The country’s credit registry is asking lenders to be more considerate amid the coronavirus disease 2019 (Covid-19) pandemic, advising them not to tag missed or partial payments of loans as default or delinquent right away given the current situation.
In a statement on Tuesday, the state-run Credit Information Corp. (CIC) said this was in accordance to the provisions of the “Bayanihan to Heal as One” Act, which requires implementation of 30-day grace period to all loans with principal and/or interest falling due during the enhanced community quarantine (ECQ).
The credit registry noted that the delayed payment will not incur interest, penalty and other charges.
“We are one with the national government in promoting and protecting the collective interest of our citizens during this unprecedented period,” CIC President and CEO Jaime Casto Jose P. Garchitorena was quoted in the statement as saying.
“Following the Bayanihan Act, lenders must not tag non-payments or missed payments as default when submitting data to the CIC,” CIC Senior Vice President for Business Development and Communications Aileen L. Amor-Bautista added. “Otherwise, it would mean that they have not given their borrowers a one-month extension to pay their obligation.”
Garchitorena said that non-payment of a borrower during the
lockdown should not be basis of one’s creditworthiness, encouraging lenders to analyze historical data as well to see the whole picture.
The CIC chief said should consider the ECQ in evaluating creditworthiness, comparing the payment behavior before and prior the lockdown.
Garchitorena said the credit registry ensures that the data submitted by the financial institutions should be accurate, which means it underwent fair review and assessment of credit history and financial condition of the borrowers.
Furthermore, Amor-Bautista said the CIC is consulting with accredited credit bureaus and other credit reporting experts to formulate best practices on how to use CIC data in assessing portfolio during and after ECQ.
“We are exploring ways to include notations in the CIC Credit Report that will clearly indicate the period of ECQ to create proper context to any payment behaviors that may emerge from the same,” Garchitorena said.
The CIC currently has 483 members comprising credit card issuers, universal and commercial banks, thrift banks, rural banks, cooperatives and cooperative banks, savings and loan associations, private lending institutions, private leasing and financing companies, microfinance institutions, government-owned and controlled corporations with lending facilities and insurance companies.
- Tyrone Jasper C. Piad
Source: BusinessMirror