Gov’t targets Indians in ‘5-6’ lending scheme

MANILA, Philippines – The administration of President Duterte will run after Indian nationals engaged in the “5-6” lending business, Justice Secretary Vitaliano Aguirre II revealed yesterday.

In a press conference, Aguirre said the President instructed Cabinet members during their meeting last Monday to clamp down on the usurious lending scheme preying on struggling and small-time entrepreneurs.

Aguirre said Duterte wants the Indians engaged in such business arrested by police and deported.

“They can be arrested for operating without any permit,” Aguirre stressed, citing the strict requirements of the law on lending businesses.

The Department of Justice (DOJ) chief also explained that the Indian nationals could be arrested even in the absence of a warrant of arrest from courts because such offense is considered a continuing crime.

He added that these Indians have not paid taxes to the government from their illegal lending business, which has preyed on many Filipinos.

Aguirre admitted that legally speaking, the 5-6 scheme where the Indian lenders impose a 20-percent interest per month on their borrowers is not exactly illegal following the suspension of the usury law and the removal of interest ceilings.

“But we could not accept that kind of interest. When it comes to civil cases, the courts do not recognize such excessive interest rate,” he pointed out.

Aguirre said this is the reason President Duterte has decided to set aside P1 billion for a micro-lending program to provide loans for small businesses to be handled by the Department of Trade and Industry (DTI).

In the Cabinet meeting last Monday, the President stressed that the lending scheme of over 50,000 motorcycle-riding Punjabis from India all over the country has further aggravated the poverty of many Filipinos. 

Duterte also directed Foreign Affairs Secretary Perfecto Yasay Jr. to coordinate with the Indian ambassador regarding the drive to stop the usurious lending scheme.

Under the money-lending scheme, borrowers pay back a P5,000 loan with P1,000 in interest in one month collected on a daily basis. This translates to a 20-percent per month interest rate.

The very high interest rates have resulted in hardships for the borrowers who could hardly settle the debt.

The DTI has formulated a scheme on how to extend soft loans to small businessmen with an interest of 20 percent per year, payable in one year.

Meanwhile, the Philippine Coast Guard (PCG) conducted joint maritime pollution exercise with the Indian Coast Guard (ICG) yesterday morning in Sangley Point, Cavite City. 

The exercise between the PCG’s 56-meter BRP Pampanga, several of its small craft and ICG’s 105-meter offshore patrol vessel Samarth took place at 1.9 nautical miles northwest of Sangley Point in Cavite. 

PCG spokesman Commander Armand Balilo said that the maritime exercise aims to enhance the capability in cross boarding; maritime pollution response and containment; and fire fighting of the two coast guards.

The PCG and ICG sent their boarding team and conducted a visit, board, search and seizure aboard two other vessels that participated in the exercise. 

They also demonstrated their capability in maritime pollution containment and response to prevent an oil spill if a vessel ran aground and incurred damage. They also showed how to control a fire and how to prevent a fire from happening. – With Evelyn Macairan