BSP to promote BARMM Islamic banking and finance
Economic News • 18:30 PM Thu Feb 18, 2021
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RBOI-BARMM news release
Image from Philippine News Agency
COTABATO CITY - The Bangko Sentral ng Pilipinas (BSP) seeks to promote BARMM as an investment destination for Islamic banking and finance.
This is according to the regional Bangsamoro Board of Investments (RBOI), which received a letter from BSP dated February 17, 2021 in response to the RBOI’s initiative to provide fiscal and non-fiscal incentives for investment operations under Republic Act No. 11439 entitled “An Act Providing for the Regulation and Organization of Islamic Banks.”
The BSP wrote the RBOI as follows:
“The foregoing initiatives of the BARMM are laudable and can greatly assist in the development of Islamic banking in the Philippines. These initiatives are timely as they complement Revenue Regulation No. 17-2020 issued by the Bureau of internal Revenue (BIR) on 7 August 2020. The said Revenue Regulation, which implements the Tax Neutrality provision under R.A. No. 11439, essentially provides that Islamic banking transaction are taxed no more heavily (and no more lightly) than conventional banking transactions.
"The issuance of the key regulatory frameworks on Licensing and Shari’ah Governance’ by the BSP and the aforesaid Revenue Regulation by the BIR coupled with the foregoing incentives of the BARMM for Islamic banks, have made the Philippines, and BARMM in particular, an even more attractive venue for Islamic banking. Rest assured that we will include the foregoing BARMM’s incentives for Islamic banks in our conversations with potential investors relative to Islamic banking.
We express our continued support to the initiatives of BARMM and the Regional Board of Investments in promoting Islamic banking and finance in the Philippines.”
Lawyer Ishak Mastura, RBOI chairman, said the natural clientele and base of operations of Islamic banking and finance in the Philippines is the BARMM considering that it is the only Muslim-majority region in the country with about four million people bigger than even the population of neighboring Sabah in Malaysia, which is a majority Muslim country.
“With the assurance of the BSP that it will promote Islamic banking and finance investments in the region, we are in a good position to attract the first Islamic banking and finance investments in the country, or at the very least Islamic banking and finance services will reach the potential Muslim and even non-Muslim clients in the region,” Mastura said.