The Bangko Sentral ng Pilipinas (BSP) on Monday underscored the country’s promising prospects as a key destination for Islamic finance investment, citing a growing regulatory framework and market readiness during the recent launch of an Asian Development Bank (ADB) report.
BSP Governor Eli M. Remolona, Jr. emphasized the central bank’s role in fostering an enabling environment for Islamic finance, backed by reforms that support both Islamic and conventional banks. He highlighted recent milestones, including the issuance of two Islamic banking unit (IBU) licenses to a rural bank in June 2023 and a commercial bank in July 2024. These new institutions represent a significant expansion in the country’s Islamic banking landscape.
“With the support of the ADB, we are creating a regulatory framework that will accelerate the growth of the Islamic finance sector,” said Remolona, speaking at the event attended by key government and financial sector stakeholders.
BSP Deputy Governor Chuchi G. Fonacier called on participants to leverage the opportunities provided by the Islamic finance sector, aiming to make it a cornerstone of a more inclusive financial system. ADB’s report, titled Unlocking the Potential of Islamic Finance in the Philippines, identifies key drivers for growth, including the nation’s expanding economy, financial inclusion goals, and significant financing gaps among micro, small, and medium enterprises (MSMEs).
The report also highlights a strong interest from Filipino investors and businesses in Islamic financial products. “We invite you to explore the compelling investment opportunities presented by this report,” said ADB Co-Team Leader Asghar Ali Sayed, pointing out the potential for ethical, socially responsible financial solutions.
The event also underscored the importance of recent regulatory reforms, such as tax regulations that ensure neutrality between Islamic and conventional finance, and the establishment of the Islamic Finance Coordination Forum and the Shari’ah Supervisory Board in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM), which oversee compliance and coordination in the sector.
In closing, BSP assistant governor Arifa A. Ala expressed optimism that the sector’s growth would foster a more inclusive and prosperous future for the Philippines.
The BSP and ADB also presented the report’s findings at Islamic finance roadshows in Malaysia and Indonesia earlier this year, positioning the Philippines as a strong player in the regional Islamic finance market.
The launch event was attended by senior diplomats, government officials, and key players in the financial and private sectors.
