The Philippine Chamber of Cooperatives, Inc. (Coop Chamber), led by Chairperson Noel D. Raboy and Secretary-General Edwin A. Bustillos, met with Senator Risa Hontiveros at her Senate office to raise key concerns regarding several provisions of Senate Bill No. 1431, or the proposed Revised Cooperative Code of the Philippines, ahead of its consideration on Third and Final Reading.
Joining the Coop Chamber leadership were NCR Regional Coop Chamber Governor Roger Manlangit, representing Barangka Credit Cooperative; Vice Governor Olivia Ferrer, representing San Dionisio Credit Cooperative; NCR Council Leader Jose Aguilar, representing IMCO; NCR Council Leader Allan Caddarao, representing Bagong Bansa ng Mamamayan Credit Cooperative; Porthia Tupas, representing Holy Spirit Community Multi-Purpose Cooperative; Noel De Guzman, Arranque Multi-Purpose Cooperative; and Yolanda Pinzon, NCR and CALABARZON Coordinator of the Philippine Chamber of Cooperatives, Inc.
During the meeting, the delegation presented its concerns regarding provisions that it believes require further review to ensure consistency with the fundamental principles and identity of cooperatives. The key issues raised were:
1. Share-based or proportionate voting in secondary and tertiary cooperatives;
2. Foreign cooperative participation of up to 40% of the equity or subscribed share capital of certain cooperatives or federations; and
3. The implications of restrictions on the use of the word “cooperative” by legitimate non-stock, non-profit organizations registered with the Securities and Exchange Commission (SEC).
Democratic Member Control and Share-Based Voting
Chairperson Noel D. Raboy emphasized the Coop Chamber’s position that voting mechanisms in cooperatives must remain firmly anchored on the principle of democratic member control.
He explained that the Chamber is concerned that a voting system substantially influenced by share capital could shift decision-making power toward members with larger capital contributions. In the Chamber’s view, this could weaken the fundamental distinction between a cooperative and an investor-owned corporation, where voting power is generally linked to ownership or investment.
The Coop Chamber stressed that cooperative participation should not be determined primarily by the amount of capital a member contributes. Rather, the cooperative model is founded on democratic participation and the meaningful involvement of members in organizational decision-making.
The Chamber therefore reiterated the importance of safeguarding the cooperative identity and ensuring that any voting mechanism under the revised Code does not undermine the principle of democratic member control.
Concerns on Foreign Cooperative Participation
The delegation likewise raised concerns regarding provisions allowing foreign cooperative federations to participate in the capital of Philippine cooperatives or federations.
While recognizing the importance of cooperation among cooperatives, the Coop Chamber expressed concern over allowing foreign cooperatives to hold as much as 40% of the equity or subscribed share capital of a local cooperative or federation.
From the Chamber’s perspective, such a level of capital concentration could have implications for both governance and financial stability. Cooperatives depend significantly on stable internal capital build-up. A substantial concentration of capital among a limited number of foreign cooperative members could therefore expose an organization to liquidity risks should a major investor withdraw its capital.
The delegation also raised the need for safeguards against arrangements that could potentially be used to circumvent restrictions applicable to other forms of business organizations. The Coop Chamber stressed that privileges and incentives granted to cooperatives are intended to advance the social and economic purposes of genuine cooperatives and should be protected from possible misuse.
For this reason, the Chamber called for clear safeguards to ensure that foreign participation strengthens legitimate cooperative development without compromising local member control, financial stability, or the fundamental character of Philippine cooperatives.
Use of the Word “Cooperative”
The delegation also discussed the potential implications of Section 183, particularly for legitimate SEC-registered non-stock. These non-profit organizations have historically used the word “cooperative” or “cooperatives” in their official names.
Secretary-General Edwin A. Bustillos explained that organizations such as the Coop Chamber do not present themselves as registered primary cooperatives. Rather, they serve as advocacy, policy, networking, and support organizations working with the cooperative sector and government institutions.
He emphasized that the Coop Chamber has been actively assisting the sector by advocating cooperative concerns, strengthening partnerships with government agencies, and helping cooperatives better understand and comply with regulatory requirements, including relevant issuances of the Bureau of Internal Revenue and other government agencies.
The Chamber acknowledged the legitimate objective of protecting the public against organizations that falsely represent themselves as registered cooperatives or use the cooperative identity for fraudulent purposes. At the same time, it stressed the importance of distinguishing such entities from legitimate chambers, advocacy organizations, NGOs, and support institutions that use the term as part of their established organizational identity without claiming to be CDA-registered cooperatives.
Senator Hontiveros Raises Reservations
During the discussion, Senator Risa Hontiveros conveyed that while she would vote in favor of the proposed Revised Cooperative Code, she would place on record reservations regarding several provisions raised during the meeting.
Among the concerns discussed were the application of proportionate voting to secondary and tertiary cooperatives; the proposed tax-exemption threshold for cooperatives; provisions concerning foreign cooperative participation; and the implications of the penal provisions governing the use of the word “cooperative.”
The discussion also highlighted the difference between the proposed ₱50-million threshold under SB 1431 and the ₱100-million threshold contained in the Senate-approved agricultural cooperatives measure.
On foreign participation, concerns were raised regarding the need for consistency among provisions dealing with preferred shares, common shares, and total equity.
With respect to Section 183, Senator Hontiveros recognized the policy objective of addressing organizations that improperly represent themselves as cooperatives, while also acknowledging concerns regarding legitimate organizations, including cooperative chambers, that are registered with the SEC and use the term “cooperative” as part of their institutional identity.
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The delegation was likewise informed that these matters could still be raised during the Bicameral Conference Committee, where differing provisions of the Senate and House versions may be reconciled.
Continuing to Safeguard the Cooperative Identity
The discussion underscored a fundamental issue for the cooperative sector: modernizing the Cooperative Code must go hand in hand with preserving the principles that distinguish cooperatives from conventional corporations.
The Coop Chamber maintains that organizations enjoying the privileges and benefits accorded to cooperatives must remain faithful to the principles and values of cooperativism, particularly democratic member control. Where economic control becomes predominantly determined by capital ownership rather than membership, the Chamber believes that the fundamental distinction between a cooperative and an investor-owned corporation may be weakened.
At the same time, the Chamber recognizes the need to protect the integrity of the cooperative name against organizations that falsely present themselves as cooperatives. Such protection, however, should be carefully crafted so that legitimate advocacy organizations, chambers, and support institutions working for the advancement of the cooperative sector are not unintentionally prejudiced.
The Coop Chamber, together with CLIMBS Life and General Insurance Cooperative and NAFECOOP, will continue to engage constructively with Congress as the measure proceeds to the Bicameral Conference Committee. It will likewise closely participate in subsequent consultations with the Cooperative Development Authority and other concerned institutions should the measure be enacted and proceed to the formulation of its Implementing Rules and Regulations.
For the Coop Chamber, the continuing advocacy is clear: reforms should strengthen cooperatives without compromising the identity, democratic character, and member-centered principles that make cooperatives fundamentally different from investor-owned corporations.
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