Bangsamoro region set to adopt Islamic finance
DAVAO CITY—THE Bangsamoro region is poised to implement the collateral and interest-free financial and banking transactions and put this region in the Islamic global financing map, its legislators said.
“Once BTA Bill 286, or the proposed Bangsamoro Revenue Code, is enacted, the Barmm is set to implement Islamic financing,” the Bangsamoro legislators told a public forum in Cagayan de Oro City last week.
Adapting Islamic finance would make the Bangsamoro Autonomous Region in Muslim Mindanao (Barmm) “more competitive in the market,” said Paisalin Tago, deputy speaker of the Bangsamoro Transition Authority (BTA), the interim Parliament of the Barmm.
He said though, that the shift to Islamic finance would need educating Barmm’s predominantly Muslim population about Shariah and Islamic finance.
Lawyer Ubaida Pacasem, also a member of Parliament and who heads the Ministry of Finance, Budget, and Management Minister, said the proposed code would standardize Islamic financial contracts and transactions, “ensuring their economic equivalence with their conventional counterparts.”
The enactment of the proposed code “is expected to create a level playing field for Islamic finance products and services,” he said, “as it also promotes a sustainable Islamic finance industry as well as an open, equitable, and competitive financial system within Barmm.”
Islamic finance would be implemented as the main content of the Bangsamoro Revenue Code, one the two remaining priority codes that are yet to be enacted by the Barmm midway into the second transition period.
The BTA Ways and Means Committee team handling the consultation of the revenue code held a two-day forum in Cagayan de Oro City, for stakeholders in Northern Mindanao.
The revenue code includes institutionalizing hisbah to manage Shariah in the economy, taxation based on excess wealth, and incorporating zakat into the revenue code. Hisbah was explained by Mindanao State University-marawi Shari’ah Center Director Anwar Radiamoda as an Islamic duty that emphasizes managing economic affairs in accordance with Islamic principles.
“Islamic finance promotes satisfaction for Muslims and enables them to fulfill their obligations to Allah and society,” Radiamoda said.
In an economic brief released by the Ministry of Finance and Budget and Management, Islamic finance prohibits riba (interest), which differs substantially from traditional banking and investment practices, the Bangsamoro Information Office said.
It said Islamic finance “encourages equity, social justice, and economic participation through profit and risk-sharing mechanisms, aiming to prevent exploitation and ensure that financial transactions positively impact society.”
Lawyer Saniarah Diangca, a legal expert from D’firm Diangca Law and Taxation Consultancy, “emphasized the need to address potential overlaps in the functions of the BIR and the Bangsamoro Revenue Office, which is mandated to assess and collect all taxes, fees, and charges, as well as to account for all revenues collected.”
Tago, who chairs the committee, said it has scheduled another forum in Davao City next week with resource persons from Region 12.