THE Al Amanah Islamic Investment Bank of the Philippines, a subsidiary of the Development Bank of the Philippines (DBP), may get a capital infusion from the proposed annual grant for the Bangsamoro government.
Second District Rep. Rufus Rodriguez of Cagayan de Oro said there must be a separate banking entity for the Bangsamoro. The establishment of the Bangsamoro should also strengthen the Al Amanah, the only bank in the Philippines authorized to offer Islamic banking services. Islamic banking adheres to the Islamic Sharia principles which prohibit the imposition of interest [riba] on various types of lending and borrowing as provided under Republic Act 6848, or the Charter of the Al Amanah.
“The Bangsamoro government may organize government-owned and -controlled corporations. They have the option to infuse capital into Al Amanah Bank. They can also create a new one because they will have the funds,” Rodriguez told the BusinessMirror.
“With the big grant block that they have, they can put in money there to make it [Islamic banking] work,” he added.
The proposed Bangsamoro basic law provides for an automatic appropriation to the Bangsamoro similar to the internal revenue-allotment scheme given to local governments.
The amount will be based on a formula pegged at 4 percent of the 60 percent of the national total revenue collection. DBP Vice President Isidro Sobrecarey pointed the need for a legal and regulatory framework to sustain the bank’s Sharia operations.
Bangko Sentral ng Pilipinas (BSP) General Counsel Elmore Capule said the exclusive power of the Bangsamoro over banks within its jurisdiction, as proposed in the draft law, should be clearly defined as it could run counter to the mandate of the BSP.
Under the Constitution, he said, the power to supervise banks rests on the BSP.
He also expressed concern over the proposed grant of authority to contract foreign loans to the Bangsamoro, explaining that under existing laws, contracting foreign loans must first be approved by the national government.