Consolidated Board of Directors Report: 53rd Annual GA of FICCO

Following is a summary of the state of our Cooperative from our Board of Directors for the operating year ended December 31, 2007:

Profitability

We realized a net surplus of P144 million, representing an increase of 22% over last year’s P118 million. This, despite recognizing P39.7 million for additional allowance for probable losses on our loans released and not attaining our loan target for 2007. This provision also makes us compliant with international standards for loan loss provisions.

Liquidity

Our total cash as of year end amounted to P 387.95 million, or 16% of our total resources, higher than last year’s 13%. We have sought more attractive rates for these excess funds since we need better returns than the 4-5% on time deposit offered by banks but to no avail since we offer up to 6.5% interest for time deposits, 4% for savings, 8% for retirement savings and up to 10.75% for interest in share capital, yet only charge 9% for loans.

Stability

Our share capital to total assets ratio increased to 38%, or 7% higher compared to 2006. Our statutory fund to total asset ratio also rose 6.2%, compared to 5.8% for the previous year. Our statutory funds fully funded our total property and equipment. Equity increased 24% to P 176 million compared to last year. These figures reflect FICCO’s self-sustaining capability over the long-term.

Growth

Our total resources increased 30% or P 480 million from P 1.92 billion to P 2.40 billion by year end. This increase was sourced from loans to members and their deposits in savings and share capital. Our total number of members increased 16% to 103,854 from 89,307 in 2006, making us the biggest cooperative in the country in terms of membership.

Based on the aforementioned figures, the FICCO Board of Directors has declared a modest 10.75% rate on Interest on Share Capital and 9.25% rate on Patronage Refunds. These are higher compared to last year’s figures of 10.50% and 9.0%, respectively. These are also higher than most commercial banks in the country have declared for the same period.

Our loan releases for 2006 has been pegged at P 2.52 billion, which we deem sufficient to make a big difference in the livelihood and daily sustenance of our cooperative members as well as trickle down to spark further economic activity in the rest of the region.

Other significant accomplishments

Besides the financial aspects of our accomplishments last year, we are also proud to share with you the following which have complemented FICCO’s growth for the period:

Branches and Business Centers

· We have opened three new branches in the following areas:

o Davao City at Bangkerohan

o Maranding, Lanao del Norte; and

o Bayugan, Agusan del Sur

· We are planning to add several more branches and business centers in various areas of Mindanao.

Human Resource Development

· Appointed three (3) new branch managers in connection with the opening of additional branches.

· The Board of Directors approved the creation of the position of Chief Executive Officer (CEO) and three (3) Regional Managers.

Mutual Benefits Association

· For the year ended December 31, 2007, the FICCO MBA generated over P2 million pesos.

Misamis Occidental Cooperative Bank (MOCB)

· With five (5) of the nine (9) members of the Board, FICCO now exercises significant control and influence over the operations of the MOCB.

· Through a General Assembly Resolution, MOCB has been renamed “First Community Cooperative Bank” pending approval of the Bangko Sentral ng Pilipinas (BSP).

Cooperative Bank of Davao del Sur (CBDS)

· Our Board of Directors approved a P10 million investment in CBDS.

· As a result of this, FICCO now sits as a member of the CBDS Board of Directors and now exercises control over the bank’s operation.

Computerization

· Our Board of Directors has contracted G2G Computer (a General Professional Partnership) to develop a new computer program to upgrade our online services for FICCO members.

Amendment of By-Laws

· The Cooperative Development Authority (CDA) has approved FICCO’s amendments of its By-Laws, as follows:

o Expanded scope of operations from Mindanao to the entire Philippines.

o Added Funeral Services and Mutual Benefit Association as part of its primary purpose.

Financial Highlights

as of December 31, 2007

(in Million Pesos except for no. of members)

Despite the unsuccessful conclusion of our bid for a more direct and active participation in our political system as a party list, we shall keep pursuing our dream. We have been a positive agent of change through social, economic and cultural initiatives through the cooperative ideal and its principles, and we shall continue to pursue this ideal and principles in the spirit of cooperativism.

For the Board of Directors and Management

Atty. PROCULO T. SARMEN

Chairman