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Phil-Indo Consulates ask HK for lower loan interest

19 October 2018

ConGen Morales at the CORP-Gear-Up Launch

By Daisy CL Mandap

The consulates of the Philippines and Indonesia are set to announce their joint effort to get the Hong Kong government to ease interest rates on loans, seen as one of the reasons why many migrant domestic workers get enmeshed in debt.

The joint campaign is expected to be unveiled at a press conference on Monday, Oct. 22.

Earlier, Philippine Consul General Antonio A. Morales spoke about the initiative in a speech at the launching of a new reintegration campaign for returning Filipino workers on Oct. 14 at the Philippine Overseas Labor Office in Wanchai.

“Last week, I and the consul general of Indonesia met with the Chief Secretary (Matthew Cheung) on the possibility of reducing interest rates and of course, the possibility of prosecuting those who get their (migrant workers) passports, Morales said.

He cited the most recent case of about 400 Philippine passports being seized from the house of a suspected loan shark in North Point. Last year, more than 800 passports, mostly belonging to Indonesians, were seized in a separate operation.

Morales sees the high interest rates on loans as one of the reasons why migrant workers end up saddled in debt.

“Alam ba ninyo na ang interest rate na legal maximum is 60%?,” he said in his speech at the launch of the Comprehensive OFW Reintegration Program (CORP). “So kung mangungutang kayo ng $1,000, $1,600 ang babayaran ninyo. Yan ang legal.”

In the case of the loan sharks, police have revealed that the interest rate charged to migrant workers who are asked to pawn their passports and employment contracts as security, is 125%.

It’s not known what, if any, steps will be taken by the Hong Kong government in response to the appeal by the two consulates. However, someone privy to the talks said the two consuls general were told during their meeting with the Chief Secretary to step up their education campaign to discourage heavy borrowing among their workers.

Morales said it is part of his advocacy to get more Filipino migrant workers to save and plan for their future so they can avoid the debt trap.

He revealed encounters with some migrants who have been working in Hong Kong for 20 or more years, including those who volunteer at the Consulate, who have not saved for their eventual return to the Philippines.

“It is really tragic,” he said.

But he added, it is unavoidable for some to resort to borrowing due to unforeseen events. “Hindi rin natin mapipigilan ang ating mga kababayan na mangutang.”

So apart from asking the Hong Kong government to lower the legal rate of interest for loans and crack down on illicit loans, Morales said the Consulate has been spearheading effort to provide financial education to Filipino migrant workers.

Helping OFWs prepare for their eventual return home, as the CORP program of the Overseas Workers Welfare Administration plans to do, is another way to help them focus on their goal, and avoid unnecessary and burdensome borrowing.

CORP has partnered with Atikha's "Go,Earn, Accelerate, Return Uplift Philippines" (Gear-Up) program in providing comprehensive reintegration for OFWs in Hong Kong.  
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