President Rody Duterte last night moved to save the struggling poor Filipino vendors by ordering the arrest and deportation of foreigners involved in the usurious "5-6" money lending scheme.
At the same time, he announced the allocation of an initial P1-B for a micro-lending program to provide loans for small business capitals to be handled by the Dept. of Trade and Industry.
"Sobra na yan. Pautangin ng 5-6 (interest rate) tapos bentahan pa ng mahal na mga appliance. Patay talaga ang pobre dyan," he commented after the issue of the usurious money lending scheme of foreigners, especially Punjabis from India, was discussed towards the end of the Cabinet meeting last night.
There are about 50,000 motorcycle-riding Punjabis involved in a money-lending scheme where borrowers pay back a P5,000 peso loan with a P1,000 interest in one month collected on a daily basis.
The very high interest rates, however, have resulted in hardships for the borrowers who could hardly pay up the loans.
DTI Sec. Ramon Lopez said the proliferation of the "5-6" lending is mainly 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.
During the Cabinet meeting last night, President Duterte asked Foreign Affairs Secretary Perfecto Yasay, Jr. to inform the Indian Ambassador of his decision to stop the usurious lending scheme in the Philippines.
"They are violating Philippine laws by indulging in a money-making business without the necessary permits," President Duterte said.
During the campaign, then Presidential candidate Duterte vowed to relieve the small Filipino businessmen from their sufferings by providing a P1-B easy access credit per region.
Last night, after I discussed the poverty in the countryside and the desperate moves of small businessmen to borrow money from "5-6" lenders just to survive, President Duterte announced an initial release of P1-B for a micro-lending program.
He said that as soon as the country's gaming bodies, the PCSO and PAGCOR, turn over to his Office funds collected from their operations, he would provide additional money for micro lending program in all regions.
Source: Manny Piñol