Central credit bureau still lacks seed capital

MANILA, Philippines - The proposed Central Credit Information Corp. (CCIC) has not received its mandated seed capital of P75 million under Republic Act (RA) 9510, or the Credit Information System Act (CISA).

Likewise, it is still filing its corporate registration papers with the Securities and Exchange Commission (SEC). The CCIC is the country’s first mandated credit information bureau under RA 9510.

“Nonetheless, we are submitting our registration papers with the Securities and Exchange Commission, formalizing the corporation, and we are trying to become a legitimate corporation,” Baltazar N. Endriga, newly-appointed CCIC president, said. President Aquino appointed Endriga last May 31.

He admitted that the future central depository of credit history is still looking for an office, still forming the organizational chart, and outlining plans for the rest of the year.

Under the CISA implementing rules and regulations (IRR), the proposed corporation will have a seed budget of P75 million. But so far, CCIC only received P17.5 million.

On the other hand, the private sector partners of the corporation had already submitted their financial commitments.

Under the law, 60 percent of the credit information corporation will be owned by the National Government while representatives of the private sector can jointly own 40-percent equity.

Qualified private investors are allowed to invest more than P5 million but not more than 10 percent each of the total value allocated for the private sector.

In absolute terms, the total seed capital should reach P125 million, or P75 million from government and P50 million from the private sector.

The Bankers Association of the Philippines (BAP), Chamber of Thrift Banks (CTB), the Rural Bankers Association of the Philippines (RBAP), the Philippine Credit Reporting Alliance (Philcrea), and the Credit Card Association of the Philippines (CCAP) are the initial investors to the credit information bureau.

The CISA law was formalized in 2008 and in the following year, the implementing rules and regulations (IRR) was release. Discussions at the legislature started as far back as 2003.

Endriga is the managing partner of Endriga, Manangu and Associates certified public accountants. He is active in the Philippine Institute of CPAs. He served as a board member of the Management Association of the Philippines, board member of the Capital Market Development Center Inc., board member of the Miriam College, managing director of the Management Association of the Philippines Research & Development Foundation Inc. and founding member of the Foundation for Transparency & Public Accountability.

Meanwhile, the BAP Credit Bureau Inc. (BAP-CB) has successfully penetrated the commercial, thrift and rural banking sector, and has made inroads with the microfinance sector.

The BAP-CB is a product of the Bankers Association of the Philippines (BAP), the trade organization of the commercial banking system. It is a computerized credit information exchange institution that allows members credit-dealing reports on individual and corporate borrowers to combat fraud and bad loans.

Its membership list has reached 140 sectors including three government financial institutions, 50 rural banks, 21 thrift banks, 14 credit unions and cooperatives, 28 commercial banks and universal banks, and 24 other non-banking financial institutions.

So far, the list reached 4.5 million names of individuals and institutions, and the average inquiries are 15,000 a day. The historical peak in a single day reached a little over 30,000. A P5 fee is charged for every inquiry.