BSP pushes for local Sukuk market to boost funding
The Bangko Sentral ng Pilipinas (BSP) is advancing its push for a domestic Sukuk market, hosting a high-level forum on July 15 to promote Islamic bonds as a viable and inclusive financial instrument in the Philippines. The “Stakeholders’ Forum on Domestic Sukuk Issuance,” held at the BSP Head Office in Manila, was organized by the

By Staff Writer
The Bangko Sentral ng Pilipinas (BSP) is advancing its push for a domestic Sukuk market, hosting a high-level forum on July 15 to promote Islamic bonds as a viable and inclusive financial instrument in the Philippines.
The “Stakeholders’ Forum on Domestic Sukuk Issuance,” held at the BSP Head Office in Manila, was organized by the Islamic Finance Coordination Forum (IFCF), a BSP-led interagency platform dedicated to developing Islamic finance in the country.
The forum aimed to increase awareness and support for Sukuk issuance, particularly to help Muslim-owned businesses gain greater access to capital through Shari’ah-compliant financing.
“The BSP remains firmly committed to advancing initiatives that promote Islamic banking and finance as part of its broader financial inclusion agenda,” said BSP Monetary Board Member Rosalia V. De Leon.
De Leon noted rising interest in Sukuk following the Philippine government’s USD 1 billion maiden Sukuk bond issuance in December 2023, which was warmly received by global Islamic investors.
More than 100 participants from government and private institutions attended the forum, including the Securities and Exchange Commission (SEC), the Bureau of Internal Revenue (BIR), the Insurance Commission (IC), and international experts from the International Islamic Liquidity Management Corporation (IILM).
IILM CEO Mohamad Safri Sahul Hamid joined the panel discussions, sharing insights from IILM’s experience with short-term Sukuk instruments used by member central banks and financial institutions across various markets.
Key topics discussed included the proposed legal and regulatory frameworks for domestic Sukuk issuance, Shari’ah compliance, BIR’s Sukuk memorandum circular, draft SEC guidelines, and the IC’s rules on Takaful Window Operations.
Sukuk are Shari’ah-compliant certificates representing undivided ownership in tangible assets or investment projects, offering an alternative to interest-bearing bonds prohibited in Islamic finance.
BSP Assistant Governor and IFCF Chairperson Arifa A. Ala said Sukuk instruments will play a key role in building a diversified and inclusive financial system.
“Sukuk issuances will spur the further growth of a diversified financial market in the Philippines,” Ala said.
Monetary Board Member Romeo L. Bernardo emphasized that cross-agency cooperation and regulatory innovation are critical to shaping an Islamic finance ecosystem that meets both prudential and ethical standards.
“A key takeaway from the forum is the need for stronger collaboration, openness to prudential innovation, and sustained commitment to building a dynamic and inclusive Islamic finance ecosystem,” Bernardo said.
The IFCF was formed from the original Interagency Working Group on Islamic Banking and Finance, which helped draft the law enacted in 2019 that formalized Islamic banking in the country.
It includes member institutions such as the BSP, Department of Trade and Industry, BIR, SEC, IC, the Bangsamoro Government, and the Asian Development Bank.
The development of a domestic Sukuk market is seen as a strategic move to attract capital from both Muslim and non-Muslim investors, diversify government funding sources, and empower businesses seeking non-interest-based financing.
The forum also highlighted the importance of aligning financial regulations with international Islamic finance standards while remaining inclusive of the Philippine market context.
As part of its broader financial inclusion strategy, the BSP is actively encouraging private sector participation in Islamic finance products, including banking, capital markets, and Takaful (Islamic insurance).
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