BSP Showcases PH Islamic Finance Reforms at Abu Dhabi Finance Week

ABU DHABI, United Arab Emirates— The Bangko Sentral ng Pilipinas (BSP) highlighted the Philippines’ progress in Islamic finance to global financial leaders during the Abu Dhabi Finance Week (ADFW) held from Dec. 9-12, 2024.

The ADFW featured emerging trends, developments, and success stories in the global Islamic finance sector.

Assistant Governor Arifa A. Ala, the BSP’s lead advocate for Islamic banking and finance, represented the central bank at the event. She shared updates on the BSP’s initiatives to develop the Islamic finance ecosystem, including the licensing of two additional Islamic banking players.

“The enactment of the Islamic Banking Law in 2019 marked a major milestone, opening the Philippine financial system to new Islamic banking players. The BSP has actively led the Islamic Finance Coordination Forum, bringing together key regulatory agencies and institutions to create a viable Islamic finance ecosystem that works alongside the conventional banking system,” Ala said.

She emphasized the BSP’s proactive role in implementing regulatory reforms and licensing new players, which has fueled investor interest in the sector.

Ala also outlined key government initiatives supporting Islamic finance, including:

• Tax reforms introduced by the Bureau of Internal Revenue.
• Takaful guidelines issued by the Insurance Commission, leading to the licensing of the country’s first takaful operators.
• Successful issuance of the Philippines’ first sovereign sukuk in December 2023.
• Establishment of the Shari’ah Supervisory Board.

“These initiatives have expanded the range of Islamic financial products and services available to our population. They also demonstrate the readiness of our regulatory framework to support diverse market participants,” she said.

She cited an Asian Development Bank (ADB) report, “Unlocking the Potential of Islamic Finance in the Philippines: A Market Analysis and Landscape Report,” which highlights the country’s strong growth potential in Islamic finance and the increasing demand for it.

Ala concluded by emphasizing the need for continued public awareness and capacity-building initiatives.

“Islamic banking and finance can be a powerful tool for promoting inclusive and sustainable economic growth,” she said.