CENTRAL ISSUE
The Philippine Ports General Santos City Employees Multi-Purpose
Cooperative (PPGSCEMPC) is a cooperative that serves the employees of the
Philippine Ports Authority (PPA) in General Santos City. It aims to provide its members
with financial services and promote socio-economic development through mutual aid,
savings programs, and credit services. In the cooperative's financial management
framework, ownership and decision-making operate on democratic principles, granting
all members equal voting rights regardless of their financial input. This differs from
corporations, where control is determined by ownership shares. In the cooperative,
every member has one vote, fostering equality among participants. Capital is generated
from the members, and collective decisions concerning budgeting, expenditures, and
investments are generally made during the annual general assembly. The cooperative
follows established policies and plans that outline how funds are allocated, with elected
officers responsible for resource distribution.
To maintain transparency and adhere to cooperative policies, all business
decisions must involve member consultation. Any breach of this democratic process is
considered a violation of the cooperative's principles. To manage receivables effectively,
the cooperative performs detailed credit investigations before approving any loans,
ensuring borrowers have the financial capacity to repay. A centralized database is used
to track collections, monitoring debtors, their outstanding balances, due dates, and
overdue accounts. If a payment is missed, the cooperative sends a collection letter to
notify the debtor of the outstanding amount. If the debt remains unpaid after this, a
demand letter is issued, and legal action may be taken if necessary. The cooperative
prioritizes collections by conducting rigorous credit checks before granting loans, which
helps minimize the risk of non-payment. Collections are closely monitored, and overdue
payments are addressed promptly through a structured process that includes issuing
collection and demand letters to ensure timely resolution.
The central issues in the cooperative's financial management revolve
around the challenge of keeping funds actively invested to avoid stagnation, as idle
funds hinder growth. Decision-making is slowed by the democratic structure, where
collective member approval is required, limiting responsiveness. Managing the risk of
unpaid receivables is critical, with credit checks and a structured debt collection process
in place. Additionally, reliance on traditional methods like Excel limits operational
efficiency, and the cooperative must ensure strict adherence to Cooperative
Development Authority (CDA) regulations to remain compliant. Balancing growth, risk
management, and democratic governance are key challenges.
STATEMENT OF OBJECTIVES
This study seeks to explore the financial management strategies
employed by the cooperative, focusing on cash inflow and outflow tracking, receivables
management, and debt collection practices. The following are the key objectives of the
case study.
• Understand the overall financial management strategies implemented by the
Philippine Ports General Santos City Employees Multi-Purpose Cooperative.
• To know the procedure in managing organizational funds, including tracking cash
inflows and outflows, and ensuring the financial health of the cooperative.
• Explore the strategies used to manage receivables effectively.
• To Explore Debt Collection Processes followed by the cooperative and how they
handle difficult or non-responsive clients in receivables management.
• To Discover Best Practices recommended by the cooperative for effective handling
of funds and receivables.
AREAS OF CONSIDERATION (SWOT
A. Internal Environment Analysis of (PPGSCEMPC) Philippine Port General Santos
City Employees Multipurpose Cooperative
Strength:
Strong Democratic Structure
Transparent Financial Management
Strict Receivables Management
Compliance with Regulations
Weakness:
Idle Fund Management
Reliance on Traditional Tools
Slow Decision-Making Process
B. External Environment Analysis of (PPGSEMPC) Philippine Port General Santos
City Employees Multipurpose Cooperative
Opportunities:
Business Expansion
Innovation in Financial Management
Diversification of Investments
Threats:
Non-Responsive Debtors
Economic Downturns
Regulatory Changes
CONCLUSION
Philippine Ports General Santos City Employees Multi-Purpose
Cooperative operates with a solid foundation of financial management practices rooted
in its democratic cooperative structure. The cooperative is deeply committed to
transparency, particularly in tracking cash inflows and outflows, managing receivables,
and handling funds. Their use of daily monitoring, strict credit investigations, and a
structured debt collection process ensures financial stability and minimizes risks related
to unpaid debts.
However, challenges remain, especially in the area of idle fund utilization.
The cooperative acknowledges the need for continuous expansion and investment to
prevent stagnation of capital, which can negatively impact growth. The organization also
faces limitations due to the reliance on traditional tools such as Excel, hindering
operational efficiency.
Despite these challenges, the cooperative adheres to best practices by
ensuring only authorized personnel handle funds, maintaining strict adherence to
policies, and conducting thorough risk assessments before lending. Looking ahead, the
cooperative envisions expanding its ventures to further optimize fund utilization, such as
building a restaurant near the port. These initiatives aim to sustain financial growth and
minimize receivables while staying aligned with cooperative principles.
RECOMMENDATIONS
1. Maximize the Use of Idle Funds: The cooperative should consider building a
restaurant near the port to expand its business and ensure continuous growth. This will
diversify income streams and prevent idle funds from sitting unused. However, a
thorough feasibility study should be conducted to assess demand, competition,
operational costs, and the potential return on investment (ROI). It is important that the
expansion aligns with the cooperative’s Articles of Cooperation and By-Laws, ensuring
compliance with established policies.
2. Engage Members in the Decision: As a cooperative, all decisions must involve
member participation. The decision to invest in the restaurant should be voted on by
members, and they should be involved in setting expectations for investment returns,
operating strategies, and potential risks.
3. Strengthen Receivables and Risk Management: The cooperative should continue
its rigorous credit investigation process for new loans but introduce stricter lending
guidelines for members involved in the restaurant venture. This will minimize financial
risk. Additionally, the cooperative should consider automating its receivables tracking
system to improve accuracy and reduce errors, replacing the current reliance on Excel
spreadsheets.
4. Improve Cash Flow Management and Financial Reporting: As the cooperative
takes on new ventures, managing cash flow will become more complex. The
cooperative should implement more frequent financial reporting and forecasting,
particularly for the restaurant business. This will help ensure timely decision-making
based on accurate data. Key officers should also receive training in advanced Excel
techniques or begin using more efficient financial management software to improve
transparency and minimize manual errors.
5. Diversify Investments and Establish an Emergency Fund: While the restaurant
project presents an opportunity for growth, the cooperative should not invest all its idle
funds into one venture. A diversified investment strategy will help mitigate risk.
Additionally, the cooperative should establish an emergency fund to cover unforeseen
expenses or slower-than-expected growth from the restaurant.
6. Ensure Regulatory Compliance: Before proceeding with the restaurant, the
cooperative should consult with the Cooperative Development Authority (CDA) to
ensure that the new venture complies with all regulatory requirements. This will help
avoid any future legal or operational complications, ensuring the cooperative continues
to operate within the bounds of the law.
ACTION PLAN
Activities Objectives Division Person Cost Time
Responsible
Implement a Improve Credit and Collection ₱ 1-3 months
digital accuracy in Collection Officers, 5,000.0
receivables receivables Department General 0
tracking tracking, Manager
system to reduce
replace overdue
manual Excel payments,
sheets. and enhance
collection
efficiency.
Conduct Optimize cash Finance and General ₱ 1-4 months
feasibility flow utilization Business Manager, 20,000. for study,
studies for by minimizing Development Treasurer, 00 implementati
new business idle funds and Departments Project on to follow
ventures (e.g., exploring new Managers
restaurant revenue
near the port). streams.
Provide Ensure Finance, General ₱ Annually
training consistent Training Manager, 5,000.0
sessions on application of Division Finance 0
best financial best practices Manager,
management across all Training
practices, departments Officers
including and improve
budgeting, fund
fund management
disbursement, efficiency.
and tracking.
Create an Establish a Finance and Treasurer, ₱ Annually
Emergency financial buffer Legal Board of 100,00
Fund Policy to to cover Division Directors 0.00
set aside a unforeseen
contingency expenses and
fund. mitigate
potential
financial risks.
Conduct risk Strengthen Risk Risk Manager, ₱ 1-2 months
assessments lending Management Treasurer, 10,000.
for lending guidelines to and Internal Internal 00
processes. minimize Audit Auditors
financial risks
by ensuring
only
creditworthy
members
receive loans.
Develop a Improve Finance Accounting ₱ Monthly
standardized transparency Officer 5,000.0
cash flow and 0
monitoring consistency in
template. cash inflow
and outflow
tracking.
Create a Enhance the Collections Collection ₱ Monthly
comprehensiv effectiveness Department Manager 5,000.0
e credit and 0
investigation prioritization of
checklist to collections.
guide the
collection
process.
Documentation
