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Pin 5 connects to the LED Cathodes (- side) and the Anodes (+side) connect to the power source, so the PIC is turning on/off the Ground connection to the LEDs.
You should drive only 1 LED max from the pin on that PIC, it can't really sink enough current to drive any more than that and it looks like there are 2 in parallel in that schematic. It may work out alright with a couple of them, depending on the duty cycle of the thing, but it should only drive one LED per pin to be safe.