Thankfully, some solutions

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I have to give it to Finance Secretary Frederick Go for coming up with a concrete and timely action to help Filipinos deal with their short-term money needs that oftentimes lead the borrowers to tap unscrupulous and usurious money lenders, and in the process may sometimes unwittingly drag in or involve their clueless relatives, friends or officemates.

Just recently, I learned from a former colleague about the continuing unscrupulous tactics of money lenders, who in the process of trying to force a borrower to pay up, may also try to harass third parties not involved or had any knowledge about the loan.

My former colleague narrated that she had been harassed recently by a money lender, through repeated phone calls, to try to convince a friend who had borrowed to pay up. My former colleague was informed by the money lender that her name and contact number was given by the borrower even though she was not listed as a co-guarantor, but just as a reference or contact person.

Several years back, another former colleague’s credit card collection agency made it a practice to call the press office to shame and harass our former colleague to pay her credit card dues even though we all had no knowledge about their transaction.

At the time, credit card companies used third-party collection agencies to harass delinquent credit card holders.

I thought such harassment tactic had been prohibited already, but apparently not.

I was not even aware that money lenders can ask for contact numbers of people who are not a co-party to the loan agreement and contact them about a financial transaction to which they have no legal or financial connection to.

I think harassing people whose name or names were given as reference should be prohibited, especially if they had not even been asked to be named as a reference or contact person, specifically for a financial contract.

Likewise, parties who harass the contact or reference person should be subject to some legal punishment or liability, especially if the harassment is repeated and causes distress to that individual.

Only perhaps if there are legal consequences over such harassment will money lenders or collection agencies stop harassing other parties not legally a party to the loan agreement.

It is indeed a welcome development that Secretary Go, who is also the concurrent chairman of the Social Security System, provided a concrete solution to the short-term money needs of some Filipinos by the SSS to implement a new micro-loan program that would provide a safe, affordable and convenient access to short-term credit for SSS members.

The micro-loan program would prevent Filipinos from resorting to high-cost informal lending and instead allow them better and safer financial support for their urgent needs.

“Through the proposed SSS Micro-Loan Program, we are addressing the immediate cash needs of members by offering small, short-term loans at reasonable rates and with flexible repayment options,” Go said.

“This program will help steer members away from loan sharks and other high-cost, predatory lending schemes, while promoting responsible borrowing,” he said.

Under the proposed framework, the SSS will partner with participating banks and financial institutions to deliver the program through their digital platforms.

Key features of the proposed program will include loan amounts ranging from P1,000 to P20,000, depending on a member’s average monthly salary credit; flexible repayment terms from 15 to 90 days and an interest rate of eight percent per annum or just 0.67 percent per month.

The program will be open to eligible SSS members aged 18 to under 65 years old, with at least 12 paid monthly contributions, and who have no pending or settled retirement, total disability or death benefit claims.

Members with existing SSS loans may still qualify, subject to program limits.

The SSS will still finalize the program guidelines, systems integration, and partnerships with participating banks.

The pilot rollout is targeted in the first half of this year.

I hope Secretary Go will also address other tax loopholes which the former Bureau of Internal Revenue Commissioner chose to ignore about the rampant violation of the senior citizen discount by restaurants and pharmacies.

Some pharmacies skirt the senior citizen discount by limiting how much seniors can buy, even when they present a doctor’s prescription for the required number of medicines, forcing them to pay full price for anything beyond the imposed monthly cap.

I have to admit that the violation from restaurants is often not noticed by most seniors who don’t really bother to calculate their discount properly, or simply rely on the honesty of the establishment, or are simply cowered by the insistence that the seniors are only entitled to a 10 percent discount rather than the 20 percent mandated under the Senior Citizen Law, and are exempt from the value added tax of 12 percent.

It is a loophole that restaurants regularly abuse, granting only a 10 percent discount and not giving the 12 percent VAT exemption because the restaurant does not issue or has supposedly not gotten its BIR-issued Official Receipt.

I had written about one incident in a previous column and had reached out to the BIR’s communication office, which basically did not even look into the matter.

Unfortunately, this practice continues and only vigorous insistence and doing the proper math can force the establishment to do the proper calculations.

Imagine just how much restaurants and other establishments declare as discounts, but which in fact are skimmed off from senior citizens who do not or have forgotten to calculate, a sign that Filipinos are indeed poor in math skills.

It is sad that senior citizens who have paid their taxes when they were gainfully employed are still forced to continue paying indirect taxes that unscrupulous government officials steal anyway.