THE Bangko Sentral ng Pilipinas (BSP) is championing Islamic banking and finance as a way to open the Philippine financial system to more players, according to Atty. Arifa Ala, the central bank’s lead on the initiative.
Speaking at the 12th Asean International Conference on Islamic Finance 2024, held November 18-19 in Cagayan de Oro and hosted by Marawi State University-Iligan, Ala called the forum a crucial step in raising awareness and understanding of Islamic banking.
The event featured dignitaries from Malaysia and the Bangsamoro Autonomous Region in Muslim Mindanao.
“In the Philippines, awareness and understanding of Islamic finance remain low,” Ala said, adding that the forum helped stakeholders grasp how Islamic banking differs from conventional banking.
The Philippines had just one Islamic bank since 1973, but the passage of an Islamic banking law in 2019 enabled the BSP and other agencies to issue regulations that welcomed new players into the market.
Recent licenses have been granted to Card Bank Inc. and Maybank Philippines to offer Islamic banking services.
Professor Emeritus Dato Mohammad Azmi Omar, President of the International Islamic Council, stressed the need for public literacy on Islamic banking.
He shared that in Malaysia, people of all religions—Christians, Buddhists, and Hindus—embrace Islamic banking for its ethical principles.
“Islamic banking will not fund activities like gambling or alcohol production that harm the community and environment,” Omar explained, highlighting the system’s adherence to Shariah principles.
Omar also detailed the Islamic “Takaful” system, a form of insurance that fosters mutual support during crises and disasters.
He pointed out that the ethical standards of justice, fairness, and mercy underlying Islamic banking benefit people of all faiths.
With its push for Islamic banking, the BSP aims to transform the financial landscape by promoting inclusivity and ethical practices.
