DOF, Bangsamoro to set up Islamic bank

MANILA, Philippines — The Department of Finance (DOF) and the Bangsamoro government have agreed to set up an Islamic Bank to provide financial access to micro, small and medium enterprises (MSMEs) within the new autonomous region.

The establishment of an Islamic Bank is part of the government’s initiatives to encourage investments and expand financial services to in the region.

An Islamic bank is a business entity whose objectives and operations do not involve the usual bank interest which is prohibited by the Shari’ah and which conducts its business transactions in accordance to Shari’ah principles.

A bill seeking to create an Islamic bank in war-torn Mindanao has been approved by the Senate and the House of Representatives and is now awaiting the signature of President Duterte.

The finance department has begun the process of forming a technical working group (TWG) with other national government agencies to assist officials of the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) in initially running their economic departments and crafting sound policies to ensure the region’s long-term fiscal stability.

Finance Undersecretaries Gil Beltran and Bayani Agabin held their first meeting with minister Eduard Guerra of the Bangsamoro Ministry of Finance, Budget and Management to firm up the details on the TWG.

The body would also include representatives from the Department of Budget and Management, Bureau of Customs, Bureau of Internal Revenue, Bureau of Local Government Finance and the Commission on Audit.

Agabin said the DOF would draw up its table of organization and list down the functions of its offices to help the Bangsamoro government adopt the structure suitable for its system of government.

“They agreed that the DOF will give a briefing on the structure (of the finance and budget department) so that they can properly set up their own structure.  We’ll help them interface with the other departments as well,” Agabin said.

Beltran said the agency would also design more briefings on BARMM’s areas of interest in connection with fiscal management, budget management and financial planning.

The DOF co-chairs with the BARMM minister of budget, finance and management the Intergovernmental Fiscal Policy Board (IGBF), which is designed to address revenue imbalances and fluctuations in the regional financial needs and revenue-raising capacity of the BARMM government.

Finance Secretary Carlos Dominguez made a commitment to Guerra to assist BARMM in setting up its new government, especially in handling its fiscal affairs.

Besides forming a TWG, Dominguez also directed Beltran to tap the Philippine Tax Academy (PTA) to help educate the new set of government officials of the BARMM on fiscal management, financial planning and budget-related matters.