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Islamic Banking Bill

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MikeLigalig.com:
The Islamic Banking bill (HB 8281) which was approved at committee level this week has the great potential to speed up economic development in Mindanao and the country's integration with ASEAN, as well as reduce the number of unbanked and underserved among Filipino Muslims, a ranking solon said.

"This is a landmark measure. When the future history of our country is told, the Islamic Banking bill this 17th Congress will enact will be identified as one of the pivotal pieces of legislation that spurred economic growth in Mindanao and other parts of our country where there are tens of thousands of Filipino Muslims," Rep. Henry C. Ong, Chair of the House Committee on Banks & Financial Intermediaries said.

HB 8281 empowers the Bangko Sentral ng Pilipinas to authorize the establishment of Islamic banks and allow the entry of foreign Islamic banks.

HB 8281 expands the country's financial vocabulary, as well as range of financial instruments and practices. It specifically mentions the following Islamic finance terms: riba (receipt and payment of interest); sukuk (bonds); mudarabah (partnership); musharakah (joint venture); murabahah (cost-plus financing purchasing); ijara (lease); and istisna'a (manufacture arrangements).
 
"Islamic banks will be regulated in the same ways as the other banks under the jurisdiction of the BSP, but the BSP will promulgate rules specific to how Islamic banking and finance practices shall be conducted," the Leyte 2nd District Congressman said.

Ong said he is "excited about HB 8281 because it will open up a whole new dimension to our economy that has been largely uncharted."

"More Islamic banks means more direct investments, including investments by international Islamic banks especially those here in ASEAN, the Middle East, and even Africa. For the public, their options will expand very significantly," Ong added.

The House banking committee chair said the country's economic ties with the Middle East would be given a boost.

"Aside from more ways for OFWs in the Middle East to send remittances, Arab investors and bankers will have more reasons to participate in the growth of our economy," Ong also said. (END)

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