MANILA, Philippines - The country’s credit information bureau is expected to finally commence commercial operations through the Credit Information Corp. (CIC) by the end of next year to establish a comprehensive and centralized credit information scheme.
CIC president and chief executive officer Baltazar Endriga said in an interview with reporters during the CIC’s 30th anniversary foundation ceremony that they hope to get the entire system going before the end of December next year.
“We will be operational by 2013,” Endriga stressed.
He pointed out that the company is now in the process of reviewing several project proposals and business models that would serve as the guidelines for its operations as well as ownership structure.
Presently, the bureau is predominantly government controlled or 60 percent of the total equity while the private sector accounts for 40 percent. The private segment is composed of the trade organizations of the country’s banking system.
These are the Bankers Association of the Philippines (BAP), the Chamber of Thrift Banks (CTB), and the Rural Bankers Association of the Philippines (RBAP).
The government stakeholders are: the Securities and Exchange Commission (SEC), the Bangko Sentral ng Pilipinas (BSP), the Insurance Commission (IC), Department of Trade and Industry (DTI), and the Coooperative Development Authority (CDA).
The commissioner of the Securities and Exchange Commission (SEC) is expected to chair the CIC board of directors.
Endriga added that CIC is set to bid out the software and hardware paraphernalia that would run the country’s centralized credit information system through the CIC that would shorten processing time and reduce transaction costs.
The CIC was formed through Republic Act 9510 otherwise known as the Credit Information System Act (CISA) authored by Sen. Edgardo Angara to serve as a comprehensive and centralized depository of credit information system for dissemination of fair and accurate information from credit and credit-related activities critical for the country’s economy, in general, and financial system.
Earlier, Endriga said CIC is moving forward after the Governance Commission of Government-owned and controlled corporations (GCG) has ruled that the CIC need not register with the SEC.
The CIC was placed under the supervision of the GCG early this year. That created some legal confusion since it was not clear whether the central depository of credit history had to register as a corporation under the existing laws.
It also triggered financial issues since the CIC could not tap the funds allocated for its operations since it was not yet a “legal entity.”
The funding came in two tranches, the first was P32.5 million released after Endriga was appointed early last year, and the balance of P42.5 million only last November. Both tranches were deposited with the Land Bank of the Philippines.
The CISA law was formalized in 2008, and in the following year, the implementing rules and regulations (IRR) was released. Discussions at the legislature level started as far back as 2003.
A credit information system would directly address the need for reliable credit information concerning the credit standing and track record of borrowers.
An efficient credit information system would also enable financial institutions to reduce their overall credit risk, contributing to a healthier and more stable financial system.
Presently, the largest credit information system is run by the BAP, or the trade organization of the country’s commercial banking system.