ISLAMIC banking is an important component of the government’s financial inclusion program, a key official of the Bangko Sentral ng Pilipinas (BSP) told investors in Dubai.
BSP Assistant Governor Arifa A. Ala said Islamic banking provides financing options for both Muslims and non-Muslims. She is the BSP’s lead-advocate on Islamic banking and finance and Chairperson of the BSP-led Islamic Finance Coordination Forum (IFCF).
Ala also discussed recent milestones in the development of the Philippines’s Islamic banking and finance ecosystem to the stakeholders in the Middle East emphasizing the readiness of the country to accept new and potential Islamic banking players.
“The promotion of Islamic banking expands the BSP’s financial inclusion agenda of increasing broad and convenient access to high quality financial services for all Filipinos, including the minorities and underserved population,” Ala said during the recent Philippine Economic and Investment Summit (PEIS).
Ala said Islamic banking complements conventional banking by providing alternative forms of investments and financing options for both Muslims and non-Muslims alike.
She emphasized that Islamic finance on Shari’ah governance and risk sharing principles are seen to support the BSP’s financial stability mandate.
“The BSP remains steadfast in its commitment to support the growth of Islamic finance in the country by continuing its roles as a catalyst in re-shaping the Philippine Islamic banking landscape, an enabler of Islamic banks and Islamic banking windows, and a champion of financial inclusion and stability that meets the needs of the financially underserved population, create better opportunities and promote a high quality of life for all Filipinos,” Ala said.
Ala, participated in the 9th Annual Philippine Property and Investment Exhibition (PPIE) and inaugural PEIS held last May at Radisson Blu Hotel, Dubai, United Arab Emirates (UAE).
The PPIE is the biggest, longest-running, Philippine business and investment forum in the Middle East, which provides opportunities for businesses and investors in the UAE to explore the huge potential of the Philippine market.
The PEIS promotes business and investment opportunities in the Philippines by highlighting economic forecasts/business trends, government initiatives, investment incentives and other laws and regulations that will encourage investors to invest in the Philippines.
Islamic banking was introduced in the country in 1973 with the opening of the Philippine Amanah Bank. The latter 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 economic zones.
The following year, BSP reconstituted the Inter-Agency Working Group on Islamic banking into the 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 9 (Zamboanga Peninsula) with 18.2 percent, Soccsksargen with 15.8 percent, Region 10 (Northern Mindanao) with 8.5 percent and Region 11 (Davao Region) and the Mimaropa Region with 3.5 percent each.