Cebu City Councilor Francis Esparis has formally introduced an ordinance prohibiting the use of Pantawid Pamilyang Pilipino Program (4Ps) cash cards as collateral for loans, gambling debts, and other financial obligations.
The ordinance responds to reports from the Department of Social Welfare and Development (DSWD) in Central Visayas that beneficiaries have been pawning their cash cards to informal lenders.
Once surrendered, these cards allow loan sharks to confiscate monthly subsidies intended for food, schooling, and medical needs.
Several beneficiaries have been caught engaging in this ‘Sangla ATM’ scheme, according to DSWD-7 monitoring.
The Bangko Sentral ng Pilipinas has also warned that pawning ATM cards exposes borrowers to unauthorized withdrawals and deepens their debt cycles.
The 4Ps program, institutionalized under Republic Act No. 11310 in 2019, provides conditional cash transfers to poor households to break the cycle of poverty.
In Central Visayas, more than 310,000 families are enrolled, with a household of three children receiving about P1,400 monthly, or P15,000 annually, for up to seven years. These funds are strictly designated for health, nutrition, and education.
Esparis emphasized in his explanatory note that pawning cash cards ‘fundamentally subverts, weakens, and sabotages the very heart of the state’s poverty alleviation goals.’
While DSWD guidelines penalize beneficiaries caught pawning their cards, they do not hold lenders accountable.
The ordinance seeks to close this gap by targeting both sides of the transaction and offering financial literacy interventions to guide erring beneficiaries back to compliance.
During the latest regular session, the body referred the proposed measure to the Committee on Laws, Ordinances and Styling, the Committee on Trade, Commerce and Entrepreneurship, and the Committee on Social Services.
The proposed ordinance imposes penalties ranging from fines of P2,000 to P5,000 and imprisonment of up to one year, with repeat offenders facing harsher sanctions.
Business establishments found guilty may also have their permits suspended or revoked.
The City Legal Office, in coordination with the Department of Social Welfare Services, is mandated to draft implementing rules within sixty days of the ordinance’s effectivity.