Al Amanah Islamic Investment Bank of the Philippines, the country’s only Islamic-oriented financial institution, is facing several challenges in its bid to grow as a financial institution.
Among these obstacles include the lack of legal and regulatory framework; oversight of Shariah; technical capacity and pool of practitioners; Shariah-complementary product/service demand in the Philippines; correct perception of Islamic finance; coordination for a globally-accepted legal and regulatory standards.
In a Amanah Islamic Bank brief, it was proposed that the bank seek partnerships with government agencies and the private sector with a know-how on Islamic banking and finance.
That includes exploratory partnership with Tabungg Haji and Zakat Fund.
Tabung Haji, or Lembaga Tabung Haji, is the Malaysian hajj pilgrims fund board. The main headquarters is located at Jalan Tun Razak, Kuala Lumpur. Tabung Haji facilitates savings for the pilgrimage to Makkahthrough investment in Shariah-compliant vehicles.
The Zakat Foundation of America is a Chicago-based, Muslim non-profit dedicated to alleviating the immediate needs of the poorest communities, as well as providing emergency relief, post-disaster rehabilitation, development, education, healthcare, orphan sponsorship, and seasonal programs such as Ramadan Iftars and Udhiya/Qurbani.
It likewise seeks assistance for the establishment of a National Shariah Advisory Council. The body is a prerequisite to the formation of Islamic-oriented financial institution.
The primary market of Amanah Islamic Bank is the six-million Muslim population found primarily in Mindanao, but are likewise scattered throughout the country.However, it has been unable to service the target market due to limitations to its full implementation of the Shariah-compliant financial products. It has also been unable to tap the billions of dollars worth of Shariah-compliant assets globally.
Islamic finance has grown significantly with Sharia-compliant assets of at least $1 trillion. Sukuk bond issuance, Islamic debt and equity papers, grew 50 times from 2001 to 2010 amidst slow global growth in the aftermath of the 2008 global financial crisis.
According to data from the British Embassy, Southeast Asia is seen as a top source of growth. Furthermore, the growth of Islamic finance in the country may play a crucial role in the economic development of Mindanao.
The UK is home to almost every major international bank and financial institution in the world, ranking first in the March 2011 Global Financial Centers Index (GFCI) survey. It is by far the most successful non-Islamic country in Islamic banking, with 22 banks offering Sharia-compliant financial instruments.
There are 34 Islamic funds managed from the UK, and 31 Sukuk issues raising $19 billion listed on the London Stock Exchange.
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