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Thursday, February 28, 2008

FICCO Invests in Mutual Fund, Coop Guarantee Fund, Coop Banks, Coop Insurance

In a move to build an integrated financial system for the grassroots, FICCO joined the “century coops” group, otherwise known as the National Cooperative Movement (NCM) to establish a mutual fund and a deposit guaranty fund for cooperatives.

Through the guidance and encouragement of former Senator Agapto “Butz” Aquino, former Secretary of Agriculture Senen Bacani, and former PDIC President and SSS Administrator Vitaliano Nanagas, the leaders of big cooperatives in the country (Cebu CFI Com. Coop, Perpetual Help Com. Coop, NOVADECI, San Dionesio Dev. Coop, USPD Coops, FICCO and many others), in a series of meetings since November 2007, agreed to organize a coop mutual fund and a coop deposit guaranty fund.

The coop mutual fund will address the need of most cooperatives as to where to park their money. With the drastic reduction in interest rates on time deposits of banks, coops with surplus funds are desperately searching for investment opportunities to maximize return. This prompted Sen. Aquino and Sec. Bacani to spearhead the formation of a coop mutual fund, patterned after the GSIS mutual fund.

The GSIS mutual fund invested heavily in equities and, over the long term, has posted gains way higher than time deposit rates. In the initial years though up to 1999, the GSIS mutual fund lost value when the price of equities declined. But it has since performed remarkably ad recovered lost ground.

In a parallel move, the NCM also formulated guidelines for the creation of a coop guarantee fund, initially known as CODIS, or Coop Deposit Insurance System. CODIS will hopefully serve the coops in the same manner that the PDIC (Phil. Deposit Insurance Corp.) is servicing banks. It is anticipated that CODIS will assure the general public of the stability of cooperatives with the CODIS label. This will hopefully lead to a feeling of security for their funds resulting to the increase of deposits in cooperatives.

FICCO also participated in the effort to consolidate or unite all the the cooperative banks in Mindanao. With our equity investment in the Misamis Occidental Cooperative Bank, and the move to also make equity investments in the cooperative banks of Davao del Sur and Surigao del Sur, FICCO hopes to play an active, if not a leading role in the consolidation effort.

FICCO’s participation in the unification effort is anchored on a vision of building an integrated financial system for the grassroots. We look forward to the day when FICCO, just like Migros of Switzerland, Caja Laboral of Mondragon, Spain, and Rabobank of Germany and the Netherlands, will have made possible for the ordinary people to own a world-class multi-national bank. Of course, we have to start small. Let us start with the strengthening of the coop banks.

Prompted by the same vision, FICCO will also invest in the equity of the Coop Life Insurance and Mutual Benefit Services (CLIMBS). CLIMBS is a coop insurance network with more than 1,500 member-cooperatives all over the country under its wing. With the FICCO MBA already operational, FICCO will be able to provide more insurance, fidelity, assurance and guarantee services to its members.

With this move, FICCO is going into the direction taken by universal banks that invested in, if not own insurance companies, e.g. Phil. AXA of Metro Bank, Ayala Life of BPI, Malayan Insurance of RCBC, UCPB General Insurance of UCPB and Generali Pilipinas of BDO.

FICCO’s innovative and enterprising spirit lives on with the end in view of improving further the lives of its members. (IBDABA)

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