Loan sharks at City Hall?

CEBU, Philippines — A proposed ordinance seeking to regulate surging interest rates in lending practices at Cebu City Hall received broad support from the city council during a recent public hearing.

The proposed legislation, authored by Councilor Jocelyn Pesquera, aims to curb a workplace culture driven by informal financial aid among employees—one that, ironically, has led to exploitative lending.

According to Pesquera, the ordinance is intended to put an end to usurious interest rates that undermine genuine efforts to help colleagues in need. Pesquera pointed out that some lending practices within City Hall impose monthly interest rates ranging from 10 to 20 percent.

“Sa gisulti pa nila dinhi, kung mahimo kang empleyado sa gobyerno, di ka magsalig sa sweldo, magsalig ka sa utang,” said Pesquera.

The ordinance, formally titled “An Ordinance Amending Sections 3, 6, and 14 of City Ordinance No. 2142, Entitled: ‘An Ordinance Enacting the Code of Ethics of Cebu City Employees,’ As Amended,” seeks to revise the existing Code of Ethics to include prohibitions against excessive lending and related practices.

While a Code of Ethics is already in place for City Hall employees, Pesquera said certain unethical financial practices remain unabated. The proposed amendments cite reports alleging that some personnel involved in payroll processing are also engaged in lending, which may contribute to salary delays—particularly for job order employees.

To eliminate this issue, the ordinance introduces explicit provisions against such conduct, with penalties ranging from suspension to dismissal.        

During the most recent council session, several departments submitted position papers supporting the ordinance. Among the first to voice support was the Burial Assistance Office (BAO), which emphasized that addressing predatory lending would help uphold the dignity and integrity of Cebu City Government employees.

The BAO also called for the inclusion of a ban on cheque discounting—a practice defined as “the purchase of cheques at discounted values, with full collection made from the original payers.”

“We, the undersigned stakeholders, express our full support for this ordinance and respectfully recommend its immediate passage and full implementation,” the BAO stated.

The Business Permits and Licensing Office (BPLO) echoed this support, highlighting the urgency of refining the ordinance to reflect present-day realities.

The City Nutrition Office likewise backed the proposal, but stressed the need for a robust monitoring and enforcement framework. Among their recommendations were the creation of a compliance unit or task force, regular audits, and confidential reporting mechanisms to protect whistleblowers and affected employees.

Pesquera also revealed that some employees have resorted to creating “sinking funds” to assist co-workers in financial distress. She clarified that the ordinance aims to define acceptable lending practices among employees while eliminating abusive ones.

Additional support came from several other departments, including the Department of General Services, Office of the City Markets, Cebu City Health Department, Office of the City Health, and the Department of Social Welfare and Services.

However, Pesquera noted that the ordinance will not apply to project-based employees, explaining that their exclusion was deliberate and based on the ordinance’s specific scope. She assured the council that all submitted recommendations will be reviewed and considered in the final draft of the amendment. (CEBU NEWS)