Cooperative Development Authority Dagupan Extension Office Region I Philippines

1. The Philippine
Constitution
and Cooperatives

2. The 1987 Constitution of the
Philippines contain provision
recognizing cooperatives as legal
personalities with economic and
social functions and mandating the
creation of an agency to promote
their viability and growth for the
good of the nation.

3. Sec. 1, paragraph 3, second sentence of Articles XII
provides that “(p)rivate enterprises, including
corporations, cooperatives, and similar collective
organizations shall be encourage to broaden their base of
ownership.”
Sec. 6, second sentence of the same article states
that “(i)ndividuals and private groups, including
corporations, cooperatives, and similar collective
organizations shall have the right to own, establish, and
operate economic enterprises, subject to the duty of the
State to promote distributive justice and to intervene when
the common good so demands. ”

4. Sec. 5 of Article XIII holds that “(t)he State shall
recognized that right of farmers, farm workers,
and landowners, as well as cooperatives, and
other independent farmers’ organizations to
participate in the planning, organization, and
management of the program, and shall provide
support to agriculture through appropriate
technology and research, and adequate financial,
production, marketing, and other support
services. ”

5. Perspective
Mankind’s origin, existence, and survival
stems from the ability of human being
to work together for a common goal are
it for physical safety, food, clothing,
shelter, and all the calamities of a good
life. So it has been since the dawn of
Man until 20th century and will continue
to be so into the future.

6. Perspective
The art and science of working together or
“cooperation” has been applied in all fields of
human endeavor; and history records the result
which altogether point to its effectiveness in
attaining preset objectives given full
commitment by those concerned.
Over the centuries, and specifically the last
two, cooperation assumed greater significance to
individual human beings who belong to the
middle and low income sectors of society,
striving for better living condition in their lives.

7. Perspective
Eventually, people banded together in
informal groups to achieve common
economic and social goals. Many of
these groups gradually evolved into
formal association now called
cooperatives.

8. Nature of Cooperatives
Cooperatives are an almost universal form of
organization today found in practically all countries and
used by people in many ways; to market food products, to
purchase production supplies for farming and fishing, to
provide housing – especially low-cost housing – to
purchase family and household needs, to market the
goods made by workers, farmers and craftsmen, to supply
community services like electric power, or to provide
various forms of protection like insurance or health
services. There is no end to the ways in which the
cooperative idea can be made to benefit people in their
everyday needs in life.

9. Nature of Cooperatives
Certainly essential features are seen in all forms of
cooperatives:
•They consist of groups of people who join together
to do something they cannot very well to do as
individuals.
•They aim to provide some services that is
necessary or very desirable in their lives.
•They operate on the basis of self-help, that is, the
people involved look to one another as a group for the
solution of their problems.
•They do business motivate by service and not by
profit.

10. Definition
Former Director W.P. Watkins of the
International Cooperative alliance, the world
organization of cooperatives, defines
Cooperation as a “system social organization
based on the principles of unity, economy,
democracy, equity and liberty.”
(International Cooperative Alliance)

11. Definition
ART. 3. General Concepts. RA 9520 - A
cooperative is an autonomous and duly registered
association of persons, with a common bond of
interest, who have voluntarily joined together to
achieve their social, economic, and cultural needs
and aspirations by making equitable contributions
to the capital required, patronizing their products
and services and accepting a fair share of the risks
and benefits of the undertaking in accordance with
universally accepted cooperative principles.

12. Definition
A widely-used definition of a cooperative is:
a business organization that is owned by those
who use its services, the control of which rest
equally with all its members, and the surplus
earnings of which are divided among the
members in proportion to the use they make of
its services. This definition, however, should be
expanded for it makes no mention of the social,
educational and community values that are
widely recognized and generally found in
cooperative organizations.

13. It is sometimes easier to explain cooperatives
by stating the objectives
thus:
 They aim to provide goods services at cost.
They aim eliminate unnecessary profits if
middlemen in trade and commerce.
They seek to prevent the exploitation of the
weaker member of the society.
They aim to protect the rights of people both
as producers and consumers.
They promote the mutual understanding and
education among their members and, in the
long run, among people in general.

14. The idea of greater unity and cohesion within the
Cooperative Movement under various names –
coordination, consolidation, concentration, integration
– is gaining ground among Cooperators, for the most part
as they come to realize that there most redoubtable
competitors today are large-scale capitalistic concerns,
vertically and horizontally integrated. There no grounds
for thinking that this competition will diminish in
severity. Rather price will tend to continue its evolution
towards oligopoly and monopoly, not in national market
only, but on the international plane in new multi-national
economic units called free-trade areas or economic
communities..

15. The competition which survives will not be the
competition of the greater against the smaller,
but the competition of the greater amongst
themselves. The Cooperative Movement is
potentially among the greatest. It needs only to
concentrate its power in larger units by applying
consistent without restriction, from the local to
the international plane, the principle of
cooperation among cooperatives, to make its
greatness manifest and to act successfully
against the monopolies.

16. In order that it shall do so, Cooperators must
from time to time re-examine their practices
and their institution in the light of their
ultimate aims and the principles which serve
these aims. It will be necessary to have a one-
sided interpretation based on expediency in
order to make clear the common ground on
which Cooperators can come together and work
together for the ideal of a better and more fully
human society than mankind in the mass has yet
achieved..

17. Such working together implies not merely the
loyal collaboration, within their unions and
federations, of cooperatives of any given type,
but also closer and more helpful relations
between cooperatives of different types of
every level where this is practicable. The
idea of a cooperative sector in the economic is
too often an intellectual concept without a
corresponding material reality, simply
because of the lack of unity and cohesion
between the different branches of the
Movement.

18. The Cooperative Movement, when true to its
principles and armed with the courage of its
convictions, can prove to practical demonstration
that a world society is possible in which man is
no longer the slave but the master of economic
forces. Its mission is to teach the common people
by demonstration how the principles which
express their neighborly and brotherly relations in
their Cooperative can also inspire the mutual
relations of the nations.

19. If the cooperative movement is to rise to its full
structure, either within each country, or
internationally, the several cooperative institutions
must unreservedly support one another. They must
act as members of a common united effort to
realize the objectives and ideals of the movement
as a whole. These are no less than the attainment of
a stage at which conflict, monopoly and unearned
profit cease to exist.

20. The ideal of the workers’ community such as
the one envisaged by the Rochdale pioneers,
or a cooperative commonwealth desired by
several other cooperators, can hardly be
realize in practice except by the generous and
united efforts of all cooperators and
cooperative institutions, large and small,
national and international.

21. Cooperators the world over should
profoundly appreciate that the most
important aim of the cooperative
movement is the promotion of the
social and economic rights of the
people and that the pursuit and
achievement of this high aim
requires active and concerted efforts
towards the realization of the world
peace.

22. Reference:
The Philippine Cooperative Law,
Annotated: Judge Manuel F. Verzosa,
1991Adriana Printing Company, Inc.
Quezon City
Report of the ICA Commission on
Cooperative Principles Reprinted by the
Cooperative Foundation Philippines, Inc
RA 9520 The Philippine Cooperative
Code of 2008