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Co-operatives in the
PhilippinesANALYSIS & PROGNOSIS
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A Historical Analysis
State of the Co-op System
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If you would understand
anything, observe its beginning
and its development.
-Aristotle
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A Historical Analysis
Why are most co-operatives in thePhil into financial services?
Why are there very few co-operatives involved in agriculture?
Why is government more involvedin development than in regulation?
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3 Waves of Co-ops Promotion inthe Philippines
1st Wave (1900
1960)2nd Wave (1970 1985)
3rd Wave (1986 1990)
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3 Waves of Co-ops Promotion
1st Wave (1900
1960) Govt organized
thousands of co-opsamong farmers tostimulate 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
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3 Waves of Co-ops Promotion
3rd Wave (1986
1990) Govt + GFIs, NGOs using
donor money spawned
thousands of co-opsnationwideDonor money spilled overto co-operatives
Easy money
most are barelyexisting
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The MANDATED Tradition of co-operatives in the Philippines
1st Wave (1900
1960)2nd Wave (1970 1985)
3rd Wave (1986 1990)
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The MANDATED Tradition ofCo-operatives in the Philippines
The first 2 waveswere driven
mainly bygovernmentwhose bias wasfor ruraldevelopment &the farmers.
The mandatedtradition continued
in the 3rd
wave,driven by govt fundsand financing,
exacerbated by theextensiveinvolvement ofdonor-driven NGOs.
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Mandated tradition
1900 1950 1970 1980
Voluntary Tradition
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The Voluntary Tradition
Is distinguishedfrom the
mandatedtradition
Internally generatedfunds (members)from the beginning
Co-op principles andpracticeswerefollowed
Social capital was keyresource at thebeginning
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The Voluntary Tradition
The voluntarytradition tookroot in the late1950s with theorganization ofcredit unions.
- Relegated to non-agriculture sector bylaw (RA 2023)
- Influenced by US &Canadian credit unionexperience
- Hence, credit unionsbecame theorganization of choiceof the voluntarysector
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The Voluntary Tradition
Credit unionsflourished in the
non-agriculturalsectors of theeconomy, in
towns & cities.
Credit unionssucceeded by
following thephilosophy (self-help & mutual
help), values andprinciples of realco-operatives.
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Mandated tradition
1900 1950 1970 1980
Voluntary Tradition
1
8
K
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This is why...
Of the 18,000+ registered co-operatives, 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).
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This is why...
Co-operativescontribution to
the economy ismarginal.
Co-operativeshave no
strategicpresence in
the nationaleconomy.
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This is why...
Government, byinclination &
capacity, ismore involvedin development
than inregulation.
We have aweak
regulatoryenvironment.
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Multi-purposeco-operatives
as indicative ofthe state of
our co-opsystem
any purpose co-operative
trend: pursuit ofgrowth without acommon purpose
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This is why...
Co-operativesare growing
individuallyrather than as
a movement.
There is nocommon
purpose.
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There are gnawing doubtsabout the true purpose of co-operatives and whether they
are fulfilling a distinct role as adifferent kind of enterprise.
- Dr. Alexander LaidlawCo-peratives in the Year 2000