Nat’l credit bureau to boost Phl ranking in doing business

MANILA, Philippines - The establishment and full operation of a national credit bureau would boost the country’s ranking in doing business, said Credit Information Corp. (CiC) president Baltazar N. Endriga.

In its Doing Business 2013 report, the World Bank and the International Finance Corp. (IFC) ranked the Philippines 138th out of 185 countries in the survey.

As the country failed to implement any institutional or regulatory reforms to make it easier for enterprises to do business the past year, its rank slipped two notches from the previous year’s 136th.

In the survey, “getting credit” is one of the factors that determine the ease with which business can be done within a country. From 126th the past year, the country’s ranking in terms of obtaining credit fell three notches down to 129th in the latest WB-IFC survey.

The rank was based on the presence of collateral and bankruptcy laws that facilitate lending in the country, as well as the accessibility of credit data that is housed and distributed via public credit registries and private credit bureaus.

“The Philippines remains to be among the few countries in the region where credit data sharing is still in the works. Singapore, Malaysia and Thailand have fully functioning credit bureaus at the moment, while even Mongolia and Bhutan are almost there,” Endriga said during the 11th National Cooperative Summit held recently in Cagayan de Oro City.

He admitted that the Philippines had a long history of private sector initiatives to establish credit bureaus.

“Since these are private initiatives, they didn’t have the teeth to compel other institutions for the information that they need. Their coverage was very limited, and their databases were not comprehensive,” the CiC chief executive added.

The CiC is a government-owned and -controlled corporation (GOCC) mandated to serve as the leading provider of independent, reliable and accurate credit information in the country. It will be able to address the credit information gap, thus unburdening entrepreneurs of the current long, slow and complicated processes in doing business.

Under Republic Act (RA) 9510 or the Credit Information Act of 2008, the CiC is 60 percent owned by the government, while 40 percent is co-owned by the private sector. The private sector ownership is composed of the Philippine Cooperatives Center (PCC), Bankers Association of the Philippines (BAP), Credit Card Association of the Philippines (CCAP), Chamber of Thrift Banks (CTB) and Rural Bankers Association of the Philippines.

Endriga said having a reliable and state-of-the-art credit database will also help lower bad debts and defaults, thus strengthening the country’s financial system, increasing credit activity, and boosting investment.

“There is a need for our credit facilities to make better and faster decisions regarding credit. The lack of easy access to credit continues to be a major roadblock in entrepreneurship,” Endriga added.