BSP sees 2 Islamic banks in BARMM

Two banks are interested to set up in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) as the Philippines has become an attractive location following the issuance by the Bangko Sentral ng Pilipinas of key regulatory framework and licensing of Sharia governance and tax neutrality.

Atty. Noel P. Tianela, officer in charge for the supervisory, policy and research of the BSP, revealed at the virtual event on “Delivering Islamic Microfinance in BARMM: The ASA Philippines Foundation Experience” of one or two possible prospects to establish a branch or set up full fledged Islamic branch in BARMM from their existing conventional bank operation.

Tianela did not identify the prospect but said embassy officials and BSP are discussing the prospects.

In the same event, Maharlika Alonto, adviser of ASA Philippines Foundation, expects more Islamic banks and financing institution players in the country in the next five years.

At the same event, BSP Deputy Governor Chuchi Fonacier said that the Philippines has become an attractive venue for Islamic banking and finance with the issuance by the BSP of key regulatory framework and licensing Sharia governance and tax neutrality, coupled with our country's strong economic fundamentals.

“The Philippines has become an attractive venue for Islamic banking and finance,” she stressed.

“The BSP has been at the forefront and has been very actively involved in events aimed at attracting foreign investors or foreign Islamic banks to establish either a full fledged a branch or an Islamic banking unit in the Philippines,” said Fonacier.

According to Fonacier, the BSP has established the necessary reforms that convey to the market, that the Philippines fosters an open and competitive financial system with a prospect for anticipated or Islamic banking, especially when economies is just the new normal.

Fonacier stressed that the role of Islamic finance in promoting social equity, equity, cannot be overlooked, noting that there are still predominantly Muslim provinces like the Bangsamoro Region in Muslim Mindanao where poverty incidence is as high as 68 percent.

Islamic finance can deepen financial inclusion because Islamic finance products are specifically designed to support the needs and protect the rights of the poor and the underserved.

“We at the Bangko Sentral ng Pilipinas recognize this important role. Therefore we have been working continuously to provide an enabling environment that will further promote the growth and development of Islamic banking and finance in the Philippines,” she said. (Bernie Cahiles-Magkilat)