The National Electrification Administration (NEA) issued a memorandum announcing their compliance to Republic Act No. 9510 and the mandatory submission of credit data of Cooperatives, who have loans or lines of credit, to the Credit Information Corporation (CIC). NEA is a covered Submitting Entity by R.A. No. 9510, being a government-owned and controlled corporation (GOCC) with borrowing authority and corporate powers to provide loan to electric utility operators for financing the construction and operation of generating plants, electric transmission and distribution systems for the furnishing of electric energy, particularly in the rural areas.
As a Submitting Entity, through Memorandum No. 2018-041 dated 13 July 2018 signed by Administrator Edgardo Masongsong, electric cooperatives under NEA were informed that the agency will regularly submit their loan data, consisting of both on-time and delayed repayments, to CIC.
R.A. No. 9510 or the Credit Information Corporation Act (CISA), requires institutions that offer loans, lines of credit, and other covered transactions to notify all its borrowers that the latter’s basic credit data will be submitted to CIC.
Asked for comment, SVP for Business Development and Communications, Atty. Aileen L. Amor-Bautista commented that there is a real business advantage to NEA and the cooperatives to submit this type of data to the CIC. “It’s not just a matter of legal compliance.” She was quoted as saying. “Cooperatives, as borrowers, that settle their obligations on time create a positive history of transactions that tag them as well-functioning cooperatives. This could set them up for equally positive attention when additional funding is needed to serve their constituents.”
Atty. Bautista also elaborated on the advantage it gave NEA. “In many, if not all economies, creditors derive advantage from this type of data activity in two ways; one is when the recipient of credit sees prompt payment as a gateway for better terms and bigger loans, or longer terms of credit, and two, the creditor then improves their cash flow and reduces delayed and non-payments.”
CIC President and CEO, Jaime P. Garchitorena, welcomed the news, as he said he has a “soft spot” for cooperatives. “Cooperatives are always seen as institutions that serve as the “last mile delivery vehicle” for many services and the national government frequently downloads billions of pesos through cooperatives to bring resources to smaller areas that are neglected by big businesses.
He added that “the submission of a cooperative’s positive and negative credit behavior allows NEA to take appropriate action on the negative credit behaviors, but more importantly, allows good power cooperatives to shine.”
The next step is for the CIC and NEA counterparts to begin the process of training in the areas of Data Formats, Security, Connectivity, and Access Procedures. Data submission to the CIC is expected to start within 2018.