Philippines pushes Islamic finance

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PHILIPPINES-MUSLIM STUDENTSThe Philippines’ central bank has begun pushing several initiatives to develop the Islamic finance sector and encourage financial inclusion of the Muslim minority.

“There is renewed interest in this and the key drivers are the peace initiative in Mindanao as well as broad initiative of the central bank to create a more inclusive financial system,” Bangko Sentral ng Pilipinas deputy governor Nestor Espenilla said.

Mindanao island accounts for around one-quarter of the country’s 97 million population and one-fifth of its economy. But decades of neglect, corruption and violence have impoverished parts of the island, despite being rich in natural resources which the government wants to develop.

“We have a significant Muslim population and they are economically active and if you want to create an inclusive financial system then you should also have financial products that are geared to that particular customer base,” the governor added.

The central bank has asked congress to have its charter amended, a move that would allow it to provide Shariah-compliant instruments to Islamic banks, in particular interbank lending products.

The central bank also hopes an Islamic banking law can help attract more market participants as there is only one Islamic bank, Al Amanah, which has struggled financially and is being privatised by the Development Bank of the Philippines.

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Reading Time: 1 minute

The Philippines’ central bank has begun pushing several initiatives to develop the Islamic finance sector and encourage financial inclusion of the Muslim minority.

Reading Time: 1 minute

PHILIPPINES-MUSLIM STUDENTSThe Philippines’ central bank has begun pushing several initiatives to develop the Islamic finance sector and encourage financial inclusion of the Muslim minority.

“There is renewed interest in this and the key drivers are the peace initiative in Mindanao as well as broad initiative of the central bank to create a more inclusive financial system,” Bangko Sentral ng Pilipinas deputy governor Nestor Espenilla said.

Mindanao island accounts for around one-quarter of the country’s 97 million population and one-fifth of its economy. But decades of neglect, corruption and violence have impoverished parts of the island, despite being rich in natural resources which the government wants to develop.

“We have a significant Muslim population and they are economically active and if you want to create an inclusive financial system then you should also have financial products that are geared to that particular customer base,” the governor added.

The central bank has asked congress to have its charter amended, a move that would allow it to provide Shariah-compliant instruments to Islamic banks, in particular interbank lending products.

The central bank also hopes an Islamic banking law can help attract more market participants as there is only one Islamic bank, Al Amanah, which has struggled financially and is being privatised by the Development Bank of the Philippines.

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