Bam Seeks to Strengthen Islamic Banking in PH
Habang wala pa ang BBL, tuloy ang pagtulong natin sa ating mga kapatid na Muslim.
A senator has filed a measure to strengthen the country’s Islamic banking system to give Filipino-Muslim entrepreneurs access to financing and other services that are compliant with the principles Shari’ah or Islamic law, while the much debated Bangsamoro Basic Law is still being deliberated.
Sen. Bam Aquino’s Senate Bill No. 3150 or the Philippine Islamic Financing Act of 2016 seeks to amend the charter of the Al-Amanah Islamic Investment Bank of the Philippines, the only Islamic Bank in the country established in 1973.
“It seeks to strengthen the Al-Amanah Bank to provide a broader market, while promoting both the establishment of other Islamic banks and engagement in Islamic banking arrangements by conventional banks under the supervision and regulation of the BSP,” Sen. Bam said.
At present, Sen. Bam said Muslim banking and finance applies principles based on the Shari’ah Law, where the kind of banking and financing operations is characterized by risk-sharing and equitable distribution of wealth.
“Undertaking or financing of anti-social and unethical business, and the setting of interest or a fixed pre-determined rate of return are prohibited,” said Sen. Bam, chairman of the Committee on Trade, Commerce and Entrepreneurship.
With this, Islamic banking and finance in the Philippines is limited by three major challenges, such as lack of clear and regulatory framework, lack or scarcity of experts on Islamic banking and finance, and lack or very low investor awareness and acceptance of Islamic banking and finance.
These challenges prevent the country from enjoying the vast growth of Islamic banking worldwide, which increases by 21 percent despite the existing global context.
“Currently, there are more than 600 Islamic financial institutions operating in more than 75 countries and almost all major multinational banks offer Islamic financial institutions,” Sen. Bam said.
Sen. Bam said the measure will help address these challenges and provide Muslim entrepreneurs an environment where they can thrive and prosper through his measure.
“Accompanied by other critical inclusive financial reforms and innovations, this bill seeks to ensure the development of MSMEs not only in our major urban centers but also in the poorest and hardest to reach areas,” the senator said.
“It also seeks to ensure that every Filipino, regardless of status, identity or religion has access to critical services to enable them to seize economic opportunities and be part of the country’s progress,” he added.
The bill amends the charter of the Al-Amanah Bank, providing for the organization and regulation of an expanded Islamic banking system in the Philippines.
The proposed measure further mandates government to provide programs for increased consumer awareness and capacity building required by the expanded Islamic banking system.
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