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By Efren L. Danao Senior
Reporter
The Senate approved two bills on
third and final reading Wednesday—one on the University of the
Philippines charter, the other to establish a credit information
system.
Senate Bill 1964 aims to
strengthen UP as “The National University,” a senator said. The
credit information system to be created by Senate Bill 1881 is
designed to meet the need for reliable credit information concerning
the credit standing and track record of borrowers.
Sen. Edgardo Angara, chairman of
the Senate Committee on Banks and sponsor of Senate Bill 1881, said
a credit information system will greatly improve the overall
availability of credit to micro, small- and medium-scale
enterprises, lower the cost of financing, and reduce the
“excessive” dependence on collateral to secure credit
facilities.
“An efficient credit
information system will also enable financial institutions to reduce
their overall credit risk, contributing to a healthier and more
stable financial system,” he explained.
The Legislative-Executive
Development Advisory Council (Ledac) and various business groups
endorsed Senate Bill 1881. It was among the 19 bills in the priority
agenda of the Senate.
A new entity, the Central Credit
Information Corp. (CCIC), will receive and consolidate basic data
credit, to act as the central repository of credit information, and
to provide access to reliable, standardized information on credit
history and financial condition of the borrowers.
Banks, quasi-banks, their
subsidiaries and affiliates, credit-card companies and other
entities that provide credit facilities are required by the measure
to submit basic credit data and their updates to the new credit
entity.
“Banks will no longer charge
high interests to known responsible borrowers. Moreover, this will
encourage responsible borrowing attitude as debtors will know that a
negative credit behavior will remain in their record,” Angara
said.
Negative information on a
borrower will stay in the database of the Central Credit Information
Corp. for up to five years from the settlement of the debt or from
the correction of the negative information.
Angara said the bill does not
impair the secrecy of bank deposits. It gives a borrower the right
to access credit information about him to give him a chance to
dispute and correct any inaccuracy.
“To avoid damage to one’s
financial reputation, borrowers would have the full right to know
the credit information about them,” he added. “There are also
safeguards against breach of confidentiality and misuse of borrower
information.”
UP charter
Senate Majority Leader Francis
Pangilinan said the bill amending the UP charter will enhance its
status as a leader in setting academic standards.
“There are many state
universities, but UP will be known as The National University,” he
added.
The UP Board of Regents will draw
up a position classification and compensation plan for its faculty
and staff. The salaries and benefits shall be comparable to those
being received by their counterparts in the private sector.
Pangilinan noted that many
excellent UP faculty members had already left for private
universities offering higher pay. He is confident that this
provision on pay would stop this pirating of UP talents.
UP will be allowed to enter into
a long-term lease with private entities on any university property.
All incomes generated by UP will be retained by the university and
disbursed at the discretion of the Board of Regents.
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