The Unyielding Spirit of Samar Multi-Purpose Cooperative (SAMICO)

CATBALOGAN may be a component city and the gateway to three Samar provinces—Samar, Eastern Samar, and Northern Samar—but it’s still saddled with a high poverty rate. For instance, according to the 2023 census, 1 in 5 residents found it almost impossible to put food on the table.

Samar Multi-Purpose Cooperative (SAMICO) was born against this backdrop, where poverty and natural disasters can instantly wipe out whatever gains by the residents over the years.

The seeds of SAMICO were sown in 2001, a natural progression from the pilot microfinancing program of the People’s Credit Finance Corporation (PCFC), which took root in the ten poorest provinces of the Philippines, including Samar.

Allan Jay Llanita, now the chairman of SAMICO, recalls those early days. “We started with just four founders, driven by a vision to provide accessible financial services to those who needed it most,” he shares.

The PCFC model emphasized community group formation, peer support, and a high collection rate, laying a strong foundation. Mr. Llanita said that their purpose wasn't just making money through lending but building trust and fostering a sense of shared responsibility.

SAMICO was formed with just 38 members and ₱40,000 seed capital, but it quickly grew as a force, particularly in what was considered the “underground economy.”

These are the sari-sari stores, market vendors, street sellers, tricycle and jeepney drivers, repair shops, and the self-employed. These are what banks and financial institutions regularly shun, except if they agree to a collateral.

With banks closing their doors to these entrepreneurs, they naturally turned to loan sharks despite the crushing interest rates.

"We saw how loan sharks were exploiting our people with 20% interest rates while banks turned them away. Our first office was so small people joked we could fit our entire operation in a tricycle sidecar," he mused.

The cooperative's innovative approach of group lending and weekly payments at just 2.5% interest quickly gained traction among the borrowers who had been at the mercy of predatory lenders.

“We offered a viable alternative, a chance for them to capitalize their small ventures and improve their lives,” he says, adding that their services eventually extended to farmers and fisherfolk, injecting much-needed capital into the region’s agricultural backbone.

The pilot program proved to be a success as their assets grew to P4 million. When the two-year lifecycle of the program ended, PCFC announced to bid the model to other financing institutions. That’s when Mr. Llanita and his co-founders decided that they would just take over. And it was all hard work from then.

In just a decade, using door-to-door advertising and word-of-mouth, SAMICO’s membership swelled. The cooperative established branches and satellite offices to meet the demand across Samar and Leyte.  

By 2012, just before the catastrophic landfall of Super Typhoon Yolanda (Haiyan), its membership had already reached 33,000 and assets of P320 million. Despite the mushrooming microfinancing cooperatives and private lenders, SAMICO had established itself as an integral part of the local economy.

The Landfall

On November 8, 2013, described as the most powerful typhoon to hit the Philippines, Typhoon Yolanda flattened, particularly nine of the 23 Samar municipalities.

While the government stopped counting the dead at 6,300 and P95 billion in damage, the scars left by the Category 5 typhoon to the cooperative are still visible to this day.

"The damage wasn't just physical," Llanita recounts. "Our Tacloban office, located just across from the convention center that became ground zero, was completely destroyed. Three satellite offices vanished entirely. Many of our members died. Those who survived lost everything - homes, fishing boats, livelihoods."

The numbers told a devastating story: ₱150 million in exposed loans, ₱80 million in net losses, and collection rates plummeting from as high as 98% at the co-op’s peak to a dismal 30%.

Unlike commercial banks that sometimes enjoy bailouts, SAMICO had zero safety net as they relied solely on the share capital and member savings. The advantage was that they did not have outside borrowings, which cushioned the financial impact to their bottom line.

However, their problems were insignificant compared to what their members suffered. As he explains, "When the storm passed, we weren't just picking up the rubbles of our offices—we were also helping members bury their dead and rebuild their lives."

Even today, he confesses that the cooperative is still reeling from the after-effects of Typhoon Yolanda, as millions in loans had to be crossed out of their books.

While SAMICO implemented emergency loan restructuring and partnered with NGOs to replace fishing boats and farming tools, recovery was still painstakingly slow.

Finding Opportunity from the Pandemic

In 2018, SAMICO was beginning to regain its footing as it managed to double the collection rate from 30% to 60%. Then, another crisis struck. The economic lockdowns dealt the cooperative another major blow.

"When lockdowns began because of the COVID-19 pandemic, we couldn't collect payments at all," Llanita recalls. "Our repayment rate dropped again. We had to think differently or risk disappearing altogether."

For instance, SAMICO pivoted to dairy farming since the nationwide lockdowns paralyzed traditional microfinance operations. In June 2021, the cooperative imported 111 Saanen goats from Australia after planting forage and building barns during lockdowns.

In just two years, the number of heads grew to 330 goats, each producing an average of 1.2 liters of milk daily. SAMICO also secured ₱9 million in contracts with the Department of Social Welfare and Development and ₱5 million with the Department of Education for school feeding programs.

"We turned crisis into opportunity," Llanita says. "While others waited out the pandemic, we were creating new livelihoods for our members."

On top of its dairy milk venture, SAMICO also signed a P7 million contract with the Philippine Carabao Center (PCC) to become a consolidator of the carabao milk dispersal program in Samar.

Today, SAMICO continues to innovate, implementing GCash payments to improve collections and constructing a ₱30 million headquarters in Catbalogan. This year, the cooperative plans to launch a 100-head hog raising and fattening program to meet the demand for meat in the province.

Dreaming is Free

However, the scars of Yolanda remain.

"We may never fully recover what the storm took," Mr. Llanita admits. The cooperative's assets, which stood at ₱320 million before the typhoon, have only recently approached ₱260 million.

Nonetheless, he credited the co-op’s survival to the network and partnerships SAMICO developed through the years.

For instance, since 2007, SAMICO has been a member of the Federation of Peoples' Sustainable Development Cooperative (FPSDC). Mr. Llanita says that he had been a member of the federation’s governing board, which speaks to the level of cooperation they have with FPSDC.

SAMICO hasn’t availed of FPSDC loans. Instead, it invested about P6-9 million of its money into the federation’s lending program extended to its affiliates. They also managed to get slots in the regular Lakbay Aral by the FPSDC. “Last time, we went to Taiwan to visit and benchmark ourselves with the agricultural cooperatives there,” he says.

At this rate, Mr. Llanita is resigned to the fact that they will never duplicate the 98% collection rate pre-Yolanda.

However, cooperative officials are undeterred. In fact, Mr. Llanita shared SAMICO’s target goal of joining the elite billionaires’ club in five years.

"It might be a pipe dream. But it’s free to dream,” he says, adding that SAMICO is Samar’s last homegrown cooperative at this scale.  "We're not just a cooperative. We're proof that when everyone comes together, no storm, no matter how powerful, can break the community’s spirit.”