Philippines Example How a Barangay Cooperative Works

Tongonan is a mountain barangay in Ormoc where a cooperative is showing the way on maximizing the place’s human resources.

Utilizing the barangay’s distinct advantage as a producer of geothermal energy, Allied Tongonan Multipurpose Cooperative (Atomco) has embarked on a program that will assure gainful employment for all residents in that village.

It helped that one of its founders is a former barangay captain who has the best interest of his constituents in mind. Isagani R. Bañez shares that Atomco was established in 2008 and capitalized with funds derived by the barangay from its geothermal resource.

As one of the host barangays of Leyte Geothermal Production Field, Tongonan is a recipient of millions worth of royalties, realty taxes and other benefits paid annually by Energy Development Corp. (EDC) which enabled the village to finance its priority projects including the establishment of a coop.

To sustain its operations, Atomco initially ventured into manpower services and heavy equipment rental. It acquired a backhoe unit which it rented out to other contractors. Unfortunately, internal conflict and mismanagement drained Atomco’s finances until only P20,000 was left in its coffers in May 2011.

Having fully served his term as barangay captain, Bañez decided to concentrate his efforts on reviving Atomco to enable it to fulfill its objective to become an instrument in improving the lives of the barangay folk through employment generation. He set his sights on EDC which requires more than a thousand laborers annually.

This requirement is already a big boost to his barangay if his constituents are able secure all the labor contracts, he realizes. Bañez buckled down to work and turned Atomco into a full-pledged manpower contractor. Being a cooperative, it can afford to quote a lower bid price compared to competing general service companies without sacrificing the pay of its workers.

But Atomco soon lost this advantage when EDC began requiring skilled workers, specifically those who underwent training from the Technical Education and Skills Development Authority (TESDA). Bañez took on the challenge by lending P400,000 of his personal money to train their workers for free.

Their first two batches of trainees underwent 2½ months of training beginning Sept. 30 last year from trainers of Calubian National Vocational School. Atomco shouldered the expenses at P15,000 per trainee. In return, the trainees will work for Atomco for three years.

The two batches consisted of 72 workers who obtained National Certificates II and TESDA accreditation for their trainings on automotive servicing (19 trainees), shielded metal arc welding (18), driving (14), scaffold erection (17), and electrical installation and maintenance (4).

Bañez shared his company’s resources (IRB Enterprises) and equipment for the workers’ training as well as the classrooms. He realized that the TESDA accreditation will increase the value of their workers who will be paid P200-250 a day compared to only P180 for their unskilled counterparts.