Tuesday, July 8, 2014


Some 430 cooperatives, jointly with  15 NGOs, 34 LGUs, the Development Bank of the Philippines, Land Bank of the Philippines, and the Industrial Guarantee and Loan Fund, have forged a partnership with the Bangko Sentral ng Pilipinas, for the creation of Credit Surety Funds (CSF) nationwide.

A published BSP report cites that as of March 31, 2014 there are now 29 CSFs set up in 22 provinces and 7 cities nationwide, with loans approved under this program now amounting to P1.1-billion, which benefited 8,421 beneficiaries.

First launched by BSP IN 2008, the CSF "..pools the contributions of well-managed and well-capitalized cooperatives along with entities mentioned above, and make use of such pool of funds as surety against loans of the cooperatives.

The CSF fund  is deposited in a trustee bank and invested in high-yielding government securities.  It is intact, it earns and any member of the cooperatives who wishes to withdraw has the flexibility to do this and his principal remains, published BSP said further. 

Perhaps it is for the actual benefit and potential of CSFs that COOP-NATCO Partylist REP. CRESENTE C. PAEZ filed HB 278.

It provides for the creation and organization of CSF cooperatives, to manage and and Credit Surety Funds to enhance and the accessibility of micro, small and medium entrepreneurs, cooperatives and and non-government organizations to the credit facility of banks.

Rep. Paez said that the bill seeks to create special cooperatives to be known as Credit Surety Fund Cooperatives (CSF Coops) to administer and manage their respective Credit Surety Funds.

(Sources:  BSP Special Newspaper Supplement; House of Reps. Committee Daily Bulletin).  (END). 

Thursday, July 3, 2014


Chaired by COOP-NATCCO Partylist Rep. CRESENTE PAEZ, the House of Representatives' Committee on Cooperatives Development had asked the Bureau of Internal Revenue (BIR) about the status of issuance of Certificates of Tax Exemption (CTEs).

CTE refers to the certificate/ruling issued by the BIR granting exemption to a cooperative, which is valid for a period of five years from the date of issue.

In a reply to a query, BIR lawyer John Rainier Camba informed the Committee on Cooperatives Development that of the 23,672 cooperatives in the country, 6,850 had applied for tax exemptions in various BIR regional district offices.

Out of the total number of applications received, 6,248 were already issued CTEs.

The rest, Camba explained, were either denied (285 CTE applications) or are still pending (317 applications) for non-compliance or non-submission of requirements, including certificate of registration, and CGS from the Cooperative Development Authority, certificate of registration from the BIR, and cooperative by-laws.

(Source:  House of Reps. Committee Daily Bulletin, Vol.I No. 121, June 4, 2014.)


Tuesday, June 3, 2014


    Coop stakeholders were unpleasantly surprised, if not shocked, at yesterday's (June 3, 2014) hearing at the Ways and Means Committee of the House of Representatives.

    The Committee was deliberating on the bills proposing amendments to the R.A. 6939 charter of the Cooperative Development Authority (CDA).

    What caused the surprise and apparent dismay among representatives of the cooperative sector was the opposition reportedly expressed by CDA Administrator Eulogio Castillo to the grant of automatic tax exemption to cooperatives, which should come as a matter of course, upon issuance by CDA of the cooperatives' certificate of registration.

    As proposed in the bills, once a cooperative is registered with CDA, all it needs is the certificate of registration, and does not need to secure a number of documents (as is the practice now) and submit these documents separately to CDA, and then later to the Bureau of Internal Revenue, for these cooperatives to enjoy their tax exemption under the current laws.

    What is ironical to the supposed opposition by CDA Administrator Eulogio Castillo, is that the automatic enjoyment of tax exemption, as already provided for in the bills, and have supposedly passed scrutiny in a number of Committees of the House of Representatives.

    This means that many Congressmen, apart from the cooperative sector,  have in fact endorsed and supported the said grant of automatic tax exemption.  CDA Administrator Eulogio Castillo's alleged opposition, thus, comes as some kind of unpleasant surprise, something cooperative leaders do not expect from the said official.

    If these reports were true, and the transcripts of the hearing will bear this out, CDA Administrator Eulogio Castillo's reported opposition is something cooperatives will not be happy about.

    It will be recalled that the onerous requirements alone, imposed by the CDA for a cooperative to secure an annual Certificate of Good Standing (CGS) from the agency, cost money and has been proven to be unaffordable by the majority of registered cooperatives, particularly micro and small cooperatives which comprise some 91% of registered cooperatives, if I get my numbers right.

     As a matter of fact, in a Senate hearing last March 13, 2014, CDA reported that less than half (49%) of over 23,600 CDA-registered cooperatives were able to secure the CGS from CDA.

    In addition to this, and under the current practice, a CGS is one of the documents, among many, in turn required by the Bureau of Internal Revenue (BIR) to be submitted by a cooperative, for the latter to be issued what is called a Certificate of Tax Exemption (CTE) by the BIR.

    If it is any indication of how onerous and unaffordable the costs of these exactions are, BIR reported also during the abovementioned Senate hearing that as of said date, only a little over 27% of CDA-registered cooperatives were able to secure and be issued their CTEs.

    That means that some 73% of CDA-registered cooperative as of that period, technically and actually were disenfranchised of their tax exemption provided by law.

    And for the responsible official of the CDA to have reportedly expressed such opposition, which otherwise would facilitate the cooperatives' automatic enjoyment of their tax exemption, sans the current hassles, appears truly unexpected.

    Anyway, to be fair, by this, we wish to invite CDA Administrator Eulogio Castillo to also present his side on the matter. (END).
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