A BILL filed at the House of Representatives mandates local government units (LGUs) to allot a portion of their income for projects and programs that will encourage the growth of cooperatives in their respective communities.
House Bill 2162, authored by Rep. Brian Raymund Yamsuan of the Bicol Saro party-list group, hopes to bring about unprecedented increase in the number of cooperatives in the country, which, in turn, would create more jobs, invigorate local economies, and address poverty incidence.
“Cooperatives can have a significant impact in reducing poverty in our communities. Unlike a for-profit business where a substantial portion of its earnings go to paying the large salaries of its investors, and only a fraction is re-invested to keep the business going, a cooperative invests the money it earns back to the coop and the community it serves,” Yamsuan said.
“If an owner of a for-profit enterprise spends his earnings, he will most likely spend it outside the community where he does business. But for cooperatives, a large part of its profits goes back to the communities they serve. Thus, their members and their communities are the ones who benefit,” said Yamsuan, chair of the House Committee on Fisheries and Aquaculture.
Yamsuan said cooperatives can power the modernization of the agriculture sector in areas like the Bicol Region. Cooperatives can also thrive in urban centers like Metro Manila where they can fill the needs and service gaps in their communities.
HB 2162 provides for the creation of the Local Cooperatives Development Fund (LCDF) to be managed and administered by the provincial, city and municipal LGUs to support programs, projects and activities for local cooperatives development in their respective jurisdictions.
Under the measure, the envisioned LCDF will come from two percent of the funds that LGUs get as their National Tax Allotment (NTA), which represents their share in the taxes collected by the national government.
For LGUs belonging to the 4th to 6th income classifications, the bill states that they may opt to allocate at least two percent of their funds for local development projects as the LCDF. They, however, should commit to progressively realize the mandate of allotting two percent of the NTA for local cooperatives development within the next five years from the time the bill becomes a law.
Yamsuan said HB 2162 complements Republic Act 11535, which makes the position of Cooperative Development Officer (CDO) mandatory in the municipal, city and provincial levels.
Under RA 11535, the towns, cities, and provinces will be required to appoint a CDO who will be in charge of assisting groups and sectors in organizing and forming their own cooperatives.
The CDOs will also bridge regional cooperatives with the Cooperative Development Authority (CDA) and other national government agencies to help them harmonize their goals with the national cooperative movement.
“Our proposed measure will empower CDOs to effectively fulfil their duties and responsibilities,” he said.
For fiscal year 2024, the total NTA allocation of LGUs amounts to P871.3 billion, representing a 6.23-percent hike from their 2023 NTA of P820.2 billion, according to the Department of Budget and Management (DBM).
Data from the CDA as of 2023 showed that there were 12.4 million members in the country’s 20,752 cooperatives, which employ about 312,300 people. The combined total assets of cooperatives as of 2023 amounted to P719.3 billion, with a net surplus of P23.7 billion and savings reaching P294.5 billion, according to CDA.
Editor’s Note: This is an updated article. Originally posted with the headline “Bill seeks to establish LGU fund to boost cooperative growth”
