David Cagahastian

August 22, 2014

The Bangko Sentral ng Pilipinas (BSP) and the government-owned Credit Informatio
n Corporation (CIC) are working with private firm FICO to establish benchmarks t
hat may be used by banks to determine the credit-worthiness of individuals.
FICO Country Director for the Philippines Burton Crapps said yesterday the colla
boration with BSP and CIC will allow more Filipinos to get access to credit, the
ultimate goal of the government's financial inclusion program.
"As the economy of the Philippines grows, there is a challenge of finding a way
to normalize credit so that more could get access to credit, that is financial i
nclusion," he said.
For instance, Crapps said that out of the estimated 10 million overseas Filipino
workers (OFWs), less than five percent would be able to take out a loan from Ph
ilippine banks because banks would not be willing to lend them money for the mer
e lack of information on their credit-worthiness.
"Less than 500,000 OFWs would not be able to get a loan in their own country. Th
ey can get a loan from where they're working, but not here," Crapps said.
Crapps refuted perceptions that Filipinos are not very keen on getting loans bec
ause it is in our culture to avoid being in debt. He said that Filipinos are alw
ays taking out loans, not from banks but from loan sharks.
He said that when the CIC finally becomes fully operational to provide banks wit
h the credit information on Filipinos, it would allow more Filipinos access to c
redit for their business endeavors.
FICO has established the so-called "FICO score" which determines the credit wort
hiness of an individual. The scores are arrived at using a set of criteria that
range from the payment history of a person, the amounts of loans that he has con
tracted, the length of the credit, etc.
Crapps said that FICO's work with the BSP and the CIC are done for free, and tha
t the collaboration is focused on arriving at a national benchmark for gauging t
he credit-worthiness of individuals, and on crafting the best-practices establis
hed by other national credit bureaus around the world.
FICO also works with banks around the world to provide "predictive analysis" reg
arding credit histories of the banks' clients, and to provide safeguards against
credit card fraud. Crapps said that FICO manages the credit analysis of 2.6 bil
lion of the world's credit cards, representing more than 70 percent of the world
's total credit card accounts. (David Cagahastian)