Press Release
December 19, 2007

Angara SPONSORS credit information system act

"A tool for financial development."

This is how Senator Edgardo Angara describes the Credit Information System (CIS).

According to Senator Angara, the Credit Information System [1] will gather consumer credit information from financial institutions such as banks, credit card companies, and government lending institutions.

"The establishment of a centralized credit information system will make credit more available, especially to small yet responsible borrowers [2], as their good track record in paying their obligations will be made known to financial institutions," Senator Angara said.

"Currently, the absence of reliable credit information makes financial institutions hesitant to grant credit to small borrowers, leaving the latter no choice but to resort to what is commonly known as "five-six" borrowing," said Senator Angara.

Senator Angara explained that a CIS will also help lower the cost of financing. Because the CIS will reduce the cost of gathering credit information, the amount to be passed on to borrowers will likewise be lower. This will also lessen the risk of lending money, and hence reduce interest rates on loans.

"The CIS will encourage responsible borrowing attitude as debtors will know that a negative credit behavior will remain in their record," the senator said.

"Borrowing is necessary to fuel business and sustain economic growth. By establishing a credit information system, we reduce the risk of credit, allow more people to access it, and ultimately contribute to a healthier and more stable financial system," Senator Angara asserted.

The Credit Information System Act has been ratified by the Senate on the third reading during the last congress, but failed to get ratified due to technical reasons.

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