Islamic banking seen to boost financial inclusion in PH

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) on Monday said the Islamic Banking Bill, currently pending for President Rodrigo Duterte’s signature, would provide greater financial inclusion in the country.

“There are still segments of the population that is outside the conventional banking framework so implementing this Islamic Banking law to include into the mainstream banking framework will definitely provide for greater financial inclusion among the population,” BSP Deputy Governor Diwa Guinigundo told reporters.

Guinigundo also pointed out that Islamic Banking will help boost foreign direct investment inflows.

“I think even at the beginning of the Duterte administration, there were already queries coming from some jurisdictions whose population is mostly Islamic and therefore to the extent that some countries are interested in bringing their business here through Islamic means,” he explained.

The bill refers to the establishment of the Islamic bank, which operations will not involve interest – prohibited under the Shari’ah law, and will conduct its business transactions in accordance to Shari’ah principles.

Shari’ah refers to “the practical divine law deduced from its legitimate sources: the Qur’an, Sunnah, consensus of Muslim scholars, analogical deduction, and other approved sources of Islamic law.”

The proposed measure also seeks to regulate and organize the Islamic banks by mandating the Central Bank to supervise, license, and regulate its operations. (Editor: Katherine G. Adraneda)