Erring banks, cooperatives

BEHIND THE SCENES

Alfred P. Dizon

Marlyn Santos (not her real name) is a retired teacher who invested her hard-earned money in a cooperative rural bank along Naguillan Road. Her dilemma: the bank suddenly closed two weeks ago and she is now at a loss on how to get back her money.

Her co-depositors are irate why the bank’s management didn’t inform them earlier that the cooperative was going bankrupt. Now, they are planning to sue its officers.

Like Santos and her peers, there are depositors all over the country who are facing the same dilemma. How can the government protect depositors from wayward banks or cooperatives?

The Cooperative Development Authority, it seems, lacks enough teeth or authority to go after officers or corrupt members of banks or cooperatives and can only remind erring firms to fulfill their obligations to their depositors.  

In the Cordillera, the CDA has urged erring cooperatives that did not re-register with the government agency, as mandated under Republic Act 9520 or the New Philippine Cooperative Code of 2008, to liquidate or convert their assets into cash so they can pay their creditors and return equities or share capital of their members.

Martin Manodon, CDA regional information officer said as a regulatory body, the CDA has tried to implement rules and procedures on how cooperatives could liquidate.

           

Under the liquidation rules, he said a board of liquidators   composed of three to five incumbent or former officials shall be formed to list existing assets of their coops for conversion of such assets into cash.     

According to Manodon, based on CDA records, a total of 701 cooperatives in the Cordillera have not re-registered with the CDA.  The same report indicated as of April 25, there were a total of 2,400 registered/confirmed cooperatives in the region, which included newly registered cooperatives and those who re-registered under RA 9520.

           

Manodon advised cooperative members to check with the CDA if their coops were re-registered and if not, demand liquidation from their cooperative officials.

           

For additional information, Manodon said concerned officials or stakeholders of cooperatives could visit the CDA regional office at Lyman Ogilby Centrum, 358 Magsaysay Avenue, Baguio City.

           

Meanwhile, in Kalinga, the CDA provincial office said cooperative members should undergo education or orientation seminars before financial assistance is given them.

Abel Dawey, provincial CDA officer said government in the past poured in millions of pesos to cooperatives which later collapsed because of the dole-out mindset of members.

           

“There is need to effect behavioral change in them (coop stakeholders) to rid them of wrong mentality because we cannot afford to repeat past mistakes,” he said. “The ideal situation is for the education and technical assistance to be implemented first before the release of the fund assistance.”

           

Hundreds of cooperatives nationwide reportedly collapsed in the 80’s and 90’s when government agencies poured millions into cooperative development initiatives but the money was not put to good use.

           

“This is one drawback of government cooperative programs - they give the financial assistance without preparing the cooperative first. It should not be that once registered, they will already be given assistance,” he said.

           

He said the CDA and Kalinga-Apayao Cooperative Union are now working to make sure prescribed training modules are followed to enable new cooperatives to survive and grow.

           

According to Dawey, survival rate of new cooperatives will improve given assistance and guidance provided by the CDA.