What a cooperative actually is

A cooperative is an organization owned and controlled by the very people it serves, called members, rather than by outside shareholders chasing profit. Members pool resources, usually through share capital and savings, so the group can offer things like loans, discounted goods, or shared services that would be harder for any one member to arrange alone.

The defining rule is one-member-one-vote, no matter how much share capital someone holds. A member who contributed ₱1,000 has exactly the same say at a general assembly as a member who contributed ₱50,000, which is the opposite of a regular corporation, where voting power scales with how many shares you own.

Cooperatives in the Philippines come in several forms: credit cooperatives focused on savings and loans, multipurpose cooperatives that combine several services, and producer or consumer cooperatives built around a specific trade. They're a fixture of barangays, parishes, workplaces, and farming communities, and they sit alongside an even older, more informal tradition, the paluwagan, which the next lesson covers.

A barangay multipurpose cooperative has 200 members who each contributed at least ₱1,000 in share capital. Because it's member-owned, a member who needs a ₱10,000 loan for a small sari-sari store can borrow from the pooled funds at a lower rate than a commercial lending app would charge, and gets a vote on how the cooperative is run regardless of how small their share is.