Justice Secretary Vitaliano Aguirre II. INQUIRER FILE PHOTO
“Bumbay” loan sharks, you are next.
President Duterte has ordered the arrest of those motorcycle-riding moneylenders prowling Metro Manila’s slums and marketplaces to squeeze their victims—store owners so desperate for cash they are willing to borrow a fistful of pesos and pay for it in full plus an arm and a leg.
Filipinos derisively refer to the loan sharks as “Bumbay,” after the old name of Mumbai, capital of Maharashtra state on the Indian west coast.
But use of the term goes back many decades, to the time when Indians in the Philippines traded domestic stuff, such as mosquito nets, blankets and umbrellas, which they sold to Filipinos on long-term plans that cost suckers a fortune.
Justice Secretary Vitaliano Aguirre II told reporters on Tuesday the loan sharks were operating here without permit from the government and that Mr. Duterte had ordered their arrest to put an end to their usurious practices.
“The President ordered the arrest of Bumbay because he pities the [poor Filipinos] who are being sold overpriced appliances [in money-lending schemes]. They could be arrested without any warrant because when they are doing that they are committing a crime,” Aguirre said.
Unconscionable rates
Aguirre explained that although the antiusury law limiting interest rates has been repealed, the Supreme Court has ruled that moneylenders cannot impose unconscionable interest rates.
The Indians charge 20-percent interest per month on loans they give to poor market vendors and sari-sari store owners.
“It’s not illegal [to charge high rates], but that’s unconscionable and we cannot accept that kind of interest anymore,” Aguirre said.
Agriculture Secretary Manny Piñol said Mr. Duterte gave the order to arrest the loan sharks during the Cabinet meeting on Monday.
In a post on Facebook, Piñol said Mr. Duterte instructed Foreign Secretary Perfecto Yasay to inform the Indian Embassy in Manila about the government’s plan to put an end to its citizens’ usurious lending scheme here.
He said about 50,000 men from India’s Punjab state were involved in loan sharking in the Philippines, charging interest of P1,000 on P5,000 loans that must be paid in one month.
“They are violating Philippine laws by indulging in a money-making business without the necessary permits,” Piñol quoted Mr. Duterte as saying.