“Hello po. Di ko na po alam gagawin ko sa dalawang OLA ko. hindi ko na kayang bayaran (wailing emoji) sana pumayag silang unti unting ko nalang mr.cash at mabilis cash (Hello. I do not anymore know what to do with my two OLAs. I cannot anymore repay my loans with them. (Wailing emoji) I hope Mr. Cash and Mabilis Cash will let me repay them in installments).” -Anonymous Participant, Facebook Page, United OLA Victims Movement) posted on 9 December 2024
All over the world, debt and credit are an overriding framework used to understand numerous economic and political interactions, and very often, these interactions can be described as extractive, asymmetrical, and distressing. Debt, at its most fundamental sense is one person repaying what he/she owes to another person; nonetheless, although this suggests a logic of fair mutuality or reciprocity, debt manifests itself very frequently in instances of imbalance, ruin, conflict, and even injustice. More frequently, interactions based on debt involve one-sided wealth or resource transfer.
This essay will attempt at providing preliminary insights into the meaning-making of a subject who is entangled in a contemporary form of app-based indebtedness. We shall take a peek at how modern online and digital debt disbursement platforms, absent collateralized social relations transfer completely all the burdens of debts on the borrowers by charging exorbitant administration fees (deducted even before the actual amount is received by the borrower), abbreviated loan terms, usurious interest rates, and the borrowers’ very self and identity as loan security.
For online lending apps (OLAs) the creditor is unknown, unforgiving, even god-like in its ability to impose upon borrowers terms that cannot be negotiated, as after all, who can reason with an algorithm? Certainly, these digital creditors still work within the rules of a capitalist market system, and individuals are still able to retain their agentic powers to choose from a vast array of credit options, but for individuals with very limited choices, always situated on the liminal edge of persistent precarity, negotiation is often out of the question.
I’ve known Shane (not her real name) for over a year and a half now. She worked on a part-time basis as a teacher of Tagalog at the school where I work as its academic director. I learned about her entanglement with Online Lending Apps (OLAs) after I received a message on the school’s FB page early this year. I also received a call from a representative of one of these OLAs to confirm that I was her employer and to instruct me to remind her to settle the loan she took out with them. As I have an idea about the extent of harassment leveled by these collectors and agents on their borrowers who cannot meet the deadlines for repayment, I promptly told the person on the other end of the line to stop this kind of threatening call and to properly discuss the matter with Shane instead of calling the contacts she had provided them with during her loan application.
It wasn’t the first and the last time I received a similar call from an OLA collector. The following day at work, I informed Shane about the message and the phone call—she sounded apologetic and clearly distraught by the knowledge that I, her supervisor at work, had been made aware of her indebtedness, though not its full magnitude.
Following this, Shane has gotten ill more regularly and been missing work as a result. Her appearance looked more unkempt as the days passed. She informed me a week before the term ended that she would be undergoing surgery to remove her gall bladder and would be unable to teach face-to-face classes moving forward. That was the last time I saw her; we would send each other greetings on Messenger sometimes after, though.
As of the end of 2024, one very popular OLA (its ads are played on YouTube regularly and they have billboards along strategic parts of EDSA) boasts on its website that it has already had in excess of 59.5 million app downloads, with 11.6 million registrations, and almost 11 million total approved loans in 2024. This number is staggering given that the population of the Philippines as of December 2024 is over 116 million; this means, therefore, that more than half of this number have downloaded onto their smartphones their application, if this OLA were to be believed.
Meeting Shane Again
Located on a street with rows of well-maintained bungalows and townhouses, Shane’s looks out of place. The house badly needs a coat of fresh paint; there are clothes hanging on the porch, and I have difficulty differentiating between those clothes that need to be laundered and those hanging to dry and awaiting folding. Seeing that it is exactly 9:00am, I scream “Tao po!” several times. No one answers. I am aware that Shane is married, with a 10-year-old kid whom I guessed is named after a beloved character of a Tagalized Japanese animation that was very popular in the 1990s.
I punctuate my “tao po’s” so as not to disturb the families living nearby. I have been waiting outside for more than 15 minutes when a big, gray and whitish Husky comes out of the house; it doesn’t bark. A rusty and dilapidated metal fence is the only thing that separates me and the dog. At this point I see a silhouette of a man inside the house. But my “tao po’s” remains unanswered.
Considering the difficulty of getting to Shane’s place, I hope to make the most of my time that day and wait until she finally appears. Around 20 minutes have passed when finally, Shane appears dressed in a black house shirt that is too long it resembles a duster but too short it cannot be classified under this very specific category of clothing.
Shane looks like she has gotten smaller and more wrinkly than the last time I saw her. She’s only 42, but her thin and curly long hair is already graying. Her skin is dry, pallid, and dark. Most of her front teeth are now gone; she covers her mouth with her hand or only opens it ever so slightly when speaking. She has difficulty looking at me and maintaining extended eye contact. The pupils of her eyes are dilated; it seems that she did not have enough sleep the previous night.
Shane says “I’m sorry” for her appearance and, again, for making me wait outside of their house. She says that she is still reeling from the effects of her last gall bladder surgery and the hospitalization in January of her father who is now in Cebu with his siblings following the death of their mother last year.
Shane’s Predicaments with OLAs
Shane began availing of the services of these OLAs when her mother got sick last year. “Buti nakauwi ako at nakapagpaalam sa nanay ko bago siya namatay” (I was lucky to have been able to go back home (to Batangas) and say my final good-bye to my mother). The money she used to rent a van and take her family and her older sister’s family to see their dying mother in Batangas in October of last year came from an OLA. Of the 4,000 pesos that she borrowed on the app that time, Shane only received 2,700 pesos; 1,300 went to the administration fee and other fees. “Tanga lang, di ba?” (It was really stupid of me!). Shane repeatedly says this line to describe herself and her actions whenever she recalls the unfortunate things that happened to her the previous year.
She traces her illness and the gallbladder surgery to these online debts and her constant worry over not being able to make her repayments. Shane says that she began borrowing small amounts from these OLAs before 2020, and that from that time until before her mother passed away, she had always been a good payer. A good payer is someone who pays her debts plus interests on time. Frequently, these good payers are incentivized to borrow more as the maximum amount that they can take out is increased.
Following her non-payment of the money she borrowed after the passing of her mother, she downloaded one OLA after another—she took out loans to pay for the earlier debts she had incurred. First it was 5,000 pesos, of which she only received 2,800 pesos. Then she had to borrow 7,000 pesos from another OLA, and another one after it. They refer to this as tapa-tapal (roughly translates to making up for the short fall. Another good English translation is plastering, as if covering a leak).
Shane’s current accounted loan ballooned to about 70,000 pesos. She is yet to account for other loans taken out more recently as she experiences anxiety attacks whenever she sits down and attempts to compute her over-all loan exposure to these OLAs.
Many of these apps are related to each other and are connected to Chinese POGOs (Beltran, 2024). Shane calls them sister apps. They share details of their clients with each other and advertise their services to borrowers who have already used the services of their sister OLAs. Shane said that even while playing online games, one way she entertains herself these days when she is not taking her child to his school or looking for employment that will not require her to travel far or work at night, she would get ads that lead to an OLA.
For Shane, clicking these links is not a question of willpower; she believes that anyone who is in dire need of cash would fall into the trap of borrowing ever greater amounts and racking higher interest in the process.
Shane classifies these OLAs according to how “legit” they are. This idea of being legit is characterized by several factors. Both OLAs that are legit and those that she labels as “scam” generally claim to be registered with the Securities and Exchange Commission (SEC).
After a cursory examination of the online ads that promote these OLAs, one will notice the prominent position of texts that announce their SEC registration. Indeed, registration with this government agency bestows on these OLAs a degree of legality, hence legitimacy. Scam OLAs, for Shane, are those that charge exorbitant administration fees and do not explain how these interest rates are arrived at.
Legit OLAs, according to her, send professionally written (and sounding) emails to remind borrowers of their outstanding loans and clearly indicate in these emails the interest computations. On these apps, administration fee, the exact amount she is borrowing and the interest repayments are “clear kung magkano at saan napunta” (one knows exactly how much and where the amounts go).
One disadvantage of these legit apps, however, is that it takes about a week for their loan applications to get approved, and on occasions of emergencies or urgent need, such as when her husband’s mother had to be admitted to a hospital early this 2024, there was no way she could wait for a week to receive the amount she applied for. “Kung kapit ka na sa patalim, pikit-mata ka na lang at manghihiram sa mga scam na OLA” (When one is in a very desperate situation, she is left with no option but to borrow money from scam OLAs).
Shane used to work for a call-center company in Makati, but she resigned from this work in the first quarter of 2023 when she had been asked to transfer to a different account within the company and eventually to a site in another part of the city. While still employed at this company, Shane reflects that “hindi ako kinakapos at kaya kong bilhin ang mga gusto ko. Jollibee or Cream-o masaya na ako” (I could buy whatever I wanted. Jollibee or Cream-O was enough to make me happy).
She was earning 21 to 24 thousand pesos a month at that time, and oftentimes, she would take home even be higher than this amount, mainly from bonuses and incentives; meanwhile, her husband who sets up computers at home earns roughly 21 thousand pesos monthly.
Her monthly earnings took a dip after her resignation from her previous work. She went back to teaching Tagalog after she was recommended to the language school by a teacher who at that time could not teach at the required hours. At this work Shane earned 330 pesos an hour for a daily three-hour class; and in a month, she would take home approximately 20 thousand pesos. At 42 and with a kid, Shane’s life is characterized by constant precariousness and uncertainty.
On most days, she goes without much sleep because of the anxiety about the rapidly increasing interest on the amounts she has borrowed from a total of five OLAs. Just a few months before my visit, Shane said that she had received a message from an unregistered number threatening her that “pasusundan kita sa riding-in-tandem” (I’ll have you followed by a gun-for-hire on a motorcycle). The stress brought about by this call led her to finally seek help and became a member of United OLA Victims Movement (UOVM) which she discovered on Facebook.
The organization provides both a sense of community built on a shared suffering by “victims” of OLAs and direct assistance like face-to-face counselling to their members. They even have lawyer members who give talks and seminars on their rights as borrowers. Shane’s fears are appeased by the line lawyers always told them and something that has become like a mantra among members of the Facebook group, “walang nakukulong sa utang” (nobody goes to jail because of debts).
The group was founded by Kikay Bautista (Beltran, 2024) who herself borrowed money from OLAs until it spiraled out of control. Shane knows Bautista personally and relays that she has benefited much from face-to-face counselling provided by the group Bautista established.
The counselors themselves were also OLA “victims” who, like Shane, endured the daily collection reminders and threats coming from both OLA agents and third party-collectors. “Nung isang araw nakatanggap ako ng message galing sa kanila (collectors). Sabi pa ng text, ‘Alam naming kung saan pumapasok ang mga anak mo. (Laughter).’” (The other day, I received a message from them telling me that they know where my children go to school).
Shane realized through this encounter that these threats are generic ones, merely “copy-pasted para manakot” (copy-and-pasted threats) as she only has one child instead of children, she quips matter-of-factly.
Death is the ultimate form of surrender for Shane and other OLA members of the group. She told me that they had few members who committed suicide because they could not anymore bear the stress of indebtedness and the frequent threats and shaming from collectors. The very aggressive tactics employed by these OLAs to recover their loaned amounts are not unknown (Beltran, 2024). Shane shared with me her ideation of suicide on very low days.
Midway between our conversation, Shane proudly declares that she is embarrassed to borrow money from her friends and would only do so when it was very necessary like instances of sickness or death in the family. When she was still working for that BPO company, she recalls, it was she who lent money to needy co-workers, and she never directly asked them to pay her back. She would patiently wait until they were liquid enough to be able repay her. For those who never returned the money they borrowed from her, “pinasa-Diyos ko na lang” (I left it up to the Lord).
Without doubt, OLAs have become ubiquitous; a quick search on the term will lead one to pages upon pages of Google search result and sponsored ads. According to one estimate, there were already 140 registered online lenders in the country. As of 15 December 2024, twelve of the top 20 financial apps on Google Play in the Philippines are OLAs, with G-Cash being the most downloaded followed by Maya; Tala and JuanHand are number nine and ten, respectively.
One important factor for this rapid spread in the use of online lending platforms is the burgeoning digital financial services ecosystem; other factors include the digitalization of financial transactions. As a natural effect, digital data proliferates, and so far, it has been the driving force behind this alternative lending model. Lending companies can now utilize new categories of data when determining creditworthiness of prospective clients, allowing them to target groups that traditional banks and lenders do not service.
Additionally, the absence of regulatory systems is also a major influence. With essentially each step of the lending process completed digitally, securing OLA loans is comparatively faster thank loans from a bank or other credits. These OLA services are available anytime so long as the borrower has a working smartphone and is linked to the internet.
Paperwork is avoided, and so is falling in line. Additionally, they do not require much from a borrower insofar as evidence of identification and income is concerned; nevertheless, they make up for this by collecting huge amount of data by accessing their customer’s smartphone.
Notwithstanding the benefit certain populations derived from the loan inclusivity and greater access to needed funds, the accompanying dangers are incontrovertible. Working within an area without much regulatory control, many of these OLAs fail to register or comply with requirements for licensing, making it enormously challenging for regulatory agencies to oversee their business.
Furthermore, their underwriting process and marketing operations lack transparency. The algorithmic structure they utilize is opaque, rendering monitoring a challenge. There have been efforts for transparency such as ticking privacy notices and terms of use, but sometimes, these are insufficient, inaccurate, or deliberately misleading.
There is also an observation that OLAs are engaged in unwarranted data collection. The biggest complaint about these OLAs is their practice of recovering debts. Collectors and agents use abusive language, intimidation, and public shaming in forcing debtors to pay up.
These OLAs are also notorious for imposing and charging usurious interest rates, leaving their borrowers without a choice when they unilaterally execute punishing and arbitrary terms and conditions, and not forthright about their charges and fees. The lending practice of most of these OLAs is predatory to say the least.
In the modern context, traditional practices of borrowing money have lost their main driver, the bonds of reciprocity. Aided by modern technologies, borrowing money has become a market-motivated practice with little social purpose, hostile rather than consensual, and satisfying immediate and profit-driven needs rather than long-term relationships.
In other words, panghihiram ng pera (borrowing money), usually from relatives and friends, has drifted away from being an informal norm in the past, with socially shared unwritten rules, that were created, communicated and enforced outside official channels. While these official channels meant to protect the participants are still relatively absent in the use of OLAs, traditional relationships and norms have been done away with. In their stead is an algorithm that is impersonal, downright exploitative, and sucks the life out of an individual. (Photo courtesy of https://www.linkedin.com/pulse/top-10-best-fast-cash-loan-app-philippines-2024-reviewall-qsgmc)
(John Ryan Recabar does research on Southeast Asia, specifically Vietnam, and he hopes to re-sharpen his skills in the Vietnamese language. He is currently finishing his PhD in Anthropology at the University of the Philippines Diliman. In his free time, he walks his dogs and feeds stray cats at a nearby park.)
