Al-Amanah Islamic Investment Bank of the Philippines is looking beyond its traditional Muslim and Mindanao customer base, but its push to become a nationwide financial player faces a fundamental challenge: building scale and competitiveness from a relatively small banking operation.

Newly appointed Chair and CEO Amenah F. Pangandaman said the bank wants to reach more Filipinos, including micro, small and medium enterprises (MSMEs), women-led businesses, overseas Filipino workers (OFWs), young professionals and families.

“When people hear Islamic bank, many assume it serves Muslims alone or belongs mainly in Mindanao. That is the first thing we need to change,” Pangandaman said.

Pangandaman said she wants Al-Amanah to become a stronger partner in national development over the next two years, with financing tied to businesses, homes, equipment and infrastructure.

But expanding beyond its traditional market will require Al-Amanah to overcome a significant scale disadvantage.

Lending capacity below mainstream commercial banks’

Bangko Sentral ng Pilipinas (BSP) data showed that as of 30 June 2026, Al-Amanah had about P2.59 billion in total assets, P2.18 billion in deposits and only P254.72 million in loans. The figures put the bank’s lending capacity well below that of mainstream commercial banks, raising questions about how quickly it can scale its proposed nationwide financing push.

The bank’s small loan portfolio is particularly relevant to Pangandaman’s plan to expand MSME financing, as lending will be central to turning the bank’s financial-inclusion ambitions into actual economic activity.

Pangandaman acknowledged that many MSMEs struggle to obtain financing because they do not meet conventional lending requirements.

“We need to look at what a business can become, not only at what its owner already has. Credit that reaches only those who are already comfortable is not financial inclusion — it is simply easier banking,” she said.

From monopoly to competition

Al-Amanah also faces a more crowded Islamic-finance market than it did several years ago.

While it remains the country’s sole dedicated Islamic bank, it no longer has the Islamic-banking space to itself. BSP’s list of institutions with Islamic banking authority includes Al-Amanah as well as Islamic banking units operated by CARD Bank and Maybank Philippines.

The BSP said the development of Islamic banking is intended to serve both Muslims and non-Muslims, providing an alternative to conventional banking and supporting financial inclusion.

The central bank has also been easing rules and developing the broader Islamic-finance ecosystem, including Islamic banking units, takaful and the domestic sukuk market.

That means Al-Amanah’s proposed expansion will not simply be a matter of convincing Filipinos that Islamic banking is open to everyone. It will also have to persuade customers to choose it over increasingly available Islamic products from larger and more established financial institutions.

Pangandaman said the bank’s proposition should be based on fairness, transparency and shared risk.

“Faith shaped the principles of Islamic finance. Fairness is what makes those principles useful to everyone,” she said.

Awareness remains a hurdle

Another obstacle is public understanding.

Pangandaman said too many Filipinos earn money without being taught how to manage, protect or grow it, arguing that banking should not be difficult for ordinary customers to understand.

“Banking often feels like a language designed to confuse ordinary people. A bank should never benefit from a customer’s confusion,” she said.