CHAPTER 2: ROLE OF COOPERATIVE IN THE ECONOMY AND SOCIETY

Cooperatives are not strange term for most. It has been an integral part of the society and
community building for the past span of years and has always been an ally to the people. I t is
where one can loan some money, and reap others benefits that come by being a member. It is a
business designed based on the principles that every member gets to vote and has a voice.
Overall, it aims it helps the community by uniting the members of it.
Many cooperatives and cooperative systems around the world perform exceptionally well
in supporting the priorities and aspirations of their members and in contributing to economic and
social progress. In some countries they have struggled with government dominance, co-option by
elites and impacts of structural adjustment and economic liberalization, creating in some cases
and among some institutions misunderstanding about cooperatives and how they work. However,
in many countries, they have demonstrated resilience and supported local communities in the
wake of globalization. For these reasons and others, as development and donor agencies seek for
organizational forms that are sustainable while being both values-based and market oriented,
they are beginning to “take another look at” cooperatives. Scholars and researchers are also
increasingly noting the power of cooperatives to internalize market externalities, serve as
laboratories for social innovation, advance social entrepreneurship and promote ethical business
practices (see Novkovic, 2008) and provide an ability to function in circumstances where other
forms might fail.4 The potential of co-operatives to promote economic and social development
for low income people has therefore returned to development agendas (DFID, 2010; UN, 2009)
A cooperative is a voluntary association of individuals with a common objective and
bond of interest. Its basic goal is to promote the economic and social well-being of its members
by pooling their resources and by working together in solving their own problems and
satisfying their own needs. The membership of the cooperative is open and voluntary to
all who subscribe to the objective and concepts of the cooperative.
According to Greve (2012), “the community solves a collective action problem by
founding a non -profit, the procedures for founding an organization and the associated skills
linger as an institutional legacy of civic capacity. Through these processes the founding of
a non-profit produces a community proclivity to form additional non-profit organizations.”
Cooperatives develop and sustain communities in providing local employment. They
also fill an important role in economic capacity-building in terms of skills development,
business development, mentoring, and employment.
Shows that cooperatives in the Philippines are making a significant economic difference
in the lives of the large majority of members and are also contributing to their overall well-being.
Members are also benefiting from socially-oriented activities of the cooperatives, although this
benefit is not perceived to be as great as the economic benefits
BENEFITS OF COOPERATIVE
COMMUNITY
1.Accessibility and availability
 Cooperatives often provide quality goods and services to areas that are usually
alienated by major corporations. This is because these areas seem to be non-
profitable markets. Through cooperatives, one can now easily access essential
services and goods readily available to the members. This could come in the form
of a loan, banking, and other partnership ventures usually just available in big
cities.
 It has been observed that in the event the family suffers financially, they usually
resort to borrow money from the financial entities. The most common of these
strategies is to go cooperatives which are available in most of the Local
Government Units
2. Community-based growth
 Cooperatives heavily invest in most local communities for it is where they are
needed most. Through investing in these local communities, more money is put
into welfare projects such as infrastructure, health, education, and many others.
They also make investments on locally owned businesses which translates to a
higher chance of success to compete with bigger corporations. It promotes the
members to start their businesses and then fund them, helping the community as a
whole by providing money and manpower. They also fund community-based
events, a fiesta or a gathering could be funded by them on most occasions for the
members are your usual and typical people in the community enjoying the events
themselves.
3. Money circulation
 As previously said, most of the members in a cooperative are residents, this
means that whatever financial profits the business or the cooperative makes it
remains and circulates within the community itself. It remains an ever growing
and self-sustaining business meant to progress the economy within the
community, whatever comes and goes out of the cooperative will be handled
directly by the members. Everybody plays a part in the circulation of money.
4. 4. Making connections
 Cooperatives enable connections through keeping close membership of people in
the society. This, in turn, creates a network of people unified through a common
goal where everyone makes a benefit. This connection fosters a good relationship
among the members of the community. A business that not only receives but most
of all gives and connects. Strengthening pillars of society through social cohesion
of diverse community residents enriching lives within the community.
5. Financial services
 People from far flung areas are usually not among those individuals who can
easily and regularly access the traditional banking offered in congested cities.
Financial cooperatives centralize in these types of people, they offer sustainable
financing to local people having these kinds of problems. With the cooperative
being run by the members of the same community, the service is affordable and
even friendlier to those who would want to avail. This promotes a safe and
insured approach to savings and loads.
 It has been observed that in the event the family suffers financially, they usually
resort to borrow money from the financial entities. The most common of these
strategies is to go cooperatives which are available in most of the Local
Government Units.
ECONOMY
1. Mitigate Poverty
 Areas especially those that are considered rural areas filled with crippling poverty.
These are areas where cooperatives are mostly stationed in. With the cooperative
providing jobs, financial assistance, and other services, It does its part in
mitigating poverty in that community. It provides financing to farmers, regular
workers, and every other consumer in a rate equivocal to what they can safely
accommodate.
2. Job opportunities
 Every business requires manpower, the same is true for a cooperative. It does not
only have local members as its core, but it also has local workers within the
cooperative itself. Not just that, when cooperative funds a local business it also
creates another chain of available jobs.
 This ensures an ever-increasing need for manpower. And where do they get this
manpower? From the members within the community itself, This would not only
make every member of the cooperative be involved, but they can also make other
members of the community involved.
SOCIETY
1. Women empowerment
 Cooperatives foster gender equality. Women of varying ages often have a plethora
of positions in cooperatives. They are highly regarded and respected by
community members for they are agents of community building. They help those
who need help. Most cooperatives were even established by women to make a
living while their husband’s work. In a nutshell, they make money by helping
their husbands and the community.
 . Cooperatives in the Philippines have an excellent record on gender inclusion as
perceived by both women and men.
  Women and men members benefit equally economically when compared to their
nonmember counterparts. This compares favorably with the overall gender pay
gap in the Philippines of 79%.7
 The higher representation of women cooperative members (55.4%) in the
 representative survey sample suggests that women play an important role in
 cooperatives across the board.
 7 Although still the leader in Asia, the World Economic Forum (WEF) slipped the
Philippines 6th place 2016 ranking
 to 10th in 2018 due to pay inequality.
https://news.abs-cbn.com/business/11/02/17/why-philippines-slipped-inwefs-
gender-gap-ranking.
 This higher representation also suggests that cooperatives play a key role in
women’s economic empowerment since women’s participation in the general
labor force is significantly lower than that of men.
 99.1 % of coop member respondents report women and men have equal roles in
 decision making
 99.3% of coop member respondents perceive that both women and men join
under the same conditions

Cooperatives generate employment, household income of the members has been

increasing, and improve their shelters. Cooperatives undertake participatory development
programs for poverty alleviation and improvement of quality of life of the poor. There is a need
for cooperatives to encourage and gather other people to join their movement. It is highly
recommended that the government must invest to shoulder the capital aside from the paid-up
capital of the members.
A seminar on how to manage a cooperative, farming techniques and livelihood program
are also recommended. ent. In order for the members to compete in world market, the
Government should finance cooperatives. The cooperative should be developed to become
similar to publicly-listed corporations to give opportunity to small investors who cannot invest
stocks in Philippine stock market.

The following suggestions indicate some potential ways in which cooperatives could play an
even more robust role in the realization of Ambiyson Natin 2040.
1. Build a platform for greater financial inclusion and poverty alleviation through
cooperatives.
 In line with the core cooperative principles, cooperatives have a role to play, for
example, in delivering credit to poor farmers and fisher folk. Overall,
cooperatives offer an excellent vehicle to support the provision of economic
opportunity in a valued (as shown by the data) and empowering way supportive
 of inclusive growth. The country is a prosperous middle-class society where no
one is poor. People live long and healthy lives and are smart and innovative. The
Philippines is ahigh-trust society where families thrive in vibrant, culturally
diverse, and resilient communities”
2. Strengthen the Social Contributions of Cooperatives –
 The level of social capital that exists and the levels of trust, both within and
outside cooperatives, suggest that exploration of such a role tailored to the needs
and priorities of each region has merit. According to USAID’s Roadmap to Self-
Reliance, Social Group Equity in the Philippines is 42, falling below average for
low- and middle-income countries. Cooperatives could play an important role in
increasing social equity. For example, where cooperatives play a role in
delivering health-related programs (which most do not do), these are experienced
positively. This plays also on the core cooperative values, which include
contribution to community.
3. Strengthen women’s participation in the labor force and lessen the gender pay gap
through cooperatives.
 Women and men benefit equally from cooperative membership –both
economically and socially (including agency shown through leadership
opportunities) – which differs from the statistics for the general population. To
lessen the gender, pay gap cooperatives may have a special advantage.
4. Explore further possibilities for cooperatives as a strategic approach to poverty
alleviation:
 While it is important that the economic strength of cooperatives not be sapped,
the comparison between poverty levels of members and the average in the
Philippines suggest that those in cooperatives are pushing that finding further, it
appears that there might be a specific poverty alleviation strategy in which
cooperatives are a strong pillar, while taking into account the environment
necessary for cooperatives to flourish as self-reliant entities serving their
members (meaning enhancing their voluntary, democratic and self-reliant nature)
5. To strengthen the overall cooperative sector and its performance, explore the potential of
technology:
 The positive effects can range from improved management to improved
production. The Philippines ranks above average compared to other low- and
middle-income countries on ICT use.