FOURTEENTH CONGRESS OF THE 
First Regular Session 
REPUBLIC OF THE PHILIPPINES 
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Introduced by SENATOR EDGARDO J. 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 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. 
With the aforementioned premises, approval of this bill is earnestly 
sought. 
Senator 


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FOURTEENTH CONGRESS OF THE 
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REPUBLIC OF THE PHILIPPINES 
First Regular Session 
SENATE 
Introduced by SENATOR EDGARDO J. ANGARA 
AN ACT ESTABLISHING A CREDIT INFORMATION SYSTEM, 
AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the 
Philippines in Congress assem bled: 
SECTION 1. Title. - This Act shall be known as the 
"Credit 
Information System Act." 
SECTION 2. Declaration of Policy. - 
The State recognizes the 
need to establish a comprehensive and centralized credit information system 
for the collection and dissemination of fair and accurate information relevant 
to, or arising from, credit and credit-related activities of all entities 
participating in the financial system. A credit information system will 
directly address the need for reliable credit information concerning the credit 
standing and track record of borrowers. 
The operations and services of a credit information system can be 
expected to: greatly improve the overall availability of credit especially to 
micro, small and medium-scale enterprises; provide mechanisms to make 
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 an.d shall ensure the protection of consumer 
rights and the existence of fair competition in the industry at all times. 
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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 credit 
information provided by a borrower to a submitting entity in 
connection with the application for and availment of a credit 
facility. 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: Prouided, 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) 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 shall refer to the Bangko Sentral ng Pilipinas, created under 
Republic Act No. 7653 and approved on June 14,1993. 
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(e) “Corporation” refers to the Credit Information Corporation 
established under Section 5 of this Act. 
(0 “Credit Facility” refers to any loan, credit line, guarantee or any 
other form of financial accommodation from a submitting entity: 
Prouided, 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) “Gouernment Lending Institutions” refers to government 
financial institutions (GFIs), government -owned-and-controlled 
corporations (GOCCs) engaged in lending activities and, such other 
institutions that the Monetary Board may deem appropriate, 
excluding however the Philippine Deposit Insurance Corporation 
(PDIC) and the BSP. 
(i) “Monetary Board” refers to the Monetary Board of the BSP. 
(k) “Negatiue Credit Information” refers to informationldata 
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. 
(1) “Non-Accessing Entity” refers to an entity other than a 
Submitting Entity, Special Accessing Entity or Borrower that is 
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authorized to access credit information from a Special Accessing 
Entity. 
(m) “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. 
(n) “Positive Credit Information” refers to informationldata 
concerning the credit performance of a borrower, such as but not 
limited to information on repayments. 
(0) “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. 
(p) “Submitting Entity” refers to an entity which provides credit 
facilities such as, but not limited to, banks, quasi-banks, trust 
entities, investment houses, financing companies, cooperatives, 
non-governmental, micro-financing organizations, credit card 
companies, 
insurance companies 
and 
Government lending 
institutions. 
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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, credit card 
companies and other entities that provide credit facilities, are 
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required t o  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: Prouided, That all other entities qualified 
to be submitting entities may participate subject to their acceptance 
by the Corporation: 
Prouided, further, That, in all cases, 
participation under the system shall be in accordance with such 
standards and rules that the Monetary Board may prescribe. 
(e) Participating submitting entities are required to regularly 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 correctlupdate 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. 
(0 Each submitting entity shall notify its borrowers of the former’s 
obligation to submit basic credit data to the Corporation and the 
disclosure thereof by the Corporation, subject to the provisions of 
this Act and the implementing rules and regulations. 
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(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 a borrower as contained in the credit 
history files of borrowers should stay in the database of the 
Corporation for not more than five 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. 
(i) Special Accessing Entities must be accredited by the Corporation in 
accordance with such standards and rules as the Monetary Board 
may prescribe 
0') Special accessing entities shall be entitled access to the 
Corporation's pool of consolidated credit information, subject to the 
provisions of Sections 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 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 request of the payment of reasonable fees by a constituent of 
the concerned LGU. 
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(m) Accessing Entities shall hold strictly confidential any credit 
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(0) The borrower, for a reasonable fee, shall have, as a matter of right, 
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ready and immediate access to the credit information pertinent to 
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the borrower. In case of erroneous, incomplete or misleading credit 
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information, the subject borrower shall have the right to dispute 
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the 
erroneous, incomplete, 
outdated or 
misleading 
credit 
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information before the Corporation. 
The Corporation shall 
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investigate and verify the disputed information within five working 
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days from receipt of the complaint. If its accuracy cannot be 
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verified and cannot be proven, the disputed information shall be 
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deleted. 
The borrower and the accessing entities and special 
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accessing entities who have received such information shall be 
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informed of the corresponding correction or removal within five 
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working days. The Corporation should use a simplified dispute 
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resolution process to fast track the settlement/resolution of 
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disputed credit information. Denial of these borrowers’ rights, 
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SECTION 5. Establishment of the Central Credit Information 
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Corporation. - 
(1) 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. 
information they receive from the Corporation. 
(n) The borrower has the right to know the causes of refusal of the 
application for credit facilities from a financial institution that uses 
basic credit data as basis or ground for such refusal. 
without justifiable reason, shall entitle the borrower to indemnity. 


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(a) The Corporation shall be established as a stock corporation under 
Batas Pambansa Bldg. 68 (The Corporation Code). The primary 
purpose of the Corporation 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 the 
borrowers. 
(b} The ownership of the BSP in the Corporation shall not exceed forty 
percent (40%) and its equity investment therein is hereby 
authorized notwithstanding the prohibition under Republic Act No. 
7653. Industry associations of banks, quasi-banks, other credit- 
related associations, associations of consumers and other entities as 
the Monetary Board may allow, may also subscribe and own shares 
in the Corporation, subject to a ten percent (10%) individual ceiling 
or such other ceiling as the Monetary Board may prescribe; 
provided that all the aforementioned qualified stockholders shall be 
offered equal equity participation in the Corporation. 
(c) The BSP may purchase capital notes that may be issued by the 
Corporation as a supplement to capital notwithstanding the 
prohibition under Republic Act No. 7653, provided that the BSP 
owns at least 34% of the Corporation. 
(d} The Monetary Board 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. 
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(e) The BSP Governor shall be the chairman of the board. Whenever 
the Governor is unable to attend a meeting of the board, he shall 
designate a member of the Monetary Board to act as his alternate. 
(0 The directors and principal officers of the Corporation, except for 
the BSP Governor or his designated representative, shall be 
qualified by the BSP under its “fit and proper” rule for bank 
directors and officers. 
(g) Operations. The Corporation shall acquire and upgrade technology, 
equipment 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 borrower’s identification system 
for the purpose of consolidating credit information 
SECTION 6. 
Confidentiality of Credit Information. - The 
Corporation, the accessing entities, the special accessing entities and duly 
authorized non-accessing entities shall hold the credit information under 
strict confidentiality and shall use the same only for the declared purpose. 
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. 
The accreditation of an accessing entity, a special accessing entity 
and/or an outsource entity which violates the confidentiality of, or which 
misuse, the credit information accessed from the Corporation, may be 
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suspended or revoked. Any entity which violates this section may be barred 
access to the credit information system and penalized pursuant to Section 12 
of this Act. 
The Corporation shall be authorized to release and disclose 
consolidated Basic Credit Data only to the BSP, the Accessing Entities, the 
Special Accessing Entities, the Outsource Entities and Borrowers. Basic 
Credit Data released to Accessing Entities shall be limited to those 
pertaining to existing Borrowers or Borrowers with pending credit 
applications. Credit information shall not be released to entities other than 
those enumerated under this Section except upon order of the court. 
SECTION 7. 
Educational 
Campaign. - A 
continuing 
nationwide educational campaign shall be developed and undertaken by the 
Corporation to promote the benefits of a credit information system to the 
economy; to create awareness on the rights of consumershorrowers to access 
their credit reports collected, stored and disseminated by the Corporation; to 
disseminate the rights of the borrowers to dispute any incorrect/inaccurate 
credit information in the database file of the Corporation; to familiarize 
consumers of the procedure in collecting, storing and disseminating credit 
information of borrowers by the Corporation; and to brief consumers of other 
related information. 
SECTION 8. Rules and Regulations. - For purposes of creating a 
healthy balance between the need for reliable credit information and 
safeguarding consumer protection, ensuring free and healthy competition in 
the industry, the Monetary Board, in coordination with existing industry 
27 stakeholders, shall issue the implementing rules and regulations (IRRs), 
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which shall be submitted to the congressional oversight committee which 
shall review, revise and approve the same: 
(a) Restrictions on the use and transfer of credit information; 
(b) 
Rights of the borrowers to access their respective credit 
information and to dispute the factual accuracy of such credit 
information; 
(c) Requirements and standards for the establishment of the 
Corporation including, but not limited to, ownership, industry 
representation, independent directors and process of nomination of 
directors; 
(d) Accreditation standards for submitting and special accessing 
entities; 
(e) Sanctions to be imposed by the Corporation on: 
(i) The submitting entities for non-submission of reports and for 
delayed and/or erroneous reporting; 
(ii) Accessing entities, special accessing entities, outsource 
entities and duly authorized non-accessing entities, for breaches 
of the confidentiality of, misuse of, the credit information 
obtained from the credit information system; and 
(iii) Violations of other applicable rules and regulations: 
Prouided, That these sanctions shall be in the form of applicable 
administrative penalties under Section 37 of Republic Act No. 
7653; and 
(f) Suspension or cancellation of the rights of any Accessing entity or 
Special Accessing Entity to access Credit Information from the 
Corporation Provided, That the Monetary Board may issue 
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subsequent regulations consistent with the IRR as approved by the 
Congressional Oversight Committee. 
In addition, the Monetary Board may regulate access to the credit 
information system as well as the fees that shall be collected by the 
Corporation from the Accessing and Special Accessing Entities, taking into 
consideration the policy of lowering the cost of credit, promoting fair 
competition, and the need of the Corporation to employ state-of-the-art 
technology. 
SECTION 9. 
Congressional Oversight Committee. - There is 
hereby created a congressional oversight committee, composed of five 
Members from the Senate and five Members from the House of 
Representatives. The Members from the Senate shall be appointed by the 
Senate President with at least two Senators representing the minority. The 
Members from the House of Representatives shall be appointed by the 
Speaker with at least two Members representing the minority. 
After the Oversight Committee will have approved the implementing 
rules and regulations, it shall thereafter become functus officio, and therefore 
cease to exist; provided that the Congress may revive the Congressional 
Oversight Committee in case of a need for any major revisiods in the 
implementing d e s  and regulations. 
SECTION 10. 
lndemnity in Favor of the Corporation, its 
Officers and Employees. - Unless the Corporation or any of its officers and 
employees is found liable for any willful violation of this Act, bad faith, malice 
and/or gross negligence, the Submitting Entities, Accessing Entities, Special 
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Accessing Entities, Outsource Entities and duly authorized non-accessing 
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entities shall hold the Corporation, its of€icers and employees harmless to the 
fullest extent permitted by law and shall indemnify them for any and all 
liabilities, losses, claims, demands, damages, deficiencies, costs and expenses 
of whatsoever kind and nature that may arise in connection with: 
(i) 
the performance of their functions, or 
(ii) any and all breaches of their covenants, obligations, duties and 
responsibilities, representation or warranties under this Act, or in 
connection with Credit Information which was obtained and/or 
disseminated under the Credit Information System 
SECTION 11. Exemption from Liability. - A Submitting Entity, an 
Accessing Entity, a Special Accessing Entity, an Outsource Entity, the 
Corporation and their respective officers and employees shall not be 
criminally liable nor civilly liable for acts done by them under Section 4 of 
this Act, unless there is a clear showing of bad faith, malice or gross 
negligence as determined by the court. Neither shall they be administratively 
liable for the same acts, unless there is a clear showing of bad faith, malice or 
gross negligence as determined by the Monetary Board. 
SECTION 12. 
Penalties. - Any person who violates any of the 
provisions of this Act or the rules and regulations promulgated by the 
Monetary Board under authority thereof shall, upon conviction, suffer a fine 
of not less than Fifty thousand pesos (P50,OOO.OO) nor more than One million 
pesos (P~,OOO,OOO.OO) or imprisonment of not less than one year nor more 
than five years, or both, at the discretion of the court. 
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SECTION 13. 
Inuiolable Nature of the Secrecy of Bank 
Deposits and/or Client Funds. - Pursuant to 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, nothing in this Act shall impair the secrecy of bank deposits and/or 
client funds 
SECTION. 14. 
Annual Report. - The Monetary Board, shall 
submit an annual report to Congress on the status of the implementation of 
this Act. 
SECTION 15. Separability Clause. - Should any provision of this 
Act or the application thereof to any person or circumstance be held invalid, 
the other provisions or sections of this Act shall not be affected thereby. 
SECTION 16. 
Repealing 
Clause. - This 
Act 
repeals 
Presidential Decree No. 1941 in its entirety. All laws, decrees, executive 
orders, rules and regulations or parts thereof which are inconsistent with this 
Act are hereby repealed, amended or modified accordingly. 
SECTION. 17. 
Effectivity Clause. - This Act shall take effect 
fifteen (15) days following its publication in the Official Gazette or in two 
national newspapers of general circulation. 
Approved, 
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