The War on Money Lenders
Emmanuel F. Piñol Secretary of Agriculture posted on his facebook page on January 10, 2017 that President Duterte ordered the arrest and deportation of foreigners engaged in 5 – 6 money lending.
5 – 6 money lending; are small loans given to small business who cannot obtain bank loans as they are unable to provide collateral. 5 – 6 loans interest rates are usually in the range of 20% a month.
“They are violating Philippine laws by indulging in a money-making business without the necessary permits,” President Duterte said.
Indian national are prominent 5 – 6 money lenders and President Duterte has asked Foreign Affairs Secretary Perfecto Yasay, Jr. to inform the Indian Ambassador of his decision to stop the usurious lending scheme in the Philippines.
Foreigners of other nationalities and Filipinos are also involved in illegal money lending schemes.
Justice Secretary Vitaliano Aguirre announced that foreigners lending money without permits may be arrested even without a warrant of arrest as they’re operating illegally without permits and licenses and therefore are committing a crime.
Following these announcements, there has been a surge in Lending Investors registration with the SEC as people are scrambling to avoid the crackdown on illegal money lenders in the Philippines.
Money lending is highly regulated in the Philippines. Lenders must incorporate as a Lending Investor and obtain a secondary license from the SEC.