“The Philippine Chamber of Cooperatives, Inc. (Coop Chamber) joins the growing call to address the misuse of Letters of Authority (LOAs) by the Bureau of Internal Revenue (BIR),” declared Chairperson Noel Raboy.
Senator JV Ejercito has warned that LOAs are being “weaponized” by some BIR officials, allegedly used for harassment and extortion. He emphasized that excessive LOAs discourage investors and undermine trust in the Philippine business environment.
Senator Erwin Tulfo has called for a Senate Blue Ribbon Committee investigation, describing LOAs as a “long-running money-making scheme” that harms taxpayers and businesses. He stressed that many fear retaliation if they speak out.
LOA misuse diverts funds away from scholarships, livelihood programs, and community development into audit defense and legal costs. Misclassification of cooperative transactions threatens their tax-exempt status under RA 9520, weakening their role in poverty reduction and grassroots empowerment.
Moreover, the Coop Chamber underscores that LOAs have become a toll for abuse of authority, pressuring cooperatives to settle within very limited timeframes, forcing them into negotiations where corruption begins. This coercive use of LOAs erodes trust, undermines cooperative autonomy, and sabotages their mission of inclusive growth.
Chairperson Noel D. Raboy further asserts that LOA misuse undermines cooperative sustainability; excessive audits derails anti-poverty programs and erode member trust; and cooperatives must be treated distinctly from corporations, in line with the Cooperative Code.
The Coop Chamber supports the calls of Senators Ejercito and Tulfo and urges:
- Immediate Senate investigation into LOA misuse.
- Regulation of LOA issuance with safeguards for cooperatives.
- Protection of Certificates of Tax Exemption (CTEs) from arbitrary suspension.
Cooperatives are pillars of inclusive growth and poverty reduction. The misuse of LOAs undermines this mission. The Coop Chamber calls on the Senate, the BIR, and all stakeholders to act decisively, ensuring that cooperatives remain protected, empowered, and able to serve their communities.
For the Cooperative Movement, For the People.
Our Coop, our voice
For reference:
Edwin Bustillos
Secretary General, Coop Chamber
Mobile: 09178017309
