Lawmaker hopeful Senate will pass bill on Islamic banks
By Charissa Luci-Atienza
The chairman of the House Committee on Banks and Financial Intermediaries is hoping for the smooth passage in the Senate of the bill providing for the regulation and organization of Islamic banks to attract better investments for the country.
Leyte Rep. Henry Ong said he is counting on the Upper Chamber to follow suit to the House of Representatives’ approval of the bill, which seeks the establishment of a regulatory framework for Islamic banks to attract investments in the country’s banking sector.
“I see no problem with House Bill 8281 getting merged with Senate Bill 668. The two bills complement each other and can be merged with ease,” Ong said in a statement, citing that the House version of the bill is “compatible” with SB 668.
With an overwhelming 221 votes, the House of Representatives recently approved on third and final reading the bill, which was principally authored by Speaker Gloria Macapagal-Arroyo.
“With HB 8281 approval on third and final reading in the House, my focus relative to this bill is to get it enacted into law early next year,” Ong said.
“Parallel to that is the laying of more groundwork for a Philippines’ Islamic banking roadshow in Malaysia, Indonesia, Singapore, Saudi Arabia, United Arab Emirates, Qatar, and Morocco, to name a few prospects,” the House leader said.
He said the proposed Act will certainly generate investment interest among major players in Islamic finance in Southeast Asia and in the Middle East.
Ong said he will meet with officials of the Bangko Sentral ng Pilipinas, the Board of Investments, and the Securities and Exchange Commission, as well as with the Philippine Stock Exchange and the chambers of commerce, “to help them generate investment interest among major players in Islamic finance in Southeast Asia and in the Middle East.”
HB 8281, principally authored by former Anak Mindanao party-list Rep. Sitti Djalia Turabin-Hataman and Arroyo, mandates the Bangko Sentral ng Pilipinas (BSP) to supervise, license and regulate the operations of Islamic banks.
Under the bill, an Islamic bank is referred as a business whose objectives and operations do not involve interest (riba), which is prohibited by the Shari’ah and which conducts its business transactions in accordance with Shari’ah principles.
Under the bill, the Monetary Board (MB) may authorize the establishment of Islamic banks and allows conventional banks to engage in Islamic banking, provided that these banks create a system that will separate their Islamic banking transactions from their regular business.
The Islamic banks shall be licensed and regulated in the same manner as a universal bank and the BSP shall issue the necessary rules and regulations governing Islamic banking, the measure provides.
HB 8281 allows Islamic banks to perform banking services, such as accepting or creating current, savings accounts and investment accounts, accept foreign currency deposits, and acts as correspondent banks and institutions among others.