HISTORY

A Filipinos traveling in Europe during the later part of the 19th century must have been impressed with
the success of a new economic movement in effecting a gradual metamorphosis of the economic and
social life of the people ion those countries. At the turn of the century, Filipinos, in increasing number,
traveled and studied abroad and brought home with them new ideas. It was this group of Filipinos who
were in close in contact with the new economic movement in Europe. Two names worthy of note were
Dr. Jose P. Rizal and Teodoro Sandiko.

Rizal, after his side trip to Sandakan, Borneo in 1892, requested Governor Despudol that he and some
relatives and friends be permitted to move to that place and found a colony under the cooperative plan
of Robert Owen. Instead, he was arrested for treason and banished to Dapitan, Zamboanga del Norte. In
Dapitan, Rizal had his ideas in cooperation partially fulfilled. He put up a school for the poor community
on a purely cooperative basis. He also established a cooperative store with the help of his pupils. One
noteworthy group organized by Rizal was the La Sociedad de los Abacaleros (Society of Abaca
Producers). This functioned for only one year. Rizal returned the members share capital without any loss.

Teodoro Sandiko, in his travels in Europe, must have had a close contact with the cooperative movement
in Germany where he came across with the Raiffeisen movement. He was very much impressed by this
type of cooperative and he looked forward for an opportunity to have it introduced here in the
Philippines. As destiny might have its choice, Sandiko had his chance when he was appointed one of the
early governors when Civil Government, under the Americans, was established.

The Rural Credit Law. As soon as Civil Government was established, Filipino participation in government
was encouraged. Teodoro Sandiko, then governor of Bulacan, prepared a bill patterned after the
Raiffeisen type of credit union and had Rep. Albert Barreto of Zambales sponsor the bill in the lower
House of Congress. The principal aim of this bill was to protect and develop the agricultural interest of
the country. When the Barreto sponsored bill was presented it readily obtained unanimous approval on
January 20, 1908. The Philippine Commission however, turned it down.

Undaunted by this defeat the sponsors of the bill again put it through in the Second Philippine
Legislature. This time it was sponsored in the Lower House by Rep. Rafael Corpuz who succeeded Rep.
Barreto from Zambales. The bill was ably presented in both Houses and it was finally passed into law on
February 11, 1914 and became Act 2508. When this Act was finally made into law, Gov. Sandiko earned a
title of Father of Cooperation in this country.
The administration of the Rural Credit Law was entrusted to the Bureau of Agriculture. The first rural
credit association that was organized under this Law was the Agricultural Credit Cooperative Association
of Cabanatuan, Nueva Ecija. It was formed on October 18.1916. With this initial organization farmers in
the different provinces were organized. At the end of 1926 there were 544 rural credit cooperatives
organized in the 42 provinces and by 1930 there were 571 associations formed all over the country. In
1935, however, about 90% of these cooperatives were inactive with no funds left in their treasury. The
experiment on rural financing, through cooperatives was a failure.

Marketing Cooperatives. As soon as the organization of rural credit cooperatives was in full swing, The
Cooperative Marketing Law (Act 2425) was enacted and approved on December 9, 1927. The rural credit
associations were designed to help finance the productive efforts of the farmers. In order to provide
incentives to the farmers to produce more an efficient machinery for the profitable marketing of their
products should be provided. Wherever rural credit associations were organized cooperative marketing
societies were also designed to be organized.The apparent weakness of the rural credit cooperatives,
however, failed the enthusiasm of farmers to organize themselves into cooperative marketing
associations. By 1939 only 164 societies were actually organized with a total membership of around
5,000 farmers. With this number only 35 reported their sale of products to the Bureau of Commerce.
The number of associations reporting indicated that only 20% of the organized associations were active.

Causes of the failure of early cooperatives in the Philippines. Filipino economists and students of
cooperatives in this country have often attributed the failure of cooperative societies in this country to
the following causes:

Incompetent management

Lack of proper understanding of the principles, practices true aims, and purposes of cooperative
associations.

Improper use of credits by the borrowers who, instead of using money borrowed for production, spent it
for fiestas or luxuries.

Defective securities.

Political interference particularly in the collection of overdue accounts.

Lack of compensation of officers.

Inadequate character and moral responsibility in handling the other fellow’s money.
Lack of adequate safeguard against unscrupulous officers who took advantage of their position to grant
loans to themselves and their compadres which later proved disastrous to the system.

The dominance of the individualistic attitude instead of the spirit of cooperation among the people.

Inability of cooperatives to secure adequate capital.

Their dependence on alien suppliers and distributors.

Ineffectiveness of the government and promotion of cooperative organizations.

Inadequate marketing facilities.

Considering the experiences of similar societies in other countries, however, the fundamental cause of
failure in a cooperative enterprise is the lack of proper understanding of the principles and true aims of
cooperative associations, and the non-adherence to them in actual operation of cooperative enterprises.

The ACCFA Financing Program. In recognition of the strategic position occupied by our farmers in the
social structure and economic development of the country, the Congress of the Philippines in 1952
enacted Republic Act 821. This law established a system of liberal credit which is specially designed to
meet the needs of the small farmer. It also created an administrative agency known as the Agricultural
Credit and Cooperative Financing Administration (ACCFA). To implement the great task of rural financing,
four general and interrelated objectives of the law are set forth as follows:

To assist small farmers in securing liberal credit.

To promote the effective groupings of farmers into cooperative associations.

To establish an orderly and systematic marketing machinery for, and controlled by, the small farmers.

To place agriculture on a basis of economic equality with other industries.

CORE VALUES

Excellence

Giving one's best performance and achieve the desired outcome through effective and efficient
management of resources.

Commitment
High dedication and proactive involvement in the realization of the Agency's mandate.

Integrity

Maintain personal conduct, beyond reproach.

Teamwork

Working collectively and harmoniously to achieve synergy in an environment conducive to the

LEGAL BASIS

In fulfillment of the provisions of section 15, article XII of the Philippine Constitution.  To have an
agency that would promote the viability and growth of cooperatives as instruments of equity, social
justice and sustainable economic development, defining its powers, functions and responsibilities,
rationalizing government policies and agencies with cooperative functions, supporting cooperative
development, transferring the registration and regulation functions of existing government agencies on
cooperative as such and consolidating the same with the authority, appropriate funds, therefore, and for
other purposes.