The government should significantly increase the budget allocation of the country’s central credit registry to further perform its mandate in providing accessible financing, a study by Policy and Economic Research Council (PERC) and Makati Business Club (MBC) suggested.

The research by the US-based think tank and business group explained that “while the CIC (Credit Information Corp.) could earn fees, it should not be considered its primary source of revenue,” CIC noted in a recent statement.

With this, both parties emphasized the “the need for the government to substantially increase the CIC’s budget allocation.”

The CIC in September asked for a P90-million government subsidy for next year as it prepares to improve its database management. Of this amount, P35 million is earmarked to better the security and maintenance of its growing credit database.

System improvements will continuously be in place as the credit registry onboard more submitting entities, load additional credit data and further broaden financial inclusivity, the CIC said.

With this, the firm said it is investing in third-party solutions provider to ensure cybersecurity all the time. CIC, in addition, is earmarking funding for regular annual penetration testing of the Credit Information System (CIS) to discover potential gaps in security.

The MBC-PERC study, meanwhile, noted the increase in quality and quantity of credit data being shared with the CIC.

“The CIC has made incredible contributions despite some real significant constraints,” PERC President Michael Turner said. “And it’s not only a pipe-in to the CIC, but also pipes out to the extent that there are accessing entities—lenders who are making use of CIC data for varying purposes including origination and risk assessment.”

The study underscored the importance of proper management of data quality in developing an effective reporting system.

As of the latest report, CIC has over 22 million unique individual records in its database. It also has 79 accessing entities, including major universal and commercial banks, rural and thrift banks, microfinance, lending and financing companies, cooperatives, and government lending institutions.

CB as regulator

The study also suggested that the Bangko Sentral ng Pilipinas (BSP) may be deemed as the better regulator for CIC than the Securities and Exchange Commission.

The PERC and the MBC said that BSP employs an international best practice in housing the public credit registry.

Ben Joshua Baltazar, CIC’s newly elected President and Chief Executive Officer, said that the CIC was open to looking into the proposed transfer of the credit registry to the Central Bank.

“With the proposed restructuring of the CIC—while maintaining its legal mandate—we look forward to a more efficient and more effective credit registry to service not just financial institutions, not just MSMEs, but all Filipinos to establish creditworthiness, here and abroad,” said Aileen L. Amor-Bautista, CIC Senior Vice President for Business Development and Communications.

Amor-Bautista added that the CIC was “grateful that the MBC and PERC study was able to recognize all our notable accomplishments, our mission-oriented leadership and staff, and awareness-raising efforts.” - Tyrone Jasper C. Piad

Source: BusinessMirror