Wednesday, June 17, 2015

CO-OPS: THE INCLUSION BUSINESS





Cooperatives, as instruments of poverty alleviation, equity and social justice are well and good, as a value proposition.


To heed the call of the times, however, maybe cooperatives can be rebranded as champions of inclusion, be it social, financial, economic, or environmental inclusion.  This is the "in" thing.  The new indicator and measure of the real mission and vision of cooperatives today.


It easily projects what a cooperative as the "preferred" business model is supposed to accomplish:  a state where stakeholders, particularly those in the lower rungs of society, have an effective access to the totality of services necessary not only to exist but to realize their full potential, as well as positively contribute to the economy and society in general.


To project this repurposed message for cooperatives, we could also perhaps tweak a bit CDA's annual "Gawad Parangal" Awards.  The giving of this award is a good practice, not only to acknowledge but also to encourage the good performance of our cooperatives.


In line with our effort to upgrade the local cooperative brand, we could repurpose our awards like so: Provincial, City, Municipal Champions for Financial Inclusion; for Social Inclusion; for Economic Inclusion, Environmental Inclusion, etc.  That way, it could  strengthen the messaging for cooperatives, as champions of inclusion in general.


Cooperatives have been doing this inclusion business, like no other enterprise can.  We should own up to this idea.  I believe that we can better "sell" the concept of cooperatives in the mainstream of society this way.  Perhaps get a bigger budget for CDA; erase the mistaken notion that cooperatives are merely tax-freeloaders, etc. 

What do you think?

(END).


 

Monday, June 15, 2015

FINANCIAL REPORT FORMAT FOR CO-OPS





The Cooperative Development Authority (CDA) announced that it will finally, err, again present and discuss the Philippine Financial Reporting Format for Cooperatives, during the CDA Forum with its CDA-accredited External Auditors.


If only to know what this "thing" is and how it will affect the financial reporting of your cooperative in the near future, you must attend this CDA event, or send a concerned/appropriate representative.


This will be on July 10-11, 2015 at the Subic Travellers Hotel, Subic Freeport Zone, Subic, Olongapo.


Also invited are not only CDA-accredited external auditors, but also Certified Public Accountants, accountants, even bookkeepers of cooperatives.  That is how important it is, I think.


This Philippine Financial Reporting Format for Cooperatives has been talked about for at least 3 years, if I remember correctly.  Experts are saying that cooperatives, due to the peculiar nature of their business, concepts, and principles, among other things, do not fit in the PFRS SME, Full PFRS, or other such similar formats.  Hence, the need for a PFRFormat for Cooperatives.


If I recall correctly, the "exposure draft" of this financial reporting format was first presented and discussed during the Luzon Convergence held in San Juan City, during the time of then CDA Chairman, Dr. Emmanuel Santiaguel.


Since then, it was reported to have been finalized.  Now, CDA "treathens" to present and discuss this again, albeit now in its final stages?  Let's find out.  I mean, you find out.


Anyway, attendance has additional sweetener, other than the substantive portion of the forum itself.  It was reported that CPAs who will attend will be credited with 16 hours of training, a requirement for the issuance by CDA of accreditation to co-op external auditor.


The forum also lists the following learning opportunies, such as: how to strengthen cooperative audit system; improve financial reporting system for cooperatives; and address issues on audit for cooperatives, among other things.

For more info on how to join, pls. visit www.cda.gov.ph

(END).


Sunday, May 31, 2015

CO-OPS TO FOLLOW CISA LAW, JUNE 16





Starting June 16, 2015, cooperatives engaged in lending activities, such as credit cooperatives, or financial service cooperatives, will have to comply, along with other covered entities, with the R.A. 9510 (Credit System Information Act or CISA), requiring their submission to the Credit Information Corporation (CIC) of credit information on their borrowers and updates thereon, on a regular basis.


This is contained in CIC Circular No. 2015-01, signed last May 15, 2015 and published on June 1, 2015 in a major newspaper. The Circular states that it shall be effective fifteen (15) calendar days after the date of publication either in the Official Gazette or in a newspaper of general circulation, among others.


The Circular is issued for the following purposes, to quote:

1.  To enforce the Act (CISA), as well as promulgated rules and regulations, which directs and requires banks, quasi-banks, their subsidiaries and affiliates, credit card companies, life insurance companies and other entities providing credit facilities, to submit the credit information of its borrowers and thereafter update the same on a regular basis to the CIC;

2.   To ensure that "Submitting Entities" comply with the requirements of the Act and its implementing rules and regulations, and other regulatory requirements; and

3.  To prescribe the rules and procedures for submitting credit information and updates to the CIC and other obligations of "Submitting Entities" thereunder.

The provisions of the Circular shall be enforced and applied to the following entities providing credit facilities, hereinafter referred to as, individually "Submitting Entities" :

1.  Universal, commercial and thrift bans, including their trust departments, rural banks and and entities with quasi-banking license issued by the BSP, including their  subsidiaries and/or affiliates that are engaged in the business of providing credit;

2.   Life insurance companies, mutual benefit associations and similar entities supervised by the Insurance Commission;

3.  Credit card companies;

4.  Financing companies;

5.  Trust entities;

6.  Investment houses with quasi-banking license;

7.  Non-government organizations engaged in micro financing business;

8.  Government lending institutions both GFIs and GOCCs engaged primarily in lending;

9.  Cooperatives engaged in lending activities such as credit cooperatives or financial services cooperatives; and

10.  Other entities providing credit facilities.


We are reprinting hereunder the complete Circular, for reference.

____________________________________________


CREDIT INFORMATION CORPORATION

CIC Circular No. 2015-01
Series of 2015

FOR:  UNIVERSAL, COMMERCIAL AND THRIFT BANKS, INCLUDING THEIR TRUST DEPARTMENTS, RURAL BANKS AND ENTITIES WITH QUASI-BANKING LICENSE ISSUED BY THE BSP, INCLUDING THEIR SUBSIDIARIES AND/OR AFFILIATES THAT ARE ENGAGED IN THE BUSINESS OF PROVIDING CREDIT; LIFE INSURANCE COMPANIES, MUTUAL BENEFIT ASSOCIATIONS AND OTHER SIMILAR ENTITIES SUPERVISED BY THE INSURANCE COMMISSION; CREDIT CARD COMPANIES; FINANCE COMPANIES; TRUST ENTITIES; INVESTMENT HOUSES WITH QUASI-BANKING LICENSE; NON-GOVERMENT ORGANIZATIONS  ENGAGED IN THE MICRO FINANCING BUSINESS; GOVERNMENT LENDING INSTITUTIONS, BOTH GFIS AND GOCCS ENGAGED PRIMARILY IN LENDING; COOPERATIVES ENGAGED IN LENDING ACTIVITIES SUCH AS CREDIT COOPERATIVES OR FINANCIAL SERVICES COOPERATIVES; AND OTHER ENTITIES PROVIDING CREDIT FACILITIES


Subject:  ENFORCEMENT OF THE CREDIT INFORMATION SYSTEM ACT PURSUANT TO REPUBLIC ACT NO. 9510 AND ITS IMPLEMENTING RULES AND REGULATIONS


SECTION 1.  Background

Republic Act (R.A.) No. 9510:  An Act Establishing the Credit Information System and for Other Purposes otherwise known as the Credit Information System Act (the "Act") was approved on 31 October 2008, establishing the Credit Information Corporation ("CIC"), requiring banks, quasi-banks, their subsidiaries and affiliates, credit card companies, life insurance companies and other entities providing credit facilities to submit credit information and updates thereon on a regular basis to the CIC whose primary purpose is to receive and consolidate such basic credit data.  CIC is thus, mandated to act as a central registry or central repository of credit information, and to provide access to reliable and standardized information on the credit history and financial condition of borrowers.


SECTION 2.  Purpose

This Circular is issued for the following purposes:

2.1.  To enforce the Act, as well as its promulgated rules and regulations, which directs and requires banks, quasi-banks, their subsidiaries and affiliates, credit card companies, life insurance companies and other entities providing credit facilities, to submit the credit information of its borrowers and thereafter update the same on a regular basis to the CIC;


2.2.  To ensure that the Submitting Entities comply with the requirements of the Act and its implementing rules and regulations, and other regulatory requirements; and


2.3.  To prescribe the rules and procedures for submitting credit information and updates to the CIC and other obligations of Submitting Entities thereunder.


SECTION 3.  Scope

The provisions of this Circular shall be enforced and applied to the following entities providing credit facilities, hereinafter referred to as, individually as "Submitting Entity", and collectively as "Submitting Entities":



3.1.  Universal, commercial and thrift banks, including their trust departments, rural banks and entities with quasi-banking license issued by the BSP, including their subsidiaries and/or affiliates that are engaged in the business of providing credit;


3.2.  Life insurance companies, mutual benefit associations and other similar entities supervised by the Insurance Commission;


3.3.  Credit card companies;


3.4.  Financing companies;


3.5.  Trust entities;


3.6.  Investment houses with quasi-banking license;


3.7.  Non-government organizations engaged in the micro financing business;


3.8.  Government lending institutions, both GFIs and GOCCs engaged primarily in lending;


3.9.  Cooperatives engaged in lending activities such as credit cooperatives or financial service cooperatives; and


3.10.  Other entities providing credit facilities.



SECTION 4.  Definition of Terms

    "Accessing Entity" 

- refers to any Submitting Entity or any other entity authorized by the CIC to access Consolidated Credit Data from the CIC. 



    "Affiliate"

-refers to a corporation, of which not more than fifty percent (50%), but not less than ten percent (10%) of the outstanding voting stock is directly or indirectly owned, controlled or held, with the power to vote, or under common control by the Submitting Entity or Borrower as the case may be.


    "Basic Credit Data"

-means basic credit information, which includes Positive and Negative Credit Information provided by a Borrower to the Submitting Entity in connection with an application for and/or availment of a credit facility, and any information on the Borrower's creditworthiness in the possession of the Submitting Entity and other factual and objective information related or relevant thereto in the Submitting Entity's data files; but shall exclude confidential information on bank deposits and/or client funds under existing laws unless the Borrower executes a Deposit and/or Fund Waiver.



    "Borrower"

- means a natural or juridical person, including any local government unit, its subsidiaries and affiliates, which applies for and/or avails of a Credit Facility.



    "Consolidated Credit Data"

-  refers to the output of the CIC comprising of Basic Credit Data, and other data or credit information in the possession of the CIC and accessible through the System.



    "Credit Facility"

- refers to any loan, credit line, guarantee, standby letters of credit, trust receipts, or other form of financial accommodation or credit from the Submitting Entity, except that deposits in banks shall not be considered as credit facility extended by the depositor in favor of the bank.



    "Data Subject"

- refers to an existing borrower or loan applicant or anyone who in any way applies for or avails of a credit facility.



    "Deposit and/or Fund Waiver"

- refers to the written waiver duly executed by a Borrower, waiving confidentiality of information on his bank deposits and/or client funds under existing laws, including Republic Act No. 1405 ("The Law on Secrecy of Bank Deposits"), Republic Act No. 6426 ("The Foreign Currency Deposit Act"), Republic Act No. 8791 ("The General Banking Law of 2000"), and their respective amendatory laws.



    "Error Report"

- refers to a system-generated report/s from the CIC that identifies errors in the file, in prescribed format, submitted by the Submitting Entity.



    "Negative Credit Information"

- refers to information/data concerning the poor credit performance of Borrowers such as, but not limited to, adverse court judgments relating to debts and reports on bankruptcy, insolvency, petitions or orders on suspension of payments and corporate rehabilitation.



    "Positive Credit Information"

- refers to information or data concerning the credit performance of a Borrower such as, but not limited to, information on timely payments/repayment or non-delinquency.



    "System"

-  refers to the program and database of he CIC through which the Accessing Entity and Data Subject shall be allowed to access Consolidated Credit Data in the possession of the CIC.



    "Update Cycle Date"

- means the period within which the Submitting Entity shall submit new and updated Negative Credit Information, Positive Credit Information or other credit information to the CIC to update previously submitted information.  The reference date for credit cards is the statement of cut-off date while the reference date for other entities is the end of the month.



SECTION 4.  Obligations of the Submitting Entity

4.1.  The Submitting Entity shall inform its Borrowers in writing of its obligation to submit their Basic Credit Data and other credit information to the CIC.


4.2.  The Submitting Entity may adopt the following letter template to notify their existing Borrowers of its obligations under the Act:

    "Dear Valued Client:

    This is to notify you that pursuant to Republic Act (R.A.) No. 9510 and its Implementing Rules and Regulations (IRR) creating the Credit Information Corporation (CIC) we are mandated to submit your basic credit data (as defined in R.A. 9510 and its IRR), as well as any regular updates or corrections thereof, to the CIC for consolidation and disclosure as may be authorized by the CIC.  Consequently, your basic credit data may thus be shared with other lenders authorized by the CIC, and other credit reporting agencies duly accredited by CIC, for the purpose of establishing your creditworthiness.


    For more information, please contact (name of Submitting Entity) or visit our website (website of the Submitting Entity).


    Thank you.

    (Name of Submitting Entity)"



4.3.  The Submitting Entity may adopt the following notification clause template to be inserted in its loan/credit applications for Data Subjects to sign:

    "I hereby acknowledge and authorize: 1) the regular submission and disclosure of my basic credit data (as defined under Republic Act No. 9510 and its Implementing Rules and Regulations) to the Credit Information Corporation (CIC) as well as any updates or corrections thereof, and 2) the sharing of my basic credit data with other lenders authorized by CIC , and credit reporting agencies duly accredited by the CIC."



4.4.  The Submitting Entity shall maintain copies of the letter notification and, when so required by the CIC, submit the same to the latter.



4.5.  If a Borrower executes a Deposit and/or Fund Waiver, the Submitting Entity shall maintain a copy of the same and when so required, submit the same to CIC.



4.6.  The Submitting Entity shall regularly submit the Basic Credit Data of all its Borrowers contained in its database, file or system, to the CIC not later than the 5th day of the month and in the form/format and manner prescribed by the CIC.



4.7.  The Submitting Entity shall ensure that the Basic Credit Data of its Borrowers with the CIC is accurate, complete, correct and current up to the relevant Update Cycle Date.



4.8.  The Submitting Entity shall ensure that when receiving Error Reports from the CIC, the Submitting Entity shall rectify the errors in the relevant files and send the corrected files to the CIC whithin a period of  of three (3) working days.



4.9.  The Submitting Entity shall develop an internal dispute resolution process by which a Data Subject can dispute information recorded in his own Consolidated Credit Data, and by which said dispute may be investigated  and resolved within a period of five (5) working days.



4.10.  The Submitting Entity shall extend full, complete and timely cooperation to the CIC with respect to disputes brought before it by Data Subject who allege that the credit information pertaining to them is erroneous, incomplete, or misleading.



4.11.  The Submitting Entity shall educate its Borrowers on the importance of maintaining a good credit record.



4.12.  Submitting Entity in good standing may access the System to inquire on a Data Subject provided that the terms and conditions as hereinafter promulgated by the CIC are complied with.



4.13.  Submitting Entity shall comply with these provisions in order to maintain good standing and violation of any of these provisions that subject them to penalties and fines under CISA, IRR and rules as may be promulgated by the CIC or the Securities and Exchange Commission, as may be applicable.



SECTION 5.  Repealing Clause

All issuances, orders rules and regulations or parts thereof that are inconsistent with the provisions of this Circular are hereby repealed, amended or modified accordingly.



SECTION 6.  Separability Clause

Should any provision of this Circular be declared invalid or unconstitutional, the other provisions not affected thereby shall remain valid and subsisting.



SECTION 7.  Effectivity

This Circular shall be effective fifteen (15) calendar days after the date of its publication either in the Official Gazette or in a newspaper of general circulation in the Philippines and upon filing with the University of the Philippines Law Center of three (3) copies .



Signed this 15th of May 2015, Makati City, Philippines


(Sgd.)  MR. JAIME CASTO JOSE P. GARCHITORENA
             President 

(END) 
 

STOP CO-OP TRAINING NOW!





If you ask me, that is my advice to all cooperative officers.  If you have taken at least 16 hours of training this year and you do not belong to a financial service cooperative, stop now.


That is the minimum training required by the Cooperative Development Authority under the Amended Implementing Rules and Regulations of R.A. 9520, the Cooperative Code of 2008.


The amended IRR were promulgated by CDA, and by the Joint Congressional Oversight Committee on Cooperatives last March 18, 2015.  CDA officials say that they are still doing an "awareness campaign" and roadshow on this before the IRR are finally published in the Official Gazette, or in newspaper of wide circulation.

Two consultative meetings on the IRR had been done, first in Davao City, and recently last May 30, 2015 in Baguio City.  On June 5, 2015, a similar meeting/consultation is scheduled in Cagayan de Oro City.  That might be the last?

So, by late June, or early July, 2015, I am optimistic and feeling sure that the publication of the IRR would have been done.

If taking more mandatory courses, on top of the 16 hours that you might have finished by now, would cost your cooperative some burdensome expenses, then stop.

And wait for the publication and implementation of the "game-changing" rules.  But if training costs and time are not a matter of concern for you and your cooperative, then, by all means, train, train, train.

(END).


 

Tuesday, May 26, 2015

ARMM'S 1ST SUCCESSFUL CO-OP CONGRESS





Marawi City, Lanao del Sur 
May 26, (PIA) -


    The Cooperative Development Authority of the Autonomous Region in Muslim Mindanao (CDA-ARMM) launched on May 25 the 1st ARMM Successful Cooperatives Congress to promote the viability and growth of cooperatives in the region.


    Dimnatang Radia, CDA-ARMM administrator, said successful cooperatives presented their best practices -specifically new management techniques, good governance, and entrepreneurial activities - to newly-established cooperatives.


    The 1st ARMM Successful Cooperatives Congress formed part of the benchmarking program of the CDA-ARMM to enable small and micro-cooperatives to be inspired by the best practices of the successful ones," Radia said, noting that may cooperatives in the region have struggled to uplift their members' economic status.


    "With their unyielding conviction, hard work, and determination, some of these cooperatives surpassed their goals and have become millionaires," he said.


    The CDA-ARMM has registered around 4, 600 cooperatives from 2010-2014, the highest number among the regions in the country.


    Orlando R. Ravanera, CDA national chairman said the cooperatives are the way to end poverty.

    
    "With the promotion of cooperatives as instruments of equity, social justice, and economic development, we can end poverty that besets the region," Ravanera said.


    Data show more than 12, 000 cooperatives are registered in Mindanao with P150-billion worth of assets.


    During the two-day event, partners of the cooperative movement at the local, national and international levels, also shared their respective programs, projects and services that the region's cooperatives may avail of.


    These partners include international agencies such as the World Bank, Japan International Cooperation Agency as well as national partners led by Land Bank of the Philippines, and National Commission on Muslim Filipinos.


    The congress also served as a venue to showcase the services and goods of ARMM's successful cooperatives.


    About 200 participants from the provinces of the region - Maguindanao, Lanao del Sur, Basilan, Sulu, and Tawi-tawi participated in the two-day activity.


    (By Bureau of Public Information -ARMM/APB/PIA-10). 

(END).

Monday, May 25, 2015

AFTER 2014 HOUSING SUMMIT, WHAT?





In the run up to the 2nd Housing Summit, slated on July 16, 2015 in Quezon City, it is timely to revisit what were committed during the July 17, 2014 1st Housing Summit.


I caught a portion of the 2014 Year-End Report of the Housing and Urban Development Coordinating Council (www.hudcc.gov.ph/sites/default/files/large/public/documents/2014/VPYEARENDREPORT-2-final.pdf), and I quote what was reported on Housing Cooperatives.


"..The government is now also in the process of amending the Implementing Rules and Regulations on housing cooperatives in the country...


"We are now in the process of amending the IRR on housing cooperatives; wherein the key shelter agencies and government financial institutions are enjoined to craft common guidelines for the implementation of cooperative housing programs and to create especial loan windows that will cater exclusively to housing cooperatives, Vice President Jejomar C. Binay said during the First Cooperative Summit in Quezon City.
 

 "This IRR will also mandate government agencies to provide technical assistance and capacity building to housing cooperatives, and will also provide for conflict resolution mechanism," he added.


Aside from amending the IRR, VP Binay said the housing sector is also taking "several compelling directions" to ensure the viability of and sustainability of housing cooperatives.


"First, we have to ensure that the concept of cooperative housing is harmonized with our existing housing programs in the sector..


"It is important to have agreements to adapt the housing cooperatives  as a viable method of producing shelter, especially since they are already organized and would be made more capable through the key shelter agencies' projects and programs," VP Binay said.


The Vice President also said that the housing agencies should also continue to make financing available to cooperatives through regular programs and through special loan window.


"In addition, we shall find a way to make the processing of requirements less stringent and more efficient and make it easier for housing cooperatives to engage in housing programs especially for socialized housing," the housing czar said.


(Now, all we have to ask is what happened after that?  Are there updates on said commitments?  That is worth knowing before we go to the 2nd Housing Summit.  Isn't it?).  (END).


   








P0.44-M FOR CO-OP 100-YR. FUND




Donations form cooperatives and related organizations have reached P442,412 as of May 24, 2015, to fund various activities in the celebration of 2015 Cooperative Centennial Year.


In the preliminary list of donors posted in the website of the Cooperative Development Authority (CDA),  some 149 cooperatives donated a total of P301, 612.


The balance of P140, 800 was from donations of the League of Cooperative Development Officers of the Philippines; Region VII Cooperative Development Council; Southern Tagalog Regional Cooperative Council; and Regional (XI) Cooperative Development Council.  This was in connection with the block screening of the movie "Bonifacio: Ang Unang Pangulo", held earlier.


Top donors were 15 cooperatives from Region VII, with P78, 009; followed by 22 cooperatives  from Region I, with P68, 378; and from 12 cooperatives from Region VIII, with P30, 838.


The list did not yet show records of donations from CAR Region; Regions 2, 3, 4 and X.


The multi-sectoral Centennial Committee estimated a total budgetary requirement of 7.3-million for identified centennial celebration projects, including for culmination activities (in October 2015); book writing and printing; promotional and advocacy; documentation of cluster congresses; souvenir program; logo design and jingle-making contest.


A fund-raising project called "Piso Para sa Sentinaryo" was earlier launched which aim to solicit voluntary donations of at least One Peso from each of the members of cooperatives nationwide, estimated to number some 12 million.  (END)


 


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