Cooperative Tool for Solving Poverty and Unemployment

by

EULOGIO T. CASTILLO, Ph. D.
Administrator, Cooperative Development Authority

Nation building also means bringing the poor in urban, rural and agricultural areas to mainstream economic, social and cultural development.

Statistics show that poverty incidence remain at about 28% from 2006 to 2012, on the average, nationwide. The country's performance in reducing poverty incidence is far below the Philippine commitment of reducing the extreme poverty incidence under the Millennium Development Goals from 33% (1991) to 16% (2015).

An approach to combat poverty and unemployment is through cooperatives.

Cooperative is an economic and social organization of people who have less in life. In cooperative members bond together to pursue common economic, social and cultural ends in times of hardships and needs. It is a self-help organization. Members put together their small savings to build capital and form business to meet their needs. Together, members take the risk in doing the business, patronize the goods and services produced, and share in the net surplus in accordance to patronage of business and contribution of capital.

As self-help organization, members rely on themselves in serving their needs. In effect, they help themselves in doing cooperative business and at the same help the government in building the nation. On the part of government, it is useful to promote the organization of cooperatives, particularly in the areas where poverty incidence is high, because cooperatives do for their members what the government should do for them.

There are some hurdles in accelerating the pace of developing cooperative such as the shortcomings in capital and capacities of members to manage the cooperative organization and the businesses it handles. 

In general, cooperatives start small with membership of 15 or more individuals and combined capital of P15,000.00. They can't do much with these resources. More difficulty arises when cooperative is organized by poor urban dwellers, farmers, and fishermen. Generally, they are short of capital, business acumen, and capacity to handle government requirements on governance, business reports, and training.

To accelerate the growth of cooperative and to significantly make cooperative helpful to the members, government technical assistance is needed on cooperative governance and management, and entrepreneurship, as provided for in the Cooperative Code, RA 6938 as amended by RA 9520. Financial assistance, in terms of more access to financial resources of government at affordable cost, also helps in accelerating the development of cooperatives.

The support to cooperatives would also accelerate the growth of economic and social lot of members and eventually accelerate the expansion of economic base of the country.

Original article from CDA Official Website