Compliance with RA 9520 and Policy Directions for Strengthened Reserve Fund Governance among Cooperatives in a Philippine Regional Cluster

Abstract

This study assessed the level of compliance of cooperatives in the MIMAROPA region with the Philippine Cooperative Code of 2008 (RA 9520), focusing on reserve fund provisions. Anchored on strengthening financial accountability, the study examined compliance inconsistencies despite regulatory monitoring. A descriptive-correlational design was employed using data from 234 cooperatives, analyzing reserve fund allocation, financial reporting, and utilization practices. Results showed that only two out of 101 cooperatives were non-compliant in reserve fund allocation, indicating generally high adherence to mandated requirements. However, 71.19 percent of non-compliant cooperatives reported using reserve funds as operating capital, reflecting misuse and weak policy enforcement. Additionally, 114 out of 234 cooperatives experienced financial losses, suggesting gaps in financial management practices. Statistical analysis further revealed no significant relationship between cooperative type and compliance (p = .696), indicating that compliance behavior is influenced more by governance practices than organizational classification. The study concludes that while compliance with RA 9520 is generally observed, inconsistencies in fund utilization and reporting practices persist. It recommends strengthening enforcement mechanisms, enhancing financial literacy, and institutionalizing compliance monitoring systems among cooperative officers. The findings imply that improving governance structures and capacity-building initiatives is essential to ensure sustainable financial management and accountability. However, the study is limited to cooperatives in the MIMAROPA region and relies on reported financial data, which may not fully capture underlying behavioral factors. Future studies may incorporate qualitative approaches to explore deeper causes of non-compliance.