IslamicFinance.de

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.

The Mindanao Development Authority (MINDA) is currently pushing to fast track the institutionalization of the Islamic Financing Mechanism. MINDA assistant secretary Romeo Montenegro said they are proposing the amendment in order to have specific mechanisms for full implementation of the Islamic Finance Mechanism. He added the bill in the Senate is already in the committee level and are already waiting for the same version to be filed in the House of Representatives. Montenegro said they wish to have the Islamic Financing Mechanism to pilot at Marawi to help with the reconstruction efforts in the area. It is also targeted to be a channel for the Middle Eastern countries willing to shell out financial support for the victims of the Marawi siege.

President of the #Philippines Rody Duterte announced the need to help the people of the Autonomous Region in Muslim Mindanao (ARMM). Al-Amanah Islamic Investment Bank of the Philippines (AAIIBP) is the only bank authorized to conduct Islamic Banking business in the country. The AAIIBP total Assets for the month of July 2016 is P785.66 million, a decrease from previous month’s total assets of P795.05 million. In comparison to the same period last year, there is an increase of P6.58 million in total assets largely due to higher deposit levels in 2016. According to lawyer Arifa Ala, there is a significant untapped market opportunity for banks in the Philippines, because only about 30% of Filipino adults have deposit accounts at a financial institution.

Islamic banking and financing as it is introduced in the Philippines opened a lot of inquiries and challenges. In the previously held Forum on Islamic Banking and Financing by the Mindanao State University–Iligan Institute of Technology, in partnership with Anak Mindanao and National Commission on Muslim Filipinos last September 2 at MSU IIT Campus, Iligan City, participants from different sectors especially the future accountants of the university, both Muslims and non-Muslims, were given the basics of such concepts by the resource persons. This is a system that can be adopted by all.

The National Commission on Muslim Filipinos (NCMF), the lead government agency tasked to spearhead the Philippine Halal industry, in partnership with Bangko Sentral ng Pilipinas (BSP), is now pushing for a new legislation on Islamic banking. Secretary Yasmin Busran-Lao of NCMF told reporters Wednesday at the sidelines of the opening ceremony of the first Mindanao Halal Festival that they are now furnishing the draft of a bigger legal framework for Islamic banking. She said that part of the plan is the conversion of Al Ahmana bank in the Philippines to a fully Shari'ah compliant bank.

Baitul Mal Wa Tamwil (BMT) is a microfinance institution in Indonesia that is a shariah compliant. It aims to develop micro and small business enterprise for the poor and economically marginalized sector in the society. BMT is a small financing institution which operates using mixed concepts of "Baitul Maal" and "Baitul Tamwil" with its target focused on the small business sector. By this concept, BMT also acts as Zakah institutions (Amil). BMT has been in operation since 1995 under the supervision of Incubation Center of Small Business (PINBUK). Since its establishment in 1995, around three million customers have obtained micro-financing from BMTs in Indonesia. At present, the role of BMT as an Islamic microfinance institution has become increasingly important, particularly regarding poverty alleviation in Indonesia.