COOPERATIVES, AFFILIATED WITH METRO SOUTH COOPERATIVE BANK HAVE UP TO MARCH 15, 2012 TO SIGNIFY ANY OPPOSITION TO THE PLAN TO MERGE WITH CAPIZ SETTLERS COOPERATIVE RURAL BANK, INC.

Primary cooperatives, who are shareholders of Metro South Cooperative Bank (MSCB), including creditors, have up to March 15, 2012  to signify any objection/opposition to the recently-approved merger of MSCB with Capiz Settlers Cooperative Rural Bank, Inc. (CSCRBI).

In a letter to  MSCB member-cooperatives, Atty. Simeon T. Asia, Jr., MSCB Board Secretary, reported the that MSCB's Board of Directors approved during its January 20, 2012 meeting, the merger or consolidation of MSCB with CSCRBI.

There are over 800 primary cooperatives nationwide who are shareholders of MSCB, according to reports.


During  last year's meeting, its General Assembly approved/authorized MSCB to merge/consolidate with other cooperative banks after conducting due diligence.  This was contained in Resolution Nos. 2011-002 and 2011-003, Atty. Asia said.

The said merger/consolidation is pursuant to Resolution No. 1690, dated November 10, 2011, of the Monetary Board of the Bangko Sentral ng Pilipinas (BSP).

The Resolution encourages mergers, consolidation and acquisitions of cooperative banks to strengthen the cooperative banking sector of the banking system.  

The BSP's strengthening program for cooperative banks (SPCB) recognizes the role of cooperative banks in providing adequate banking services in the local communities and specialized or niche markets, and in supporting the growth of rural economies and communities, Atty. Asia said in his letter.

"The SPCB requires the sending of notice/information to member cooperatives/stockholders and creditors.  If any member/stockholder or creditor signifies objection/opposition to this SPCB, please notify the Bank (MSCB) in writing not later than March 15, 2012 ", Atty. Asia said.

If no written advice is received by then, the Bank(MSCB) will consider your cooperative/institution to be in support of the (merger, consolidation) program,"  Atty. Asia added. (END).

THE COOPERATIVE DEVELOPMENT AUTHORITY AT 22 YEARS, THE ACCOMPLISHMENTS AND CHALLENGES"

It has been some 22 years since the Cooperative Development Authority (CDA) was created in 1990 by virtue of Republic Act 6939.  This law, signed on March 10, 1990, is a companion of Republic Act 6938, the "original"  Cooperative Code of the Philippines..

What had happened to CDA since then?  What had transpired in the cooperative movement?  Of course, we now have a Cooperative Code of 2008, among other things.  Where is CDA now and where is it going?

This will be answered by the current CDA Chairman Emmanuel M. Santiaguel, Ph.D., as the guest of honor and speaker during the  March edition of the "Cooperative Breakfast Forum" series.

Being conducted by the National Cooperative Movement, the series will have for its topic:  

"THE COOPERATIVE DEVELOPMENT AUTHORITY AT 22 YEARS, THE ACCOMPLISHMENTS AND CHALLENGES."

This will be held on March 08, 2012 (Thursday), 8 a.m. -10:30 a.m. at Club Filipino, San Juan City, Metro Manila with Prof. Bien Nito of the University of Asia a & the Pacific,  as moderator.

The occasion could also serve as the ""State of the CDA/Cooperative Movement Address" of  Chairman Santiaguel, who will be celebrating his one year and two months, more or less, of his stewardship of CDA.

I remember seeing Dr. Santiaguel for the first time when he attended the launching of the first leg of the Joint Senate-CDA-BIR Tax Consultations last January 2011, held at the Amoranto Sports Complex in Quezon City.

I remembered that Dr. Santiaguel was freshly-inaugurated by Pres. Aquino that day, after which he proceeded directly to the said consultations.  

I also had the privilege of hearing Dr. Santiaguel  as he spelled out his 3-point CDA agenda, during the Cooperative Forum portion of the convention of the Philippine Institute of Certified Public Accountants, in mid- 2011 held at the Hotel Intercontinental Manila, in Makati City.

And for his action plan and vision for 2012, Dr. Santiaguel spelled these out in his 2012 New Year's Message, which is posted in the webside of the CDA.

So, if you wish to gauge the CDA and Dr. Santiaguel's performance, you are advised to review those targets and performance benchmarks which he set for CDA and himself.

Attendance to the Breakfast Forum may be confirmed by calling  tel. nos. (02) 634-8614 (c/o Merly Medina), or Gie Lamson at (02)- 416-6458.  It will entail a cost of P250 per head, according to the announcement.   (END).

"...PAG-IIBAYUHIN PA NATIN ANG PAGSUPORTA SA ATING MGA KOOPERATIBA UPANG MAITAGUYOD ANG KAPAKANAN NG MAS NANGANGAILANGAN..." - PANGULONG AQUINO

To all those who joined or monitored the National Show of Cooperative Force last February 18, 2012, did you not wish that Pres. Benigno Simeon "Noynoy" Aquino III t were the guest of honor?

Anyway, P-Noy, nevertheless sent/delivered a video-taped message.  This video clip was played during the occasion and is also shared in Facebook.  We are posting our transcription of the said message, as follows:

"Binabati ko ang lahat ng kooperatibang kalahok sa pagtitipong ito na nagpamalas ng tatag at tibay upang isulong ang tuloy-tuloy na pagbabago at pag-asensso ng bayan..

Bilang isa sa mga pangunahing pinansyal na yunit ng ating mga komunidad, kayo ang nagpapatingkad sa tunay na kahulugan ng bayanihan.

Sa ibinibigay na lakas ng mga kooperatiba, nabibigyan ng oportunidad ang mga kababayan nating magpatakbo ng sarili nilang pagkakakitaan at maghawan ng sarili nilang landas para makapagtaguyod ng magandang pamumuhay.

Patunay ang pagdiriwang ng International Year of Cooperatives ngayong taon, sa pagkilala ng mundo sa malaking ambag ng mga kooperatiba sa pagkakamit ng kaunlaran.

Isa ring magandang pagkakataon ang selebrasyong ito upang pag-usapan at tugunan ang  inyong mga pangangailangan para sa mas malakas  na pagkakaisa ng mga kooperatiba sa bansa.

Sa Senado pa lamang, batid ng inyong lingkod ang kakayahan ng kooperatiba na tumulong sa pag-aangat sa buhay ng ating mga kababayan at ng ating pambansang ekonomiya.

Isa po tayo sa sumuporta nang amyendahan ang panukalang batas para sa mga kooperatiba.

Nilinaw at isinaayos po natin ang sistema at patakaran ng mga kooperatiba upang higit na matugunan nito ang pangangailangan ng inyong pamayanan, lalo na ng mga nasa isang tabi ng lipunan.

Pinag-igting po natin ang mga probisyon nito upang mangibabaw ang pananagutan ng mga pinuno at matiyak na ang mga benepisyo nito ay hindi mapunta sa iilan lamang.

Di po natin hinayaang maging panakip butas lamang ng ilang mga negosyante ang kooperatiba upang makatakas sa mga buwis na kailangang bayaran at gawin itong pugad ng pag-aabuso at katiwalian.

Pag-iibayuhin natin ang pagsuporta sa ating mga kooperatiba upang maitaguyod ang kapakanan ng mas nangangailangan.

Nanatiling tapat at may pananagutan ang ating pamahalaan sa pagtupad ng panata natin para sa makahulugang pagbabago.  Ituloy po natin ang pagkakapitbisig at pagdadamayan sa pagtitindig ng patas at maunlad na bayan.

Samasama po nating pag-alabin ang liwanag ng katarungan na maghahatid sa atin sa pangmatagalang kasaganaan.

Maraming Salamat Po.

(END).

 ional

COOP-NATCCO PARTY LIST REP. CRESENTE PAEZ VOWS TO FILE HOUSE RESOLUTION TO CLARIFY SEC. 109 OF THE N.I.R.C. ON VAT COVERAGE OF SOME COOPERATIVES

My February 16, 2012 blog was titled  "Some Cooperatives May Have to Pay Value-Added Tax (VAT) If Any of Its Members' Capital Shares Exceed P15,000."

Then, I wrote that some officers of the Bureau of Internal Revenue  (BIR) continues to implement Section 109 of the N.I.R.C.  (National Internal Revenue Code), despite the enactment of R.A. 9520, which was deemed to have superseded this Section.

It provides, among other things, that non-agri, non electric, and non-credit cooperatives  shall pay VAT once  any of the cooperative's members' share capital  exceeds  P15,000.

I shared this information to the  Facebook page  of Coop-NATCCO Party List Rep. Hon. Cresente Paez  last February 17, 2012.

And the following was the reaction he posted on his page on February 19, 2012 (Sunday) at 9:30 a.m.:

"... I believe that RA 9520 has already superseded Section 109 of the NIRC (National Internal Revenue Code), as this law was enacted before the passage of the Philippine Cooperative Code of 2008...

I agree that CDA (Cooperative Development Authority) has to make a strong representation of the coop sector with the BIR (Bureau of Internal Revenue).  After all, they belong to the same agency.

In the following post on the same page, Rep. Paez wrote (same day, at 9:40 a.m.) the following:

"... I intend to file a House Resolution clarifying Sec. 109 of the NIRC vs RA 9520 in order to allow BIR and CDA  to make their respective interpretations on the VAT exemptions.

Likewise, I learned from (CDA) Chairman (Emmanuel Santiaguel that BIR (Commissioner) Henares wrote him that CDA should refrain from  registering cooperatives whose businesses are related to labor (only)-contracting; professional services and mining to get rid of pseudo cooperatives whose ulterior motive is to avoid paying taxes.

The letter also mentioned directing CDA to revoke/cancel the registration of these cooperatives.  I will include this issue in the congressional inquiry I plan to file next week," Rep Paez concluded. 

I am happy to have shared this concern with Rep. Paez, even if through Facebook only.  Even then, I thank him very much for taking such as swift action.  This speaks a lot about the man.

I can only wish that we have more Representatives in Congress, who are as responsive to the pulse of the stakeholders of the cooperative movement, as the Hon. Rep. Cresente Paez.  He is a pride of Coop-NATCCO Party List and of the cooperative sector where he came from.  (END).

SAMPLE COMPUTATIONS ON HOW YOUR COOPERATIVE'S PLACEMENT IN THE NATIONAL COOPERATIVE MUTUAL FUND OF THE PHILIPPINES WOULD GROW

Earlier in this blog, we wrote about the potential for cooperatives in investing their excess funds in mutual funds.  This is particularly under the National Cooperative Mutual Fund of the Philippines (NCMFP).

As it takes some time to explain this to your cooperative's Board of Directors, we printing hereunder an illustration from made by Mr. Ephraim L. De Guzman to send us an illustration, on sample computation on how investments in mutual funds could grow.

Such computation is illustrated in the following  letter sent by Mr. De Guzman to one of the cooperatives who requested to be informed:

From:  
Espiritu Associates
Philamlife, Philamlife Bldg.
Aurora Blvd., Cubao, Quezon City


To:  
Mr. Francisco Aquino
Chairman
Business and Marketing Committee
Board of Directors
Nueva Viscaya Alay Kapwa
Multi-Purpose Cooperative
Solano, Nueva Ecija

Thru:  Ms. Minerva ST. de Guzman
           General Manager                 

Dear Mr. Aquino,

Greetings from Philam Asset Management, Inc.  one of the leading mutual fund companies in the Philippines!

We would like to invite your cooperative to the National Cooperative Movement Mutual Fund of the Philippines (NCMFP).  

Our original investors in NCMPF are FICCO of Davao; CLIMBS; Novadeci; AMKOR-ANAM; San Dionisio Credit Cooperative; United Sugar Cane Planters of Davao; Peace and Equity Foundation; and Cebu CFI Community.

ADVANTAGES:  Joining NCMPF offers your cooperative the following distinct advantages:

1.  PRIDE OF THE COOPERATIVE MOVEMENT. m The NCMFP is the only mutual fund established by and for cooperatives in the Philippines.

2.  PROVEN GOOD FUND PERFORMANCE. This fund has achieved an average rate of return of 26.66% per annum from July 3, 2010 up to Dec. 29, 2011.

Since  January 2, 2012 up to February 6, 2012 alone, the fund has achieved a year-to-date (YTD) rate of return of 8.95% in just 34 days' time.
  
3.  LIQUIDITY.

 oThis fund has a minimum holding period of only 6 months - unlike other funds with 5 year maturities.

BACKGROUNDER.

A mutual fund company is an open-end investment company registered with the Securities and Exchange Commission with at least P50 million in capital.

A mutual fund is a collection of funds placed thru a company (like NCMFP) which empoys investment professionals who would collectively invest the money of small and big investors in such funds as government bonds, stock funds and/or balanced funds, with the aim of making such funds earn more than the usual rate of return.

The company pools the money of people for one common reason - to make more.

The resulting size of the fund allows it to invest in a basket of securities.  The funds are managed by full-time professionals.

PAMI (the investment manager of NCMFP) is a mutual fund company, under Philamlife, which is one of the most successful companies in the industry since its establishment more than 20 years ago.

PAMI was recently named by Asia Investor magazine's 2009 Investment Performance Awards as the Philippines' Best Onshore Fund House.

HIGHLIGHTS OF THE NCMFP.

Please take note of the following highlights of the National Cooperative Mutual Fund of the Philippines:

1.  Inception was July 13, 2010;

2.  Since inception, the funds have grown by 40.48% in value, or an average annual growth of 26.66% per annum;

3.  As of January 4, 2012, the NCMFP's major components are:

          EQUITIES                 59.58%

          FIXED INCOME     40.42%

  The  individual stocks that comprise the equities portion are:

           nPLDT, Energy Development Corporation; First Gen. Corp.; SM Investments; NIHAO Mineral Corp.; DMCI Holdings; BDO Unibank Inc.; ICTS, Alliance Global and Bank of the Phiippine Islands.

 SAMPLE COMPUTATION OF MUTUAL FUND INVESTMENTS:

As in other mutual funds, an entry fee is charged upon entry.  The entry fee has a 12% value-added tax.

For the National Cooperative Mutual Fund of the Philippines, for placements of 2 Million or higher, a 1% entry fee is charged plus the value added tax, for a total of 1.12% charged on your investment fund amount upon placement.

EXAMPLE.   For a P5 Million Investment Projections, the medium projections show an initial amount of P4,944,000 derived by the formula:

GROSS INVESTMENT 
AMOUNT (P5,000,000)

           Less 1.12% (Entry fee with VAT)
           Equals:  Investible Amount

ILLUSTRATION:

1.  Beginning Of the 1st year:

        Gross Investment 
       Amount of P5,000,000

        Less:  Entry Fee 
        with VAT or 1.12%,

                                            or  P56,000

        Beginning of the 
       1st Investment Year =

                                            P4,944,000

2.   End of the 1st Year

      Beginning of the 1st
      Investment Year           P4,944,000

      Plus Assumed
      10% Growth               + P   494,400

      End of the Year
      Fund Value                   P5,438,400

3.  Beginning of the
     2nd Year

      End of the 1st
      Year Fund Value         P5,438,400
      Plus:  Assumed
      10% Growth                P   543,840

      For 2nd Year 10%       P5,982,840

    For succeeding years, the other fund values from year to year will now depend on the assumed growth rate, whether it is 8%, 10%, 12% or higher.

An exit fee of 1% is charged only if any partial or full withdrawal is made within the 1st 6 months from date of placement.

After 6 months, no exit fees are chargeable any more.

If you need any clarifications, please text or call me at 09174734149. 

Thank you.

Very truly yours,


EPHRAIM L. DE GUZMAN 
Financial Consultant


(Disclosure:  Cooperatives Philippines is NOT in any way related businesswise with Mr. Ephraim L. De Guzman.  Any transactions that may be entered into between parties relating to this article shall be solely on their look out and shall absolve Cooperatives Philippines of any possible liabilities.) END.

SOME COOPERATIVES MAY HAVE TO PAY VALUE-ADDED TAX (VAT), IF ANY OF ITS MEMBERS' CAPITAL SHARES EXCEED PHP15,000?

Are you aware that there is a tax rule saying that a certain type of cooperative will have to pay Value-Added Tax (VAT) (VAT), when the share capital of any of its members exceeds Php 15,000?

I had vaguely heard about this before.  Our cooperative's Accountant cited this once.  This was when we were deciding to convert some of the "special deposits" of our cooperative's members to augment their paid-up capital.

Under our By-laws, a member shall have a minimum of ten (10) subscribed shares of which five (5) shall be paid.  Each share has a value of P1,000.

I was dumbfounded then.  All the while, I thought (and it is generally held) that cooperatives are free from certain taxes, such as, but not limited to INCOME taxes; and even Value-Added Tax.

Moreover, I understand that there is no cap on the amount of capital share that a member may own.  This is provided that the same shall not exceed ten percent (10%) of the total share capital of the cooperative.  This percentage ceiling used to be 20%, prior to R.A. 9520.

And whoever would think that a member exceeding his/her capital share of Php 15,000 would cause his/her cooperative to be subject to VAT?

In a post-audit (external audit) conference on our cooperative's 2011 results of operations, our external auditor reported that there is Sec. 109 of the National Internal Revenue Code.

It says, and I quote:  "...non-electric, non-agri, non-credit Cooperatives are exempt from from VAT if the cooperative is in good standing with the Cooperative Development  Authority and share capital contribution of each member does not exceed Php 15,000.

Since ours is a multi-purpose coopertive and many of its members may have exceeded Php 15,000 in share capital, then, it may be liable to pay VAT, if we follow Section 109 of the NIRC.  Or if the Bureau of Internal Revenue invokes such tax provision.

This NIRC provision appears INCONSISTENT with the tax provisions under R.A. 9520.  But in all tax issues involving cooperatives, the voice of the Cooperative Development Authority (notwitstanding R.A. 9520) appears not to be taken into consideration by BIR.

By the way, BIR and CDA are both under the umbrella of the Department of Finance. What an irony?

Maybe this should be an issue that should be raised by the cooperatives' Federations, Unions, other Apex Organizations, not only during the Cooperative Summit, but right here and now.  

Should we stay quiet about this, until the BIR says that we are now liable to pay VAT?  So there.  (END).

LEADERS, STAKEHOLDERS SUGGEST WAYS TO FURTHER STRENGTHEN THE PHILIPPINE COOPERATIVE MOVEMENT: IYC 2012

On Feb. 9, 2012, Coop Phils (the Facebook counterpart of this blog:  www.cooperatives-society.blogspot.com) posed the following question on Facebook, to elicit the views of cooperative leaders/stakeholders:

"As we celebrate the 'International Year of Cooperatives' 2012, suggest at least ONE WAY by which we can further strengthen the COOPERATIVE MOVEMENT in the Philippines." the Philippines

Below are some of the suggestions sent:

1).  "... Separate CDA from DOF (Department of Finance)...so they will never be an income generating department..." (sic).

      Ely M. Laberez, Aileen Catuira Malubay and Ayel Cruz voted for this. 

2).  "..Agree CDA to be a department of Cooperatives ...it means a big challenge to us..."

      Those who voted for this are:  Cucmmuntinlupa Cucm, Ely M. Labarez, Giovanni Platero, and Ernesto Galenzoga.

3).  "..Enact Bill Strengthening CDA..."

     Seven (7) voted for this proposal.  They are Loay Cmp Cooperative; (Coop-Natcco Rep.?) Cresente Paez; Ely M. Labarez; Mel Coop; Alexander Raquepo; Florangel Ymana Feliciano; and Nhids Evangelista.

4).  "...They will focus on educating and supporting the coop sectors.."

So far, 8 voted for this:  Phil Coop; Daniel R. Ang (cooperatives sectoral council representative to NAPC); Cosme Pacana; Ely M. Labarez; Belison Multi-Purpose Cooperative; Florangel Ymana Feliciano; Aileen Catuira Malubay; and Ayel Cruz.

In addition, the following contributed these comments:

BING JUAREZ (former CDA Chairperson):

     "...By making a concerted effort of strengthening our learning and development program framework and interventions to build and improve the aptitude and attitude of our coop leaders, our coop managers and our executives in running and growing the coop business...and running and growing it the COOPERATIVE WAY..."

COSME PACANA:  

     ".. I believe that all the other 3 issues will follow if the cooperators (coop leaders) are educated, trained and informed.  The 5th coop principle is the soul and spirit of the coop movement..."

ERNESTO GALENZOGA:

     "...I challenge our coop sector in the lower house to sponsor a bill creating a new department - the Department of Cooperative and Agrarian Reforms..."

EPHRAIM DE GUZMAN:

     "...We suggest that the cooperatives design a time deposit plan that will give members a rate of return very close to the rate of return of mutual funds of the National Cooperative Movement Mutual Funds of the Philippines...

     "...Of course, the cooperatives should get a minimum service fee for the marketing and administrative efforts..."

BENEFICO BLONES:

     "...ok yan sir yan cguro magandang antayin..."

To all these, Cooperatives Philippines say:  Well said.  And thank you for participating/responding.  (END).