Irish Fae E. Bartolome et al., The Sustainability and Resiliency of Cooperatives amid Economic Challenges (2022)

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Article by Irish Fae E. Bartolome and five co-authors in the International Journal of Advanced Engineering, Management and Science, Vol-8, Issue-12, December 2022, on how cooperatives in Talavera, Nueva Ecija stayed afloat through the pandemic. Officers of selected cooperatives, most of them multipurpose cooperatives with credit operations and assets between three million and fifteen million pesos, answered a questionnaire. All reported earnings in 2021, and almost none faced closure or staff cuts. The authors rate business diversification as very effective and recommend business continuity plans. They note Philippine GDP shrank 4.2% in the first quarter of 2021.

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International Journal of Advanced Engineering, Management and
Science (IJAEMS)
Peer-Reviewed Journal
ISSN: 2454-1311 | Vol-8, Issue-12; Dec, 2022
Journal Home Page: https://ijaems.com/
Article DOI: https://dx.doi.org/10.22161/ijaems.812.3

The Sustainability and Resiliency of Cooperatives amid
Economic Challenges
Irish Fae E. Bartolome1, Maricris R. Barlinan2, Princess R. De Guzman3, Giemelle C.
Gavina4, Marie Sol D. Hizon5, Marilou P. Pascual6

1Internal Audit Head, Kilusang Lima (5) Para Sa Lahat Multipurpose Cooperative
2Senior Accountant, Shantahl Direct Sales, Inc.

3Office Staff, College for Research and Technology Inc
4Accounting Associate, D&V Philippines
5Field Loan Processor, AFPFC Multi-Purpose Cooperative
6Dean, Nueva Ecija University of Science and Technology

Received: 07 Nov 2022; Received in revised form: 30 Nov 2022; Accepted: 05 Dec 2022; Available online: 12 Dec 2022

Abstract— This research looked at how cooperatives maintain their sustainability and resiliency in the face
of economic challenges. The questionnaire checklist was used as the data collection instrument in a
descriptive research design. Respondents in this study were officers from selected cooperatives in Talavera,
Nueva Ecija. The majority of them are multipurpose cooperatives that conduct credit operations. Five
cooperatives have been in operation for more than ten years, with the majority of them being small businesses
(asset sizes are between three million and fifteen million pesos). Despite the pandemic, they all earned in
2021, according to the respondents. According to the survey results, business diversification is very effective
in maintaining cooperative standing in the face of economic challenges. The survey also revealed that
cooperatives are self-sustaining, as almost all respondents did not face the severe problems that most
businesses face, such as closure and employee reductions. The majority of them have adapted to the new
normal work setup. It is recommended that cooperatives expand and improve their services in order to
provide immediate and timely information and assistance to members in order for them to operate and
survive any economic challenges that may arise. Cooperatives should also develop a Business Continuity
Plan and diversify their businesses rather than concentrating on a single one.
Keywords— Business continuity plan, cooperatives, diversification, resilient, sustainable.

I. INTRODUCTION accordance with universally accepted cooperative
A cooperative is a voluntary association of people who principles.
contribute shares in order to meet their economic, cultural, The Philippine economy suffered a severe recession as a
and social needs through the ownership and operation of a result of the COVID-19 Pandemic. The Philippine GDP
business. The cooperative is characterized by a cooperative shrank by 4.2% in the first quarter of 2021, extending the
spirit and collaboration. It is a lawfully registered recession to three straight quarters as the pandemic dragged
organization of individuals with a common bond of interest on, making it the longest recession since the Marcos era.
who have voluntarily joined together to achieve a lawful The business industry was severely impacted as a result of
common social or economic goal, making an equitable these figures. Even some of the largest corporations have
contribution to the required capital and accepting a fair seen a drop in revenue as a result of the pandemic. It
share of the risks and benefits of the undertaking in impacted not only the entrepreneurs but also the overall
employment rate in the country.

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Bartolome et al. International Journal of Advanced Engineering, Management and Science, 8(12) -2022

According to the Open Knowledge Repository, “9% of existence, asset size, and financial status at the end of 2020
businesses closed in response to government regulations. and 2021. Furthermore, this research identified the changes
There are also others who have closed voluntarily and in the cooperatives during the pandemic in terms of their
account for 21% of the total of all businesses in our country. managerial, marketing and financial aspects. Lastly, this
7% have closed permanently. Also, the sales of the study described the strategies that cooperatives have taken
companies continue to decline due to fears and restrictions to maintain the stability of their businesses.
as well as the protocols implemented by the government.
There are many entrepreneurs who until now hope that our
II. MATERIALS AND METHODS
country's economy will rise up again and that their
businesses will return to normal but on the other hand, some The descriptive research design was used in this study.
entrepreneurs expect that the situation of their businesses "Descriptive research is devoted to the gathering of
will worsen as the economy of our country continues to information about prevailing conditions or situations for the
collapse”. purpose of description and interpretation," according to Dr
Y.P. Aggarwal (2008), as cited by Salaria (2012) and Garcia
Despite the challenges faced by most private sectors,
and Subia (2019). This type of research design entails more
cooperatives remain resilient, continue to resist the threat of
than just gathering and tabulating data; it also includes
the pandemic, and strengthen cooperation in the belief that
proper analyses, interpretation, comparisons, and the
the cooperative sector can be the answer or help to protect
identification of trends and relationships." Eight selected
our society's financial condition. According to a study
officers of cooperatives from Talavera, Nueva Ecija,
conducted by the Cooperative Development Authority,
Philippines were chosen on purpose for this study (Subia,
nearly 92% of cooperatives from various sectors were
2018) because of their knowledge of the study being
affected by the pandemic. Cooperatives were impacted, but
conducted. The information was gathered using a
they avoided major issues such as layoffs, decreased
questionnaire checklist and analyzed and interpreted using
production due to work-from-home arrangements, and,
appropriate statistical tools such as frequency and
most importantly, business closure. Surprisingly,
percentage. The researchers made certain that all
cooperative economic standing is not suffering as much as
participants received all relevant information about the
other types of business in the Philippines.
study, as well as the risks and benefits of participating.
Based on these, this study looked specifically into the Because everyone has the right to privacy, the researchers
demographic characteristics of respondent cooperatives in safeguarded their personal information.
terms of their type, a number of branches, years of

III. RESULTS AND DISCUSSION
1. Profile of the Cooperatives
Table1.1. Types of Cooperatives in Talavera
f %
Types of Cooperative
Multipurpose Cooperative 6 75%
Credit Cooperative 1 12.5%
Producers' Cooperative 0%
Employees' Cooperative 0%
Cooperative Bank 0%
Others 1 12.5%
Total 8 100%

As to types of cooperatives, the table shows that six (6) cooperative is one that promotes and undertakes savings
cooperatives are multipurpose. One (1) credit cooperative, and lending services among its members, while an
and one (1) agriculture cooperative. Multipurpose refers to agriculture cooperative is a cooperative in which farmers
cooperatives with a combination of two or more combine their resources in certain areas of activity.
business/economic activities. On the other hand, a credit
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Bartolome et al. International Journal of Advanced Engineering, Management and Science, 8(12) -2022

Table1.2. Number of Branches of Cooperative
Number of Branches f %
1 7 87.5%
2 to 4 0%
5 to 7 1 12.5%
Total 8 100%
As to the number of branches, only one (1) cooperative has more than one branch nationwide and seven (7) have only one
branch.
Table1.3. Years of Existence of Cooperative
Years of Existence f %
1 to 5 1 12.5%
6 to 10 2 25.0%
10 years above 5 62.5%
Total 8 100%

As to years of existence, five (5) cooperatives are operating for more than 10 years already, two (2) cooperatives are in business
for 6 to 10 years of existence and one (1) cooperative is operating for 1-5 years.
Table1.4. Asset Size of Cooperative
Asset Size of Cooperative f %
Micro Enterprise (up to 3 million) 1 12.5%
Small Enterprises (above 3 million to 15 million) 4 50.0%
Medium Enterprise (above 15 million to 100 million) 0 0.0%
Large Enterprise (above 100 million) 3 37.5%
Total 8 100.0%
As to the cooperative's asset size, three (3) cooperatives are under large enterprises. They have more than one hundred million
asset sizes. Four (4) cooperatives have more than three million but not more than 15 million asset sizes or are under small
enterprises. One (1) cooperative is under the microenterprise or the asset size is up to three million.
Table 1.5. Financial Status at the End of 2020
Financial Status at the End of 2020 f %
At Profit 4 50%
Break Even 2 25.0%
Loss 2 25.0%
Total 8 100%
At the end of 2020, the year that the lockdown happened, there were four (4) cooperatives that were still at profit, two (2) were
at break even and two (2) were at loss.
Table 1.5. Financial Status at the End of 2021
Financial Status at the End of 2021 f %
At Profit 8 100%
Break Even 0 0.0%
Loss 0 0.0%
Total 8 100%
At the end of 2021, eight (8) cooperatives or 100% of the respondents were at profit. It shows that cooperatives were still
thriving in the midst of the pandemic.
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Bartolome et al. International Journal of Advanced Engineering, Management and Science, 8(12) -2022

2. Changes in cooperatives during the pandemic
Table 2.1 Changes in cooperatives during the pandemic in terms of Management
f %
Adapting to the new normal (the mandatory wearing of
Management facemasks and face shields) 8 100%
Skeletal working arrangement 3 38%
Reduction of working hours 4 50%
Work-from-home arrangement 2 25%
Decrease in production (Agri, manufacture, etc.) 2 25%
Reduction of employees 1 12.5%
Closing of business 0 0%

All cooperative respondents notably did not encounter decrease in production (Agri, manufacture, etc.), reduction
business closure. Rather, skeletal working arrangement, of employees and adapting to the new normal moderately
reduction of working hours, work-from-home arrangement, affected the business operations of cooperatives.
Table 2.2 Changes in cooperatives during the pandemic in terms of Marketing
f %
Marketing Maximization of social media platforms 4 50%
Continuously communicating with members through phone
calls and texts 7 88%
Use of a referral system from current members to minimize
random exposure to random people 5 63%

Having encountered several problems in the cooperative marketing strategies are continuously communicating with
operations during the Covid-19 pandemic like limited face- members through phone calls and texts, the use of referral
to-face transactions, the areas of concern in marketing have systems from current members to minimize random
taken some measures to ensure the continuous operations exposure to random people and the maximization of social
and delivery of services to members. Among these media platforms (Facebook, YouTube, etc.).
Table 2.3 Changes in cooperatives during the pandemic in terms of Financial
f %
Financial Minimizing cash transaction 4 50%
Maximization of online bank transfer or online wallet
transfer as a mode of loan payment or deposit 5 63%
Savings withdrawal of members during the pandemic 3 38%
Loan penalties were voided 6 75%

To help the members adjust to the economic impact of the of cash transactions but instead, maximize online bank
pandemic, loan penalties for past-due accounts were voided. transfers or online wallet transfers as a mode of loan
Some cooperatives provided a moratorium on the loan proceeds, loan payments and deposits.
payments of the members. Cooperatives minimize the use

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Bartolome et al. International Journal of Advanced Engineering, Management and Science, 8(12) -2022

3. Strategies that cooperatives have taken to profitable despite the global financial crisis, despite the fact
maintain the stability of their business that the industry is in a difficult condition;
Table 3. Strategies that cooperatives have taken 5. This research also shows us the businesses involved in
F % these cooperatives helped them big time. The majority of
them operate multiple businesses. This is due to
Cooperatives with only one cooperatives' adaptability and the cooperatives’ principle,
business/economic activity 4 50% which places an emphasis on the welfare of all members;
Cooperatives with more than one 6. Cooperatives are self-sufficient and can regain their
business/economic activity 4 50% business capacities by diversification, staying committed to
the cooperative principles.

Among the eight cooperative respondents, four (4) of them 7. Cooperatives are already playing an important role in
have diversified into different business/economic activities helping to recover from the long-lasting effects of the
since they were multipurpose cooperatives. The businesses COVID-19 pandemic.
that these cooperatives operated were Agri productions, ice- Based on the conclusions, the researchers suggested the
making plants, piggeries, trading, aggregates, rentals of following:
acquired assets, etc. Four (4) cooperatives have only one
1. Cooperatives should expand and enhance their services
business/economic activity to support their members and it
like financing programs, information digitization such as
is credit services.
Facebook posts, text blasts announcement of promos and
4. Business Continuity Plan of Cooperatives new updates to members, and pieces of training to provide
Table 4. Adoption of business continuity plan of immediate and fast information and assistance to members
cooperatives to operate and survive under the new normal.

f % 2. Cooperatives should promote and educate members and
non-members on existing promos such as referral promo
Yes 2 25%
incentives to existing members that will benefit them
No 2 25% without deducting the same from the referred member's loan
No BCP 4 50% proceeds.
3. Cooperatives should diversify their revenue streams
rather than only concentrating on one in order to grow their
A business continuity plan is a written document explaining
operations; finding ways to increase work opportunities and
how a business will operate during an emergency. Only
funding would be beneficial. Also, innovation can and will
25% of the respondents claimed to have been able to use
certainly become increasingly crucial for successful new
their BCP, 25% of respondents also claimed not to have
cooperative entry and ongoing cooperative survival.
implemented their BCP, and50% of respondents claimed
not to have a BCP at all. 4. Likewise, cooperatives should devise a business
continuity plan. Having a business continuity plan is
essential to any business organization; it helps the
IV. CONCLUSIONS AND cooperatives' operation adjust with regard to unplanned and
RECOMMENDATIONS unexpected challenges.
Based on the findings, the following items were
concluded:
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