Senate OKs bill allowing more Islamic banks in PH

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MANILA, Philippines — The Senate has approved on third and final reading the bill which seeks to expand the Islamic banking system in the country.

With 20 affirmative votes, no negative and no abstention votes, the senators approved on Monday House Bill No. 8281, entitled “An Act Providing for the Regulation and Organization of Islamic Banks.”

Under the measure, a legal and regulatory framework would be put in place for the development of Islamic banks under the supervision of the Bangko Sentral ng Pilipinas (BSP) and regulation of the Monetary Board (MB).

The BSP is also tasked to issue the implementing rules and regulations on Islamic banking while the MB is given the ability to regulate the number of participants in the Islamic banking system, while considering requirements of the economy.

Islamic banks would also be able to provide services like conventional banks such as acceptance or creation current, savings, and investment accounts; acceptance of foreign currency deposits; and act as correspondent of banks and institutions to handle remittances or any fund transfers, among others.

Senator Francis “Chiz” Escudero, chair of the Committee on Banks, Financial Institutions and Currencies and sponsor of the bill, underscored that the bill would “broaden the participation of Muslim Filipinos in nation-building.”

“Under this proposed measure, we will provide Islamic banking and finance a policy infrastructure that shall enable Islamic banks to organize and thereafter provide all Filipinos that economic opportunity for inclusive growth,” Escudero said.

“Such infrastructure shall provide regulations of the organization, capitalization requirements, powers and supervision of Islamic banks. The Philippines is seen as a top source of growth in Islamic finance and now is the most opportune time that we tap on Islamic banking and finance to broaden the participation of Muslim Filipinos in nation-building,” he added.

Currently, the Al-Amanah Islamic Investment Bank of the Philippines is the first and the only Islamic bank operating in the country.