DAVAO CITY (MindaNews / 9 June) – The Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) is growing and still developing its own unique identity, especially in its socioeconomic aspect. As such, a banking system would promote and accelerate the socioeconomic development of BARMM. Relative thereto, the region would do well to have its own banking system or entity as a mechanism for economic, social, and industrial growth.
Al-Amanah Islamic Investment Bank of the Philippines (AAIIBP) is the only Islamic bank recognized in the Philippines. Originally, Amanah Islamic Bank (AIB) was created in 1973 through Presidential Decree (PD) No. 264 and was intended to become a development bank. However, it was re-tuned in 1974 to further adhere to Islamic principles through PD No. 542. However, in 1990, it became AAIIBP, a universal bank, through the enactment of Republic Act No. 6848. Later, the bank was re-branded as Amanah Islamic Bank (AIB) when it became a subsidiary of the Development Bank of the Philippines (DBP) on October 30, 2008. To date, AAIIBP has nine branches including the Cotabato City Branch, which is conveniently located within the regional capital of BARMM.
It is pivotal that BARMM has maximum participation in or acquires full control of AIIBP. The bank should also be the official bank used by the BARMM for its transactions, especially those which require compliance with Shari’ah laws. Furthermore, AAIIBP is the sole bank in the Philippines authorized to offer Islamic banking products and services that adhere to the principles of Shari’ah law. Likewise, it is mandated to uplift the socioeconomic condition of people, especially in Muslim-dominated areas of the Philippines, including BARMM. AAIIBP reflects the culture of the Muslim people through banking, financing and investment operations as well as the establishment of and participation in agricultural, commercial and industrial ventures based on the Islamic concept of banking.
Maximum participation in or full control of AAIIBP by BARMM is not necessarily prohibited under the Bangsamoro Organic Law (BOL) or Republic Act No. 11054. In fact, it is harmonious with said law. Section 1, Article XII of the BOL provides for Fiscal Autonomy with the objective of attaining economic self-sufficiency and genuine development for the Bangsamoro region. Furthermore, Section 33, Article XII of the same law provides that the Bangsamoro Transition Authority (BTA), through the Intergovernmental Fiscal Policy Board, shall even determine the participation of the Bangsamoro Government in AAIIBP, pursuant to Section 37 (e), Article XII of the BOL.
Recently, the promotion of Islamic banking has been an issue. On May 22, 2019, the Senate introduced “An Act Strengthening the Al-Amanah Islamic Bank” or Senate House Bill No. 2231 (SBN-2231), known and cited as the Al-Amanah Islamic Bank of the Philippines Act. Under the Declaration of Policy in Section 2 of said bill, the national government recognizes the role of Filipino-Muslim communities in nation building by allowing them to freely participate in financing and investments in accordance with the requirements of their religion pursuant to Section 20, Article II of the Philippine Constitution
Furthermore, under SBN-2231, it is proposed that the authorized capitalization would be increased to ten billion pesos (P10B) while the national government, through BARMM, would own sixty million (60M) shares amounting to six billion pesos (P6B) or sixty percent (60%) of the shares. On the other hand, Filipino individuals and institutions would be allowed to own ten million (10M) shares amounting to one billion pesos (P1B) or ten percent (10%) of the shares, and Foreign individuals and/or institutions or entities could own up to thirty million (30M) shares amounting to three billion pesos (P3B) or thirty percent (30%) of the shares.
Thus, as provided in Section 33, Article XII of the BOL, pursuant to Section 37 (3), Article XII of the same law, the BARMM should obtain maximum participation or full control of AAIIBP, through the determination for said participation by the Intergovernmental Fiscal Policy. Maximum participation in AAIIBP would allow the BARMM to have full control over the only recognized Islamic bank in the Philippines.
The full control of or maximum participation in AAIIBP would be highly beneficial to BARMM for governmental operations, especially for the transactions of its agencies and offices. As BARMM is an autonomous region, it should have a bank designated as its official or authorized bank. The designation of AAIIBP as the official or authorized bank of BARMM further promotes the fiscal autonomy as well as reduces the burden of the national government in processing regional governmental transactions through LBP. The funds of the regional government would also be more centralized and easily accessible by BARMM.
While Land Bank of the Philippines (LBP) is the official bank of the national government, the socioeconomic development of the BARMM should likewise be facilitated by a bank for the Muslim people. The people of BARMM would likewise benefit as they would not be overwhelmed by the volume of transactions typical of the LBP. The monetary transactions they have as individuals as well as those with agencies and offices of the BARMM could all be processed through AAIIBP, all in line with Islamic banking.
Furthermore, an increase in fiscal autonomy can be achieved through full control or maximum participation in AAIIBP. This level of control would enable the creation of economic policies, especially those relative to banking and finance, which would be promote the holistic development of the BARMM and its people since banking activity would be consistent with cultural principles and teachings. More importantly, the facilitation of socioeconomic changes, especially in banking and finance, would be achieved as well because these policies would be more relevant to the Muslim culture and embody the Islamic principles, especially those in the Al-Qur’an or the Koran.
(MindaViews is the opinion section of MindaNews. ‘Bangsamoro Speaks’ is open to any Bangsamoro who wants to speak up on any issue affecting the Bangsamoro people. Datu Mussolini Sinsuat Lidasan, Executive Director of Al Qalam Institute of the Ateneo de Davao University, is a Member of Parliament in the Bangsamoro Autonomous Region in Muslim Mindanao.)