the support of the big cooperatives to be the apex cooperative, one thing becomes manifests – only the billionaire and millionaire coops were present during the Coop convergence. Small cooperatives which cannot afford the money to spend in going to Palawan were not present. It now begs the question – do these billionaire and millionaire coops represent the will of the small and medium coops?

5. The apex coop to be created should be representative of both billionaire and small coops. Also, billionaire cooperatives has machineries to advocate on their own but insofar as the non-millionaire and small coops are concerned, they stand to be marginalized in the selection of the apex coop because it would seem that only the voice of the big coops are being considered in the selection of the apex organization. Between the rich and poor cooperatives, the latter’s interest should be at the forefront of advocacy and concern of the apex if the social justice provisions enshrined in the Constitution and in RA 9520 are to be given effect to live up to President Ramon Magsaysay’s words that “those who have less in life should have more in law.”

7. The Guidelines should also consider provisions of withdrawal of affiliation from the apex in case the coops find the one declared as apex to be no longer worthy of the title.

8.The primordial consideration should be not the selection of one particular and predetermined cooperative but one that passes through the democratic process of selection in keeping with the international cooperative principle of adherence to “democratic member control.”

9. The process of guidelines creation should not be viewed as “reinventing the wheel” but one which promotes popular representation.

10. If PCC would insist that it is the apex based on the declaration of the billionaire coops, then we might as well make informal the creation or selection of the apex and just declare PCC as the apex by acclamation. But PCC, during the 04 APR 17 consultation, rejected the option of creating a loose type of apex organization. It insisted for the coop sector to draft its own guidelines in the spirit of autonomy and independence.

11. We should also not be sidetracked with just the creation of an apex cooperative. HR 44 is instructive on this matter. The apex coop must be a unifying force of the Sector that is a recognized body of all cooperatives in the country with which the government will be consulting on matters relative to policy and economic program.

12. On the matter of financing the operation and activities of the apex cooperative, the Cooperative Education and Training Fund (CETF) remitted to unions and federations by its member-primaries should be placed beyond the reach of the apex cooperative.  It is the lifeblood of cooperative unions.  Allocating part of it for remittance to the apex will affect the operation and services of the unions to its members.  It may be appropriate to legislate a new statutory fund: ADVOCACY FUND, that could be utilized in apex activities. It can be a new or additional statutory fund or it could be curved out of the Community Development Fund (CDF). Whatever and however it may be sourced, the apex coop should not be burdened with begging funds from the Sector it is supposed to lead and protect. It should be made an obligation of all cooperatives but not to the point that it will become burdensome to the remitting cooperative unions to the point that it will toll the bell that will summon the death of the coop unions it is supposed to represent.

13. Moreover, there is no reason for the apex to be engaged in any business venture. It should concentrate on just being the voice of the Sector.

14. The apex cooperative should not only be another tier in the Cooperative Sector hierarchy. It should be the arena where the Sector members may be heard on all matters affecting the Sector in general and particularly those affecting marginalized coops that are not in the mainstream because of their small operations, like those in the labor, construction, small scale mining and school canteens, as maintained in HR 44.

A Commentary on the Compulsory Coverage of Credit Cooperatives Under the Credit Information System Act



Republic Act Nr 9510 or the Credit Information System Act (CISA) was passed into law in 2008.  Its purpose is to establish a centralized credit information system for the collection and dissemination of information relevant to, or arising from, credit and credit-related activities by requiring banks, quasi-banks and all other lending institutions to submit all the basic credit data of borrowers to the Credit Information Corporation (CIC), in order to improve the availability of cost-effective credit without much dependence on collateral.

Credit cooperatives are included among the entities mandated to register with the CIC.  Now, many leaders of top credit cooperatives are questioning the constitutionality and soundness of said law.


Republic Act 9510 or CISA was enacted into law on 31 October 2008.  The Senate version (SBN 1881) was authored by SENATOR JUAN EDGARDO “SONNY” ANGARA while the House version (HBN 4260) was principally authored by REP JAIME C LOPEZ.  The late GUILLERMO P CUA, then COOP NATCCO Party List Representative, co-authored HBN 4260 by filing HBN 2443 calling for the creation of the Credit Information Corporation (CIC).

Section 2 of CISA provides us with the purpose of the law, to wit:

“The State recognizes the need to establish a comprehensive and centralized credit information system for the collection and dissemination of fair and accurate information relevant to or arising from, credit and credit-related activities of all entities participating in the financial system.  A credit information system will directly address the need for reliable credit information concerning the credit standing and tract record of borrowers.

The operations and services of a credit information system can be expected to greatly improve the overall availability of credit especially to micro, small and medium-scale enterprises; provide mechanisms to make credit more cost-effective; and, reduce the excessive dependence on collateral to secure credit facilities.

The State shall endeavor to have credit information provided at the least cost to all participants and shall ensure the protection of consumer rights and the existence of fair competition n the industry at all times.

An efficient credit information system will also enable financial institutions to reduce their over-all credit risk, contributing to a healthier and more stable financial system.” [Underscoring supplied]

By virtue of the CISA, the CIC was born.  Eight years hence, it is now at the forefront of requiring credit cooperatives to register as submitting entities; to include the submission of all existing current, objective basic credit data, both positive and negative, for loan transactions going back five (5) years from the effectivity of RA 9510 in 2008.

Among the grounds for opposition to the compulsory coverage of cooperatives, the most pertinent are the following:

a.  The compulsory CISA coverage of credit cooperatives violates the right to subsidiarity, autonomy and independence mandated by the Philippine Cooperative Code of 2008;

b.  The implementing rule for the compulsory submission of basic credit data of borrowers going back five (5) years from the enactment of the law (2008) is contrary to the law itself and constitutes a violation of the equal protection clause of the 1987 Constitution;

c.  RA 9510 was enacted without prior consultation with the Cooperative Community;

d.  The absence of prior consultation constitutes a denial of the due process  and equal protection clauses guaranteed by the Philippine Constitution;

e.  Registration with the CIC creates another level of regulation for credit cooperatives;

f.  The obligation to submit the basic credit data of borrowers violates their right to privacy; and,

g.  The rights of cooperatives are not protected in the CIC.  Thus, the need for the CDA to be represented in the CIC Board.


 a.  On the violation of cooperative subsidiarity, autonomy and independence guaranteed by RA 9520:

Article 2 of RA 9520 is clear –

“It is the declared policy of the State to foster the creation and growth of cooperatives as a practical vehicle for promoting self-reliance and harnessing people power towards the attainment of economic development and social justice.  The State shall encourage the private sector to undertake the actual formation and organization of cooperatives and shall create an atmosphere that is conducive to the growth and development of these cooperatives.

Toward this end, the Government and all its branches, subdivisions, instrumentalities and agencies shall ensure the provision of technical guidance, financial assistance and other services to enable said cooperatives to develop into viable and responsive economic enterprises and thereby bring about a strong cooperative movement that is free from any conditions that might infringe upon the autonomy of organizational integrity of cooperatives.

Further, the State recognizes the principle of subsidiarity under which the cooperative sector will initiate and regulate within its own ranks the promotion and organization, training and research, audit and support services relating to cooperatives with government assistance where necessary. [Emphases supplied]

The pertinent provision of Article 4 of RA 9520, on the other hand, is clear and unequivocal –

“Every cooperative shall conduct its affairs in accordance with Filipino culture, good values and experience and the universally accepted principles of cooperation which include, but are not limited to, the following:


(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. [Emphases supplied]

The above-quoted Articles 2 and 4 of the Philippine Cooperative Code of 2008 show the legislative intent of making cooperatives independent of external control.

By subsidiarity, “the cooperative sector will initiate and regulate within its own ranks the promotion and organization, training and research, audit and support services relating to cooperatives with government assistance where necessary.”

In the Cooperative Development Authority’s Philippine Cooperative Medium Term Development Plan (PCMTDP) for 2011-2016, cooperative subsidiarity means that “there should be no government intervention as much as possible and government intervenes only when necessary.”  Requiring cooperatives to register with the CIC violates the subsidiarity provision of RA 9520.

By autonomy and independence, cooperatives, being self-help organizations, enjoy a degree of independence in the management of its affairs which degree of independence cannot be found in other forms of business enterprises like sole proprietorship, partnerships and corporations.

In PCMTDP (2011-2016), the principle of autonomy and independence defines cooperatives as “autonomous, self-help organizations.  Along with the principle of partnership and complementation, it also guides cooperatives in their pursuit of growth and development through critical collaboration or strategic alliances with external organizations, including government and non-government organizations (NGOs) and the business sector.”

The constitutional and statutory provisions on subsidiarity, autonomy and independence of cooperatives is a recognition by the State of the effort of these cooperatives to provide for the needs of its unique communities.  Requiring said cooperatives now to become submitting entities to CIC similar to other business enterprises would mean disregarding the express provisions of RA 9520 pertaining to subsidiarity, autonomy and independence because the submission of the basic credit data of members are direct interference into the affairs of credit cooperatives.  It can even be considered an invalid class legislation because cooperatives were lumped together with business enterprises that do not share the same interests.

Cooperatives are instruments for the equitable distribution of opportunities, income and wealth.  Because of cooperatives, the people, especially those at the grassroots level, are now being empowered economically, socially and more recently, politically.

Placing cooperatives within the ambit of CISA, wittingly or unwittingly, has the effect of putting cooperatives at a disadvantage because now, the banking and other lending institutions which consider most cooperative members unbankable, will be able to have a second look on the creditworthiness of persons they originally rejected and then compete with cooperatives in granting them loans in the guise of giving “better and more affordable options.”  At the end, only the non-coop submitting institutions can benefit from the CISA to the detriment of credit cooperatives.

b.  The implementing rule for the compulsory submission of basic credit data going back five (5) years from the enactment of the law violates the law itself:

The implementing Rule on the matter states:

“Rule 4.  Submitting Entities and the Data to be Submitted:

Rule 4.1.  The following entities shall submit to the Corporation current, objective, factual and basic credit data, both positive and negative, on all these data subjects within sixty (60) days from the effectivity of these Rules:


Provided that the Corporation after ensuring the capacity of submitting entities may allow a phasing in of submitting entities as determined by the Corporation; Provided further, that such data shall be in the form prescribed by the Corporation, said basic credit data shall include all data that are in the possession of the submitting entities for not more  than the last FIVE (5) YEARS PRIOR TO THE EFFECTIVITY of the Act.” [Emphases supplied]

This particular Rule is suffering from legal infirmity inasmuch that the statutory provision which the Rule intends to supplement is clear that credit information or basic credit data must cover only loan transactions existing on the date of the enactment of the law, to wit:

“Section 8.  Rules and Regulations.


(h)  The basic credit data about a borrower shall be limited to credit information existing on the date of the enactment of this Act and thereafter. [Emphases supplied]

There is a legal truism – “a spring cannot rise higher than its source.”  It is applicable in the case of the CISA and its implementing rules.  The mandate of the law is clear:  the basic credit data is limited to information existing on the date of the enactment of RA 9510 and thereafter but not earlier than 15 November 2008.  Unfortunately, the implementing rules of RA 9510 says otherwise.

While it is true that provisions of law are deemed written into contracts, the same cannot be said in the case at bar because the CISA implementing rule runs counter to the provision of the law it purports to implement.

c.  RA 9510 was enacted without prior consultation with the Cooperative community:

Cooperative leaders maintained that they are not aware of any public hearing or consultation made among the Cooperative Community with regard to the inclusion of cooperatives within the coverage of the CISA when it was still being deliberated in the two houses of Congress.

SENATOR SONNY ANGARA’s Senate Bill 1881 was reported by the Senate Committee on Banks, Financial Institutions and Currencies; while REPRESENTATIVE JAIME C LOPEZ’s House Bill 4260 was reported by the House Committee on Banks and Financial Intermediaries.  The late REPRESENTATIVE GUILLERMO C CUA, COOP-NATCCO Party List, was one of the co-authors of HB 4260. REP CUA was also the author of HBN 2443 (An Act Mandating the Bangko Sentral ng Pilipinas to Incorporate the Credit Information Corporation).  Accordingly, the said bill proposed the establishment of a central credit bureau to broaden access to credit, especially to small borrowers by reducing reliance on collaterals and facilitating the determination of a borrower’s creditworthiness.

The CIC is now harping that REP CUA’s authorship of HBN 02443 as basis for the inclusion of cooperatives among submitting entities.  it failed, however, to clarify if public hearings and consultations among stakeholders, like credit cooperatives, were made when the said bill was still being deliberated and considered at the House of Representatives and the Senate.  The dearth of information on the matter of public hearings and consultations tends to support the claim of many cooperative leaders that no such public hearings or consultations were made.  A verification with the Cooperative Development Authority (CDA) confirmed such belief that no prior consultations were made.  The non-consultation with credit cooperatives can be confirmed by the journal of the deliberation at the Senate on 18 December 2007 when, during the interpellation by the late SENATOR JOKER ARROYO of the principal sponsor (SENATOR ANGARA), the latter enumerated the entities that were consulted which does not include credit cooperatives, to wit:

Asked if the credit information system is a database, SENATOR ANGARA replied in the affirmative, saying that the purpose is to assemble reliable comprehensive record of potential borrowers because the main problem of BANKS and LENDING CORPORATIONS is the difficulty of determining the creditworthiness of a potential borrower.  He recalled that when he was chair of PNB, of which Senator Arroyo was also a former chair, the bank maintained a separate department to investigate the creditworthiness of every applicant for loan, which added to the overhead of maintaining the credit investigators.  He said that for lack of credit record, very few small- ad medium-scale borrowers can avail of credit with the banking system.  He stated that the credit information system would facilitate lending and management of credit risk, and add to the circulation of money in the economy.

As to whether the ones who want this system are the BANKS and not necessarily the borrowers, Senator Angara replied in the negative, saying that most of the resolutions the Committee received were from CONSUMERS who are dependent on the so-called “5-6” lending scheme.  He expressed confidence that with a credit information system in place, the BANKS would be ready and willing to lend money because they can easily determine whether the borrower is potentially creditworthy.


As to whether the BSP and the banks endorsed the bill, Senator Angara gave assurance that the bill was strongly endorsed by BANKS, OTHER FINANCIAL SYSTEMS,INSURANCE COMPANIES, CREDIT CARD COMPANIES, ALL THE CHAMBERS OF COMMERCE in the country and even by BORROWERS.” [Emphases supplied] (SOURCE: Senate Journal: Session Nr 45; 18 December 2007; pp. 985-986)


On the part of the House of Representatives, the undersigned had difficulties in accessing records of its legislative journals.  It could be that the co-authors from the House or the latter’s Committee on Banks and Financial Intermediaries conducted public hearings and consultations, but most cooperatives cannot recall being invited to attend said hearings or consultations.  Even the CDA is not aware of any such hearings or consultations.

d.  The absence of prior consultation constitutes a denial of the due process and equal protection class guaranteed by the Philippine Constitution:

The inclusion of credit cooperatives within the ambit of RA 9510 also constitutes a violation of Section 2 of Article III of the 1987 Constitution, to wit:

No person shall be deprived of life, liberty or property without due process of law, nor shall any person be denied the equal protection of the law.”

The equal protection clause of the Constitution in the instant case is violated because the law classified cooperatives with banks and other financial/lending institutions without due regard to the nature of cooperatives.  It appeared that because credit cooperatives extend loans to its members, it was categorised the same as banks, quasi-banks and other financial institutions.

The case of Basco vs Philippine Amusement and Gaming Corporation (197 SCRA 52 [1991]) on the issue of equal protection is enlightening:

“The equal protection clause of the Constitution does not preclude classification of individuals who may be accorded different treatment under the law as long as the classification is not unreasonable or arbitrary.  The equal protection clause does not prohibit the legislature from establishing classes of individuals or objects upon which different rules shall operate.  The Constitution does not require situations which are different in fact or opinion to be treated in law as though they were the same.  The equal protection clause does not mean that all occupations called by the same name must be treated the same way; the State may do what it can to prevent what is deemed as evil dn stop short of those cases in which harm to the public that would insure if the rule laid down were made mathematically exact.” [Emphases supplied]

To better understand the application of the equal protection clause of the Constitution, the Supreme Court, in the 1992 case of Chua vs Civil Service Commission (206 SCRA 65), gave us the criteria for a valid and reasonable classification, to wit:

“The equal protection applies only to persons or things identically situated and does not bar a reasonable classification of the subject or legislation.  A classification is reasonable where (1) it is based on substantial distinctions which make real differences; (2) these are germane to the purpose of the law; (3) the classification applies not only to present conditions but also to future conditions which are substantially identical to those of the present; (4) the classification applies only to those who belongs to the same class.”

In maintaining that cooperatives are of a different classification than banks and other financial institutions, it is significant to note the declaration of the High Court in the case of Dumaguete Cathedral Credit Cooperative vs Commissioner of Internal Revenue (GR 182722, 22 January 2010), that –

Under Article 2 of RA 6938, as amended by RA 9520, it is a declared policy of the State to foster the creation and growth of cooperatives as a practical vehicle for promoting self-reliance and harnessing people power towards the attainment of economic development and social justice. xxx

xxx  It must be emphasized that cooperatives exists for the benefit of their members.  In fact, the primary objective of every cooperative is to provide goods and services to its members to enable them to attain increased income, savings, investments, and productivity.” (Republic Act Nr 6938, Article 7)

The said declaration  of policy is in keeping with the clear and unambiguous provision of the 1987 Philippine Constitution that “the promotion of social justice shall include the commitment to create economic opportunities based on freedom of initiative and self-reliance” (Section 2, Article XIII, 1987 Constitution).  To now classify cooperatives among the ranks of banks and other lending institutions would amount to an invalid classification as the said entities are not of the same classification as cooperatives.

e.  Registration with the CIC creates another level of regulation for credit cooperatives:

During the recent forum held at the House of Representatives on 12 October 2016 sponsored by the House Committee on Cooperative Development, both the CIC Chairman and President maintained that the role of the CIC is just an aggregator and not a regulator. Yet, in the same consultative forum, the CIC announced that micro and small cooperatives are no longer covered by the CISA.  This development begs the question – ISN’T THE ACT OF EXCLUDING SMALL AND MICRO COOPERATIVES ON ITS OWN AN EXERCISE OF A REGULATORY FUNCTION?

The answer to such question is clear from its undated Letter Circulars nr 2015-02 and 2016-01.  Accordingly, only medium and large cooperatives are now mandated to register with the CIC.  On this matter, it is significant to note that CIC’s action of excluding micro and small cooperatives, while beneficial to said cooperatives, may not be able to stand legal scrutiny since Section 2 of RA 9510 is clear in its Declaration of Principles, that:

The operations and services of a credit information system can be expected to greatly improve the overall availability of credit especially to micro, small and medium scale enterprises; provide mechanisms to make credit more cost-effective; and reduce the excessive dependence on collateral to secure credit facilities.” [Emphases supplied]

Accordingly, the provisions of the law on which enterprises are covered are clear.  CIC, on its own cannot decide on which enterprises are covered or not.  Even the Joint Congressional Oversight Committee cannot do that because it would be tantamount to an amendment of the law which can only be done by the enactment of a repealing law.

At this point, it is best to remember that the existence of the Joint Congressional Oversight Committee on CISA was already rendered functus officio upon the approval and issuance of the CISA Implementing Rules and Regulations.  From which office or agency then did the CIC sought permission or derived such authority to exclude micro and small cooperatives from the coverage of RA 9510?

Moreover, from the quoted provision of the law, it can be gleaned that the concern of the government is towards micro, small and medium enterprises.  If such is the case, then why exclude MICRO and SMALL cooperatives (enterprises) beyond the ambit or scope of RA 9510 when the law purportedly exists to assist and support them?

f.  The obligation to submit the basic credit data of borrowers violates their right to privacy:

Cooperative leaders are in unison in claiming that the law violated their right to privacy, a right guaranteed and protected under the 1987 Constitution.

During the round-table discussion at the House of Representatives on 12 October 2016, both the CIC Chairman and President maintained that a borrower can refuse to submit his basic credit data.  Unfortunately, CIC’s undated Letter Circular Nr 2016-02 says otherwise, to wit:

Q3.  Are Submitting Entities required to submit all their borrowers’ data?

A3.  YES, they must submit all credit data of their borrowers in their database.

Q4.  Can a borrower refuse to submit his credit data?

A4.  NO. A borrower cannot refuse to submit his credit data. All borrowers’ credit data, through their credit facilities under Republic Act No. 9510 or the Credit Information System Act (CISA) are mandated to submit to the CIC all data pertaining to credit.  Notification of the existing law to the borrower is enough for the implementation of RA No. 9510.

In this regard, the journal of the Senate for the session held on 19 December 2007 will further show that such was never the intention of the principal sponsor, to wit:



Asked if the credit history of an individual or a corporation would also be submitted to the Bureau, Senator Angara replied that the implementing rules and regulations should provide how comprehensive the record of credit history should be.  He pointed out that unless the person or entity authorizes it, credit record would not be loaded into the system.” (Senate Journal: Session Nr 45, 18 December 2007; p. 988)

Clearly, the CIC’s requirement for the mandatory submission of basic credit data is not in keeping with the legislative intent insofar as the borrowers’ right to keep his transactions with the submitting entity inviolable is concerned.

g.  The rights of cooperatives are not protected in the CIC.  Thus, the need for the CDA to be represented in the CIC Board:

Another contentious issue brought about by the non-consultation with the Cooperative Sector, is the matter of the governance of the CIC.  There was a proposal to include the CDA or its representative to sit in the CIC Board of Directors.  The CIC President maintained that it may no longer be necessary since the NATIONAL CONFEDERATION OF COOPERATIVES (NATCCO) is already a CIC investor with a seat in the Board of Directors (NOTE: CIC President Jaime Casto Jose P Garchitorena was referring to the PHILIPPINE COOPERATIVE CENTER or PCC where NATCCO is also a major investor). Somehow, this information is begging the question – if PCC is indeed an investor with CIC, then how come that its Managing Director, MR DANNY ANG, during the CDA-sponsored forum in September 2016 at the Department of Foreign Affairs in Pasay City, maintained that PCC’s position with regard  to the compulsory registration of credit cooperatives with the CIC need further study, when clearly, PCC has already embraced CIC as its own?

Be that as it may, the inclusion of a representative from PCC in the CIC Board is not an assurance that the rights of cooperatives will be protected since PCC is a federation registered with the CDA to undertake business activities in support of its member-cooperatives.

At this time, PCC is positioning itself as the cooperative apex organization; but until such time that it can prove its worth as an advocate for the Cooperative Sector, it is necessary that the rights of credit cooperatives be protected and that can be done only if the CDA will be given a seat in the CIC Board to guaranty industry representation.


In all arguments, there are always two (2) opposing views.  There are always two sides to a coin; the pros and the cons; the thesis and the antithesis; those in favor and those against.  After the extensive disquisition on the objection to the CISA coverage of credit cooperatives, we need now discuss the benefits to be derived from registration with the CIC.

Setting aside the constitutional issues, those who favor the registration of credit cooperatives with the CIC consider it a welcome development because it would give opportunity to cooperatives to be at par with other business enterprises.  According to MS ELSIE REMONTE, Operations Manager of the Philippine Cooperative Center, with the credit cooperative registration with the CIC, a door has been opened for cooperatives to join the mainstream and not just to take advantage of its gaining access to the borrowers’ databank from other submitting entities.  She also maintained that what we need at this time is to negotiate for the protection of small and micro cooperative which are not yet prepared, in terms of infrastructure, for the submission of the required basic credit data of  its borrowers.

There are also cooperatives which believe that participation with the credit information system will help uplift the status of cooperatives.  Accordingly, putting cooperatives at par with other business enterprises will ensure that cooperatives will no longer be just a footnote in people empowerment.  Included among these cooperatives are the following large cooperatives: PCC, NATCCO, VISAYAS COOPERATIVE DEVELOPMENT CENTER (VICTO), PHILIPPINE FEDERATION OF CREDIT COOPERATIVES (PFCCO), NOVALICHES DEVELOPMENT COOPERATIVE (NOVADECI) and the MINDANAO ALLIANCE OF SELF-HELP SOCIETIES – SOUTHER PHILIPPINES EDUCATIONAL COOPERATIVE (MASS-SPECC).


Notwithstanding the active participation of large cooperatives in the incorporation of the Credit Information Corporation and the perceived benefits that can be derived from registration with CIC, it is submitted that the constitutional infirmity surrounding the enactment of the law needs to be resolved at the earliest opportunity before we can move forward.  Accordingly, the absence of credible consultations before RA 9510 was passed into law puts in question its constitutionality.  Until such issue is resolved, credit cooperatives, which did not invest with the CIC, will continue to oppose its compulsory registration inasmuch that it perceive that sharing the basic credit data of its borrowing members with banks and other lending institutions through the CIC has the effect of opening the gates to undue competition in favor of banks and other lending institutions to the detriment of cooperatives.

Moreover, it renders nugatory the importance of cooperatives as practical vehicles for promoting self-reliance and for harnessing people power for the attainment of economic development and social justice.  Accordingly, cooperatives are a class of its own.  Its raison d’etre is not the same as banks and other lending institutions.  They exist mainly to empower its members to become better effective partners of the government in nation-building and people empowerment.  Therefore, treating credit cooperatives the same as other profit-focused institutions is anathema to the very existence of said cooperatives.

Cooperative Success vis-a-vis Members’ Benefits


Is the grant of high interest rate for share capital contribution, to include the patronage refund, sufficient to claim that the cooperative is making a difference in the lives of its members?

This is a question that many may not have considered but the answer to it can make or break the cooperative.

Many cooperatives, in efforts to entice prospective members to join the organization or to retain their membership, often expound on the high rate of interest income and the so-called “balik tangkilik” or patronage refund that members are entitled to receive when they patronize the services of the cooperative; and, for many members, their benefits are limited to the following:

  1. Interest income on share capital contribution
  2. Patronage Refund
  3. Providential, Productive and Durable Consumer Goods Loans
  4. Rebates for faithful loan payment
  5. Tax-free Interest income on savings deposits
  6. Damayan Program Benefits

This is how the cooperative earns, through the patronage of its members; but when the cooperative grows to become a multi-million peso institution, does the accolade for success cascade to the benefit of the general membership, or is it limited to the cooperative alone?

In a perfect world, the answer should be in the affirmative: that cooperative success should redound to the benefit of the ordinary members and not only to a selected few. But we live in an imperfect world.  Thus, cooperative members become mere tools in attaining affluence for the organisation.

Accordingly, an ordinary member, whose understanding of the purpose of a cooperative is limited only to that of an institution that provides loans, is not aware that he has a larger role in the scheme of things in his cooperative.  This can be attributed to a failure by the cooperative to deepen the members’  education on the potentials being offered by the cooperative.  It may be because the cooperative leaders themselves, do not fully understand what the cooperative is all about; or, maybe, member empowerment is not included in their agenda.  For myself, I consider such apathy towards uplifting the societal position of coop members as a betrayal of the trust reposed to the select few at the helm of the organisation.

Really, among cooperative leaders, now more than ever, there is a need for a thorough understanding, education and internalization of basic cooperative principles for a realisation that cooperative stewardship carries with it a social contract between the coop leaders and members that the former shall do everything in their power to uplift the social and economic well-being of the latter. Sad to say, however, the members are being exploited to perpetuate the interest of the organisation.

A cooperative may receive recognition and accolade for its success based on statistical data on the growth and development of the organisation; but, until and unless an individual member can rise from the quagmire and misery of poverty, can the cooperative come into full realisation of its objectives.

A COOPERATIVE’S FOCUS SHOULD BE ON THE WELFARE OF ITS INDIVIDUAL MEMBERS AND NOT ON THE PERPETUATION AND RECOGNITION OF THE ORGANISATION. This is as it should be for what good will the cooperative be if it fails in its obligation to uplift the lives of its individual members?

Ten (10) Misconceptions re Parliamentary Practice and Procedures


(Photo of the Roman Senate courtesy of

During the 29-30 March 2014 Refresher Training for Trainers of the Union of Defense and Public Safety Cooperatives (UDPSC) conducted at Montevista Hotspring and Conference Resort at Pansol, Calamba City, the participants were each given a 15-minute period to make our respective presentations. Accordingly, my presentation is about ten (10) misconceptions on parliamentary practice and procedures, as follows:

1. The Robert’s Rules of Order is the rule for all deliberative assemblies.

The Robert’s Rules of Order is just one among many parliamentary rules of order. The misconception arises from the fact that it is the most popular. Aside from Robert’s, there’s the Standard Code of Parliamentary Procedure, Demeter’s Manual of Parliamentary Law and Procedure, Jefferson’s Manual, Mason’s Manual and legislative Procedures, Kerr and King’s Procedures for Meetings and Organizations, Code Morin and the Standing Rules of the United States Senate.

2. Interpellation is directed to the proponent of the motion

Interpellation and other forms of questions must be addressed to the chairman or the presiding officer and not directly to the proponent of a motion. This is necessary to insure the chairman or the presiding officer’s full control of the deliberation. Otherwise, by directly questioning the other person, it could result to a prolonged discussion between the two persons and deprive the other members of the organization to exercise their right to speak.

3. Committee meetings must strictly adhere to the formalities of the rules of procedure

Referral of a subject matter to a committee necessitates a free-willing deliberation among the members of the committee. Thus, the formalities in the rules of procedure of the main body is not adopted in the committee level. This is necessary so that all pros and cons over the subject can be deliberated upon.

4. Seconding a motion terminates all discussions on the motion’s subject.

Seconding a motion means that a member, other than the movant, is supporting the need to have the matter deliberated upon by the body and approved, if necessary. Otherwise, if a motion is not seconded, it means that the body finds no merit in its deliberation.

5. The vice chairman automatically becomes the chairman upon the latter’s permanent disability

The vice chairman only assumes the chairmanship only upon the TEMPORARY inability of the chairman to perform his duty. In case of permanent disability, the body will select the new chairman who may not necessarily be the current vice chairman.

6. The chairman cannot vote or make motions

In small bodies, the Chairman, like all the other members of the deliberative asssembly, have a right to vote or to make motion when he deems it necessary. For large bodies, however, the chairman needs to maintain decorum by appearing to be impartial.

The notion that the chairman can exercise his right to vote only to break a tie is only partially correct. Voting to break a tie is relevant only if the voting process is by viva voce; but if the voting is through secret balloting, the chairman may cast his vote like any other member.

On the matter of making motion, the chairman can do so but he must make it appear as a suggestion and letting any of the other members to do it for him (e.g., when there are no other business for deliberation, the chairman may say, “If there are no other business for the day, the Chair will entertain any motion to adjourn“)

7. A member can demand a copy of the minutes of the meeting of the Board of Directors

The minutes of the meeting of the Board of Directors are confidential and can only be released to a particular member upon approval by the Board of any request that it be disclosed. The release of such information can only be done by calling for a meeting of the Board and then allowing such member to read the minutes but not to copy the same.

Only resolutions approved by the Board of Directors are open to the members of the deliberative assembly.

8. A defeated motion can no longer be revived for deliberation

A defeated motion can still be revived provided that it is done in another meeting but not during the same meeting when it was defeated.

9. A director cannot move or second the motion for approval of the minutes of the previous meeting in which he was absent

There is no rule that prohibits a director from moving for the adoption or to second the motion to approve the minutes of a meeting where the moving or seconding director was absent.

10. A meeting minutes, once approved, can no longer be amended

If there is a material error or omission in the minutes which became manifest after the lapse of a long period of time, such approved minutes can still be amended by making a motion to Amend Something Previously Adopted.

Such amendment to the minutes can be approved by a two-thirds vote, majority vote (with notice), majority of the entire membership or by a unanimous consent of the deliberative body.


Can Foreigners Join Cooperatives?


A few days ago, a fellow lawyer asked if foreigners can join a cooperative. Accordingly, the Filipino workers in a multi-national corporation formed a cooperative which, for the purpose of this paper I shall call ABC Multiple Purpose Cooperative or ABC MPC, and the expat workers would want to join the cooperative.

My lawyer-friend said that he consulted the Cooperative Development Authority (CDA) regional office which has jurisdiction over ABC MPC. He was told that the foreigners cannot join the cooperative as it is not allowed by law (presumably RA Nr 9520).

A reading of Republic Act Nr 9520 or the “Philippine Cooperative Code of 2008” (the Code, for brevity), however, will show that the expat workers are not really prohibited in “joining” a cooperative. The restriction is with regard to the formation or establishment of cooperatives. Accorrdingly, jArticle 10 of said law is clear on the matter – Organizing a Primary Cooperative – Fifteen (15) or more natural persons who are Filipino citizens, of legal age, having a common bond of interest and are actually residing or working in the intended area of operation, may organize a primary cooperative under this Code: Provided, That a prospective member of a primary cooperative must have completed a Pre-Membership Education Seminar (PMES)”.

From said provision, it is clear that the restriction applies only in the organizing of a cooperative. Once the cooperative is organized, it may accept application for membership from any one; be it a Filipino, a former Filipino or an expatriate. Such fact is supported by Article 5 of the Code which defines a member as “a person either natural or juridical who, adhering to the principles set forth in this Code and in the articles of cooperation, has been admitted by the cooperative as member.” There is no requirement that a person to be accepted as member must be a Filipino. All that is needed is for such a natural person to adhere to the principles set forth in the Cooperative Code and the articles of cooperation of the cooperative. Otherwise, the law would have defined a member as a Filipino who, adhering to the principles set forth in this Code and in the articles of cooperation xxx But such is not the case. Ubi lex non distinguit nec nos distinguire debemus – “When the law does not dinstinguish, we must not distinguish.”

Premises considered, it is submitted that even foreigners can join a primary cooperative. On the matter of membership type, whether it be as a regular or associate member, it would be dependent on the General Assembly-approved articles of cooperation and by-laws.

On Estate Settlement


Is the settlement of estate needed only in case the decedent left a considerable amount of properties?

Sad to say but many believe it to be so.  Reasons advanced include, but are not limited to, the following:

  1. There is no reason to subdivide the property because the heirs want it to be owned in common by all the members of the family.
  2. It is the wish of the decedent, i.e., that the property should be owned in common by all heirs of the decedent.
  3. Dissatisfaction on the proposed distribution of estate.  Thus, the heirs prefer the status quo to preserve common ownership over the estate of the decedent.
  4. The heirs cannot agree on who will facilitate the settlement of the estate, or act as administrator or administratrix over the estate.
  5. Ineptitude or lack of concern over the settlement of the estate.
  6. Belief that estate settlement is only for the rich.
  7. Ignorance on the requirement of the law for the need of settlement of the estate.

These are but some of the excuses or justification in the avoidance or refusal to settle or liquidate the estate of a decedent.  But after all has been said and been done for, is it really the best decision at this time or at any other time?  Clearly, an affirmative answer to the question would be the wrong answer whichever way you look at it.  Not only is it wrong but also it is irresponsible because it would expose the property to the payment of penalty.  It could even spell the lose or dissipation of the entire property.  

In law school, we were taught that taxes are the lifeblood of the government.  Without it, the government cannot exists.  So whether we like it or not, for richer or poorer, in sickness and in health, in life and in death, government taxation is unescapable; and, the more we procrastinate, the more will we be taxed especially with respect to the payment of estate tax.

Settlement of the estate should not be delayed.  It may be that the current surviving heirs will not feel the repercussion of it but the younger generation or future members of the family will be the ones to suffer for it.  

Settlement of estate is the concern not only of the landed or the rich.  It is the concern of all heirs (to include legatees and devisees), regardless of their station in life.

Also, it is best to remember that among the rich, the middle class and the poor, the latter has more to lose than the others.  The rich and the middle class has the means to pay the fine/penalty for late or non-settlement of a patriarch’s or matriarch’s estate but the poor, more often than not, only has that one piece of property that the government could levy upon to satisfy its claim for taxes. 

Finally, for as long as the estate tax becomes due and remains unpaid, there is a corresponding penalty (TWENTY PERCENT (20%) ANNUALLY) on the unpaid tax liability computed from the date the tax is due to the date of its payment.