www.manillatimes.net - FINANCIAL institutions from the United Kingdom are at the forefront of showcasing the possibilities and capabilities of Islamic Finance (IF) commercial operations, and the opportunities offered by the growing global demand for Sharia-compliant financial instruments—with British Ambassador Stephen Lillie as a significant supporter.
The participating banks— KPMG, HSBC, PruLife UK, and Standard Chartered—shared their expertise with members of the Philippines financial sector at a forum organized by the British Embassy where Lillie was a keynote speaker. The banks played a role in legal reforms that support Islamic Finance in the UK that were instrumental in propelling its status as the most successful non-Islamic country in Islamic banking. (source)
“There is no doubt that looking into the future, Islamic finance will grow and South East Asia will be a top source of growth,“ said Lillie. “As we look at opportunities for Islamic Finance in the Philippines, we look to the UK, a predominantly Christian country, as a reference of how this sector can be set-up and developed in another predominantly Christian market. This is why the British Embassy found it strategic to support this roundtable discussion.”
”Islamic finance has grown rapidly in the past decade, and the City of London with its commitment to financial innovation and outstanding global reach has been a big part of this. As the Philippines seeks to expand its investor base, it should look seriously at how it could follow our example to attract more funds from Muslim countries by offering Shariah compliant
products.”
”It’s worth asking too whether the expansion of Islamic banking and insurance products could help in supporting the integration of Muslim Filipinos and the development of the economy in Muslim Mindanao. That would be good for some 8 million Muslim Filipinos specifically, and for the Philippines’ development more generally.”
Ambassador Lillie revealed that his interest in IF was sparked by that fact that the British Embassy has worked with Muslim civil society in the Philippines (including the Philippine Institute for Islam and Democracy) to support that sector’s effective participation in Philippine society. More specifically, UK interest in the Mindanao Peace Process, including through International Contact Group (ICG).
“So you can see why an event on IF might intrigue me. But I think there would be many who would ask whether IF really is a relevant issue for the Philippines, the world’s largest Catholic country whose legal code is Spanish/United States, not Shariah,” says Lillie.
He contends that while the Philippines is predominantly Christian three of its biggest ASEAN partners—Indonesia and Malaysia and Brunei—are predominantly Muslim. In addition, the Philippines has a web of trade and investment and people to people links with Middle East.
Globally IF has grown significantly during the last decade. In the period 2006 to 2009, Sharia-compliant assets doubled to more than $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.
Although the global market remains at an early stage of development, there are strong opportunities through product innovation. The broadening geographical customer base and continued market developments in the banking sector will boost the potential of IF to sustain its rate of growth of 10 to 15 percent over the coming years.
The UK—where the Muslim population is 3 percent compared to the Philippines where it is 8 percent—is home to almost every major international bank and financial institution in the world, ranking first in the March 2011 Global Financial Centers Index survey. It is by far the most successful non-Islamic country in Islamic banking, with 22 banks offering Sharia-compliant financial products and services. There are 34 Islamic Funds managed from the UK, and 31 Sukuk issues raising $19 billion listed on the London Stock Exchange.
As Lillie points out, the IF forum his Embassy organized is part of the UK’s strategy as outlined in its Trade and Investment for Growth White Paper to boost economic growth and remain competitive in the global market.
“So we’re absolutely right to be looking at the opportunities for IF in the Philippines and opening this debate on how to enable it,” he adds.
Source: http://www.manilatimes.net/index.php/opinion/columnist1/19084-enabling-islamic-finance-in-the-philippines? - March 13, 2012
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