Finance Secretary Ralph Recto on Monday said the Bangsamoro government proposed to acquire the Development Bank of the Philippines’ (DBP) shares in the Al-Amanah Islamic Investment Bank of the Philippines (AAIIBP) to promote financial inclusion and accelerate socio-economic development in the region.

In a statement, Recto said the proposed transfer of shares was approved by the Intergovernmental Fiscal Policy Board (IFPB) co-chaired by Recto and Bangsamoro Government Minister of Finance, Budget, and Management Ubaida Pacasem during its seventh meeting on Sept. 3, 2024.

The approval, however, is still subject to the terms and conditions as may be agreed by both parties, in accordance with existing laws, rules, and regulations.

The AAIIBP is the first Islamic bank in the Philippines. By its charter, it is recognized as a universal bank with an authorized capital stock of PHP1 billion consisting of 10 million common shares and a network of nine branches.

In 2008, the AIIBP became a subsidiary of the DBP, owning 99.9 percent of its capital stock.

Under the Bangsamoro Organic Law (BOL), the IFPB will determine the participation of the Bangsamoro government in the AAIIBP.

Recto said that by owning the shares of the AAIIBP, the BARMM effectively saves on the total minimum capitalization required of around PHP6 billion in setting up a universal bank.

“Through this, we are taking bold steps to build a strong and vibrant Islamic banking system that caters to the specific needs of the people of BARMM. This will support the Bangsamoro government’s efforts to provide vital social and infrastructure projects to fast-track the region’s progress. The road to peace, inclusive growth, and prosperity in the region becomes even brighter,” he said.

The Bangsamoro government’s planned acquisition of the DBP’s shares in the AAIIBP aligns with Section 3 of Republic Act 6848 or the AAIIBP Charter, which mandates the Islamic Bank to support socio-economic development in the BARMM.

Recto said that by buying significant control of AAIIBP, the BARMM government will be able to facilitate the financing of government policy priorities and projects that other banks would normally not perform.

He said the DBP supported the transfer of the shares to the Bangsamoro government and assured the IFPB of the AAIIBP employees’ capacity to operate an Islamic bank.

To complete the transfer, the Bangsamoro government and the DBP are now securing necessary approvals from the Bangsamoro Transition Authority-Parliament, the Bangko Sentral ng Pilipinas, and the Governance Commission for GOCCs (Government-owned or -Controlled Corporations). (PNA)