Bangko Sentral ng Pilipinas (BSP)

#Philippines plans to allow banks to set up Islamic banking units

Bangko Sentral ng Pilipinas (BSP) is leaning toward allowing local lenders to set up Islamic banking subsidiaries, as it steps up efforts to promote Shariah-compliant finance in the country. According to the central bank's Deputy Governor Chuchi Fonacier, the BSP is pushing for an open approach where conventional banks can operate Islamic banking windows or to establish subsidiary Islamic banks. Operating fully fledged subsidiaries would allow lenders to offer a wider range of Shariah-compliant services than through a window, which remains part of the parent bank. Fonacier added that foreign Shariah-compliant banks would also be allowed to operate locally. The BSP wants to issue the implementing rules for the new law before the end of the year.

Duterte signs law regulating Islamic banks in #Philippines

President Rodrigo Duterte has signed Republic Act (RA) 11439 that allows the establishment of Islamic banks in the Philippines. Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said R.A. No. 11439 would unlock the full potential of Islamic financing in fostering inclusive economic growth. RA 11439 mandates the Bangko Sentral ng Pilipinas (BSP) to exercise regulatory powers and supervision over the operations of Islamic banks. The Trade department earlier said that several banks have expressed interest to open their branches in the Philippines, once a law on Islamic banking is signed. The banks were identified as CIMB, Islamic Development Bank, Qatar Bank, Credit Investment Bank of Malaysia and a Saudi bank.

Islamic banking law to unlock financing potential, foster inclusive growth —BSP

The Bangko Sentral ng Pilipinas (BSP) welcomes the enactment of a law putting Islamic banks under its regulation and supervision. Republic Act No. 11439 or "Act Providing for the Regulation and Organization of Islamic Banks" was signed by President Rodrigo Duterte on August 22. In the Philippines, the potential market for Islamic banking products mainly comprises the Muslims which account for about 10% of the population. The BSP noted that Islamic banking can also be attractive to non-Muslims, particularly investors who may be looking for new asset classes, instruments and products to diversify their portfolios. An Interagency Working Group on Islamic Banking and Finance has been constituted to develop a regulatory framework for Islamic banking.

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