THE PHILIPPINES – For the past five years the changes in the Philippine credit union movement have been significant. This is a country of 7,107 islands with 75 million people speaking 80 dialects, and it would be easy to think that that type of geographic and language diversity would hinder credit union development. It hasn't. The World Council of Credit Unions (WOCCU) and the United States Agency for International Development (USAID) have a joint project to help develop credit unions for the Filipinos. The WOCCU-USAID project works to stabilize credit unions and provide a framework to make these financial services safe and desirable places for Filipinos to save and borrow. Credit unions are called cooperatives in the Philippines, but the concept is the same as anywhere else, Lois Kitsch, WOCCU's Regional Director of Asia and Europe, said. Kitsch spent five years living in the Philippines and working with credit unions before moving back to Madison, Wis. to assume her current responsibilities. Her new duties allow her to continue the work through periodic visits to the WOCCU-USAID offices. One way the program strengthens the Filipino credit unions movement is through Credit Union Trainers for Empowerment (CU-TE pronounced Cue-tee) which includes three-day, high-intensity training courses. The last one was held this spring in Mindinao and worked with 40 students. The major goal was to enhance knowledge of credit union operations while developing leadership and communications skills. "CU-TEs provide training to build model credit unions. Credit union employees who go through the program learning to maintain standards, evaluate situations and to hone communication skills to build confidence when talking to boards and their communities. The training also gives them a common vision for their credit unions often making it easier to communicate in credit union board and staff meetings," Kitsch said. The nearly 200 graduates call themselves CU-TEs and represent 16 credit unions from within the Philippines. Class sizes averages 30-35 students, and instructors/mentors, all of whom are previous CU-TE students, help keep the course focused while at the same time remain as hands- off as possible, allowing students a prescribed amount of flexibility in the learning process. Originally developed and run by the WOCCU- Philippines project, the CU-TE program is now completely self-sufficient and is managed by the CU-TE Foundation with continued support from the WOCCU CUES Philippines II project. The program has been so successful that WOCCU has implemented a similar training program in Romania. The climate which Kitsch described as "hot and hotter, wet and wetter," does nothing to discourage the staff which is now headed by Luis Sasuman. Kitsch admits to missing the office that she ran for 5 years. Because there is only poor financial services legislation in the Philippines, one of the first things that had to be done was to establish a credibility factor before the general public could trust credit unions with their money. WOCCU used PEARLS, a financial monitoring tool for credit unions. It has a set of financial ratios that when used over time will help the credit union determine both positive and negative trends. "It acts as an early warning system that something is headed in the wrong direction," Kitsch said. WOCCU worked with credit unions to help them qualify under PEARLS. Credit unions that qualify under PEARLS earn the privilege of carrying the FOCCUS label which connotes financial organizations achieving certified credit union standards. So far, 12 credit unions have reached the FOCCUS silver status. Of these 12, three have now reached the gold status and two more have earned the highly prized platinum status. "The credit union leadership is very proud to achieve this. We also host an award banquet, which are the Oscars of credit unions. This past banquet had some 450 people in attendance including WOCCU leadership," Kitsch said. PESOS, a new national system may be adapted in the future to replace PEARLS, but Kitsch said that 19 of the 21 financial ratios in PESOS are identical to PEARLS. Other new projects are underway, including the expansions of at least 20-30 more credit unions. Development is also going on in Moslem areas which Kitsch describes as "challenging" because traditional interest for loans cannot be charged. A fee structure needs to be established. Matt Schultz, a WOCCU staff member who spent time working with the Filipinos this spring described the people as "Well educated, very astute well-tuned to current events," all traits that bode well for the Filipino co-operatives of tomorrow. Kitsch echoes his sentiment and feels that the dynamic new leaders will transcend the problems of both the industry and country. -

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