Coops

I thought I’d share with our readers some salient points of my lecture for fellow lawyers at the UP Law Center in Diliman, Quezon City, on Nov. 15, as part of our compliance with Mandatory Continuing Legal Education (MCLE) as decreed by the Supreme Court.

I decided to discuss “Cooperative Law and Jurisprudence,” in light of a new major law that is supposed to further propel social justice and economic development especially in the provinces: the PHILIPPINE COOPERATIVE CODE OF 2008 or RA No. 9520. Congress passed it on Dec. 16, 2008, and former Pres. Macapagal-Arroyo signed it into law on Feb. 17, 2009.

Notably, the Dept. of Finance (DOF) and the Cooperative Development Authority (CDA) issued the joint rules on tax exemptions of cooperatives under RA 9520 only on Feb. 5, 2010. Thereafter, during its meeting on Feb. 16, 2010, the Joint Congressional Oversight Committee on Cooperatives approved the implementing rules and regulations of the other provisions of RA 9520. The BIR further issued Revenue Memorandum Order No. 76-2010 on Sep. 27, 2010, which prescribes the policies and guidelines in the issuance of certificates of tax exemption of cooperatives.

In law school, there is actually no course on cooperative law. It is also not included in the Bar examinations. Thus, lawyers have never really been trained in the laws on cooperatives. We get to learn them if and when coops consult us or if we help in organizing or managing coops.

But there is one new thing that should encourage our people to do business using the coop model. Under article 61 of the new code, as the above-mentioned BIR Memorandum Order explains, “transactions of members with cooperatives are now expressly exempt from any imposition of taxes and fees thereby making the legislative intent for taxation to give way to the demands of social justice more apparent.”

 Our Constitution actually mandates the promotion of the “viability and growth of cooperatives as instruments of social justice and economic development.” (Art. 12, sec. 15).

Indeed, Commitment 9 (h) of the 1995 Declaration and Programme of Action of the World Summit for Social Development adhered to by the Philippines resolved that states and governments, at the national level: “Utilize and develop fully the potential and contribution of cooperatives for the attainment of social development goals, in particular the eradication of poverty, the generation of full and productive employment and the enhancement of social integration.”

Significantly, the UN has proclaimed 2012 as the “International Year of Cooperatives” as “a way of promoting cooperatives and raising awareness of their contribution to social and economic development.” (UN Doc. A/Res/64/136, 11 Feb. 2010)

CDA reports that as of Dec. 31, 2009, 5.9 million people are members of operating cooperatives or 13.04% of our population 19 years old and above. There were 78,611 registered cooperatives and 102 laboratory coops (by minors) nationwide. But there were only 23,836 cooperatives actually operating.

Much work certainly needs to be done.