February 9, 2017
MAKATI CITY – In line with government’s drive to reform the micro-financing system in the country, the Department of Trade and Industry (DTI) recently called for an inter-agency meeting to work on the transition to allow illegal foreign money lenders to legalize their resident status and register with the Securities and Exchange Commission (SEC) their lending business. The transition period is needed to prevent undue harassment of concerned lenders.
DTI Secretary Ramon Lopez with SEC Chair Tess Herbosa and representatives from the Departments of Justice and Foreign Affairs, Immigration Bureau, National Intelligence Coordinating Agency, Bangko Sentral ng Pilipinas, Philippine National Police, Small Business Corporation (SB Corp.) and the Indian Chamber of Commerce, gathered to discuss legitimization of lending businesses and initial steps to put a stop on the said lending scheme.
The total operation value of the “5-6” lending system sums up to a total of P2.4 billion, with 30,000 operators across the country, according to the Indian Chamber of Commerce Philippines. A transition period will be provided to lending operators, giving them ample time to register their businesses with SEC.
“After the prescribed transition period, 5-6 scheme must stop and micro-businesses must shift to P3 and other legal micro-financing facilities,” said Sec. Lopez, referring to the government’s flagship micro-financing initiative Pondo Para sa Pagbabago at Pag-asenso or P3, initiated by President Rodrigo Duterte.
Launched in Tacloban, Occidental Mindoro and Sarangani, the P1-billion micro-financing program aims to provide micro, small and medium enterprises (MSMEs) with easy access to finance with no collateral and minimal interest, through micro-financing institutions (MFIs) and cooperatives accredited by DTI and the SB Corp.
“We should be seeking the frontiers, these people who have not been reached by the MFIs are the same people targeted by the ‘5-6’,” Sec. Lopez added.
A Technical Working Group (TWG) on the matter will provide specific guidelines on the compliance and registration of lending businesses.
Indian Chamber of Commerce Philippines President Rex Daryanani expressed hope that term “5-6” would eventually be eradicated and be replaced by the term “micro-financing.”