Indian Loan Sharks in Guimaras

Had lunch at my favorite talabahan in Guimaras the other day.  My asawa went up front to order her usual two bowls of oysters at P30 each. I requested a grilled chicken along with four sticks of pork BBQ. And a bottle of Pilsen, of course.

the shark(Photo

As I was stripping a tasty pork BBQ morsel from the sharp skewer I had just stuck in my mouth, I noticed an Indian walk in. Not Native American. No, he wasn’t wearing a headdress like some Victoria’s Secret’s runway model.  But a guy from India. He was accompanied by a female Indian.

I’ve never seen someone from India in over three years of living in and visiting Guimaras. Seen a few in Iloilo where they even have a Sikh temple.  My asawa has spied some before on the pumpboats, their motorcycles used for their daily collections, on board. The couple immediately caught my attention. 

He was a Bombay loan shark. He stuck his head into the kitchen window.  I saw three Filipina workers inside peeling off  P100 bills and handing them to the man. No doubt for a 5/6 loan.

5/6 simply means the amount you borrowed must be returned with 20% interest added. Example: If you borrowed P1,000, then you  should pay it back with 20% interest: 1,000 x .20 = 200. You have to pay P1,200 in return.Philippines.

The pretty pinays stepped inside the restaurant area and pointed out the menu dishes for the day to the lender. I had no doubt he would be helping himself to a free lunch. The workers were tripping over themselves to make sure the man had plenty of food.  He was receiving the full-blown rock star, celebrity treatment many foreigners encounter in the Philippines.  A foreigner that gives you money attains almost god-like status. 

Soon another Indian man, larger than the first, came inside the talabahan. He took off his motorcycle helmet and sat down to eat with his friends. I nudged The Sainted Patient Wife  who was seated next to me. She, too, had seen the money exchange and of course, knew immediately that the workers were paying back a 5/6 loan.

The Indians are known as “last resource lenders.” Indian moneylenders are also sometimes preferred by Filipinos over their local counterparts. Indian lenders, most of whom are men and are more discreet, according to borrowers. The locals say that Filipino lenders are usually women who tend to gossip about their clients.

In 5-6 transactions, while legal documents are not signed, lenders get their customers’ signatures in notebooks, calendars, or even on a piece of paper. They make entries in their own handwriting so the customer cannot tamper with the record.

The Sainted Patient Wife reports that none of her family has used any of the Indian lenders. And yes, perhaps that was due to the fact that my own spouse has personally loaned out thousands of pesos to some relatives (though never charging any interest.)


Is 5/6 loan sharking legal in the Philippines? Here’s what the law states: Central Bank of the Philippines issued C.B Circular No. 905-82 adopted on December 22, 1982 but which took effect on January 1, 1983 effectively removing the ceiling on interest rates both for secured and unsecured loans regardless of maturity. The news of its passage turned out as  good news for loan sharks.

The Supreme Court ruled in the case of Florendo vs. Court of Appeals, that “by virtue of CB Circular 905, the Usury Law has been rendered ineffective.” “Usury has been legally non-existent in our jurisdiction. Interest can now be charged as lender and borrower may agree upon.” (Source:

An article in the Inquirer News last year reported that the Bureau of Internal Revenue (BIR) planned to go after Indian nationals involved in money lending activities. They admitted that it would not be easy to collect taxes from them.

Venerando Homez, revenue district officer for  Kidapawan City, said at least a dozen Indian nationals were suspected of involvement in money lending activities, mostly to small entrepreneurs there.

Homez said they were certain the Indian nationals were not paying taxes and did not have business permits.

At least a dozen Indian nationals lending capital to small business establishments, particularly restaurants, sari-sari stores and vegetable vendors can be seen roaming around the major thoroughfares in the afternoon to collect the daily payments from the debtors, he said.

But Homez has a problem. How to build up cases against these Indian nationals.

“Only the Economic Intelligence Investigation Bureau (EIIB) based in the BIR main office has the authority to reprimand or invite foreign money lenders operating in various places in the country,” he said. But that office has been eliminated, Homez reports. 

Homez said that the BIR  would have to get the testimonies of those who had borrowed money from the Indian money lenders, but admitted that would be a difficult task. 


(Photo Source:Philippine Center for Investigative Journalism)

Aside from dodging the BIR, Bombay loan sharks have to occasionally dodge bullets as well in the Philippines. A recent article in The Daily Guardian, an Indian newspaper, reports that over 150 Indians, many of them Punjabis, have been killed in the Philippines.

But you won’t find the Philippine government agreeing with those statistics. Although, the Philippine National Police (PNP) admits its records are inaccurate there is a wide disparity from figures the Indian government reports versus the official Philippine government statistics.  (Source: Philippine Center for Investigative Journalism.)

Still, police records and news reports strongly indicate that the attacks against Indians are indeed on the rise, and range from holdups to kidnapping to outright ambushes, and occur even outside of Metro Manila. Police records alone show that in 2005, there were only three crimes against Indians, but the figure shot up to 13 in 2006. From January to June 2007, the PNP had already recorded eight cases with Indians as victims. 

The Daily Guardian reports that the resentment against the Bombay lenders also showed in adverse publicity in the Philippines. In fact in 2006, the Punjab Revenue and Rehabilitation and NRI Affairs Minister had cautioned the people of Punjab against indulging in money lending in Philippines, noting that Punjabis were joining mafia gangs with Chinese and Filipinos engaged in organized extortion and kidnapping.

“Killing of Punjabis is on the rise in Manila because there has been no remedial action,” said former Union minister and Akali leader Balwant Singh Ramoowalia. He has called upon the Centre to take up the issue with the Philippines government to ensure the safety of the Punjabis in Philippines.

As I downed another bottle of cold San Miguel Pale Pilsen, the coldest bottle of beer I’ve ever had at this talabahan, and served by a 14-year-old waitress, I saw the Bombay loan sharks leaving. I’m sure they had more rounds to make in the sleepy little capital of Guimaras and would no doubt be adding even more pesos to their wallets.  It’s a dirty job, sometimes risky, but I suppose somebody has to do it.

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