Pending law to end ‘five-six?’

The House Committee on Appropriations chaired by Davao City Congressman Karlo Nograles has approved the funding provision of a measure that could render loan sharks or “five-six” lenders out of business.
The specific measure is House Bill (HB) No.5158, also known as the “Act providing a socialized micro financing program for micro enterprises thereby promoting entrepreneurship.”

Nograles says the bill “seek to promote the benefits of entrepreneurship, which sadly remains an unmastered art to most Filipinos.”

“Despite this, we continuously strive to come up with the next breakthrough company or business, and [this measure has] been designed to make this dream more achievable,” Nograles said.

The main objective of HB No.5158 is to provide Filipinos with an affordable, accessible and simple micro financing program for the country’s micro enterprises, especially those in the poorest sectors.

The bill’s top feature is the creation of the Pondo sa Pagbabago at Pag-Asenso fund or the P3. In fact, the short title of the measure is the “P3 Act.”

“Once institutionalized, the P3 will give prospective entrepreneurs a better source of capital than say, informal moneylenders or loan sharks, including those who use the burdensome ‘five-six’ lending system,” Nograles said.

Five-six refers to a lending scheme that imposes a rather hefty 20 percent interest on the borrower, who are usually market vendors, private storeowners and other micro entrepreneurs. Filipinos still avail of this due to sheer need for capital.

“Through this fund, the state will truly be a partner in growing one’s business or in simply helping make a good business idea come to fruition,” added the congressman, who is vying for a Senate seat next year.

Eyed as beneficiaries of the P3 fund are micro enterprises and entrepreneurs, including market vendors, agri-businessmen and members of cooperatives, industry associations and cooperators.

The measure mandates that the Small Business Corporation (SB Corp.) to be the lead agency for the P3 fund, and will handle the fund delivery through direct lending to micro enterprises; wholesale lending to conduits which shall on-lend to micro enterprises; and provision of guarantees to loans granted by the banks to qualified P3 beneficiaries.

Approval of the bill’s funding provisions places it closer toward passage at the plenary, the final level of which is third reading.

Kathy Kenny


Digital marketer. Events host. Content writer. Pursuer of dreams. Music, movie, and book lover. Collector of snowglobes, ref magnets, pens, mugs, Care Bears, notebooks, and makeup. Wanderlust. Sapiosexual. Yawyan Advocate.