Co-operatives in the Philippines

ANALYSIS & PROGNOSIS

 A Historical Analysis State of the Co-op System

If you would understand anything, observe its beginning and its development.
- Aristotle

A Historical Analysis
Why are most co-operatives in the Phil into financial services? Why are there very few cooperatives involved in agriculture? Why is government more involved in development than in regulation?

3 Waves of Co-ops Promotion in the Philippines

1st Wave (1900 1960) 2nd Wave (1970 1985) 3rd Wave (1986 1990)

3 Waves of Co-ops Promotion

1st Wave (1900 1960) Govt organized thousands of co-ops among farmers to stimulate the rural economy
rural credit co-operatives, marketing co-operatives provision of credit, marketing, technical support 12 co-op laws, executive orders all are gone

3 Waves of Co-ops Promotion

2nd Wave (1970 1985) Martial govt mandated farmer-based co-operatives in support of agrarian reform
samahang nayon kilusang bayan AMC, CRB Superpalengke CISP CUP most are gone

3 Waves of Co-ops Promotion

3rd Wave (1986 1990)
Govt + GFIs, NGOs using donor money spawned thousands of co-ops nationwide
Donor money spilled over to co-operatives Easy money
most are barely existing

The MANDATED Tradition of cooperatives in the Philippines

1st Wave (1900 1960) 2nd Wave (1970 1985) 3rd Wave (1986 1990)

The MANDATED Tradition of Co-operatives in the Philippines

The first 2 waves were driven mainly by government whose bias was for rural development & the farmers. The mandated tradition continued in the 3rd wave, driven by govt funds and financing, exacerbated by the extensive involvement of donor-driven NGOs.

Mandated tradition

1900

1950

1970

1980

Voluntary Tradition

The Voluntary Tradition

Is distinguished from the mandated tradition
Internally generated funds (members) from the beginning Co-op principles and practices were followed Social capital was key resource at the beginning

The Voluntary Tradition

The voluntary tradition took root in the late 1950s with the organization of credit unions.
- Relegated to nonagriculture sector by law (RA 2023) - Influenced by US & Canadian credit union experience - Hence, credit unions became the organization of choice of the voluntary sector

The Voluntary Tradition

Credit unions flourished in the non-agricultural sectors of the economy, in towns & cities. Credit unions succeeded by following the philosophy (selfhelp & mutual help), values and principles of real co-operatives.

Mandated tradition

1 8 K

1900

1950

1970

1980

Voluntary Tradition

This is why...
Of the 18,000+ registered cooperatives, about 78% are into financial services, including MPCs. There are very few co-operatives involved in agriculture (by 2010, 2% are classified as producers, 3% as marketing).

This is why...
Co-operatives Co-operatives contribution to have no the economy is strategic marginal. presence in the national economy.

This is why...
Government, by We have a inclination & weak capacity, is regulatory more involved environment. in development than in regulation.

Multi-purpose co-operatives as indicative of the state of our co-op system

any purpose cooperative trend: pursuit of growth without a common purpose

This is why... Co-operatives There is no are growing common individually purpose. rather than as a movement.

There are gnawing doubts about the true purpose of cooperatives and whether they are fulfilling a distinct role as a different kind of enterprise.
- Dr. Alexander Laidlaw
Co-peratives in the Year 2000