The World Bank’s Doing Business 2020 report is out, and the Philippines improved as expected in the ‘Getting credit’ indicator in both score (from EODB score of 5.0 to 40.00) and ranking (from 184/190 economies to 132/190─increasing by 52 notches). This followed requests for modification of last year’s data, for which TransUnion has contributed significantly.
In particular, the Philippines logged improvements in the ‘Depth of credit information’ index (7 out of 8) and ‘Credit bureau coverage’ (13.5% of the adult population) from previous scores of 0 and 2.7%. ‘The Strength of legal rights’ index and ‘Credit registry coverage’ scores remain the same at 1 and 0, respectively, as some reforms have not been considered in this cycle.
“Last year’s Doing Business survey results for the ‘Getting credit’ topic were disappointing and arguably not how the Philippines would like to be regarded. Across the industry, we’ve been working hard to come together and tell our story. TransUnion has worked closely with World Bank representatives, sharing high-level credit statistics that our data privacy laws allow. The Philippines has a lot to be proud of and TransUnion will always do everything in our power to reinforce our belief in Information for good,” said TransUnion Philippines President and CEO Pia Arellano.
The most improved economy in Southeast Asia, the Philippines earned an overall EODB rating of 62.8 and ranked 95th (previously at 124th). At the press briefing organized by the Department of Trade Industry (DTI) for the survey results, DTI Sec. Ramon Lopez expressed approval that a more realistic assessment of the Philippines’ credit information ecosystem has been reflected in the World Bank report and acknowledged the contribution of TransUnion and other public and private sector members.
“May I take this opportunity to recognize our partners from both government and the business community who made the +29 notches possible. Congratulations for your dedication, patriotism, and hard work,” Lopez said. “In Getting credit – private sector organizations like TransUnion.”
Lopez has also assured “that the ARTA (Anti-Red Tape Authority), DOF (Dept. of Finance), SEC (Securities and Exchange Commission), DTI team are all behind you (credit bureaus) in your quest to promote financial inclusion. We recognize the need to continue the work. We have to expand the coverage of distributed credit information of TransUnion to firms not only individuals, so we shall help in that respect, pursue data exchange between credit bureaus and SSS, GSIS, and utility companies and retailers, and fully utilize the credit information system.”
The availability of credit information is an important indicator of the ease of doing business as it gives stakeholders insight into how lending decisions are facilitated in the economy. The broader the credit information available to financial institutions, the better they can assess an individual’s or firm’s creditworthiness.
“Our increased grade in ‘Getting credit’ reflects the positive effect TransUnion has had on the economic standing of the country. It’s tangible proof recognized by the World Bank that the work we do can improve people’s lives. We’re creating a virtuous cycle of empowered businesses that empower consumers to gain access to financial services which can uplift their lives and the economy as a result, and that is something we’re enormously proud of,” Arellano said.
The World Bank’s Doing Business survey provides objective measures of business regulations for local firms in 190 economies. A country’s ranking in this report is indicative of the regulatory and financial structures which are readily available to businesses in order to effectively conduct their business and promote economic growth in the country. The higher the ranking, the “easier” it is for businesses to more confidently invest in their growth due to their access to credit information, financial services, and regulatory protections.
Celebrate Today, Continue The Work Tomorrow
The spike in ranking puts the Philippines in the top 50% of the economies surveyed but there remains more work to be done to reach the next goal of being in the top 40%. An immediate action mentioned by Sec. Lopez is the expansion of coverage of TransUnion’s credit information to firms and not just individuals, in order to complete the perfect score of 8 in the ‘Depth of credit information’ index.
“There is much work to be done to achieve our goals but for now, we will continue to grow our relationships with government bodies and other stakeholders to find productive ways in making a positive impact on the economy. We are working to establish a credit bureau association together with the rest of the private credit bureaus to foster the common goal of consumer education on credit information and financial responsibility when getting credit. We are passionate about what we believe we can achieve together,” Arellano concluded.
TransUnion is a sophisticated, global risk information provider and credit bureau dedicated to finding innovative ways information can be used to make better and smarter decisions. Through its global mantra Information for good, TransUnion advocates financial literacy and responsibility.