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 Inquirer.net.
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.