Proposal pushed for cooperatives to collect govt insurance

MANILA, Philippines (Mindanao Examiner / July 17, 2011) - A Filipino lawmaker has proposed to allow the country's more than 18,000 cooperatives to collect government health insurance from its members.

In House Resolution 1455 he filed, Congressman Arnel Ty urged the Philippine Health Insurance Corporation to enable accredited cooperatives as collecting agents, following the laudable example of the Social Security System (SSS).

In pushing for his resolution, Ty invoked the mandate of the Constitution for the State “to promote the viability and growth of cooperatives as instruments for social justice and economic development.”

Ty said the Philippine Health Insurance Corporation would provide cooperatives a new revenue stream and thus building up their financial capabilities as business enterprises and drivers of economic and employment growth.

The SSS, Philhealth and Pag-IBIG would also benefit from a potential increase in contributing members, he said.

Ty cited the need to redistribute in favor of cooperatives, the enormous income from service fees amassed by commercial banks as principal collecting agents of the SSS, Philhealth and Pag-IBIG.

“Banks now capture the bulk of service fees paid by the SSS, Philhealth and Pag-IBIG. One way to reallocate this huge income is to allow cooperatives to serve as collecting agents of the three state-run financial institutions,” he said.

Ty said a total of 7,196,097 Filipinos, or 13.51 percent of all Filipinos 20 years old and above, now belong to 18,205 registered cooperatives, based on Cooperative Development Authority statistics as of Dec. 31, 2010.

These cooperatives with an average of 395 members each have combined assets in excess of P158.5 billion, and an aggregate paid up capital of more than P35.6 billion, according to Ty, a member of the House committee on trade and industry.

“Cooperatives deserve our strong support. They are improving the lives of a growing number of families by producing additional economic activity and new jobs, besides promoting thrift among their members and providing them much-needed financial services,” Ty said.

“Cooperatives also serve as crucially important training grounds for their members in democratic leadership, responsible citizenship and simple business operation and management,” he added.

The SSS has launched a process wherein self-employed and voluntary members may pay their contributions as well as educational, salary, calamity and stock investment loan amortizations through the cooperative in which they are also members, as long as their cooperative is accredited as a collecting agent.

To qualify as collecting agent of the SSS, a cooperative must be registered with the CDA, be in existence for at least three years, and pass a financial screening. The cooperative must also be registered as an employer with the SSS and regularly paying as such.

All cooperatives regardless of business character – whether credit, consumers’, producers’, marketing, service, or multipurpose – may qualify for accreditation provided they meet the requirements.

In return, cooperatives accredited as collecting agents would receive from the SSS a fixed amount of P6 as service fee for every transaction.