PH Senate passes Revised Cooperative Code on final reading

The Senate on Monday passed on third and final reading a sweeping measure to overhaul the country’s legal framework for cooperatives, aiming to boost the sector’s economic impact and foster stronger self-reliance.

With 19 affirmative votes and no negative votes or abstentions, Senate Bill No. 1431—the proposed “Revised Cooperative Code of the Philippines”—cleared the chamber’s plenary session on September 28, 2026.

Sponsored by Sen. Imee Marcos, the legislation establishes updated rules on cooperative organization, registration, governance, capitalization, operations, and regulation. Crucially, it reinforces member autonomy and democratic control while aligning local policies with the seven internationally recognized cooperative principles.

Opening Doors to Foreign and OFW Investment

A key innovation of the proposed code is the expanded scope for foreign involvement, subject to constitutional limits.

"We will allow certain foreign nationals to participate in a primary coop if they are former Filipino citizens subsequently naturalized in another country, or the children of Filipino citizens who became naturalized abroad," Marcos noted, highlighting that the move aims to channel overseas Filipino worker (OFW) investments directly into rural communities.

Under the measure, certain foreign nationals may also become associate members of cooperative federations and unions.

Targeted Tax Relief for Agriculture

The bill puts a strong spotlight on agricultural cooperatives, offering tax exemptions for those whose core operations drive the farm-to-table supply chain.

"The other cogent portion would be the agricultural coops, which we are pushing very hard to make tax-free—provided at least 50 percent of their primary business activity involves agricultural production, agribusiness, or related supply-chain services," Marcos emphasized.

Overall, the measure lowers tax rates for cooperatives across the board and raises the exemption threshold to provide broader financial breathing room.

Streamlining Regulation Across Sectors

Beyond governance and surplus allocation, the bill seeks to untangle regulatory overlaps. Transport, water, and electric cooperatives currently navigate supervision from multiple government entities; the new code clarifies the jurisdiction of the Cooperative Development Authority (CDA) alongside specialized regulatory bodies to eliminate redundant bureaucratic processes.

The Senate’s approval arrives just ahead of the national observance of Cooperative Month in October, which celebrates the vital contributions of cooperatives to local communities and the broader economy.