One of the interested foreign firms is already operating in the country while the other is a new player in the Philippine market. BSP officials said both are keen on securing licenses for Islamic banking and takaful, an Islamic version of insurance
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The Bangko Sentral ng Pilipinas (BSP) on Tuesday said two more foreign firms plan to offer Islamic banking in the country as a survey backed by the Asian Development Bank (ADB) reveals the highest interest for such financial service among residents in Metro Manila and the Bangsamoro Autonomous Region in Muslim Mindanao.
"A number of banks and non-banks signified interest but I cannot disclose them yet because they have not submitted formal applications," BSP assistant governor and chairperson of Islamic Finance Coordination Forum Atty. Arifa Ala told the media on Tuesday.
She shared this at the ADB and Islamic Finance Advisory and Assurance Services' Islamic Finance Landscape Report presentation at Peninsula Manila in Makati City.
One of the interested foreign firms, Ala said, is already operating in the country while the other is a new player in the Philippine market.
However, she said both are keen on securing licenses for Islamic banking and takaful, an Islamic version of insurance.
Ala said takaful will complement their operations as these firms aim to ensure minimal fund losses among clients due to emergencies or financial challenges.
Most Filipinos or 78 percent of Muslims and non-muslims said they want to learn more about Islamic banking based on the survey presented Tuesday by the ADB and the Islamic Finance Advisory and Assurance Services, a global consultancy on Islamic finance.
Very interested
Breaking it down, 51 percent of the respondents said they are "very interested" in Islamic banking and are residing in Metro Manila and the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM).
The remaining 27 percent said they are "quite interested" and live in other parts of Mindanao.
The five most sought-after services include savings, business loans, medical insurance, personal loans and e-wallets.
"In Islamic banking, instead of paying interest, you're paying profits based on an underlying asset that is productive," BSP Governor Eli Remolona Jr. said.
"Corporations that are proposing financing for alcoholic drinks or gambling are not allowed," Ala added.
92 percent in BARMM unbanked
The BSP officials said the market for Islamic banking remains wide as the central bank's data show 92.4 percent in BARMM are still unbanked.
Meanwhile, most micro, small and medium enterprises nationwide felt underserved by traditional banks as only 20 percent of all loan applications from this group were approved in 2022.
Currently, there are three banks offering Islamic banking in the country: Al Amanah Islamic Bank of the state-owned Development Bank of the Philippines, Laguna-based CARD Bank Inc., and Malaysia's Maybank.
