President Rodrigo Duterte has vowed to end the informal lending scheme “5-6” which he claimed a debt trap for many poor Filipino households.
Duterte said 5-6 collectors loan money to the poor at a price of very high interests.
“Ang gusto ko talagang patayin if God will give me at least more years to finish my term, itong 5-6. That is my burning desire. Either I stop the 5-6 or I will stop the collectors,” Duterte said in his speech at the micro, small and medium enterprises (MSMEs) summit in Clark, Pampanga.
The lending scheme, which is a common loan option among poor households in the Philippines, comes in various forms—either cash loan installment with high interest or products and appliances paid in installment basis.
Duterte recalled that during his time as mayor of Davao City, he talked to an Ambassador of an unspecified country to deal with the issue which was prevalent in his area.
“Sabi ko doon noong mayor ako, ‘That this is too much.’ Sobra ‘yan. But before that I communicated it to the ambassador at that time,” Duterte said.
Duterte also warned financers and collectors of the lending scheme to stop the practice themselves.
“‘Pag hindi ninyo hininto ‘yang 5-6 na yan, kayo ang hintuin ko. Mark my word,” he said
Last year, Duterte warned foreigners engaging in the lending scheme to stop the practice or else they will be arrested and deported.
The government currently offers loaning options from Php5,000 to Php100,000 for small and medium enterprise owners under the Pondo sa Pagbabago at Pag-Asenso (P3) program of the Department of Trade and Industry (DTI). The program was specifically created to encourage Filipinos to avoid lending money from “5-6” collectors.
