PCG Issues Warning on Using Passports as Loan Collateral

Having to go without money is one thing, spiralling into debt is another, and losing control over your legal status in a foreign country is altogether a different story.

However, all these things become a collective problem when people choose to make poor decisions in order to make ends meet. This is especially true for foreign domestic workers and migrant workers in Hong Kong, who are bound by their contact, and are not allowed to find other sources of income outside of their employment.

pcg advisory passport loan collateral

Filipinos Advised Not to Use Passports as Collateral for Loans

The Philippine Consulate General in Hong Kong has recently issued a new warning against anyone using the Philippine passport as collateral for securing a loan.

The warning came after reports of a record haul of more than 1,400 Philippine passports had been seized by police from a lending company in Sheung Wan called OFC, during a raid on Jun 5.

The official documents were collected and kept by the company as collateral from Filipino borrowers, a practice by money-lenders to ensure repayment of loans from their debtors.

According to the advisory posted, the Consulate said, “We remind all Filipinos in Hong Kong that all Philippine passports are property of the Government of the Republic of the Philippines and shall not be used as collateral for any loans or debts.”

pcg advisory passport loan collateral
Credits: PCG-HK Facebook Page

Furthermore, the advisory cited Foreign Service Circular No 214-99, which states that all passports used as guarantee for loans or debts are “automatically cancelled” upon notice by the passport holder that the document had been lost.

This basically means that once a Philippine passport has been cancelled, the passport holder will have to apply for a new one, which, under current practice, will require him or her to go to the main passport office of the Department of Foreign Affairs in Manila.

As per regulations, the Consulate will not issue replacement passports once it proves that such passports have been used as collateral for loans, or lost to a money lender.

According to Consul Paul Saret, head of the Consulate’s assistance to nationals section, they will stand by this policy, even if it will mean long hours of processing requests to replace all the passports that had been seized from OFC, to serve as a warning and reminder of the legal implications of dealing with moneylenders in such methods.

ALSO READ: DFA to Replace Pawned Passports, but only in Manila Office

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