Loan sharks feast on 4P’s, gov’t noble goals ‘sabotaged’

Pantawid Pamilyang Pilipono Program (4P’s) beneficiaries.Photo courtesy of

By Joey Natividad

PILI, Camarines Sur, 10Sept2013 ( – Loan sharks in this province are feasting on President Aquino’s 4P’s (Pantawid Pamilyang Pilipino Program) poverty alleviation program by lending out to cash-hungry beneficiaries and imposing 20 percent monthly interest payments.

The bonanza of profits among money lenders is the eagerness among beneficiaries to borrow money and offering high interest in exchange for immediate cash within a few hours- notice.

In turn, the borrowers surrender to money lenders their ATM bank cards as form of collateral or guarantee of future payment.

Observers here have taken note that the prevailing “borrowing culture” is reinforced by the never-ending cycle of borrowing-lending-payment over the 3-month quarterly payout period that provides more profits to money lenders.

It is feared that financial money lending syndicates may evolve which will monopolize the lucrative 4P’s beneficiaries’ “blackmarket borrowing”.

Since 2010, President Aquino has pumped in billions of money in his 4P’s program in the hope of ending poverty.

“If one half of these billions are pledged as loans to money lenders, just imagine the huge income in three- month time the lenders will amass at 20 percent monthly interest. This income is undocumented and tax-evasive,” said an analyst.

In most areas, 4P’s beneficiaries receive their regular grants in lump sums every quarter, the amount between PhP 4 – 6 thousands depending on their family sizes.

Usually, a poor family-beneficiary with children receives a minimum of PhP1,400., and this is given out in lump sum every three months. The total pay-out is about PhP +4000. But, the 3-month waiting period is too long, – a situation that drives beneficiaries to borrow from money-lenders for immediate cash. Their ATM bank cards are surrendered to the lenders.

“This scheme of borrowing from money lenders ultimately derails the government’s noble mission of providing the poor the bridge to cross over from poverty to the threshold of self-sufficiency,” said the analyst who refused to be named.

“Also, analyze the hugh profits the lenders get from their interests charges. Assuming in a given town, some PhP 5 million are regularly granted out to beneficiaries, and say, PhP 3 million of these are pledged out to the lender,” said the analyst. “At twenty percent (20%) interest of the 3M, about PhP 600 thousands go to the lender’s pocket as undocumented income. Assuming only one lender monopolizes the town’s 4P’s borrowing community”.

“What we fear most is when a situation arises that a financial syndicate may evolve monopolizing lending at the province-wide level. The formation of a monopoly lending cartel riding on the 4P’s program is a near probability,” added the analyst. []



Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.