Islamic banks and investors from the Middle East have been urged to expand their operations into the Philippines which is currently seeing a growing halal industry.
Speaking at the webinar ‘Islamic Finance as Vehicle to Economic Recovery’, Philippine Central Bank (BSP) Managing Director Atty Arifa Ala (pictured) highlighted the potential of the Islamic finance industry in her country which has also recently implemented a new law on Islamic banking. She went on to invite foreign Islamic banks and investors, especially from the Middle East to expand their operations in the Philippines to cater to a growing number of Muslim and non-Muslim Filipinos who are consuming halal products and services.
The virtual conference which was attended by representatives from the Qatar Free Zones Authority (QFZA) and several companies based in the Middle East and South Asia, was recently organised by the Philippine Economic Zone Authority (PEZA) in cooperation with the BSP, Institute for Autonomy and Governance (IAG) and PEZA’s Investment Promotions Partners in the Middle East.
During the event, Ala highlighted the new law Republic Act No.11439 or ‘An Act Providing for the Regulation and Organization of Islamic Banks’ and discussed the guidelines for establishment of Islamic banks and Islamic banking units in the Philippines.
She reiterated that the new law was created as an expanded Islamic banking system that involves tax neutrality, stronger risk management, ethical financial stability, further establishment of Islamic banks and other Islamic financial activities, as well as the imposition of principles-based rules and standards in addition to strict Shariah law compliance.
Under the Shariah Governance Framework (SGF), all Islamic banks and Islamic banking units in the Philippines must have an effective Board of Directors to provide management oversight over Shariah compliance, and independent Sharia Advisory Council and an independent effective internal auditor.
Under the new law, the BSP will also create an enabling environment that will allow Islamic banks to operate alongside the conventional banks under the same regulatory and supervisory approach, taking into consideration the unique features of the Islamic banking operations.
The goal is to provide a coherent, consistent, and comprehensive set of regulations and standards to encourage wider investor and consumer participation on Islamic banking and finance sector.
Also speaking during the event, PEZA Director General Charito B. Plaza added that the new law will maximise the full potential of Islamic financing in promoting inclusive economic growth in the Philippines. “Islamic banking will surely help PEZA achieve its vision in promoting economic growth in the countryside,” she added.
Other panelists and reactors who also spoke during the event were Philippine Business Counicl in Qatar Chairman and Managing Director Greg Loayon and Philippine Commercial Attache for Middle East & Africa Charmaine Yalong among others.
Doha-based PEZA Investment Promotions Partner Joseph Timothy Rivera said that more than 100 participants mostly from GCC countries attended the forum. He added that a second similar forum, which will involve banks around the world, would soon follow as he reiterated the staunch commitment of PEZA Investment Promotions Partners in the Middle East in fostering economic business relations between the Philippines and the Arab region despite the ongoing pandemic.—The Peninsula