MAKATI CITY, 6 February 2020 – The state-run Credit Information Corporation (CIC), along with its two accredited credit bureaus—CIBI Information, Inc. and CRIF Philippines—reported an increase in credit report inquiries for financial and loan purposes.
CIC President and CEO Jaime Casto Jose P. Garchitorena mentioned that this is in line with CIC’s long term expectation as “the CIC has the largest credit database and the most diverse set of contributors in the country with 9,021,803 unique data subjects and 81,364 companies/corporations, and 56,481,088 contract data as of December 2019.”
CIC’s accredited credit bureaus, also known as Special Accessing Entities (SAE), are duly accredited private corporations engaged primarily in the business of providing credit reports, ratings, and other similar credit information products and services. Per Republic Act (R.A.) No. 9510 or the Credit Information System Act (CISA), they are entitled access to the CIC’s pool of consolidated basic credit data, subject to security requirements.
CIBI, the Philippine’s first and leading credit bureau, has indicated an increasing amount of usage in the automotive sales industry, as well as the more traditional financial service companies such as lending institutions, banks, and credit card companies.
CRIF Philippines, the CIC’s second most active credit bureau, has reported similar increase in activity with financing companies.
“We are pleased that CIBI and CRIF, as well as their clients, are finding the usability of our credit data. Bulk of the CIC data is accessed through them,” Garchitorena added.
Supporting the underserved
Credit report inquiries are made through accredited credit bureaus to evaluate credit applications of new-to-credit borrowers. “New-to-credit” validations allow even the government lending institutions to push for expanding financial services to the previously underserved sector of the population. Another feature of the CIC system is allowing lenders to monitor existing accounts to assist in determining expansion or restriction of existing lines of credit.
Garchitorena further enjoined qualified financial institutions to go beyond compliance and start accessing the CIC database, especially given the introductory price of P10 per credit report/inquiry as approved by the Securities and Exchange Commission (SEC) until March 31, 2020.
“You can do this by entering an agreement either directly with the CIC or through our SAEs—CIBI and CRIF Philippines—provided, of course, that you meet the minimum standards of compliance by having at least six (6) months’ continuous submission, and by completing all necessary documentation,” the PCEO explained.
Financial institutions that are also directly accessing the CIC database include banks, credit card issuers, financing, and lending companies.
Security as CIC’s primary concern
In response to the increasing security needs of a growing database, the CIC’s accredited credit bureaus or SAEs are likewise bound by a subscription agreement that requires the assurance and confidentiality of accessed information or data. This is implemented by strict internal control procedures and application of relevant security processes involved in the access, retrieval, use, and transfer of information or data accessed from the CIC.
“We recognize CIBI and CRIF for having completed the CIC-mandated security audit in 2019. This speaks of their commitment to ensure that disclosure of consolidated credit data does not breach any obligation of confidentiality under the law,” Garchitorena said.
CIC’s two other accredited credit bureaus— Transunion Information Solutions Inc. and Compuscan (which was recently acquired by Experian)—are in the process of completing the audit requirements and are yet to access the CIC credit data.
“In the end, our goal and that of our SAEs is to use credit information for the benefit of both the lender and the borrower: the lenders can lend more to more clients with lower investment risk; and the borrowers—those new-to-credit and the underserved—can gain access to credit facilities and other financial services,” the PCEO concluded.
Credit reports and emerging needs
For its part, exit surveys of CIC’s direct clients indicate that a growing number of credit reports are being used for job employment purposes.
CIC Senior Vice President for Business Development and Communications, Atty. Aileen Amor-Bautista, welcomes this development as one of the goals of the CIC is “to allow customers to gain full value from their own credit report.”
The SVP also cited instances of foreign nationals previously employed in the Philippines and are applying to work abroad: “They are required by their new employers abroad to provide a CIC Credit Report to show that they have no outstanding obligations in the Philippines.”
The CIC Credit Report is a comprehensive view of an individual’s positive and negative credit exposures and can be used for personal and institutional purposes in various risk management applications.
“From a risk perspective, this isn’t surprising,” Amor-Bautista continued. “Employers that require high levels of trust and confidence or indicators of personal stability may look into personal indebtedness as either positive or negative markers.”
She clarified, however, that it was the customers who transmitted their own credit reports to their prospective employers: “The CIC does not deal with employers because they are not accessing entities of the CIC.”