A LEGISLATOR is pushing for an increase in the number of Islamic banks and conventional banks that can do business based on Islamic banking practices to achieve a genuine and productive economic activity in the country.
AMIN (Anak Mindanao) Partylist Rep. Sitti Djalia Turabin-Hataman has filed House Bill (HB) 5989 “An Act amending Republic Act No. 6848 or the “Charter of Al Amanah Islamic Investment Bank of the Philippines” seeking to provide for the regulation and organization of an expanded Islamic banking system in the Philippines.
“We filed this Bill to provide the necessary framework and infrastructure for the country to engage in this rising global phenomenon, develop competencies among Filipinos and popularize the concept of Islamic Banking in the country,” she said.
The Al-Amanah Islamic Investment Bank, which was established in 1974, is one of the oldest Islamic banks in the world making the Philippines a pioneer in Islamic banking.
“There is a need to review and amend the said Law, for the country to significantly participate in the recent global developments in Islamic banking and provide the appropriate regulatory frameworks and policies for local banks and financial institutions to engage in Islamic banking,” said Turabin-Hataman.
She said key stakeholders in the government and private sector must work together to expand the number of financial outlets in the country for financial inclusion and to encourage more inflows from foreign investors.
“Islamic banks both local and foreign banks can operate in the Philippines provided they are universal banks. Existing local banks can also operate Islamic banking units,” she said.
She added that setting up a new Islamic bank requires a capitalization of P5 billion, based on the Bangko Sentral ng Pilipinas guidelines on universal banks.
“We’d like to invite everyone, Muslim and non-Muslim to take a closer look at Islamic banking as an alternative financing modality, instrument and facility. This is very good for the economy considering the enormous potentials of the Halal industry. As we enter the ASEAN integration, we need to attain financial inclusion for the Muslims in the country,” she said.
Senior State Solicitor Maisara Dandamun Latiph, lead convenor of the technical working group (TWG) that drafted the bill said, “This is a product of convergence of different agencies and sectors. We look forward to its passage to strengthen ethical banking in the country through socially responsible funds and investments. It aims to allow the growth of Islamic banks, paving the way for other investors both local and international.”
Dr. Nataliya Mylenko, World Bank Financial Sector senior specialist, reiterated the significance of Islamic banking in light of the ASEAN Integration. Mylenko noted the potential of Islamic banking and finance in the areas of microfinance and available financing products for small and medium enterprise.
Dr. Zamir Iqbal, head of the World Bank Global Islamic Finance Development Center, emphasized that Islamic banking is not exclusive to Muslims and is in fact a growing global industry even in non-Muslim countries like the United Kingdom, Germany, France and South Africa.
“From a mere $150 billion industry in the mid-90s, Islamic finance is now worth $1.8 trillion with presence not just in the Gulf areas but even in Europe, Africa and Southeast Asia,” Dr. Zamir said.
“Islamic banking may also be termed as structured financing, participation banking, or partnership finance. Most people think it is only about being interest-free but that is less than half of what it is all about,” he said.
Accordingly, there were at least 700 Islamic financial institutions operating across more than 70 countries, with the industry registering an annual growth rate of 16.94 percent from 2009 to 2013.
Present in the forum held by AMIN (Anak Mindanao) on August 24, 2015 at the House of Representatives, were BBL AdHoc Chairman Rep. Rufus Rodriguez and House Committee on Muslim Affairs Chairman Rep. Tupay Loong, both co-authors of the proposed bill.
Representatives of Senator Koko Pimentel, Rep. Malou Acosta Alba (Bukidnon), Rep. Teddy Baguilat (Baguio), Rep. Arlene Bag-ao (Dinagat), Rep. Leni Robredo (Camarines Sur), Rep. Baby Pizarro (ABS Partylist), Rep. Abdullah Dimaporo (Lanao del Norte) also attended the forum.
The committee secretariats of the House Committee on Banks and Financial Intermediaries and House Committee on BIMP-EAGA were also present.