Traders get behind move to expand Islamic banking in the Philippines

COTABATO CITY, Philippines - Local traders expressed support for House Bill 5989, which aims to amend the Amanah Bank Charter to institutionalize an expanded Islamic banking system in the country.

The bill, now in the House Committee on Banks and Financial Intermediaries, was authored by Rep. Sitti Djalia Turabin-Hataman of the Anak Mindanao (AMIN) Partylist.

“We support all efforts meant to strengthen the Islamic banking system in the country. An Islamic banking system is `pro-poor' and is leaned to the empowerment of small and medium entrepreneurs,” said Sandra Siang, chair of the Kutawato Muslim Business Chamber.

Siang leads a bloc of Muslim traders operating in Central Mindanao, some of them engaged in construction supply and grains buy-and-sell business in underdeveloped towns.

The committee handling the bill, chaired by Batangas 3rd District Rep. Sonny Collantes, has started deliberating on the measure.

Experts from the Bangko Sentral ng Pilipinas had briefed members of the committee on the intricacies and challenges nsurrounding Islamic banking in the city.

Small traders in Maguindanao are in favor of HB 5989 too.

“Islamic banking system only has `service charges,'  no high interest rates on loan repayments and has very humane policies on slow repayment with very acceptable reasons,” said Badrudin Dicaya, a grains merchant.

Dicaya had studied Islamic theology while an overseas worker in Al-Taif, Saudi Arabia in the early 1990s.

Usury and money-lending activities with exorbitant interest rates are taboo in Islam.

Pete Marquez, a businessman based in Cotabato City, who is a senior member of different business clubs in Central Mindanao, said it is appropriate now to expand the operations of the Amanah Bank in the five provinces of the Autonomous Region in Muslim Mindanao to complement the socio-economic agenda of the Southern peace process.

 “We ought to thank the AMIN partylist for this initiative,” Marquez said.

A senior member of the 24-seat ARMM Regional Assembly, Maguindanao 2nd District Assemblyman Khadafeh Mangudadatu, said he looks forward to the setting up of a more comprehensive Islamic banking system in the autonomous region.

"I am for an Islamic banking system that is free from 'riba' which is forbidden in Islam and is not good for the poor people that need capital inputs for small businesses," Mangudadatu said.

The term riba is Arabic for prohibited high-interest money lending profit scheme.

Mangudadatu said he and some members of the ARMM law-making body had, in fact, planned to pass an Islamic banking edict, but balked after learning that AMIN's representative, Congresswoman Hataman, had sponsored HB 5989.

"We will just have to wait now for the enactment into law of that AMIN-initiated bill, whose approval by Congress we long for," Mangudadatu said. 

Mangudadatu said he is certain Hataman has consulted Islamic theologians on the religious intricacies and ramifications of the proposed law.

Hataman said Islamic banking and finance is now a worldwide industry.

Mangudadatu said there are even Islamic banks operating in some European cities now.

“It is a growing industry worldwide, gaining a market not just exclusively for Muslims, as it is seen as an alternative to existing conventional banking,” Hataman said.

She said the setting up of an internationally viable Islamic banking system in the country is essential in strengthening the stature of the Philippines as a major player in the Association of Southeast Asian Nations.

The integration thrust is a transnational socio-economic partnership covering Asian states, including those in "BIMP," a geographical commerce and trade locator, which groups together Brunei, Indonesia, Malaysia and the Philippines.

The four countries have bonded as the BIMP East Asian Growth Area in the late 1990s yet.