Islamic Banking Law to boost Mindanao economy — Fortun

Published January 1, 2020, 12:00 AM

by manilabulletin_admin

By Ellson Quismorio 

Agusan del Norte 1st district Rep. Lawrence Fortun envisions a “finance surge” in Mindanao this 2020 or when the new Islamic Banking Law is fully implemented.

“[This] 2020 will mark the start of a surge in finance and banking in Mindanao with Bangko Sentral ng Pilipinas’s (BSP) approval of initial regulations implementing the new Islamic Banking Law or Republic Act (RA) 11439,” said Fortun, a member of the House Minority Bloc.

“With the new law and rules, the Islamic banks can soon reach out to the millions of ‘unbanked’ Filipinos. Most of the unbanked towns are in Mindanao,” added the lawmaker, citing BSP data.

Fortun, a member of the House Committee on Banks and Financial Intermediaries said, “the BSP was swift and wise to approve the Islamic banking rules before yearend.”

President Rodrigo Duterte signed RA 11439 into law on August 22, 2019.

According to BSP Governor Ben Diokno, the law “will unlock the full potential of Islamic financing in fostering inclusive economic growth.”

“This is expected to widen opportunities for Muslim Filipinos, including those from the Bangsamoro Region, in accessing banking products and services. This is a great stride in our financial inclusion mandates,” Diokno, a former Department of Budget and Management (DBM) secretary, said.

Under RA 11439, Islamic banking refers to a banking business with objectives and operations that do not involve interest as prohibited by the Islamic or Shari’ah Law and which conducts its business in accordance with the principles of the Shari’ah.

“For purposes of this Act, the Al-Amanah Islamic Investment Bank of the Philippines, other Islamic banks, designated Islamic banking units of conventional banks, and foreign banks that are authorized to conduct business in accordance with the principles of Shari’ah shall be referred to collectively as ‘Islamic banks’ or ‘Islamic banking system,'” the law stated.

Fortun described the new Islamic Banking Law as “one significant legislative accomplishment for inclusive economy” during the Duterte administration.

“Foreign and local investors eyeing new investments in Islamic banking and finance now have the go-signal to move forward with their plans for Mindanao and cities where there are concentrations of Filipino Muslims and Muslim expatriates,” he noted.

“Due credit goes to the late BSP Governor Nestro Espenilla Jr. for initiating the measure and lobbying for its passage by the 17th Congress,” Fortun said.