CFI official explains coop mechanics-A A +A
Sunday, May 5, 2013
THE Cebu CFI (Court of First Instance) Community Cooperative gives back up to 30-percent dividends to its members.
According to Lito Astillero, a member of its board of directors, the cooperativeâs total earnings for the year is shared by all its members in the form of dividends and patronage refund, or âannual payment to depositors,â as provided in the Cooperative Code of the Philippines.
A bigger deposit in CFIâs three types of depositsâfixed, savings or time deposit--means a bigger dividend, he said.
âTomas (OsmeĂ±a) clearly doesnât know the concept of a cooperative as weâve been doing this for 20 years,â Astillero said.
Cebu City South District Congressman OsmeĂ±a, in his regular Friday press conference, questioned CFIâs 25-percent patronage refund and interest from fixed deposits.
âItâs a sign that it should be investigated because the safety of depositors is at risk,â OsmeĂ±a said.
He explained that the interest is too high and thereâs a possibility that it (CFI) might end up like the Legacy Group and Rural Bank of Subangdaku that went into receivership by the Philippine Deposit Insurance Corp.
OsmeĂ±a also encouraged depositors to take their money out of CFI.
He said it would be used to help the gubernatorial bid of Rep. Pablo John Garcia (Cebu, 3rd district) of One Cebu Party.
OsmeĂ±a is the ally of Liberal Partyâs gubernatorial candidate Hilario Davide III.
But Astillero said higher dividends and interest only mean that CFI, which started in 1970, is earning well.
However, he said a member cannot deposit more than P500,000.
He said the CFI started with only 29 members with P200 as total fund. Now, it has 80,000 members with P7 billion in assets.
Astillero said the CFI has a P3.5-billion credit line with the Land Bank of the Philippines, but it is only using P1.5 billion.
âSo the bank is scrutinizing all our finances,â he said.
âMy appeal to Tomas is donât use the cooperative in his politicking because we have never involved ourselves in politics in our 43 years of existence,â Astillero said.
CFI is also regulated by the Cooperative Development Authority (CDA) and the Bangko Sentral ng Pilipinas.
CDA field officer Ruben Delfino explained that the cooperativeâs earnings are divided annually among its members.
He cited the implementing rules and regulations of Republic Act 9520, or the Philippine Cooperative Code of 2008, which provides that after deducting expenses from the cooperativeâs annual earnings, 10 percent of the remaining net surplus will go to the reserve fund, 10 percent to cooperative education and training, three percent to the community and development fund and seven percent to the land and building fund.
What remains will be divided into two: the bigger portion is divided among members as dividend or interest of capital, while the smaller portion is divided among members as their patronage refund.
CFI is chaired by retired judge Esperanza Garcia, wife of Rep. Pablo Garcia (Cebu, 2nd district) and mother of suspended Gov. Gwendolyn Garcia and Congressman Pablo John.
It was Barili Mayor Teresito MariĂ±as, who brought up the issue when he hand-carried a letter allegedly signed by some Barili residents who belong to CFI. They were afraid their deposits would be used for partisan politics.
Published in the Sun.Star Cebu newspaper on May 05, 2013.