MinDA to ask BSP to craft Islamic finance policy

DAVAO CITY, Philippines — The agency overseeing development in Mindanao plans to expand Islamic banking through the Bangko Sentral ng Pilipinas (BSP), even without legislation from Congress.

Romeo Montenegro, executive director assistant secretary at Mindanao Development Authority (MinDA), said their policy team has teamed up with consultants to see what existing polices are available in the banking system to “enable” Islamic finance.

“We’re looking of a possible policy instrument that can be issued by Cental Bank that will allow for Islamic finance to be made available and practiced especially in Mindanao,” he told Rappler in an interview on Wednesday, January 17.

The country’s lone bank allowed to do Islamic banking is the Amanah Islamic Investment Bank of the Philippines (Amanah), a subsidiary of the state-owned Development Bank of the Philippines (DBP).

Amanah currently awaits for Congress to approve its new charter, which in turn would raise the bank’s authorized capital stock to P10 billion. (READ: Sriwijaya Air revives Davao-Manado route)

P2 billion capital

Back in October 2017, Amanah chairman and chief executive officer Alex Bangcola said it would need at least P2 billion worth of capital so it could return in the black by 2018.

He added that with Middle East countries, like Qatar, wanting to invest in the Philippines, especially in Mindanao, Islamic banking would be needed –  MinDA on Wednesday agreed.

“Even those who want to invest in Marawi are looking for Islamic banks to download their funds,” said Montenegro, referring to Middle East countries.

MinDA’s level of talks with the BSP has yet to reach the governor as they are yet to prepare the agency’s final position on the matter.

“The timeline of that is of course as immediate as it can be pursued, given the oppotunities we now have in Mindanao,” he said.

The MinDA official said there are two fronts in advancing Islamic banking in the Philippines: one is the effort to stengthen Amanah, while the other being the introduction of Islamic microfinance. — Rappler.com