Loan sharks and instalment shops trap Filipino domestic workers in Singapore in spiralling debt, Straits Times finds

A Straits Times investigation found domestic workers in Singapore, including Filipino workers at Lucky Plaza, falling into deep debt through loan sharks, instalment shops and pawned goods, with loan sharks turning a claimed S$180 loan into a S$1,040 demand, as a support group urges audits of hulugan shops and MOM warns that illegal borrowing can cost workers their permits.

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Domestic workers in Singapore are falling into spiralling debt through loan sharks, purchases on instalment that can be pawned for cash, and informal loans, The Straits Times reported in an investigation. In one case, an employer was bombarded with threatening calls and messages from loan sharks who claimed her helper had borrowed S$180 and that, with interest, the debt had grown to S$1,040. The helper denied taking any money. The lenders sent images of the helper's work permit that included the employer's name, identity card number and home address.

At Lucky Plaza, a popular gathering place for Filipino domestic workers on their days off, the newspaper counted six licensed moneylenders, five pawnshops, seven remittance centres and more than 20 jewellery and mobile phone shops advertising hulugan, the Tagalog term for instalment plans. In one contract reviewed by ST, a 22K gold necklace cost S$1,320 payable over five months, but fetched S$430 when pawned. Pastor Billy Lee of Blessed Grace Social Services said he encounters about 10 Filipino domestic workers each month who have borrowed from loan sharks.

Lee traced the shift to July 2019, when Singapore cut the total that foreign workers earning under S$10,000 a year could borrow from licensed moneylenders from S$1,500 to S$500. "The retail shops have taken the place of the licensed moneylenders," he said. He urged the Law Ministry, MOM and the Competition and Consumer Commission of Singapore to audit retail businesses offering hulugan. MOM said domestic workers who borrow from unlicensed moneylenders will have their work passes revoked and be barred from employment in Singapore, and pointed to its settling-in programme and financial literacy courses run by groups such as Aidha.

A companion story profiled Monette, a 42-year-old Filipina who owed money to three loan sharks in 2019 and now leads a church cell group advising other Filipina domestic workers. "Explain to your family that you're not earning much. If you can't afford to send money, wait for your salary. Don't borrow," she said.