THE House committee on banks and financial intermediaries has approved the twin measures, including that of former president and Pampanga Rep. Gloria Macapagal Arroyo, that would pave the way for the expansion of Islamic banking in the country alongside with the conventional banking system to help sustain the country’s economic growth.
Arroyo and Anak Mindanao (Amin) party-list Rep. Sitti Djalia Turabin-Hataman lauded the panel’s approval of House Bill Nos. 3957 and 492 that they filed, respectively, which seek to amend the Philippine’s lone Islamic bank, the Al-Amanah Islamic Investment Bank to regulate and organize an expanded Islamic banking system in the Philippines.
Arroyo said the enactment of the measure was very timely as this would help the country’ growth inclusive and sustainable.
Turabin-Hataman also thanked Arroyo for having filed a similar measure she filed.
“We also thank Deputy Speaker Gloria Macapagal Arroyo who authored a similar bill. Having a former President and a renowned economist share the same legislation is not only an honor but further validates our advocacy. Our bills have been consolidated,” said Hataman, chairman of the House committee on Muslim affairs.
Hataman said her proposal “for the establishment of a national framework for Islamic banking in the Philippines” contained in her measure would be treated as another separate bill.
“My bill originally drafted to amend the Al-Amanah Islamic Investment Bank and expand Islamic banking in the Philippines gave birth to to separate bills, one for the establishment of a national framework for Islamic banking in the Philippines and, another, solely on the amendments of the Al Amanah Charter,” said Hataman.
Hataman added: “We agreed to the committee chair’s recommendation to separate the two ideas in one bill aimed at preventing a constitutional prohibition on having two subject matters in one legislative measure.
“This will further give the bill establishing the needed national Islamic banking framework a separate opportunity to be passed, while we will work on the Al-Amanah Charter amendments’ approval at the [House] committee on appropriations since it provides budgetary requirements for additional capitalization.”
The consolidated proposal will make the Al-Amanah independent from the Development Bank of the Philippines; be a universal bank with initial paid up capitalization of P10 billion; and, if capable, be the first in the country to fully engage in Islamic banking that can issue sukuk --the Islamic bond which is not a debt instrument but a financial certificate.
Hataman said the measure would help provide a responsive regulatory framework for Islamic banking that encourages a level playing field for a wider success in financial transactions by amending the Al- Amanah Bank Charter.
She said the measure would allow local and international investors to open Islamic Banks and existing conventional banks to open Islamic Banking units.
“Islamic Banking and Finance is a growing industry worldwide, gaining a market not just exclusive for Muslims, as it is seen as an alternative to existing conventional banking. This is particularly significant for the country as we position our self as a major player in the Asean integration,” Hataman said.
Once passed into law, the Islamic banking will become an alternative financing service to address financing requirements of the agriculture sector, she said.
The Bangko Sentral ng Pilipinas presented to the panel the status, trends, challenges and opportunities of Islamic Banking in the country and its global implications, emphasizing the need for a more dynamic and responsive law that will set up national regulatory frameworks on Islamic Banking.