Local Cooperatives Development Fund Act

TWENTIETH CONGRESS OF THE offer of the d REPUBLIC OF THE PHILIPPINES First Regular Session JUL 14 P3:59 SENATE RECEIVED BY: S.B. No. 573 INTRODUCED BY SENATOR RISA HONTIVEROS AN ACT ESTABLISHING LOCAL COOPERATIVES DEVELOPMENT FUND, APPROPRIATING FUNDS THEREFOR, AND FOR OTHER PURPOSES EXPLANATORY NOTE This bill seeks to institutionalize stronger government support for the cooperative movement by mandating the establishment of a Local Cooperative Development Fund (LCDF) in every province, city, and municipality. Under this measure, local government units (LGUs) shall be authorized-and required-to allocate at least 1% of their Internal Revenue Allotment (IRA) or 2% of their local development funds for programs, projects, and activities supporting cooperative development within their jurisdictions. The proposed measure is rooted in the constitutional recognition of cooperatives as instruments for promoting just and equitable social and economic development. In alignment with this constitutional mandate, the State has enacted key laws such as Republic Act No. 11364 or the Cooperative Development Authority (CDA) Charter of 2019, and Republic Act No. 11535 or the Local Cooperatives Development Officer Act. These laws reflect the State's continuing commitment to respect, promote, and protect the rights of cooperatives, and to support their growth in accordance with internationally accepted cooperative principles, values, and practices. Local governments play a vital role in implementing this commitment. Under existing law, LGUs are mandated to deliver basic services to the public-including support for cooperatives. Local cooperatives serve not only as economic actors but also as vehicles for community empowerment, especially for marginalized sectors. They contribute significantly to social service delivery, poverty alleviation, and sustainable local economic development. In light of the Mandanas-Garcia ruling of the Supreme Court, which took effect in 2022 and expands the fiscal autonomy of LGUs through the full devolution of certain

national functions and increased IRA shares, this bill leverages that additional fiscal space to invest in local cooperative development. The LCDF shall support initiatives such as: - Participatory local cooperative development planning; - Provision of technical and financial assistance; - Promotion, organization, and mobilization of cooperatives; - Capacity-building for cooperative leaders, members, and partners; - Strengthening of Local Cooperative Development Councils and Offices. By formalizing the allocation of local resources to cooperatives, this measure aims to further empower cooperatives as key drivers of inclusive and sustainable development. In view of the foregoing, the immediate passage of this bill is earnestly sought. RISA HONTIVEROS Senator

TWENTIETH CONGRESS OF THE Pha ot tor REPUBLIC OF THE PHILIPPINES ) First Regular Session ) JUL 14 P3:59 SENATE RECEIVED BI S.B. No. 573 INTRODUCED BY SENATOR RISA HONTIVEROS AN ACT ESTABLISHING LOCAL COOPERATIVES DEVELOPMENT FUND, APPROPRIATING FUNDS THEREFOR, AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

Section 1. Short Title. - This Act shall be known as the "Local Cooperatives

Development Fund Act."

Sec. 2. Declaration of Policy. - The State recognized the roles of cooperatives

as an instrument for economic development, social justice, and equity. The State guaranteed that the rights of the cooperatives, anchored upon internationally accepted principles and practices, shall be respected, promoted, and fulfilled. The State mandates national government agencies and local government 9 authorities to promote the growth and expansion of cooperatives, provide resources and mechanisms to strengthen the cooperatives movement, enable policies and programs to transform cooperatives as a viable, responsive, and resilient economic enterprise, and facilitate partnerships with other national and local stakeholders. The State, except as provided in this Act, shall maintain the principles of noninterference in the development and management of cooperatives and guarantee that the cooperatives shall be free from conditions that infringe upon its objectives and characteristics.

Sec. 3. Creation of Local Cooperatives Development Fund. - The Local

Cooperatives Development Fund, herein referred to as LCDF, is hereby created to be

1 managed and administered by the provincial, city, and municipal local government 2 units, to support local cooperatives development in their jurisdictions.

Sec. 4. Funding Source. - Provincial, city, and municipal local government units

are hereby mandated to appropriate at least two percent (2%) of their Internal Revenue Allocations (IRA) for programs, projects, and activities for local cooperatives 6 development. Provided that provincial, city, and municipal local government units 7 belonging to fourth to sixth income classification, may opt to allocate at least two percent (2% of their funds for local development projects as their LCDF. Provided further, the local government units belonging to fourth to sixth income classification 10 shall commit to progressively realize this mandate within the next five years upon effectivity of this Act.

Sec. 5. Use of Funds. - The LCDF shall primarily be used to support and fund

programs, project, and activities directed towards: 1. Formulation and implementation of a participatory Local Cooperatives Development Plan and localized special programs deemed as priorities of the local cooperatives. 2. Provision of technical guidance, financial assistance, and other services to local cooperatives. 3. Promotion, organization, and mobilization of local cooperatives as a viable and responsive social and economic development enterprise and to strengthen the cooperatives movement. 4. Provision of capacity development and capacity-building initiatives and activities for local cooperatives. 5. Support the plans, programs, and activities of the local cooperatives' development councils, the local cooperatives development officers, local federation of cooperatives, and local cooperative union in line with its mandates under existing laws.

Sec. 6. Implementing Rules and Regulations. - The Cooperatives Development

Authority and the Department of Interior Local Government shall, in consuitation with the cooperative sector and concerned leagues of local governments, formulate, and disseminate the IRR within ninety (90) days since the effectivity of this Act.

Sec. 7. Congressional Oversight. - Upon the effectivity of this Act, the Joint

2 Congressional Committee on Cooperatives (JCOCC), created under Republic Act No. 9520, shall review, and monitor the implementation of this Act.

Sec. 8. Repealing Clause - All laws, decrees, executive orders, rules and

regulations, issuances, or parts thereof inconsistent with this Act are hereby repealed or amended accordingly.

Sec. 9. Effectivity. - This Act shall take effect fifteen (15) days after its

publication in the Official Gazette or a newspaper of general circulation. Approved,