Section 5October 31, 2008, Sec./Art. 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 continuing competence and capability to provide updated negative and positive credit information; to enable the Corporation to relay credit information electronically as well as in writing to those authorized to have access to the credit information system; and to insure accuracy of collected, stored and disseminated credit information. The Corporation shall implement a borrowers identification system for the purpose of consolidating credit information.

(j) The provisions of any general or special law to the contrary notwithstanding, the importation by the Corporation of all equipment, hardware or software, as well as all other equipment needed for its operations shall be fully exempt from all customs duties and from all other taxes, assessments and charges related to such importation.

(k) The Corporation shall have its principal place of business in Metro Manila, but may maintain branches in such other places as the proper conduct of its business may require.

(l) Any and all acquisition of goods and services by the Corporation shall be subject to Procurement Laws.

(m) The national government shall continue to hold sixty percent (60%) of the common shares for a period not to exceed five (5) years from the date of commencement of operations of the Corporation. After the said period, the national government shall dispose of at least twenty percent (20%) of its stockholdings in the Corporation to qualified investors which shall be limited to industry associations of banks, quasi-banks and other credit-related associations, including associations of consumers. The national government shall offer equal equity participation in the Corporation to all qualified investors.

When the ownership of the majority of the common voting shares of the Corporation passes to private investors, the stockholders shall cause the adoption and registration with the SEC of the amended articles of incorporation within three (3) months from such transfer of ownership.