In compliance with a government mandate, Globe Telecom said it is ready to provide the Credit Information Corporation (CIC), a state-run agency, with the credit information of its customers starting February this year.
“As mandated by law, Globe is ready to comply with the directive to provide basic credit data. We are confident that establishment of a credit information system in the country will further enhance development of the local financial sector that, in turn, will further boost economic growth,” Globe General Counsel Froilan Castelo said.
Republic Act 9510, also known as the Credit Information System Act enacted into law in 2008, provides for the creation of the CIC. The agency is primarily tasked to collect and disseminate relevant credit information that directly address the need for reliable credit information concerning the credit standing and track record of borrowers, thus potentially improving chances of loan approvals and enabling lenders to make appropriate decisions regarding loan applications.
The law requires banks, quasi-banks, their subsidiaries and affiliates, life insurance companies, credit card companies, and other entities that provide credit facilities to submit basic credit data and updates on a regular basis to the CIC for its mandate to update the basic credit data of a borrower on a monthly basis. The said data includes any negative and positive credit information that tends to update the credit status of borrowers.
The establishment of a comprehensive credit information database is expected to enhance financial inclusion in the country. For instance, those with Globe accounts but have no credit record from a bank or any financial institution can now have credit information, which could be one of the possible bases for loan approval.
Recently, the scope of CIC’s coverage was expanded to include telecommunication companies as provided for under CIC Circular 2016-01. “The CIC has determined that telecommunications companies are within the purview of the law whose data is relevant for determination of creditworthiness and in making credit decisions,” the circular stated.
With the establishment of a comprehensive credit information database, financing companies may use the basic credit data from the pool of credit information gathered and collected by CIC from the submitting entities to establish the creditworthiness of an individual or an organization.