Cooperatives in the Philippines: The Principles that Govern Them

The Philippine government has been trying to promote the growth of cooperatives all over the country and has even created Republic Act 6938 to encourage like-minded individuals to form these organizations. However, many people still do not know the purpose and principles that govern cooperatives even to consider creating one.

The following are the main guidelines that anyone should consider when forming a cooperative.

Open and Voluntary Membership

Any co-op should open its doors to anyone who volunteers to be a member, regardless of their social, religious, political beliefs or background. Though some cooperatives have set requirements, these depend on the kind of cooperative they want to join.

Democratic Control

A cooperative should be managed by a group of people directly elected or appointed by its members. A co-op should give them equal voting rights, and every member is granted one vote.

Limited Interest on Capital

The members of a cooperative are to provide products, services, and benefits to its members. It is not meant to make a profit from the contributions. When a cooperative charges interest for a loan, it is kept to a minimum. Many co-ops charge only for the administrative costs and savers’ interests. The members should also receive a limited interest rate on their share capital.

Division of Net Surplus

If a cooperative earns a net surplus from its operations and initiatives, it should be equitably distributed to members and the rest should be dispensed for the development of the cooperative’s services. It should also be set aside as a reserve fund to meet the financial needs and obligations of the organization.

Cooperative Education

A cooperative should initiate programs that provide for the improvement of its members and the general public, especially when it comes to education. These educational training programs should focus on the specific objectives and principles of the organization.

Cooperatives and Cooperation

Cooperation among cooperatives should be observed by all cooperatives so that they could serve the interest of the community. They should foster engagement between cooperatives at all levels, whether local, national, or international.

A Common Interest

A group of people sharing a common interest and willing to use their skills to develop their community should consider starting a cooperative. Individuals can do more when they help each other through sharing knowledge, offering financial aid, and initiating community activities that could enrich the country. A small group of people could do more when they cooperate, which is the true spirit of cooperativism.

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