STATE-RUN Credit Information Corp. (CIC) is on track to get the country’s centralized credit information system up and running by January next year, albeit noting that several system issues may delay the process.

The CIC said its January 2018 target for the database to go live may be pushed back should the firm experience issues in the system primarily involving security measures.

“I think so, the only thing that might possibly delay it is if we encounter any major connectivity issue or any security issues,” CIC President and Chief Executive Officer Jaime P. Garchitorena told BusinessWorld in an interview when asked if they are on track to make the database live by January.

Mr. Garchitorena added CIC could face these types of issues amid constant reports of hacking, but noted the firm remains keen on keeping to its schedule.

To recall, in June, technology troubles hit some of the country’s biggest banks, namely Bank of the Philippine Islands (BPI) and BDO Unibank, Inc. (BDO), which the central bank said likely dealt a “reputational” blow to these lenders.

BPI said the incorrect account balances that occurred early last month due to human error after a programmer made a mistake in posting debit and credit transactions that doubled amounts deposited or withdrawn. Some 1.5 million BPI clients were affected by the data processing error that saw about P46 million mistakenly withdrawn from bank accounts.

Meanwhile, Sy-led BDO Unibank, Inc. in June said it recorded at least 95 cases of card fraud after seven automated teller machines were reportedly tapped into using skimming devices that stole client data and passwords.

“So we’re committed to the January or early 2018 live launch but we’re constantly monitoring the environment for any changes in the security [or] any changes in connectivity,” Mr. Garchitorena noted.

Early this year, the CIC said it expects the country’s centralized national credit information system to go live by January or even earlier should the database’s nine-month pilot phase — which began on May 8 — run smoothly.

Republic Act No. 9510 or the Credit Information System Act mandates the establishment of a comprehensive and centralized credit information system, with CIC tasked to consolidate the data.

The law also states that submitting entities, which are the lenders, are required to submit and provide all credit data of their borrowers in their database to the CIC.

“Of course, this is not a ‘launch or die’ kind of thing. If you recall, the thing that we protect the most is the data… The National Privacy Commission also has some influence on how the data is used,” Mr. Garchitorena said.

“I can guarantee that the system will be ready but if the environment is not ready for whatever reason, then we’ll delay,” he said. “So let’s just say the probability of us launching in January is very high, but…what we’re saying is that we would never sacrifice the integrity of the data if there is a circumstance that will require us not to launch in January.”

To date, the CIC has recruited 104 financial entities to join the testing phase of its database. The system has two current users: the special accessing entities (SAEs) or credit bureaus and the submitting financial institutions, such as banks, cooperatives, lending firms, to name some.

The CIC has said the pilot database will be used by financial firms and SAEs solely for review purposes and not meant for any decision-making involving credit.

Currently, there are four official SAEs namely local firm CIBI Information, Inc., South Africa’s Compuscan, Italy’s CRIF S.p.A, and United State’s TransUnion Information Solutions, Inc.

The law has defined an SAE as a duly accredited private corporation engaged primarily in the business of providing credit reports, ratings and other similar credit information products and services. — Janine Marie D. Soliman

THE CENTRAL BANK’S rediscount window remained untapped in June, ahead of adjustments in the borrowing rates which will kick in this month.

In a statement, the Bangko Sentral ng Pilipinas (BSP) said the total loan availments under the peso rediscount facility remained at P15 million as of end-June, as banks saw no need augment their money supply to service client transactions.

The rediscount facility has been left untouched for two straight months, with the entire P15-million loan recorded in April.

Philippine banks may avail loans from the BSP’s rediscount window in order to meet their short-term liquidity needs, where they can present promissory notes from outstanding client debts as collateral.

These loans mature in different tenors, ranging from three to six months. The lenders may then use the fresh money supply to extend more loans or service withdrawals.

This comes ahead of the shift to uniform borrowing rates under the peso rediscount window which take effect on July 21, after the central bank decided last month to lift the preferential rates extended to small lenders.

The BSP said it will be closing the special rediscount window for thrift, rural, and cooperative banks, where they are allowed to incur loans at a smaller margin compared to those imposed on universal and commercial banks.

With the adjustment, rediscount loans availed by the small banks will be charged the same rates imposed on the big lenders, which currently stand at 3.5625% for loans maturing in 90 days and 3.625% for 180-day credit lines.

Likewise, no banks tapped the dollar and yen rediscount facility during the first semester, according to central bank data.

Still, interest rates under the foreign currency windows went up this July, in sync with an uptrend in global borrowing rates.

Yields for dollar loans inched up to 3.29917% for 90-day loans; 3.36167% for 91- to 180-day loans; and 3.42417% for 181- to 360-day loans. On the other hand, yen borrowings will also likewise see higher rates at 1.99986% for one to 90-day loans, 2.06236% for 91- to 180-day loans, and 2.12486% for 181- to 360-day loans. — Melissa Luz T. Lopez

THE PESO weakened against the greenback yesterday, hitting a new 10-year low, as upbeat US jobs data supported the case for another interest rate hike by the US Federal Reserve by yearend.

The local currency closed at P50.695 versus the dollar on Monday, dropping 11.5 centavos from its P50.58-per-dollar finish on Friday.

Yesterday’s close was a fresh low for the peso as this was its weakest close in over a decade or since it ended at P50.735 against the greenback on Sept. 1, 2006.

The peso opened Monday’s session a shade lower at P50.59 per dollar. Its intraday peak was logged at P50.58 against the greenback, while its worst showing for the day was at P50.695-to-the-dollar.

Dollars traded amounted to $438.8 million, down from $514.7 million seen last Friday.

Traders attributed the peso’s weakness against the dollar to upbeat US non-farm payrolls (NFP) data, which boosted expectations of the US central bank hiking interest rates anew before the year ends.

“Last Friday, we saw very good NFP numbers, which was more than what was expected in the market. However, wage growth came out less than what was expected,” one trader said by phone.

Similarly, another trader said on Monday: “The dollar appreciated today, as the jump in US non-farm payrolls increased the chances of another US rate hike before the year ends.”

The US Labor Department reported on Friday that US job growth surged more than expected last month and employers hiked hours for workers, which reflected a tightening in the US labor market, in return, could keep the Fed on track for a third rate hike by yearend despite sluggish wage gains.

Non-farm payrolls jumped by 222,000 jobs in June, driven by hefty gains in healthcare, government, restaurants and professional and business services sectors. That was the second biggest payrolls increase this year and beat economists’ expectations for a 179,000 rise. The economy also created 47,000 more jobs in April and May than previously reported. While the unemployment rate rose to 4.4% from a 16-year low of 4.3% in May, that was because more people were looking for work, a sign of confidence in the labor market.

The Federal Reserve raised its benchmark overnight interest rate in June for the second time this year.

“Still, overall, the dollar remains to be very supported. The data proved the US economy remains to be stable and improving and consistent with the tone of the Fed… Authorities think that any weakness like the previous NFP data may just be transitory, so their view still goes back on the upside of the data and stable economy,” the trader said.

One trader noted that the Bangko Sentral ng Pilipinas (BSP) was present in the market during yesterday’s session. As regulator to the Philippine financial system, the BSP sometimes intervenes in the daily foreign exchange market in order to temper any sharp peso swings and maintain its stability.

The second trader noted that the exchange rate could settle at P51-to-the-dollar level within the month.

“The next target is P51 levels. The range in the next few days depends where the authorities will try to temper the move but it looks as though the higher dollar is the general direction. I think we’ll see the P51 levels or higher than that if this continues… Maybe soon we’ll see it, probably this month or probably next week,” the trader said.

For today, the both traders see the peso moving within P50.60-P50.80 versus the dollar.

“The peso might generally move sideways, although it might show some upward bias due to profit-taking amid bets of softer US inflation and likely stronger Philippine data on exports and industrial production. The peso’s correction might be capped by continued expectations of another US rate hike this year,” the other trader said. — Janine Marie D. Soliman with Reuters

AXA LIFE Insurance Corp.’s (AXA Philippines) bancassurance partnerships with Metropolitan Bank & Trust Co. (Metrobank) and its thrift banking arm Philippine Savings Bank (PSBank) have borne fruit, as more than half of the insurer’s business operations now come from the lenders.

The chief of AXA Philippines — which is 25%-owned by GT Capital Holdings, Inc. and 28% by First Metro Investment Corp., both controlled by tycoon George S.K. Ty of the Metrobank Group — said its collaboration with Metrobank and PSBank “is doing extremely well,” as it contributes 60% of the life insurer’s total business operations.

“We’re doing extremely well and we’re very proud of our joint venture partnership with Metrobank and PSBank,” AXA Philippines President and Chief Executive Officer Rahul Hora said in a recent press conference.

“When a customer walks in a Metrobank or PSBank branch, he can get a full range of financial products from those institutions, from banking, to loan, to investment, to life insurance, to general insurance products, and that’s what really makes us closer to convenience that we want for our customers,” Mr. Hora said.

As of end-2016, AXA Philippines had more than 3,000 exclusive agents and 693 financial executives in a total of 938 Metrobank and PSBank branches nationwide.

Asked how the joint venture has contributed to the life insurer’s performance, Mr. Hora said, “For us internally, 60% of our business actually comes from Metrobank, so for us it’s a very, very important partnership.”

Metrobank is the country’s second largest bank in asset terms with P1.423 trillion at end-June 2016.

“And more importantly, if you look at the Metrobank branches, almost 100% of the branches are active, which means they do sell life insurance and general insurance products coming from AXA,” Mr. Hora said. “And I think that’s a big measure because the Metrobank staff, the Metrobank employees, are embracing the fact that they want to be a financial institution where the customer began all their financial products on one institution.”

Latest data from the IC showed AXA Philippines ranked second in premium terms in 2016 with P21.6 billion.

AXA Philippines has been operating here since 1999 and pioneered bancassurance operations — which is the distribution of insurance products through banks’ branch networks — in the country.

Shares in Metrobank gained P1.40 or 1.51% to close at P94.15 apiece on Monday, while PSBank shares went down by P1.90 or 2.11% to P88.10 each. — J.M.D. Soliman