Up until recently, the Philippines had no centralized database of credit information. In other countries, like the United States, banks and other lending institutions may simply consult this database to determine whether a customer is qualified for a loan.
This year, however, the Philippines has finally embarked upon building a centralized database for credit information. Republic Act No. 9510, "An Act Establishing the Credit Information System," set up the Credit Information Corporation (CIC) in 2008.
A government-owned and controlled corporation, the CIC is vested with powers to collect credit information from banks, financial institutions, insurance companies, financing companies, credit cooperatives, and utility companies and other businesses that provide loans. The CIC will then compile the credit information and make them available to creditors.
Previously, creditors had only limited resources from which to glean credit information. They relied on financial information submitted by the customer, bank records of existing clients, credit bureaus containing only negative information, and asking for information from other banks, which opens up the risk of client poaching.
With the centralized database, creditors can now easily determine whether a customer is qualified to avail of a loan. The CIC started accepting credit information on June 15, 2015. According to its President and CEO, Jaime P. Garchitorena, the next six to 18 months will be allotted to building the database and improving upon its usability.
"We hope that in 24 months we will be able to say that everyone will be able to get the credit they deserve from their credit history," quipped Garchitorena in a press release.
About Jay Castillo
Jay is the founder of Foreclosure Philippines where he shares real estate investing tips and foreclosed property listings. He quit his job as an I.T. Manager to focus on Real Estate Investing and Internet Marketing. He is a PRC licensed Real Estate Broker (REB License # 3194)