Friday, August 12, 2016


    "The involvement or participation of cooperatives in this undertaking is prejudicial to the viability and growth of cooperatives."

    Thus, spoke former Rep. Pabling Garcia of Cebu, current
chairperson of the Cebu CFI Community Cooperative, during
the June 6, 2016 Roadshow held in Cebu City, conducted to facilitate cooperatives' compliance, as "submitting entities" 
under Republic Act 9510,  or the Credit Information System 
 Act (CISA).

    Under CISA, implemented by the Credit Information Corporation (CIC), cooperatives, among many others, are required to submit the credit data of their members to CIC, and to update these on a regular basis.  Initially, large cooperatives are supposed to comply not later than October 30, 2016; and medium-sized cooperatives, up to December 31, 2016. 

    After studying the effects of CISA on cooperatives, he said: "..So, at least in my cooperative (Cebu CFI Community Cooperative), we will oppose and refuse to comply with this CIC Circular.  We are standing on solid constitutional and legal grounds," Rep. Garcia declared.

    "For one thing, cooperatives are required to create an automated electronic reporting system that will be..I don't know how to call it, but that will connect with the database of CIC.  And so, it will be expensive for cooperatives," Rep. Garcia said.

    He also pointed out that additional personnel will have to be hired to take charge of this periodic reporting.

    "If the borrower is delinquent, it will be reported to CIC.  And to me, aside from the expense, what is bad is that: Number one, if our member is delinquent, that will not speak well about him.  But we will be telling the whole world that this guy is delinquent.  We will be untrue to our members and that (delinquent) member," Rep. Garcia informed.

    On the other hand, he claimed, that for the cooperative's good debtor, "there is clear and present danger" that this debtor-member will be pirated by banks and other lending institutions, since the cooperatives are charging higher interest rates than banks.

    On the CIC penalty of P30,000 per day that may be imposed on non-complying cooperatives, Rep. Garcia claimed: "I say it is illegal.  CIC as a private corporation cannot impose a fine.  That is against the rule of law.  This is against due process."

    He claimed that "R.A. 9510 is of doubtful constitutionality.  It is a violation of our rights, and of the Bill of Rights.  The information that they are getting from cooperatives is a property of the member and also of the cooperative, and this is private between the cooperative and the member."

    "And the Constitution protects the cooperatives and the member.  This property cannot be taken from either of them.  And also, the privacy of this communication is inviolable under the constitution.  Section 2 of Article 3 of the Bill of Rights says the right of the people to be secure in their persons, houses, etc., against unreasonable searches, or seizure of any nature and for any purpose shall be inviolable, and no search warrant or warrant of arrest shall be issued except for probable cause to be determined by the judge personally," according to Rep. Garcia.

    More excerpts from Rep. Garcia's speech:

    "..This law will not contribute to the viability and growth of cooperatives.  Cooperatives have everything to lose, nothing to gain from this law...

    ..So, the first obstacle to the implementation of this law would be the Constitution...If some cooperatives will raise this question before the courts, the law (CISA) would be declared as unconstitutional and CIC will be abolished..

    ...Second, I believe this is most important ..against the enforcement of this law, is that R.A. 9510 is inconsistent with the latter law, R.A. 9520 (Cooperative Code of 2008), which impliedly repealed or modified the earlier law..R.A. 9510 is already deemed modified or amended (by R.A. 9520) to exclude cooperatives..

    ..We are not covered by that law (R.A. 9510) because R.A. 9520 commands that cooperatives are autonomous and independent...

    ...Before October 30, 2016, we are planning to file a case for declaratory relief to declare the law, R.A. 9510 as unconstitutional.." Rep. Garcia added. (END of excerpts).

    (For the complete speech/remarks of Rep. Garcia on this matter, you may visit . This video is titled: "Cooperative Consultative Forum on CISA, by CoopTV Federation." ). 

    Prior to this post, CooperativesPhilippines posted a related blog entry on July 30, 2016. It was an en toto repro of the Facebook page comments of CIC President, apparently on a related (or same?) issue. For perspective and balance, visit this at https: issues-with-co-ops.html?.spref=fb ).


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