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Manila Bulletin devider Business devider Banking & Finance devider Bangsamoro government to acquire AAIIBP from DBP

Bangsamoro government to acquire AAIIBP from DBP

Published Sep 9, 2024 02:02 am

The Bangsamoro Government is poised to take over the Development Bank of the Philippines' (DBP) shares in the Al-Amanah Islamic Investment Bank of the Philippines (AAIIBP), a move that aims to strengthen its economic autonomy and support development initiatives in the region.

Finance Secretary Ralph G. Recto announced the decision in a statememnt on Monday, Sept. 9, which was approved by the Intergovernmental Fiscal Policy Board (IFPB) on Sept. 3. 

As the first Islamic bank in the Philippines, Recto said AAIIBP holds a strategic position in the region's financial landscape.

He added that the transfer of ownership aligns with the Bangsamoro government's efforts to strengthen its financial institutions and promote inclusive economic growth.

The approval is still subject to the terms and conditions agreed upon by both parties, in accordance with existing laws, rules, and regulations. Under the Bangsamoro Organic Law (BOL), the IFPB, co-chaired by Recto and Bangsamoro Government Minister of Finance, Budget, and Management Ubaida C. Pacasem, will determine the Bangsamoro government's participation in AAIIBP.

AAIIBP is a Universal Bank with an authorized capital stock of P1 billion and a network of nine branches. In 2008, it became a subsidiary of DBP, owning 99.9 percent of its capital stock. 

By acquiring DBP's shares, Recto said the Bangsamoro government can save on the total minimum capitalization required to establish a Universal Bank.

The planned acquisition aligns with Section 3 of Republic Act No. 6848, which mandates AAIIBP to support socio-economic development in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM). This will be achieved through banking, financing, and investment operations, as well as agricultural, commercial, and industrial ventures based on Islamic banking principles.

AAIIBP will also serve as an official government depository bank for government-owned or controlled corporations (GOCCs) operating in the BARMM. These mandates align with the BARMM's Islamic Finance Roadmap, making the transfer of DBP's shares a strategic move.

By having significant control of AAIIBP, the BARMM government will be able to facilitate the financing of government policy priorities and projects, increase competition in the market, and introduce innovative financial services.

The DBP has supported the transfer and assured the IFPB of AAIIBP employees' capacity to operate an Islamic bank. To complete the transfer, the Bangsamoro Government and DBP are now securing necessary approvals from the Bangsamoro Transition Authority (BTA) - Parliament, the Bangko Sentral ng Pilipinas (BSP), and the Governance Commission for GOCCs (GCG).

Related Tags

Development Bank of the Philippines (DBP) Department of Finance (DOF) Al-Amanah Islamic Investment Bank of the Philippines
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