RECOGNIZING the huge economic opportunities of Islamic financing, the Peace and Equity Foundation (PEF) in partnership with Al Qalam Institute, Cordaid and World Bank (WB) Philippines, is gearing up for drafting of the 21-year roadmap to attain compliance to Sharia'h-based financing industry.
Islamic Financing is touted as a growing "$2 trillion" global industry,
The roadmap will be patterned from the Southeast Asian countries like Indonesia, one of the leading countries in adopting Islamic Finance in the global scale. It will be divided into three stages with seven years each of realization.
Ricardo Torres, PEF's Partnerships and Program manager, in a press conference Wednesday, told reporters this 21-year journey will commence next year.
Torres was in Davao City for the three-day Sharia'h conference dubbed as “Islamic Financing in the Philippines: A Step towards the First Seven years,” at the Ritz Hotel and Garden Oases, "The first seven years will be the first step and we intend to implement it starting 2016. After this Sahria’ah conference which will be attended by some 200 stakeholders we intend to craft fully the whole roadmap,” Torres said.
He added that initially the first phase of the program will be focusing on information drive, increasing the public awareness and capacity building of stakeholders on Islamic Financing in the country.
“We really have to invest on people because not all are comprehensively aware, we also have to build institutions and leaders, among others. We aim that by 2020 we will address the scarcity of experts on Islamic banking,” he added.
Maharlika Alonto, WB consultant, said that as part of their program, they are now assisting Pakistan, Indonesian and other international Islamic Financing experts.
“They are now on the ground studying what can be replicated in the Philippines from their Islamic Financing models,” Alonto said.
Torres also mentioned that PEF has partnered with international organizations like Cordaid, a Netherlands-based development finance organization in capacitating more personnel in ensuring successful Islamic Financing in the country especially in Mindanao.
He added that PEF with its target 30 partner organizations will invest a total of P600 million in investments in Islamic Financing by the end of 2020, P100 million of which will be sourced from Pef itself.
These partner organizations are eyed to be offering different Islamic Financing products such as microfinance, insurance and loans.
“Among some development that seemingly triggers Islamic Financing in Muslim Mindanao include Autonomous Region in Muslim Mindanao (Armm) poverty incidence that is 54 percent, the peace and order problems and the stalled peace negotiations, Asean integration and the foreign banks liberalization,” said one of PEF’s member of the board, Martiano Magdolot.
Some of the industry’s challenges very limited Islamic banking experience in the Philippines, absence of regulatory infrastructure on Islamic Banking, lack or scarcity of experts on Islamic banking/finance, very low investor awareness and acceptance of Islamic banking, and limited Halal investment products in the Philippines.
In the Philippines, Al Amanah Islamic Investment Bank in the Philippines, a subsidiary of the Development Bank of the Philippines (DBP) is the only bank in the country authorized to offer Islamic banking.