MAKATI, Philippines (July 19) — As I write this article, it is currently the second day of the International Islamic Finance Conference organized by the National Commission on Muslim Filipinos (NCMF).
The NCMF is mandated by law to facilitate the mainstreaming of projects and programs towards the preservation and development of the culture and tradition, institutions, and well-being of Muslim Filipinos. They aim to establish Islamic Banking and Finance, Islamic Microfinance, Awqaf (Endowment), and development of Halal products and industry.
The theme for this year’s conference is “Trabaho ko, Ibadah (act of worship) ko”: Mainstreaming Awqaf and Islamic Microfinance towards SME Empowerment. They targeted 150 participants from their partner communities in Mindanao and the Autonomous Region in Muslim Mindanao.
There are also International participants and speakers coming from Malaysia, South Korea, United Arab Emirates, Cambodia, Thailand and Singapore.
During the first part of the program, the Guests of honor: Senator Benigno “Bam” Aquino IV and Congresswoman Sitti Djalia Turabin-Hataman gave an update regarding the pending bill on the amendments of the charter of Al Amanah Islamic Investment Bank of the Philippines and to provide for the regulation and organization of an expanded Islamic banking system in the Philippines.
The sessions in the conference were divided into four different topics: The first plenary session pertained to the Philippine Scenario; “The Islamic Finance and Microfinance as vehicles to inclusive economic growth”. The second session focused on Islamic finance as an emerging market trend in the Asean and the GCC countries. The third session talked about Islamic and financial system in the effective pursuit of poverty reduction and sustainable community empowerment; “The role of Islamic microfinance and Awqaf”. The last session concentrated on Socio-economic facilities to Asean Economic Integration; “The Philippine Halal Initiative and SME’s Empowerment”.
The second day (Tuesday) of the conference will focus on the details and how to operationalize the principles of Islamic finance.
As one of the resource person in the Conference, my presentation is focused mainly on the type of Islamic microfinance that Al Qalam Institute for Islamic Identities and Dialogue in Southeast Asia formulated and implemented in our partner communities.
Our Studies have shown that poverty alleviation remains the most important challenge within our time today. The poverty levels are also associated with high inequality alongside low productivity. Thus, we need to assist communities who are identified as “unbankable” to have access on the credits and loans to become empowered entrepreneurs.
We have to take note that Al Qalam’s program of establishing a Shari’ah finance in the community level is still at its incipient phase. However, some of the necessary conditions are already in place, making the prospects for its institution.
Based on our experience, we can see that the future of Islamic microfinance looks promising. Funders like the World Bank, Islamic Banks and microfinance organizations in South East Asia have expressed their intention to support Shari’ah finance in Mindanao.
According to the Joint Ateneo Institute on Mindanao Economics (Jaime); “to date, external grants for microfinance have been coursed to Muslim intermediaries, enabling them to plan, undertake their credit operations and assist selected client members with their livelihood proposals.”
Jaime is an institute within the Ateneo Universities that conducts intensive studies and research on Mindanao economic and development issues.
With the help of the Peace and Equity Foundation (PEF), an initial sum of Php 3.75 Million grant was provided last 2015 to the Al Qalam’s network of Muslim community organizations. The fund was utilized to provide Shari’ah finance training and orientation to prospective credit recipients.
I also shared in the Conference yesterday that according to Jaime; “this is notable because training in commonly-shared Islamic principles, the requirements for halal enterprises, and the application of Shari’ah finance to project management and business practices is essential.”
These trainings are aimed to inculcate the value of avoiding the unproductive use of credit in wasteful consumption and economic activities at all cost, as well as to inform potential clients of the allowable projects for loan applications and the requirements a fund applicant must fulfill.
I do hope that this conference will help our country come up with a clear policy and framework that focuses on Islamic banking and finance. It is about time that we help our Muslim communities with an economic program that is suitable to their religious and cultural belief and practices.