The Bankers Association of the Philippines – Credit Bureau Incorporated (BAP-CB), a nonprofit organization that was established in 1949, recently offered rural banks in the Philippines access to its credit information system. Although the government of the Philippines passed the Credit Information System Act (CISA) in 2008, which mandated the Securities Exchange Commission (SEC) to take the lead in establishing a central agency that would consolidate credit information, such a system has not yet been implemented. Most commercial banks in the Philippines subscribe to BAP-CB’s credit information database, which contains approximately 3.8 million accounts and information pertaining to unpaid loans, loans under litigation, bounced checks and credit card debt.
To encourage rural banks to subscribe to the database BAP-CB lowered the fee for each inquiry from PHP 11 (USD 0.25) to PHP 5.6 (USD 0.13) and removed the upfront subscription fee. As of January 2011, twenty rural banks have joined the bureau. Access to credit information can help rural banks identify whether loan applicants already have outstanding loans and avoid the problem of over-indebtedness, which can be harmful to the borrowers, the banks and the sector as a whole [1].
By Julie Moksim, Research Associate
About Bankers Association of the Philippines (BAP): Bankers Association of the Philippines is a nonprofit organization that was established in 1949 to represent the interest of banks throughout the country. In 1964, BAP registered with the Securities Exchange Commission (SEC). BAP works in collaboration with local legal entities and the Philippines Chamber of Commerce to advocate regarding laws that relate to banking. Members of BAP include Asia United Bank, Development Bank of the Philippines, Philippine Veterans Bank and Union Bank of the Philippines.
[1] The Philippine Star: “Commercial Banks Offer Credit Bureau Services to Rural Banks”, http://www.philstar.com/Article.aspx?articleId=646916&publicationSubCategoryId=74
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