Having spent the past year been involved helping this particular government agency organise and prepare itself to set-up and operate the country’s national credit bureau, the new deadline of late 2014 gives me confidence that the light at the end of the tunnel is near. I am hoping to work with one of Europe’s largest credit bureau to participate in this tender to provide the needed system for its needs.
From BusinessWorld Philippines
November 19, 2012
Credit info bureau hit by delay again
THE CENTRAL credit information bureau is expected to become operational in late 2014 — two years later than first thought — as the data storage system that is key to its functioning still needs to be set in place.
“We have moved our target for the launch of the central credit information bureau. We think the credit bureau can be fully operational by the last quarter of 2014,” Baltazar N. Endriga, Credit Information Corp. (CIC) president, told BusinessWorld yesterday on the sidelines of a symposium organized by the Rural Bankers’ Association of the Philippines (RBAP) to mark its 55th charter anniversary.
The bureau should have become operational in December 2012 but this was delayed to December 2013 as issues regarding its legal identity as a corporation first needed to be settled.
The CIC was created under Republic Act (RA) No. 9510 or the Credit Information System Act of 2008 to serve as a central registry or central repository of credit data. A credit information system is expected to improve the availability of credit, especially to micro, small and medium enterprises, and to reduce financial firms’ credit risk.
Mr. Endriga said the CIC started to hire employees only in January and used up four months to find and rent an office as it had to follow procurement rules being a state firm.
He pointed out things got moving only after the Governance Commission for GOCCs, which oversees state firms, issued its opinion in November 2011 the CIC no longer needed to pay the Securities and Exchange Commission’s P1 million registration fee and seal its legal identity as a corporation as RA 9510 essentially established that it is one.
“Then, we found a consultant who will guide us through the process of finding the right system provider only last month,” Mr. Endriga further said.
Lat Nov. 14, CIC signed a memorandum of understanding with the International Finance Corp. (IFC), the private sector investment arm of the World Bank. IFC will provide advisory services to CIC, particularly with regard to the third party that will provide and maintain the credit database.
“IFC will help us choose the right system provider and guide us through the contract negotiation process,” he said.
Requests for proposal will be sent out in January, to be followed by a bidding to appoint the system provider.
Once the provider is chosen, CIC will turn its attention to collecting and cleaning credit data from banks, which is expected to be a tedious process.
Sought for comment, RBAP President Edward Leandro Z. Garcia, Jr., in an interview said the lack of a central credit information bureau prevents banks from extending lower lending rates to clients or to pursue clients who have good credit records.
“Since we have access only to the BAP (Bankers’ Association of the Philippines) credit bureau, which provides only a negative list of borrowers, we cannot lower the borrowing cost of some clients who have a good credit record,” he said.
The CIC will provide both positive and negative credit data on borrowers. — Ann Rozainne R. Gregorio