Rescuing MSMEs from ‘five-six’ lenders: Yamsuan pushes bill institutionalizing low-interest financing program for micro, small entrepreneurs

Parañaque 2nd District Representative Brian Yamsuan has called on fellow lawmakers to help shield small businesses from ‘five-six’ money lenders by passing a measure that aims to institutionalize a government-funded initiative providing collateral-free, low-interest loans to micro and small enterprises (MSEs).

If assured of sustained funding, this government-funded program—the Pondo Para sa Pagbabago at Pag-Asenso (P3)—will free MSEs from the clutches of predatory lenders and provide them the means to easily access capital with fair, easy-to-pay terms, Yamsuan said.

“Taong 2026 na, may ‘five-six’ pa rin na ngayon ay may online na at mas abusado pa (It’s now 2026 but ‘five-six’ lending is still around and they have gone online and are even more abusive). Many of their victims are micro and small entrepreneurs who have fallen into their debt cycle trap. Institutionalizing the P3 program will free MSEs from this vicious cycle and open opportunities for them to sustain and expand their businesses,” said Yamsuan as the nation celebrates MSME Development Week.

‘Five-six’ lenders usually charge an interest rate of 20 percent per month. This means that if one borrows P5, one will have to pay back P6, hence the term ‘five-six.’

This no-collateral tactic employed by predatory lenders also comes with hidden charges. Unregistered, illegal online lenders have been flagged not only for their exorbitant interest rates, but also for abusive collection practices. Micro and small businesses often resort to the “five-six” scheme because of the difficulty of securing financing from banks, which demand collateral and stringent requirements.

To rescue MSEs from these nefarious practices, Yamsuan has filed House Bill (HB) 9472 or the proposed Pondo sa Pagbabago at Pag-asenso Act, which seeks to institutionalize the P3. a microfinancing program currently being implemented by the Department of Trade and Industry (DTI) through the Small Business Corp. (SBCorp).

The measure aims to benefit sari-sari store owners, market vendors, carinderia operators and other community-based entrepreneurs.

While a laudable program, Yamsuan noted that funding for the P3 under the national budget has fluctuated over the years. The program was allocated P2 billion in 2022, P750 million in 2023, and P1 billion in 2024. This dropped to P500 million in 2025, and was increased anew to P1 billion in 2026.

“In the implementation of livelihood programs in our district, I saw how a modest amount can spell the difference between a business that closes its doors and one that thrives and expands. This is why the P3 program is a landmark initiative that deserves yearly funding and prioritization, and should not be bound to annual budgetary whims and the shifting priorities of any administration,” Yamsuan said.

HB 9472 provides for the creation of the P3 Fund, which shall be lent out to qualified MSEs without collateral and with interest rates of not more than 1 percent per month for direct lending and not exceeding 2.5 percent for lending through accredited partner financial institutions (PFIs). Interest earnings shall accrue to the Fund.

The SBCorp’s usual loanable amounts under the P3 range from P5,000 to P300,000.

As implementing agency, the SBCorp. is mandated under the bill to prioritize lending to underserved and unserved areas, and MSE segments of the country, subject to the review and approval of the Micro, Small and Medium Enterprise Development (MSMED) Council.

Yamsuan said the measure also encourages the use of financial-technology (fintech) enabled systems and processes to expand the reach of the P3 program to all provinces and barangays.

“Our goal is not only to further promote entrepreneurship, but to establish trust in our formal financing institutions. Ultimately, livelihood is about transforming the daily struggle for survival into an opportunity for financial stability,” Yamsuan said.

“Providing steady funding for the P3 will give our micro and small entrepreneurs, who form the backbone of our local economies, hope and a fighting chance for a better future for themselves and their families,” Yamsuan said.

Yamsuan pointed out that the bill would benefit more than 90 percent of enterprises classified as micro businesses and about 9 percent classified as small enterprises.

He noted that the proposed P3 Act was passed on third and final reading by the House of Representatives during the 19th Congress.