Centralized credit bureau seen to open in Dec. ’14

/ 08:24 PM September 22, 2013

A centralized national credit bureau under a fledgling government-owned and -controlled corporation called Credit Information Corp. (CIC) is expected to start operations under the auspices of the Securities and Exchange Commission by December next year.

In a recent press briefing, SEC Chair Teresita Herbosa said CIC was now in the process of procuring computer systems and establishing the network to finally jump-start operations. CIC has budgeted about P100 million to set up its information technology platform, she said.


The CIC is a partnership between the government, which owns a 60-percent stake, and the private sector, which controls the remaining 40 percent.

Herbosa said the credit bureau’s stockholders included the Credit Card Association of the Philippines, the Bankers Association of the Philippines and the Cooperative Development Authority.


“The target is to be operational by December 2014,” Herbosa said.

The law creating the CIC was passed in 2009 but it took another two years to pass the implementing rules and regulations and more time to fill up the board and for the government to make its equity contribution, she said.

The CIC has a paid-up common stock of P125 million as initial capitalization. It also receives a regular subsidy from the government to fund its startup costs.

Herbosa said Jaime Garchitorena was named officer in charge of CIC.

The SEC chair noted  that the GOCC would benefit not only from Garchitorena’s managerial skills but also his marketing experience.

The operation of CIC would require educating the public.

Congress has mandated the SEC, instead of the Bangko Sentral ng Pilipinas, to  oversee the operations of CIC but Herbosa said the SEC would always invite representatives from the BSP to assist during crucial meetings.


“Microfinance is handled by us and microfinance is one of the biggest beneficiaries of a central credit bureau,” Herbosa said.

“The big banks have their own credit systems. The targets of CIC are the people who will otherwise not be able to borrow. Financial inclusion is the objective—those people who borrow from rural banks and pay (credit) in installments,” she said.

She said financial inclusion was one of the requirements for the Philippines to improve its competitiveness.

CIC is envisioned to become the leading provider of independent, reliable and accurate credit information in the Philippines. It was created by virtue of Republic Act. No. 9510, otherwise known as the Credit Information System Act.

This GOCC is mandated to collect, collate and disseminate credit information that come from various sources, including banks, financial institutions, insurance companies, financing companies, credit cooperatives, utility companies and other businesses that extend loans.

The CIC will  compile these credit information to help creditors evaluate the ability of prospective and existing customers to pay.

Under the law, the government has five years from the start of the CIC’s operations to dispose of at least 20 percent of its shares to qualified investors. This means CIC will, in the future, cease to be a GOCC.

CIC is tasked to help lenders, borrowers and the economy as a whole by:

•Making credit accessible to more people, especially to small entrepreneurs.

•Protecting creditors against incurring bad debts, thus improving the health of the financial system.

•Aiding in quicker credit evaluation and decisions.

•Reducing the cost of processing loans, thus benefiting consumers in terms of lower borrowing cost.

•Protecting creditors from fraudulent borrowers, as well protecting consumers against financial mismanagement.

•Promoting more confidence in the system, thus spurring greater economic activity through a more sustainable expansion of credit and reducing poverty.

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