A fraction is a numerical representation indicating the quotient of two numbers.5/6 is one of the most common fraction we hear especially when we talk about alternative external source of funds needed to finance a business.
Aside from the fight again illegal drugs in the country, The Duterte administration is bent in addressing the 5/6 trade in the leading trade. The government’s action has gained a strong public support based on the collated statistics presented by some of the credible social weather stations.
In leading money, 5/6 basically connotes that for every Php 5.00 worth of borrowing, the borrower must pay Php 6.00 in return. This simply means that every peso is bought for additional 0.20 centavos in the money trade. In short, it is plainly an automatic 20% as mark up.
For small businesses, getting into 5/6 is one of the easiest way of getting financial assistance which can be of use to start a business or in sustaining an existing one. When the capital thread gets shorter, 5/6 becomes a main option because of the following reasons; first, it requires no collateral as security. Secondly, no voluminous documentations are needed to be complied with since there is no contract to forge. Thirdly, the release of the proceeds is fast, without the processing fee or advance interest being charged. Lastly, the term of the payment can be opened ended.
Given these facts, a borrower in need falls prey to the high cost of investing money. Fundamentally, simple mathematics will show the negative chain of effects in entering the 5/6 money trade. The cost of investment to finance the business will be passes on to the price of products and services to be sold. It would be mean that the borrower has to consider the additional 20% interest of the deal before delivery of marked up selling price of goods and services in the market.
Eventually, the burden will be shouldered by the consumers as they pay for such products and services during purchases. Aside from it, local taxations will be put on hold the finance the government services to the public which is detrimental to the national economy.
To recap, addressing the pressing concern of the 5/6 trade in the country will elicit more public support for the government’s program of action.
By: Aileen P. Velasco|Teacher II| Bataan National High School | Balanga City, Bataan
