MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) is pushing for the establishment of a Shari’ah supervisory board within the year, paving the way for the establishment of Islamic banks in the country.
In a speech delivered on behalf of BSP Deputy Governor Chuchi Fonacier, BSP Financial Supervision Subsector managing director Arifa Ala said Republic Act 11054, otherwise known as the Organic Law for the Bangsamoro Autonomous Region in Muslim Mindanao, calls for the establishment of the board.
Ala said the law mandates the BSP, together with the Bangsamoro Government, Department of Finance (DOF), and the National Commission on Muslim Filipinos to jointly promote the development of an Islamic banking and finance system under RA11439 or An Act Providing for the Regulation and Organization of Islamic Banks.
Ala said the BSP is optimistic about the future of Islamic finance in the country after establishing the regulatory framework and supporting environment to usher in a vibrant Islamic finance industry in the country.
Ala explained the regulator has also been actively involved in events aimed at attracting foreign investors or foreign Islamic banks to establish a full-fledge branch or an Islamic banking unit in the country.
“Greater prospects are anticipated for Islamic banking especially when economies adjust to the new normal. The BSP is continuously finding better ways of doing things under the new normal and working on the completion of more policy issuances which are supportive of Islamic banking,” Ala said.
Ala pointed out the BSP has provided an enabling environment through circulars 1069 and 70 to further promote the growth and development of Islamic banking and finance in the country.
Likewise, the DOF, through the Bureau of Internal Revenue (BIR), issued the revenue regulation implementing the general principle of tax neutrality provision to provide a level-playing field for Islamic banking products and services.
“With the issuance of the key regulatory frameworks on licensing, Shari’ah governance and tax neutrality, coupled with our country’s strong economic fundamentals, the Philippines has become an attractive venue for Islamic banking and finance,” Ala said.
ASA Philippines Foundation president and chief executive officer Kamrul Tarafder stressed the importance for the BSP and the Bangsamoro government to establish the National Shari’ah board soon.
“The NSB will accredit financial institutions Shari’ah advisory council through a due diligence process and shall create an accredited list of scholars who could be tapped as Shari’ah advisors,” Tarafder said.