by Lorie Ann A. Cascaro
If the remaining number of cooperatives is to be the gauge, then cooperativism in the Davao region is on the wane.
Out of the 5,546 registered cooperatives in region 11, only 1,822 are still operating. About 60% of the total coops are non-operating. A coop may be categorized as non-operating if it cannot start a business in two years, and cannot comply with the reportorial requirements.
Eventually, 446 coops were dissolved, 586 cancelled and 245 delisted. This was before the amendment of Republic Act 6983 through RA 9520 or an act amending the cooperative code of the Philippines to be known as the “Philippine Cooperative Code of 2008”.
Cooperative Development Authority 11 regional director Elma R. Oguis told Edge Davao that under the new law, cooperatives are required to re-register upon its implementation on March 22, 2009 with a deadline set at one year. As of March 22 this year, there were 1,260 re-registered coops and 163 newly registered under the new law.
Assuming that 1,822 are still active, Oguis said many of them have not yet re-registered. Hence, the CDA extended the re-registration period from July 1 to September 30, 2010.
Oguis said they will send cancellation notices to those who fail to re-register under RA 9520. What causes most cooperatives’ failure to re-register, she said, is their difficulty in coming up with audited financial statements. Although the CDA had provided trainings for bookkeepers, she said some of them, after being trained, were pirated by other coops, thus pending the requirement.
Considering the problem, Oguis said they are planning with the City Cooperative Development Office to provide them with computerized bookkeeping so that financial statements will automatically be created, which in turn facilitates easy auditing.
Under the new law, the optional fund which originally was 10% will be distributed to community development funds for at least three percent, and to land and building funds at not more than seven percent.
Another amendment is the provision of mediation and conciliation in cases of disputes. These will be settled in the primary or coop level, and will be raised to the secondary or union and federation level. Arbitration may happen if resolution is impossible at both levels.
Economic recession
The lingering worldwide financial meltdown may have affected adversely the cooperatives in the region, Oguis said. Based on consolidated reports, in 2007 coops in the region had P10.7 billion assets, but in 2008 when total members reached 240,602, there was a decrease to P7.99 billion. She added that most of them were not able to submit audited financial statements, others were bankrupt.
However, the volume of business increased, referring to similar reports, from P4.841 billion to P5.711 billion. This volume of business is the total sales of coops, including released loans, businesses and other services.
Although the net surplus decreased a bit from P448.61 million to P429.94 million, Oguis said this amount ultimately went back to the members by patronage and shared capital. “May income pa rin (They still have income.),” she said.
When asked about her personal assessment of the cooperatives in Davao City, Oguis said “Very strong pa rin ang credit cooperatives dito. Malakas ang microfinancing sa Davao City (credit cooperatives are still strong here. Microfinancing is strong in Davao City).”
Does microfinancing contribute to the eradication of poverty? Oguis said “Definitely, yes. Marami talaga silang natutulungan, tapos may paghahatian pa sila after each year (They really helped a lot of people and they have something to share after each year).”
More than just credit
Eradicating poverty for some may be a very ambitious goal even within the entire term of President Aquino. While some politicians say that poverty can be solved by putting an end to corruption, some private sectors claim that lending the poor a small amount of money to start a livelihood is the way to do it.
This is how the Microfinancing Council of the Philippines, Inc. (MCPI) will help solve poverty. It has been microfinancing or providing money from PhP5,000 to PhP8,000 to less fortunate Filipinos as startup capital for any micro and small business.
“They will always remain poor as long as they remain in shanties, squatter areas… that’s why we are financing farmers, financing micro-insurance…” Ruben C. De Lara, MCPI president said during the press conference at the Probinsiya restaurant in Davao City last July 5.
Thus, this year, the MCPI will be adapting a wholistic approach in eradicating poverty in the country. De Lara said that aside from microfinancing, they have social development programs such as housing, education and anything that gives a chance to alleviate the poor people.
Lalaine M. Joyas, MCPI executive director, said there are three types of microfinancing institutions (MFI), namely MFI non-government organizations (NGO), thrift/rural banks and cooperatives. She said there are a total of 39 members of MCPI, 11 are based in Mindanao.
“We go beyond micro-credit, and provide other services,” Joyas said. MFIs provide mini loans, and other financial services for the poor which include savings, mutual funds, micro-insurance, money transfers and payment systems and even business development assistance.
In addition, they are also studying other interventions to improve the poor people’s access to social services and infrastructure, such as assistance in housing, education, health care, water and sanitation, alternative energy, physical community infrastructure, financial literacy and legal services.
The Mindanao Microfinancing Council, partner of MCPI in its second of the series of three conferences on July 29-30, entitled Beyond “MicroCredit: A Wholistic Approach to Poverty Eradication”, is a network of 41 MFIs based in Mindanao. It is composed of 21 rural banks, nine NGOs, seven cooperatives and four cooperative banks.
Not yet in Lanao, Maguindanao
Jeffrey R. Ordoñez, MMC executive director, said they have outstanding loans of PhP1.03 billion provided for 670,600 active microfinance clients. He added that Lanao del Sur and Maguindanao are not yet reached by their network primarily due to security condition.
What they planned was to tap existing institutions that provide savings, insurance, remittance services and credit. He said instead of them penetrating these areas, they encourage bigger enterprises to come in because they already declared their difficulty in finding members there.
VAT exemption pushed
Meanwhile, De Lara mentioned that a bill was passed and approved in the 2nd plenary of the 14th Congress of the House of Representatives on the operation of microfinancing institutions. He said this will be refiled in the 15th Congress.
He added that MF NGOs were not supposed to be categorized as profit making thus exempted from the 35% income tax. And because of their efforts, this is already a settled case, he said. Currently, they push for the regulation of MF NGOs and the exemption of MFIs from 12% value-added tax.
Joyas said that although MF NGOs are practicing self-regulations with MCPI-provided financial performance standards, they are unregulated. Rural banks are regulated by the Bangko Sentral ng Pilipinas while cooperatives by the government.
