By Antonio Colina IV
DAVAO CITY – Mindanao lawmakers must pursue the proposed framework on Islamic banking in the Philippines for the development of the Bangsamoro territory, a top executive of the state-owned Development Bank of the Philippines (DBP) said.
“We have not heard much about the initiatives and probably since we are now doing the plebiscite on the BOL we will eventually have the BARMM, this will be a good time to push those initiatives forward, and create that law, “ DBP chief executive officer and president Cecilia Borromeo said.
She said the proposed legislation will provide the legal framework for Islamic banking in the country.
She said the DBP-owned Al Amanah Islamic Bank, the only Islamic bank in the Philippines, can help by establishing branches in the Bangsamoro Autonomous Region in Muslim Mindanao to make Islamic financing more accessible.
“If the BARMM will need an Islamic bank, then with the clearance the Department of Finance, the entire Board of DBP is willing to give Al Amanah Bank as its contribution to the Bangsamoro,” she said, noting that the framework for Islamic banking must be approved to optimize the opportunities that can be offered by the Al Amanah Islamic Bank.
She said there are global Islamic financial institutions interested in Al Amanah Bank but they are waiting for a general framework.
He said there are current initiatives in Congress to create the measure in coordination with the Bangko Sentral ng Pilipinas (BSP).
Borromeo said an Islamic banking framework is necessary because Islamic banks offer no interest rate and the arrangement between lender and borrower will be under the Shariah law.
“There are unique features of Islamic banking, very different form the regular banking that we know like charging interest rate – one basic difference – it’s not allowed under the Islamic banking, so the regulations that will govern the transactions under the purely Islamic banking would be very different from the regular banking that we know,” she said.
DBP Director Maria Lourdes Arcenas said they want to provide a mechanism for Islamic financing to bring development that reduces vulnerabilities of the people in the Bangsamoro areas, among them financial, health, and education.
“Any project of development must reduce vulnerabilities especially in conflict areas. For us now, especially in these kinds of situation, we would like to see development reducing vulnerabilities in these areas, financial vulnerability, health, education,” she said.
She the DBP granted P5 million in regular loan to Mothers for Peace, but the group lends it to the Meranaw women from Marawi who are holed up in Iligan City and Cagayan de Oro the “Shariah way” with no interest.