Thank you very much to the chairman of Department of the Foreign Affairs Multi-Purpose Cooperative or DFAMC, for that very kind, kind introduction.
I only take exception to, akala ko lusot na eh pero binigay pa din yung birthday. Yung last sentence maganda na eh, yung last sentence nabigay pa yung birthday, di na ko makasinungaling sa ating mga bisita about my age.
Well, I would like to greet of course my good friend from all the different activities that we have been doing all those so many years, Usec. Rafael Seguis, Undersecretary for Special and Ocean Concerns, also Ms. Nancy Marquez, Secretary General of DFAMC, the board of directors of your organizations, members of DFAMC, ladies and gentlemen, my friends, good evening on this rather rainy day.
First of all I would like to begin with two notes of gratitude to all of you because I know that we had requested , you had originally scheduled this for yesterday but I have been travelling around, duly supported of course by our different missions abroad, trying to bring some kind of investment back to the Philippines. And in this regard, that is why I have been moving around and you have been kind enough to move the original schedule from Sunday to today. So maraming salamat sa inyo for accommodating me.
Secondly, its brought to my attention before I came here while we were preparing before coming here was that many of the individual donations, contributions, help that were being sent to, first of all the earthquake victims in Bohol, in Cebu and finally to Yolanda, from the DFA came to my office. These were not official from the department itself but from individuals and dumaan ito sa office ko and I would like to speak as half a “Waray: thank you very much for all your assistance. Sometimes people will say maliit lamang ito pero wag niyo inaalala ang maliit kasi kahit na gaano kaliit ay meron kayong binubuhay, meron kayong tinutulungan. Maraming maraming salamat sa inyong ginawang tulong sa amin.
I took the opportunity, when I received this invitation, I thought I’d like to come to the DFA to see how you are all doing. As I started to talk with Usec. Seguis, you know the DFA has been going through a rather challenging time with all the changes in our approach for foreign policy in the past years and I’m afraid that this has caused all kinds of commotion not only amongst ourselves, across ourselves in government but also our neighbours around ASEAN and around the world.
Of course I don’t think anyone would be surprised to say that I am referring to our recent exchanges with the People’s Republic of China. Of course we have taken a personal interest in that regard because it was my father who initiated all the talks—I was in the first trip in 1974 with my mother to the People’s Republic of China. It was was a historic visit and that is why this is something that we take great interest in. So it has been with some dismay and also a little sadness to see that the beginnings of the policy began with has been derailed and moved to something else. This is not to criticize anyone in the DFA as I know perfectly well that your experts and your more experienced diplomats have been making recommendations to the government but unfortunately the government has chosen to take a different tack when it comes to our dealings with our neighbours, notwithstanding, as I said, the expertise that has been applied to analysing those situations.
But hopefully, these things will work out. We have now, again knowing there is going to be some kind of discussion in the proposed signing between the United States and the Republic of the Philippines, regarding the rotational presence of American troops in the Philippines. The discussion I think was going to center around whether or not this needs to be ratified in the Upper House, as I guess the lawyers will be debating it. Sen. Miriam, our chairman-- I’m the vice chairman of Foreign Relations in the Senate---but our chairman has made her position very clear, I happen to agree with her. I believe the other vice chairman who is Sen. Angara also agrees with us.
And so this will have to be threshed out, quite possibly after the visit of Pres. Obama, since he is coming I think the last week of April and we do not come back to session until May, I think its 4 or 5. But anyway these are the things that I have been watching from a far and its always very useful, I find, and I was very curious to talk to my old friends here in the DFA to see how you are managing all these difficulties because it cannot be easy trying to walk a fine line between what you know to be in a proper course of action and perhaps some contradictory instructions from other quarters. So that is one of the reasons I immediately agreed to come and to visit you.
But of course our subject, our main purpose here is for the cooperatives and I’m the Vice chairman of the Committee of Cooperatives in the Senate--I have been since the last Congress. What had happened is that the previous chairman was Sen. Migz Zubiri until he resigned. And when he resigned the chairmanship was given to Sen. Lito Lapid, at which point—having been already a vice chairman---I volunteered to take on the bulk of the work. And I said, because I know that Sen. Lapid already had his committee chairmanships to attend to, and I am particularly interested in the subject, I asked, sabi ko sa kanya if you want the bulk of it, syempre he has to be the chairman, pero the bulk of it kaya ko na yan and gusto kong i-trabaho yan dahil maraming kailangan gawin.
And that is why I continue to be the vice chairman and at functions like this I serve as his proxy or his representative as chairman or the committee. My interests in the cooperatives came from quite far back. Nagsimula ito, I really learned about cooperatives in my time in UK when I was studying there, studying the different economic system during my secondary, the equivalent of high school. And in that time I saw many cooperatives and I saw many successful cooperatives. It first came to me when I saw what is called-- it is under the original cooperative spawned after the war, it was an agricultural cooperative in England. So much so that by that time in the 80’s that agricultural cooperative have grown so much that 50% of all the groceries that has sold in the UK was sold by the coop-- they changed their name into a coop and if you drive around any part of England you’ll see coops and tindahan ito, designed primarily to sell the produce that was being done by the members of the agricultural cooperatives and subsequently other products as well.
So immediately it came to me that I will form coops. So took my CDF yung tawag dun CDF eh, ngayon naging PDAF. I took my CDF and I applied it all and I formed cooperatives in every town, teacher’s cooperative in every town. Nagsimula sa basically savings and loan-- yung magpapautang sila—yun na nga habang hindi pa nababayaran yung kanilang sweldo, hindi pa nila natatanggap ang kanilang sweldo, meron silang ginagagamit na pondo na after a while--- basically it’s a small bank, savings and loan is just a small bank--- so ibabayad nila. And it was very interesting to see how they developed over the years. On the one hand some cooperatives decided that what they wanted to do was to make money para palakihin ng palakihin ang kanilang kooperatiba. And of course that was their management decision to make---it was not for me to interfere in what it is that they have decided. And the other cooperatives took a different tack, and their tack was that they will provide more services kahit hindi sila kumikita, marami silang serbisyo. So pumasok sila sa scholarship, pumasok sila sa kung ano-ano and they are still existing now.
I’m happy to say that all of the cooperatives we formed are still existing. In fact yung iba nanganak na and they have other cooperatives that are attached to them. And so again the idea of cooperative itself was clearly a good, and could be a successful, one.
So when I became Governor of Ilocos Norte employment pattern was very simple: 73 to 76% of Ilocos Norte derives most if not all of their income from agriculture and agriculture-related activities. So sabi ko that is my audience, that is my constituency, kailangan unahin ko yung agriculture. But as we started to reform this agricultural policy it became clear to me that the implementation was going to be difficult if not impossible because it is not possible, it is not practical for our people, our staff, no matter how many we were in the office of the governor to go to each farmer and explain. But I remember my experience with the teachers, I remember the experience of what I had learned in the UK, and I said maybe cooperatives will be the answer.
And so we first examined how many cooperatives there were in Ilocos Norte to see, para makita namin kung alin dun ang mga pwede naming gamitin to implement this policy. Di kayo maniniwala nang hiningi namin sa CDA ang figures where there are more than 6,000 registered cooperatives in Ilocos Norte. So sabi ko ilan dyan ang functioning? Naging 600 na lang. And we looked at these 600 cooperatives, which of them are continuing to have a management organization, yung tumatakbo talaga. It came down to 60. When we looked at those 60 and said okay ilan dito sa 60 ang gagamitin natin, nagin 5 na lang ang natira.
And so we had to go into the actual building of the cooperatives wherein we formed the cooperatives and we helped organize them, and we conducted training. And because in our view you do not need for example to teach a farmer how to farm; the farmer knows how to farm. Maybe the new techniques meron kayong maituro pero as a basic skill it is something they’ve known for all their lives. What is important is that there is a good management on in that cooperative that is critical. Kaya ang itinuturo namin dun sa sinasabing kong training was not farming-- it was to do with management, with business planning, with accounting, book keeping, how to deal with the banks, how to get a good credit rating etc. etc., all those things which are really on the business side of the cooperatives. And that is why in the end the key is always to be the management of the cooperative. I have seen in the last four years—I’ve been going around every chance I get--the cooperatives like yours which we deem to be successful and we also go around to other cooperatives which didn’t make it. And the difference always is in the management. And so that is the key element for growing, for making a cooperative successful. What do I mean for making a cooperative successful? A cooperative is successful not only because it makes money. In fact you might become a victim of your own success when your reserves rise from ten million and you become part of the tax base and Kim Henares will come knocking on your door.
More importantly, is that you provide a service for your members, that whatever your stated intention, your stated reason for the existence of your cooperative, that function is being fulfilled that’s the important thing. If it’s in the case for the teachers it was to provide notes to hold them over until they got their sweldo--that is the service that you are saying.
In your case—I did a little research before coming today--this is where I think you are an excellent example why management counts. Because if you look, you started with the canteen, which is kind of obvious. Syempre that would seem to be not really a difficult decision to make; that would be an obvious area for you to enter into. But then to go into passport services, courier, notarial, , photocopy pinasok na rin ninyo. That is exactly the kind of idea, the business model that is peculiar to you. Siguro may ibang opisina that can copy that. But it is the idea of the management looking at the different areas that is relevant to you as employees, as workers, and to see, to find those niches where you can provide the service that will give benefit to your members.
And so we continue to go around ,and we continue to see what it is we have to do to make this kind of thinking more streamlined so that if you would like to put this into operation, that it is easier to do, that the CDA is providing proper support for our cooperatives so that that kind of new enterprise, that kind of maybe singular enterprise that is not easily categorized into some pigeonholes that we used to use, that this can be encouraged and supported, monitored and supported, and even taught to other cooperatives so that they can learn what we in government call “best practices.”
Kaya naman tuloy-tuloy ang ikot ko sa buong bansa upang tingan kung ano ang pangangailangan ng ating mga kooperatiba, kung ano ang kakulangan ng ating CDA. Halibawa, kung ano yung mga -bagong naiisip ng ating iba’t-ibang kooperatiba, because the cooperative movement is a large one but we still see that i has become much bigger in the last few years and simply because—although government t policies states that the cooperatives spirit and the movement of cooperativism is important to the government, then it is not translated into actions, acts or policies that we can say is supportive and encouraging cooperative movement in the Philippines.
So yung mga pagkukulang na yun ay hinahanapan natin ng solusyon. In fact we have just finished the hearings that we have conducted all around the country for the strengthening of the CDA charter. And essentially the strengthening that we talk about is to add to its capability.
Now I don’t know if you are suffering the same problem that other cooperatives are suffering, (it) is that our friend Kim Henares of the BIR has been trying to tax all our cooperatives. Whereas in the law it is very clearly stated that cooperatives are tax exempt. However she has taken the opposite policy and she says now, instead of by virtue of law accepting and recognizing that cooperatives are tax exempt sinasabi niya: “you prove first that you are tax exempt,” which in my view is completely the wrong way around to go. But nahihirapan-- kayo siguro madaling mag-general assembly because you all work in Metro Manila. But can you imagine farmers in a small province somewhere, para mag-general assembly para kunin yung mga pirma, para makuha ulit yung mga address, mga telephone numbers, para ibigay yung documentation ibigay sa BIR—napakahirap gawin. Tapos dadalhin sa BIR regional office, pag-aaralan, sasabihin: come back in three days. You know, it’s not easy for people to do that. So that’s one of the big problems we have been facing.
I think the problem lies, not so much in the main office because I have gotten repeated assurances from the BIR and the Department of Finance that they do recognize the fact that cooperatives as long as they are accredited by the CDA, that the cooperatives are in fact exempt. Ngunit sa baba, siguro hinahabol nila yung qouta nila, basta kung sino sino lang yung i-tax nila basta malagay lang sa papel na they reach their quotas---I think that’s what’s happening down on the lower levels. So that is the kind of thing that we are trying to help with.
Now for example the strengthening of the CDA Charter that I spoke about pinaparami lang namin yung tao para yung pag-monitoring, even the training that is required of all cooperatives can be given and our trainors know what they are talking about, really give a good training. And then this training has become of particular importance, again because of my experience, in that management makes all the difference when it comes to cooperatives.
You must always remember that the cooperative is exactly what it calls itself—it is a cooperation between the members. The organization belongs to the members, it does not belong to the members not to the stock holders, it does not belong to the board of directors-- it belongs to the members. But the members are also beneficiaries to the cooperative. And that cooperative will have to work to make sure that their members/beneficiaries are receiving their services and the benefit the cooperatives was formed to do. Wag dapat makalimutan, dahil that’s one of the reasons we see cooperatives fail is they forget why they exist. They enter into all kinds of other agreements, in fact it causes them their own difficulties, because sometimes some of the activities and operations that they start up and enter into are no longer necessarily under the list of activities that are undertaken by cooperatives and nagkakaproblema sila. Once you get away from that idea of the cooperative, you may have seen that these so-called cooperatives—in my view some of them no longer are cooperatives—but these cooperative no longer do very well, they are confused, they do not know exactly what they are.
So, it is useful to go back to basics and rediscover every so often what is the reason for our existence: bakit ba natin tinayo ito? Inevitably every cooperative has been formed to give benefits to its members: what was that stated benefit? Anong tulong yun? And to continue, is it to provide income? It is to provide businesses, what do you want to do, what exactly is it that you want to do? You must keep that focus very very clear. But inevitably as well any successful cooperative would try to find different ways to bring different services to its members. As an example, your cooperative nga, nagsimula sa catering, cafeteria, napunta na sa iba’t ibang activities, again to give benefit. So it is a balance that you have to achieve, that you have to remain true to what it is you have been trying to do, to what you were formed for in the first place. And at the same time still continue to—I hate to use the phrase because it’s so clichéd already---think out of the box, think differently, think linearly, mag-isip kayo ng bago, na pwede pang gawin, na hindi pa naiisip ng iba, you identify the niche that exists or didn’t exists before but now exists, etc. etc. and you serve that market.
That kind of thing is that’s where you get into business practices na. Ang magaling na negosyante ganyan, magaling makapag-iisip ng mga bagong idea, magaling makapag-identify ng mga bagong activities, operations na gagawin. Ang mahusay na manager ng kooperatiba ganyan din, kailangan laging nag-iisip, kapag may nakitang opportunity ay gagawan ng paraan para makapag-take advantage so that again we can bring benefits to our members. makapagbigay ng benefit to our members. This is the continuing balance that all cooperatives have to do. For a corporation for example, it’s not so difficult, there is no balance—profit, it’s all about profit. You know, even when there is…meron silang good citizen, good corporate citizen program, that’s also to increase profit, pang PR nila yun para they are judged well by the community and that PR is in the interest of gaining more profit.
In the cooperative it is not that clear. And although profit plays an important part in many of the activities of the cooperative, that is not the sole motive for your existence. And to continually recognize that it is this balance that you have to achieve is the job of your managers and in the end it is their responsibility. And this is where you will be tested.
The other important part is that simple organization is important, that you must have a sensible organization that depends upon the functions that you are trying to provide, the services that you are trying to bring to your members. Not all cooperatives are the same, as I mentioned, agricultural cooperatives will do different things from a savings and loan cooperative from a procurement cooperative. Kasi sa agri kung minsan yung procurement ng inputs ginagawang cooperative-based. All of these things will dictate upon you what kind of structure you will have. Again in your specific case, the fact that all your members—not in the same building but you have your members all round—but the very fact you’re in close contact, the very fact that you are in easy reach of one another, will change the way the cooperative is run and the way the cooperative is structured.
But I have to say that from the little that I know, that I have found out in my research about your cooperative, I think it has become clear, I think the success of your cooperative has derived from the fact that you have stayed true to the stated objectives of the cooperative, you have stayed true to that pledge of provision of services and benefits to your members, and at the same time, that you have also been imaginative and creative in looking and finding different ways to help your member. And for that we can only congratulate your management in the form of the board, in the form of the chairman, and in the form of the manager.
And I think that so long as you will continue to do this we would always be using you, and with your permission I will be using your cooperative as an example when I give my talks to cooperatives around the country and to try to explain what a successful cooperative has done to become successful. So I congratulate the management of the Department of Foreign Affairs Multi-Purpose Cooperative and I congratulate all its members for their continuing cooperation with one another and continuing to fight for the cooperative movement---such an important part of our economy. It is the only means by which we can make an individual have a large enough voice to be heard in the market, to be heard by government. And in that regard I will continually work to make sure that the cooperative movement stays alive, stays vibrant, will stays progressive, in the face of what sometimes is misunderstanding, ignorance and lack of interest. So I will need your help in that and my door will always be open to any suggestions to improve the situation of the cooperative movement and to move it forward further and further to greater to greater success.
Thank you very much!