By Bernie Cahiles-Magkilat
At least six Islamic banks have expressed interest to open their branches in the Philippines once the Islamic Banking bill, which is now on its second reading in both Houses of Congress, is passed into law.
Trade and Industry Undersecretary Abdulgani M. Macatoman identified these banks which include CIMB, Islamic Development Bank, Qatar Bank, Credit Investment Bank of Malaysia and a Saudi bank.
These banks could help provide financing for Halal projects and investments in the Philippines.
Macatoman, one of the seven DTI Undersecretaries and in charge of special concerns and trade and investments group, said this as he reported of the country’s performance in the recent Halal fairs where the local halal-certified enterprises have raked in $11 million in estimated sales contracts at the Malaysia International Halal Showcase and $20 million at the Gulfood.
Macatoman said that Al Amanah Bank, the lone Islamic bank in the country but which is now under the government-owned Development Bank of the Philippines, does not really provide Islamic financing because it is operating under the traditional banking regime.
CIMB and MayBank have branches in the Philippines but are really functioning as traditional banks.
Once the Islamic Banking law is passed, Macatoman said these banks are expected to open an Islamic financing window.
Macatoman, however, could not say the extent of local demand for Islamic financing as there is no concrete data to back it up but noted that with the creation of the Bangsamoro Autonomous Region in Muslim Mindanao there would be economic activities in Muslim Mindanao, which is home to most of the 11 million Muslim population in the country.
Likewise, there has been no official data except for a rough estimate of $554 million of the country’s halal exports to ASEAN, Middle East and South Africa. The global halal market is estimated at $3.2 million for the 2 billion Muslim population globally.
So far, the DTI is working on the accreditation of the six halal certifying agencies in the Philippines by the Malaysian government although these bodies have already been recognized by the Gulf Cooperation Council states.
So far, only three local certifying bodies have been certified by Malaysia. Macatoman said he has secured a commitment from the Ministry of International Trade and Industry of Malaysia to intensify halal trade between the Philippines and Malaysia. Together with MITI, they will convince JAKIM, the central certification body of Malaysia, to recognize more certifying bodies from the Philippines.
Aside from food, other halal products from the Philippines include condiments, pharmaceuticals, and cosmetics.