MANILA — Sen. Sherwin Gatchalian and outgoing Sen. Chiz Escudero seek to establish legal and regulatory framework that will make Islamic finance in the country.
Gatchalian, Escudero has co-sponsored Senate Bill No. 2231, or An Act Providing For The Regulation and The Organization of Islamic Banks.
Gatchalian chairs the Senate Committee on Economic Affairs, while Escudero heads the Senate Committee on Banks, Financial Institutions, and Currencies.
Senate Bill 2231 would also allow Filipino Muslim entrepreneurs, especially those involved in micro, small, and medium enterprises, to effectively access responsive banking and financial services that are compliant with the principles of the Shari’ah or Islamic law.
According to Gatchalian, it would enable the country to tap into the growing pool of Islamic investors across the Middle East and Southeast Asia in areas of resource mobilization and investment diversification through Sukūk and equity markets.
“The Islamic finance industry has expanded rapidly over the past decade, growing at 10 (percent) to 12 percent annually,” he added.
Under SB 2231, the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) is tasked with authorizing the establishment of Islamic banks.
It can also allow conventional banks to engage in Islamic banking arrangements through a designated Islamic banking unit within the bank, provided that the Islamic banking unit is separate from its conventional banking transactions.
The bill also mandates the BSP to formulate regulations for the development of Islamic banking in the country.
