PASAY CITY - The Cooperative Code of 2008 or Republic Act 9520 is up for amendments as the Senate Committee on Cooperatives has begun conducting consultations with co-op leaders in a new round of hearings and created a technical working group to thresh out some difficult matters.

Senator Imelda Marcos presided at a meeting with leaders on August 19 where she announced the filing of senate Bill 116 and Senate Bill 572 by Senator Hontiveros.

RA 9520 was signed into law in February 2009 by President Gloria Arroyo, serving as the amendment to the Cooperative Code of 1990 signed into law by President Corazon Aquino.

On its sixteenth year, co-op sector leaders have deemed the necessity of updating or amending the current Cooperative Code to respond to the current state of the cooperatives.  

Present at the hearing were co-op leaders representing government agencies Cooperative Development Authority, Department of Agriculture, Dept. of Agrarian Reform, Dept. of Finance, Bureau of Internal Revenue, Bureau of Customs, Dept. of Trade & Industry, Dept. of Economy, Planning, and Development, National Tax Research Center, Land Bank of the Philippines, Dept. of Budget and Management, National Anti-Poverty Commission, Bangko Sentral ng Pilipinas, Dept. of Transportation, National Electrification Administration, and the Insurance Commission.  

The cooperative sector was represented by the NATCCO Network, National Union of Cooperatives, League of Cooperative Development Officers, National Alliance of Cooperatives, Nueva Segovia Consortium of Cooperatives, Philippine Cooperative Center, Philippine Family Farmers' Agriculture Fishery Forestry Cooperatives Federation (AgriCOOPh), Philippine Chamber of Cooperatives, Philippine Rural Electric Cooperating Association, and the National Federation of Transport Cooperatives. 

In her opening statement as presiding officer, Senator Marcos stated: “The new Cooperative Code will be signed into law by October, in time for the Cooperative Month.  So let’s hurry.”

Topics discussed were tax exemption of cooperatives, incentive voting versus one-member, one-vote, remittance of CETF, preferential treatment for agricultural cooperatives, concerns of transport cooperatives particularly regarding access to routes and obtaining loans from financial institutions, and tax matters concerning electric cooperatives.

Senator Marcos immediately steered the discussions to the matter of cooperative tax exemption.  She relayed to the DOF representative the co-ops’ complaints on complying with the BIR’s TIN submission requirement and also the Reserve Fund threshold of Php 10 Million, adding that the amount has been eaten up by inflation and is no longer relevant.  

The DOF representative promised that the Dept. will review the policies.

On incentive voting, Edwin Bustillos of the Philippine Chamber of Cooperatives were at logger heads with Fr. Aton Pascual of the National Union of Cooperatives, as Bustillos insisted that the International Cooperative Alliance was clear that all co-ops were to practice one member-one vote.  Fr. Anton countered that such practiced applied only to primary cooperatives as federations abroad would give up to five votes for a member to gain “just one seat in the board.”

On CETF remittance, leaders of cooperative unions led by Fr. Anton a year ago lobbied for all CETF to be remitted to unions, while federations already had income sources in their business activities, which were their main purpose.  

At the hearing, the NATCCO Network insisted on the guidelines of the ICA that all cooperatives – whether federations or unions – should engage in cooperative education, business-related training, and informing the public about cooperatives.  Such activity was not be limited only to unions.

It was argued that consequently, federations are to perform all three functions and not just business.

Senator Marcos then replied: "Eh di hindi na natin kailangan ang unions!" (Then there is no need for unions.)

The NATCCO Network informed the Senator that based on consultations with co-op leaders nationwide, the general sentiment is that primary cooperatives cannot be mandated to remit CETF to unions.

The cooperative union leaders have conceded and agreed to 80-20 remittance scheme, where twenty-percent will automatically be remitted by primary cooperatives to unions, while the rest would be their choice. 

On agricultural cooperatives, Senator Francis “Kiko” Pangilinan announced that he was going to integrate the tasks of the Bureau of Agricultural Cooperatives into the new Cooperative Code. He also questioned why a certain law prohibits co-ops from selling processed agri products, and should be limited only to raw products.  He promised that he would ensure co-ops will have post-harvest facilities and will be able to market their processed products.

Lani Anciano of AgriCOOPH said co-ops must enjoy favored status in supplying government requirements for agri products.  Senator Marcos and Pangilinan agreed.  AgriCOOPH will submit recommendations. 

Transport cooperatives requested Senator Marcos to ensure that their members will have access to loans from financial institutions and will have protection in their franchise routes.

On electric cooperatives, the National Electrification Administration stated that they are proposing for all electric cooperatives – whether registered with NEA or CDA – to be tax-exempt from local taxes.  

Senator Marcos asked the DOF representative if electric cooperatives can be exempt from income taxes as well (which goes to the national budget).  The DOF promised to conduct studies.

Senator Marcos also asked the DOF to submit a manifestation how much taxes is collected by the BIR from co-ops nationwide.

Right before the closing of the hearing, Senator Marcos formed a technical working group (TWG0 that will thresh out the controversial matters.  Among the members are NATCCO Network, Edwin Bustillos of Phil Chamber of Cooperatives, Fr. Anton of NUC, Agricooph, transport cooperatives, the Philippine Cooperative Center, the CDA, and Senate Cooperative Committee staff.