OVERVIEW OF COOPERATIVES

Philippine Cooperative Code of 2008

(Republic Act No. 9520)

What is a cooperative?

A cooperative is an autonomous (in the context of cooperatives means that they have
the freedom to make their own decisions, manage their affairs, and pursue their objectives
independently while adhering to cooperative principles and legal regulations) and duly
registered association of persons, with a common bond of interest, who have voluntarily joined
together to achieve their social, economic, and cultural needs and aspirations by making
equitable contributions to the capital required, patronizing their products and services and
accepting a fair share of the risks and benefits of the undertaking in accordance with universally
accepted cooperative principles.

What are the essential characteristics of cooperatives?

The following shall characterize a cooperative:

1. Autonomy and due registration (Due registration" in the context of cooperatives refers to
the process of officially registering a cooperative with the relevant government authority or
regulatory agency. Due registration is a crucial step for cooperatives, as it provides them
with the legal framework and protections needed to operate effectively and with confidence.
It also allows them to access various benefits, including tax exemptions, financial support,
and the ability to participate in government programs and initiatives that promote
cooperative development.)

due registration typically entails:

1. Application Submission: The cooperative initiates the registration process by

submitting an application to the designated government agency responsible for
cooperative regulation. In the Philippines, this agency is the Cooperative
Development Authority (CDA).
2. Documentation: The cooperative must provide the necessary documentation as
required by the agency. This typically includes the cooperative's bylaws, articles of
cooperation, a list of founding members, and other relevant information about
the cooperative's objectives, structure, and governance.
3. Review and Evaluation: The government agency reviews the submitted
documents to ensure that they comply with legal requirements and regulations.
They may also assess the cooperative's proposed activities and governance
structure.
4. Inspection and Validation: In some cases, government representatives may
conduct on-site inspections or validations to verify the accuracy of the
information provided and ensure that the cooperative meets certain standards.
 5. Approval: Once the agency is satisfied with the cooperative's application and
compliance with the law, they grant official approval or registration. This legal
recognition provides the cooperative with certain rights and privileges, such as
the ability to enter into contracts, access government support, and enjoy tax
benefits.
6. Issuance of a Certificate: The agency typically issues a certificate of registration
or incorporation to the cooperative as proof of its legal status. This certificate
includes important details about the cooperative, such as its name, registration
number, and address.
7. Compliance with Ongoing Requirements: After registration, the cooperative
must continue to comply with legal requirements, which may include submitting
regular reports, financial statements, and other documentation to the regulatory
agency.
8. Renewal: In some jurisdictions, cooperatives are required to renew their
registration periodically, often on an annual basis, to ensure that they continue to
meet legal requirements and remain in good standing.

2. Voluntary membership

3. Equitable capital contributions of members (Equitable capital contributions are a fundamental

principle in many cooperatives it refers to the practice of members contributing capital to the
cooperative in a fair and just manner. This principle is one of the core cooperative values and is
often associated with the "one member, one vote" principle regardless of their financial capacity,
there may be variations in how this principle is applied based on the cooperative's bylaws and
the legal framework in the specific jurisdiction. However, the underlying goal remains the same:
to ensure that all members have an equal voice and are treated fairly within the cooperative,
regardless of their financial capacity.)

4. Patronizing by members of the products and services of the cooperative

5. Share in the risks and benefits On Organization and registration of cooperatives

What is a primary cooperative?

A primary cooperative is a cooperative whose members are natural persons.

A primary cooperative, often referred to simply as a "cooperative," is the most basic and
foundational form of cooperative organization. It is a type of cooperative that operates at the
local community and is typically composed of individual members or households who come
together to address their common needs and interests.

As to membership, the other categories are:

• Secondary cooperative – the members of which are primary cooperatives

• Tertiary cooperative – the members of which are secondary cooperatives

Who may organize a primary cooperative? A primary cooperative may be organized by a group of
individuals or entities who share a common bond of interest and have a specific purpose or need that
they want to address collectively. In the context of primary cooperatives, the term "organizers" typically
refers to the individuals or entities involved in the formation and establishment of the cooperative. Here
are some common types of organizers who may initiate the formation of a primary cooperative:
Community Members, Farmers, Consumers, Producers, Savings and Credit Groups, Housing
Associations, Workers

 Fifteen (15) or more natural persons who have the following requisites may organize a
primary

cooperative: The cooperative must be formed by a group of at least fifteen individuals who are
interested in collectively establishing and operating a primary cooperative. This minimum
number ensures that the cooperative has a sufficient membership base to operate effectively.

 Filipino citizens: All individuals involved in the organization of the primary cooperative must be
Filipino citizens. This requirement ensures that the cooperative is owned and operated by
Filipino nationals. This requirement ensures that the cooperative is established and operated by
Filipino nationals, aligning with the principle of promoting the economic well-being of Filipino
citizens through cooperation.
 Of legal age: The organizers must be of legal age, which is typically defined as 18 years old or
older in the Philippines. This requirement ensures that individuals participating in the
cooperative are legally capable of entering into contracts and assuming responsibilities. Being of
legal age ensures that the organizers have the legal capacity to enter into cooperative
agreements, make financial commitments, and participate in the governance of the cooperative.
 Have a common bond of interest : The common bond of interest is a fundamental principle of
cooperatives, as it brings together individuals with shared goals and needs. This shared interest
forms the foundation of the cooperative's objectives. The organizers must share a common
bond of interest. This common bond could relate to various aspects, such as:

Economic Activity: Organizers may be engaged in a similar economic activity, such as

farming, small-scale manufacturing, or providing a specific service. Their shared interest could
be a common trade or profession.

Consumption Needs: Organizers may come together based on common consumption needs,
such as access to affordable goods or services. For example, residents in a neighborhood may
form a consumer cooperative to collectively purchase food items.

Geographic Location: The common bond may also be related to geographic location. Organizers
may reside or work in the same area or community and have a shared interest in improving the
local economy or addressing local issues.

 Actually residing or working in the intended area of operation: Organizers must either reside or
work in the intended area of operation of the cooperative. This requirement ensures that the
cooperative is closely connected to the specific community or locality it serves. Requiring
organizers to reside or work in the intended area of operation helps ensure that the cooperative
 is rooted in the local community and directly addresses the needs and concerns of the
community members.

Can a primary cooperative be registered as a multi-purpose cooperative?

Any newly organized primary cooperative may be registered as multi-purpose cooperative only after

compliance with the minimum requirements for multipurpose cooperatives to be set by the Cooperative

Development Authority (CDA). Here's an explanation of this process:

 Conversion Process: When a primary cooperative wishes to become a multi-purpose

cooperative, it must undergo a formal conversion process. This process entails several steps,
including:
 Assessment of Feasibility: The cooperative's leadership and members should
assess the feasibility and need for expanding into multiple activities or services.
This involves determining whether there is sufficient demand and resources to
support the expansion.
 Amendment of Bylaws: The cooperative must amend its existing bylaws to
reflect the change in its status from a primary cooperative to a multi-purpose
cooperative. The amended bylaws should outline the cooperative's expanded
objectives, services, and governance structure.
 Compliance with Regulatory Requirements: The cooperative must ensure that it
meets all the regulatory requirements and standards set forth by the relevant
cooperative authority. This may include complying with minimum capitalization
requirements, reporting obligations, and other regulatory guidelines.
 Application for Conversion: The cooperative submits an application for
conversion to the appropriate regulatory authority. This application typically
includes the amended bylaws, financial statements, and other relevant
documents.
 Review and Approval: The regulatory authority reviews the application and
assesses whether the cooperative has met all the necessary requirements for
conversion. This process may involve inspections or interviews with cooperative
officials.
 Issuance of New Certificate: If the regulatory authority is satisfied with the
cooperative's compliance and the rationale for conversion, it will issue a new
certificate of registration, officially recognizing the cooperative as a multi-
purpose cooperative. This certificate will include updated information about the
cooperative's expanded services and activities.

 Benefits of Becoming a Multi-Purpose Cooperative: By becoming a multi-purpose cooperative,

the organization gains the flexibility to engage in a wider range of activities and services. This
can include offering financial services, providing various consumer and producer services,
 operating retail stores, and more, depending on the cooperative's goals and objectives. Multi-
purpose cooperatives can better adapt to changing member needs and market dynamics.
 Responsibilities and Accountability: As a multi-purpose cooperative, the organization will have
additional responsibilities and may be subject to more regulatory oversight, depending on the
activities it engages in. This means it must maintain compliance with all relevant laws and
regulations governing its expanded services.
 Member Participation: The cooperative's members continue to play a vital role in decision-
making and governance. In the cooperative spirit, members typically have equal voting rights
and opportunities for active participation in the organization's affairs.
 Community Impact: Multi-purpose cooperatives can have a broader impact on their
communities by offering a wider range of services and contributing to local economic
development.

Can a single-purpose cooperative become a multi-purpose cooperative?

Yes.

A single-purpose cooperative may transform into a multipurpose or may create subsidiaries but only

after at least 2 years of operations. by amending its bylaws and complying with the necessary regulatory
requirements. This transformation allows the cooperative to expand its range of activities and services
to address a broader set of member needs and community interests. Here's a closer look at how this
transition can occur:

1. Assessment and Decision: The cooperative's leadership and members should assess the
feasibility and need for expanding into multiple activities or services. This assessment involves
considering factors such as member demands, available resources, and market opportunities. If
there is a compelling reason to diversify the cooperative's services, the decision to become a
multi-purpose cooperative is made through a democratic process involving member input and
approval.

2. Amendment of Bylaws: To effect the transition from a single-purpose to a multi-purpose

cooperative, the cooperative must amend its existing bylaws. The bylaw amendments should
outline the cooperative's expanded objectives, services, and governance structure to reflect the
new multi-purpose status.

3. Regulatory Compliance: The cooperative must ensure that it meets all the regulatory
requirements and standards set forth by the relevant cooperative authority. This typically
involves:

 Complying with minimum capitalization requirements if applicable.

 Reporting on its financial standing and operational plans.

 Demonstrating how the expanded services align with cooperative principles and benefit
members and the community.
 4. Application for Conversion: The cooperative submits an application for conversion to the
appropriate regulatory authority or cooperative development agency. This application typically
includes the amended bylaws, financial statements, and other relevant documents that support
the rationale for the conversion.

5. Review and Approval: The regulatory authority reviews the application and assesses whether
the cooperative has met all the necessary requirements for conversion. This process may involve
inspections, interviews, or additional documentation to verify compliance.

6. Issuance of New Certificate: If the regulatory authority is satisfied with the cooperative's
compliance and the rationale for conversion, it will issue a new certificate of registration,
officially recognizing the cooperative as a multi-purpose cooperative. This updated certificate
will reflect the cooperative's expanded services and activities.

7. Transition and Implementation: With the new status as a multi-purpose cooperative, the
organization can begin offering the additional services or activities outlined in its amended
bylaws. It may involve hiring or training staff, securing the necessary resources, and engaging in
partnerships or collaborations to effectively provide the new services.

8. Member Participation: Throughout the transition, members continue to play an active role in
the cooperative's decision-making and governance. The cooperative's democratic structure,
with equal voting rights for members, remains intact, ensuring that members have a say in the
cooperative's activities and services.

What is the extent of the liability of a cooperative?

A duly registered cooperative shall have limited liability.

 Exceptions to Limited Liability: While limited liability is a fundamental principle in cooperatives,

there may be exceptions or circumstances where members can be held personally liable. These
exceptions could include instances of fraud, illegal activities, or instances where members have
provided personal guarantees for cooperative debts.

What is the legal life of a cooperative?

A cooperative shall exist for a period not exceeding 50 years from the date of registration unless sooner
dissolved or unless said period is extended. Dissolution can occur for various reasons, including a
decision but it can be shorter if the cooperative is dissolved due to decision by the members to
terminate the cooperative, financial insolvency.

What is the rule on extension of cooperative life?

The cooperative term, as originally stated in the articles of cooperation, may be extended for periods

not exceeding 50 years in any single instance by an amendment of the articles of cooperation.

However, no extension can be made earlier than 5 years prior to the original or subsequent expiry

date unless there are justifiable reasons for an earlier extension.

What is the capital requirement to register a cooperative?

No cooperative, other than a cooperative union, shall be registered unless the Articles of

Cooperation is accompanied with the bonds of the accountable officers and a sworn statement of the
treasurer

elected by the subscribers showing that:

• at least 25% of the authorized share capital has been subscribed; and

• at least 25% of the total subscription has been paid

However, the Minimum paid-up share capital must be at least P15,000.

When does a cooperative acquire juridical personality?

A cooperative formed and organized under the Code acquires juridical personality from the date the

CDA issues a certificate of registration under its official seal.

What is the legal power of a certificate of registration?

A certificate of registration issued by the CDA under its official seal shall be conclusive evidence

that the cooperative therein mentioned is duly registered, unless it is proved that the registration has
been

cancelled.

On types of cooperatives

What are the different types of cooperatives?

Cooperatives may fall under any of the following types:

1. Credit Cooperative – one that promotes and undertakes savings and lending services among its
members. It

generates a common pool of funds in order to provide financial assistance to its members for productive
and

provident purposes.

2. Consumers Cooperative – one the primary purpose of which is to procure and distribute commodities
to

members and non-members.

3. Producers Cooperative – one that undertakes joint production whether agricultural or industrial. It is
formed

and operated by its members to undertake the production and processing of raw materials or goods
produced
by its members into finished or processed products for sale by the cooperative to its members and
nonmembers. Any end product or its derivative arising from the raw materials produced by its members,
sold in

the name and for the account of the cooperative, shall be deemed a product of the cooperative and its

members.

4. Marketing Cooperative – one which engages in the supply of production inputs to members and
markets their

products.

5. Service Cooperative – one which engages in medical and dental care, hospitalization, transportation,

insurance, housing, labor, electric light and power, communication, professional and other services.

6. Multi-purpose Cooperative – one which combines two (2) or more of the business activities of these
different

types of cooperatives.

7. Advocacy Cooperative – a primary cooperative which promotes and advocates cooperativism among
its

members and the public through socially-oriented projects, education and training, research and

communication, and other similar activities to reach out to its intended beneficiaries.

8. Agrarian Reform Cooperative – one organized by marginal farmers majority of which are agrarian
reform

beneficiaries for the purpose of developing an appropriate system of land tenure, land development,
land

consolidation or land management in areas covered by agrarian reform.

9. Cooperative Bank – one organized for the primary purpose of providing a wide range of financial
services to

cooperatives and their members.

10. Dairy Cooperative – one whose members are engaged in the production of fresh milk which may be
processed

and/or marketed as dairy products.

11. Education Cooperative – one organized for the primary purpose of owning and operating licensed
educational

institutions notwithstanding the provisions of Republic Act No. 9155, otherwise known as the
Governance

of Basic Education Act of 2001.

12. Electric Cooperative – one organized for the primary purposed of undertaking power generations,
utilizing

renewable energy sources, including hybrid systems, acquisition and operation of subtransmission or

distribution to its household members.

13. Financial Service Cooperative – one organized for the primary purpose of engaging in savings and
credit

services and other financial services.

14. Fishermen Cooperative – one organized by marginalized fishermen in localities whose products are
marketed

either as fresh or processed products.

15. Health Services Cooperative – one organized for the primary purpose of providing medical, dental
and other

health services.

16. Housing Cooperative – one organized to assist or provide access to housing for the benefit of its
regular

members who actively participate in the savings program for housing. It is co-owned and controlled by
its

members.

17. Insurance Cooperative – one engaged in the business of insuring life and poverty of cooperatives and
their

members.

18. Transport Cooperative – one which includes land and sea transportation, limited to small vessels, as
defined

or classified under the Philippine maritime laws, organized under the provisions of the Code.

19. Water Service Cooperative – one organized to own, operate and manage waters systems for the
provision

and distribution of potable water for its members and their households.

20. Workers Cooperative – one organized by workers, including the self-employed, who are at same
time the

members and owners of the enterprise. Its principal purpose is to provide employment and business

opportunities to its members and manage it in accordance with cooperative principles.

What is a laboratory cooperative?

A laboratory cooperative is one organized by minors. It shall be governed by special guidelines to

be promulgated by the CDA.

A laboratory cooperative, as defined in your provided information, is a type of cooperative organized by

minors. This means that it is a cooperative formed and operated by individuals who are under the legal
age of adulthood in their jurisdiction. Typically, the legal age of adulthood is 18 years in many countries.

The term "laboratory cooperative" suggests that this type of cooperative is established for experimental
or educational purposes, often to teach young individuals about cooperative principles and business
operations. It may serve as a learning platform for minors to gain hands-on experience in cooperative
activities.

Notably, because minors lack full legal capacity, there are specific guidelines and regulations that may
apply to laboratory cooperatives to ensure the protection of the minors involved and to comply with
legal requirements. These guidelines are typically established and promulgated by the relevant
regulatory authority responsible for cooperative development.

On Membership and Administration of Cooperatives

What are the types of members in a cooperative?

A cooperative may have 2 types of members:

 Regular Members:

 Primary Stakeholders: Regular members are typically the primary stakeholders and owners
of the cooperative. They have a significant financial and participatory interest in the
cooperative's activities and governance.

 Rights and Benefits: Regular members often enjoy full membership rights, which may
include voting rights, the ability to run for and hold leadership positions within the
cooperative, and access to the cooperative's services and benefits.

 Financial Contributions: Regular members usually make financial contributions to the

cooperative, such as purchasing shares, investing capital, or making regular contributions.

 Participation: Regular members are expected to actively participate in the cooperative's

affairs, attend meetings, and contribute to decision-making processes.

 Associate members

 Supportive Role: Associate members are typically individuals or entities that have a
supportive or secondary role in the cooperative. They may not have the same level of
ownership or decision-making influence as regular members.
 Limited Rights: Associate members often have limited or restricted membership
rights compared to regular members. They may not have voting rights, and their access to
certain cooperative services or benefits may be limited.
 Specific Objectives: Associate membership is often designed to serve specific
purposes, such as allowing non-members to access certain services or engage in limited
cooperative activities.
  Less Stringent Qualifications: The qualifications and requirements for associate
membership may be less stringent than those for regular membership. Associate members
may not be required to make substantial financial contributions.
What is a regular member?

A regular member is one who has complied with all the membership requirements and entitled to

all the rights and privileges of membership.

What is an associate member?

An associate member is one who has no right to vote nor be voted upon and shall be entitled only

to such rights and privileges as the bylaws may provide.

However, an associate who meets the minimum requirements of regular membership, and continues

to patronize the cooperative for 2 years, and signifies his/her intention to remain a member shall be
considered

a regular member.

Who are disqualified to become members or elected as officers of a cooperative?

Any officer or employee of the CDA shall be disqualified to be elected or appointed to any position

in a cooperative.

All elective officials of the Government shall be ineligible to become officers and directors of

cooperatives.

What is the extent of a member’s liability?

A member shall be liable for the debts of the cooperative to the extent of his contribution to the

share of the cooperative.

Unlike in partnership, and like in corporations, a member’s personal assets shall not answer for the

debts of the cooperative.

May a member withdraw his membership from the cooperative?

Yes.

A member of a cooperative may, for any valid reason, withdraw his membership from the

cooperative by giving a 60 day notice to the Board of Directors.

Will a withdrawing member receive a refund of his capital contribution?

Yes, with qualifications.

Subject to the bylaws of the cooperative, the withdrawing member shall be entitled to a refund of
his share capital contribution and all other interests in the cooperative.

However, the refund shall not be made if upon such payment the value of the assets of the

cooperative would be less than the aggregate amount of its debts and liabilities exclusive of his share
capital

contribution.

Can a member be removed from the cooperative?

Yes.

Membership in the cooperative may be terminated by a vote of the majority of all the members of

the BOD for any of the following causes:

• When a member has not patronized any of the services of the cooperative for an unreasonable period

of time as may be previously determined by the BOD

• When a member has continuously failed to comply with his obligations

• When a member has acted in violation of the bylaws and the rules of the cooperative

• For any act or omission injurious or prejudicial to the interest or the welfare of the cooperative

What is the composition of a cooperative’s General Assembly?

The General Assembly shall be composed of such members who are entitled to vote under the

Articles of Cooperation and bylaws of the cooperative

What are the powers of the General Assembly?

The General Assembly shall be the highest policy-making body of the cooperative and shall exercise

such powers as are stated in the Code.

Specifically, the following powers of the General Assembly cannot be delegated:

• To determine and approve amendments to the articles of cooperation and bylaws

• To elect or appoint the members of the board of directors, and to remove them for cause. However,

in the case of the electric cooperatives registered under the Code, election of the members of the

board shall be held in accordance with its bylaws or election guideline of such electric cooperative

• To approve developmental plans of the cooperative

When should general meetings of a cooperative be held?

A regular meeting shall be held annually by the General Assembly on a date fixed in the bylaws.

What if the bylaws do not fix a period for the regular meeting?
If not fixed in the bylaws, the regular meeting shall be on any date within 90 days after the close of

each fiscal year.

What constitutes a quorum in cooperative meetings?

A quorum shall consist of at least 25% of all the members entitled to vote.

Is the quorum the same for all types of cooperatives?

No, there are exceptions.

In the case of electric cooperatives, a quorum, unless otherwise provided in the bylaws, shall consist

of 5% of all the members entitled to vote.

In the case of cooperative banks, the quorum requirement for General Assembly meetings, whether

special or regular, shall be 1/2 plus one of the number of voting shares of all the members in good
standing.

In the meetings of the BOD, whether special or regular, the quorum requirement shall be 1/2 plus

one of all the members of the BOD.

Each director shall only have 1 vote.

What is the voting system in meetings of cooperatives?

The voting system depends upon the category of cooperative.

For primary cooperatives, each member shall have 1 vote.

For secondary or tertiary cooperatives, each member shall have 1 basic vote and as many incentive

votes as provided for in the bylaws but not to exceed 5 votes.

What is the composition of the BOD of cooperatives?

Like regular corporations, the BOD of cooperatives shall be composed of not less than 5 but not

more than 15 members.

Who elects the members of the BOD?

The members of the BOD are elected by the General Assembly.

What is the term of office of the members of the BOD?

BOD members shall be elected for a term of 2 years and shall hold office until their successors are

duly elected and qualified, or until duly removed for cause.

What are the powers and functions of the BOD?

The direction and management of the affairs of the cooperative shall be vested in the BOD.
Also, the BOD shall be responsible for the strategic planning, direction-setting and policyformulation
activities of the cooperative.

What is the prohibition for BOD members on voting?

Directors cannot attend or vote by proxy at board meetings.

Who shall elect the officers of the cooperative?

The BOD shall elect from among themselves the chairperson and vice-chairperson, and elect or

appoint other officers of the cooperative from outside of the board in accordance with their bylaws.

What is the status of dealings of directors and officers with the cooperative?

A contract entered into by the cooperative with 1 or more of its directors, officers, and committee

members is voidable, at the option of the cooperative, unless all the following conditions are present:

• That the presence of such director in the board meeting wherein contract was approved was not

necessary to constitute a quorum for such meeting

• That the vote of such director was not necessary for the approval of the contract

• That the contract is fair and reasonable under the circumstances

• That in the case of an officer or committee member, the contract with the officer or committee

member has been previously authorized by the General Assembly or by the BOD

On responsibilities, rights and privileges of cooperatives

What cooperative books shall be kept open for inspection?

Every cooperative shall have the following documents ready and accessible to its members and

representatives of the CDA for inspection during reasonable office hours at its official address:

• A copy of the Cooperative Code and all other laws pertaining to cooperatives

• A copy of the regulations of the CDA

• A copy of the articles of cooperation and bylaws of the cooperative

• A register of members

• The books of the minutes of the meetings of the General Assembly, BOD and committee

• Share books, where applicable

• Financial statement

• Such other documents as may be prescribed by laws or the bylaws

The accountant or the bookkeeper of the cooperative shall be responsible for the maintenance of the
cooperative records in accordance with generally accepted accounting practices.

He shall also be responsible for the production of the same at the time of audit or inspection.

The audit committee shall be responsible for the continuous and periodic review of the books and

records of account to ensure that these are in accordance with generally accepted accounting practices.

He shall also be responsible for the production of the same at the time of audit or inspection.

For up to what period shall cooperatives keep its records?

A cooperative may dispose by way of burning or other method of complete destruction any

document, record or book pertaining to its financial and nonfinancial operations which are already

more than 5 years old except those relating to transactions which are the subject of civil, criminal

and administrative proceedings.

Which cooperative members need to be bonded?

Every director, officer, and employee handling funds, securities or property on behalf of

any cooperative shall be covered by a surety bond to be issued for a duly registered insurance or

bonding company for the faithful performance of their respective duties and obligations.

Are cooperatives required to pay tax?

Duly registered cooperatives which do not transact any business with non-members or the

general public shall not be subject to any taxes and fees imposed under the internal revenue laws

and other tax laws.

What if the cooperatives have transaction with both members and non-members?

Cooperatives transacting business with both members and non-members shall not be

subjected to taxon their transactions with members.

What privileges do cooperatives have?

Cooperatives enjoy the following privileges:

1. The privilege of depositing their sealed cash boxes or containers, documents or any valuable papers in
the

safes of the municipal or city treasurers and other government offices free of charge

2. Cooperatives organized among government employees enjoy the free use of any available space in
their

agency, whether owned or rented by the Government

3. Cooperatives rendering special types of services and facilities such as cold storage, ice plant,
electricity,

transportation shall secure a franchise therefore, and such cooperatives shall open their membership to
all

persons qualified in their areas of operation

4. In areas where appropriate cooperatives exist, the preferential right to supply government
institutions and

agencies rice, corn and other grains, fish and other marine products, meat, eggs, milk, vegetables,
tobacco

and other agricultural commodities produced by their members shall be granted to the cooperatives
concerned

5. Preferential treatment in the allocation of fertilizers, including seeds and other agricultural inputs and

implements, and in rice distribution

6. Preferential and equitable treatment in the allocation or control of bottomries of commercial shipping
vessels

in connection with the shipment of goods and products of cooperatives

7. Preferential rights in the management of public markets and/or lease of public market facilities, stalls
or

spaces for cooperatives and their federations, such as farm and fishery producers and suppliers, market

vendors and such other cooperatives, which have for their primary purpose the production and/or the

marketing of products from agriculture, fisheries and small entrepreneurial industries and federations
thereof

8. Cooperatives engaged in credit services and/or federations shall be entitled to loans credit lines,
rediscounting

of their loan notes, and other eligible papers with the Development Bank of the Philippines, the Land
Bank

of the Philippines and other financial institutions except the Bangko Sentral ng Pilipinas

9. A public transport service cooperative may be entitled to financing support for the acquisition and/or

maintenance of land and sea transport equipment, facilities and parts through the program of the
government

financial institutions. It shall have the preferential right to the management and operation of public
terminals
and ports whether land or sea transport where the cooperative operates and on securing a franchise for
active

or potential routes for the public transport

10. Cooperatives transacting business with the Government of the Philippines or any of its political
subdivisions

or any of its agencies or instrumentalities, including government-owned and controlled corporations

shall be

exempt from prequalification bidding requirements

11. The privilege of being represented by the provincial or city fiscal or the Office of the Solicitor
General, free

of charge, except when the adverse party is the Republic of the Philippines

12. Preferential right in the management of the canteen and other services related to the operation of
the

educational institution where they are employed for Cooperatives organized by faculty members and

employees of educational institutions

13. The appropriate housing agencies and government financial institutions shall create a special
window for

financing housing projects undertaken by cooperatives, with interest rates and terms equal to, or better
than

those given for socialized housing projects. This financing shall be in the form of blanket loans or long-
term

wholesale loans to qualified cooperatives, without need for individual processing