Mass-specc-annual-report (2).pdf

2016

ANNUAL

REPORT

COVER

VISION

A strong and sustainable Mindanao-based confederation of viable and people-oriented cooperatives.

MISSION To foster and strengthen the financial cooperation among cooperatives towards the long-term institutional and financial stability of the cooperative sector; To promote cooperatives as a distinct sector in the economy and as a People’s Movement bound by shared values and philosophy; and To promote dialogues and establish linkages with stakeholders on the basis of partnership and mutual respect—for greater impact on peace and development, for and with the tri-people of Mindanao.

2016

ANNUAL

REPORT

COVER

About the Cover Fifty years ago, a cooperative movement was born in Mindanao and spread its influence throughout the Philippine archipelago, inspired by successful cooperatives around the world. As we move forward in the next fifty years, there is a need even more for cooperatives to work and pull themselves together. Cooperate, collaborate, differentiate. This will be key to their success as a movement.

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About the Theme Messages Performance Reports Central Fund (CF)

table of contents

Information and Technology (ICT) MASS-SPECC Consultancy Unit (MCU) Institute of Cooperative Studies (ICS) Membership and Networking Gender and Development Youth Environment 2016-2017 BOD Resolution Highlights Milestones 50th Anniversary Highlights

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Audit Committee Report EXTERNAL AUDIT REPORT Statement of Management’s Responsibility for Financial Statement Independent Auditor’s Report Audited Financial Statements 2016 MASS-SPECC Awardees 2016 MICMA Award 2016-2017 Board of DIrectors & Key Officers 2016-2017 Committees 2016-2017 Regional Steering Committee Officers MASS-SPECC Strategic Plan 2017-2021 2017 Action Plans and Targets 2017 Budget

about the

“ W THEME:

Growing Cooperatives into a Movement

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e are continuing last year’s theme – Growing Cooperatives into a Movement – in this year’s General Assembly to focus on one important goal and to see that same goal from two perspectives.

As we prepared to celebrate last year our 50th anniversary (August 9, 2016), the theme was meant to capture the continuous effort of the Federation to grow co-operatives and to develop services that were relevant to their growing needs. Part of this effort was the strengthening of its governance system, allowing for greater member participation in its decision-making process. To grow the movement, MASS SPECC established structures and processes to strengthen collaboration among co-operatives, such as the pooling of reserve funds and retirement funds, conceptualization of the stabilization fund and other support systems, and discussions on self-regulation. The same theme in the 2017 General Assembly serves to emphasize the need and urgency for co-operatives to work together. The increasing pressures from a competitive market and political environment prompt us to do so. The building blocks that MASS SPECC has put in place to grow the movement must now be institutionalized, if co-operatives are to secure their future and ensure the success of cooperatives in the country.

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theme

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message fRom the

chairperson

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reetings on the 43rd MASS SPECC General Assembly!

Is MASS-SPECC an epitome of courage, strength, and empowerment? Yes, because for 43 years, MASSSPECC stood firm as it established its roots among primary cooperative affiliates. SPECC started in educating its members on cooperatives while MASS concentrated on bookkeeping and auditing services. We can recall that MASS-SPECC came into existence when the leaders of both institutions merged MASS and SPECC. SPECC, being organized earlier, celebrated its 50th year in August 2016. Through the years, MASS-SPECC grew immensely in terms of membership, assets, and in the quality of its services. Recognized internationally through its membership with the International Cooperative Alliance (ICA), it has become the biggest regional cooperative federation in the Philippines with over 300 primary cooperatives as members, mainly in Mindanao. We abide by the precepts of democracy in the conduct of our organizational processes, where the voice of the primary cooperatives guides the hand that steers the wheel of governance and management. Our strategic plan for 2017-2021 has set in motion the dream of growing cooperatives into a movement, backed by the common vision of coop members enjoying better quality of life. Our overarching strategy to pursue this vision is to cooperate, collaborate and differentiate. We continue to strengthen the present services of MASS-SPECC to meet the demands of our members, particularly in the areas of information and communication technology, membership and networking, consultancy, and education under the Institute of Cooperative Studies. We continue to promote our Sustainable Coops Programs (SCOOPS) by integrating the Environment Management System and Disaster Risk Reduction Management (DRRM), Credit Information System (CIS), and the Agribest Program. President Duterte’s vision 2040 of a high-income economy is a challenge. MASS-SPECC must be ready to face the realities of the fast changing times in the coming years. All cooperatives, regardless of size, must work with a unified purpose. This can be achieved through the cooperation, vigorous contribution, and support of primary cooperatives for the sustainability of MASS-SPECC’s programs and projects. The constant practice of good governance, transparency, and adherence to cooperative values will be the guiding tool for MASS SPECC in its pursuit of growing cooperatives into a movement and helping members enjoy better quality of life. Let the Lord be the captain of our journey in the coming years. God bless us all. Congratulations!

EVELIA R. SATOR, Ph.D. Chairperson

message from the

president of the philippines

M

y warmest greetings to the Mindanao Alliance of Self-Help SocietiesSouthern Philippines Educational Cooperative Center (MASS-SPECC) as it holds its 43rd General Assembly and 47th Co-op Leaders’ Congress.

For years, the MASS-SPECC has been a reliable partner in the government’s thrust to fortify cooperatives in Mindanao. It continues to offer a wide range of support to its affiliates’ various needs. The success of community-based businesses like these greatly impact peace and development programs in our localities. Thus, I laud the federation for its efforts to advocate for inclusive growth among members. By encouraging small cooperatives to grow together with their bigger counterparts, we ensure lasting institutional and financial stability in the region. I hope that the managers and Board of Directors will uphold the principles pf excellence, efficiency and productivity in guiding their respective cooperatives towards success.

RODRIGO ROA DUTERTE The President of the Philippines

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message fRom the

House of Representatives (Coop natcc0 partylist)

C

ongratulations on your 43rd General Assembly and 48th Coop Leaders Congress! May this special occasion provide you an opportunity to discuss fresh and relevant ideas that can contribute to the growth of MASS-SPECC federation and its coop affiliates.

The federation’s role in national development is very valuable. Being the unifying force for 300 member cooperatives mostly in Mindanao, MASS-SPECC play a key role in strengthening the cooperative movement in the country. MASS-SPECC is in fact recognized as the biggest regional cooperative federation and I am proud of all your achievements. You deserve to be recognized for your great efforts in boosting the cooperative spirit of cooperators. Continue your pursuit of excellence and growth. Together with the coop affiliates, keep on growing coops into a movement. Certainly, you can also build communities and take part in nation-building. Today we are facing the challenge of defending the tax exemption privileges of cooperatives. We apreciate your support and commitment to actively partake in this campaign against the government’s plan to tax our cooperatives. Let us continue our partnership in advocating cooperative development and people empowerment. God bless and more power! HON. ANTHONY M. BRAVO, Ph.D. Representative, Coop-NATCCO Party-list

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House of Representatives (Coop natcc0 partylist)

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armest cooperative greetings!

It is my honor and privilege to extend my heartfelt felicitations to the Officers, Management, Staffs, and the members of MASS-SPECC on the occasion of your 43rd General Assembly and 47th Co-op Leaders’ Congress, celebrating the theme: Growing Co-operatives Into a Movement. I salute your continuous commitment to the developmental growth of the industry and ensuring sustainable business for your members. Let us continue to be partners in the cooperative development efforts for together we can do more. As your partner and voice in the House of Representatives in this 17th Congress, I am very proud to count you as an active member of COOP NATCCO Party-list. I do hope our partnership will continue for the long-term. Let’s work collectively to seize opportunities and ensure that our gains are preserved. Congratulations and mabuhi kamo!

HON. SABINIANO S. CANAMA Representative, Coop- NATCCO Partylist

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message fRom the

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message from the office of the president of the phil.

cooperative development authority

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elicitations to MASS-SPECC Cooperative Development Center on the occasion of your 43rd General Assembly and 47th Co- op Leaders’ Congress as well as your 50th Anniversary (Golden Anniversary).

Empowerment is the call of the times because when people are empowered, it will give way to social restructuring. That looming structure called cooperativism is now considered the people’s preferred development model as the cooperatives are now seen globally as the acknowledged leaders in the economic, social and ecological sustainability. In essence, what cooperatives now are advancing is a kind of development that is holistic, propeople, community-based and with a popular participation. It is an approach that puts man at the center and in the mainstream of the processes. These are well-pronounced in the principles we live by. It has been said that the past or the present does not shape the future; your vision does coupled with the single-minded determination to work for it and put it to reality. Mere intention alone creates its own energy, how much more if it is pursued with a strong will. MASS-SPECC Cooperative Development Center has shown the way on what a cooperative should be. Its accomplishments are the concrete and tangible manifestations of the driving forces that are in the realm of the intangibles. The good governance exemplified by its Board of Directors, the industry and innovativeness poured-in by its management and the values of cooperation and participation of its members are the pillars of its strength in the long and arduous journey towards making life better for the people. Innovativeness coupled with industry, good governance and coop- eration from members are the values that have catapulted the cooperative to achieve an indelible mark of success. More power and kudos to MASS-SPECC Cooperative Development Center!

ORLANDO R. RAVANERA Chairman

message from

Association of asian confederation of credit unions Team Spirit in a Movement—the power to cooperate.

I

am delighted to know that you will continue vigorously to put in place the building blocks of a coop movement in the areas of governance practice, programs and services. No doubt, you are building a coop movement with a good cause and a common mission, a coop movement for constructive change, a movement to give people meaningful participation and an opportunity through ownership to become masters of their own destinies. Last August, I had the honor of attending your Grand Anniversary Celebration and I brought back with me your booklet entitled “Member Care” which I have been quoting at credit union seminars and meetings comparing it with the ACCU course on “Basics in World Class Customer Service”. Also, I have learned that you are interested in the ACCU course of “Managing Yourself for Others”. This confirms our shared belief that a coop movement is made up of cooperators committed to work for and with others for socio economic development and for the development of people. In your effort to growing cooperatives into a world class movement, you will find that cooperation leads to cooperation. You will also find that team spirit connects people who share the same value system and that the power to cooperate makes the great task easy and enjoyable!

(SGD) ANDREW SO Founding President of ACCU

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message from

développment international desjardins

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n behalf of the entire team of Développement International Desjardins (DID), we wish to extend our most sincere congratulations for the 50th anniversary of MASS-SPECC.

DID is so proud to have become a MASS-SPECC partner since the early 90s. Today, it is very impressive to see how a cooperative organization like MASS-SPECC has achieved those amazing results in 50 years. We know how much it was, and it remains very demanding for the members, the managers, and the leaders of MASS-SPECC to reach such results. We salute that! Once again, please accept our warmest congratulations for these 50 years and receive our best wishes for the future.

(SGD) JULIE VEILETTE Senior Director Finance & Administration

(SGD) SERGE GOSSELIN Director Market Development

performance reports 2 0 1 6 A N N UA L R E P O R T

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central fund

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We have to stay relevant to our members. Systems thinking, overarching strategies, and a common vision are necessary in the operations of cooperatives for their members to enjoy better quality of life. Together we can achieve much, especially when we live out the basic co-op values.

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s the Philippines becomes an emerging market in Asia, the cooperative industry in the country follows suit. Our pursuit of helping individual members enjoy better quality of life requires us to develop creative and dependable business models that would consequently help us achieve our purpose. We aim to imbed the Agribest program, which promotes agricultural value-chain undertaking within the co-operative network, in our members’ operations. We continue to provide dependable financial and technical assistance to our members through timely and customized loan assistance and savings and investment windows, which have better earning opportunities for their liquid funds. Our financial packages are combined with relevant interventions that add value to our members’ needs.

H ig h lig h ts o f th e Cen tr a l Fu n d O p er atio n s •

Outstanding Deposits of Php 1.045B in 2016 exceeded the Php 875M target

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Cumulative Share Capital increased to Php 245M from Php 225M in 2015

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Loans Payable decreased to Php 221M from Php 410M in 2015

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Loan Releases of Php 706M in 2016, higher than Php 564.8M released in 2015

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No. of borrowers decreased by 21% to 50 in 2016 from 63 qualified borrowers in 2015

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Portfolio Quality slightly decreased to 5.9% from 5.07% in 2015

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Compliance for loan losses sustained at 100%

H ig h lig h ts o f th e Ag r iBES T P r o g r am Piloting of the program in four cooperatives with the following results: 1.

We noted, however, that members’ patronage of our loan products decreased from 63 cooperatives in 2015 to 50 cooperatives in 2016, as some banks continue to extend loans to cooperatives at a lower price. With the increasing demand of labor service co-operatives for loan assistance, loan releases in 2016 exceeded the target for the year. We continue to improve our loan delivery system and aim to reduce interest rates based on credit risk. We strongly encourage members to build up share capital and invest in the Federation to allow us to offer loans at more competitive rates.

Conceptualization of Business Development Service for participating coops with assistance from ACDI/VOCA 2. Formation of 13 Clusters of farmers with 91 farmers in 4 cooperatives 3. 54 modules or 540 heads of hogs produced and marketed by participating coops Partnership/Linkages with the following institutions: 1. 2. 3. 4. 5. 6. 7. 8. 9.

DA-Region X for technical support and vegetable seeds worth P100K; DTI-Region X for trainings Nat’l Meat Inspection Section R-10 for technical assistance in meat shop and meat cutting plant LGU of Lantapan – endorsement to MAO which gave technical support to HIVAOC MPC (Coop partner in piloting) FSSI for financial support for HIVAOC MPC and grant to MASS-SPECC XU College of Agriculture for research and product development ACDI/VOCA- for BDS conceptualization and framework Hineleban Foundation- for management support to HIVAOC MPC & technical support on vegetable production FEEDPRO – for animal feeds distribution & technical assistance in hog production

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information & communication technology

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Technology helps create efficient systems, thereby conserving time and other resources that could be devoted to more significant activities and services. Our standards aim to set the norm in the industry.

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Our purpose The European Commission sums up the importance of ICTs as that which lies less in the technology itself than in its ability to create greater access to information and communication in underserved populations. We at MASS SPECC (MSP), believe in this precept and continue to develop ICT systems that would benefit our members and consequently create a positive impact on the lives of their individual members. Setting standards, developing the norm In line with standardization, we developed a standard dividend and patronage distribution system, which our members can use in generating reports on their own. We also succesfully implemented the first electronic voting for the Sta. Catalina Credit Cooperative during its General Assembly, where the winners’ list for their raffle was generated within 30 minutes – a novel experience for the members. We coordinated with MASS-SPECC CISA Project Team in the development of a computer system that would facilitate compliance by co-operatives with CISA requirements and provided technical assistance

in the development and simulation of MSRTE-Core, MASS-SPECC’s online banking system. We have kept up with the standards of the banking industry by migrating our ATMs to the new EMV platform. The work of the different sub-ICT units does not come without challenges as the demand for time and coordination with other units come into play. With the on-boarding of new IT-based applications focused on e-banking, we are hopeful that the ICT Unit would be able to provide innovative services that would respond to the growing needs of cooperatives. MSP ICT continues to pursue this noble mandate with the endeavors of the following units: Management Information Systems (MIS) – We innovate software solutions to equip MASS SPECC members with productivity tools for their operation. Education & Training – We provide continuous training and IT information to enable co-operatives to maximize the use of technology. CoreBanking – Our new centralized system enables fast, secure and real time financial transactions by

co-op members, with inter-branch capabilities. Data Center – We ensure reliability, availability and security of your data, 24/7. We make sure that your data is safe with us. Cloud Services– We provide shared computer processing resources and data to facilitate intra- and inter-co-op connectivity.

find it difficult to give up their own processes and business practices. Further, the inferior state of internet access in the Philippines continues to be a great challenge in connectivity and online efficiency.

M S RTE Use r s 2015

2016

189 Cooperatives

195 Cooperatives

561 sites or branches

558 sites or branches

MASS-SPECC STANDARD RUN TIME EDITION (MSRTE) Hardware & Security –We deliver competitive and is the most widely used cooperative accounting effective IT solutions for hardware, software and software in the Philippines endpoint security.

ATM s

ICT Projects – We initiate and execute new technology to support co-operatives with electronic services.

In step with the dynamics of technology A key factor in the success of software deployment in a multi-institution and multiple products and services scenario is the standardization of system parameters. This requires synchronization of services, identical procedures and process flows across institutions, and the integration of multiple user types. The drawback in this desired setup is the readiness and capability of co-operatives to align their system infrastructure with industry standards. This remains a challenge since some co-operatives

2015

Gold Edition

2016

37 coops

39 coops

60 ATM Terminals

64 ATM Terminals

164, 795 cards issued

210, 009 cards issued

3,839, 697 transactions

4,427,551 transactions

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mass-specc CONSULTANCY UNIT

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We are the soul and conscience of the Federation. Our end goal is to be relevant to our members. We need to employ a dynamic communication mechanism for us to gain a better understanding of their needs. We hope that our services would consequently alleviate their members’ lives; only then can we experience the co-op movement.

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Our brand of service We are committed to offer quality consultancy services in financial intermediation, credit, marketing, human resource, strategic planning and business planning. Our member-cooperatives expect us to develop and build well-balanced business systems through actual, on-site accompaniment, in order to produce more tangible results and achieve desired financial standards. A pool of co-op practitioners The presence of co-operative practitioners, specialists, and advisors with practical experience on co-op matters strengthens our resource pool. Our associates from the academe and the corporate sector ensure that the co-op experience is enriched and updated with the practices of mainstream industry. The ties that bind and strengthen We mostly assisted in the mid-year and year-end planning of those co-operatives for which we conducted Strategic Planning sessions in the past years. We modified the cluster training, which our Davao-based South Team used to

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handle, and instead started collaborating with the Institute of Cooperative Studies (ICS) with our advisers as trainers or resource persons. We also serviced non-affiliates and assisted them with their concerns.

Internal collaboration We continue to work closely with the different MASS SPECC units and assist them through various means - as resource persons in training and as analysts assisting the Savings and Loans unit in assessing cooperatives that avail

P e r fo r man c e H ig h li ght s •

62 co-operatives (15 new coops) accessed services compared to last year’s 58 cooperatives (22 new coops)

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79 co-operatives assessed using Capacity Assessment Tool (CAT) out of 12 target co-operatives

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Two (2) new solutions menu completed (one in Credit and one in Finance)

The Capacity Building Program: Developing people for stronger co-operatives We are pleased to report that the CB Program has been replicated in Southern Mindanao when we conducted Regional Capacity Building Workshops for Regions 11 and 12 in July 2016. Mentors’ Training and Financial Analysis Training for Mentors were held in Davao for Regions 11 & 12 in August and September. We have also started conducting validation workshops in the South for the co-operatives in Regions 11 and 12 and we checked on the progress of those co-operatives that signed up for the CB Program. Through our collaboration with the Institute of Cooperative Studies (ICS), we conducted the first training on Governance and Leadership and held cluster interventions for the mentees. CB mentees and other cooperatives also attended the training in Risk Management. We are hopeful that the CB Program would gain ground after 13 more co-operatives signed the Memorandum of Understanding (MOU) indicating their interest to participate in the CB Program.

Strengthening ties The year started with much anticipation to serve and engage more members. Mechanisms were improved to ensure better member engagement in consultancy services. While there were fewer interventions in 2016, the potential for reaching out and spreading these services to more cooperatives remain. We noted that we have served more medium and large co-operatives than the smaller ones. We, at the MCU, resolve to reach out to member cooperatives that have yet to respond to our initiatives. We shall be relentless in finding and improving ways to help address their organizational needs, further demonstrating to them our commitment to their growth and development.

Polomolok Multi-Purpose Cooperative We’ve become more competent, stable and organized through the guidance of the Consultancy Unit of MASS SPECC. They helped us set clear directions and realistic strategies that improved our operations, specifically with the development of our Coop Credit and Internal Control Manuals. Our member-focused programs were strategically developed with the help of the MCU. Their support encouraged us to pursue objectives and programs that would ultimately empower our members to become financially independent.

—Teresa Balmores Manager

Iligan Cement Multi-purpose Cooperative Think big – this was how the MCU motivated us to become an open-type co-operative after operating as a multi-purpose cooperative. We’ve been availing of the services of the MCU since 2008 and they’ve served us well, guiding us as we develop our business plans and our products and services. With education and training of our officers and staff plus constant coaching from MCU, we are able to run our operations professionally. All these have benefited our members greatly. We’ve broken down barriers and overcome borders seeing our members develop into entrepreneurs and striving hard to attain financial freedom. As a testament to their hard work, we won as Grand Winner in the 2014 MICMA Mauswagon Category and 2nd runner-up in the 2016 MICMA Nanlimbasog Category. The MCU builds up our capacity to grow, develop, and evolve and we see the fruits of our collaborative work in the lives of our members.

—Asuncion Mabano Manager

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of the Federation’s loan products. We also contribute materials for the Co-op Monitor.

INSTITUTE OF COOPERATIVE STUDIES

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There are essentials that make co-operatives what they are and different from other enterprises. This is what we need to emphasize in our training so that co-operatives succeed as socio-economic enterprises, and fulfill their purpose in society.

Accessible training, socialized pricing

T r ai n in g 2016

2015

Total training conducted

107

106

Number of participants

3,013

2,013

Continuing education

Acting as the center of learning for officers, managers, and staff of cooperatives, we develop and implement training programs designed to equip our members with competencies required in the fulfilment of their respective functions. We advocate for the promotion of the co-operative values and principles, and we aim to guide cooperatives towards achieving the real purpose of cooperatives as socio-economic enterprises.

Our decision to localize training with cluster partners has made training more accessible and affordable to both members and non-members. Equipping the Education Committees of co-operatives with learning materials has made training more accessible and affordable to our members. We hope that more would join this effort.

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Tr ain in g E v e n ts Number of Pax

Number of Training

MSP Member

Non-Member

70

1,481

416

1,897

Specialized (Coop Officers)

8

324

15

339

Specialized (Mgt/Staff)

27

653

70

723

Management Development Program

1

23

0

23

Other training

1

31

0

31

107

2,512

501

3,013

148

110

Training Events CDA-related

Totals No. of Coops Patronizing

Total Pax

19

Jobnet Service Cooperative

ICS helped us diagnose our weaknesses as an organization and this had significant impact on our systems and operations. We felt empowered with a heightened sense of ownership and belongingness in our organization. The training and mentoring that we received from ICS allowed us to implement our plans, expand our operations, and increase our membership, particularly through our genuine members’ care program. Consequently, this boosted our principal’s trust and confidence in us. —Diego Palacat Manager

Region

# Training

# Officers

# Mgt/ Staff

Members

Region 9

18

216

313

5

Region 10

33

334

290

21

Region 11

13

128

159

0

Region 12

14

279

280

0

Caraga

18

241

429

119

ZBST

5

37

39

4

Visayas

6

47

72

0

TOTALS

107

1,282

1,582

149

A total of 107 training events were conducted in 2016. The number of CDA required trainings also increased in the same period from 42 to 70, thanks to the active involvement of ICS’s cluster partners in the provinces. Training participants in 2016 increased by 64% from 2015. Our succession program, the Management Development Program (MDP) that runs for six months, had 23 managers from 11 cooperatives composing the 5th batch of management trainees.

Co-op principle in practice

Only 48% of our members took part in the training we conducted last year. Many of those that did not participate were small co-operatives, presumably because of resource constraints. Yet this is an opportunity for bigger cooperatives to help smaller ones, and put into practice the principle of “cooperation among co-operatives”. With the regular and consistent remittance of the Cooperative Education Training Fund (CETF), we see the possibility of providing training at least cost to all our members.

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Re g io n al D istr ib u tio n

NETWORKING & membership 2 0 1 6 A N N UA L R E P O R T

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Our guiding principle Cooperation among co-operatives – we put this co-operative principle forward both as a primary objective and a business proposition, especially for those within the network of MASS-SPECC. Corollary to our mission of promoting cooperation among cooperatives is our drive to enhance MASSSPECC’s external linkages to non-government and government organizations and institutions. As a secondary objective, we believe that linkages galvanize meaningful cooperation – the kind that enables authentic collaboration and breeds positive results. Member engagement Expressing the spirit of cooperation in the exercise of the right of suffrage is one perfect example of cooperation in concrete action and in 2016, we applied this principle through the national election campaign for the coop sector representatives in Congress, through the Coop-NATCCO Partylist. In the same breadth and intensity, the signature campaign that we initiated against a legislative attempt to repeal the tax exemptions of cooperatives yielded more than 30,000 signatures, which were then presented to Senators Zubiri and

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We’re focusing on reviving member-cooperatives that need our support rather than recruiting new members. Let’s go back to basics – who are we? What do we represent? We endeavor to help our members through technical assistance so they can develop their members in becoming self-sufficient for them to attain better quality of life. After all, that is a cooperative’s main goal.

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Gordon, and to Coop-NATCCO representatives. Considered as a serious threat to co-operatives, the attempt to repeal the tax exemptions comes at a time when co-operatives in the Philippines mark their centennial. We continue to institutionalize and strengthen the mechanism for membership engagement seen in the active involvement of Regional Steering Committees (RSC) headed by MASS-SPECC Director Representative in the region, the regular conduct of Ownership Meetings, the increased attendance in the Annual General Assembly and Coop Leaders’ Congress, and the organization of the cluster team approach within the MASS-SPECC management structure to enhance coordination.

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We actively participated in the discourse on good governance and federalism as part of our sectoral advocacy and actively engaged in the debate on “endo” (contractualization) and proposed the workers’ co-operative or service co-operative as an alternative model.

Quality over quantity As much as we would like to aggressively recruit members, our focus has been on reviving the membership of those co-operatives whose affiliation with the Federation has somehow waned. Currently, our members total to 330. To update members’ data, the Networking Unit established basic profile of member-cooperatives.

Open Letter to the President of the Philippines published in the Philippine Daily Inquirer on December 30, 2016

P e r fo r man c e H ig h lig h ts •

13 member cooperatives recruited in 2016 compared to 23 recruits in 2015

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CETF remittance increased from Php 11.977 in 2015 to Php 11,982 in 2016

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MIGS members increased from 93 coops in 2015 to 110 in 2016

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GA attendance sustained at 148 cooperatives with 665 delegates in 2016 versus 148 cooperatives with 611 delegates in 2015

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Attendance in bi-annual Ownership Meetings reached 182 cooperatives (458 participants) in 2016 from 176 cooperatives (428 participants) in 2015

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There is a need to institutionalize gender and development in our members’ operations and systems, where equal opportunity in accesing training and education or financial services and even board representation, is given to all gender types.

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Gender and Development (GAD) Mainstreaming Manual We have started developing the manual, which our members may use as reference for gender mainstreaming in accordance with CDA MC 2013-22. The framework was modified to suit the co-operatives here in Mindanao. Success stories of co-operatives mainstreaming gender are documented in the manual to inspire other co-operatives. The manual also contains the details of the Gender Mainstreaming Framework inspired by the past projects of Asian Women in Cooperative Development Forum (AWCF) and the Gender Equality Resource Center Philippines, Inc. (GERC, Inc.) •

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Held Design Conference for the Gender Mainstreaming Manual on March 6, 2016 in Cagayan de Oro City; 10 representatives (three (3) men and seven (7) women) from Regions 9, 10, 11, and 12 co-operatives attended Conducted two (2) validation workshops for co-operatives that started establishing their own Gender Equality (GE) related initiatives; 12 participants (two (2) men and 10 women) from Regions 9, 10, 11, and 12 and ZamBaSulTa cooperatives attended

Gender Congress 2016 Gene r al Assem bly Resolution and Update GENDER RESOLUTION

Accreditation of GAD Facilitators We conducted an Orientation on the Accreditation of the MASS-SPECC Gender and Development (GAD) Facilitators. As of late 2016, we had nine (9) potential candidates that our panel of evaluators, composed of MASS-SPECC GAD committee members and the ICS Managing Director, will be evaluating. Living out GAD Although we understand the reluctance of some of our members to integrate Gender and Development in their operations due to various reasons, we exhort them to do so as it would benefit their organization, primarily, their members. We’ve started to standardize all manuals, modules, and other tools and resources for gender mainstreaming to assist our members to adapt GAD. We will strive to provide significant data to our members to help them assess the social impact of gender equality in co-operatives, which links to the need for effective monitoring and evaluation processes and tools. We at MASS SPECC have started institutionalizing our internal gender mainstreaming and are currently developing our committee members so they can mobilize their regional counterparts as well.

Approval of the development of the Gender Mainstreaming Manual for a standard GAD program in member cooperatives

UPDATES/ACTION TO BE TAKEN Gender Mainstreaming Manual for co-operatives was developed through validation workshops to be piloted in selected cooperatives in 2017

Ac tio n P lan fo r 2 017 By the end of 2017, the following shall have been implemented: •

Piloted Gender Mainstreaming Manual in three (3) selected co-operatives

•

Conducted two (2) regional workshops to implement the Gender Mainstreaming Manual to co-operatives

•

Accredited at least 10 GAD facilitators to conduct Gender Sensitivity Training and other GAD relevant activities.

•

Conducted four (4) GAD Committee meetings.

•

Appointed one (1) MASS-SPECC GAD focal person to ensure implementation of gender-related initiatives and policies in MASS-SPECC

•

Conducted two (2) joint meetings with Regional Gender Focal Persons (GFP) and GAD Committee to gather cluster concerns and issues for discussion during Regional Steering Committee meetings

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Youth

“

2 0 1 6 A N N UA L R E P O R T

24

T

he Youth sector holds vast potential for education and perpetuation of the values and principles of cooperativism and volunteerism and we at MASS SPECC remain steadfast in striving to achieve this vision of youth organizations, empowered with leadership and entrepreneurial skills engaged in building a movement of young cooperators. We shall achieve this through holistic leadership formation and youth member training.

Who are the youth? Are they the ones in school or are they those who are about to leave school and are in the prime of their lives? This we know: the youth are the future of our country. We start with them, we develop them. The co-operatives cannot hope to grow without them. No movement should happen without them.

”

Strengthening the Cooperative Youth Parliament Two (2) CYP meetings were conducted during the year. In these meetings, they elected the new set of CYP Officers for 2016-2018. The new Youth Program Coordinator was introduced and a planning session was held to assess the performance and agree on doable action points for the year. Exposure Visit to Tallahassee-Leon Federal Credit Union (TLFCU), Florida, USA The BOD Youth Sector Representative, Ms. Thea Janica Gwenn Handumon benchmarked with TLFCU to learn about their unique annual youth camp that could also be adapted in the Philippines. It was also an avenue to exchange best practices about youth development programs that MASS-SPECC could use to develop quality products and services for the youth sector.

2016 Youth Congress General Assembly Resolutions and Update

INCULCATING THE VALUE OF VOLUNTEERISM Annual Volunteers’ Gathering The CYP, together with the Youth Savers’ Club of Oro Integrated Cooperative (OIC), participated in the gathering held on December 23, 2016 at the Capitol University Gymnasium in Cagayan de Oro City. The VOICE Network and the Department of the Interior and Local Government (DILG) – R10 organized this activity with the theme Volunteer for Sustainable and Inclusive Development: Isulong, Ibahagi, I-ugnay, Isagawa!. Our CYP representatives, as well as those from the OIC Youth Savers’ Club, shared with the other participants, the nature and programs of their organizations.

UPDATES/ACTION TO BE TAKEN

1. Adopt the new youth program as succession strategy to train the second liners of cooperative leaders

On-going dissemination to member cooperatives during 1st and 2nd round of Ownership Meetings

2. MASS-SPECC to develop a policy requiring all member cooperatives to adopt the new youth program

On-going drafting of the policy guidelines to support the implementation of the youth program to cooperatives

3. Approve the CYP 20162020 Strategic Plan

Implemented

4. Allocate budget to support the implementation of CYP’s 2016-2020 Strategic Plan

Implemented

5. Adopt a clustering approach in conducting youth formation and training

Clustering approach will be adopted in the 2017 conduct of the Fundamentals of Cooperatives for the Youth

6. Assign or hire Youth Program Coordinator to handle CYP program implementation

Hired one (1) Youth Program Coordinator

Actio n P lan fo r 2 0 17 By the end of 2017, the following shall have been implemented: •

Developed a Youth Program Manual

•

Conducted one (1) Youth Leadership and Entrepreneurship Seminar

•

Conducted one (1) Youth Camp on Financial Literacy for Youth and Environmental Management Seminar

•

Conducted six (6) localized seminars on Fundamental of Co-operatives for the Youth

•

Assisted at least 10 Youth Co-operative Laboratory in their formation, orientation, and evaluation

•

Conducted three (3) CYP meetings

•

Conducted three (3) community outreach activities

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1st Junior Cooperators’ Camp Held on November 25-27, 2016 at Highland Stone Chapel Adventure Park, Brgy. Hoyohoy, Tangub City, Misamis Occidental, 13 representatives from various youth cooperatives in the country participated in the camp. Chief Executive Officer of Tallahassee-Leon Federal Credit Union, Florida, USA, Ms. Liza Brown and youth leaders, Mr. Dawson Brown & Ms. Lauren Mosley, assisted in the camp. We’re pleased to note the campers’ enthusiastic participation in personal development, teambuilding, and financial literacy activities, as these were designed to suit the Filipino culture. The participants from Regions 11 & 10 crafted their own plans as the national team developed plans for the national level.

GA RESOLUTION NO. 20 SERIES OF 2016

environment

“

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26

Sustainable Cooperatives

T

he vulnerability of co-operatives to climate change drives MASS-SPECC to appeal for sustainability through the integration of environmental management systems in our members’ operations and to encourage them to take a proactive role in addressing social concerns and environmental issues. Adopting SCOOPS (Sustainable Co-operatives) as the implementing program for the CCA-DRRM would develop resiliency from natural disasters and strengthen sustainable development in the co-operatives.

Mainstreaming SCOOPS Program To popularize SCOOPS Program, the Institute of Cooperative Studies (ICS) has developed a training module on Building Sustainable Cooperatives through the Integration of Environmental Management System (EMS) and Disaster Risk Reduction Management (DRRM). The first training workshop was conducted on September 8-9, 2016 at the SAFRAGEMC Function Hall in San Francisco, Agusan del Sur where 11 member representatives from the CARAGA Region participated.

No one is spared these days from the effects of climate change. Every operation ought to consider disaster risk reduction management. We at MASS SPECC encourage our member cooperatives to collectively participate in the SCOOPS program.

”

Funding for disaster prevention and mitigating measures will be sourced from 17% of the Community Development Fund (CDF) of the member-cooperatives, which MASS-SPECC will manage. A massive campaign is being conducted to encourage members to support this.

Payments for Ecological Services (PES) Payment for Ecosystem Services (PES) for Mt. Kalatungan Natural Park and the Miarayon– Lapok–Lirongan–Tinaytayan Tribal Association (MILALITTRA) is a multi-sectoral initiative with the goal of rehabilitating and preserving the forest resources in the upland areas and rewarding the Indigenous People communities that act as the forest managers. In 2016, 150 hectares of the degraded portions of Mt. Kalatungan were devoted for rehabilitation. MASS-SPECC actively supported this undertaking as a staunch stakeholder of the MILALITTRA, Last July 29, 2016, PES launched the forum Payments for Ecosystem Services: Opportunities in Protecting Biodiversity in Mt. Kalatungan in partnership with Philippine Tropical Forest Conservation Foundation, Inc. and Department of Science and Technology (DOST). The latest status report showed that 42.09 hectares has been rehabilitated out of the target of 30 hectares. The tribal communities that are partners of MASS-SPECC in this endeavor are Awang, Lirongan, and Talakag, Bukidnon. Cagayan de Oro River Basin Management Council (CDORBMC) MASS-SPECC is one of the stakeholders of the Cagayan de Oro River Basin Management Council (CDORBMC), a multi-sectoral group of concerned individuals, agencies and institutions that has dedicated themselves in protecting, preserving, rehabilitating, and managing the Cagayan de Oro river basin. Our attendance in the 3rd International River Summit held on November 24-26, 2016 at the Pryce Plaza Hotel in Cagayan de Oro City, encouraged us

through the theme Healthy Watersheds, Clean Rivers, Safer Communities. This captured the call to action on revitalizing rivers as an economic imperative. The summit highlighted the socio-cultural significance of the rivers and focused on the resiliency of the people within the river ecosystem and the communities, which the ecosystem supports. The summit enjoined the most important river stakeholders – the global, national, and local authorities.

Actio n P lan fo r 2 0 17 By the end of 2017, the following shall have been implemented: •

Promoted SCOOPS program in the Bi-Annual Ownership Meetings

•

Conducted members’ survey on environmental initiatives and plan activities with other cooperatives

•

Conducted six (6) sessions on Building Sustainable Cooperatives through the Integration of Environmental Management System (EMS) and Disaster Risk Reduction Management (DRRM)

•

Developed Employee Health Safety and Security (EHSS) Manual for co-operatives

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27

Partnership with institutions

HIGHLIGHTS OF THE bod RESOLUTIONS 2016-2017 2 0 1 6 A N N UA L R E P O R T

28

A. MEMBERSHIP Approval of the acceptance of thirteen (13) new members and the withdrawal of three (3) co-operatives from membership.

3. 4. 5.

B. ACCESSING OF LOAN FUNDS 1. Approval to increase the CCT Line with Landbank of the Philippines from Php 994 million to Php 1.5 billion 2. Approval of the LBP renewal with increased rediscounting line from Php 300 million to Php 500 million C. ADVANCING THE INFORMATION COMMUNICATION AND TECHNOLOGY OPERATIONS 1. Approval of the MOA between MASS-SPECC and Bancnet, Inc. for the availment of Bancnet Online (BOL) Services 2. Approval of the Revenue Sharing Agreement between MASS-SPECC and Coreware Technologies, Inc. for the web-based banking solutions. 3. Approval of the new generic,co-branded and 50th anniversary Pinoy Coop ATM Card 4. Approval of the MOA between MASS-SPECC and EPH Secure Systems, Inc. for the hosting facilities and other related outsourcing services 5. Approval of the Master Outsourcing Service Agreement with ALLCARD Plastics Philippines, Inc. 6. Approval of seven (7) new policies on Information Technology Risk Management System D. INVESTIBLE FUND MANAGEMENT 1. Approval to revise the overall investment portfolio allocation 2. Approval to revise the investment portfolio allocation of Trust Accounts

Approval to hire investment consultant to assist in improving management of investible funds Approval to engage in on-line trading platform with Philstocks Financial Inc. Approval to revise the Investment Policy Statement (IPS) related to preferred method of recording the investment

E. 50TH YEAR CELEBRATION AND THE 2017-2021 STRATEGIC PLANNING 1. Approval of the 50th Anniversary activities 2. Approval of the research and message development report entitled: Perceptions of Cooperatives and Cooperative Federations 3. Approval of the Strategic Communication Plan for 2017-2027 4. Approval of the Strategic Plan for 2017-2022 F. NEW PROGRAMS, PROJECTS, AND ACTIVITIES 1. Approval to implement the Cooperative Information System (CIS) to member cooperatives and connect with Credit Information Corporation (CIC) to comply with Credit Information System Act (CISA) 2. Approval to create special project committee responsible for upscaling Agri-based Enterprise System (AgriBEST) program 3. Approval to endorse to TESDA the inclusion of governance, management, and operation among the priority qualifications for training regulations development, assessment and certification for cooperatives G BOARD AND COMMITTEE REPORT 1. Acceptance and approval of the Chairperson and BOD Reports 2. Acceptance and approval of the Treasurer’s Report 3. Acceptance and approval of the Youth Sector Report

Acceptance and approval of the Credit Committee Report 5. Acceptance and approval of the Audit Committee Report 6. Acceptance and approval of the Election Committee Report 7. Acceptance and approval of the Investment Committee Report 8. Acceptance and approval of the Mediation and Conciliation Committee Report 9. Acceptance and approval of the Unification and Consolidation Committee Report 10. Acceptance and approval of the Asset Liability Committee Report 11. Acceptance and approval of the Ethics Committee Report 12. Acceptance and approval of the Gender and Development (GAD) Committee Report H. AFFILIATIONS, LINKAGES, AND PARTNERSHIPS 1. Confirmation of the re-appointment of MASSSPECC to the Foundation of Peoples’ Sustainable Development Cooperative (FPSDC) Mediation and Conciliation Committee 2. Approval of the MOA between MASS-SPECC and Philippine Cooperative Center (PCC) for the hosting of the 14th National Cooperative Summit 3. Approval of the partnership with VICTO National Cooperative Federation and Development Center to extend technical assistance to the Philippine Cooperative Central Fund Federation (PCF) 4. Approval of membership fee payment to the International Co-operative Alliance (ICA) I. OPERATIONS 1. Approval of MASS-SPECC building renovation in Cagayan de Oro and Davao 2. Approval to engage tax consultant to negotiate the settlement of 2000 Tax Case with the Bureau of Internal Revenue (BIR) 3. Approval to amend policies on Procurement and Codified Approving and Signing Authority (CASA) 4. Approval on the amendments and additional policies related to MASS-SPECC Officers 5. Approval to hire an FS compiler for 2016 financial reporting 6. Approval of one (1) vehicle acquisition 7. Approval to use the Philippine Financial Reporting Standards (PFRS) in 2016 instead of Philippine Financial Reporting Framework (PFRF) for Cooperatives

J. HUMAN RESOURCE DEVELOPMENT 1. Approval to send three (3) staff to inspect the colocated datacenter in Singapore. 2. Approval to send six (6) staff to attend the Information Technology Infrastructure Library (ITIL) Foundation Training and take the ITIL Certification Exam in Cagayan de Oro City 3. Approval to send two (2) IT staff to attend the World Council of Credit Union Technical Workshop Technology-Based Strategies in Bangkok, Thailand 4. Approval to send one (1) staff to participate in the Credit Union League of the Republic of China (CULROC) Exposure Trip to Taiwan 5. Approval to send the BOD Youth Sector representative as speaker at the Microfinance Council of the Philippines (MCPI) Annual Conference in Manila 6. Approval of the BOD Youth Sector representative to participate in the Summer Youth Camp in Tallahassee, Florida USA sponsored by Tallahassee Leon Federal Credit Union 7. Approval to send the Chairperson, Vice Chairperson, and the Chief Executive Officer to the Asian Credit Cooperative Union Forum 2016 in Incheon, Korea 8. Approval to send three (3) participants to the CLIMBS 45th Annual General Assembly in Davao City K. ADVOCACY AND LOBBYING INITIATIVES 1. Confirmation of a resolution strongly requesting for the exclusion of RA 9520, particularly Article 60 and 61 thereof, from the laws to be repealed under House Bill 4774, Section 28, items B and C in the Final Tax Reform Program of Government and to conduct information dissemination, to initiate a signature campaign among Federation members, and to lobby with congressmen and senators on this issue 2. Approval of the position paper that supports the call to end “ENDO” and promote the value of Labor Service Cooperative as an alternative model to empower workers to become real stakeholders in the industries they are engaged in, working hand in hand with companies in creating wealth for the nation, establishing long lasting industrial peace, and promoting full employment at the same time

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2 0 1 6 A N N UA L R E P O R T

4.

s e n o t s e l i M 1 decade st

MASS-SPECC traces its beginnings to the 1950’s when co-operatives started to take root in the country.

1962 - the Misamis Orienal-BukidnonCamiguin Federation of Cooperatives (MBC) was formed. Leaders of the MBC spearheaded the organization of the Southern Philippines Educational Cooperative Center (SPECC) on August 9, 1966.

SPECC pioneered the Pre-Membership Education Seminar (PMES), which was later adopted in law as a requirement for membership in primary cooperatives in the Philippines.

50th anniversary celebration August 9, 2016

2 decade nd

1973 - SPECC led povincial federations in forming the Mindanao Cooperative Alliance, renamed later to Mindanao Alliance of SelfHelp Societies (MASS); it provided auditing services to its members.

1971 - SPECC introduced the country’s first co-op mutual protection system, which is now known as CLIMBS Life and General Insurance Cooperative.

1978 - MASS ventured into its first business undertaking when it started the Central Fund Program, a deposit-taking and lending facility for its members.

3 decade rd

July 1, 1984 - MASS and SPECC consolidated into MASS SPECC Cooperative Development Center to streamline the operations of both organizations.

MASS

MASS-SPECC COOPERATIVE DEVELOPMENT CENTER

SPECC

2 0 1 6 A N N UA L R E P O R T

61

MASS SPECC started the computerization program with primary cooperatives, enabling them to move from manual to computer system, with the introduction of the General Ledger Systems.

Partnership with international development agencies re-focused on financial intermediation in the areas of information technology, consultancy, and central fund operations.

4th decade 1997 - construction of the six-storey office building of MASS SPECC in Cagayan de Oro City with investments from primary cooperatives and grant fund from MISEREOR. It also houses a cooperative hostel. The building serves as training and meeting venue for co-op leaders.

MASS-SPECC was re-ingeneered to focus on rural savings and financial intermediation. The Central Fund and the computerization of financial co-operatives became the holding unit with the other departments as subsidiaries.

1996 - in partnership with Développement International Desjardins (DID), MASS SPECC introduced the MASS SPECC Standard Run Time Edition (MSRTE), an integrated banking software for savings and credit cooperatives. MSRTE is now installed in over 200 primary cooperatives with 528 sites throughout the country.

1997 - MASS SPECC led the formation of the Coop NATCCO Partylist, which has now two (2) representatives in the House of Representatives.

5 decade th

2006 - launching of the first Pinoy Coop ATM, becoming the first non-bank member of MEGALINK (now BANCNET); currently with 39 ATM sites and 210,009 cards issued.

The 5th decade saw MASS SPECC launch several pioneering initiatives to deepen its services to cooperatives and to their individual members, as well as strengthen member participation in the affairs of the Federation.

2008 - the Mindanaw Microentrepreneur Award (MICMA) was launched to recognize the exemplary achievements of model coop members.

Organized Regional Steering Committees to deepen engagement with members

Engaging the youth through the Coop Youth Parliament (CYP). Innovations in programs included the Agri-Best Enterprise Systems Program (AgriBest) for farmers, and Management Development Program (MDP) for the next generation of co-op managers, with 97 graduates after four (4) batches

Capacity Building Program that allows cooperatives to assess their own performance and develop solutions with practitioner mentors, and contribution to the environment through SCOOPS program.

Audit Committee Report 2 0 1 6 A N N UA L R E P O R T

30

Dear Valued Cooperators and Esteemed Members:

W

e are pleased to report that the Audit Committee has made a series of discussions with both our internal and external auditors regarding their audit findings and recommendations and has made representations to the Board during its meetings for the said findings and recommendations.

The Committee, likewise, confirms the financial highlights, financial position, and cash flow of MASSSPECC for the year then ended, December 31, 2016, as our external auditor reported RECOMMENDATIONS: 1. The Committee recommends that Management should take the initiative in the following: a) Review the amount of Php 184 million as Accounts Receivables and subject the said amount to aging analysis, so that an appropriate amount could be provided as estimated allowance for probable losses. b) Review accounts with overdue loan receivables with loan loss provision and correspondingly write-off these accounts which cannot be collected anymore. Moverover, these written off accounts should be monitored from time to time for possible recoveries. c) Follow-up with member-cooperatives the collection of share capital with less than Php 25,000.00. 2.

On latest mandate of the CDA regarding compliance with the preparation and reporting of the Federation’s financial statements: after due consideration, the Committee agreed with Management to retain the same principles and procedures in the preparation of its financial statements.

3.

The Committee recommends to rehire BDO Roxas, Cruz, Tagle and Co. as outsourced Internal Auditor.

4.

The Committee also recommends the re-appointment of SGV & Co. as External Auditor.

Our sincere appreciation to the management and staff for their efforts to comply with the recommendations of internal audit on all its recurring findings such as increasing cash advances, improper doumentation of CTD’s, loan releasing, the incomplete signatories in check vouchers, and deficiences in other supporting doucments. We would also like to extend our heartfelt gratitude and appreciation to all member-cooperatives and everyone working behind the success of MASS-SPECC for the year 2016 and for the years to come. Happy 43rd General Assembly and may God bless us all!

SONIA L. CHUA, CPA Chairperson

REY GABILAGON Vice Chairperson

EXTERNAL AUDIT REPORT 2 0 1 6 A N N UA L R E P O R T

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Tiano-Yacapin Sts. Cagayan de Oro City Telefax +63 88 856-2339 Email: [email protected] Anahaw Road, Dinaville Village Ma-a, Davao City Telefax +63 82 244-1096

2 0 1 6 A N N UA L R E P O R T

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STATEMENT OF MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL STATEMENT

T

he management of MASS-SPECC COOPERATIVE DEVELOPMENT CENTER is responsible for the preparation and fair presentation of the financial statements including the schedules attached therein, for the years ended December 31, 2016 and 2015, in accordance with Philippine Financial Reporting Standards, and for such internal control as management determines is necessary to enable the presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Cooperative’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Cooperative or to cease operations, or has no realistic alternative but to do so. The Board of Directors is responsible for overseeing the Cooperative’s financial reporting process. The Board of Directors reviews and approves the financial statements including the schedules attached therein, and submits the same to the stockholders. Sycip Gorres Velayo & Co., the independent auditor appointed by the Board of Directors, has audited the financial statements of the Cooperative in accordance with Philippine Standards on Auditing, and in its report to the Members and Board of Directors, has expressed its opinion on the fairness of presentation upon completion of such audit

EVELIA R. SATOR, Ph.D. Chairperson ALETA A. GICOLE Treasurer

SONIA L. CHUA, CPA Chairperson of the Audit Committee

EMMA A. NIEVA, DM, CPA Treasurer

BERNADETTE O. TOLEDO, CPA Chief Executive Officer Signed on the 3rd day of March, 2017.

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34

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35

MASS-SPECC COOPERATIVE DEVELOPMENT CENTER STATEMENTS OF FINANCIAL POSITION

December 31 2015 2016 ASSETS

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36

Current Assets Cash and cash equivalents (Note 6) Loans and other receivables - net (Note 7) Other current assets (Note 11) Total Current Assets

P =435,877,438 487,285,276 63,113,442 986,276,156

=245,970,840 P 606,741,322 27,852,637 880,564,799

Noncurrent Assets Loans and other receivables - net (Note 7) Available-for-sale securities (Note 8) Property and equipment - net (Note 9) Investment property (Note 10) Retirement benefit asset (Note 20) Other noncurrent assets (Note 11) Total Noncurrent Assets

214,808,936 396,683,791 45,925,111 2,455,495 7,959,106 94,993,196 762,825,635

216,240,000 386,544,856 46,930,492 3,451,233 10,200,592 30,628,456 693,995,629

TOTAL ASSETS

=1,574,560,428 P =1,749,101,791 P

LIABILITIES AND MEMBERS’ EQUITY Current Liabilities Interest-bearing loans and borrowings (Note 12) Accounts payable and accrued expenses (Note 13) Short-term members’ deposits (Note 14) Interest on share capital and patronage refund payable (Note 16) Total Current Liabilities

P =182,818,274 109,629,477 270,633,043 17,721,954 580,802,748

P41,103,508 = 273,350,414 250,826,025 13,176,385 578,456,332

Noncurrent Liabilities Interest-bearing loans and borrowings (Note 12) Long-term members’ deposits (Note 14) Other noncurrent liabilities (Note 15) Total Noncurrent Liabilities Total Liabilities

38,165,146 814,099,191 2,581,389 854,845,726 1,435,648,474

10,821,429 686,587,879 2,972,360 700,381,668 1,278,838,000

313,453,317

295,722,428

Members’ Equity (Note 16) TOTAL LIABILITIES AND MEMBERS’ EQUITY

=1,574,560,428 P =1,749,101,791 P

See accompanying Notes to Financial Statements.

SGVCAG*S16*IND001

MASS-SPECC COOPERATIVE DEVELOPMENT CENTER STATEMENTS OF COMPREHENSIVE INCOME AND DISTRIBUTION OF NET SURPLUS Years Ended December 31 2015 2016

COSTS AND EXPENSES Interest on members’ deposits (Note 14) Employee benefits (Note 20) Interest on borrowed funds (Note 12) Depreciation and amortization (Note 9) Impairment losses (Notes 7, 9 and 10) Other operating expenses (Note 19) NET SURPLUS BEFORE INCOME TAX PROVISION FOR INCOME TAX (Note 22) NET SURPLUS OTHER COMPREHENSIVE INCOME Other comprehensive income to be reclassified to profit or loss in subsequent periods: Fair value losses on available-for-sale securities (Note 8) Other comprehensive income not to be reclassified to profit or loss in subsequent periods: Remeasurement loss on retirement benefit asset (Note 20) Increase in fair value of land (Note 9) TOTAL COMPREHENSIVE INCOME DISTRIBUTION OF NET SURPLUS (Note 16) General reserve fund Cooperative education and training fund Land and building fund Information and communication technology development fund Community development fund Interest on share capital and patronage refund

P55,626,904 = 39,653,607 24,007,317 21,340,688 10,308,903 – 2,852,138 153,789,557

P61,133,488 = 44,911,454 11,960,478 21,104,149 10,423,925 2,221,613 5,490,567 157,245,674

40,667,077 30,289,328 13,041,822 7,118,356 3,068,718 31,723,148 125,908,449

50,604,903 31,258,922 14,229,246 6,440,684 2,221,613 30,664,844 135,420,212

27,881,108

21,825,462

616,563

1,554,101

27,264,545

20,271,361

(6,169,809)

(8,580,471)

(4,589,226) – (10,759,035)

(4,980,991) 5,340,900 (8,220,562)

=16,505,510 P

=12,050,799 P

P5,452,909 = 1,363,227 1,090,583 817,936 817,936 17,721,954 =27,264,545 P

P4,054,272 = 1,013,568 810,854 608,141 608,141 13,176,385 =20,271,361 P

See accompanying Notes to Financial Statements.

SGVCAG*S16*IND001

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REVENUES Interest income on loans and other receivables (Note 7) Consulting and service fees (Note 17) Income from bank deposits and investments Services fees - conditional cash transfer (Note 18) Education and training Donation Other income

MASS-SPECC COOPERATIVE DEVELOPMENT CENTER STATEMENTS OF CHANGES IN MEMBERS’ EQUITY Years Ended December 31 2016 2015 SHARE CAPITAL (Note 16) Common: Balance at beginning of year Additional members’ contributions Balance at end of year Preferred: Balance at beginning of year Additional members’ contributions - net of transfers from (to) time deposits Balance at end of year Total share capital

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38

OTHER COMPONENTS OF EQUITY (Note 16) Unrealized loss on available for sale securities: Balance at beginning of year Fair value losses on available for sale securities (Note 8) Balance at end of year Remeasurement loss on defined benefit plan: Balance at beginning of year Actuarial losses on defined benefit plan (Note 20) Balance at end of year Revaluation increment on land: Balance at beginning of year Increase in fair value of land (Note 9) Balance at end of year Total other components of equity STATUTORY FUNDS (Note 16) General reserve fund: Balance at beginning of year Allocation from net surplus Adjustments Balance at end of year Cooperative education and training fund: Balance at beginning of year Allocation from net surplus Disbursements Balance at end of year Land and building fund: Balance at beginning of year Allocation from net surplus Balance at end of year Information and communication technology development fund: Balance at beginning of year Allocation from net surplus Balance at end of year Community development fund: Balance at beginning of year Allocation from net surplus Disbursements Balance at end of year Interest on share capital and patronage refund: Balance at beginning of year Allocation from net surplus Transfer to interest on share capital and patronage refund payable Balance at end of year Total statutory funds TOTAL MEMBERS’ EQUITY

P =218,002,794 20,312,115 238,314,909

P =194,086,773 23,916,021 218,002,794

7,222,083

11,119,094

37,070 7,259,153 245,574,062

(3,897,011) 7,222,083 225,224,877

(8,396,565) (6,169,809) (14,566,374)

183,906 (8,580,471) (8,396,565)

(8,626,965) (4,589,226) (13,216,191)

(3,645,974) (4,980,991) (8,626,965)

14,194,905 – 14,194,905 (13,587,660)

8,854,005 5,340,900 14,194,905 (2,828,625)

53,923,478 5,452,909 690,602 60,066,989

46,295,203 4,054,272 3,574,003 53,923,478

1,013,568 1,363,227 (1,013,568) 1,363,227

1,506,326 1,013,568 (1,506,326) 1,013,568

10,525,876 1,090,583 11,616,459

9,715,022 810,854 10,525,876

4,771,722 817,936 5,589,658

4,163,581 608,141 4,771,722

3,091,532 817,936 (1,078,886) 2,830,582

3,299,913 608,141 (816,522) 3,091,532

– 17,721,954 (17,721,954) – 81,466,915

– 13,176,385 (13,176,385) – 73,326,176

P =313,453,317

P =295,722,428

See accompanying Notes to Financial Statements.

SGVCAG*S16*IND001

MASS-SPECC COOPERATIVE DEVELOPMENT CENTER STATEMENTS OF CASH FLOWS

Years Ended December 31 2015 2016

=27,881,108 P

=21,825,462 P

13,041,822 7,118,356

14,229,246 6,440,684

419,880 (2,347,740) 46,113,426

2,221,613 (11,903,854) 32,813,151

120,887,110 (35,260,805)

(781,090) (25,329,687)

(165,085,487) 147,318,330 113,972,574 (12,293,835) 101,678,739

217,362,441 211,928,759 435,993,574 (15,518,089) 420,475,485

(16,308,744) (6,112,975) 575,858 (64,364,740) (86,210,601)

(182,586,617) (5,265,506) – (13,814,692) (201,666,815)

442,207,654

191,720,936

20,349,185 (273,149,171)

24,036,407 (368,822,509)

(390,971) (14,578,237) 174,438,460

(8,467,300) (18,331,084) (179,863,550)

NET INCREASE IN CASH AND CASH EQUIVALENTS

189,906,598

38,945,120

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR

245,970,840

207,025,720

CASH AND CASH EQUIVALENTS AT END OF YEAR (Note 6)

P =435,877,438

P =245,970,840

CASH FLOWS FROM INVESTING ACTIVITIES Additions to: Available-for-sale securities (Note 8) Property and equipment (Note 9) Proceeds from disposal of investment property (Note 10) Increase in other noncurrent assets (Note 11) Net cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from: Interest-bearing loans and borrowings (Note 12) Issuance of share capital - net of transfers from (to) time deposits (Note 16) Payment of interest-bearing loans and borrowings (Note 12) Decrease in: Other noncurrent liabilities (Note 15) Statutory fund Net cash flows from (used in) financing activities

See accompanying Notes to Financial Statements.

N.B. Notes to FS are found in the GA kit.

SGVCAG*S16*IND001

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CASH FLOWS FROM OPERATING ACTIVITIES Net surplus before income tax Adjustments for: Interest expense on borrowed funds (Note 12) Depreciation and amortization (Note 9) Impairment losses on property and equipment and investment property (Notes 9 and 10) Net change in retirement benefit asset (Note 20) Operating income before working capital adjustments Decrease (increase) in: Loans and other receivables (Note 7) Other current assets (Note 11) Increase (decrease) in: Accounts payable and accrued expenses (Note 13) Members’ deposits (Note 14) Net cash generated from operations Interest paid Net cash flows from operating activities

2016 MASS-SPECC AWARDEES 2 0 1 6 A N N UA L R E P O R T

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MINDANAO CO-OP LEADERSHIP AWARD Evelia R. Sator, Ph.D PIONEER SHARE CAPITAL CONTRIBUTORS Sta. Ana Multi-Purpose Cooperative Kiblawan Multi-Purpose Cooperative Oro Integrated Cooperative CLIMBS Life and General Insurance Cooperative Notre Dame of Jolo Multi-Purpose Cooperative Nabunturan Integrated Cooperative TOP 5 OUTSTANDING CO-OP TIME DEPOSITORS Oro Integrated Cooperative Tagum Cooperative MSU-IIT National Multi-Purpose Cooperative Sta. Ana Multi-Purpose Cooperative Aurora integrated Multi-Purpose Cooperative TOP 5 SHARE CAPITAL CONTRIBUTORS Bukidnon Government Employees Multi-Purpose Cooperative Lorenzo Tan Multi-Purpose Cooperative Pantukan Chess Club Cooperative ICTUS Premier Multi-Purpose Cooperative Alamada Multi-Purpose Cooperative TOP PERFORMING ATM SITES Tagum Cooperative Oro Integrated Cooperative Manuel Guianga and Sirib Growers and Employees Multi-Purpose Cooperative Baug CARP Beneficiaries Multi-Purpose Cooperative ACCESS (A ONE COMPETITIVE CHOICE FOR EXCELLENCE IN SERVICE AND SOUNDNESS) SILVER BRAND AWARD Tagum Cooperative

2016 SIPAG AWARD (SIPAG – Social Institute for Poverty Alleviation and Governance) Maragusan Growers Multi-Purpose Cooperative ICTUS Premier Multi-Purpose Cooperative Tago Agro-Industrial Development Cooperative BILLIONAIRE CO-OPS’ CIRCLE AWARD Sta. Ana Multi-Purpose Cooperative Sta. Catalina Credit Cooperative Panabo Multi-Purpose Cooperative Nabunturan Integrated Cooperative Agdao Multi-Purpose Cooperative CENTURY CO-OPS’ CIRCLE AWARD Inter-Office Employees and Businessmen Credit Cooperative Allied Services Multi-Purpose Cooperative Cannery Multi-Purpose Cooperative SERVICE AWARDEES Roberto U. Padilla Rey F. Gabilagon Atty. Jose Agerico R. De Guzman Democrito A. Buladaco Eleonor A. Dillena Sanny D. Seco Arnulfo L. Murro Sonia L. Chua MAASDANGON AWARDEES Mier Matalines Semitara (15 years in service) Ermie L. Hilario (20 years in service)

FULL CETF REMITTANCE

9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41.

Aurora Integrated Multi-Purpose Cooperative Alicia Neighborhood Multi-Purpose Ampayon Multi-Purpose Cooperative Banga Agrarian Reform Community Cooperative Bayside Multi-Purpose Cooperative Batus Farmers Multi-Purpose Cooperative Bukidnon Development Multi-Purpose Cooperative Bukidnon Government Employees Multi-Purpose Cooperative Buklod Multi-Purpose Cooperative CARAGA State University Administrative Personnel Multi-Purpose Cooperative Cooperative Bank of Agusan Norte Butuan City Coops for Christ Multi-Purpose Cooperative – Mindanao Cooperative Union of Iligan City DENR CARAGA and Community Multi-Purpose Cooperative Davao Oriental Health Personnel Multi-Purpose Cooperative Dujali Free Farmers Multi-Purpose Cooperative El Grande Multi-Purpose Cooperative First Agrarian Reform Credit Cooperative Glan Multi-Purpose Cooperative Greater Midsayap Area Multi-Purpose Cooperative Hinatuan Government Employees Multi-Purpose Cooperative Human Resource Multi-Purpose Cooperative ICTUS Premier Multi-Purpose Cooperative Iligan Dealers Multi-Purpose Cooperative Iligan Cement Multi-Purpose Cooperative Iligan City Government Employees Multi-Purpose Cooperative Iligan Light Employees Multi-Purpose Cooperative Initao National Comprehensive High School Teachers and Employees Cooperative Inter-Office Employees and Business Credit Cooperative Jobnet Service Cooperative Kauyagan Savers Multi-Purpose Cooperative Kauswagan Community Multi-Purpose Cooperative Lake Sebu Countryside Development Multi-Purpose Cooperative Loreszon Tan Multi-Purpose Cooperative Mahayag Farmers Multi-Purpose Cooperative Mahayahay Credit Cooperative Makilala Multi-Purpose Cooperative Maramag Community Multi-Purpose Cooperative Malimuni Municipal Employees Multi-Purpose Cooperative Mambajao Credit Cooperative Mediatrix Multi-Purpose Cooperative

42. 43. 44. 45. 46. 47. 48. 49. 50. 51. 52. 53. 54. 55. 56. 57. 58. 59. 60. 61. 62. 63. 64. 65. 66. 67. 68. 69. 70. 71. 72. 73. 74. 75. 76. 77. 78. 79. 80. 81. 82. 83. 84.

Micro-Entrepreneurs’ Multi-Purpose Cooperative Midsalip Farmers Multi-Purpose Cooperative MOCRECO Multi-Purpose Cooperative MUST Employees Multi-Purpose Cooperative MSU-IIT National Multi-Purpose Cooperative MSU-SULU Multi-Purpose Cooperative Notre Dame of Jolo Multi-Purpose Cooperative News Multi-Purpose Cooperative Oro Integrated Cooperative Oro Court Employees Multi-Purpose Cooperative Oro Savings and Sharing Cooperative Ozamis City Peoples Multi-Purpose Cooperative Pacement Multi-Purpose Cooperative Pagadian City Government Employees Multi-Purpose Cooperative Paglaum Multi-Purpose Cooperative Pagtinabangay Multi-Purpose Cooperative Panabo Multi-Purpose Cooperative Pantukan Chess Club Cooperative PNP Bantek Kasunayan Development Cooperative Polomolok Multi-Purpose Cooperative Ramon Magsaysay Employees Multi-Purpose Cooperative Sacred Heart Multi-Purpose Cooperative Salug Valley Compact Farm Multi-Purpose Cooperative Servus Savings and Credit Cooperative SCI Multi-Purpose Cooperative Socorro Empowered Peoples’ Multi-Purpose Cooperative SRT Tacurong City Cooperative SRT Digos Cooperative of Davao del Sur Sta. Ana Multi-Purpose Cooperative Sta. Catalina Credit Cooperative Sta. Catalina Multi-Purpose Cooperative St. Michael Multi-Purpose Cooperative Sto. Nino Teachers and Farmers Multi-Purpose Cooperative Surigao Employees and Entrepreneurs Multi-Purpose Cooperative Tagnanan CARP Beneficiaries Cooperative Tagum Cooperative Tibud sa Katibawasan Multi-Purpose Cooperative Timbermines Multi-Purpose Cooperative Toril Community Cooperative Zamboanga del Sur Government Officials and Employees Cooperative Zillovia Womens Multi-Purpose Cooperative Zamboanga del Sur Agricultural College Multi-Purpose Cooperative 634 Multi-Purpose Cooperative

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2 0 1 6 A N N UA L R E P O R T

1. 2. 3. 4. 5. 6. 7. 8.

2016 Mindanaw Micro-entrepreneur Award (MICMA) 2 0 1 6 A N N UA L R E P O R T

42

OBJECTIVES 1.

To acknowledge the contribution of cooperatives in reducing poverty through the coop’s support for micro-enterprises and showcase the best practices on how cooperatives responded to members’ needs and preferences, and achieved the desired changes in their lives 2. To create public awareness to gain strong and create massive impact in microenterprise sector

CATEGORIES Nanlimbasog

Mauswagon

The NANLIMBASOG Category is open to microentrepreneurs whose businesses are now their families’ reliable source of income. Asset size of the microenterprise must have a market value of not more than P300,000.00, inclusive of those rising from loans, but exclusive of the land on which the particular business entity’s office, plant and equipment are situated.

The MAUSWAGON Category is open to micro-entrepreneurs that have grown their businesses to a level that is now generating employment for people apart from the household or family members. Asset size of the microenterprise must have a market value above P300,000.00 up to a maximum amount of P 1 million, inclusive of those rising from loans, but exclusive of the land on which the particular business entity’s office, plant and equipment are situated.

Micro-Agri The MICRO-AGRI Category is open to farmers whose agribusinesses are now their families’ reliable source of income. Asset size of the agri-enterprise must have a market value of not more than P300,000.00. The enterprise may include farm practices, such as mono-crop farming, diversified farming, or integrated farming system. The category also considers valueadding practices for product differentiation and increased revenues.

RUTH’S TRUTH: Buko Pie Goodness for Success GRAND WINNER

RUTH M O D E Q UI LLO

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CATEGORY: NANLIMBASOG

F

rom small beginnings to a bigger, more definitive journey in business, Ruth Modequillo never knew that selling food for snacks in schools would lead her to start a more serious venture in food production, until it became true.

“

We utilize 200 pieces of young coconut to produce 90 boxes of Neneng’s Buko Pie everyday. I look forward to increasing those numbers to reach as many people as we can.

”

—Ruth Modequillo

Now focused on Buko Pie production, Ruth has come a long way in maximizing her talent, effort, and resources to grow her family business and increase production volumes. “Nothing gives me more delight than to see my Buko Pie product becoming available to more and more people”, she reveals. A member of the MSU-IIT Cooperative, Ruth believes that seven years of coop membership has taught her the value of saving.

2 0 1 6 A N N UA L R E P O R T

MSU-IIT NMPC, Palao, Iligan City

2 0 1 6 A N N UA L R E P O R T

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FIRST PLACER MICHAEL FLORES Servus MPC, Initao Misamis Oriental

SECOND PLACER ANTONIETA SAGUINDANG Gata Daku MPC, Clarin Misamis Occidental

CATEGORY: NANLIMBASOG

CATEGORY:

Michael’s Brand of Customer Care

A

pplying what he learned in school, Michael Flores started as an ordinary car mechanic. But with help from friends, he started his own car repair shop. Never letting his speaking disability prevent him from effectively dealing with clients, Michael is able to build his customer base and enjoys a significant patronage of his car care services. A member of Servus Savings & Credit Cooperative in Initao, Misamis Oriental, Michael acknowledges the big boost the cooperative has given his business through its financial assistance programs, as well as its endorsements to coop members of his car repair services. “As a coop member, I see to it that I take diligence in my obligations and to regularly save for my future needs”, Michael says.

“

Disability is not a hindrance to our ambition. With hard work and with help from our God almighty, nothing is impossible.

”

—Michael Flores

NANLIMBASOG

A

a leap of faith

member of GATA DAKU Multipurpose Cooperative in Clarin, Misamis Occidental since 2008, Antonieta Saguindang attributes her business success to having become a cooperative member. It was during this time when she decided to take a shot at expanding her small sari-sari store through a loan that GATA Coop granted her. The move proved to be wise, for not only did she become successful in growing her business into a full-scale sari-sari store. She had also been able to venture in hog raising and rice growing. Antonieta, a 55-year old widow and mother of four children, could not thank GATA Coop enough for trusting her and helping her succeed. With her flourishing businesses, she is able to send her children to school and is able to provide for their other needs as well. She believes in hard work and in building good customer relationships.

“

I see to it that I am always a coop member of good standing.

”

—Antonieta Saguindang

Looking Forward, Paying Forward GRAND WINNER

CATEGORY: MAUSWAGON

T

he MSUIIT NMPC in Pala-o, Iligan City has seen significant success in helping Arvin Quijada grow his business from a single entity of providing office supplies to schools and cooperatives, to branching out into food deliveries; an additional line of business established as a separate entity under one ownership. Arvin’s foresight complements his wife’s

“

From my simple skepticism on what the coop’s aims are, we have come a long way in experiencing the benefits the coop can deliver to its members. We’re no less than grateful for that. —Arvin Quijada

”

persistence in building a strong customer base, consistently opening growth opportunities for their business to naturally diversify. Arvin acknowledges the greatly significant boost in their business that came from the MSU-IIT Coop. “I had three options; whether to borrow money from the bank, from the loan sharks, or from the coop—and the choice became clear to me that it had to be from the coop. We’re really thankful to the coop for what we have achieved in our business”, Arvin narrated. Now owning two companies (one in the office supplies business and the other in food deliveries), Arvin and his wife, Janusa, are firm in their belief in the importance of taking care of their employees and to be constantly seeing to their welfare. “Aside from providing them with working clothes, we make sure in providing them with Vitamin C supplements. They need to be protected from the sun and the rain”, he explains. It seems like the Quijadas are paying it forward—that they’re actually passing on to their employees the help and support they’re receiving from the MSU-IIT Cooperative. For such a good thing, it should go a long way.

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2 0 1 6 A N N UA L R E P O R T

ARVI N Q UI JADA

MSU-IIT NMPC, Palao, Iligan City

2 0 1 6 A N N UA L R E P O R T

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FIRST PLACER MARIVIC BULAYBULAY Gata Daku MPC, Clarin Misamis Occidental

FIRST PLACER RHODORA OLADO MSU-IIT NMPC, Palao Iligan City

CATEGORY: MAUSWAGON

CATEGORY: MICRO-AGRI

hard work beats Adversity

F

rom a life of farming pepper and bananas, Marivic Bulaybulay and her husband could hardly make both ends meet. But when she decided to embark on selling a whole range of vegetables and root crop products, not as a farmer but as a full time trader, things began to look up Marivic’s prospects became even rosier when she got invited by some local teachers to join their grouping as members of the Gata Daku Multipurpose Cooperative in Tukuran, Zamboanga del Sur. Today, thanks to the valued assistance and support of the Gata Daku MPC, Marivic is able to expand by selling groceries and more spices. She has also been able to venture into selling livestock, maximizing her market presence. I always make it a habit

“

to wake up very early in the morning to serve as many customers as possible. I also make sure that I strictly fulfill my obligations at the coop, since it has helped me so much in expanding our family business.

”

—Marivic Bulaybulay

a golden goal in coal

F

or twenty years, Rhodora Olado, together with husband Nestor, stuck to her chosen business of charcoal production.

Using crude transport (a carabao-driven carriage) in buying and gathering coconut shells from around the areas of Lanao del Norte, Rhodora kept her faith in the great promise of the charcoal business. Now with three trucks hauling coconut shells from faraway sources, they are able to take stock of these shells on larger volumes, giving their business a big boost in revenue margins.

“

I am proud to tell anyone that the MSUIIT Coop really help people who are willing to strive to make their businesses better, and eventually improving the quality of their lives. —Rhodora Olado

”

Passion Leads to Diversification GRAND WINNER

NEMIA BUHIAN

Servus MPC, Initao, Misamis Oriental

CATEGORY: MICRO-AGRI

B

oth an agriculturist and a licensed teacher, Nemia Buhian found it easy to decide which path to pursue in life. With a fierce passion for agriculture development, Nemia has poured all the hard work and her energies into managing their farm. From growing coconuts to establishing a diversified farm, Nemia’s hard work is all painted on the walls of the Buhian Diversified Farm. Aside from maximizing the farm’s coconut produce, she developed livestock propagation and the growing of vegetables and herbs.

“

The Servus Multi-Purpose Cooperative has helped me a lot. The financial opportunity they have given me has tremendously helped me as a farmer. —Nemia Buhian

”

The farm’s applied methods have encouraged visitors from nearby academic institutions as well as farmers who intend to widen their knowledge and exposure in diversified farming.

2 0 1 6 A N N UA L R E P O R T

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2 0 1 6 A N N UA L R E P O R T

48

2016-2017

board of directors

KEY OFFICERS

BACK (left to right): Roberto U. Padilla (Elected-at-Large), Arnulfo L. Murro (Representing Region IX), Bernadette O. Toledo (Ex – Officio), Pacienciano A. Tomarong (Elected-at-Large), Sanny D. Seco (Representing Caraga Region)

Aleta A. Gicole Treasurer

Emma A. Nieva Treasurer

FRONT (left to right): Nora A. Clar (Vice Chairperson & Representing Region X), Evelia R. Sator (Chairperson), Ninfa B. Macabenta (Representing Region XII), Thea Janica Gwenn C. Handumon (Youth Sector) Maricelle M. Nueva BOD Secretary NOT IN PHOTO: Donato A. Almador (Representing Region XI), Eleonor S. Dillena (Representing ZBST), Ronnie Feliano (Women Sector)

Bernadette O. Toledo Chief Executive Officer

2 0 1 6 A N N UA L R E P O R T

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2016-2017

committees BACK (left to right): Rey F. Gabilagon (Audit Committee), Democrito A. Buladaco (Secretary, Election Committee), Daven P. Gamolo (Investment Committee), Joselito S. Enot (Mediation & Conciliation Committee), Jose Agerico R. De Guzman (Chairman, Election Committee), Efren M. Bravo (Ethics Committee), Mansueto V. Dela Peña (Credit Committee)

FRONT (left to right): Dr. Rhodora S. N. Englis (Investment Committee), Miriam R. Baloyo (Women Sector, Investment Committee), Sonia L. Chua (Audit Commttee)

NOT IN PHOTO: Romeo R Busalla (Chairperson, Mediation and Conciliation Committee), Mario A. Baterna (Vice-Chairperson, Mediation and Conciliation Committee), Edgar G. Amoronio (Chairperson, Ethics Committee), and Jimmy E. Beray (Secretary, Ethics Committee)

2 0 1 6 A N N UA L R E P O R T

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2016-2017

REGIONAL STEERING COMMITTEE OFFICERS POSITION

Region 9

Region 10

Region 11

Region 12

CARAGA

ZBST

Chairperson

Arnulfo L. Murro BAFAMCO

Nora A. Clar MSU-IIT NMPC

Donato A. Almador El Grande MPC

Ninfa B. Macabenta Polomolok MPC

Sanny D. Seco News MPC

Eleonor S. Dillena MEMPCO

Vice Chairperson

Marilou Banding MWIMPC

Julius Haganas ICGEMPC

Roberto U. Padilla PCCC

Rodolfo A. Batoy ICTUS Premier MPC

Edelito Sangco SOEMCO

Hja Rohina Adju MSU Sulu MPC

Secretary

Jinky Flores GDMPC

Coraninfa G. Vivar MCC

Agripino L. Torres MAGSIGE MPC

Glory Grace C. Albaran SRT Tacurong MPC

Romulo Salvador CARSUADPMCO

Antonio Matias PMFC

Treasurer

Porferia A. Sayson USDMPC

Willy G. Buquis NEMPC

Caridad C. Aribe Laak MPC

Jovita Felongco, NDMPC

Luxmi B. Auxilio BCBMPC

Leonor A. Aizon ZCGEMPCO

Auditor

Wilfe Quimno AICO

Edwin P. Quisido Riza Mae Velasco ICMPC DIMAVEMC

Leopoldo Dulay MakMPC

Mario S. Paver Mahayahay MPC

Juliun Jailani MSU Sulu MPC

O

ur 50th anniversary celebration in August 2016 prompted us to embark on a strategic thinking process to map out a new direction for the future.

Clearly, the path to success in the future has to be taken by all cooperatives working together in uplifting the lives of their members.

The process that we undertook involved three steps: 1. An independent research was commissioned to determine the primary cooperatives’ perception of MASS SPECC as a federation, using selected coop leaders as key informants. 2. During the Ownership Meetings, we consulted the general membership from all the regions, on important issues facing them as primaries and the coop movement as a whole. 3. We gathered a select group of coop leaders to analyze the results of the regional consultations and to translate these results into actionable agenda. 4. The Federation’s Board, committees, and the management formulated a strategic plan to guide us in the next five (5) years, using the ideas from the consultations as key inputs.

Based on this framework, MASS-SPECC puts forward its Strategic Plan for 2017-2021:

Our strategic thinking process resulted in two major points: 1. That individual members of cooperatives are the key measure of success and must now be the focus of cooperative promotion and development; and 2. That, given the significant internal and external challenges that cooperatives face in the country, cooperatives must think, act, and move forward as a movement.

Cooperate, Collaborate, Differentiate

VISION:

All members enjoy better quality of life The economic success of primary cooperatives must be seen in the improved lives of their individual members, even as they contribute to the development of the community as a whole.

OVERARCHING STRATEGY: Cooperatives must work together to achieve significant market presence throughout the country and differentiate themselves to increase visibility in the marketplace.

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MASS-SPECC STRATEGIC PLAN 2017 - 2021

GOALS Goal 1:

Strengthen the cooperative identity

2 0 1 6 A N N UA L R E P O R T

52

Goal 5:

Scale up services, programs, and shared financial services

This goal shall have been achieved when: • all members adopt one vision • all members adopt a common brand • all members including MASS SPECC experience an increased number of quality members • 60% of Federation members are rated ‘mature’ on Cooperative Essentials in the CB program

This goal shall have been achieved when: • 60% of member cooperatives subscribe to most of MSP services and programs • individual members can cross-transact business with other cooperatives (i.e. deposits, payments, withdrawals, remittances)

Goal 2:

Goal 6:

Strengthen cooperative governance and management

This goal shall have been achieved when: • membership participation in MSP is increased to 90% • 20% of MSP members are rated ‘mature’ in all capacity areas of the CB program • MSP is ISO certified

Goal 3:

Institutionalize support systems This goal shall have been achieved when: • 90% of member cooperatives participate in the CB program • the Stabilization Fund is operational • the Deposit Guarantee Fund is operational • SCOOPS is operational • 20% annual increase in pooled GRF & Retirement Fund is realized • 60% of MSP members are inter-connected in one IT system

Goal 4:

Institutionalize self-regulatory mechanisms This goal shall have been achieved when: • CDA or Bangko Sentral ng Pilipinas (BSP) shall have deputized MSP to regulate cooperatives • MSP has aquired self-regulatory power and authority • 60% of member cooperatives adopt standardized processes and products

Set up collaborative programs and enterprises in key social and economic sectors This goal shall have been achieved when: • one (1) social enterprise serving the agricultural sector within MSP membership is set up • one (1) federation (for agricultural or workers’ cooperatives) is set up • the MSP mortuary system covers 80% of coop members • Joint project with coop investments in agriculture and health sectors is set up

Goal 7:

Ensure viability and sustainability of the cooperative movement This goal shall have been achieved when: • all members remit 100% CETF • the subscribed share capital in MSP is paid in full • excess funds of member cooperatives are deposited in MSP

By the end of 2017, the following plans shall have been achieved:

CENTRAL FUND • P 800 million worth of loans released to 60 qualified borrowers • Five (5%) percent of less Portfolio at Risk (PAR-1 day) • 100% loan loss provision complied with • P500 million loan fund from funding institutions made available (to be drawn anytime) • P900 million outstanding deposits reached • P320 million share capital accumulated • Product Bundling implemented • Risk Management System implemented • Interest rate based on credit risk set • Agri-BEST program implemented in 12 member co-operatives • Eight (8) co-operatives established Business Development Service (BDS) on Agri-BEST program • At least two (2) co-operatives per region facilitated with DTI training for MSME members • At least four (4) partnerships/linkages established with Government line agencies, NGOs and Private institutions • At least one (1) type of product sold and produced by several coops marketed under a common brand • A social enterprise, developed as marketing arm of coops engaged in Agri

INVESTMENT • Consultant to set-up 2017-2022 Investment Plan hired • Investment Officer to manage the Investment Unit hired • Investment Workshop and Planning conducted • Investment policies and guidelines approved and implemented • At least one (1) Investment project piloted INSTITUTE OF COOPERATIVE STUDIES • Learning materials to promote and strengthen cooperative identity revised • 80 CDA-required training conducted • 20 specialized training for co-operative officers conducted • 20 specialized training for co-operative managers and staff conducted • 15 HR competency-based training for cooperative staff conducted • Competency-based training system for cooperative sector in the Philippines developed with TESDA, CDA, and other cooperative organizations • 30 active education committees in-place in all regions • 10 active cluster partners operating in all regions

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2017 ACTION PLANS & targets

• • • • • • •

2 0 1 6 A N N UA L R E P O R T

54

•

15 active facilitators present in all regions 40 co-operative managers completed Management Development Program One (1) youth leadership development program conducted Master’s program for CEO/ GMs in partnership with the University of Asia and the Pacific (UA&P) conducted Four (4) quarterly issues of the Coop MONITOR published Co-operative industry data analyzed and disseminated to MSP members 75 % of the financial data of MSP members updated in the database One (1) evaluation study on the effectiveness of enhanced learning materials conducted

CONSULTANCY • Three (3) Mentors’ training conducted • 13 volunteer mentors actively engaged in mentoring • 10 new co-operatives mentored • Two (2) Mentor learning sessions conducted • 21 co-operatives assessed using Capacity Assessment Tool (CAT) • Two (2) leadership fora initiated • 10 co-operatives with increased CAT scores in at least three (3) capacity areas of Capacity Building assessed • 100% mentored co-operatives adopting manuals and tools • At least four (4) bundled services for mentee co-operatives facilitated • 22 co-operative CEOs/General Managers coached • 36 co-operative engagements on strategic planning, operations review, mid-year and year-end planning, coaching, and conduct of feasibility studies INFORMATION & COMMUNICATION TECHNOLOGY • Two (2) co-operatives connected to Koop Konnect • 100% compliant with Europay, MasterCard, Visa (EMV) Security Standard • Four (4) BancNet On-line (BOL) services implemented • Five (5) new ATM terminals installed • 10% increase in e-services transactions • 30 MBWin sites installed • 10 co-operatives installed with e-Registration and e-Voting system • 100% of MIGS co-operatives installed with Coop Information System (CIS) • Two (2) new MBWIN MIS application implemented

• • • • • • • • • •

25 co-operatives availed Backup services 60 co-operatives availed SMS services Five (5) co-operatives availed hardware and security services Upgraded datacenter complied with required standards One (1) Disaster Recovery site implemented Infrastructure Monitoring Solutions implemented Datacenter hardware components made available 24/7 Knowledge-based processes, procedures, and training for all IT services implemented Standard system manuals and templates developed ICT Service Portfolio branded

ICT PROJECT • Two (2) Federations/Unions in ICT services engaged • One (1) co-operative with multi-branches implemented Koop Konnect Solutions • Two (2) new Koop Konnect Channels developed and ready for implementation • Project Management System implemented • New IT systems projectized: R Data Analytics system R Document Management system R Cloud backup system MEMBERSHIP AND NETWORKING • 75 co-operatives or 25% of membership adapting a common vision for the movement • 150 member-co-operatives are in Good Standing • 70% of total membership in the region participate in OMs and GA • MSP deputization lobbied with CDA and legislature • SCOOPS and Stabilization Fund strengthened • Discussion on the creation of a workers’ cooperative federation through the workers’ desk initiated • Assisted in planning the set-up of a network of hospitals and/or housing projects • 20% increase of capitalization, deposit, and CETF remittance • At least five (5) new members per region recruited • Assisted in the compliance for ISO certification. • At least one (1) implementation of adopted cooperative integration model per region • Assisted in the development of standards and adaption by the members • Proposed network mortuary program revisited and concept paper drafted

PROJECT DEVELOPMENT UNIT • Nine (9) MICMA winners awarded (three (3) winners each in three (3) award categories) and their stories published • Agri-BEST program relevant tools developed • At least four (4) CB Program manuals finalized • At least seven (7) CB Program tools finalized • At least three (3) project proposals completed and submitted to funders ADMIN & SUPPORT GROUP • Talent and Career Management program implemented • Regulatory requirements complied with • At least 30% increase in investible funds • Asset Management sub-unit (AMSU) created • One (1) consultant to assist in the establishment of AMSU • Fund investment ROI to reach above inflation rate and WACC • Improved and implemented policies, processes and procedures for: R Accounting system R Cash management system R Fund Management system R Property disposal system R Maintenance, Safety and Security of properties R Human Resource System R Internal Control R Disaster Risk and Reduction Management (DRRM) • Php 1.5 billion Conditional Cash Transfer (CCT) for 631,000 beneficiaries in six (6) regions in Mindanao released

GOVERNANCE The following activities/events conducted: • Three (3) BOD and two (2) Joint Officers meeting • Three (3) Executive Committee meetings • Two (2) Audit Committee activities • Two (2) Election Committee meetings • Two (2) Investment Committee meetings • One (1) Mediation and Conciliation Committee meeting • One (1) Ethics Committee meeting • Two (2) Managers’ Club meetings • One (1) Chairperson’s forum • Two (2) CYP meetings • Two (2) GAD Committee meetings • Two (2) Special Committee meetings FINANCIAL TARGETS • Total Assets of at least P 2 billion achieved • Net Surplus of P 28 million realized • Total Capital Expenditures P 26.9 million spent • Dividends and patronage refund above prevailing market rates given

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ENTERPRISE RISK MANAGEMENT • 70% Standard ITRMS co-operative policies implemented • 90% of MSP ITRMS policies approved and implemented • 50% MSP units risk processes assessed and mitigating controls implemented • 100% support to MSP Units on various capacities extended

MASS-SPECC Cooperative Development Center

2017 budget 2 0 1 6 A N N UA L R E P O R T

56

2017 Budget

REVENUES Interest on Loans Consulting and service fees Education and Training Interest from bank deposits and investments Miscellaneous Total Revenues EXPENSES Personnel Cost Salaries and Wages Employees benefits SSS Contribution Philhealth Contribution CERP Contribution HDMF contribution Total Personnnel Cost Interest expense on deposits Interest on borrowed funds and other charges Meetings and conferences Depreciation and amortization Trainings and seminars Travel and Transportation Staff development Provision for retirement benefits Communication Professional fees License Fee Provision for doubtful accounts Light and Power Security and Janitorial Materials and Supplies Repair and maintenance Marketing expenses Taxes and Licenses Rental expense Collection and Litigation expense Insurance Miscellaneous

NET SURPLUS

64,173,214 51,448,141 14,000,000 26,886,978 17,541,828 174,050,162

23,888,371 7,983,733 1,053,204 196,374 246,600 129,750 33,498,032 15,932,969 44,805,886 7,646,765 7,590,483 4,916,016 5,556,430 3,345,762 6,952,773 2,016,537 2,887,731 1,500,000 2,151,393 1,371,447 1,288,568 830,211 977,021 690,024 350,000 325,000 219,418 100,000 1,097,695 146,050,162 28,000,000

I

COMMITMENT TO SDG

n June 2016, a big gathering of representatives of MASS SPECC members gave special attention to the United Nation’s Sustainable Development Goals, a global call to action for Transforming Our World: the 2030 Agenda for Sustainable Development. It soon came to light that, on their own, many cooperatives have already taken concrete steps in addressing some of the Goals. At the same time, there was a realization that cooperatives can do much more, in all 17 goals. Concrete action points were identified that if pursued by cooperatives, individually and as a movement, could reinforce their commitment to the achievement of their social goals, thereby contributing to world peace and prosperity.

2 0 1 6 A N N UA L R E P O R T

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Contact us: MAIN OFFICE

MASS-SPECC Tiano-Yacapin Sts. Cagayan de Oro City Telefax +63 88 856-2339 Email: [email protected]

DAVAO OFFICE

MASS-SPECC Anahaw Road, Dinaville Village Ma-a, Davao City Telefax +63 82 244-1096

www.mass-specc.coop