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Debt is the scourge of overseas Filipino workers.
Even before they leave the Philippines for work abroad, many are already saddled with debt. In most cases, it’s due to the high placement fee they are made to pay, which smacks in the face of our government’s supposed no-placement fee policy for Filipino domestic workers.
Those phone numbers that they freely give become instruments for debt collectors to harass them into paying, or getting them sacked if they refuse.
Once they get looped in, a borrower may find it difficult to get out. For one, the legal interest rate in Hong Kong is a whopping 60% per year. That means, one who borrows a thousand bucks is liable to pay $1,600 (USD$206.45) by year’s end.
Given these figures, many of our workers express shock. It’s because all that they are told when they take out the loan is how much they need to pay each month. Once they see that they can pay this, they relax. They start thinking borrowing money is not as bad as they are made to think.
When that happens, what do they do?
Some flee, but even in the Philippines, the collectors hound them. It’s because of that clause in the contract that they signed that says the debt is recoverable even in the Philippines.
A few end up losing their minds, or taking the ultimate cop-out: suicide.
Then there are also those like Jonabeth Espanola who end up in jail because the debt burden made them resort to committing crimes.
In Jonabeth’s case, the crime was helping a syndicate lure Filipinas into borrowing money at 10% interest each month. This is a practice known to all of our more incorrigible borrowers. The first monthly interest is deducted automatically, and one needs to pay the full amount plus interest if she wants the loan contract extinguished.
Even by Hong Kong’s standards, this is clearly unconscionable.
Jonabeth was a victim herself. After struggling to pay her own usurious loan, she agreed to act as go-between for other Filipinas looking to borrow money.
The case for which she was charged involved a loan amount of HK$4000 (US$516). The borrower paid the full loan, plus interest of HK$800 (US$103.22), within two months. But trouble erupted when she failed to get back her passport, and complained to authorities.
Jonabeth pleaded guilty to helping facilitate the usurious loan, but still got sent to six months in jail.
It’s a sad outcome of a case that started when a syndicate found a way to exploit our workers’ propensity to borrow money, at whatever interest, whatever the consequences.
May it serve as a wake-up call to the many who don’t think twice, thrice, or more, before they take out a loan. It shows that the money you borrow now could lead you to bigger trouble, even misery. – Rappler.com
(*US$1 = HKD$7.75)
This piece was first published in The Sun Hong Kong. Rappler is republishing this with permission. The author is a veteran journalist, having worked for various newspapers and TV stations in the Philippines and in Hong Kong. She is also a lawyer and migrants rights activist.
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