SANTA ROSA (Philippines) • Philippine rice farmer Francisco Santo Domingo's life is in ruins after losing yet another gamble with nature, but the typhoon that destroyed his crops means gleeful loan sharks have again hit the jackpot.
Like thousands of other farmers, Mr Domingo will be forced to go back to the "shadow" bankers who dominate the nation's agricultural economy and take on even more debt at exorbitant interest rates.
"My life is an endless cycle of borrowing money to plug more money that I owe," a disconsolate Mr Domingo told Agence France-Presse as he looked over crops that were just a week away from harvest but now ruined by Typhoon Koppu.
My life is an endless cycle of borrowing money to plug more money that I owe.
MR FRANCISCO SANTO DOMINGO, a Philippine farmer who got a 60,000-peso (S$1,800) loan a few months ago to buy rice seeds, fertilisers and equipment
"This storm will mean we will go hungry for a very long time. We bet everything on this harvest."
The typhoon brought floods as high as 3m to one of the Philippines' most important rice-growing regions, fertile central plains on the main island of Luzon.
Mr Domingo's 3ha tract is in Santa Rosa, a sleepy farming town about two hours' drive north of Manila.
He took out a 60,000-peso (S$1,800) loan - a massive amount for any small-time farmer in the Philippines - just a few months ago to buy rice seeds, fertilisers and equipment.
With zero savings or collateral to offer banks for a loan, Mr Domingo said he had no choice but to seek out a village loan shark and agree to terms of 25 per cent interest per month.
If the typhoon had not come, the father of three had planned to sell his rice quickly to pay off most of the loan, while earnings from other crops would have helped manage the rest of the debt.
Now, he faces going back to a loan shark to try and finance another rice crop.
"The loan sharks have to deal only with delayed payments, they will get their money. But us farmers are condemned to die in debt," the 37-year-old said.
This cycle of debt and disaster haunts millions of farmers and their families across the Philippines, where an average of 20 major storms smash the country each year. According to the central bank, 604 of the country's 1,600 cities and towns do not have a bank, denying many residents access to formal credit.
It is in these remote areas that backyard credit operations thrive, with scandalous interest rates sometimes reaching up to 20 per cent a day, analysts said.
In Santa Rosa, one loan shark admitted there were seven of them operating in a single government building.
She said she got into the lending game a year ago with just a few thousand pesos. Charging monthly interest of 10 per cent, she was quickly amassing a fortune.
The woman said she already had more than one million pesos lent out to customers, meaning revenues of 100,000 pesos a month.
"I am earning countless times more than my government pay cheque. I hope to expand," said the loan shark.
Because she works at the government office, she can get authorisation from the farmers to take money from their relatives' pay cheques, reducing the risk for default.
Some loan sharks also ask for the ATM cards of the farmers or their relatives, which they will keep until the loan is paid, she said.
Five per cent of all Filipino adults owe money to informal lenders, Central Bank governor Amando Tetangco said, adding that the authorities were trying to encourage banks to lend to the poor.
Many of the farmers who bite the bullet with loan sharks will never recover from debt, according to financial planner Salve Duplito, a celebrity personal finance coach.
"The more they get into these schemes, the harder it will be for them to lift themselves out of this debt quicksand," she said.