The future of 50,000-odd Punjabi-origin Indian moneylenders in the Philippines hangs in the balance following an ultimatum by the government of the South East Asian country last week asking them to either register with the Securities and Exchange Commission (SEC) or risk arrest and deportation. The Indian embassy in Manila, meanwhile, seems to be twiddling its thumbs. A senior officer, who refused to come on record, simply called it “an ongoing affair”.
Two killings of the moneylenders this month alone have put the spotlight on the vulnerability of the Punjabi community and its primary business in the Philippines.
Ravinder Singh, who was born and raised in a money-lending family in Manila, says the community has been on tenterhooks since January 10 when the minister of agriculture, Manny Pinol, put up a post titled “Goodbye Bombay! ” on his Facebook page, saying that President Rodrigo Duterte had ordered the arrest and deportation of foreigners involved in the usurious “5-6” moneylending business. Later, justice secretary Vitaliano Aguirre II warned that these moneylenders could be arrested even without a warrant.
NEW LEGAL PROVISION
Fortunately, no arrests were made, and the department of trade and industry (DTI) recently called for an inter-agency meeting so that the illegal foreign moneylenders could be given time to legalise their resident status and register their businesses with the SEC.
Ravinder says this has led to many moneylenders giving up their work. “People have just been sitting idle at home. It’s the borrowers who come to them,” says Ravinder, who heads a group called Desi Matters, comprising Indians and Filipinos, to promote Punjabi culture in the country. Though registering with the SEC seems to be an easy way out, there is a catch. A foreigner can only have 40% stake in a corporation registered with the SEC, while 60% has to be owned by a local.
Ridding the country of “5-6” was one of the poll promises made by President Rodrigo Duterte, who came to power in June last year and has been in news for extra-judicial killings of drug dealers in the country.
Scattered all over the island country, the moneylenders do not have a united front or any single body to represent them. Sanjeev Singh, a trader in Angeles City, two hour from Manila, admits that lack of unity is their biggest problem. Of late, there has been an attempt in this direction. Sanjeev, who came to the Philippines from a village near Jalandhar 15 years ago, cites the Filipino Indian Welfare Society, which has recently set up a Facebook page to apprise the community of the latest developments.
FEDERATION TO THE RESCUE
Unsure of any help from the Indian embassy, the moneylenders are pinning their hopes on the Federation of Indian Chamber of Commerce of the Philippines. Rex Daryanani, president of the federation, said: “We are in the thick of sorting out the details with the government and do not wish to make any official announcements while this is still pending.”
Arjun Shroff, CEO of Shroff Travels and a prominent member of the local Punjabi community, said the new government directives will make things more upfront. “The Indian moneylenders will be able to register their companies, their work will be legitimised, and they will also pay taxes. Now no one will be able to put blame for this practice on a nationality.” Shroff, who is on the federation board as well, said this step will also stem the flow of illegal immigrants from Punjab.
Meanwhile, BS Mubarak , director (south) in India’s ministry of external affairs, said he was aware of the case and what the Indian mission was doing, but refused to give any details saying it would be a breach of protocol. In Manila, Ravinder and many others are playing the waiting game.
The Boombais from Punjab
Called “Bombay” (pronounced as ‘Boombai’ by the Filipinos) or “5-6”, motorcycle-borne Punjabis are an important part of the country’s underground economy. JC Punongbayan, a teaching fellow at the School of Economics, University of the Philippines, attributes the enduring popularity of these moneylenders to high collaterals or excessive paperwork required by the credit markets in the country.
The term “5-6” was coined for them because they would lend five pesos in the morning and expect the borrower to return six pesos by the evening.
A 2015 National Baseline Survey on Financial Inclusion shows that 61.9 % of the Filipinos borrow from friends or relatives and 10% from informal moneylenders like the “5-6”, mainly due to the unfriendly credit market. Punongbayan says the “5-6” are still popular among small enterprises or petty traders because they work on trust, and don’t demand any collateral or paper work.
But they make up for the risk by charging exorbitant interest rates as high as 20% a year, or even more. Living on the fringes of society because of their hazy legal status — often they carry on living in the country on work visas renewed every three years, or marry a local — the moneylenders are at the mercy of the enforcement agencies. They make news back home only when one of them gets killed either by an irate lender or a business rival. At least two such murders have been reported this month alone.
Writer tweets @grewal_sharma