CDA Region IV-A EO

Makiling Forestry Multipurpose Cooperative Success Story

Five decades ago, a group of 21 forestry-based employees from UPCF, ERDB and FPRDI bonded together to form what is now popularly known as the MAKILING FORESTRY CREDIT COOPERATIVE (MFCC).

The highest motivation was to free themselves from the influence of loan sharks who were then controlling the credit line for most of the employees in need of financial aid. Their goal was to create an organization that could educate them on how to save and how to make wise use of credit. In other words, they wanted to learn how to manage their finances to provide them added income and better quality of life.

On February 10, 1958, the Articles of Incorporation and By-laws of the Makiling Forestry Cooperative Credit Union, Inc. (MFCCUI) were adopted. It was submitted to the Cooperatives Administration Office on March 27, 1958, for registration and on April 30, 1958, the MFCCUI was born.

The first Board of Directors consisted of 5 members: Luis Aguilar, president; Emiliano Roldan, vice-president; Francisco N. Tamolang, secretary; Manuel R. Monsalud, treasurer; and Simplicio Bellosillo, assistant treasurer, (Mr. Bellosillo, the only surviving member, now lives in Canada).

Members of the first Credit Committee were Rosario Cortes, Calixto Mabesa and Feliciano Lauricio. Those of the Supervisory Committee were Lucio Quimbo, Jose Orozco and Rodrigo Valbuena.

The surviving original incorporators, who are all retired government employees, are: Feliciano Lauricio, Norberto Mercado, Hugo Ramos, Aquina Mendoza, Liwayway Decena, Arturo Pablo, Gabriel Lopez, Arsenio Tongacan and Virgilio Asis.

  From the total assets of P9, 211 in 1958, the cooperative’s assets rose to P16, 315 by the end of 1959. Every decade brought with it the fruits of the labor of management and the cooperation and support of the members as seen from the growth of its assets in the last 5 decades, as follows: 1967 (P116, 570); 1977 (P372,440); 1987 (P4,970,934); 1997 (P44,935,714); and 2007 (P127,589,890).

The turning point was in 1963 with the promulgation of the policy on maximum loan equal to 4 times the Fixed Deposits. This policy resulted in 100% increase in Fixed Deposits in 1963 and significant increases thereafter.

New leadership from 1963 to 1965 spearheaded by Mamerto Garcia, Agustin Ramos, Jr., Arsenio Tongacan, Feliciano Lauricio, Isidro Zamuco, Felix Eusebio and myself raked in a total increase in Fixed Deposits, assets and gross savings about 4 times that of 1962.

The new ideas and the dynamic leadership of these officers steadily propelled the cooperative to progress which meant a steady increase in membership; substantial capital build-up; more income and higher dividends for the members.

In 1974, all cooperatives were required under P.D. 175 and L.O.I No. 23, to re-register with the Bureau of Cooperatives Development of the Department of Local Government and Community Development. Likewise, all members have to undergo the pre-membership education seminar.

On February 21, 1975, our cooperative was re-registered as MAKILING FORESTRY CREDIT COOPERATIVE, INC. (MFCCI), with Registration No. FF-005RR. Significantly, MFCCI was the 1st re-registered credit cooperative in the entire country, the first four registrants being other types of cooperatives.

In 1977, the Bureau of Cooperatives Development mandated all cooperatives to revise its Articles of Incorporation and By-laws. Some salient revisions were: (1) change of name to MAKILING FORESTRY KILUSANG BAYAN FOR CREDIT, INC. (MFKBCI); (2) increase in the Board of Directors to 7 members (3) creation of Election Committee of 3; (4) President and Vice President was changed to Chairman and Vice-Chairman; (5) the KB Guarantee Fund was established; and (6) annual general assembly formerly based on the calendar year was changed to Fiscal Year ending November 30.

The year 1977 was best remembered as the “Bonanza-of-Dividends” year with the distribution of the highest dividend rate since 1958; 8.5% for interest on Savings Deposits, 10.45% for Fixed Deposits and 5% for Patronage Refund. By 1977 we had 307 members already.

It was in 1980 also when delinquency was given a major role in the operations of our cooperative by suspending for a certain period any member who had been delinquent for more than 2 months. Should the delinquency extend to 6 months, the member was automatically expelled. This policy has been one of our best policies for the controlled percentage of delinquencies we have at present.

In 1982, the maximum loans were increased to P6,000 payable in 20 months or P10,000 payable in 15 months at 12 % interest per annum despite MLGCD Circular No. 80-13 authorizing an interest  rate of 17 %. Likewise, all temporary and casual employees may borrow an amount equal to their Fixed and Savings Deposits.

The 25th anniversary of our cooperative was very memorable because the million peso asset mark was hit in that silver anniversary year of 1983 when total assets jumped from P968,730 in 1982 to P1,246,566 in 1983. During that year, Fixed Deposits also jumped from P540,645 to P704,650.

This increase in assets and income was partly due to the loan obtained from the Cooperative Development Loan Fund (CDLF) in the amount of P100,000. Another P400,000-loan was obtained in 1985 which was paid in full by 1987.

By 1986, dividends of 16% on Savings Deposits, 18% on Fixed Deposits and 5% Patronage Refund were given out. That year more than P6 million went in and out of the credit union coffers. Loan applications processed were 545 that generated a gross savings of more than ½ million pesos.

In 1986, the maximum amount of loan was P20,000 for regular loan and P20,000 for special loan payable in 20 months. Mutual Aid Fund contribution for deceased members was set at P25 per member.

January 15, 1988 was the date when the rate of interest for regular loan was decreased from 14.4% to 13.2% and for special loan, from 17% to 15.6%.

In 1988, the Board also passed a resolution granting the casual and contractual employees special loans payable on a term co-terminus with their appointments.

In 1994, the maximum regular loan was again increased to P50,000. The term of payment was 24 months= except for the jeep loan which was payable in 30 months.

From 1994 to 1997, the MFCC granted a total loan of P130.7M to 2,392 borrowers. Of this amount, P25.1M went to capital for business; P49.9M was for house construction/improvement, or repair and lot purchase; P13.2M for educational purposes; P16M for purchase of cars and jeeps; P3.7M for medical/dental needs; P1.5M for agricultural loans; and all others-P21.3M.

On November 30, 1997, or fifteen years after the Credit Union hit the million peso mark, our assets leaped to P44,935,714 or an increase 36 times over that of 1983. The total cash handled during the year was P80M; a total deposit received was P40.6M; and a total loan granted was P39.5M.

Of the P39.5M loans granted by the cooperatives, 22.4% went to 36 members for the construction of houses and apartments, acquisition of lots and purchase of brand new cars in the total amount of P9.4M. In addition to this, a P6.4M loan was granted for house repairs and improvement.

Productive loans were likewise given to increase family income such as: Business purposes-P16.9M, Agricultural endeavors- P5.08M; and Purchase/repair of jeeps-P6.73M.

Other providential purposes granted were: Educational-P3.8M; Medical/Dental- P8.24M; and purchase of appliances, lends money to relatives/friends and payment of obligations-P7.5M.

The gross savings was more than P8M. Dividends on Savings Deposits at 17.5% were P4.2M and Fixed Deposits and Shares at 19.5% were P1.7M. Patronage Refund set at 10% was P6.48M.

The year 2001 had been the peak of operations in terms of gross savings when our cooperative earned the unprecedented amount of P22.45M on a total asset of P127.93M. The dividends given that year are as follows: Interest on shares-21%; interest on fixed deposits-21%, interest on Savings Deposits-17% and Patronage Refund-14.5%.

MFCC joined the one hundred millionaire-cooperative distinction in 2000 when its assets reached P100.37M. But the highest asset was achieved in 2003 when total assets became P148.93M. However, from then on it declined to P144.48M in 2004, P128.60M in 2005 and P120.89M-2006. As of 2007, assets totaled P127.59M.

Likewise the gross savings/surplus gradually declined from 2001 to P21.468M in 2002; P17.429 in 2003; P15.196M in 2004; P16.191M in 2005; P14.161M in 2006 and slightly increasing to P14.796M in 2007.

The abrupt decrease in income in 2003 was the result of the new policy on the decrease of the following charges on the loans of borrowers. Interest on loans-from 1.1% to 1% per month for regular loan; and 1.3% to 1.15% for housing, special and short-term loans. Service fee was decreased to 1% per year from 2%. Service fees on petty cash were decreased from 1.5% to 1% per month; fines from 2% per month to 1% on all loans.

It was in 2001 when the Loan Redemption Fund (LRF) was set up.

What is LRF? It is a fund set up for the payment of the theoretical balance of Regular, Special and Housing loans so covered by said fund.

Initially, the LRF coverage applied only to Regular and Special loans up to P250,000. Later, the coverage was expanded to Special Loans up to P500,000 Housing Loans up to P250,000 (compulsory) and P500,000 (optional) and to loans payable in lump sum. The fees started with 0.8% per year, reduced to 0.6% in 2003 and further reduced to 0.5% in 2007.

As of 2008, LRF fund has a balance of P2.91M. A total of P1.4M had been paid out for the loans of deceased members so covered by the LRF fund. Loans of members

From whose full payment shall not go beyond age 75 may be covered by the LRF. After age 65, LRF coverage is optional.

Another benefit comes from the Mutual Aid Fund (MAF). It was started in 1980 by giving the family of a deceased member the amount of P200. From then on the benefits gradually increased. In 1997 said MAF was increased to P60 per member-contributor provided the deceased member is not delinquent for more than 2 months.

From 2008 to 2020 the MAF gives a benefit of P100 per member-contributor or approximately P51,000 provided a deceased member is not delinquent for more than 2 months. For qualified dependents, the member is given P10,000 MAF.

Aside from the Mutual Aid Fund, the cooperative also extends medical assistance to members and their immediate family in the amount of P5,000 & P3,000, respectively. For 2020, 10 members and 8 dependents were given assistance. The condition for all the benefits given is that the member must be in good standing meaning not delinquent in the payment of loans.

Members aged 64 and under are enrolled in Fortune Life Insurance for death benefits and those 65 and over who cannot be covered by insurance are funded by our cooperative.

 Since then, the spirit of cooperativism works in MFCC as shown by its growth from 2008 to 2023 as follows: financial growth 134M to 315M; membership 558 to 622, business development (loans) 99M to 179M, community involvements such as tree planting and creek cleaning, donations to various underprivileged groups/organizations, scholarship programs, livelihood projects among others.

The MFCC in its 65 years of existence is continuously moving forward to a stronger Cooperative ““MFMC tumutugon sa mga hamon ng pagbabago tungo sa higit na  matatag at maunlad na kooperatiba”,