Y 
SEN@TE 
FFICE #E 'PfE SECRETARY 
13TH CONGRESS OF THE REPUBLIC 
) 
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:Y 
OF THE PHILIPPINES 
1 
First Regular Session 
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Introduced by 
Senator Edgardo 3. Angara 
EXPLANATORY NOTE 
Credit information is very important in the assessment of the creditworthiness of 
a prospective borrower. A financial institution, upon receipt of credit application, gathers 
such information by conducting a credit investigation which usually covers the 
applicant's background and history, financial condition, dealings with government 
agencies, court cases, and such other data relevant to his ability and propensity to pay 
the obligation being applied for. 
The vast information necessary to create a meaningful assessment of the 
creditworthiness of the applicant is costly and time-consuming. Moreover, due to the 
lack of a centralized database, the information accumulated is usually incomplete and as 
a result, the financial institution is exposed to a higher risk. 
The long, tedious and costly process of credit investigation poses a big problem 
to both the financial institutions and the prospective borrowers. The financial 
institutions, due to the incompleteness of the credit information, may err in its 
assessment of the creditworthiness of the applicants, thereby exposing them to high 
credit risk. On the other hand, the prospective borrowers are burdened with high 
interest rates, more collateral requirements and longer waiting time for the approval of 
their loan applications. 
To remedy the situation, it is hereby proposed that a credit information bureau 
system be established. A credit investigation bureau, which will be incorporated, with 
the BSP as the majority shareholder, will have the power to collect and disseminate 
credit-related information. It will directly address the problem of the lack of centralized 
information concerning the credit history and track record of borrowers, both individual 
and corporate. The operations and services of a credit information bureau system can 
be expected to greatly improve the overall availability of credit especially to small 
borrowers, lower the cost of credit to responsible borrowers, and reduce excessive 
dependence on collateral to secure credit facilities. An efkiently operating credit 
information bureau system will also enable financial institutions to lower their overall 
credit risk, contributing to a healthier and more stable financial system. 
With the aforementioned premises, approval of this bill is earnestly sought. 
EDGARDO J. ANGARA 


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13TH CONGRESS OF THE REPUBLIC ) 
OF THE PHILIPPINES 
1 
ntst Regular Session 
1 
i’ 
1 
S E N A T E  
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Introduced by 
Senator Edgardo J. Angara 
AN ACT 
ESTABLISHING A CREDIT INFORMATION BUREAU SYSTEM, 
AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines 
in Congress assembled: 
Section 1. 
Title.- 
This Act shall be known as “The Credit Information 
Bureau System Act.” 
Section 2. 
Declaration of Policy. - The State recognizes the need to 
establish a credit information bureau system for the collection and dissemination of 
transaction information relevant to or arising from credit and credit-related activities of 
ail entities which comprise the financial sector. A credit information bureau system will 
directly address the problem of the lack of centralized information concerning the credit 
history and track record of borrowers, both individual and corporate. The operations 
and services of a credit information bureau system can be expected to greatly improve 
the overall availability of credit especially to small borrowers, to lower the cost of credit 
to responsible borrowers, and to reduce excessive dependence on collateral to secure 
credit facilities. 
An efficiently operating credit information bureau system will also 
enable financial institutions to lower their overall credit risk, contributing to a healthier 
and more stable financial system. 
Section 3. 
‘Xccessing €ntity”refers to any Submitting Entity, as well as any Outsource 
Definition of Terms.- For purposes of this Act: 
Entity, which accesses Credit Information from the Credit Information Bureau. c. 


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‘!Accreditation Agreements” refer to the Accreditation Agreements described 
in Section 9(c) of this Act. 
“BIR”refers to the Bureau of Internal Revenue. 
“BSf”refers to the Bangko Sentral ng Pilipinas. 
“Bureau“ refers to the Credit Information Bureau. 
‘*Credit Facility”refers to any loan, credit line, guarantee or other form of 
financial accommodation from the Submitting Entity. 
“Credit Information” refers to information provided by a borrower to a 
Submitting Entity in connection with the 
application for and availment of a Credit 
Facility, and other information related or relevant thereto in the data files of the Central 
Credit Information System, including the credit report or credit rating on said borrower. 
“Government fending Institutions” refers to government financial 
institutions, government-owned-or-controlled-corporations (GOCCs), departments and 
agencies of the Government that provide loan or credit facilities. 
“GS1S”refers to the Government Service Insurance System, 
”Moneta/yBoa~d”refers to the Monetary Board of the BSP. 
“Outsource Entity” refers to any third party contractor to whom the Credit 
Information Bureau may outsource the collection, processing and consolidation of raw 
Credit Information pertaining to a borrower and/ or the creation of a credit report or a 
credit rating on the Borrower. 
“SSS”refers to the Social Security System. 
“Subjective Credit Informatimf’refers to Credit Information originated by a 
Submitting Entity which is open to varying opinions between the borrower and the 
Submitting Entity, which an Accessing Entity would reasonably find to be highly relevant 
in assessing the credit risk posed by the borrower concerned. 
“Submitting €ntity”refers to an entity which provides Credit Facilities, such as 
but not limited to entities regulated by the BSP, investment houses, financing 
companies, credit cooperatives, non-governmental micro-financing organizations, credit 
card companies, insurance companies and Government Lending Institutions. c/ 
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Section 4. 
Establishment of Credit Information Bureau and Credit 
Information Bureau System - 
(a) The Bureau shall be organized as a stock corporation in accordance with 
Batas Pambansa Blg. 68, otherwise known as "The Corporation Code of the Philippines" 
with: Provided, That, The BSP shall at all times remain the majority owner of the Bureau 
and its equity investment therein is hereby authorized notwithstanding the prohibition 
under Republic Act 7653. Government financial institutions, multilateral international 
financial institutions, and bank industry associations, as may be authorized under their 
respective charters, may also subscribe and own shares in the Bureau. 
(b) The Bureau shall have a minimum authorized capital stock of Fifty million 
pesos (P50,000,000.00), 
with a minimum subscribed capital stock of Twelve million five 
hundred thousand pesos (P12,500,000.00), 
and a minimum paid-up capital of Three 
million one hundred twenty five thousand pesos (P3,125,000.00). 
(c) The directors of the Bureau shall come from the private sector and shall be 
nominated by the stockholders thereof. The directors and officers of the Bureau shall be 
qualified by the BSP under its "fit and proper" rule for bank directors and officers. 
(d) I n  furtherance of the policy set forth in Section 2 of this Act, a Credit 
Information Bureau System is hereby established, 
(i) Each Submitting Entity is hereby required and authorized to submit 
Credit Information, on a regular basis, to the Credit Information Bureau 
operating under this Act and the Bureau is in turn authorized to release Credit 
Information to Accessing Entities and Outsource Entities. 
(ii) No action, suit or proceeding shall lie against a Submitting Entity, the Credit 
Information Bureau, their officers and employees in connection with any acts 
done by them under item "(i)" above in good faith. 
Section 5. 
Authority of the BSP.- The operations and activities of 
Submitting Entities and Accessing Entities, which are subject to supervision by the BSP, 
insofar as their participation in and compliance with the Credit Information Bureau 
System is concerned, shall be included in the exercise of the supervisory authority of the 
BSP over these 
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Section 6. 
Access to Credit Information from Government Offices 
and Agencies.- The Bureau is hereby authorized to access Credit Information from 
government offices and agencies and from pension funds being administered by the 
government, and, subject to conformity by the Supreme Court, from the judiciary, its 
courts and offices. 
Section 7. 
Confidentiality of Credit Information in Credit Information 
Bureau Databanks.- Accessing Entities and Outsource Entities shall hold the Credit 
Information under strict Confidentiality and use the same only for the intended purpose 
as declared by the Accessing Entity or Outsource Entity to the Credit Information 
Bureau. The Accessing Entities and Outsource Entities which violate the confidentiality 
of, or which misuse, the Credit Information accessed from the Credit Information 
Bureau, or other rules and regulations, may be administratively sanctioned and their 
access privileges to Credit Information may be suspended or revoked. The Bureau shall 
be authorized to release and disclose Credit Information only to the BSP, to the 
Government Lending Institutions, to the Submitting Entities, and to the Outsource 
Entities, or upon an order issued by the court. 
Section 8. Borrower’s Identification System - The Credit Information 
Bureau shall implement a Borrower’s Identification system, for the convenience of 
identifying the borrower and the files or data associated with such borrower that are 
lodged with the Bureau. 
Section 9. Rules and Regulations- The Monetary Board shall issue the 
implementing rules and regulations (IRR) to ensure compliance with the provisions of 
this Act, which shall include, but not be limited to, the following matters: 
(a) 
the nature and extent of the Credit Information that shall be required to be 
provided by a borrower, and required to be submitted by a Submitting Entity to 
the Bureau, and which may be released by the Bureau to an Accessing Entity 
under this Act. 
the arrangements for the submission of Credit information by the Submitting 
Entities to the Bureau, including but not limited to: 
(b) 
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(c) 
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(i) 
the execution of a Borrower's Consent, in the form and substance as the 
IRR shall require, for the purpose of obtaining the express written 
consent of a borrower to the submission by the Submitting Entities to the 
BSP of credit information pertaining to the borrower and related matters, 
and in turn to the release of such credit information by the Bureau to 
Accessing Entities as may be requested by the latter in connection with 
credit applications of the concerned borrower, and which shall contain 
the Borrower's representation and warranty on the accuracy and 
correctness of all of such credit information which it provided, and which 
it will provide, to the Submitting Entity, and that ail such credit 
information are up to date as of the date provided to the Submitting 
Entity, as well as an indemnification clause in favor of the Bureau, its 
officers and employees in case of breach of such representation or 
warranty; and 
the submission of Subjective Credit Information; 
(ii) 
accreditation of Submitting entities, Accessing Entities and Outsource Entities 
with the Bureau through the execution of Accreditation Agreements with the 
Bureau; 
restrictions on the use and transfer of Credit Information; 
rights of the borrowers to access their respective Credit Information and modify, 
revise or cancel the same, and their remedies in case of any violation thereof; 
sanctions to be imposed by the Bureau on the Submitting Entities for non- 
submission of reports and for delayed and erroneous reporting. 
contractual sanctions to be imposed by the Bureau on any Accessing Entity or 
Outsource Entity for breaches of the confidentiality or misuse of the Credit 
Information that they have obtained from the Credit Information Bureau or from 
other Outsource Entities; and 
suspension or cancellation of the rights of any Accessing Entity or Outsource 
Entity to access Credit Information from the Bureau or from other Outsource 
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Entities€ 


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Section 10. 
Indemnity in Favor of the BSP and the 
Bureau.- 
Borrowers, Submitting Entities, Accessing Entities and Outsource Entities that participate 
in the Credit Information Bureau System shall indemnify, defend and hold the BSP and 
the Bureau, their officers and employees, harmless to the fullest extent permitted by 
law, from any and all liabilities, losses, claims, demands, damages, deficiencies, costs 
and expenses of whatsoever kind and nature that may arise, heretofore and henceforth, 
in connection with the performance of their functions under this Act, or in connection 
with or otherwise relating to as follows: 
(a) 
with respect to a borrower, any breach of its representation and warranty that all 
of the Credit Information that it provides to a Submitting Entity is accurate, correct 
and up-to-date; 
(b) 
with respect to a Submitting Entity, Accessing Entity or Outsource Entity, (i) any 
misuse of Credit Information by the relevant Entity, or (ii) any breach of any of its 
covenants, obligations, duties or responsibilities under this Act; and 
with respect to a Borrower, Submitting Entity, 
Accessing Entity or Outsource 
Entity, that which may otherwise arise from any action, suit or proceeding that 
may be brought against the Bureau in connection with the borrower’s Credit 
Information which was obtained and/or disseminated under the Credit Information 
Bureau System. 
Section 11. 
(c) 
Separability Clause.- If any provision or section of this Act or 
the application thereof to any person or circumstance is held invalid, the other 
provisions or sections of this Act, and the application of such provision or section to 
other persons or circumstances, shall not be affected thereby. 
Section 12. 
Repealing Clause. - All laws, decrees, executive orders, rules 
and regulations or parts thereof, which are inconsistent with this Act, are hereby 
repealed, amended or modified accordingly. 
Effectivity Clause.- This Act shall take effect fifteen (15) days 
following its publication in the Official Gazette or in two (2) national newspapers of 
general circulation. 
Section 13. 
G, 
Approved. 
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