The House of Representatives led by Speaker Gloria Macapagal Arroyo has transmitted to Malacañang for President Rodrigo Duterte’s signature the proposed law creating a sound legal and regulatory framework for Islamic banks in the country.
Reelected Anak Mindanao Party-list Rep. Amihilda Sangcopan said the measure will attract more investments in the country’s banking sector and complement the newly created Bangsamoro Organic Law.
The House submitted the measure to the Palace as the 17th Congress ended Tuesday.
Sangcopan, a member for the House majority bloc of the House committee on Mindanao Affairs, said she hopes the measure will be signed by the President. The bill refers to an Islamic bank as a business whose objectives and operations do not involve interest (riba), which is prohibited by the Shari’ah and which conducts its business transactions in accordance to Shari’ah principles.
“This is a good news as we celebrate Eid’l Fitr tomorrow (Wednesday). This will help Filipino Muslim businessmen to have access to banking and financial services that are attuned to the principles of Shari’ah or Islamic law. With the imminent passage of this measure into law, Laos will be the remaining country in the ASEAN region which has no Islamic banking system,” said Sangcopan who succeeded former AMIN Rep. Sitti Djalia Turabin-Hataman, the principle author of House Bill (HB) 8281 or “An Act Providing for the Regulation and Organization of Islamic Banks.”
Sangcopan said the House concurred the Senate’s adoption of its version and will not require a bicameral conference.
Speaker Gloria Macapagal-Arroyo is also the principal author of the measure that seeks to regulate and organize Islamic banks by mandating the Bangko Sentral ng Pilipinas (BSP) to supervise, license and regulate the operations of Islamic banks.
The bill provides that the Monetary Board may authorize the establishment of Islamic banks.
It may also authorize conventional banks to engage in Islamic banking arrangements, including structures and transactions, through a designated Islamic banking unit within the bank provided that the Islamic banking unit is separate from its conventional banking transactions.
The Monetary Board may also authorize a foreign Islamic bank to establish banking operations in the Philippines under any of the modes of entry provided under Republic Act 7721 or “An Act Liberalizing the Entry and Scope of Operations of Foreign Banks in the Philippines and for Other Purposes”, as amended.
Islamic banks shall be licensed and regulated in the same manner as a universal bank and the BSP shall also issue the necessary rules and regulations on Islamic banking.
Moreover, it shall be the responsibility of an Islamic bank to ensure its compliance with Shari’ah principles.
It shall constitute its Shari’ah advisory council composed of persons who are qualified in the Shari’ah or who have knowledge or experience in Shari’ah banking, finance, law or such other related disciplines.
Islamic banks may also perform the following services: 1) accept saving accounts for safekeeping or custody with no participation in profit and loss except unless otherwise authorized by the account holders to be invested; 2) act as correspondent of banks and institutions to handle remittances or any fund transfers; 3) accept drafts and issue letters of credit or letters of guarantee, negotiate notes and bills of exchange and other evidence of indebtedness; 4) provide financing with or without collateral by way of leasing, sale and leaseback, cost-plus profit sales arrangements, and other Shari’ah compliant financing contracts and structures; and 5) other banking services as may be authorized by the Monetary Board.
Islamic banks created under the Act shall comply and conform with pertinent laws, rules, and regulations applicable to private corporation engaged in banking, such as the Corporation Code of the Philippines, and the requirements of the respective regulatory agencies.
Turabin-Hataman, the incoming mayor of Isabela City in Basilan, thanked the senators led by Sen. Francis Escudero for sponsoring the measure and adopting the House version without amendments, adding this will support the mandate of the Bangsamoro Government to promote and develop the Islamic banking and financial system in the country.
“I thank my colleagues for the passage of this measure. Congratulations everyone! No words are enough. Prayers are all I can utter,” said Turabin-Hataman who stepped down from her post last October 2017 after filing the measure to return to community service.
“The passage of the measure will help encourage the influx of more investments from the Islamic investors in the Middle East and other parts of the world,” said Turabin-Hataman.
“We would like to invite everyone, Muslim and non-Muslims, to take a closer look at Islamic banking as an alternative-financing modality, instrument and facility. This is very good for the economy, considering the enormous potentials of the halal industry. As we enter the ASEAN integration, we need to attain financial inclusion for the Muslims in the country,” said Turabin-Hataman.