Arroyo to sign credit info system bill into law
10/31/2008 | 04:12 AM
MANILA, Philippines - President Arroyo will sign into law Friday the Credit Information Act, or Republic Act 9510, to ensure the credibility of credit standing borrowers.
A Malacañang statement said the bill, one of the priority measures listed by the Legislative Executive Development Advisory Council (LEDAC), was ratified by both Houses of Congress last month.
The bill, which the Palace certified as urgent, will establish the Central Credit Information Corp., which will compile data from financial institutions to facilitate creditworthiness checks.
With the implementation of the law, information on the credibility of credit standing of borrowers will be available.
Presidential Management Staff (PMS) head Cerge Remonde said the measure is "very relevant" in the wake of a global financial meltdown.
Remonde said that if there is credit information, there would be transparency and banks would know the financial standing of an institution.
Remonde, who is also the Cabinet oversight official for micro-finance, said the bill would allow small businesses easier access to funds as this will address the lack of reliable information regarding the credit standing of borrowers and thus facilitate decisions of financing institutions.
Thus, he said this will improve access to credit of borrowers.
He added it will also lower the cost of financing and interest rates with good and efficient credit information system because credit risk will be lower.
The measure gives access to the credit market now that the banks are expected to be more selective because of recent global developments, he said.
The Central Credit Information Corp., to be headed by the chairman of the Securities and Exchange Commission (SEC), will consolidate data from banks, quasi-banks and their subsidiaries and affiliates, life insurance companies, credit card firms, government lending institutions and other entities that provide credit facilities.
It will provide credit data to "accessing entities" or the financial institutions, "special accessing entities" (those engaged in the business of credit reports and other information products/services), "outsource entities" (accredited third party providers which will handle data processing), and the borrowers themselves.
Also, it will have an authorized capital stock of P500 million, divided into common and preferred shares, with the national government owning own 60 percent of the common shares while the remaining 40 percent can be owned by associations of banks, quasi-banks and other credit-related associations.
The measure also requires the government to spend P75 million from the national budget to pay for its share, while private investors should shell out P50 million.
Implementing rules will be drawn up by the SEC and other agencies, and will be reviewed by a congressional oversight committee composed of seven members each from the Senate and the House. - GMANews.TV
A Malacañang statement said the bill, one of the priority measures listed by the Legislative Executive Development Advisory Council (LEDAC), was ratified by both Houses of Congress last month.
The bill, which the Palace certified as urgent, will establish the Central Credit Information Corp., which will compile data from financial institutions to facilitate creditworthiness checks.
With the implementation of the law, information on the credibility of credit standing of borrowers will be available.
Presidential Management Staff (PMS) head Cerge Remonde said the measure is "very relevant" in the wake of a global financial meltdown.
Remonde said that if there is credit information, there would be transparency and banks would know the financial standing of an institution.
Remonde, who is also the Cabinet oversight official for micro-finance, said the bill would allow small businesses easier access to funds as this will address the lack of reliable information regarding the credit standing of borrowers and thus facilitate decisions of financing institutions.
Thus, he said this will improve access to credit of borrowers.
He added it will also lower the cost of financing and interest rates with good and efficient credit information system because credit risk will be lower.
The measure gives access to the credit market now that the banks are expected to be more selective because of recent global developments, he said.
The Central Credit Information Corp., to be headed by the chairman of the Securities and Exchange Commission (SEC), will consolidate data from banks, quasi-banks and their subsidiaries and affiliates, life insurance companies, credit card firms, government lending institutions and other entities that provide credit facilities.
It will provide credit data to "accessing entities" or the financial institutions, "special accessing entities" (those engaged in the business of credit reports and other information products/services), "outsource entities" (accredited third party providers which will handle data processing), and the borrowers themselves.
Also, it will have an authorized capital stock of P500 million, divided into common and preferred shares, with the national government owning own 60 percent of the common shares while the remaining 40 percent can be owned by associations of banks, quasi-banks and other credit-related associations.
The measure also requires the government to spend P75 million from the national budget to pay for its share, while private investors should shell out P50 million.
Implementing rules will be drawn up by the SEC and other agencies, and will be reviewed by a congressional oversight committee composed of seven members each from the Senate and the House. - GMANews.TV
