PH and Indo consulates ask HK to lower interest rates for FDH loans
The Philippine and Indonesian consulates on Wednesday formally asked the Hong Kong government to crack down on loans sharks who target Filipino and Indonesian domestic workers and also if it were possible to “lower the interest rates” of their loans.
Philippine Consul General Antonio A. Morales and Indonesian Consul Erwin Muhammad Akbar met with Hong Kong Chief Secretary for Administration Matthew Cheung Kin-chung and made a joint demarche seeking “strong action from the Hong Kong government” against the loan sharks.
“This joint call aimed to raise concerns on recurring cases that occurred on November 2016, July 2018, and August 2018 wherein illegal money lenders asked the HSWs (household service workers) to surrender their passports in exchange for the loans,” said a statement issued by the Indonesian consulate general.
“Without sufficient knowledge of Hong Kong law combined with economic pressures, many helpers see this method as simpler than going to loan agencies,” it added.
The police had recovered 422 Philippines passports from a loan shark in North Point in August; 850 passports, many of them Indonesian, from another loan shark in July; and 242 Philippine passports from another syndicate in 2016.
The two consulates asked Hong Kong if it were possible to criminalize “the act of demanding and withholding passports and labor contracts as loan collateral, not only those committed by employers and employment agencies but, more importantly, by illegal or unlicensed money lenders,” the statement said.
It said they also asked about the “possibility of lowering the interest rate for loans, the current across the board rate is legally set at 60 percent, contracted specifically by foreign domestic workers.”
The statement also said that the two consulates called for the “expeditious conclusion of the investigation by the Hong Kong Police and completion of the legal process” on the cases so that appropriate charges can be filed against the suspected loan sharks.
They also called for the strict implementation and enhanced enforcement of HK’s money-lending laws, rules and regulations, and “the increase in the criminal liability of individuals illegally operating as money lenders or imposing exorbitant interest beyond what is allowed under Hong Kong laws, rules and regulations,” the statement added.
It said Chief Secretary Cheung agreed with the two consulates that “keeping the passports is a crime even under Hong Kong law” and he expressed the government’s commitment to prosecute loan sharks.
However, he added that educating the workers to avoid taking out loans from illegal money lenders and working with financial institutions in Hong Kong, the Philippines, and Indonesia “might be able to address the problem more effectively in the long term.”
“In line with these measures, both consulates continuously warn their nationals that passport is a travel document that must be securely kept and not to be misused for any reasons,” the statement said.
It said the consulates requested the HK government representatives, among whom were senior officials from the Financial Services and Treasury Bureau and the Hong Kong Police Force, “that more attention be given to the cases involving foreign domestic helpers in Hong Kong.”
They also expressed appreciation for the opportunity to express their concern to Chief Secretary Cheung, the statement added.