Workers buck ban on ‘5-6’ loan scheme

MANILA, Philippines – Don’t kill the “5-6” system just yet, workers urged government yesterday.

Militant labor group Partido ng Manggagawa (PM) warned that killing the “5-6” system without an alternative program would push the poor, particularly the workers, to the black market or illegal trades.

PM said workers support the Duterte government’s plan to eradicate the usurious loan practice, but an alternative system must first be put in place, like creating a national bank or a national lending program catering to the nation’s poor.

“Without this needed replacement, the government will only push the system further into the black market, where more notorious financial sharks operate,” PM said in a statement.

Over time, PM said, the existence of “5-6” has become socially compatible to the needs of enterprising Filipinos, who are in dire need of cash.

According to PM, the motorcycle-riding “Bumbays” (Indians) operate without permit, but they provide small loans to poor people.

“This is the practical economic reason why the system gained mutual agreement in poor communities, where a big number of unemployed and underemployed members of the labor force are in desperate struggle for sources of livelihood,” PM explained. 

Eradicating the “5-6” system without an alternate program, PM said, would leave the poor helpless.

According to PM, poor people are not welcome in commercial banks, which impose stringent requirements, like collateral, for a loan.

PM noted that 90 percent of businesses nationwide are micro-enterprises, with capitalization of less than P3 million and employing less than 10 people.

PM further cited data showing that only 60 percent of the labor force are wage and salaried workers, while the rest are self-employed, who might at some point need hassle-free loan.