by Genalyn D. Kabiling and Rey G. Panaligan
The government is stepping up its crackdown on foreigners engaged in the notorious “5-6” money lending scheme to ease the suffering of poor Filipinos.
During Monday’s Cabinet meeting, Agriculture Secretary Emmanuel Piñol said President Duterte ordered the arrest and deportation of foreigners involved in the dubious money-lending scheme.
“Sobra na yan. Pautangin ng “5-6” (interest rate) tapos bentahan pa ng mahal na mga appliance. Patay talaga ang pobre dyan (That is already too much. They lend you money with a “5-6” interest and sell appliances at a high price. The poor can never survive that kind of scheme),” Piñol quoted the President.
The President has directed Foreign Affairs Secretary Perfecto Yasay Jr. to inform the Indian Ambassador in the Philippines about his decision “to stop the usurious lending scheme in the Philippines,” Piñol said.
VIOLATING THE LAW
“They are violating Philippine laws by indulging in a money-making business without the necessary permits,” Duterte said.
Piñol noted that around 50,000 motorcycle-riding Punjabis have been charging high interest rates in their money lending offer to borrowers in the country. When a borrower owes a P5,000 loan, they are forced to pay P1,000 interest in a month collected every day. A person who owes P1,000 under the “5-6” scheme has to pay P30 a day for 40 days or a total of P1,200.
“The very high interest rates, however, have resulted in hardships for the borrowers who could hardly pay up the loans,” the agriculture secretary said.
Justice Secretary Vitaliano Aguirre II said those engaged in the “5-6” lending scheme can be arrested even without a warrant if they do not have business permit and other government requirements.
The interest in the “5-6” lending activity is legal after the repeal of the Usury Law and the removal of the interest ceilings, he said, “but we could not accept that kind of interest. In civil cases, the courts do not recognize that usurious interest rate.”
P1-B STANDBY FUND
To curb dependence on dubious lending schemes, Piñol said the government has set aside an initial P1 billion to provide easy access to loans to small businessmen.
The President promised to allocate additional funds for micro lending in all regions as soon as the Philippine Charity Sweepstakes Office (PCSO) and the Philippine Amusement and Gaming Corporation (Pagcor) remit their income to the national government.
Trade Secretary Ramon Lopez has observed the “5-6” lending scheme has proliferated due to the inability of government lending institutions to provide an easy access facility for small businessmen.
“Sec. Lopez said DTI has already designed a scheme on how to extend soft loans to small businessmen with an interest of 20% every year, payable in one year,” Piñol said.
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