CAGAYAN DE ORO CITY—Different cooperative party-list organizations in the Philippines, led by the Coop-Natcco, have risen to the challenge to rehabilitate at least 15 distressed cooperative banks in the country, infusing a total of P2.5 billion into the effort.
Coop-Natcco Rep. Cresente Paez and Rep. Jose Ping-ay have successfully convinced the Bangko Sentral ng Pilipinas (BSP) to implement a rehabilitation program for the cooperative banks under its Prompt Corrective Action (PCA).
“The burning issue is that there are now 10 cooperative banks that are in trouble and are under Prompt Corrective Action by the BSP due to capital deficiency. The government will stand to lose P1.8 billion if these 10 distressed co-op banks will eventually be foreclosed,” Paez said.
Paez later acknowledged that there are actually 15 cooperative banks now under the PCA.
He pointed out that the P2.5-billion rehabilitation fund will come from the government to help at least 258,000 ordinary people who are bound to lose their P244.2-million equity funds invested in these ailing co-op banks if these will be foreclosed.
To further strengthen the rehabilitation efforts, Paez also filed House Bill (HB) 4054, coauthored by Ping-ay and Rep. Agapito Guanlao of Butil party-list and Rep. Isidro Lico of Ating Koop party list.
HB 4054 seeks to establish a provident endowment and viability-enhancement fund amounting to P2.5 billion for cooperative banks in the country.
During a recent meeting with the cooperative party-list congressmen, BSP Governor Amando Tetangco Jr. expressed willingness to provide rehabilitation program for the ailing co-op banks.
And in another meeting, BSP Deputy Governor Nestor Espenilla told the House Committee on Cooperatives the BSP’s willingness to strengthen coop banks through a rehabilitation framework so that these ailing co-op banks will not just rely solely on the government.
Espenilla also said these banks’ quality of management and governance should be addressed.
Meanwhile, the Land Bank of the Philippines and the Philippine Deposit Insurance Corp. expressed willingness to help rehabilitate the ailing co-op banks by providing equity and technical assistance (i.e., risk management training) based on the self-help mechanism that the co-op banking sector will come up with.
