Policy Objective and Administrative Responsibility
- The policy of CDA is to support the proper and transparent administration of the incentives to registered cooperatives under Republic Act No. 6938 (Cooperative Code of the Philippines) and other laws and government issuances (Section 2).
- CDA sets requirements allowed under the Cooperative Code of the Philippines and the Charter of the CDA under Republic Act No. 6939 (Section 2).
- CDA establishes administrative responsibilities of its concerned office/unit to ensure proper implementation of the circular (Section 2).
Definitions Used in the Circular
- “Authority” refers to the Cooperative Development Authority (Section 3).
- “Cooperative in Good Standing” means a cooperative that:
- conducts affairs pursuant to its by-laws, Republic Acts 6938 and 6939, and
- has complied with statutory reports whether operating on net surplus or net loss (Section 3).
- “Certificate of Good Standing (CGS)” is a certificate issued by CDA in accordance with the circular (Section 3).
- “Operating Cooperative” is a cooperative that has performed business and cooperative operation, including those that have not commenced business and cooperative operation within two (2) years from the date of registration (Section 3).
- “Non-operating Cooperative” is a cooperative that has not performed business and cooperative operation for at least two (2) consecutive years, as determined by actual inspection (Section 3).
- “Business Operation” is the economic undertaking of providing product and services to members in accord with cooperative registered objectives (Section 3).
- “Cooperative operation” refers to the membership, institutional, and governance undertaking of cooperatives (Section 3).
- “Preceding Fiscal Year” refers to the fiscal year immediately preceding submission of statutory reports (Section 3).
- “Statutory Reports” refers to the Cooperative Annual Performance Report (CAPR) and Audited Financial Statements required under:
- Article 54 of Republic Act No. 6938, and
- Section 3(f) of Republic Act No. 6939 (Section 3).
- “Accountable Officers” refers to persons directly responsible for handling funds, securities, and properties of the cooperative, such as the Chairman, Manager, Treasurer, Cashier, and other persons authorized to act as custodian of cooperative assets (Section 3).
Who May Receive a CGS
- A CGS may only be issued to an operating cooperative (Section 4).
- A requesting cooperative must have submitted its Cooperative Annual Performance Report to CDA, whether or not it had actual business operations for the preceding fiscal year (Section 4).
- The cooperative’s absence of business operations must not have lasted for two (2) consecutive years at the time of filing for a CGS (Section 4).
Who Cannot Receive a CGS and Limits
- A CGS must be denied to a cooperative that fails to submit all basic statutory reportorial requirements to CDA (Section 5(1)).
- The denial rule is anchored on the effect of failure to file annual reports, providing that:
- failure to file the annual report is a ground for revocation of authority to operate and/or cancellation of certificate of registration, and
- no certificate of whatever kind, nature or purpose may be issued to a cooperative that has not filed its annual report (Section 5(1), citing Section 5, Rule 2 of the IRR of the Cooperative Code).
- A CGS must not be issued to a cooperative that has not carried on business for two (2) consecutive years, because such cooperative is subject to Article 69 of Republic Act No. 6938 on dissolution by failure to organize and operate (Section 5(2)).
- No CGS with retroactive effectivity may be issued to a cooperative (Section 5).
Documentary Requirements and Special Exemptions
- Before CDA issues a CGS, the requesting cooperative must comply with the following documentary requirements (Section 6):
- a. An application letter duly signed by the Cooperative Chairman or authorized representative stating the reasons for the request.
- b. Complete statutory reports for the preceding fiscal year.
- c. A copy of the updated bond of accountable officers/employees of the cooperative.
- d. Minutes of the Annual General Assembly Meeting for the preceding fiscal year, including the results of election of the Board of Directors and Committee Members, in accord with the by-laws.
- e. A certification by the Chairman or the Secretary of actual specific business undertaken during the preceding fiscal year (for cooperatives with business operations) and a certification that the cooperative is compliant with the Standard Chart of Accounts appropriate to its type.
- f. A certification from the Legal Officer of the CDA Extension Office or the Legal Division of the CDA Central Office, as the case may be, that the cooperative has no pending case.
- g. Payment of the certificate fee.
- Newly-registered cooperatives are exempt from complying with requirements (a), (b), (c), (e), (f), and (g) if they secure the CGS within ninety (90) days from the date of registration (Section 6).
- If the newly-registered cooperative applies for CGS after ninety (90) days from the date of registration, it must comply with requirement (d) (Section 6).
Approving Authority, Waiver Power, and Fee Rules
- The authority to sign and issue CGS depends on the requesting cooperative’s classification and purpose (Section 7).
- The Extension Office Director approves CGS applications for primary and secondary cooperatives for incentives under Revenue Regulation No. 20-2001 and other legitimate purposes, including applications for financial assistance from other financial institutions, except purposes reserved to the Chairperson (Section 7).
- The Chairperson approves CGS applications for tertiary cooperatives for incentives under Revenue Regulations No. 20-2001 (Section 7).
- The Chairperson also approves CGS applications for:
- availing incentives for the rice importation program, whether the cooperative is primary, secondary, or tertiary;
- availing incentives for importation of machineries, equipment, and spare parts, whether the requesting cooperative is primary, secondary, or tertiary; and
- applications specifically from electric cooperatives, cooperative banks, and cooperative insurance societies (Section 7).
- Board Resolution No. 290, s. 2003 is repealed because it granted administrators authority to approve CGS based on geographical area jurisdiction (Section 7).
- The Board of Administrators, upon recommendation of the concerned Extension Office Director, may waive specific requirements when compliance is deemed impossible due to force majeure or calamity or fortuitous event (Section 8).
- Requirements that may be waived are:
- statutory reports for the preceding year,
- copy of the updated bond of accountable officers/employees, and
- minutes of the general assembly meeting for the preceding year including election results, if provided in the by-laws (Section 8).
- Even if waived under Section 8, the other requirements under Section 6 must still be complied with (Section 8).
Certification Fees, Penalties, and Filing Deadline
- CDA charges a certification fee of PHP 200.00 for every CGS issued, including certification of no pending case under requirement (f) in Section 6 (Section 9).
- Additional penalties are charged for specified circumstances (Section 9):
- PHP 300.00 for every year of failure to secure a CGS; and
- PHP 300.00 for late filing as determined under Section 10.
- A cooperative must secure a CGS on or before April 30 of the current year (Section 10).
- Requests received by CDA after April 30 are considered “late filing” and incur a penalty of PHP 300.00 (Section 10, consistent with Section 9).
Reporting Requirement to CDA Registration Division
- CDA requires a monthly report on CGS issuance to be submitted to the Registration Division, CDA Central Office no later than the 5th day of the succeeding month.
- The monthly report must be in a form required by the Registration Division (Section 11).
Transitory Rules and Special Treatment
- A CGS issued on or before July 13, 2007 is effective one (1) year after the date of issuance (Section 12).
- From August 1, 2007 until December 31, 2007, a CGS issued in that period is valid and effective until December 31, 2008 to ensure rational implementation in the first year (Section 12).
- Thereafter, a CGS is valid and effective until April 30 of the succeeding year (Section 12).
- During the first year of implementation, CDA must not impose a penalty on applying cooperatives that have not secured a CGS or Certificate of Operation for FY 2007, notwithstanding Section 9(a) (Section 12).
Repeals, Ceasing Prior Issuance, and Effectiveness Cycle
- CDA Memorandum Circular No. 2004-01 (January 12, 2004), as amended, is repealed, subject to Section 12 (Section 13).
- Upon effectivity of CDA Memorandum Circular No. 2008-01, CDA must cease issuing the Certificate of Operation (Section 13).
Information Dissemination Mandate
- All CDA Extension offices must conduct a massive information campaign on CDA Memorandum Circular No. 2008-01 until the end of FY 2007 (Section 14).