A new law in the Philippines will seek to support the growth of Islamic finance, extending financial inclusivity to the country’s minority Muslim population.
Republic Act 11439, which was signed on August 30 by President Rodrigo Duterte, mandates the Bangko Sentral ng Pilipinas (BSP) to oversee Islamic banking in the country, Rappler reported. An inter-agency working group has also been formed to develop a regulatory framework for Islamic finance.
The agencies involved include the Asian Development Bank, Bureau of the Treasury, Department of Finance, Securities and Exchange Commission, Philippine Deposit Insurance Corporation, Insurance Commission, Bureau of Internal Revenue, Financial Reporting Standards Council, and National Commission on Muslim Filipinos.
Around 10% of the Filipino population is Muslim, and most are located in the southern island group of Mindanao. The law comes after the Bangsamoro Autonomous Region, the country’s sole Muslim-majority region, was established earlier this year.
“RA 11439 will unlock the full potential of Islamic financing in fostering inclusive economic growth,” said BSP Governor Benjamin Diokno in a statement. With a well-defined regulatory framework now in place, the BSP looks forward to seeing greater participation in Islamic financing by both domestic and foreign banks.
“This is expected to widen opportunities for Muslim Filipinos, including those from the Bangsamoro Region, in accessing banking products and services. This is a great stride in our financial inclusion mandates.”