Pres’l assistant to the Visayas goes cooperative

In his message before members of Cebu NewsCoop during its 20th Annual General Assembly, Presidential Assistant for the Visayas Michael “Mike” Dino showed a keen interest in the workings of cooperatives.

Lifting a clip from an archived message of former UN President Ban Ki Moon, Secretary Dino stressed the democratic ideals that govern co-ops, making it effective in empowering people towards sustainable and inclusive growth.

But it is in the co-op’s upward financial trajectory that got the businessman and presidential “utusan” (in his own words) even more interested. He is poised to invest in the self-help enterprise even as he encouraged OPAV employees to list up. The once-fledgling and closed-type enterprise founded twenty years ago by 32 media practitioners who pooled P72,364 in share capital has now become a medium-sized cooperative with over P38 million in assets. This year, NewsCoop distributed a net surplus of P2.16 million to more than 1,500 members.

Board Chairman Elias Baquero leveraged the co-op’s steady growth for the past six years by opening the enterprise to the community last year, paving the way for some 183 non-media people (as of December 2016) to go cooperative.

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In the ensuing Q & A after Sec. Dino’s speech, I stood up to thank him for his heartfelt support and to update him about developments in the movement.

In previous articles, I wrote that PH cooperatives are once again up in arms over moves in Congress to repeal the tax exemption privileges of co-ops, expressed in Articles 60 & 61 of RA 9520, also known as the Cooperative Code of 2008.

The move is being pushed by the Department of Finance through administration allies in Congress: Dakila Cua (Quirino province) and Joey Salceda of Albay. Congress is looking for ways to counter budget deficits that would result once the government implements the lowering of personal income tax and reduction of value added tax exemptions.

In a talk with “Co-op TV” over CCTN Channel 47 early this month, Atty. Jonathan Capanas, dean of the College of Law of the University of San Jose-Recoletos, said the initial bills (HB 4774 and 4888) are but two of a wide array of tax proposals that will eventually impact on the viability of co-ops.
Atty. Capanas knows whereof he speaks. As CEO of the Cooperative and Resource Management Center, a top-flight training and co-op education provider in the country, he interacts with co-op members regularly and knows RA 9520 like the palms of his hands.

The government should recognize that co-ops are key partners in poverty alleviation; as instruments of social justice self-help enterprises like co-ops should be supported if not rewarded for bridging services to marginal communities, which oftentimes the state cannot reach owing to a lack in resources, according to Atty. Capanas.

In other words, RA 9520 is not just a legal framework governing co-ops. The law commits the state to directly support the sector not necessarily through allocations but through tax subsidies.

But for Ms. Doris Canares, manager of TMX Credit Cooperative who appeared in tandem with Atty. Jonathan in the co-op advocacy show, co-ops are actually being taxed through statutory allocations contemplated in Article X of RA 9520.

Under Articles 85 and 86, co-ops set aside 30 percent of net surplus (co-op jargon for profits) to reserve funds, education and training, community services and funds for land acquisition. As a rejoinder, Atty. Capanas urged policy makers to spend time with co-ops so they will know how the sector impacts the lives of the poor.

Well, what a difference a couple of hours or so of co-op engagement makes for Sec. Mike Dino.

In response to the co-op updates I and Chairman Baquero laid out for the PA in particular and the assembly in general, Secretary Dino promised to bring to Pres. Rodrigo Duterte’s attention the sentiments of the assembly and his own opposition against moves to tax co-ops.

I certainly hope he will make a good presentation and get the President to side with the movement because there is pressure in the executive to generate funds for the P3.35-trillion budget for the current year. Because of the gargantuan budget requirements for education, public works, local government, defense not to mention the 400 percent increase in the President’s discretionary fund, I don’t feel optimistic for the movement.

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As part of the core group in Region 7 tasked to mobilize co-ops in the region to show its force against the tax repeal moves, may I update co-ops far and near that the protest on April 29 will be nationwide. Cebu-based co-ops and federations aim to mobilize some 10,000 members to send a strong message to Congress. Final details will be threshed out today in the office of Fairchild Cooperative CEO Reynaldo “Reygan” Gandionco.

With the co-op sector finding an unexpected ally in the Presidential Assistant for the Visayas who promised to raise the issue in the next Cabinet meeting, the movement in Cebu has practically pushed the anti-tax repeal campaign to the next level.