Philippines establishes credit bureau

This is good news to credit grantors and hopefully credit users too.

President Arroyo today signed into law Republic Act 9510 establishing a credit bureau that will consolidate “credit information from financial institutions to facilitate creditworthiness checks”, reported the

Before RA 9510 came to law, Philippine banking and financial institutions depended on private-sector initiatives such as the BAP Credit Bureau and the Credit Management Association of the Philippines which maintain credit worthiness records.

In a press release, Malacanang said the law’s salient points include the following:

The establishment of a Credit Information Corporation (CIC) with the primary mandate to receive and consolidate basic credit data and to act as a central registry of credit information which will provide access to reliable standardized information on credit history and financial condition of borrowers;

The allocation of 60 percent of the total common share of the corporation in favor of the national government and the remaining 40 percent to be owned and held by qualified investors such as industry associations of banks, quasi-banks and other credit related associations. The amount of P75 million will be provided by the national government in the General Appropriations Act representing its equity share and the P50 million to be subscribed and paid up by qualified investors;

Strict confidentiality of credit information is to be maintained by the corporation, the submitting entities, the accessing entities, outsource entities. The special accessing entities and duly authorized non-accessing entities;

The law is not meant to be an exception to the Bank Secrecy Law (BSL) because confidential information under the Law of Secrecy of bank Deposits, Foreign Currency Deposit Act, General Banking Law and the Anti-Money Laundering Law are expressly excluded from the information to be shared in the system.

Credit card issuers and banks specializing in loans, of course, welcome this development. But whether it will result in more loans and credit going to the people who need them most (and have the ability to pay), only time may tell.

{ 11 comments to read ... please submit one more! }

  1. This is something that I didn’t understand at first when I started running “credit checks” for my American customers on the phone (yeah, am a sales rep in a call center and customers are usually scared of the deposit amount that they need to pay:D). With this it’d definitely preclude fraudsters to continuously squander and make people realize that they are financially incapable–no, too negative–not ready. I’m yet to know its cons for those who have good credit results, tho.

  2. Like what I said, this is definitely good for the credit card issuers and banks. It will make them see quickly who have outstanding arrears in financial companies.

    For the credit card and loan applicants who have paid their past arrears but have not been cleared by the banks, this should also be good.

  3. This is welcome news especially for small businessmen. Banks can more easily ascertain the credit standing of lendees. Shorter processing time and less risk-assumption for banks means that businessmen (with good credit history) in need of capital can get the money more quickly, and hopefully at lower interest rates. Or is it all wishful thinking?

  4. Credit-worthiness issues are fixed in no small way by a dynamic credit bureau.

    Whether the banks and credit card companies would lower interest rates is another matter altogether. Other factors come into play regarding interest rates.

  5. I just really dont know if this will really be patterned same with the US credit bureau ( its almost part of thier lives ). Does anyone knows if this already took effect? I did not hear anything for the updates. For transparency, i believe creditcard companies informs thier cardmembers for this. Whats the irony is that my co employee actually applied for DMP ( dept management program ) for his delinquent creditcard account, but he was still able to have his loans from other banks.

  6. Good day, I just want to ask is there a possibility that once your name is on the list of this credit bureau, magkakaroon na ba ng access ang lahat ng banks para makita ito? paano po ba makita ang mga names na listed dito..I have a probs kasi on my credit card kasi it was used by my rider na sobrang laki na ng balance as of today tapos ako lahat ang pinagbabayad, nababayaran ko naman nung una but ngayon i find it hard to pay everything kasi sa interest lang lahat nahuhulog ang payment ko. Pano ko ba malalaman na included na ang name ko sa list ng credit bureau? please help me po…this is my email add…thank you and God bless

  7. I want to know how I can improve my credit ratings? I have a bad record kase. how can I recover from this? please email me back. thanks.

  8. This is kinda alarming. Though the establishment of our own credit bureau will give our finacial industry the backbone to operate, the rights of the consumers were being put at stake.

    The only protected party here in the financial market players. How about the consumer. If you have a bad credit then you will not be qualified to get a loan in any form. They have created this, I think the lawmakers should also create a counterpart law that will protect us. Like the FDCPA of the US.

    Under this law, our credit information is protected, finacial institution are not allowed to not disclose the reason why you are being denied for a credit. Moreover, we the consumer are being protected on collection practices. No more threatening by sending a dunning letter with a certain lawfirm’s letter head.

    We are yet new with this process, but this is indeed a great stepping stone to give our financial industry a break, but the governement should at least take its people into consideration.

    FYI: Sen. Merriam Defensor-Santiago had this Fair Debt Collection Practices Act pends in the Senate. I just hope that this newly elected lawmakers take a look at it and have it reviewed.

  9. disappointedapplicant

    I would like to know how you can repair a bad credit rating. Is there a centralized agency who can collect all these information and let you know how you can resolve them?

    At the moment, is there any centralized credit rating bureau that credit card companies/banks use to investigate their applicants?

    My card application has been declined and I understand why they cannot disclose the reason. I have a good paying job and I havent had any credit cards before so I dont have unpaid credit card debts. They’ll tell you to re-apply but for what, just to be declined again?

    They should at least give a general reason why applications are being declined. Is there someone there who can shed a light for me to understand this? Just a thought.

  10. This credit bureau that we have now solely protects and benefits the financial sector and businesses. How about us consumers? It’s is lacking some principles such as consumer data protection.

    Common consumers has no way of getting their credit reports, we can’t file disputes to derogatory information, most importantly it has no identity theft protection. We can’t check our credit standing.

    I hope a credit bureau just like in America will be created here in the Philippines.

  11. hi! im goint to have my thesis already.. and im planning to propose a credit burea not just for the business sector but for consumers as well.. like in US.. they have experian, equifax and transunion.. i really think its abt time that people should be aware how to take care of their credit history regardless if its borrowing money or not.. because employers in US also take in consideration the credit worthiness of an applicant.. if you guys have any suggestion towards this project kindly send me an email.. tnx!

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