Six financial institutions and a cooperative have complied with a requirement to submit relevant data that will be used for the establishment of a nationwide credit registry.
Credit Information Corp. (CIC), created under Republic Act 9510 or the Credit Information Systems Act of 2008, last October issued a circular setting a data submission schedule for all covered institutions.
Credit card issuers were to submit the data in November 30, 2015 while medium and large cooperatives were given October 30, 2016 and December 31, 2016, respectively, to do the same.
In a statement, CIC formally recognized the six financial institutions and the cooperative for being the earliest to submit credit data to the Credit Information System.
The six were credit card issuers Metrobank Card, HSBC Philippines, East West Bank, UnionBank, RCBC Bankard and Security Bank, while the sole cooperative was identified as the Taloy Norte Multi-Purpose Cooperative.
“[T]he value of the database is what should be driving us to submit,” CIC President Jaime Garchitorena said.
“There is this large sense of nationalism that we have attached to the CIC with the labeling of the use of credit data being an enabler to inclusive growth. We want to make that a reality,” he added.
The CIC said centralization would be an important tool for improving the overall availability of credit to micro, small, and medium enterprises (MSMEs), which account for 99.6 percent of total registered enterprises in the Philippines.
The Credit Information System is designed to be one of the vehicles that will establish a transparent, fair and equitable relationship among financial institutions, borrowers and other stakeholders.
Borrowers will be able to monitor their credit status and ease doubts as to their standing from the point of view of lenders. Financial institutions, meanwhile, can expedite loan applications.
In addition, the centralized registry can assist lenders in screening out high-risk borrowers, which will contribute to a healthier and more stable financial system in the country.
The state-owned firm earlier completed the first round of accrediting several Special Accessing Entities, officially accepting the applications of five international and one local credit bureaus that expressed their intent to become CIC Credit Bureaus.
An SAE is defined as a duly accredited private corporation engaged primarily in the business of providing credit reports, ratings and other similar credit information products and services. Accreditation allows them access to the CIC’s pool of consolidated basic credit data.
The six who passed the document requirement stage were: Credit Bureau Singapore, Credit Information Bureau Inc., Compuscan, CRIF, Dun and Bradstreet South Asia Middle East and TransUnion.
Once CIC finalizes the accreditation of qualified credit bureaus and opens its database sometime in 2016, MSMEs, the general public, corporations, and financial institutions can start benefiting from provided credit scores and reports.
The data is expected to expedite the process of loan applications, increase the lending potential of financial institutions, potentially decrease the need for collateral and help manage the risk of default.