Lack of president stymies credit information bureau’s operations

A CENTRAL credit information bureau cannot start operating because Malacañang has yet to appoint its top executive.

“There is no president yet,” Fe B. Barin, Securities and Exchange Commission (SEC) chairman, told BusinessWorld Friday night.

“[The president] is necessary to draw up a plan. We have to decide on the organizational structure of the corporation. And also… where to put up the office,” she added.

The implementing guidelines of Republic Act (RA) 9510 establishing a credit information system state that the President of the Philippines shall appoint seven to the Credit Information Corp.’s board of directors, including the corporation’s president, who shall also serve as an ex officio board member.

Five board members are to come from the private sector, and two independent directors shall be appointed as well.

The SEC chairman will serve as the board’s ex officio chairman.

Ms. Barin said the Credit Information Corp.’s board is almost complete and the government and the private sector have come up with the initial funding to set it up.

But since President Benigno S. C. Aquino III has yet to name a president for the
corporation, she said she cannot tell when operations can start.

“No new appointments yet [for the Credit Information Corp.], according to the Office of the Executive Secretary,” said Presidential Legal Counsel Eduardo V. de Mesa in a text message yesterday.

The Credit Information Corp., according to the law, has an authorized capital stock of P500 million, divided into 1.25 million common shares with par value of P100 each and 1.875 million preferred shares with par value of P200 each.

The government must contribute P75 million, and the private sector, P50 million.

Ms. Barin said the government has provided P17.5 million, while the private sector has come up with P12 million, which are enough to set up the corporation.

Six private sector groups represented in the Credit Information Corp. have contributed P2 million each, she said.

These are: Chamber of Thrift Banks formerly represented by past President Pascual M. Garcia III but to be replaced by the new President Patrick D Cheng; the Bankers Association of the Philippines (BAP) represented by its Director Omar T. Mier, Credit Card Association of the Philippines represented by Executive Director Elizabeth L. Legarda; Philippine Credit Reporting Alliance, Inc. represented by Marlo R. Cruz; the Rural Bankers Association of the Philippines (RBAP) represented by President Corazon L. Miller; and the Philippine Cooperative Center represented by Fr. Mar R. Arenas.

In an email last Tuesday, Ms. Barin said the six have been appointed by Malacañang to the Credit Information Corp.’s board: Candido R. Belmonte, Priscilla Marie T. Abante, Alfredo Ramon Herrera, Wilson U. Tecson, Richard Alvin M. Nalupta and Dalmacio L. Lim.

Ms. Barin said she has yet to discuss with Budget Secretary Florencio B. Abad the funds needed to complete the government’s counterpart.

Regarding the private sector’s contribution, she said: “It is not fair to ask the private groups to pay immediately when you don’t have the government counterpart.”

RA 9510 or the Credit Information System Act of 2008 seeks to establish a centralized credit information system to improve the availability of credit, especially to micro, small and medium enterprises.

The Credit Information Corp. shall collect credit data from banks, including their subsidiaries and affiliates, life insurance companies, credit card companies and other entities that maintain credit facilities.These same “submitting entities” may access the data for their use.

Industry players, however, said the absence of a central credit information bureau has not curtailed their operations.
Banco de Oro Unibank, Inc. President Nestor V. Tan said in a text message last Tuesday pointed out: “They (banks) are already used to operating without it.”

In a separate text message, Cesar O. Virtusio, BAP executive director, said banks’ lending operations have not been affected.

“In addition to banks’ [information], they (banks) may also access the BAP credit bureau,” he said.

In a phone interview yesterday, RBAP’s Ms. Miller said: “In the absence of a [central] credit bureau, I am encouraging the rural banks to tap the BAP’s negative file information system to check on prospective clients’ profile.”

Ms. Miller noted that although BAP’s credit bureau is limited to information on “bad accounts,” it will still be helpful in coming up with precautionary measures such as a higher collateral for those with negative records. — Louella D. Desiderio with a report from Ann Rozainne R. Gregorio, BUsinessworld