A Tagbilaran City councilor expressed support for Pres. Rodrigo Duterte’s stand against loan sharks or those lending money under the “5-6” system, citing Indians in Bohol who extend loans with exorbitant interest rates.
City Councilor Jonas Cacho on Wednesday said that such lenders are a burden and cause for financial problems particularly for small businesses.
According to the legislator, the practice is likely to drive the borrower into deep debt instead of being beneficial.
Although interest in the “5-6” lending activity is legal after the repeal of the Usury Law and the removal of interest ceilings, Cacho pointed out that some of these lending businesses do not pay taxes and do not have permits to operate.
The councilor noted that unlike legitimate lending companies, banks and cooperatives, “5-6″ lenders practice unfair methods and have an interest rate that is usurious.
Even when he was still the incoming president, Duterte had warned businessmen, particularly Indians, who practice the activity, threatening to deport and arrest them.
In Novermber, the national government allotted an initial P1 billion fund to finance micro and small enterprises in the country and as part of a crackdown on the “5-6” lending scheme.
The said fund which will be available this year, according to the Department of Trade and Industry, is part of a planned P19-billion allotment for micro and small businesses. (Allen Doydora)