CAGAYAN DE ORO CITY (PIA) — The Islamic banking sector in the Philippines is gaining momentum, with more financial institutions entering the market and regulatory efforts intensifying to support long-term growth, a Bangko Sentral ng Pilipinas (BSP) official said.

Speaking at the Philippine Economic Briefing in Cagayan de Oro on October 20, BSP Director Sittie Hannisha M. Butocan said six new players have joined the Islamic finance landscape since the passage of the Islamic Banking Law, signaling increasing interest in alternative banking models that comply with Shari’ah principles.

“We have seen Islamic finance in the Philippines gaining ground, especially when the Islamic Banking Law was passed. Since that time, we have already seen or ushered in six new players in Islamic banking,” Butocan said.

Among them are Maybank, which operates an Islamic banking unit in Zamboanga, and CARD Bank, which offers microfinance services in Cotabato City. Butocan expressed optimism that similar services will soon be introduced in Cagayan de Oro.

To encourage further growth, the BSP is pursuing several strategic initiatives. These include easing licensing requirements to attract more Islamic finance players, developing Sukuk guidelines for issuing Islamic bonds, and expanding outreach to foreign investors.

“Sukuk (Islamic bonds) is one means of providing long-term infrastructure funding,” she said, emphasizing the role of Islamic bonds in supporting both public and private sector development.

To draw interest from regional Islamic finance hubs, Butocan said the BSP conducted roadshows in Indonesia and Malaysia, presenting the Philippines as an emerging market for Islamic banking. She said these efforts have generated strong interest from potential partners abroad.

The BSP is also working with 11 agencies under the Islamic Finance Coordination Forum to create a fully supportive ecosystem for Islamic finance.

The Forum is composed of the BSP, Asian Development Bank, Auditing and Assurance Standards Council, Bangsamoro Government, Bureau of Internal Revenue, Bureau of the Treasury, Department of Trade and Industry, Insurance Commission, National Commission on Muslim Filipinos, Philippine Deposit Insurance Corporation, Philippine Financial and Sustainability Reporting Standards Council, and Securities and Exchange Commission.

“What this committee is looking at is to really provide an entire ecosystem for Islamic banking,” Butocan said.

The Philippine Economic Briefing in Cagayan de Oro is the last leg of this year’s regional economic briefings, which aim to showcase regional economic opportunities and promote inclusive growth across the country. (APB/PIA-10)