CAGAYAN DE ORO CITY (PIA) — Bangko Sentral ng Pilipinas (BSP) Assistant Governor Arifa A. Ala highlighted the national government’s ongoing commitment to the development of Islamic banking and finance in the country, emphasizing the importance of regulatory frameworks and tax neutrality in encouraging the growth of this sector.
Speaking at the 12th ASEAN International Conference on Islamic Finance, Ala shared the BSP’s efforts to create an enabling environment for Islamic banks through the issuance of the Shariah Governance Framework and other prudential regulatory frameworks for banking institutions.
“We want to join discussions on Islamic banking finance as it provides a good opportunity to share insights on how we can further promote and develop this sector,” she said.
Ala stressed the critical importance of tax neutrality in developing Islamic finance. She explained that without a level playing field in tax treatment, Islamic banking products would face higher tax implications, making them more expensive for customers.
“We were fortunate that the Department of Finance and the Bureau of Internal Revenue were able to quickly issue the regulations, which in essence provide that Islamic banking products should not be taxed more heavily than conventional counterparts,” she added.
Another key milestone, Ala noted, was the establishment of the Shariah Supervisory Board and the introduction of implementing regulations for opening Islamic banking windows. These regulations have played a key role in attracting institutions like CARD Bank and Maybank, which have recently launched Islamic banking windows.
The BSP’s efforts are part of the initiatives to create a comprehensive Islamic banking ecosystem that includes Islamic banking, takaful (Islamic insurance), and the Islamic capital market.
Ala said the BSP is also working on delivering Shariah-compliant facilities, such as enabling Islamic banking windows to place their funds in the central bank, a move that will further solidify the government’s commitment to the growth of Islamic finance.
Looking ahead, the BSP is set to host the launch of the Islamic Finance Report, commissioned by the Asian Development Bank (ADB) this November. Ala said they invited CEOs of banks and other regulatory bodies to the event, aiming to accelerate the adoption of Islamic banking practices in the country. (APB/PIA-10 Lanao del Sur)
