case study: quezon fed union of coops

7/25/2019 Case Study: Quezon Fed Union of Coops

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In the early 1970s, the Institute of Social Order (ISO) begantraining local priests to eventually man social action centers (SACs)throughout the country. This move was inspired by the Vatican IIEcumenical Council which established that part of the task of spreadingthe Word of God was by answering mans temporal needs. One course of

action that the SACs took then was to link with and organizecooperatives. In 1972, Mrs. Remy Rikken, a social worker based inLucena, contacted the graduates of ISO in the hope of that they couldparticipate in the management of a social action center being organizedin Cotta, a barangay of Lucena City. One of the priests who heeded hercall was Rev. Fr. Ruben Profugo, a native of Lucena who later became thebishop of the diocese of Lucena. Fr. Profugo was assigned to handle thecooperative department of the St. Jude Parish Social Action Center inCotta.

Fr. Profugo was then relatively a newcomer in the cooperative

world. During the latter months of 1968, he helped organize the St.Dominic KB for Credit, Inc. in Unisan, Quezon. As the spiritual directorof Unisan, he encouraged his parishioners to join the St. DominicCooperative. Thus, in the following year, the cooperative becameoperational. In May 1972, Fr. Profugo was transferred to the St. JudeParish in Cotta at a time when the social action center there was beingreorganized. However, he did not leave his duties at the St. DominicCooperative for fear it would become disenfranchised. At any rate Fr.Profugo actively involved himself in two QFUCIs charter membercooperatives such that when the Federation was registered at theDepartment of Local Government and Community Development on July

26, 1972 he was listed as a member of the board of directors. But stillhe insisted at that time that he knew little about cooperatives and theirdevelopment. So with the help of Mrs. Rikken, he was sent in 1973 toCagayan de Oro to attend a three-month seminar of the SouthernPhilippine Education of Cooperatives Center (SPEC). He learned much inthis seminar and he was so inspired that he urged the QFUCI to moveforward for a better Quezon.

Expansion and Stagnation

The first three years of the Federation was devoted to

strengthening the organization as the education for cooperators and coopworkers was very limited. Only a few had the opportunity to attendseminars and training and most of them were the Federations topmanagement.

During the next eight years up to 1981, a strategy of promotionand development was adopted. Membership of the Federation grew inspite of the collapse of one charter member the Tiaong- San Antonio


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Cooperative Credit Union, Inc. The cooperative had relied too much onits leader that when the latter died, the rest of the members did not knowwhat to do. This eventually resulted into a halt in operations of theTiaong-San Antonio coop.

At any rate, with the help of the San Dionisio Credit Cooperative ofParanaque, Rizal, the Federation was able to recruit 16 more affiliates asof 1980 apart from its 8 original charter members. Then anothercooperative was added to the list during the succeeding year. By 1982,the Federation had 21 affiliates. Membership surged during the 1970sand early 1980s owing to two factors. Firstly, the Church in Quezonstrongly encouraged influential as well as active parishioners to form andjoin cooperatives. Religion seemed to be the focal point, explained LopeIbarrola who noted that Quezon was a very religious province. Secondly,in the initial years of the Federation, there was a certain appeal to theservices it offered to primaries.

The Federation offered three kinds of services to membercooperatives. One was auditing which verified to members of theprimaries the financial condition of their respective cooperatives. Therewas also a lending service which was provided in an amended provisionof the Federations by-laws. The scheme was similar in many respects tothe system of credit cooperatives except that it served primaries insteadindividual coop members. Another service rendered by the Federation toprimaries was education. When most of the affiliates were still in theirinfant stage, this service was given through the conduct of pre-membership seminars along with the organization of their respective

education committees. Also, leadership and budgeting seminars wereconducted.

At first, these services were found to be useful by the Federationsprimaries. Cooperative leaders were active and enthusiastic as well assupportive of the financial needs of the Federation. However, in 1978,the first signs of stagnation began to surface. Cooperative leaders wereobserved to be passive, complacent and introverted.

In its 1981 Annual Report, the Federation complained of the majorproblems it had been facing since 1978. First, it said that the turnover

of leadership in the affiliates had lessened the identity of the federation.

Secondly, some cooperative leaders were not conscious of theirobligations as affiliates. [Affiliates were obliged to (1) remit a 1% monthlydue based on monthly revenues, down from 2% record in their books ofaccounts a 5% investment representing the yearly increase in fixeddeposits from the time of affiliation.] A majority of the primaries did notwant to pay membership dues regularly.


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Thirdly, certain members of the Federation Board identifiedthemselves as representatives of their own primaries, ignoring tounderstand that they represented the federation. What was actuallyreferred to was that some of the board members also had managementpositions in primary cooperatives which meant double compensation.

And lastly, only a few affiliate patronized the services of theFederation. Many felt that they did not need the auditing services of theFederation, anyway. Besides, they had to pay another set of fees for thatservice. This, the Federation thought was unfair now that many of theaffiliates attained relative prosperity.

Towards the year 1983, laxity was found in the Federationsmanagement. Purportedly, the Federation could not answer certainneeds of primaries, especially cooperative education.

Linkage with the PBSP: Service With Business

In 1983, a new Executive Officer, Mr. Lope Ibarrola, was appointedby the Board of Directors to manage the Federation. Mr. Lope Ibarrolacame from the helm of St. Jude Community Credit Cooperative and waseager to assume his new job at the Federation. In the 13 years of theFederations existence, he was the fourth person to assume this position.

The year of Mr. Ibarrolas appointment was one of transition andas such the magnitude of achievements during the year was relatively

small. Three cooperatives joined the Federation as compared to fiveduring the previous year. Nevertheless, Mr. Ibarrola was optimistic ofthe future prospects of the Federation.

The big break for QFCI came in 1984.

I came in 1983; we started the linkage with the PBSP in 1984,narrated Mr. Ibarrola. You know cooperatives before were traditionallymanaged. If everything (organizational relationships and service) wasfine, then management thought it was doing all right. There was notmuch thinking, not much creativity. But with PBSP, we saw that we

cannot maximize our service unless we have the capability to do so. Sowe realized that [what we are doing] should be service with business.

By service with business, Mr. Ibarrola meant aggressive servicebuttressed by continuous capability building programs. This wasdistinguished from the pure service styles of traditional cooperativemanagements which would wait to be approached before providing


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service and yet when approached by clients did not have the propercapability.

The first forms of assistance of the Philippine Business for SocialProgress (PBSP) to the Quezon Federation were through management

and leadership training. It was during this kind of training that theFederation officers slowly began to form a vision for Quezon albeit not yetin expressed terms. Instead of being reactive to external forces, theyrealized that they had to be proactive and conciliatory to the latter. Thiswas exemplified in their move to assimilate local Samahang Nayonorganizations with economic activities into the Federation. It is betterfor us to be united rather than to be fighting in front of the Departmentof Agriculture [for recognizing], Ibarrola said.

Then early in 1985, the Quezon Federation was able to tap PBSPsCooperative Small Economic Assistance Program (COOP-SEAP) funds.

COOP-SEAP funds of a maximum of P150,000 per coop were granted toprimaries with skills in basic services, e.g., credit. The primaries, inturn, loaned the funds to individual coop members with livelihoodprojects. The program, expanded QFUCIs significance as an umbrellaorganization of cooperatives in Quezon. It was authorized by the PBSP toscreen projects of member proponents. Likewise, under COOP-SEAP, theQFUCI was given grants of P10,000 and P75,000 to cover for a yearssalary of a technical assistant and to cover administrative costs inproject assistance and area development, respectively. Skills in projectmanagement of QFUCI officers and staff were also enhanced throughPBSP training.

In 1986, the QFUCI launched the Cooperative Stabilization andInstitutional Development Program aimed at developing the capabilitiesof its primaries, strengthening their impact as catalysts for developmentin their respective communities. This program came after Federationofficers and Education Committee member underwent a series of trainingconducted by the PBSP. But since they could not handle all of thetraining needs of primaries, they sent representatives of affiliates to thePBSP for training.

While the COOP-SEAP boosted QFUCIs prestige among members

in terms of facilitation of funding from external agencies, the Federationstill encountered the problem of irregular payment of membership dues.To partly address this problem, the Quezon Federation board decided tosoften the obligations of primaries. Instead of the remittance of 1% ofmonthly gross income which was treated solely as administrative cost,the board changed the treatment into 0.5% as operating costs and theother 0.5% as investments of the primary. Moreover, the board requiredthe primary to pay only once an annual due of P1.00 per coop member


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during the primarys year of affiliation; then an annual due of P1.00 peradditional member in the following year. For instance, if a primary had100 members during its year of affiliation, the required annual duewould be P100. Then if it had 50 more members in the following year, itonly had to pay an additional P50.

The expanded services of the QFUCI not only led to increases inmembership but to relative improvements in the quality of performanceof cooperatives as well. From 29 charter members and affiliates, theQFUCIs membership grew to 36 by October 1988. Furthermore, trainingof coop officers and members in organizing, leadership and projectmanagement was continually conducted with the help of the PBSP andthe San Dionisio Credit Cooperative. Assets of the Federation grew fromP47,480 in 1980 to P97,318 in 1983 and P163,581 in 1987. This meantthat assets as of 1988 increased by 244% from its 1980 level and 68%from 1983 (see Exhibit 4). Likewise, net income from operations was

higher in 1987 than in 1983. Net income rose from P10,612 in 1983 toP85,939 in 1987 (see Exhibits 5, 6 & 7).

Despite these achievements, a lot of things still had to be done inorder to attain the Federations vision. As of October 1988, theFederation was only operating in 24 municipalities out of the provinces40. From the 36 primary cooperatives and Samahang Nayon outfits,about 60% were either delinquent or irregular payors of dues.

The needs of QFUCIs target clientele Quezons poverty groups still had to be answered. A breakdown of poverty groups revealed that

there were about 66.213 coconut farmer share tenants (concentrated inthe municipalities of Mauban, Calauag, Gumaca, Tagkawayan andAtimonan); about 202,075 subsistence fishermen without adequatefishing gear (located in the General Nakar, Real, Infanta, Polilio, Burdeos,Patnanungan, Panukulan and Jomalig); around 15,910 families of ricetenant farmers cultivating an average of 1.5 hectares (largelyconcentrated in Lopez, General Nakar, Mulanay and Tagkawayan; andan undetermined number of urban poor people which were found inLucena City, Lucban and Tayabas.

Organization (Exhibit 8)

Generally, cooperatives were structured on the basis of the ideal

of service of maximum good to a maximum number of members. It wasposited by Fr. Benedicto Jayoma, managing director of the PhilippineFederation of Credit Cooperatives, Inc. (PFCCI), that the maximumnumber of people could be benefited if membership was qualified andthat the maximum good could be offered if a few honest knowledgeableset of officers were there to decide and operate the cooperative. This


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dictum guided the QFUCI as well as its primaries when they structuredtheir respective organizations. Thus, although membership was open onthe one hand and expansion was a primary objective of the Federation onthe other hand, a prospective primary could not become a memberunless it was qualified.

The qualifications of prospective Federation primaries were similarto those set by the PFCCI for individual coops, except that instead ofindividual persons, the point of reference was cooperatives.Qualifications included 1) the willingness to undertake theresponsibilities of membership, 2) the completion of a pre-membereducation program, 3) the intent to use the services of the Federation,and 4) the agreement to operate within provincial boundaries.

With respect to the Federations officers, their elevation tomanagement positions depended mainly on their reputation as

organizers or as managers of primary coops. Ultimately, it was thegeneral assembly which would review and decide the capabilities ofpotential officers.

Based on the Federations organizational chart (see Exhibit 7), theGeneral Assembly was the highest decision-making body. It consisted ofthree representatives (the President/Vice-President, the Secretary andthe Treasurer) of each of the 36 primaries plus one additional delegatefor every 200 members and a fraction thereof but not exceeding 7delegates per primary. Every year, the General Assembly electedmembers to the board of directors as well as the members of the Audit

and Supervision and the Election Committees. Also, it evaluated thereports of these units to see if the activities done were in accordance withthe objectives set.

The Board of Directors, composed of nine members coming fromthe primaries, was the policy-making body of the Federation. It exercisedgeneral supervision and control over the affairs of the Federation. It alsoappointed a Management staff, headed by the Executive Officer, toperform the day-to-day operations of the organization. The ManagementStaff under Mr. Ibarrola consisted of 6 other cooperative employeesincluding a training directress (or sometimes called the coop development

officer), a finance (or loan) officer, a technical assistant, a bookkeeper, acashier and a messenger. Furthermore, the Board of Directors appointedmembers to the Education and Training Committee as well as to theCredit Committee.


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Operations of the Quezon Federation

Mr. Ibarrola described that the delivery of the Federations servicesran in a somewhat cyclical pattern. Accordingly, primary coops

underwent three phases, to wit: 1) the organizing phase, 2) thestabilization phase, and 3) the institutionalization phase. QFUCIsservices were then distributed to each of these phases.

Pre-membership cooperative education was the major servicerendered to a coop during its organizing stage. Primary coop memberswere taught the fundamentals of a cooperative such as coop principlesand structure (see Exhibit 9). They were also guided in the registrationas a cooperative with the Bureau of Cooperative Development (BCOD) atthe Department of Agriculture. If the primary affiliated itself with theQFUCI, it had to pay a membership fee of P1.00 per coop member. As for

annual membership dues, the Federation adopted a policy in September1988 that 50% of the 1% of monthly gross revenues that must beremitted shall be regarded as investments of a primary to the Federation.The policy was effective from January 1988 hence.

During the stabilization phase, primaries were offered capability-building programs. Skills in credit management and in running acooperative were developed and enhanced. Moreover, the Federationregularly monitored the primaries operations and with the feedback itgathered, provided some consultancy services.

We note down the needs of cooperatives in terms of skills andtraining that they need, said Mrs. Josefina Patriarca, QFUCIscooperative development officer, who had been receiving annual trainingform the PBSP since 1984. Then, we try to design training programs forprimaries.

The registration of a cooperative in a training program was usuallysubsidized by the Federation. This was especially true for financiallyweak primaries. Nevertheless, the QFUCI demanded a minimumcounterpart from the primary such as transportation expenses ofdelegates, para lang hindi masabi na dole-out na naman iyon (so that it

would not be regarded as a dole out). In addition to the registrationfees, the QFUCI also sold to willing participants reading materials andsupplies which the Federation got on consignment from PhilippineFederation of Credit Cooperatives, Inc. (PFCCI) or the PBSP.

The monitoring of a primary coop was usually conducted duringthe meetings of its board of directors. But Mrs. Patriarca admitted that


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the monitoring of a coop was done once a year owing to the distance andnumber of cooperatives to be visited.

The institutionalization phase would then come right after seeingthat the primaries were stable enough (capable of standing alone as a

cooperative). Institutionalization services included training in projectmanagement which was also geared to encourage cooperatives todiversify operations, say from credit to marketing or production.

Also, auditing services were available for all primaries. TheFederation charged P1,000 for every P300,000 worth of assets and P500for those in excess of P300,000.

The latest service which the Federation offered under itsinstitutionalization programs came in April 1988 when it embarked on aLivelihood Development Program (LDP). This program, otherwise known

as the Federations inter-lending service, was a modification of theCOOP-SEAP. Unlike the COOP-SEAP where loans were payable annuallyfor three years, the LDP provided only a one-year term for itsbeneficiaries. The program had a starting capital of P500,000, 30% ofthis were investments of primaries while the rest from PDAP through thePBSP.

The LDP was designed to provide funds to primaries so that theycould answer the credit demands of their respective members. It wasalso viewed as a refinement of the Federations services. Reacting to ahigh delinquency rate in membership dues, the QFCI decided to treat as

investments, 50% of the required 1% due to be remitted from themonthly gross income of primaries. This provided an incentive forprimaries to pay their dues regularly and in full, and subsequently toinvest in the LDP. The initial amount of resources which came from theprimaries was P167,000. Primaries were given a guaranteed interestincome of 9% per annum.

With the cost of LPD/QFUCI funds running at 9% per year, theFederation designed a scheme to hurdle this rate. In a conference withprimaries, the following loan terms and fees were decided:

Loan Amounts Interest Rate

P50,000 and below - 8 % p.a.

P50,001 and above - 11% p.a.

Plus: 1. Service fee of 3% of total loan amount;2. Filing fee of P25.00 per loan application.


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As of November 16, 1988 the Federation had loaned out someP327,500 of its LPD funds to three primaries, namely: Pitogo, Lutukanand Lopez. All of these loans had principal amounts of more than

P50,000, thereby giving the Federation a 5% spread in each of thesetransactions.

Perceptions and Problems

Although the Federation offered a variety of services to itsprimaries, a number of primaries perceived that these services did notbear actual benefits for them. One cooperative, which was enjoyingmillions of pesos in assets, said that the Federations training seminarswould only be significant to small cooperatives but not for bigcooperatives like them because these seminars were not designed to

further develop their needs.

Another cooperative, which is contrast was small in terms ofmembership and assets, claimed that it was not enjoying the benefitsdue to a Federation member, We go to the general assembly, but [wedont get their] services, one of the primary coops director said.Furthermore, it claimed that the QFUCIs inter-lending service was notattractive for them since the risk was greater to small coops than thebigger ones.

Another cause of complaint among the cooperatives was the

auditing service rendered by the Federation. The San Luis DevelopmentCooperative, Inc. of Lucban, Quezon worried about the delay in thesubmission of an audit report by the Federation. It did not know thatthe Federations auditor got married and pregnant and that the QFUCIwas finding difficulty in looking for a replacement.

A few years ago, they came to us to offer their auditing service,but when they saw our books, they got scared and did not pursue theservice, narrated a director of the Tayabas Community CreditCooperative, Inc. (TCCCI). Thus, the TCCCI asked the services of theTagalog Cooperative Development Center or TAGCODEV, a tertiary

cooperative (formerly the Tagalog Cooperative Training Center orTAGCOTEC) operating in the Southern Tagalog region.

A tertiary cooperative was an association thought to be formed atthe regional level. But there was no description of such a cooperative inthe PFCCI manual for credit cooperatives. The PFCCI manual onlydescribed secondary cooperatives like the Katipunan ng Kilusang Bayan(Federation of Cooperatives) and the Kalipunan ng Kilusang Bayan


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(Union of Cooperatives). The former were secondaries open to at leasttwo or more Kilusang Bayan (primaries) of the same type and could beformed on the provincial, regional and/or national levels and may or maynot perform business activities. On the other hand, the latter werelikewise business activities. On the other hand, the latter were likewise

secondaries composed of at least two or more federations or otherunions, and which could be formed in the regional or national level aslong as they did not engage in non-business activities.

Likewise, there seemed to be a duplication of services offered byregional and provincial federations or unions, as seen by Quezonprimaries from those of TAGCODECs and those of the QFUCIs. Bothwere found competing against each other in auditing, in training and inother cooperative development programs. The problem apparently was aspillover of the confusion in the hierarchy of cooperatives where severalkinds of national federations existed producers, credit, womens and

even electric and water coops, to name a few. Even the CooperativeUnion of the Philippines (CUP) was said to be offering a service line whichallowed primaries to directly avail of it.

QFUCIs problems did not only concern the perceptions andattitudes of some primaries against it. It also discovered that it hadproblems which were apparently embedded in the culture of the peoplein the province. Hiya was manifested in several occasions whenrepresentatives of primaries to QFUCI working committees refused toattend meetings for lack of credentials and confidence. Also, the linedemarcating what was professional and what was personal was thin, so

much so that in arguments during meeting, leaders tended to regard thedebates as a personal matter. A number of cooperatives whose leadersused to seat at the Federations Board of Directors or Management lateron refused to cooperate with the Federation.

External Relationships

Besides the Diocese of Lucena and the PBSP, the QuezonFederation and Union of Credit Cooperatives, Inc. was receptive to thesupport of other instrumentalities and institutions willing to share in thefulfillment of its vision.

In organizing, the Federation had begun coordinating with theCenter for Community Services (CCS). This happened after the latterorganized a cooperative to engage in copra marketing activities in themunicipality of Tayabas. Subsequently, the CCS which had beenorganizing communities in Quezon since 1983 was asked by the militaryfor its registration papers. When they could not produce any, thisheightened the militarys suspicion that CCS was a rebel front


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organization. Therefore, it asked the CCS to stop its activities. What theCCS did was to approach QFUCI and help establish the legality of itscooperative in Tayabas. The QFUCI made the proper arrangements withthe Department of Agriculture and with the military authorities in orderto allow the CCS cooperative to continue its operation. Afterwards, the

Federation was asked to be a member of CCSs advisory council. Also,an informal agreement was reached between the QFUCI and the CCSwhereby after the latter had organized communities, the QFUCI wouldtake over to organize cooperatives.

Funds coming from international donor agencies were also tapped.In 1987, as Bishop Profugo was preparing a trip to Rome on a Churchmission, Mr. Ibarrola asked him to circulate promotional materials toCatholic Foundations there. The materials expressed the need fordevelopment funding in Quezon. Consequently, two foundations theKatholisches Frauenwerk in Osterreich (KFO) and CEBEMO sent letters

to the QFUCI to signify their willingness to provide financing. KFO waslater on chosen because it processed loan documents faster thanCEBMO. Before the term with KFO ended in May 1988, QFUCI begantapping funds with the help of the PBSP from the Program DevelopmentAssistance of the Philippines (PDAP) for an area development package.The package, which started on April 1988, included funds for trainingand livelihood development financing.

Maintaining a harmonious relationship with the Department ofAgriculture (DA) was also a part of the Federations agenda for growth.In fact, it derives its legal authority to operate from the DA. The

Department of Agriculture provided technical support for cooperativedevelopment such as audit. It also decided on whether a cooperativecould be allowed to operate in an area. But then, the DA lackedmanpower and skills to do these. Thus, in essence, support was onlyadministrative. To fill in the inadequacies of the DA in Quezon, amemorandum of agreement with the Federation was made, givingauthority to the QFUCI to conduct auditing services for the DA.Moreover, a screening committee was set up to determine the viability ofaspiring cooperative organizations. Through the Federationsendorsement, the Department of Agriculture would approve theregistration of a cooperative.

Success and Failure Factors

Mr. Lope Ibarrola strongly believed that the success of cooperativeswould come after the achievement of the balance between mans spiritualand temporal needs. He saw religion as a felt need and the Church asthe motivating force in cooperative development in Quezon.


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Bishop Profugo agreed with Ibarrolas position on the balance inmans spiritual and temporal needs. But he identified certain factorscontributing to the success of cooperatives in Quezon. First, hementioned the credibility of the Church. There must be the element oftrust of people in the Church, he stressed.

Secondly, he cited the education of the members as an importantfactor. This has been a major source of failure of coops, he said.Thirdly, Bishop Profugo noted leadership training. In relation to this, hecautioned that leaders should be conscious of succession. There shouldbe others to succeed (leaders) should see to it that others would havesome fulfillment, too.

There were also some observable obstacles. According to BishopProfugo, one was the tendency of officers and members to be burned out

easily. Another was the tendency of some primaries to be individualistic(makasarili). This was seen in the irregularity and deferment of paymentof monthly dues. Mr. Ibarrola noticed that if the remittance due to theFederation involved a large sum, the primary found it hard to give theamount in full and thus tended to withhold the money. Maybe for thefirst obstacle, continuous training is needed so that they get a feeling ofrenewal. As for individualistic tendencies, I think we must pound ontheir spiritual orientation, said Bishop Profugo.

Mr. Ibarrola also observed that the voluntary character of work ina cooperative could be an obstacle to a cooperatives development,

especially when it was in its survival stage or when it had a lot of projectcommitments. In relation, some cooperatives confessed that they hadweak middle level management staff. By weak, they meant lack oftechnical and management skills.

Towards the Fulfillment of A Vision

For 1989, Mr. Ibarrola expected nine additional primaries to jointhe Federation. This implied that given an average of 500 members perprimary cooperative, the Federations membership would total 22,500individuals. This further implied benefits to 2.48% of the provinces poor

(he estimated that the poor in Quezon comprised 64.4% of the 1,408.601NCSO projected population figure for 1989).

Mr. Ibarrola also saw inter-trading activities between primaries in1989. The scheme would give primaries access to the products of othercooperatives within the Federation at factory prices. It was also hopedthat the scheme would help eliminate exploitation of primaries by


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middlemen. The funding for this inter-trading service was yet to betapped from external agencies.

To meet the demands of an increasing area and scope ofoperations, the QFUCI management planned to hire a full-time auditor

(who still had to be accredited by the BCOD) and four full-time auditingaides. Likewise, an assistant community development officer would haveto be employed in view of the pending leave of absence of Ms. Patriarcawho was on the family way.

A refinement of the Federations existing services could also takeplace based on the feedback QFUCI continually gathered from itsprimaries. Also, the Federation planned to get a more presentable officeand training center by 1989.

For his part, Bishop Profugo laid down courses of action infulfilling the vision for the province of Quezon.

There is a need to strengthen the Federation, said BishopProfugo, in order to expand to barangays where there are no coops andin order to pave the way to economic recovery of the country and also tostrengthen the middle class. Justifying his position on the need tostrengthen the middle class, Bishop Profugo argued that real poor couldnot be the target of cooperatives because they dont have the requiredfixed deposits; rather they were the objects of charity and dole outs.

Organizing cooperatives in areas where there were none was partof the pastoral plan of the Lucena diocese. This was the reason whypriests and lay leaders were encouraged to join the Federation. Priests inthe diocese were asked to build Munting Sambayanang Kristiyano(MSKs), or Small Basic Christian Communities (BCCs). In the process ofbuilding MSKs, they were advised to start with the faith dimension firstand not with the material dimension. Then afterwards, they could startasking how people could help one another in satisfying or meetingtemporal needs.

In September 1988, the Diocese of Lucena, the QFUCI and thePBSP began discussing plans for a consortium. The consortium wasaimed at coordinating, maximizing and accelerating intervention effortsfor the development of Quezon through the building of MSKs and theorganization of multi-purpose cooperatives.


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Exhibit 1

Quezon Federation And Union Of Cooperatives, Inc.List of QFUCI Member Cooperatives As Of October 1988

QFUCI MEMBER COOPERATIVES

Charter Members:

1. CANDELARIA COM. CREDIT, COOP., INC.Candelaria, Quezon

2. DOLORES COM. CREDIT COOP., INC.Dolores, Quezon

3. KB PAMPANANALAPI NG SARIAYA, IN.Sariaya, Quezon

4. MT. CARMEL KB FOR CREDIT, INC.

Lucena City5. ST. DOMINIC KB FOR CREDIT, INC.

Unisan, Quezon6. ST. JUDE COM. CREDIT COOP., INC.

Cotta, Lucena City7. SAN LUIS DEVELOPMENT COOP., INC.

Lucban, Quezon

Affiliate Members:

1. AGDANGAN COM. CREDIT COOP., INC.Agdangan, Quezon

2.

ALABAT ISLAND CREDIT & CONSUMERS COOP., INC.Alabat, Quezon

3. ATING KOOPERATIBA, INCTagkawayan, Quezon

4. CARIDAD ILAYA SNCaridad Ilaya, Atimonan, Quezon

5. CATANAUAN COOP. DEV., INCCatanauan, Quezon

6. GUINAYANGAN COM. CREDIT COOP., INC.Guinayangan, Quezon

7. GUMACA PARISH COOP., CREDIT UNION, INC.Gumaca, Quezon

8.

HINGOSO COM. CREDIT COOP., INC.Gen. Luna, Quezon

9. HOLY CROSS CREDIT COOP., INC.Quezon, Quezon

10.

HONDAGUA COM. CREDIT COOP., INC.Hondagua, Lopez, Quezon

11.IMMACULATE CONCEPTION CREDIT COOP., INC.Macalelon, Quezon


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12.KB PAMPANANALAPI NG ST. CATHERINE, INC.Pagbilao, Quezon

13.KB PAMPANANALAPI NG PAROKYA NG LOURDES, INC.Iyam, Lucena City

14.KSN NG LUCBANLucban, Quezon

15.

LOPEZ (QUEZON) PAROCHIAL CREDIT COOP., INC.Lopez, Quezon

16.LOPEZ VENDORS CREDIT COOP., INC.Lopez Public Market, Lopez, Quezon

17.LUTUCAN BRGY. CREDIT COOP., INC.Lutucan, Sariaya, Quezon

18.MARYKNOLL ACADEMY KB FOR CREDIT, INC.Lucena City

19.OUR LADY OF THE ANGELS CREDIT COOP. DEV., INC.Atimoran, Quezon

20.MAYOWE COM. CREDIT COOP., INC.Mayowe, Tayabas, Quezon

21.

MAUBAN KB FOR CREDIT, INC.Mauban, Quezon

22.OUR LADY OF LOURDES CREDIT COOP., INC.Malinao Ilaya, Atimonan, Quezon

23.PEREZ COM. CREDIT COOP., INC.Perez, Quezon

24.PITOGO COM. CREDIT COOP., INC.Pitogo, Quezon

25.ST. BONAVENTURE CREDIT COOP., INC.University Village, Lucena City

26.SAN ANDRES COM. CREDIT CCOP., INC.

San Andres, Quezon27.QUEZON PROVL GOVT. OFFICIALS & EMPLOYEES CREDIT COOP.,INC.Lucena City

28.ST. FRANCIS COM. CREDIT COOP., INC.San Francisco, Quezon

29.TAYABAS COM. CREDIT COOP., INC.Tayabas, Quezon


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Exhibit 3Quezon Federation and Union of Cooperatives

Municipalities and Population in Quezon as of May 1980

Table 1. QUEZON POPULATION BY MUNICIPALITY, URBAN-RURAL(As of May 1980)

MUNICIPALITY URBAN RURAL TOTAL1. Agdangan 2,750 4,639 7,3892. Alabat 4,800 6,585 11,3853. Atimonan 11,078 28,816 39,8944. Buenavista 1,164 15,086 16,2465.

Burdeos 2,571 12,317 14,8886. Calauga 8,962 48,945 57,9077. Candelaria 13,358 41,271 54,6298. Catanauan 9,137 32,984 42,1219. Dolores 2,009 13,343 15,35210. General Luna 3,159 13,343 16,52611.

General Nakar 564 11,563 12,12712. Guinayangan 2,402 26,772 29,17413.

Gumaca 9,545 32,598 42,14314. Infanta 4,054 23,760 27,81415. Jumalig 1,243 2,729 3,97216. Lopez 11,879 46,543 58,42217. Lucban 18,619 7,207 25,82618. Macalelon 3,617 13,550 17,16719.

Mauban 14,278 23,536 37,81420. Mulanay 3,753 27,948 31,70121. Padre Burgos 2,667 11,411 14,07822. Pagbilao 9,735 21,946 31,68123. Panukulan 1,463 6,422 7,88524. Patnanungan - 7,456 7,456

25.

Perez 1,721 5,830 7,55126. Pitogo 4,529 11,296 15,82527.

Plaridel - 6,386 6,38628. Polillo 5,439 15,126 20,56529. Quezon 3,062 7,672 10,73430. Real 5,144 9,319 14,46331. Sampaloc 6,205 3,160 9,36532.

San Andres 3,287 14,535 17,82233. San Antonio 1,550 16,151 17,70134. San Francisco (Aurora) 3,317 30,611 33,92835. San Narciso 4,144 24,814 28,95836. Sariaya 8,767 65,381 74,14837. Tagkawayan 3,732 27,649 31,38138. Tayabas 14,540 27,597 42,13739. Tiaong 9,763 38,843 48,60640.

Unisan 3,211 15,019 18,23041. Lucena City 107,880

---------------

-----------------107,880

-------------TOTAL 329,093

--------------800,179

------------------1,129,277-------------


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Exhibit 4

Quezon Federation and Union of Cooperatives, Inc.Comparative Balance Sheet for 1980, 1983 & 1987

1980 1983 1987Assets

Current Assets 47,102 92,420 157,557Net Fixed Assets 12,224 4,266 5,393Other Assets 379

-----------632

-----------632

------------Total Assets 59,705

=======97,318

=======163,581

========

Liabilities and Members Equity

Liabilities 25,473 46,873 31,896Equities

Capital Donation 15,174 15,174 15,174Capital Contribution 9,203 14,972 14,972Retained Earnings 9,855

-----------20,299

----------101,528

-----------Total Equity 34,232

-----------50,445

----------131,685

-----------

Total Liabilities & Members Equity 59,705=======

97,318======

163,581=======


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Exhibit 5

Quezon Federation and Union Cooperatives, Inc.STATEMENT OF OPERATION

For the Year ended December 31, 1980

What We Earned:Monthly dues P7,648.16Members annual dues 3,046.40Registration fees-Seminar 2,400.00Registration feesGeneral Assembly P1,225.00

Less General Assembly expense 1,428.85 (203.85)Annual report income 2,410.00

Less Printing cost of 1979annual report 2,120.00

290.00

Tambuli 604.50Less Printing cost 480.00 124.50

International credit union 3,590.00Less Expenses 4,165.50 (575.50)

Interest income 4,116.44Service income 5,052.27Other income 11,791.35

Less: Auditing expenses P4,200.00Budgeting seminar Expense 5,699.35

9,899.35

1,892.00Total of What We Earned P23,790.42Less of What We Spent:

Salaries P8,975.00Cost of living allowance 1,440.00

Board meeting expense 485.90Office supplies expense 408.85Communication expense 1,040.44

Transportation expense 655.75Repairs & maintenance expense 115.00Light & water expense 33.67Seminar & Training expense 32.00Annual dues - TAGCOTEC 525.60Bank collection & services charges 154.40Depreciation expenseFurniture & fixtures 455.72*Depreciation expense

Office equipments 3,056.90Miscellaneous expenses 112.00 17,491.23

Net of What We Earned P6,298.19=========

*Includes depreciation for beds


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Exhibit 6

Quezon Federation and Union of Cooperatives, Inc.

Statement of Operation

For the year ended December 31, 1983

INCOME:

Monthly dues P35,256.54Annual dues 6,744.99Seminar Reg. Fee 6,290.00Conference Reg. Fee 3,595.00Interest income 4,182.97Auditing income 5,000.00G.A. registration 2,010.00

Income from Raffle draws 7,590.02Income from sales of equipment 1,600.00Income from sale of forms/other income 427.36Membership fee & affiliation fee 300.00

-------------Total Gross Income P72,996.88

LESS: EXPENSES:

Salaries & allowances P31,334.60SSS, Medicare & ECC 2,366.10

General Assembly 2,953.59Seminars Conference 8,067.85Due to Tagcosec 617.60Communication expense 1,676.12Transportation expense 2,376.90Auditing expense 1,069.25Office supplies 1,319.10Per diem/Board meeting expense 1,118.45Donations & Representation 841.60Maintenance, Lights and Water 913.3313thmonth pay 3,900.00

Depreciation expense 2,064.46Miscellaneous expense 1,765.20 62,384.15

Net Income from Operation P10,612.73=========


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Exhibit 8Quezon Federation and Union of Cooperatives, Inc.

Organizational Chart of the Federation

Audit and

Supervision Comm.

Board of

Directors

Education

Committee

Credit

Committee

Management

Staff

Election

Committee

GeneralAssembly


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Exhibit 9

Basic Information on Cooperativism(by International Cooperative Alliance)

Definition

A co-operative is an autonomous association of persons unitedvoluntarily to meet their common economic, social, and cultural needsand aspirations through a jointly-owned and democratically-controlledenterprise.

Values

Co-operatives are based on the values of self-help, self-responsibility,democracy, equality, equity and solidarity. In the tradition of theirfounders, co-operative members believe in the ethical values of honesty,openness, social responsibility and caring for others.

Principles

The co-operative principles are guidelines by which co-operatives puttheir values into practice.

1st Principle: Voluntary and Open Membership

Co-operatives are voluntary organisations, open to all persons able to usetheir services and willing to accept the responsibilities of membership,without gender, social, racial, political or religious discrimination.

2nd Principle: Democratic Member Control

Co-operatives are democratic organisations controlled by their members,who actively participate in setting their policies and making decisions.

Men and women serving as elected representatives are accountable to themembership. In primary co-operatives members have equal voting rights(one member, one vote) and co-operatives at other levels are alsoorganised in a democratic manner.


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3rd Principle: Member Economic Participation

Members contribute equitably to, and democratically control, the capitalof their co-operative. At least part of that capital is usually the commonproperty of the co-operative. Members usually receive limited

compensation, if any, on capital subscribed as a condition ofmembership. Members allocate surpluses for any or all of the followingpurposes: developing their co-operative, possibly by setting up reserves,part of which at least would be indivisible; benefiting members inproportion to their transactions with the co-operative; and supportingother activities approved by the membership.

4th Principle: Autonomy and Independence

Co-operatives are autonomous, self-help organisations controlled by theirmembers. If they enter to agreements with other organisations, including

governments, or raise capital from external sources, they do so on termsthat ensure democratic control by their members and maintain their co-operative autonomy.

5th Principle: Education, Training and Information

Co-operatives provide education and training for their members, electedrepresentatives, managers, and employees so they can contributeeffectively to the development of their co-operatives. They inform thegeneral public - particularly young people and opinion leaders - aboutthe nature and benefits of co-operation.

6th Principle: Co-operation among Co-operatives

Co-operatives serve their members most effectively and strengthen theco-operative movement by working together through local, national,regional and international structures.

7th Principle: Concern for Community

Co-operatives work for the sustainable development of their communitiesthrough policies approved by their members.

case study: quezon fed union of coops

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