Philippines encourages Islamic banking

Will craft regulations to spur its growth.

The Bangko Sentral ng Pilipinas, the Philippine central bank, will issue regulations and amend its charter to speed-up investments and support economic development in Mindanao by pushing Islamic banking.

“Today, there’s only one operating (Islamic) bank, Al-Amanah (Islamic Investment Bank of the Philippines) . . . so this will pave the facility for developing an Islamic banking system and not only individual entities,” said BSP Deputy Governor Nestor Espenilla Jr.

The BSP aims to provide financial facilities for Islamic banks. These banks generally offer the same facilities as conventional ones but Islamic banking does away with interest or fees for loans as it is prohibited under the principles of Sharia.

Supporting the Islamic banking industry may be crucial to the economic development of Mindanao as Muslims tend to avoid banks or products non-compliant with their religious law.