The loaning culture has become diversified with the emergence of various platforms, ever-changing and increasing inflation rates, and immobility of households, among other factors.
Loan sharks increase their visibility and accessibility by utilizing loan applications and guarantors, which are now institutionalized through registration with the Securities and Exchange Commission. It’s telling that according to the Bangko Sentral ng Pilipinas in the 3rd Quarter Consumer Expectation Survey Report of 2024, one in every four households (or at least 25.5%) availed itself of loans in the last 12 months.
The money borrowed by these households can be divided into these categories of expenditure: 1) purchase of basic goods (51.1%); 2) business start-up/expansion (27.3%); 3) education-related (19.1%); health-related (13.1%); payment of other debts (10.5%); and others.
Half the number of the borrowers said their purpose in taking out a loan was to purchase basic goods, which implies that even financial planning and literacy cannot cushion the impact of inflation vis-à-vis the low wages received by many Filipinos.
Late capitalism
The factors worth considering in this matter include the ever-rising prices of basic goods, the volatility of the purchasing power of households, expenditure shocks (such as family and personal emergencies), and sudden lifestyle changes mainly due to salary increases, among others. Relatively, these factors are conventional when late capitalism is brought to the forefront. Late capitalism describes these conditions as opportunities for market movements in which loans are generated from the available and allowed amount of savings that banks could lend to households, in which the real deal is the interest rate.
The banks’ interest rates set thresholds that will balance their leverage on keeping the savings of households while lending other households enough money in due time. As capitalism keeps changing its configuration, socioeconomic inequality persists.
At a glance, on the one hand, the growing loaning culture can be seen as poor decision-making by households, keeping them from financial freedom. This notion stems from the perception that individuals should be responsible for their finances, which, in many cases, leads them to subscribe to various self-help and financial-assistance efforts, such as the kakeibo or the Japanese concept of saving based on occasion, and the 50/30/20 rule (50% for needs, 30% for wants, 20% for savings and debts). Thus, this is a myopic perspective because it ignores outright the hidden factors that would affect the increase in loaning cultures.
‘Raket’
On the other hand, the problem lies with multifaceted concerns, such as income stability, job security, and institutional and state efforts to reduce unemployment and underemployment. These considerations have led to the emergence of the hustle culture, also known as “raket,” where a part of the labor force engages in multiple job setups, regardless of whether the setup is full-time-to-part-time, part-time-to-part-time, or full-time-to-project-based.
The primary goal of the hustle culture is to make ends meet and survive late capitalism’s blatant effects.
Both the loaning and hustle cultures manifest how late capitalism has exacerbated the configurations of labor and work in many societies. This also challenges the orthodox economic paradigms that rationalize why societies cannot instantly adjust minimum wages based on the recent movements of inflation rates.
There are times when loaning and the hustle culture go hand in hand, resulting in one’s entrapment in a cycle of debt and hard work. In particular, the rise of dual-income-no-kids couples, also known as DINKs, highlights that the cost of parenting and building a family with kids is a big liability in line with their financial capability. So much so that aside from the expected financial shocks on a household once parenting becomes a couple’s primary responsibility, many of the DINKs are convinced that the world today is no longer the world that they envisioned their would-be children to be living in due to multifaceted problems.
Moreover, telling individuals and sectors to stick with financial literacy without recognizing that institutions are failing to ensure that equitable opportunities are promoted is a form of gaslighting. The reason? It gives the impression that finances, purchasing power, and sources of income are always personal and never a collective and structural matter.
The intertwining of the loaning and hustle cultures creates conundrums and misdirected perspectives on consumer behavior and financial literacy. Financial institutions often target low- to middle-ranking employees to be introduced to financial literacy without emphasizing that there are structural factors that must be deconstructed and changed for it to be realized. Hence, the loaning culture is a manifestation of how late capitalism is deeply entrenched within the systems and intricacies of our everyday life. CS
Juniesy M. Estanislao is a teacher under the Department of Education and a lecturer at the De La Salle University Manila.
