Article 144Supplement v1, p. 144

COMMERCIAL LAWS SUPPLEMENT

(i) Special Accessing Entities shall be accredited by the

Corporation in accordance with such standards and rules

as the SEC in coordination with the relevant government

agencies, may prescribe.

(j) Special accessing entities shall be entitled access to

the Corporation’s pool of consolidated basic credit data,

subject to the provisions of Section s 6 and 7 of this Act

and related implementing rules and regulations.

(k)

Special

accessing

entities

are

prohibited

from

releasing basic credit data received from the Corporation

or credit reports and credit ratings derived from the basic

credit

data

received

from

the

Corporation,

to

non-accessing entities unless the written consent or

authorization has been obtained from the Borrower:

Provided , however , That in case the borrower is a local

government unit (LGU) or its subsidiary or affiliate, the

special accessing entity may release credit information on

the LGU, its subsidiary or affiliate upon written request

and payment of reasonable fees by a constituent of the

concerned LGU.

(l) Outsource Entities, which may process and consolidate

basic credit data, are absolutely prohibited from releasing

such data received from the Corporation other than to

the Corporation itself.

(m) Accessing Entities shall hold strictly confidential any

credit information they receive from the Corporation.

(n) The borrower has the right to know the causes of

refusal of the application for credit facilities or services

from a financial institution that uses basic credit data as

basis or ground for such a refusal.

(o) The borrower, for a reasonable fee, shall have, as a

matter of right, ready and immediate access to the credit

information

pertinent

to

the

borrower.

In

case

of

erroneous, incomplete or misleading credit information,

the subject borrower shall have the right to dispute the

erroneous, incomplete, outdated or misleading credit

information before the Corporation. The Corporation shall

investigate and verify the disputed information within

five (5) working days from receipt of the complaint. If its

accuracy cannot be verified and cannot be proven, the

disputed information shall be deleted. The borrower and

the accessing entities and special accessing entities who

have received such information shall be informed of the

corresponding

correction

or

removal

within

five

(5)

working days. The Corporation should use a simplified

dispute

resolution

process

to

fast

track

the

settlement/resolution

of

disputed

credit

information.

Denial

of

these borrowers’ rights, without justifiable

reason, shall entitle the borrower to indemnity.

Section

5.

Establishment

of

the

Central

Credit

Information Corporation . - There is hereby created a

Corporation

which

shall

be

known

as

the

Credit

Information Corporation, whose primary purpose shall be

to receive and consolidate basic credit data, to act as a

central registry or central repository of credit information,

and

to

provide

access

to

reliable,

standardized

information on credit history and financial condition of

borrowers.

(a) The Corporation is hereby authorized to adopt, alter,

and use a corporate seal which shall be judicially noticed;

to enter into contracts; to incur liabilities; to lease or own

real or personal property, and to sell or otherwise dispose

of the same; to sue and be sued; to compromise, condone

or release any liability and otherwise to do and perform

any and all things that may be necessary or proper to

carry out the purposes of this Act.

(b) The authorized capital stock of the Corporation shall

be Five hundred million pesos (P500,000,000.00) which

shall be divided into common and preferred shares which

shall be non-voting. The National Government shall own

and hold sixty percent (60%) of the common shares while

the balance of forty percent (40%) shall be owned by and

held by qualified investors which shall be limited to

industry associations of banks, quasi-banks and other

credit

related

associations

including

associations

of

consumers. The amount of Seventy-five million pesos

(PhP75,000,000.00) shall be appropriated in the General

Appropriations

Act

for

the

subscription

of common

shares by the National Government to represent its sixty

percent (60%) equity share and the amount of Fifty

million pesos (PhP50,000,000.00) shall be subscribed and

paid up by such qualified investors in accordance with

Section 5(d) hereof.

(c) The National Government may subscribe or purchase

securities or financial instrument that may be issued by

the Corporation as a supplement to capital.

(d) Equal equity participation in the Corporation shall be

offered and held by qualified private sector investors but

in no case shall each of the qualified investor represented

by

an

association

of

banks,

quasi-banks

and

other

credit-related associations including the associations of

consumers have more than ten percent (10%) each of the

total common shares issued by the Corporation.

(e) The SEC in coordination with relevant government

agencies, shall prescribe additional requirements for the

establishment

of

the

Corporation,

such

as

industry

representation, capital structure, number of independent

directors, and the process for nominating directors, and

such other requirements to ensure consumer protection

and free, fair and healthy competition in the industry.

(f) The Chairman of the SEC shall be the Chairman of the

Board of Directors of the Corporation. Whenever the

Chairman of the SEC is unable to attend a meeting of the

Board, he/she shall designate an Associate Commissioner

of the SEC to act as his/her alternate.

The powers and functions of the Corporation shall be

exercised by a board of directors composed of fifteen (15)

members. The directors representing the government

shares

shall

be

appointed

by

the

President of the

Philippines.

(g) The directors and principal officers of the Corporation,

shall be qualified by the "fit and proper" rule for bank

directors

and

officers.

To

maintain

the

quality

of

management

of

the

Corporation

and

afford

better

protection to the system and the public in general, the

SEC

in

coordination

with

the

relevant

government

agencies, shall prescribe, pass upon and review the

qualifications and disqualifications of individuals elected

or appointed directors of the Corporation and disqualify

those found unfit. After due notice to the board of

directors of the Corporation, the SEC may disqualify,

suspend or remove any director who commits or omits an

act

which

render

him

unfit

for

the

position.

In

determining whether an individual is fit and proper to

hold the position of a director of the Corporation, due

regard

shall

be

given

to

his

integrity,

experience,

education, training and competence.

The members of the Board of Directors must be Filipino

citizens and at least thirty (30) years of age. In addition,

they

shall

be

persons

of

good

moral

character,

of

unquestionable integrity, of known probity, and have

attained

competence

in

the

fields

of

law,

finance,

economics, computer science or information technology.

In

addition

to

the disqualifications imposed by the

Corporation

Code,

as

amended,

no person shall be

nominated by the national government if he has been

connected directly with a banking or financial institution

as a director or officer, or has substantial interest therein

within three (3) years prior to his appointment.

(h) The Board of Directors may appoint such officers and

employees as are not otherwise provided for in this Act,

define their duties, fix their compensations and impose

disciplinary sanctions upon such officers and employees,

for cause. The salaries and other compensation of the

officers

and

employees

of

the Corporation shall be

exempt

from

the

Salary

Standardization

Law.

Appointments in the Corporation, except to those which

are policy-determining, primarily confidential or highly

technical in nature, shall be made only according to the

Civil Service Law.

(i) The Corporation shall acquire and use state-of-the-art

technology and facilities in its operations to ensure its

© Compiled by RGL

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