BAGUIO CITY — The number of sidewalk vendors in this city swells to 7,000 during peak seasons. This even grow bigger in times of the Panagbenga Flower Festival and the Lenten season, when tourism arrivals also swell in tens of thousands.

The vendors do not only face threat to their right to earn a decent living for their families. They also are in constant need of cash to use as capital for their trade.

Five-six loan system

Borrowing from the ‘five-six’ is common among Aling Maria and Aling Naty and their colleagues in the Baguio Women Vendors Association (BWVA). The borrower is charged at least 20 % interest from the principal amount loaned with payments done on a fixed daily installment. The interest is deducted right away when the loans is granted. The daily installment then is a 30-day fixed amount from the original loan.

Dumanay Gambican, in her 40s, is a former wagwag dealer. But since wagwag dealers proliferated, most of them closed shop as they could not earn enough to pay the rent and buy their wares. A mother of two kids, she is now engage in selling brand new panties, bra, socks and other goods that she buys from the Baclaran and Divisoria markets in Metro-Manila.

She is a kurtais-paying vendor occupying an area in Kayang street. She needs at least P 50,000.00 or more for capital, borrowed from her relatives and from her paluwagan (cooperative-type lending), seed money pooled in with fellow vendors where each has her turn to use it.

She pointed out that in the five-six plan, if the loan is P 10,000, the interest is either 10 to 20 percent per month (P 1,000 to 2,000) and P400 must be paid daily. If the borrower fails to pay, the creditors impose interest on the remaining loan.

Dumanay said, “There are times the authorities prohibit the kurtais-paying vendor to sell. They do not have income to pay for their loans. She confided that those who avail of five-six loans suffer most. “They fail to earn and cannot pay for their five-six loans. They end up with bigger loans to pay and are even sued at the barangay peace council for unpaid loans.

This reporter tried to interview people who lend-out at five-six terms. They refuse to comment but insist that they do not lend money by force.

Lawyers claim the five-six interest is usurious. While the usury law is repealed, the Supreme Court ruled that more than four percent a month interest is immoral so all lending firms lowered their rates,” said lawyer Chyt Daytec-Yangot.

She claimed that five-six loan system is unconscionable and shocking but out of desperation, some “bite the bullet”.

“The problem is, it is not illegal per se because the anti-usury law is no longer in effect. What we have is a law against unconscionable interests but what is unconscionable is variable because it is dependent on several elements,” said lawyer Mary Ann Bayang. # Arthur L. Allad-iw