The Department of Finance (DOF) has urged Saudi business leaders to consider Islamic banking and finance initiatives in the Philippines, given its favorable regulatory environment.

During a roundtable meeting with potential investors in Riyadh, Saudi Arabia, Finance Secretary Benjamin E. Diokno emphasized the promising prospects of Islamic banking and financing in the country, given its eight percent Muslim population.

Diokno further cited the recent approval of legal reforms pertaining to Islamic banking and finance will serve as a strong foundation for the growth and development of a thriving Islamic finance ecosystem.

“This is complemented by a reasonable flexibility in the design and delivery of key policies,” Diokno said.

“The Philippine Central Bank has [also] adopted a single regulatory framework for both Islamic and conventional banks, enabling them to thrive on a level playing field,” he added.

The Bangko Sentral ng Pilipinas (BSP) is currently promoting Islamic banking and finance to foster financial inclusion for all Filipinos.

By implementing consistent regulations for conventional and Islamic banks, along with specific guidelines for Islamic banking, the BSP wants to ensure equal opportunities for Islamic banks to cater to the needs of Muslims and non-Muslims alike.

“This is evident in its regulations on licensing of Islamic banks and banking units, liberalized modes of entry for foreign banks, and relaxation of minimum capitalization requirements for Islamic banking units,” Diokno said.

“Prudential incentives are also offered to encourage the entry of new players,” the finance chief further said.

Furthermore, Diokno said the relevant government authorities have issued policies on tax neutrality and takaful (Islamic insurance) to provide support for the development of the Islamic banking and finance sector.

“At the core of our diverse investment opportunities in Islamic finance is a favorable regulatory environment, reinforced by an independent Shari’ah Supervisory Board,” he said.

“We invite potential investors from the Middle East to explore our diverse investment opportunities in Islamic finance to serve the Philippines’ large untapped Islamic consumer market,” Diokno concluded.