Credit bureau seen to boost Phl ranking in ease of doing business

MANILA, Philippines - The establishment of a national credit information bureau would positively impact on the country’s ranking in the Ease of Doing Business Index of the World Bank, aside from boosting its chances of securing the much-coveted investment grade status from credit raters, officials said.

Credit Information Corp. (CiC) president Baltazar Endriga said the establishment and full operation of a national credit bureau is one factor that would make it easier to do business in the Philippines.

The CiC is the national credit information bureau formed by the government through the Credit Information System Act (CISA) in 2008.

In its Doing Business 2013 report, the World Bank and the International Finance Corp. (IFC) ranked the Philippines 138th out of 185 countries surveyed, reflecting little progress in improving its global competitiveness.

The Philippines remains 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.

It is also for these reasons that the Philippines – although considered as almost an investment-grade economy – still lags behind other countries in terms of ease of doing business.

During the formal signing ceremonies between the IFC and the CiC yesterday, IFC Philippines country chief Jesse Ang said they will help CiC develop an appropriate business model for establishing a credit information system, including the selection of the best technical partner to design and set up the information system.

No money will be involved between the two entities, but IFC will pay for credit information bureau experts and information technology (IT) consultants.

CiC officials and stakeholders admitted that collection and collation of positive and negative credit data would not be easy, given that the bureau must be fully operational by 2015.

“Note that the information will come from physical data in print form as well as digital form. We are talking about millions of individual data, and we don’t even have a standardized format,” the officials said, adding that there are a lot of security and access information that have to be settled.

The bureau must create a database that will provide independent, up-to-date, reliable and accurate credit information to private sector credit bureaus, which will then sell the information to banks and other lenders. Such information will help lower payment defaults, reduce the risk of lending, and increase credit access for all borrowers.

CiC is controlled by the National Government, with a 60-percent stake, and chaired by the Securities and Exchange Commission.

The private sector controls a combined 40-percent stake, spread among the Bankers Association of the Philippines (BAP), the Philippine Cooperatives Center, the Credit Card Association of the Philippines (CCAP), the Chamber of Thrift Banks (CTB), the Rural Bankers Association of the Philippines (RBAP), and the Philippine Credit Reporting Alliance.