There are still several policy bottlenecks preventing the faster conversion and registration of transportation associations into cooperatives, but at least consultations are now being done to simplify procedures in support of government’s Public Utility Vehicle (PUV) modernization program.
Surge in koops from jeepneys. Transportation Undersecretary Anneli Lontoc stressed the need for various reforms in the registration process of transport cooperatives as the Department of Transportation (DOTr) expects a surge in demand for cooperatives within the three year transition period of the modernization program, which requires an industry consolidation giving transport groups three choices—-a corporation, consortium or a cooperative.
Big bus operators are already structured as corporations, while small bus operators can merge into consortiums or joint-ventures. Definitely, jeepney operators, who own only 1-3 units with many as operator-drivers themselves, have no choice but to go koop. Only a handful have five or more units.
Koops are also a logical choice as Republic Act 9520 or the Cooperative Code of the Philippines, designed to empower marginalized sectors, provides koops with many privileges from tax exemptions, duty-free imports, access to easy financing and for transport koops, preference in securing franchises, management of transport terminals, etc.
CDA created own bottlenecks? Unfortunately, registering cooperatives is tedious as getting schedules for Pre-Membership Seminars (PMS) alone takes 2-3 months after the Cooperative Development Authority (CDA) idiomatically painted itself to a corner or put itself in a regulatory straitjacket when CDA Chairman Orlando Ravanera issued Memorandum Circular 2017-02 last Feb 1, declaring only CDA can exclusively give these seminars.
Previously, local government units (LGUs) with their Cooperative Development Offices (CDOs) were authorized to conduct these seminars as part of devolution and reinforced further by former President Ramos’ Executive Order 96, mandating all LGUs to promote and register koops for the Poor. EO 95 mandates all government offices to assist koops.
CDA may be violating EO 96 by centralizing seminars. Worse, it has specified the frequency it conducts seminars at “once a month at the CDA Extension Office and once per quarter at CDA Field Offices,” which leaves little flexibility. With this ruling being untenable, the Manila Extension Office was forced to hold weekly seminars, and even plans to increase it twice a week with the expected rising demand.
Regulatory brakes slowing registration. Almost repeating what CDA does is DOTr’s Office of Transport Cooperatives (OTC), which conducts almost the same seminar called Cooperative Education and Transport Operations Seminar (CETOS) that is also difficult to schedule. As OTC does not have offices nationwide and has limited personnel, it wants its seminars held at its central office.
CDA and OTC do not seem to harmonize their interpretations of regulations, thus causing confusion. Some OTC personnel demand prior accreditation with OTC before registering with CDA, but how can one be accredited without becoming a koop first?
CDA allows koop founding officers and members to echo the seminars to their members, while OTC demands every member undergoes CETOS seminars, which is difficult as OTC wants seminars held weekdays, office hours, which are peak hours for drivers.
Go developmental, not regulatory. CDA Director Abad “Buddy” Santos admits the existence of procedural bottlenecks and the need for institutional convergence with other agencies. Usec Lontoc even plans to hold a convergence conference to iron out bottlenecks and tackle three inter-locking issues—modernization, cooperativism and clean air compliance.
“We can invite big billionaire cooperatives, which can participate possibly in an investment forum to help out fledgling transport koops in a business-matching program,” Lontoc added. This can lead to a Big Brother-Small Brother Koop partnership program.
This is easily acceptable for big Koops as they have by law mandatory 10 percent allocations for education and capacity building and three percent for cooperative social responsibility (CSR) projects for the community, which enable them to comply with another Koop principle of helping other koops.
CDA must therefore focus now more on development than on regulatory and tedious registration procedures, which only pose barriers to entry for the Poor. Otherwise, it must rename itself as the Coop Regulatory Authority (CRA). It can instead facilitate Koop Intra-Investments and Koop Intra-Trade, and even encourage collective participation in government’s Public-Private Partnership Infrastructure program by adding a new “P” or People’s participation to the equation.
There are vast potentials in this direction, more so with Banko Sentral ng Pilipinas’ (BSP) Credit Surety Fund (CSF) intended for the marginalized but organized groups, preferably koops, whereby every P1 in Koop equity, is matched by P10 in CSF financing at concessional rates, no collaterals, and 10 years of amortization.
This can increase DOTr’s current seven year financing amortization to 10 years, plus generate allied businesses in big brother tie-ups that can augment livelihood and compensate for the financing costs operators incur because of modernization.
Simplify the complex. Meanwhile, CDA and OTC can review all its systems and procedures and possibly learn from the best practices of the 2-3 day registration express lanes of the Securities and Exchange Commissions (SEC). In contrast, it takes 6-9 months with CDA and OTC.
About 25 years ago, an American businessman I interviewed, who set up his mining accessories business in the US, took him only $11 and three minutes and got registered. But when he set up shop in the Philippines, it took him nine months and thousands of dollars going back and forth, and ridiculously asked of unnecessary details, paperwork, full bio-data like names of ex-wife, kids which were irrelevant.
We need not simplify too much, but just get rid of redundancy and unnecessary requirements. For one, scrap the required signing on every page of the Koop registration papers, which is cumbersome as transport koops tend to have 15 to over 30 founding members. Gathering them is already a problem, getting them all to sign on every page is ridiculous as these are standard express lane forms anyway.
OTC need not repeat what CDA does by conducting again almost the same seminars. Instead, it must revive its original mandate to assist transport groups register with CDA thru an outreach program of an army of koop organizers visiting transport groups where they are based, and not just wait transport groups to apply. Perhaps, reforms need not be drastic, but how come ordinary market stall holders don’t go thru rigorous koop seminars but manage to do business well.
Do you know there are now about 14 koop seminars developed totaling over 188 hours or about 24 days? Let’s remember, drivers learned driving thru actual practice not listening to seminars. Similarly, learning the koop business can be done thru a hands-on gradual learning program designed for transport drivers.
(Email: mikealunan@yahoo.com).