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Harpooning loan sharks

  • Written by People's Journal
  • Published in Newsdesk
  • Read: 232

It is the most ignoble deed that could be done against the noblest professionals.

It is bad enough that teachers, along with soldiers and policemen, have the lowest salaries and other benefits compared to those in other professions.

After taking out taxes, social security, health insurance, and home financing deductions, teachers are left with measly disposable income.
   
Then we have to consider rent, utilities, food, and transportation expenses, and the poor teacher is left with even less.
   
And so what does she do?
   
She goes to a loan shark, and gets hit even harder with loans bearing atrocious interest rates.
   
This simply cannot go on for sheer compassion. 
   
Public school teachers are now the latest victims of loan sharks more commonly known as “5-6,” according to the Securities and Exchange Commission.
   
SEC chairperson Teresita Herbosa said recently that the commission is investigating a lending company operating in Luzon, which supposedly has been victimizing public school teachers in one province in the region.
   
“They are being oppressed by their lenders which charge very high interest. These borrowers will not be able to pay off the loan plus interest even after three lifetimes,” Herbosa told reporters.
   
She said the latest victims are public school teachers from different schools located in one province in Luzon. “The teachers wrote to the SEC.”
   
The SEC is investigating if the company is registered with the corporate regulator and if it has all the proper licenses and permits.
   
The move is part of the SEC’s crackdown on the proliferation of informal lenders, including individuals who provide 5-6 loans.
   
A 5-6 loan implies an annual simple interest rate of 20 percent because a borrower who borrows P5 needs to pay with P6.
   
Many micro, small and medium enterprises usually resort to 5-6 lenders who are usually Indians.
   
President Duterte said the 5-6 scheme has become a burden to Filipinos, especially for those who have no other resort.
   
Herbosa said penalties await those who violate the law through failure or refusal to incorporate and obtain a license from the SEC to engage in lending.
   
She cited Section 12 of the Lending Company Regulation Act of 2007 or RA 9474, which states that a fine of not less than P10,000 and no more than P50,0000 or imprisonment of no less than six months but no more than 10 years, or both, awaits violators.
   
The SEC has required companies with the primary purpose of lending to each obtain a Certificate of Authority.
   
It has issued more show cause letters to about 3,000 companies with the warning that their primary registration with the SEC will be revoked if they fail to obtain a CA and may be held liable for fines and penalties.
   
The SEC estimates that informal lending has reached at least P3 billion.