Historical Overview and Current Analysis
by Leonardo Q. Montemayor

The country's post-war experience in cooperative development can be compared to a succession of waves, with crests and troughs representing the rise and fall in the number of operating cooperatives.
The first major crest occurred in the 50s to the 60s, when the government's ACCFA organized some 780 farmers' cooperative marketing associations (FACOMAs). The second wave was during the 70s, when the martial law government sponsored the formation of area marketing cooperatives and cooperative rural banks at the provincial level, and some 22,000 Samahang Nayons (farmers' pre- cooperative associations) at the village level. The last, and current one, started after the passage of the Cooperative Code in 1990, which spawned the formation of over 50,000 cooperatives of various kinds.

Our revolutionary forefathers were our first teachers of cooperativism. Rizal organized the La Liga Filipina to work for political reforms and encourage economic cooperation as well. He was later to initiate a farmers' cooperative in Dapitan during his exile. Emilio Jacinto formed the Samahang Bayan sa Pangangalakal in Sta. Cruz, Laguna. Jacinto penned the by-laws of the association, which is strikingly similar to present-day cooperative by-laws.

Also deserving of mention are the various non-government institutions (such as church groups, labor organizations and farmers' associations), that were instrumental in the promotion and organization of many of the more successful cooperatives.

In 1907, Assemblyman Teodoro Sandico during the first Philippine Assembly proposed a bill that aimed to protect and develop the agricultural interests of the country. Sandico's cooperative vision was very much like Raiffeisen's of Germany. Unfortunately, the Sandico cooperative proposal was disapproved by the Philippine Commission, the upper chamber of the legislature, even before it was presented for deliberations.

Seven years later, Rafael Corpus filed a bill similar to that of Sandico at the Philippine Assembly. Although the bill, known as Act No. 2508, was officially enacted on February 5, 1915, it remained inoperative for about a year due to deficiencies in its implementation procedures. In 1916, a year after its enactment, the bill was amended, mandating the Director of the Bureau of Agriculture to initiate steps in establishing rural credit cooperative associations within the entire country. As a result of the amendments, the first credit cooperative was established on October 16, 1916. By December 31, 1926, a total of 544 rural credit cooperatives were in operation.

Aside from Act No. 2508, the American colonial government promulgated Act No. 2818 in 1919, effectively launching rural credit cooperatives that would provide farmers with credit for agricultural production. In support of these two earlier laws, another one was passed in 1927, Act No. 3425, which further strengthened credit access.

The Commonwealth period saw the enactment of Commonwealth Act No. 116 of 1927, which intended to promote marketing cooperatives for farmers. The Cooperative Marketing Law of 1935 was also enacted during this period. It mandated the Bureau of Commerce and Industry to organize farmers' cooperative throughout the country. The National Cooperative Law, Commonwealth Act No. 565 of 1940, was also passed, giving rise to the National Cooperative Administration, which was established a year later.

In August 1952, the Philippine government passed Republic Act No. 821 creating the FACOMAS.

In 1957, the government felt the need to respond to non-agricultural credit, and passed Republic Act No. 2023, which allowed non-agricultural coops to register with the government.

During the Martial Law regime of then President Ferdinand Marcos, Presidential Decree No. 175 was promulgated, which provided for the establishment of the Samahang Nayons. This particular law repealed past cooperative legislation inconsistent with it.

On March 10, 1990 the Aquino administration passed Republic Act No. 6938, the Cooperative Code of the Philippines. Shortly after, Republic Act No. 6939 was also enacted, which created the Cooperative Development Authority (CDA).

Table of contents

1. Current Legal and Policy Environment

2. Overview of the Philippine Cooperative Sector

3. Total Assets Total Deposit Liabilities Total Outstanding

4. Analysis of the Cooperative Sector

4.1. Strengths
4.2. Weaknesses
4.3. Threats
4.4. Opportunities
4.5. Recommendations