HIGH RATES OF 5-6
There are other Filipinos who see the 5-6 business as usurious, as the interest rates are too high. While the Central Bank suspended the Usury Law in 1983, lifting restrictions on the interest cap and allowing parties to agree on the interest rate, the Supreme Court has ruled that a 66-percent or 72-percent annual interest is excessive and exorbitant. The 5-6 business charges 10 percent per month (20 percent for two months) or 120 percent a year. Using the same rate for a period of 40 days — since Filipinos sometimes prefer a shorter period — the annual interest rate would be something like 182 percent.

	AFTER the series of killings last year, the Indian government issued a directive discouraging its citizens to come to the Philippines. [photo by Avigail Olarte]

From the looks of it, though, it seems that the Indian moneylenders are being targeted simply because the criminals know they carry cash, as well as because of the likelihood that they will not bother going to the police. Being victims of holdups is also not exactly new to the lenders; Raj Singh says he lost P2,000 to a gun-toting holdupper a decade ago.

Some observers have theorized that there may also be an element of “retaliation” in the holdups because of the high interest rates of 5-6. Filipino small-time borrowers, however, do not seem to mind such rates, since there are few loan sources available to them. A police officer at the Caloocan Sub-station 2 says he has borrowed from four Indians, with amounts ranging from P25,000 to P35,000. He had to resort to 5-6, he says, because nearly all of his monthly salary goes to payment of other debts, having exhausted all lending and insurance institutions.

“Kapit-patalim ka kasi ( You get desperate),” he says. He adds, however, that Indians are known to be generous and considerate so long as one is a good payee. The officer says that when he had to rush his wife to the hospital in the middle of the night, the neighborhood Indian moneylender, whom he calls his friend, readily gave him the money he needed.

Indian moneylenders are also sometimes preferred by Filipinos over their local counterparts. Indian lenders, most of whom are men, are more discreet, say borrowers. They say that Filipino lenders are usually women who tend to gossip about their clients.

One vegetable and fish vendor in Caloocan says Indian moneylenders are understanding of clients who sometimes are unable to pay on time. She says she borrows from an Indian moneylender every two months to reinfuse her capital. For a P5,000-loan, the vendor pays P100 per day. On days when she earns only P300, she cannot pay her daily due. But she says her Indian lender merely takes note of it and doesn’t make a scene.

A tricycle driver who usually has a daily due of P20 to an Indian moneylender at any given time admits to being remiss with his payments occasionally. But he says the Indians “rarely complain. They just say, ‘Okay, tomorrow.’” Other tricycle drivers and market vendors also say the Indian moneylenders do not get “overly angry” or violent, although they say some do get fed up and huff, “You’re all just promises!”

CHANGING PRACTICES
But the Indians have grown much wiser, say some habitual borrowers. The lenders test the reliability of new clients by making them buy one of their wares, like an umbrella, an electric fan, or a 14-inch TV. These appliances usually have a 100-percent mark-up or higher. But the payment scheme is easy, requiring a daily due of only P20 until the entire amount is covered. If the new client can keep up payments for at least two weeks, the Indian lender then allows him or her to borrow money.

Other Indians nowadays also draft promissory notes signed by lawyers for both new and errant clients. Raj Singh, who heads the lending firm he put up with his Filipino and Indian friends in 2000, sometimes does this. Before, he says, it was all just based on trust. Many moneylenders, however, have had enough of borrowers who move out of their homes without settling their debts.

	INDIANS are the third largest group of registered foreign nationals in the country, next to the United States and China. [photo by Avigail Olarte]

In Caloocan, Singh’s turf, small-time borrowers generally sympathize with the Indians, saying that they are always there to provide money when it is most needed. Asian Institute of Management associate professor Mari Kondo even says that it was the Indian lenders who helped keep Filipino vendors afloat during the 1997 financial crisis. The moneylenders tapped funds from India, where the rupee was only slightly affected, she says in a 2003 paper. “Indian 5-6s,” argues Kondo, “can be an asset for Filipino society, especially during economic downturns.”

Dhilip Budhrani, vice president of the Indian Chamber of Commerce, agrees that Punjabis in the moneylending business are helping in a way. He also says that Indians — whether Sindhi or Punjabi — have never been treated as outcasts in the Philippines. “Indians have been here for a long time,” he says. “They have integrated very well in the community.”

Bhagwant of Khalsa Diwan says that Indians normally enjoy a good relationship with Filipinos. He and his family have been here since the 1970s. But just like Raj Singh, he is now contemplating if it is still worth staying here in light of the increasing attacks against members of their community.

Yet an Indian who declines to be named asserts that many Indian migrants are staying put in the Philippines. “Indians in the Philippines have a better income than in India,” he says. “They’re taking a big risk by coming here, (but) they say never mind, if it has to be, it has to be. If we’re going to die, we’re going to die anyway." — with additional reporting by Syed Nazakat in India