Article 143Supplement v1, p. 143

COMMERCIAL LAWS SUPPLEMENT

credit

more cost-effective; and reduce the excessive

dependence on collateral to secure credit facilities.

The State shall endeavor to have credit information

provided at the least cost to all participants and shall

ensure

the

protection

of

consumer

rights

and

the

existence of fair competition in the industry at all times.

An efficient credit information system will also enable

financial institutions to reduce their over-all credit risk,

contributing to a healthier and more stable financial

system.

Section 3. Definition of Terms . - For purposes of this Act:

(a) " Accessing Entity " refers to any submitting entity or

any other entity authorized by the Corporation to access

basic credit data from the Corporation.

(b) " Basic Credit Data " refers to positive and negative

information provided by a borrower to a submitting entity

in connection with the application for and availment of a

credit facility and any information on the borrower’s

creditworthiness in the possession of the submitting

entity and other factual and objective information related

or relevant thereto in the submitting entity’s data files or

that of other sources of information: Provided , that in the

absence of a written waiver duly accomplished by the

borrower, basic credit data shall exclude confidential

information on bank deposits and/or clients funds under

Republic Act No. 1405 (Law on Secrecy of Bank Deposits),

Republic Act No. 6426 (The Foreign Currency Deposit

Act), Republic Act No. 8791 (The General Banking Law of

2000), Republic Act No. 9160 (Anti-Money Laundering

Law) and their amendatory laws.

(c) " Borrower " refers to a natural or juridical person,

including

any

local

government

unit

(LGU),

its

subsidiaries and affiliates, that applies for and/or avails of

a credit facility.

(d) " BSP " refers to the Bangko Sentral ng Pilipinas,

created under Republic Act No.7653.

(e)

" Corporation "

refers

to

the

Credit

Information

Corporation established under Section 5 of this Act.

(f) " Credit facility " refers to any loan, credit line, guarantee

or any other form of financial accommodation from a

submitting entity: Provided , That for purposes of this Act,

deposits in banks shall not be considered a credit facility

extended by the depositor in favor of the bank.

(g) " Credit Rating " refers to an opinion regarding the

creditworthiness of a borrower or of an issuer of debt

security,

using

an

established

and

defined

ranking

system.

(h) " Credit Report " refers to a summary of consolidated

and evaluated information on creditworthiness, credit

standing,

credit

capacity,

character

and

general

reputation of a borrower.

(i) " Government Lending Institutions " refers to existing

and future government (GFIs), government-owned and

controlled corporations (GOCCs) primarilly engaged in

lending activities.

(j)

" Negative

Credit

Information "

refers

to

information/data concerning the poor credit performance

of borrowers such as, but not limited to, defaults on loans,

adverse court judgments relating to debts and reports on

bankruptcy, insolvency, petitions or orders on suspension

of payments and corporate rehabilitation.

(k) " Non-Accessing Entity " refers to an entity other than a

Submitting Entity, Special Accessing Entity or Borrower

that is authorized by the Corporation to access credit

information from a Special Accessing Entity.

(l) " Outsource entity " refers to any accredited third party

provider to whom the Corporation may outsource the

processing

and

consolidation

of

basic

credit

data

pertaining to a borrower or issuer of debt or convertible

securities under such qualifications, criteria and strict

confidentiality

guidelines

that

the

Corporation

shall

prescribe and duly publish.

(m)

" Positive

credit

information "

refers

to

information/data concerning the credit performance of a

borrower such as, but not limited to, information on

timely repayments or non-delinquency.

(n)

" Relevant

Government

Agencies "

refers

to

the

Department

of

Finance,

Department

of

Trade

and

Industry,

Bangko

Sentral

ng

Pilipinas,

Insurance

Commission and the Cooperative Development Authority.

(o)

" SEC "

refers

to

the

Securities

and

Exchange

Commission.

(p) " Special Accessing Entity " refers to a duly accredited

private corporation engaged primarily in the business of

providing credit reports, ratings and other similar credit

information products and services.

(q) " Submitting Entity " refers to any entity that provides

credit

facilities

such

as,

but

not

limited

to,

banks,

quasi-banks, trust entities, investment houses, financing

companies,

cooperatives,

nongovernmental,

micro-financing organizations, credit card companies,

insurance

companies

and

government

lending

institutions .

Section 4. Establishment of the Credit Information

System . - In furtherance of the policy set forth in Section

2 of this Act, a credit information system is hereby

established.

(a) Banks, quasi-banks, their subsidiaries and affiliates, life

insurance companies, credit card companies and other

entities

that

provide

credit facilities are required to

submit basic credit data and updates thereon on a

regular basis to the Corporation.

(b) The Corporation may include other credit providers to

be subject to compulsory participation: Provided , That all

other entities qualified to be submitting entities may

participate

subject

to

their

acceptance

by

the

Corporation:

Provided ,

further ,

That,

in

all

cases,

participation under the system shall be in accordance

with

such

standards

and

rules

that

the

SEC

in

coordination with the relevant government agencies my

prescribe.

(c)

Participating

submitting

entities

are

required

to

submit to the Corporation any negative and positive

credit information that tends to update and/or correct the

credit status of borrowers. The Corporation shall fix the

time interval for such submission: Provided , That such

interval shall not be less than fifteen (15) working days but

not more than thirty (30) working days.

(d) The Corporation should regularly collect basic credit

data

of

borrowers

at

least

on

a quarterly basis to

correct/update the basic credit data of said borrowers.

(e) The Corporation may also access credit and other

relevant information from government offices, judicial

and administrative tribunals, prosecutorial agencies and

other

related

offices,

as

well

as

pension

plans

administered by the government.

(f) Each submitting entity shall notify its borrowers of the

former’s obligation to submit basic credit data to the

Corporation

and

the

disclosure

thereof

to

the

Corporation, subject to the provisions of this Act and the

implementing rules and regulations.

(g) The Corporation is in turn authorized to release

consolidated basic credit data on the borrower, subject to

the provisions of Section 6 of this Act.

(h)

The

negative

information

on

the

borrower

as

contained in the credit history files of borrowers should

stay in the database of the Corporation unless sooner

corrected, for not more than three (3) years from and after

the date when the negative credit information was

rectified through payment or liquidation of the debt, or

through

settlement

of

debts

through

compromise

agreements

or

court

decisions

that

exculpate

the

borrower from liability. Negative information shall be

corrected and updated within fifteen (15) days from the

time of payment, liquidation or settlement of debts.

© Compiled by RGL

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