The Bangko Sentral ng Pilipinas (BSP) said that there are groups who have expressed interest in pushing the Islamic banking system in the Philippines.
According to BSP Governor Amando Tetangco Jr., the central bank is open to work with these groups toward the development of the Islamic banking in the county.
However, Tetangco noted that studies will still be needed to determine on what model of Islamic banking system is suitable for the Philippines.
The BSP governor mentioned that from the experience of other countries, there are two models that can be undertaken in putting up an Islamic banking system in the Philippines.
“One model is Islamic banking to be undertaken by Western-style institutions, they have Islamic banking units. There are specific practices from Islamic banking consistent with Shariah, law etc. The other one is standalone Islamic banking,” he said.
Moreover, Tetangco said that to promote such banking system, the amendment to the charter of the only Islamic bank in the country, the Al-Amanah Islamic Investment Bank of the Philippines, is needed.
“If you want to promote Islamic banking you have to amend, to encourage more banks to go into Islamic finance,” he said, adding that right now, the law recognizes Al-Amanah as the only Islamic bank in the country.
Al-Amanah Islamic Bank traces its roots to the Philippine Amanah Bank, which was established by the late President Ferdinand Marcos in 1973 with an initial capital of P100 million.
Its charter originally allowed it to open in the provinces of Basilan, Cotabato, Lanao del Norte, Lanao del Sur, Palawan, Sulu, Tawi-Tawi, and Zamboanga del Norte and Sur, where there are large Muslim populations.
In 1974, its charter was amended, allowing it to open branches in Maguindanao and Sultan Kudarat. In 1989, the bank was re-chartered and re-capitalized pursuant to Republic Act No. 6848, and was renamed the Al-Amanah Islamic Investment Bank of the Philippines with a capital of P1 billion.
In 2008, the bank was sold to another government-owned bank, the Development Bank of the Philippines (DBP).
Recent reports said that the government is preparing to divest itself of Al-manah, by possibly bringing in a new group to run the country’s first and only Islamic bank.
However, the DBP’s divestment would have to be approved by the Bangko Sentral ng Pilipinas, the Governance Commission for Government-Owned and-Controlled Corporations and, the Office of the President.