THE BANGKO SENTRAL ng Pilipinas (BSP) is set to release implementing rules and regulations (IRR) on Islamic financing products in a bid to bolster financial inclusion for people that have limited access to financial products partly due to religious suitability, according to an official.

In an interview with BusinessWorld, BSP Managing Director of the Center for Learning and Inclusion Pia Bernadette Roman-Tayag said while there are already some Shariah-compliant financial products in the market, an IRR could urge more banks to make these kinds of offerings.

“We are going to be issuing our implementing rules for the Islamic finance. So du’n siguro magkakaroon ng details (Maybe the details will be clearer then),” Ms. Roman-Tayag said at the sidelines of an event held by Paymaya Philippines, Inc. and Oxfam Pilipinas held in Mandaluyong City on Thursday.

In 2019, BSP issued Circulars 1069 and 1070, which contain guidelines regarding the establishment of Islamic banks and banking units as well as the Shariah Governance Framework.

“More IRRs will be issued,” Ms. Roman-Tayag said.

She noted that the Muslim Mindanao region is still among the most financially underserved in the country due to lack of financial institutions in the area as well as product suitability.

“First of all, ’yung presence din kasi of banks there, du’n din kasi pinakakaunti (the presence of banks there is the lowest). That’s really one barrier, the actual presence of financial institutions there,” she said.

“So hopefully, with the digital…cash agents, that can be addressed. The second is suitability of products,” she added.

Aside from this, she noted that residents in the region are also restricted to some products amid the lack of Shariah-compliant offerings.

“From the financial inclusion standpoint, we don’t want to exclude people because of religious consideration,” Ms. Roman-Tayag said. “It’s also a form of exclusion, if you are not able to deliver products that they need…for religious considerations.”

A key concept in Islamic banking is that operations do not involve “riba” or interest.

“So hopefully with this new law, and with more providers, we can see more inclusion in the area,” Ms. Roman-Tayag said.

Republic Act. No. 11439 or the act providing for the regulation and organization of Islamic banks was enacted last August.

Among its key provision is to allow traditional banks to operate Islamic banking operations subject to approval from the BSP Monetary Board.

Tengfu Li, Financial Institutions Group Analyst at Moody’s Investors Service, has previously told BusinessWorld that the establishment of an Islamic banking framework will help boost growth in the newly established Bangsamoro Autonomous Region in Muslim Mindanao. — Luz Wendy T. Noble