Cooperative Development Authority (CDA) Board Member and Assistant Secretary Vidal Villanueva is excited over the prospect of establishing a Cooperative Stabilization Fund System (CSFS), and promised to coordinate with co-op leaders.

Addressing almost 500 co-op leaders at the online Finance Cluster Forum on Legislative Support for the Cooperative Stabilization Fund on October 12, Vidal said: “Thank you for inviting me. I am pleased to be surrounded by brilliant co-op leaders who are with us today.  It is a great pleasure for me to address all of you.” 

Villanueva heads the Cooperative Finance Cluster composed of 5,377 multi-purpose cooperatives, 1,227 credit cooperatives, 24 cooperative banks, 2 cooperative insurance federations, and 12 Credit surety Fund cooperatives.  These co-ops are stewards of savings deposits amounting to Php 79.3 Billion, time deposits amounting to Php 56.9 Billion, and Share Capital amounting to Php 120 Billion. 

Highlighting the theme of the Cooperative Month ‘Resilient Cooperatives: Responsive to Challenges, Answer to Recovery and Giving Hope in this New Age’, he emphasized that stability, sustainability and resilience  are important to cooperative especially  during the Covid Pandemic.

He reported: “Recently I received reports that several co-ops ceased to exist because of insolvency.  This would not have happened in the first place if we had a Cooperative Stabilization Fund System (CSFS).  In advanced countries, the SFS is a mechanism set up by the national government or the Central Bank, with the primary purpose to protect its domestic economy.” 

NATCCO established the first CSFS in the Philippines at the 2008 General Assembly. It is patterned after the systems in Germany, with the prime purpose of securing cooperatives to continue to operate.

“Members entrust their hard-earned money to their cooperatives.  Cooperatives should also act as good stewards of the share capital, savings deposits or time deposits,” he said.

“A SFS will now secure the money by putting up a fund which can be utilized during financial hardship or instability,” he added.

He lamented: “There are only 88 cooperatives under SFS, 26 of them are billionaire co-ops.  This number is very small compared to the number of registered cooperatives in the country.”

Leaders should really prioritize this, by joining the Stabilization fund System so that you will no longer be apprehensive of going bankrupt or suffering financial losses. 

In September, officers of NATCCO, PFCCO and MASS-SPECC presented to the CDA Board the concept and framework of a CSFS.  

“It was an enlightening meeting!” Villanueva said.

Inspired by the leaders, Villanueva proposed to the CDA Board the establishment of a Philippine Cooperative Stabilization Fund System by virtue of CDA Board Resolution No. 352 Series of 2001.  The CDA Board unanimously approved Villanueva’s proposal.  

After consulting with other co-op leaders, Villanueva brought forward the following proposals: 1) establish an office to implement  the CSFS by coming up with an agreement for a joint venture between government and the federations, both being part in the governance of the CSFS; and 2) amend RA 11364 or the CDA Charter and create a department within the CDA to function as the SF Office.

He also reported: “The Finance Cluster met with officials of the PDIC recently.  One of the topics discussed was the importance of putting up the Cooperative Deposit Insurance System (CDIS).

“Before the establishment of the Coop Deposit Insurance System, according to PDIC, dapat mauna muna ang CSFS (CSFS should be established ahead),” he said.  

This matter will also be discussed by the PDIC Board.  

“If all cooperatives will be under the CSFS, more people will feel secure and join the cooperative!” he concluded.

Later, on December 14 at the Virtual Forum of the Finance Cluster, Villanueva also revealed that the CDA Board has met with officials of the Development Bank of the Philippines with regard to possible financial support for the proposed establishment of the Stabilization Fund for cooperatives.