Gov’t to provide
transition period to end ‘5-6’ lending scheme
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
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
“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