Two senators seek approval of Islamic Banking Act

Sultan Kudarat, Maguindanao- After having filed and co-sponsored Senate Bill No. 2231, or an Act Providing for the Regulation and The Organization of Islamic Banks, two senators sought for the approval of the bill seeking the establishment of a sound legal and regulatory framework for the development of Islamic banks in the country.

Outgoing Senator Francis ‘’Chiz’’ Escudero and Senator Sherwin Gatchalian are both pushing for the approval of the said bill.

Congress has to pass the measure in the last two plenary sessions on Monday and Tuesday before adjourning sine die on June 7, according to a report by the Manila Bulletin on May 30.

Gatchalian chairs the Senate Committee on Economic Affairs while Escudero heads the Senate Committee on Banks, Financial Institutions, and Currencies.

Gatchalian, Chair of the Senate Committee on Economic Affairs said the measure would pave the way for the creation of a framework that would 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 Shari’ah or Islamic law.

He said that when approved, it would enable the country to tap into the growing pool of Islamic investors across the Middle East and Southeast Asia.

Even more important, Gatchalian stressed, the bill would complement the Bangsamoro Organic Law (BOL), which mandates the Bangsamoro Government to promote the development of an Islamic banking and finance system in the country, said the Manila Bulletin report.

“This proposed measure seeks to establish the legal and regulatory framework that will make Islamic finance in the country more viable and mainstream,” Gatchalian said as quoted by the Manila Bulletin.

 “This bill also presents an opportunity to tap international financial markets for both resource mobilization and investment diversification through Suk?k and equity markets,” he added.

In the same article by the Manila Bulletin, Gatchalian pointed out that the Islamic finance industry has expanded rapidly over the past decade, growing at 10-12 percent annually.”

Under SB 2231, the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) is tasked with authorizing the establishment of Islamic banks.