Coop Pesos Formula
Coop Pesos Formula
Coop Pesos Formula
A set of Performance
Standards for
Philippine Credit
Cooperatives
Background
Is a performance standard to measure the
performance of Philippine credit cooperatives
Is analogous to:
US NCUAs CAMELS Rating System
WOCCUs PEARLS Monitoring System
RBAPs EAGLE Performance Monnitoring System,
and
BSPs CAMEL Rating System for Philippine Rural
Banks
OBJECTIVES/PURPOSE
S
OBJECTIVES/PURPOSE
S As a management tool
The standards will allow the management
of the cooperative to detect/spot the
troubled/problem areas and determine the
necessary adjustments to its policies
and/or the way the cooperatives
operations are handled.
MAJOR CATEGORIES
OPERATIONAL
FINANCIAL
C COMPLIANCE
P PORFOLIO QUALITY
O ORGANIZATION
E EFFICIENCY
O OPERATION
S STABILITY
O OPERATIONS
S STRUCTURE OF ASSETS
The Rating
System
CATEGORY
MAXIMUM RATING
C COMPLIANCE
20 %
O ORGANIZATION
26 %
O OPERATION
40 %
14 %
The Rating
System
CATEGORY
MAXIMUM RATING
P PORFOLIO QUALITY
25 %
E EFFICIENCY
20 %
S STABILITY
30 %
O OPERATIONS
10 %
S STRUCTURE OF ASSETS
15 %
THE
COOP
Indicators
1. Cooperative Development
Authority
a. Updated bond of accountable officers
1
1
Maximum Raw
Score
a. Registration as Non-EVAT
b. Filling of Account Information
c. Withholding of Appropriate Taxes
(including tax on honorarium)
d. Certification of Tax Exemption
1
1
1
1
5
1
1
b. SSS
c. Phil Health
d. PAG-IBIG (HDMF)
e. Retirement Benefits
2
2
2
2
2
2
2
a. Laboratory Cooperative
* Community Development
b. Participated actively in federation/union
activities/program
c. Paid annual due, CETF, loans and other
accounts to the federation/union
1
3
1
1
1
1
1
Maximum Raw
Score
1. Manual of Operational Policies with
Specific Provisions on:
24
a. Membership
b. Loaning
c. Savings/Time Deposits
d. Financial Management
* Asset/Liability
* Accounting
* Internal Control
e. Human Resource Development
*
*
*
*
*
2
4
4
2
3
4
1
1
1
1
1
d. Organizational Structure
1
2
2
2
THE
PESOS
Indicators
PORTFOLIO QUALITY
These indicators are concerned with
measuring the level of protection of the
credit cooperative loan portfolio against
risks of losses due to delinquency.
PORTFOLIO AT
RISK
Formula
Balance of Loans
with one-day missed
payment
_________________
Total Loans
Outstanding
Purpose
To measure
the risk of
default in the
loan portfolio
Score
Equivale
nt Points
5% or Less
>5% to 10%
>10% to 15%
>15% to 20%
>20% to 25%
>25%
15
12
9
6
3
0
Total Amount of
Allowance
_________________
Total Outstanding
Loan Balance over
12 months past due
Purpose
To measure
the adequacy
of the
allowance for
probable
losses on
loans
Score
Equivale
nt Points
100%
80% to 90%
60% to 79%
36% to 59%
10% to 35%
9% & below
5
4
3
2
1
0
Purpose
Score
Equivalen
t Points
Total Amount of
Allowance minus
Required Amount of
Allowance for Loans
over 12 months past
due
_________________
To measure the
adequacy of
the allowance
for probable
losses on loans
35%
25% to <35%
17% to <25%
9% to <17%
1% to <9%
<1%
5
4
3
2
1
0
APPLICABLE TERMS
PORTFOLIO AT RISK (PAR)
Refers to the total outstanding balance of loans
with one day missed amortization payment.
Failure to receive payment one day after due date
of amortization, makes the entire loan balance at
risk.
APPLICABLE TERMS
LOANS RESTRUCTURED
Past due loans whose term have been extended or
renewed after full payment of interest/surcharges
due thereon. Loans restructured will be considered
performing or current when there is good track
record of continuous payment of the amount
agreed upon using the following installments: 3
installments for monthly; 4 installments for semimonthly; 6 installments for weekly and 10
installments for daily. It is considered past due
when it is not performing, i.e. no payments
received after restructuring.
EFFICIENCY
The indicators under this sub-category
measures the efficiency of the credit
cooperative in the delivery of financial
services (savings and credit) to its
members. It also finds out how able the
credit cooperative is in generating sufficient
income to cover expenses in its operations.
ASSET YIELD
Formula
Undivided Net
Surplus
_________________
Average Total Assets
Purpose
To measure
the ability of
the credit
coops assets
to generate
income
Score
At least Inflation
Rate (IR)
1% - 2% below IR
25% to <35%
17% to <25%
9% to <17%
1% to <9%
<1%
Equivale
nt Points
4
3
2
1
0
OPERATIONAL SELFSUFFICIENCY
Formula
Purpose
Measures the
ability of the
cooperatives to
sustain its
operations
Score
Equival
ent
Points
4
3
2
1
0
Formula
Purpose
________________
Average Members Share
Measures the
earning power
of members
share.
Score
>inflation rate
= inflation rate (IR)
1% to 2% below IR
>2% below IR
0 or negative ROR
Equivalent
Points
4
3
2
1
0
APPLICABLE TERM
AVERAGE MEMBERS SHARE
Beginning Members Share + Ending
Members Share Divided by 2.
LOAN PORTFOLIO
PROFITABILITY
Formula
________________
Average Total Loans
Outstanding
Purpose
Measures how
profitable the
loan portfolio is.
Score
Equival
ent
Points
4
3
2
1
0
Formula
Purpose
Score
Equivale
nt Points
Financing Cost +
(Admin Costs
Members Benefits
Expense)
Measures how
efficient the
coop is in
managing loan
portfolio.
2
1.5
1
0
________________
Average total Loans
Outstanding
APPLICABLE TERM
ADMINISTRATIVE EFFICIENCY
Formula
Purpose
Score
Equivalen
t Points
Administrative
Costs
________________
Measures the
costs of
managing the
coops assets.
2
1.5
1
0
Average Total
Assets
APPLICABLE TERM
AVERAGE TOTAL ASSETS
Beginning Total Assets + Ending Total Assets divided
by 2.
STABILITY
These indicators of this sub-category
measures whether the credit cooperative
can deliver the financial services to its
members in a sustained manner. The
increase in institutional capital is also
encouraged to maintain sufficient liquidity
to meet the financial needs of its
members.
SOLVENCY
Formula
Purpose
Score
Equivalen
t Points
(Assets +
Allowances) (Total
Liabilities
Deposits + Past
Due Loans + Loans
Restructured +
Loans under
Litigation)
________________
Deposits + Share
Capital
Measures the
degree of
protection that the
coop has favor
members savings
and shares in the
event of liquidation
of its assets and
liabilities.
110% &
above
100% to
<110%
90% to
<100%
80% to
<90%
70% to
<80%
Below 70%
10
8
6
4
2
0
LIQUIDITY
Formula
Purpose
Score
Equivalent
Points
10
8
6
4
2
0
APPLICABLE TERMS
LIQUID ASSETS
Assets that can be converted into cash within
30 days. This includes cash, cash in bank,
investment in marketable securities.
SHORT-TERM PAYABLES
These include liabilities payable within 30
days except deposits.
Formula
Purpose
Score
Equivalent
Points
(Reserves + Allowances
from Probable Losses on
Loans) (Past Due
Loans) + Loans under
Litigation + Problem
Assets
10
8
6
4
2
0
________________
Total Assets
APPLICABLE TERMS
PROBLEM ASSETS
These are investments in closed banks,
cooperatives and other institutions.
OPERATIONS
This sub-category promotes a new emphasis
for Philippine credit cooperatives, that is,
minimizing dependence on external
borrowings and instead focus on mobilizing
savings from its members, thereby enhancing
the coops role as a savings entity
(alternative to banks) for its members.
GROWTH IN MEMBERSHIP
Formula
Purpose
Score
Equivale
nt
Points
Actual Increase in
the No. of Members
Determines the
performance of
change in
membership vis-vis target.
75% to <100% of
target
50% to <75% of target
25% to <50% of target
1% to <25% of target
Status quo
Decreasing or no devt
plan
5
4
3
2
1
0
________________
Target Increase in
the No. of Members
TREND IN EXTERNAL
BORROWING
Formula
Purpose
Ending External
Borrowings
Beginning External
Borrowings
Determines the
percentage of
change in
external
borrowings.
________________
Beginning External
Borrowings
Score
No. Ext.
Borrowing
Decreasing
compared to
previous period
Status Quo.
Increasing
compared to
previous period
Equivalent
Points
5
3
2
0
STRUCTURE OF
ASSETS
ASSET QUALITY
Formula
Purpose
Non-Earning Assets
Measures the
percentage of
total assets that
are not producing
income.
________________
Total Assets
Score
5% and below
>6% to 8%
>8% to 10%
>10% to 12%
>12% to 14%
14% and above
Equivalent
Points
5
4
3
2
1
0
APPLICABLE TERMS
NON-EARNING ASSETS
Assets that do not give direct revenues to the
cooperative. i.e. cash on hand, non-interest
bearing checking accounts, accounts
receivable, assets in liquidation, fixed assets
(land building, equipment, etc.), pre-paid
expenses and other deferrals, and problem
assets.
ASSET STRUCTURE
Formula
Purpose
Score
Equivalent
Points
Total Deposits
Measures the
percentage of total
assets financed by
deposits.
>55% to 65%
>45% to 55%
>65% to 70%
>35% to 45%
>70% to 75%
35% & below
Above 75%
5
3
________________
Total Assets
1
0
ASSET STRUCTURE
Formula
Net Loans
Receivables
________________
Total Assets
Purpose
Measures the
percentage of
the total assets
invested in loan
portfolio.
Score
Equivalent
Points
>70% to 80%
>60% to 70%
>80% to 85%
>50% to 60%
>85% to 90%
>40% to 50%
>90% to 95%
40% & below
Above 75%
2
1.5
1
0.5
0
ASSET STRUCTURE
Formula
________________
Total Assets
Purpose
Measures the
percentage of total
assets financed by
members share
capital.
Score
>35% to 45%
>30% to 35%
>45% to 55%
>25% to 30%
>55% to 65%
Above 65%
Below 25%
Equivalent
Points
3
2
1
0