NextGen Day

The Bangko Sentral ng Pilipinas (BSP) hopes to finish data collection for its Credit Risk Database (CRD) Project by December this year, as part of its effort to establish credit scoring in the Philippines.

BSP Governor Benjamin Diokno said data collection began in December 2020 with the help of experts from CRD Japan during his speech at the virtual 59th Philippine Economic Society annual meeting and conference on Thursday.

“(Once the data collection is completed in December,) the credit scoring model development will begin the following month,” he said.

According to Diokno, three universal and commercial banks (U/KBs) recently joined the program, bringing the total number of pioneer financial institutions to 20.

“A concrete framework for CRD’s long-term operation is also being developed,” he added.

One of the BSP’s measures to ensure that micro, small, and medium enterprises (MSMEs), among others, have easier access to financing is the creation of a credit scoring database for borrowers.

According to Diokno, 60 percent of MSMEs, which account for 99 percent of all businesses in the country, have ceased operations and recorded zero sales due to a lack of working capital and the ability to access relief assistance.

“As a result, the BSP has outlined programs aimed at encouraging credit flow to these critical sectors and bolstering their long-term development and competitiveness,” he said.

The credit surety fund, a credit enhancement scheme being implemented with the Philippine Guarantee Corporation and the Land Bank of the Philippines, provides up to 80% survey cover for loans granted by banks to MSMEs; and the Agri-Agra Law amendment, which is aimed at strengthening rural development by providing a holistic approach in addressing financing needs of the broader agricultural financing ecosystem.

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