MANOLO FORTICH, Bukidnon – Leaders of cooperatives providing financial services gathered with regulators on October 10, 2024, for the 3rd Finance Cluster Congress to discuss pressing concerns and key regulations affecting the sector.

The Finance Cluster includes cooperatives engaged in credit and savings, multi-purpose cooperatives, insurance cooperatives, cooperative banks, and credit and surety fund (CSF) cooperatives.

The Cooperative Development Authority (CDA), the sole regulator of cooperatives in the Philippines, took part in the discussions. CDA Chairperson Joseph Encabo emphasized the need for unity across all cooperative clusters, urging them to "move forward as one." He underscored the strategic role of the Finance Cluster, saying it would "marshal the resources needed by the cooperative sector."

Finance Cluster president Atty. Mickel Borigas presented the Finance Cluster’s medium-term Strategic Plan, highlighting its role as a “consultative body” for the CDA. He emphasized that regulatory compliance should not be seen as a burden but as a “strategic tool” to foster growth and sustainability.

He focused on the role of technology as well: “Cooperatives must adopt modern technologies and innovative products to meet the evolving needs of cooperative members. The Finance Cluster will facilitate access to fintech solutions, digital banking platforms, and emerging financial services to keep cooperatives competitive and accessible.”

CDA Board Member Luz Yringco reaffirmed the cluster’s consultative role and assured cooperative leaders of the CDA’s full support for the implementation of the Strategic Plan. She urged leaders to adhere to standards and regulations, stressing that the CDA prioritizes the development of small and micro cooperatives.

Major General Gilbert Llanto, President of the National Alliance of Cooperatives (NAC) spoke on the importance of resilience, stating that cooperatives within the Finance Cluster must "embrace difficulties to become stronger and better." He cited data from the Bangko Sentral ng Pilipinas (BSP) showing that while only 29% of Filipinos had deposit accounts in 2017, this figure grew to 56% by 2021. However, only 3% of these accounts are with cooperatives. Llanto called on Finance Cluster stakeholders to “step up efforts to bridge the gaps in financial inclusion, especially in unbanked rural areas.”

Atty. Ma. Lourdes Pacao, CDA Administrator, reminded participants of the importance of compliance with the Truth in Lending Act. She emphasized the need for clear, written loan policies, adherence to the “Five C’s of Credit” to reduce delinquency, and the proper documentation of prepayment options for loans.

NATCCO CEO Sylvia Paraguya highlighted the importance of financial discipline and the political will of cooperative leaders to enforce it – specifically to have or even exceed provisions as required by law. She stressed that compliance with regulations and established standards is a gradual process, requiring patience and commitment. Paraguya also emphasized the need for timely reporting of financial data to federations and regulatory bodies.

She presented NATCCO’s Stabilization Fund System, how membership of a primary cooperative can save against insolvency.

Atty. Leah B. Banagui-Han, head of the CDA Legal Affairs Service, announced the formation of a pool of mediators. This group will handle cases that cannot be resolved by conciliation and mediation committees at the primary cooperative or federation levels, in line with the CDA Charter (Republic Act 11364).

Atty. Elizabeth O. Batonan, CDA Deputy Administrator for CSF Service, provided insights on the Financial Products and Services Consumer Protection Act (RA 11765). She urged cooperative leaders to ensure compliance with consumer protection standards to "gain and maintain the trust of members." She also reminded participants that the Act prohibits harassment of borrowers for loan repayments.

In closing, Paraguya encouraged cooperative leaders to embrace a spirit of collaboration, consultation, and coordination. She urged the CDA to engage with federations when formulating new regulations to ensure alignment with the needs of cooperatives.