The Muslim population in the Philippines accounts for 5-11% of the total population. Approximately 60% of Muslims reside in Mindanao and nearby islands.
Interest in developing Islamic finance in the Philippines was demonstrated in recent years by the government, legislators and the private sector. The primary factor is the desire to address the needs of the Muslim population in the Philippines. Secondly, as a member of ASEAN, the Philippines looks to expand economic links with neighboring countries and sees the regional and global Halal markets and linked financing as important components of its ASEAN integration strategy. The third factor is the opportunity to tap international financial markets for both resource mobilization and investment diversification through Sukuk and equity markets. Finally, it is the need to find a solution for Al Amanah Bank, an existing Islamic bank with a record of poor performance.
The successful introduction of Islamic banking and finance in the Philippines requires substantial capacity-building, financial education and awareness efforts.
To address the current needs of the Philippines, the International Council of Islamic Finance Educators conducted an Islamic banking and finance training program for 30 individuals comprising lecturers from the Mindanao State University and professional accountants from the Philippine Association of Islamic Accountants. The first phase of the training covered the fundamentals of Islamic banking and finance with seven modules, namely Islamic economics and banking business; Fiqh Muamalat for banking and finance; Islamic financial system; Islamic banking and finance transactions; Islamic banking operations; Takaful and re-Takaful and Muamalat. The fundamental course will be followed by an advanced course where the same participants will be exposed to the implementation side of Islamic finance such as auditing and governance for Islamic financial institutions, the legal framework and documentation.
We believe that this type of academic engagements will help Muslim-minority countries to establish a sound Islamic banking and finance system and develop human capital.
Dr Kamola Bayram is the project director at the International Council of Islamic Finance Educators. She can be contacted at [email protected]