In response to the continuous exposure of violent debt collection and harassment scandals on Philippine online lending platforms, Senator Sherwin Gatchalian publicly voiced his concerns, urging for the expedited deliberation of the "Fair Debt Collection Practices Act" to curb the increasingly severe illegal collection activities in the online lending industry.
In a written statement, Gatchalian expressed that although the popularity of online lending has enhanced loan accessibility to some extent, it has also led to rampant issues of violent debt collection, personal insults, and even physical threats, severely infringing on the basic rights and personal safety of borrowers.
"Every day, our office receives pleas for help from victims—some are publicly shamed on social media, others receive bullets at their doorsteps, and some even receive funeral wreaths," he said.
To address this social pain point, Gatchalian urged Congress to quickly advance the legislative process of Senate Bill No. 818. This bill explicitly prohibits any form of harassment, threats, abusive language, and public disclosure of borrower information, aiming to establish a legal, fair, and respectful debt collection mechanism.
"Debt collection is not the problem; the means of collection are. We cannot allow anyone to be driven into fear over a mere few thousand pesos of debt," Gatchalian emphasized.
He also criticized the current regulatory system, pointing out that some online lending platforms exploit regulatory loopholes to operate multiple lending apps with as little as one million pesos in registered capital, fostering inappropriate behaviors.
According to data provided by the Philippine Securities and Exchange Commission (SEC), there are currently 117 registered lending and financing companies in the country, operating a total of 181 online lending applications (OLA). However, with illegal collection methods continuously escalating, related regulatory and punitive measures still appear to be lagging.
Gatchalian called on the SEC to strengthen approval mechanisms and enforcement to prevent more companies lacking ethical standards from continuing to abuse financial technology conveniences to exploit economically vulnerable groups through violent means.
Finally, he stated that he will continue to push for legislative reforms, raise industry standards, introduce transparent mechanisms, and establish a more secure financial lending environment for consumers, ultimately putting an end to the lawless state of the online lending industry.
