MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) is set to issue a circular reminding all banks and non-bank financial institutions to submit complete credit information to the Credit Information Corp. (CiC).
The CiC is a government-owned and controlled corporation that would be the lead provider of independent, reliable and accurate credit information in the Philippines. It was created in 2008 by Republic Act (RA) 9510, otherwise known as the Credit Information System Act (CISA).
CiC president and chief executive officer Jaime P. Garchitorena said the BSP circular merely reiterates and serves as a reminder to the banking system of its duty to submit to the government bureau both positive and negative credit information.
“The BSP circular also benefits the monetary regulator since we are servicing the same industry, and that it will likewise benefit from the global view of the credit risk profile of the country’s banking industry,” he said.
He likewise reminded that under RA 9510, the CiC could penalize institutions violating the law. The credit bureau’s principal supervisor is the Securities and Exchange Commission (SEC).
Garchitorena said the CiC would first focus on the banking industry and all non-bank financial institutions under the BSP supervision, before expanding to other industries including insurance, credit cooperatives, financial companies and institutions, utility companies and other businesses that extend loans.
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Thirty-three institutions and companies have already signed up, and another 20 are undergoing data format revisions and reviews.
“We expect roughly the same number or more by June,” the CiC chief executive said.
Likewise, an internationally-recognized credit information bureau already servicing some credit card companies is signing up with the CiC, while several others are reportedly seeking SEC approval to operate in the Philippines.
In fact, the Credit Card Association of the Philippines (CCAP) has identified CiC as one of the key challenges of the plastic money industry. The other two is the establishment of a national identification system and improved electronic infrastructure for the credit card and other electronic payment systems.
There are 6.9 million credit cards in force, while the country’s banking system services some 30 million depositors.
Under the CISA Law, the government credit information bureau would compile all credit information to help creditors evaluate the ability of prospective and existing customer to pay.
Credit information allows all lenders to address among others the credit requirements of the micro, small and medium enterprises (MSME) that comprises over 96 percent of all business in the country.
The CiC would provide mechanisms to make credit more cost-effective and reduce the excessive dependence on collateral to secure credit facilities. The bureau is also mandated to create a healthy balance between the need for reliable credit information and the safeguarding consumer protection, ensuring a free and healthy competition in the industry.
