8/23/2016

FE D. CAINGLES, CPA

COOPERATIVE UPDATES

REVISED
IMPLEMENTING
RULES AND
REGULATIONS OF RA
9520

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Rule 10:
Capitalization and Accounting
Procedures of Cooperatives

Legal Basis. The legal basis for this Rule is

Art. 71 of the Code, quoted as follows:
 Art. 71. Capital. - The capitalization of
cooperatives and the accounting procedures
shall be governed by the provisions of this
Code and the regulations which shall be
issued.

RULE 10:
CAPITALIZATION AND ACCOUNTING
PROCEDURES OF COOPERATIVES

Capital Sources:
a. Members Share Capital
b. Loans and Borrowings including deposits
c. Revolving Capital
d. Subsidies, donations, legacies, grants, aids
and such other assistance from any local or
foreign institutions

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RULE 10:
CAPITALIZATION AND ACCOUNTING
PROCEDURES OF COOPERATIVES

Share Capital
The Share Capital of a cooperative may consist of common share capital
and preferred share capital;
The share capital contribution of the members shall be considered as equity.
It shall not be withdrawn and should not be used in offsetting obligations
whether past due or current.

Preferred Shares: Issuance and limitation on Preferred Share

Capital shall be prescribed in the By-laws of the cooperative

Capital-Build-up: The By-laws of the coop shall provide for a

reasonable and realistic member capital build-up program

RULE 10:
CAPITALIZATION AND ACCOUNTING
PROCEDURES OF COOPERATIVES

Subscription Agreement:
Upon admission of membership and;
Upon full payment of initial subscription

List of Share Capital Certificate:

Share Capital Certificate shall be issued to all their members
List of share capital certificate issued to members shall be maintained by
the coop

Par Value:
Should not be less than 100 but not more than 1,000 pesos
Multiple types of Common Shares with different par value per share is
prohibited
Increase/decrease the par value is likewise prohibited

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RULE 10:
CAPITALIZATION AND ACCOUNTING
PROCEDURES OF COOPERATIVES

Limitation on Share Capital Holdings: 10% limit

Fines on Unpaid Share Capital Subscription: The
By-laws of a cooperative shall prescribe a fine
on unpaid subscribed share capital. Provided,
that such fine is fair and reasonable under the
circumstances as determined by the Board of
Directors.

RULE 10:
CAPITALIZATION AND ACCOUNTING
PROCEDURES OF COOPERATIVES

Assignment of Share Capital Contribution or Interest: Not

allowed, unless:
He/She has held such share capital contribution or
interest for not less than one (1) year;
The assignment is made to the cooperative or to a
person who falls within the field of membership of the
cooperative; and
The Board of Directors has approved such assignment
Interest on Share Capital: Shall be governed by the
prescribed formula of the Authority

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RULE 10:
CAPITALIZATION AND ACCOUNTING
PROCEDURES OF COOPERATIVES

X (Net Surplus less Statutory Reserves)

-----------------------------------------------------
Total Average Share Month

Where X shall be a percentage to be determined as

determined by the Board allocated for ISC

RULE 10:
CAPITALIZATION AND ACCOUNTING
PROCEDURES OF COOPERATIVES

Withdrawal of Share Capital: 60 days notice.

Entitled to refund provided that A<DL
Patronage Refund: minimum of 30% and should not
be more than twice the rate of IC
Accounting Procedure: Should be in accordance with
the GAAPP. Shall use the Standard Chart of
Accounts and its accompanying Accounting Manual
prescribed by the Authority

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CDA ISSUANCES

MC 2016-02, AS PPROVED ON MAY 17, 2016

AMENDMENT TO MC NO. 2015-01

REVISED GUIDELINES GOVERNING THE
REGISTRATION OF COOPERATIVES

Registration Requirements Submit 4 copies
all original and complete
1) Economic Survey

2) Articles of Cooperation shall be signed by all

cooperators in each page

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MC 2016-02, AS PPROVED ON MAY 17, 2016

3) By laws shall be signed by a least majority

of the members in the adoption page.
4) Treasurers Affidavit
5) Surety Bonds of Accountable Officers
6) Certificate of PMES signed by CDA PMES
Team
7) Registration Fee

MC NO. 2016-01 AS APPROVED ON FEB 15,

2016

AMENDMENT TO MC NO. 2010-03
GUIDELINES ON THE PAYMENT OF
REGISTRATION FEES

100K AND BELOW - FULL PAYMENT

100,001 TO 200K - WITHIN 3 MONTHS

200,001 TO 300K - WITHIN 6 MONTHS

300,001 TO 400K - WITHIN 9 MONTHS

400,001 TO 1M - WITHIN 12 MOS

ABOVE 1 K - WITHIN 24 MOS

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MC 2015-11- APPROVED ON DECEMBER 15,

2015
SUJECT : AMENDED POLICY GUIDELINES
ON THE ESTABLISHMENT OF
COOPERATIVE BRANCH

SCOPE : ALL COOPS INTENDING TO OPEN

A BRANCH EXCEPT COOP BANK

DEFINITION OF TERMS

PRINCIPAL/MAIN OFFICE - shall refer to the

registered head office as indicated in the
articles of cooperation and bylaws of the
cooperative where the business and
cooperative activities are conducted and
central records and main books of accounts
are kept.

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DEFINITION OF TERMS

Branch Office shall refer to a business

office outside the principal office where
cooperative activities and business operation
are undertaken as per approved cooperative
development plan.

DEFINITION OF TERMS

Certificate of Authority The official

document issued by the Authority authorizing
the establishment and operation of a
cooperative branch

Manual of Operation shall refer to a
document showing the compilation of
detailed policies and procedures in the
operation of the cooperative..

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DEFINITION OF TERMS

Net Worth shall refer to equity inclusive of

members equity, donations, grants and reserve
funds less unbooked allowance for probable
losses on loans, accounts receivable,
investment and non-performing assets, and
other capital adjustments as may be required by
CDA.

Transfer of Office shall refer to the relocation
of the office address of cooperative branch
within the same municipality/city.

DEFINITION OF TERMS

Full Business Operation - shall refer to the
conduct of complete cycle of cooperative
business activity in consonance with the
purpose/s and scope of cooperative as provided
for in the articles of cooperation and by-laws.

Inspection Report - shall refer to the
documents where the findings/observations,
actions and recommendations of the CDA
authorized person who conducted the inspection
are summarized and presented.

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PRE-
PRE-QUALIFICATION REQUIREMENTS

Proposed Branch shall be within the are of
operations;

Minimum Paid up Capital

Paid-up Capital Category of

Coop
Php 10 Million Primary
Php 15 Million Secondary
Php 20 Million Tertiary

PRE-QUALIFICATION REQUIREMENTS

Each branch must have an available

operating capital as provided for in the
Business Plan:
Operating Capital Category of Coop
Php 5 Million Primary
Php 10 Million Secondary
Php 15 Million Tertiary

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PRE-QUALIFICATION REQUIREMENTS

The cooperative did not incur net loss for the

last three consecutive years and its net worth
is progressive for the last three years from
the date of application.

DOCUMENTARY REQUIREMENTS
A letter request for authority to establish a
cooperative branch shall be signed by the
Chairman of the cooperative or General
Manager as authorized by the Board and
shall be accompanied by the following
information/documents:
1 .Business plan;
2. General assembly resolution authorizing
the establishment of the branch and
commitment of investment or allocation of
resources in its operation;

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DOCUMENTARY REQUIREMENTS

3. Certification signed by the

Chairman/General Manager of the following:
3.1 Presence of Manual of Operations for
Branch; and
3.2 Address of the proposed branch
4. Audited Financial Statement for the last 3
years.

JURISDICTION

The approval and issuance of the Certificate

of Authority shall be made by the Extension
Office Director where the principal office is
located. For cooperative registered with the
Central Office, the Executive Director shall
approve and issue the same.

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JURISDICTION

Opening of branch in other region

> endorse by the registering EO if qualified to
open a branch office;
> the EO where the branch is to be
established
will issue the certificate of authority if
qualified to open a branch after further
evaluation copy furnish the registering EO.

RELOCATION/TRANSFER OF BRANCH OF
COOPERATIVES

Notice to CDA of relocation/transfer of branch at
least three (3) months before the actual transfer;

Posting of notice of relocation/transfer in
conspicuous place where the branch office is
located at least three (3) months prior to
scheduled relocation/transfer;

Payment of processing fee amounting to Php
500.00 for the issuance of new Certificate of
Authority upon surrender and cancellation of the
old certificate.

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ADMINISTRATIVE REGULATION

All cooperatives intending to put up a branch

and cooperatives with existing branch office
should be established within the area of
operation of the cooperative. For
cooperatives intending to branch outside the
area of operation, approval of the articles of
cooperation expanding the area operation
shall be secured.

ADMINISTRATIVE REGULATION

No branch should be established within a 500-
meter radius of the nearest cooperative
engaged in the same line of business as the
proposed branch;

All branch offices should secure a Barangay and
Mayors Permit;

Submission of operational reports to the
principal/head office such as financial
statements, cash flows, and other relevant
reports required by the main office and the
Authority.

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MC NO. 2015-10- S. 2015

REVISED GUIDELINES ON THE
ACCREDITATION OF COOPERATIVE
TRAINING PROVIDERS

Who are qualified to apply?
> Cooperative Federations
> Cooperative Unions
> Training Institutions including NGOs and
Academe
> NGA
> Local Coop Development Office ( No longer
LGU)
> Advocacy Cooperatives

QUALIFICATION REQUIREMENTS

With Juridical Personality

With Cooperative Development Program

With at least 5 competent trainers

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DOCUMENTARY REQUIREMENTS

Letter-application for renewal;

Updated list of Trainers;

Reports of training conducted

List of participants per training conducted

Modules of Cooperative Training Conducted;

Two (2) year Cooperative Training Plan.

ADDITIONAL REQUIREMENTS

Federations/Unions
- Cooperative Annual Progress Report (CAPR)
- Latest Audited Financial Statements
- Valid Certificate of Compliance (COC)

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FOR TRAINING INSTITUTIONS, NGO, AND

PRIVATE ACADEME

Copy of Annual Report of the institution
covering all its activities, programs and
undertakings
- Latest Audited Financial Statement
- New Business Permit

VALIDITY OF ACCFEDITATION

INITIAL - ONE YEAR

RENEWAL 2 YEARS

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ACCREDITATION FEE

NGO/FEDERATIONS/UNIONS/TRAINING
INST/ ACADEME
INITIAL - PHP3,000.00
RENEWAL PHP5,000.00

GOVERNMENT ORGANIZATIONS

INITIAL - PHP1,500.00
RENEWAL - PHP2,500.00

MC2015-09-REVISED GUIDELINES
IMPLEMENTING THE NEW TRAINING
REQUIREMENTS OF COOP OFFICERS

Board of Directors;

Secretary;

Treasurer;

Election Committee,

Audit Committee;

Ethics Committee;

Mediation and Conciliation Committee;

Other Committees created by the General Assembly
and BOD; and

General Manager or Chief Executive Officer.

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REQUIRED TRAINING FOR COOP OFFICERS

For Micro Coops With Assets of Three Million

and Below
1) Fundamentals of Cooperatives 8 Hours
2) Governance and Management
of Cooperatives - 8 Hours

All Other Cooperatives with more than

P3Milion Assets
1) Fundamentals of Cooperatives 16 Hours
2) Coop Management & Governance 16
Hours
3) Additional trainings for officers of
cooperatives engaged in savings and credit
with at least Five Million Pesos
(Php5,000,000.00) worth of deposit liabilities
based on their latest Audited Financial
Statement

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Additional trainings for officers of

cooperatives engaged in savings and
credit with at least Five Million Pesos
(Php5,000,000.00) worth of deposit
liabilities based on their latest Audited
Financial Statement

1) Financial Management - 8 Hours

2) Credit Management - 4 Hours
3) Risk Management - 4 Hours

PERIOD OF COMPLIANCE

Cooperative officers shall complete the

required trainings within the first half of their
term.

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MC- 2015-08 GUIDELINES GOVERNING THE

ISSUANCE OF CERTIFICATE OF COMPLIANCE

PURPOSES OF COC
1) To affirm the cooperatives compliance with
the CAPR and its attachments as prescribed
by RA 9520, its Revised IRR, and other related
issuances;
2) To avail of the incentives and privileges set
forth by the CDA-BIR Joint Rules and
Regulation Implementing Article 60 and 61 of
RA 9520 in relation to RA 8424;

MC- 2015-08 GUIDELINES GOVERNING THE

ISSUANCE OF CERTIFICATE OF COMPLIANCE
3) To secure permits and licenses
4) To comply with the documentary
requirements prescribed by the financial
institution in availing financial assistance;
5) For accreditation as CDA training provider;
6) And for such other legitimate purposes as
may be needed by the cooperatives;

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REQUIREMENTS FOR THE ISSUANCE OF COC

a) Letter request duly signed by the

Chairperson or any authorized representative;
b) Proof of compliance that all required reports
for the preceding fiscal year had been
submitted;
1) CAPR with the ff: attachements
- Audited FS
- Social Audit Report
- Performance Audit Report

REQUIREMENTS FOR THE ISSUANCE OF COC

3) Copy of the Minutes of Meetings:

- 1. If the GA is held within 90 days after the
close of the fiscal year, then the current years
GA minutes shall be submitted.
2. If the date of the GA as fixed in the by-laws
is beyond the 90-day period, then a copy of the
latest or that of the immediately preceding
years minutes shall be submitted.

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REQUIREMENTS FOR THE ISSUANCE OF COC

GA Minutes shall include :
1) Results of election
2) Approval of the Development Plan and/or
Annual Plan and Budget;
3) Presentation and acceptance of CAPR
and
4) Appointment of the CDA Accredited
External Auditor;
5) Acceptance of the management and
committee report by the General Assembly

GROUNDS FOR SUSPENSION OR NON-

NON-RELEASE
OF CERTIFICATE OF COMPLIANCE

Any existing dispute on the

legitimacy of leadership as
evidenced by a complaint filed
with the Authority shall be a
ground for suspension or non-
release of a COC.

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PERIOD FOR FILING A REQUEST

On or Before April 30 of the Current Year

PERIOD OF COVERAGE AND VALIDITY OF

COC

April 30 of the Succeeding Year

FEES AND PENALTIES

Certification Fee 100.00

Penalties

Php 300.00 for late filing of application for
COC, and

Php 300.00 for every year of failure to secure
COC.

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MC-2015-05 PHIL. FINANCIAL

REPORTING FRAMEWORK FOR
COOPERATIVES( PFRF)

For uniform interpretation in the valuation
and recording of cooperative transactions;

Enhance transparency; and

Uniform presentation of the cooperative

financial statements taking into
consideration the cooperative laws and
practices.

FINANCIAL STATEMENT PRESENTATION

 Fair presentation
 Complete set of financial statements

 Going Concern

 Accrual

 Comparatives

 Consistency

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BORROWING COSTS

Borrowing costs are recognized as expense

immediately.

Borrowing costs incurred in connection with
the construction of qualifying assets may be
capitalized as part of the cost of the asset

FOREIGN EXCHANGE

Transaction is translated into functional
currency at the spot rate at the date of the
transaction

Monetary assets and liabilities are

translated using the closing rate as of the
FS date.

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EMPLOYEE BENEFITS

Employee benefits are recognized as expense (or part

of the cost of assets) when incurred.

Retirement benefit expense includes:
 Current service costs
 Interest costs
 Amortized past service costs
 Expected return on plan assets
 Actuarial Gains and Losses

Past Service Costs
 Vested- recognize immediately
 Unvested- to be amortized

BIOLOGICAL ASSETS

Biological assets are living plants and

animals.
 Initial
measurement- Cost
 Subsequent measurement
 Cost less accumulated depreciation and
impairment losses
 Lower of cost and estimated selling price less
cost to sell and cost to complete

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BIOLOGICAL ASSETS

Biological assets are living plants and

animals.
 Initial
measurement- Cost
 Subsequent measurement
 Cost less accumulated depreciation and
impairment losses
 Lower of cost and estimated selling price less
cost to sell and cost to complete

INVESTMENT PROPERTY

Investment property shall be accounted for using

the cost-depreciation-impairment model.
For capital appreciation or rental only for real
property

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PROPERTY, PLANT AND EQUIPMENT

PPE shall be accounted for using the Cost

Model

Revaluation of land is allowed but subject to the
approval of CDA

INTANGIBLE ASSETS

Organizational costs are recognized as expense

immediately

Research and development costs are recognized as

expense immediately

All intangible assets shall be amortized

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IMPAIRMENT OF ASSETS

Recognize impairment loss as the excess of carrying

amount and recoverable amount

Impairment loss and reversals are recognized in

Statement of Operations

INVESTMENT IN ASSOCIATES AND JOINT

VENTURE

Initially recognized at Cost

Subsequently presented in the Statement of Financial

Position at Cost less Accumulated Impairment Losses

Recognize impairment loss when there is an indication

that the investment is impaired

More than 20% of the total capital

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PROVISIONS AND CONTINGENCIES

Provision is recognized when
 the entity has a present obligation;
 it is probable that an outflow of economic resources will
be required; and
 a reliable estimate of the amount of obligation can be
made

Contingent assets and liabilities are not
recognized

INVENTORIES

Initially recognized at Cost

Subsequently measured at the lower of

 Cost and
 Estimated Selling Price less Costs to Complete and Sell

Cost is determined using

 Specific Identification
 FIFO

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LEASES

Operating Lease
 Rental income/expense is recognized on a straight-line basis
over the lease term.
 Advance rent is recognized as a liability
 LEASE TO OWN recorded as installment receivable

Finance Lease
 Rental payments are treated as installment payments for the
acquisition of asset
 Depreciation and interest expense is recognized by the lessee
 Transfer of assets during the lease agreement
 Option to buy during the end of the term

IMPAIRMENT OF ASSETS

An impairment loss is recognized in P&L whenever the

carrying amount of an asset is greater than its
recoverable amount.

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REVENUE

Sale of goods- upon delivery

Sale of services- when services are performed

Interest revenue- earned and collected

Dividends revenue- when declared

Revenue means total sales regular source of

income

Gain for a certain transaction

FINANCIAL INSTRUMENTS

Debt instruments at amortized cost

Short-term debt instruments- undiscounted
amount

Investments in publicly- traded securities at
fair value with changes in fair value recognized
in profit and loss

Investments in non publicly-traded securities
mutual funds, as well as other externally-
managed funds at cost less impairment

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DONATIONS AND GRANTS

 Donations and grants are treated as

increase in equity
Donations in the form of PPE shall be
recognized as income over the life of the asset
Donations for working capital purposes shall
remain in the equity

ACCOUNTING CHANGES

Accounting estimates- current and prospective

Change in accounting policy- current

Correction of prior-period errors- current (use
Prior Period Adjustment Account in the
Statement of Operations)

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STATEMENT OF FINANCIAL CONDITION

Cash and cash equivalents

Trade and other receivables

Financial assets

Inventories

Property, plant and equipment

Investment property

Intangible assets

Biological assets carried at cost less
accumulated depreciation

Investment in associates

Investment in jointly controlled
entities

Trade and other payables

Financial liabilities

Liabilities/Assets for current taxes

Deferred tax liabilities/assets

Provisions

Members share capital

Donation and grants

Statutory funds

Revaluation surplus

STATEMENT OF OPERATIONS

Revenue

Cost of sales/services

Marketing costs

Administrative costs

Finance costs

Other income and expenses

Tax expense (if applicable)

Allocation of distribution of net
surplus among:
 Statutory fynds
 Interest on share capital
 Patronage refund

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STATEMENT OF CASH FLOWS

Classify changes in cash and cash equivalents for
a period as to operating, investing or financing
activities

Cash flows must be split into operating,
investing and financing activities.

Operating activities may be presented using
either the direct or indirect approach.

Disclose interest on share capital and patronage
refund paid

Disclose other interest paid and received.

STATEMENT OF CHANGES IN EQUITY

Show a reconciliation between the carrying amount at the
beginning and the end of the period, separately disclosing
changes resulting from:

Amounts of investments by, and distributions to, members,
showing separately issues of shares , and treasury share
transactions

Donations and grants

Movements in Statutory Funds (includes allocation of Net

Surplus as reconciled with amounts per Statement of
Operations)

Movements in revaluation surplus

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STATUTORY FUNDS

Reserve Fund
 At least 10% of the Net Surplus
 New Cooperatives should allocate 50% of its net
surplus for the first 5 years

Cooperative Education and Training Fund
 Not more than 10% of the Net Surplus

Community Development Fund
 Not less than 3% of Net Surplus

Optional Fund
 Not more than 7% of the Net Surplus

DISTRIBUTION OF SURPLUS AND MOVEMENTS

IN STATUTORY FUNDS

Distribution of the Net Surplus to Statutory
funds, Interest on Share Capital and
Patronage Refund must be presented in the
Statement of Operations

Movements in Statutory Funds should be
presented in the Statement of Changes in
Equity

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EFFECTIVE DATE

Effective for Financial Statements Period

ending on or after December 31, 2016

MC 2015-04
GUIDELINES IN THE IMPOSITION OF FINES AND
PENALTIES FOR DELAYED SUBMISSION OF
REQUIRED REGULAR REPORTS

Section 7, Rule 8 of the Revised Rules and
Regulations Implementing Certain and
Special Provisions of the Philippine
Cooperative Code of 2008 provides failure
to file the required regular reports with the
corresponding attachments on time shall
subject the Accountable Officers a fine of P
100.00 per day of delay."

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REQUIRED REPORTS PRIMARY COOP

Cooperative Annual Progress Report (CAPR) with
the following attachments:

a. Social Audit Report including its program of
activities pursuant to its socio-civic goals of the
cooperative;
b. Performance Audit Report, including copies of
the semi-annual Report on mediation and
conciliation as received by the Authority pursuant to
EO 97;
c. Audited Financial Statements; and
d. List of Officers and Trainings Undertaken
/Completed.

REQUIRED REPORT SECONDARY & TERTIARY

ADDITIONAL REPORTS

List of affiliates and cooperatives which have
remitted their respective Cooperative Education
and Training Funds (CETF);
f. Business consultancy assistance to include
the nature and cost, including the use of CETF;
and
g. Other training activities undertaken specifying
therein the nature, participants, and cost of each
activity.

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REQUIRED REPORTS ELECTRIC COOP

IN ADDITION

List of Members issued with Share Capital
Certificate. This requirement shall however
be submitted after two (2) years from the
effectivity of the Revised Implementing Rules
and Regulation of RA9520.

EFFECT OF PARTIAL COMPLIANCE

Partial compliance shall be considered non-

compliance and the cooperative shall be in
delay until such time that the filing of the
required reports have been fully complied
with.

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WHEN DELAY IS INCURRED

Delay shall commence on the day following

the last day prescribed for the filing of
reports. However, should the last day of filing
fall on a Saturday, Sunday or non-working
holiday, the last day for filing shall be the
next working day.

NOTICE OF DELAY

The Authority shall notify the cooperatives of
their non-compliance within fifteen (15) days
from the lapse of the period to file the
required reports, stating:

1. that the cooperative has incurred delay
2. the commensurate fines and penalties that
will be imposed as a result of its failure to file
the required reports
3. the demand to pay the fines and penalties

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FINES AND PENALTIES

P100.00 per day of delay

MICRO COOPERATIVES ARE EXEMPTED
TO PAY PENALTIES BUT CAN NOT BE
ISSUED COC

MEMORANDUM CIRCULAR NO. 2014-02

CLARIFICATORY ISSUANCE ON THE FIVE

(5) CONSECUTIVE YEAR LIMIT RULE IN
THE ENGAGEMENT OF COOPERATIVE
EXTERNAL AUDITOR

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Section 5 (h) The external auditor, whether

on his/her individual capacity or as partner of
a firm, may undertake the external audit of
the concerned cooperative for not more than
five (5) consecutive years, provided that the
external auditor may be allowed to audit the
same client after a gap of two (2) years.

Five (5) consecutive year limit in the audit of a

particular cooperative shall apply to the
accredited cooperative external auditor, either
as :

individual CPA or as partnership/auditing firm.
For partnership/auditing firm, accreditation is an
authority vested to them as an organization per
se and that all the partners and associates are
part of the organization. In case of audit
conducted beyond the required limit, such shall
be a basis for non-renewal of accreditation and
the audited financial statements prepared
thereof cannot be considered as valid
compliance by the cooperative.

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OTHER RELATED
LAWS

WHAT IS CISA

.A. 9510 otherwise known as Credit
Information System Act (CISA) is a law
passed in 2008 creating the Credit
Information Corporation (CIC)

The Securities and Exchange
Commission (SEC) is the lead government
agency to implement the CISA, in
coordination with other relevant government
agencies in the adoption of the IRR.

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CREDIT INFORMATION CORPORATION

CIC shall be owned 60% by the National
Government (NG) and 40% by industry
associations of banks/quasi-banks and
association of consumers

Authorized capital of CIC shall be Php 500
million

The Board of Directors of CIC shall be
composed of 15 members:
 SEC Chairman (ex-officio chairman),
 7 to be appointed by the president
 5 coming from the private sector
 2 independent directors

CREDIT INFORMATION CORPORATION

The NG shall continue to hold 60% of

common shares of CIC for a period not to
exceed five (5) years

After the said period, it shall dispose of at
least 20% to qualified investors, which
shall be limited to industry associations of
banks, quasi Banks, insurance,
financing, and credit card
companies including consumer
associations.

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FUNCTIONS OF CIC

The CIC has three (3) important functions:

To receive and consolidate basic credit
data

To act as a central registry or repository of
credit information

To provide access to reliable, standardized
information on credit history and financial
condition of borrowers

BASIC CREDIT DATA

Positive and negative credit information

about the borrowers credit facility

Any information on
borrowers creditworthiness

Other factual and objective information
about the borrower

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WHO ARE REQUIRED TO SUBMIT ?

Every participating entity shall submit to CIC

the following basic credit data:

individual

corporation

partnership

Cooperative credit coop or MPC with

lending operations

credit cards-

"POSITIVE CREDIT INFORMATION

Refers to information/data concerning the

credit performance of a Borrower
(*information on timely repayments or
nondelinquency)

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NEGATIVE CREDIT INFORMATION

refers to information/data concerning the

poor credit performance of Borrowers
(*defaults on loans, adverse court judgments
relating to debts and reports on bankruptcy,
insolvency, petitions or orders on suspension
of payments and corporate rehabilitation)

ACCESSING ENTITY"

Refers to any Submitting Entity or any other

entity authorized by the CIC to access
Consolidated Credit Data and other credit
data from the CIC.

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SPECIAL ACCESSING ENTITY

Refers to a duly accredited private

corporation engaged primarily in the
business of providing credit reports, ratings
and other similar credit information products
and services.

RIGHTS OF THE BORROWER

Know cause/s of loan refusal;

Access to credit information; Dispute
erroneous, incomplete, or misleading credit
information; and

Be notified by a submitting entity of the
latters obligation to submit and disclose
basic credit data to CIC.

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OBLIGATIONS OF SUBMITTING ENTITIES

Notify Borrowers re: submission of Basic

Credit Data to CIC via Notification clause

Submit the Basic Credit Data of all its
Borrowers in its database (Regular & Outside
Regular Submission)

EFFECT OF DATA PRIVACY ACT WITH CISA?

Philippine Data Privacy Act of 2012 is not
applicable to :

Section 4: e. Republic Act No. 9510,
otherwise known as the Credit Information
System Act (CISA); f. Information necessary
for banks and other financial institutions
under the jurisdiction of the independent
central monetary authority or Bangko Sentral
ng Pilipinas to comply with Republic Act No.
9510

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REMEDIES OF CIC FOR NON COMPLIANCE

CIC shall impose: a. Suspension b.

Administrative sanctions

*Fines

*Filing of Criminal cases

DEADLINES FOR SUBMISSION

Credit Cards Nov. 30, 2015

Universal &
Commercial Banks March 31, 2016

Thrift Banks April 30, 2016

Rural Banks June 30, 2016

Financing Corporation Aug. 31, 2016

GOCC Sept.30, 2016

Large Cooperatives October 30, 2016

Medium Coops December 31, 2016

Insurance Companies

Non Stock Savings &

Loan Associations

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