THE Bangko Sentral ng Pilipinas (BSP) is making headway in its efforts to promote initiatives to develop Islamic banking and finance in the Philippines.
The BSP Assistant Governor Atty. Arifa A. Ala, lead advocate on Islamic banking and finance and the Chairperson of the Islamic Finance Coordination Forum, recently led the briefing on “Islamic Banking and Finance in the Philippines” at the Philippine Embassy in Riyadh.
“The business model of Islamic banking is beneficial to all types of banking clients regardless of religion. Hence, the goal is to provide the public, in general, whether Muslims or non-Muslims, with appropriate financial choices that suit their risk appetite and financial needs and make the Philippines aligned with global developments,” Ala said.
Ala said there are major milestones in the development of the Philippines’s Islamic banking and finance ecosystem.
She emphasized the vast opportunities for investments and potential benefits in terms of wider reach and greater financial inclusion that an expanding Islamic banking and finance industry can bring to the country and Filipinos abroad.
The BSP’s strategy of promoting Islamic banking and finance supports the BSP’s financial stability mandate as Islamic banking and finance business model emphasizes Shari’ah governance and risk sharing principles to foster equity, justice and transparency.
Islamic banking, supported by the BSP, was introduced in the country in 1973 with the opening of the Philippine Amanah Bank. It has since become an important part of the banking industry.
In 2021, the BSP created its own Islamic Banking Supervision Group and signed a memorandum of understanding with the Philippine Economic Zone Authority on the creation of Halal ecozones.
The following year, BSP reconstituted the Inter-Agency Working Group on Islamic banking to Islamic Finance Coordination Forum. The BSP also created the Shari’ah Supervisory Board for the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM).
Official government data showed that Islam is the most predominant religion in BARMM accounting for 4.49 million persons or 90.9 percent of the 4.94 million household population in the region in 2020.
It was followed by Region IX-Zamboanga Peninsula with 18.2 percent, Soccsksargen with 15.8 percent, Region X-Northern Mindanao with 8.5 percent, and Region XI-Davao Region and Mimaropa Region with 3.5 percent each.