Avoid loan sharks, DSWD advises 4Ps beneficiaries in Bicol

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Pantawid Pamilya Program (4P's) beneficiaries.Photo courtesy of dorothybilaoen.blogspot.com
Pantawid Pamilya Program (4P’s) beneficiaries.Photo courtesy of dorothybilaoen.blogspot.com

LEGAZPI CITY, 18Sept2013 (PNA) – The Department of Social Welfare and Development (DSWD) Bicol regional office here has warned beneficiaries of the Pantawid Pamilyang Pilipino Program (4Ps) in the region against dealing with loans sharks.

There are about 357,000 Bicolano families identified as poorest of the poor that regularly receive financial subsidy under the Conditional Cash Transfer (CCT) scheme of the program and most of them, reports said, have been turning to unscrupulous money lenders every time they need fast cash, using their receivables from the CCT as guarantee of payment.

These money lenders impose 20 percent in interest, most of the time collected in advance or deducted from the loan proceeds of the borrowers who need to surrender their automated teller machine (ATM) cards to ensure future payment.

On agreement that her full name would not be published, a certain Mrs. Lomerio, a CCT grantee from the nearby Daraga, Albay, admitted that she and most in the neighborhood who are 4Ps grantees deal with a money lender in the community that collects 20 percent interest.

“It is the easiest and fastest way of having cash every time we need some for urgent family needs like medicine for the sick, food, school expenses or to pay electricity bills. Except for this loan shark, there is no one here to whom we can run to when we need instant cash” she told the PNA in local dialect.

Every CCT recipient is provided by the Land Bank of the Philippines (LBP) with an ATM card to facilitate convenient withdrawals of their cash subsidy that amounts to as much as P1,900 monthly when the family has three children in school.

The 4Ps’ maximum grant package per household amounts to P1,400 a month, where P300 is paid for every child who complies with the 85 percent required school attendance for the month and can be given to a maximum of three children per household.

Additionally, the household is entitled to P500 per month for complying with health and nutrition conditions.

The amount of the grant is based on the number of children per household and compliance to program conditions.

In most cases in Bicol, payments are made by the LBP in quarterly basis that could entitle a beneficiary nearly P6,000 per lump sum payout.

It is in their mode of payment, however, that drives cash-hungry beneficiaries to loan sharks.

According to Lito Tuanqui, a former banker here, the practice puts the 4Ps program in a very awkward position, which defeats its purpose of giving the poorest of the poor a respite from the whips of poverty.

This year alone, the government will spend about P6 billion to subsidize the cash needs of the 357,000 4Ps beneficiaries through CCT in Bicol and granting that half of them patronize the services of loan sharks, 20 percent of the P3 billion, which is a whopping P600 million, is falling into the hands of these loan sharks, he said.

Arnel Garcia, the DSWD regional director, on Tuesday here said his agency knows that the grant is a big help in augmenting Bicol’s poor families’ daily needs that is why it is making sure the beneficiaries receive their grants in the easiest, fastest and most economical way.

LBP is the only authorized agency to disburse cash grants and to ensure that beneficiaries receive their grants promptly and not spend so much for their transportation in going to the bank, it has authorized money-transfer agents such as G-Cash Remit, Philippine Postal Corporation and other conduits like rural banks and cooperatives to deliver the grants to the beneficiaries, Garcia said.

On dealing with loan sharks, he said, his office has been repeatedly dissuading beneficiaries from it, warning them that it could lead to their disqualification from 4Ps once proven that the cash grants they are receiving are not wholly used according to the conditions set by the program. (PNA)

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