Foreign Islamic banks will also be allowed to operate MANILA: The Philippines is aiming to introduce new rules allowing for the expansion of the Islamic banking system in the country by the end of the year, officials announced on Wednesday. Chuchi Fonacier, deputy governor of the country’s central bank, Bangko Sentral ng Pilipinas (BSP), told Arab News that implementing the regulation and organization of Islamic banks was a “priority” in line with an act signed by President Rodrigo Duterte in August. She said that the central bank envisioned “a regulatory regime that accommodates Islamic finance within a flexible but secular unitary framework. “For example, the proposed licensing framework for Islamic banks will be anchored on the existing licensing framework for conventional banks with supplementary prudential requirements that recognize the inherent characteristics of Islamic banking and finance, particularly Shariah compliance.” Fonacier pointed out that under the act, full-fledged Islamic banks or Islamic banking windows could operate in the Philippines, with the BSP “pushing for an open approach where conventional banks can operate Islamic banking windows or establish subsidiary Islamic banks.” Foreign Islamic banks would also be allowed to operate in the country under the terms of amendments to another act liberalizing their entry and scope, she added. Duterte’s act is expected to widen access to banking services for Filipino Muslims, including those in the Bangsamoro region. BSP Gov. Benjamin Diokno hailed the signing of the new law, which he said would unlock the full potential of Islamic financing in fostering inclusive economic growth. An interagency working group on Islamic banking and finance has been established to help develop the regulatory framework and new rules. In the Philippines, the potential market for Islamic banking products mainly comprises the Muslim population, which accounts for about 10 percent of Filipinos. However, the BSP said Islamic banking and finance could also be attractive to non-Muslims, particularly investors within or outside the Philippines. Al-Amanah Islamic Investment Bank of the Philippines is currently the only Islamic bank operating in the country.