PGMA set to sign into law Credit Info System Act
Tacloban City (October 12) -- President Gloria Macapagal-Arroyo told the business leaders at the Business Roundtable with the Government of the Philippines Friday, that she will soon sign into law bill that would effectively lower transaction flows and the cost of doing business in the country, and bolster the fight against corruption and red tape.
"In a few days time, I will be signing a bill into law on a Credit Information System that will reduce the paper requirements for accessing financing," the President said. The new law will develop efficient access to financing and reduce paper requirements in doing credit-related business in the country, the President added.
The Credit Information System (CIS) measure authored principally by Sen. Edgardo Angara and Quezon City Congressman Vincent Crisologo, was approved by both Houses of Congress last month.
The CIS seeks to improve the quality of human resources, and build a seamless infrastructure network which are all crucial for the Philippines to remain competitive and attractive to investments.
The legislation also seeks to lower the cost and risk of financing, reduce the cost of gathering credit information and the amount to be passed on to borrowers, and thereby reduce interest rates on loans.
This is a major step towards unlocking money because lenders will now be more comfortable to assess their risk of lending; while banks will now know beforehand the credit history of their borrowers.
Part of the shyness of some banks to lend is the scarcity of credible, complete and comprehensive information about borrowers and users.
CISA will create the Credit Information Corporation (CIC) headed by the Securities and Exchange Commission which will set the standards for credit reporting operations that will improve not only the ability of creditors to assess risk and allocate credit more efficiently, but will also promote the protection of the rights of consumers against irresponsible use or erroneous reporting of credit information.
The operations and services of the CIS is expected to greatly improve the overall availability of credit, especially to small borrowers; lower the cost of credit to responsible debtors, reduce dependence on collateral to secure credit facilities and enable financial institutions to lower their overall credit risk, thus contributing to a healthier and more stable financial system. (PIA 8) [top]