Arroyo signs law on credit information
By Joel Guinto
INQUIRER.net
First Posted 08:06:00 10/31/2008
Filed Under: Financial & Business Services, Central Banks, Debt Markets, Banking, Consumer Issues, Congress, Laws
MANILA, Philippines -- (UPDATE 2) President Gloria Macapagal-Arroyo signed into law on Friday Republic Act 9510 or the Credit Information Act, which would consolidate credit information from financial institutions to facilitate creditworthiness checks.
The law will pave the way for the establishment of the Central Credit Information Corp., which will pool data from banks, quasi-banks; and quasi-banks and their subsidiaries and affiliates; life insurance companies, credit card firms, government lending institutions and other credit facilities.
"A credible and comprehensive credit information system run by the Credit Information Corporation will cut credit processing times and therefore lower transaction costs," Arroyo said in a speech, shortly before she signed the measure in Malacañang.
"It will reduce risk of defaults with better credit information. It will reduce the credit premium charged by lenders and increase lending volumes. It will help expand the reach of credit to small and medium enterprises," she said.
The principal author of the law, Senator Edgardo Angara, stressed its importance amid the credit crunch in the United States, which has sent shock waves around the world.
"This law came at the most propitious time, because there is some credit shyness among lenders today because of the credit crisis. But with this, I think it will open up the credit store a little bit more," Angara told reporters at the Palace after the signing.
"The lender already will know with the click of a mouse, the credit history of every borrower," he said.
The Central Credit Information Corp., which will be headed by the chairman of the Securities and Exchange Commission (SEC), will provide credit data to financial institutions, those engaged in the business of credit reports and other information services, accredited third party providers which will handle data processing, and the borrowers themselves.
The bill was ratified by both houses of Congress in September, after Malacañang certified it as urgent.
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