Installment transactions make up more than half of CIC credit data

STATE-RUN Credit Information Corp. (CIC) said installment transactions dominated Filipinos’ credit reports as more than 36 million of the 56 million contract data it gathered had this mode of payment.

In a statement on Monday, the county’s sole public credit registry said installment transactions accounted for more than half or 65% of the total data based on the credit reports it collected as of Dec. 16.

“Installment transactions being the bulk of CIC data is significant. Until now, most transactions captured by other credit bureaus were credit card transactions which may not necessarily reflect an accurate picture of the broader type of lending that is happening in the Philippines,” CIC President and Chief Executive Officer Jaime Casto Jose P. Garchitorena was quoted as saying.

CIC said installment transactions vary from microfinance institution loans to vehicle and housing loans, which involve a series of payments that are usually accompanied by interest rates.

This was followed by the 18.81 million transactions done through credit cards which accounted for 33.58% of the total and the remaining 633,192 via non-installment contracts.

The CIC database houses more than nine million unique data subjects and 81,364 companies and corporations, it said.

Mr. Garchitorena said their large database will provide clients “a better view of true credit behaviors” as it contains data from various sources including salary loans, housing loans and car loans, compared to other databases that were mostly reliant on credit card history.

“Statistically, if a lender wants to get a relevant view of credit and lending in the Philippines, the sampling has to be broader — not just credit cards,” he said.

Meanwhile, CIC said around 25% of all borrowers own sole proprietorships which they use either as a source of income or for loan applications.

“We know that credit card penetration is still quite low in the Philippines and therefore may be less relevant to lenders who want to see behaviors of borrowers across a wider range of loan products. To the individual borrower, having access to their own credit records in the CIC database means they now have a way of proving their creditworthiness,” he said. — B.M. Laforga