The Bureau of the Treasury (BTr) is looking at incorporating Sukuk or Islamic bond issuance in its financing strategy next year, a Bangko Sentral ng Pilipinas (BSP) official said Tuesday.
"No amount yet. But in terms of timeline, Sukuk is part of their planned issuance in 2025 but no amount yet," BSP Assistant Governor for Financial Supervision Sub-Sector III and Chairperson of the Islamic Finance Coordination Forum, Arifa Ala, said on the sidelines of the Philippine Islamic Finance Roadshow at The Manila Peninsula in Makati City.
Last year, the Philippine government raised $1 billion from selling its maiden Sukuk bonds.
"I am not sure about the BTr if it's peso or dollar. But hopefully, we can have peso Sukuk as well. Because again, that can support also the growth of Islamic banking here in the Philippines," Ala said.
The Philippine government is ramping up efforts to advance Islamic finance in the country.
“Since the opening of the first Islamic bank in the country, the BSP has aspired to integrate Islamic banking into the broader financial system. Significant progress has been made,” BSP Governor Eli Remolona said.
Remolona pledged that the BSP and other stakeholders would continue to strengthen the ecosystem.
A study conducted by the Asian Development Bank (ADB) investigated the potential of Islamic finance in the Philippines by studying a group of 450 individuals and 50 business owners and decision-makers.
Results of the study released last month showed that when presented with the option of an Islamic savings account, 86 percent of the respondents expressed interest, with a significant portion being highly interested.
The report noted that the Philippine government identified the development of Islamic finance as one of its priorities to promote financial inclusion and stimulate economic growth.
Ala said that at present, two foreign players have expressed interest in securing an Islamic banking window license in the country.
"There are a number of banks and non-banks which signify interest but I cannot disclose yet because they have not really submitted a formal application. But there are a number of interested potential investors," she said.
As provided under Republic Act 11439, Islamic banking business refers to a banking business with objectives and operations that do not involve interest as prohibited by the Shari’ah and which conducts its business transactions under the principles of the Shari’ah.
Ala said the Philippines has two Islamic banking windows and one Islamic bank.
The three Islamic banking players are Maybank Philippines, Al Amanah Islamic Investment Bank, and CARD Bank, Inc.
According to Ala, one of the two firms that have expressed interest in securing a license already has some operations in the Philippines.
