Hong Kong (AsiaNews/Agency) – Many Filipinos working in Hong Kong are the victims of Philippine-based loan sharks, who go so far as to get local collectors who threaten, sometimes beat, debtors and their foreign employers.
An investigation by the Philippine Center for Investigative Journalism (PCIJ) found that employers of many Philippine migrants in Hong Kong – especially women domestic helpers – have received threatening phone calls and visits from debt collectors demanding payment of their employees' debts.
In some extreme cases, people have received packages with poisonous snakes or photos of their pets with wide eyes in mailboxes, or had their front door smeared with red paint.
"There are many such cases," said Dolores Balladares-Pelaez, president of the United Filipinos in Hong Kong, an association of Philippine migrants. The situation is such that some Hong Kong families have been questioning Philippine migrants, before hiring them, if they have any debts.
Others have confiscated workers’ passport and contract on arrival since they could be used as a loan collateral to cover debts. This is illegal under both Philippine and Hong Kong law, but when it is done, it makes life worse for migrant women.
In the Philippines, annual interest rates on loans top eight per cent, especially by foreign recruitment agencies. As debts pile up, people are forced to take out new loans to pay off old ones in an endless cycle of debt.
In Hong Kong, a “worker’s pay is small. A month’s worth of salary is not enough to pay off a loan,” Pelaez explained. It “is not really enough” since workers have to pay off debts, send money to the family home, and meet personal needs.
The Hong Kong government, which has allowed foreign domestic workers to work in the territory since the 1970s to cope with labour shortages, is aware of these practices, which increase the risk of "debt slavery" among migrant workers.
Over the past five years, local authorities have prosecuted and convicted 11 employment agencies for overcharging commissions set at up to 10 per cent of workers’ monthly salary, and have required employers to cover the costs of the mandatory medical examination and visa of those who are hired.
In a joint response to the PCIJ investigation, the Hong Kong Labour Department, the Immigration Department, and police pointed out that “the indebtedness of the FDHs (foreign domestic helpers) [starts] in their home countries before coming to Hong Kong.”
“We have repeatedly appealed to the governments of FDH-sending countries to address the problem of excessive placement or training fees charged by intermediaries in the FDHs’ home countries so as to tackle the problem of debt bondage at source,” the response added.
Data from the Philippine Department of Migrant Workers (DMW) show that 35 unlicensed recruiters were convicted between 2018 and 2022, while a total of 5,099 agencies were charged with recruitment violations.
However, more recently, Philippines-based lending agencies have resorted to “outsourcing” debt collection from Philippine debtors, by selling loans to their counterparties in Hong Kong.
