ISLAMIC banking and financing as it is introduced in the Philippines opened a lot of inquiries and challenges. Both Muslims and non-Muslims have their own version of apprehension and contesting ideas.
In the previously held Forum on Islamic Banking and Financing by the Mindanao State University–Iligan Institute of Technology, in partnership with Anak Mindanao and National Commission on Muslim Filipinos last September 2 at MSU IIT Campus, Iligan City, participants from different sectors especially the future accountants of the university, both Muslims and non-Muslims, were given the basics of such concepts by the resource persons.
The resource speakers were Ms. Nataliya Mylenko, the Senior Financial Sector Specialist from the World Bank Group, Congresswoman Sitti Djalia A. Tubarin-Hataman of AMIN, Atty. Maisara Dandamun-Latiph, the senior state solicitor of the office of the Solicitor General and Ms. Maharlika Alonto, an expert on Islamic Banking and Finance from University of Reading, United Kingdom.
From the inputs of the resource speakers, many of the usual controversies regarding Islamic Finance were discussed and given further explanations. Among these issues include the concepts of "interest free," "shari’a banking," "no-loan policy," etc.
However, do we really need Islamic Banking and Financing here in the Philippines? Is this for the Muslim communities in the country only?
The answer is No. This is a system that can be adopted by all.
Let us know the basics of Islamic financial system. As a concept, Islamic economic principles offer the individual the freedom to produce and create wealth, while surrounding the individual with an environment controlled, not by human rulers, but by Divine Guidance. The underlying principles that govern Islamic banking are mutual risk and profit sharing between parties, the assurance of fairness for all and that transactions are based on an underlying business activity or asset.
In the website of Islamic Banking and Insurance, the concept was further discussed according to the essential guidance enshrined in the Qur’an and the Sunnahs (practices) of the Prophet Muhammad (pbuh). Among these are "Trusteeship," which introduces a moral and spiritual element as men perform economic engagements, and "Care for others," which introduces the concept of serving others as part of spiritual teachings in Islam.
Another interesting concept is the idea of "productive effort" as a means of serving God. In this concept, Islam requires wealth to be spent in the cause of God. This realization moves Muslims to greater efforts in their economic activities.
Indeed, if Islamic banking and finance will be well established in this country, we will not only be stronger as a nation but we can be at par with other progressive countries around us like Malaysia. This is probably because of the basic practice of mutual risk and profit sharing between parties that assures fairness for all.
In Malaysia, as narrated by one of the resource speakers, the country’s economy became stable because of the Islamic banking and finance system adhered to by most of the country’s banks. There is this Islamic Banking and Takaful in Malaysia that complies with the Islamic law or Shari’a.
They practice the use of various Islamic finance concepts such as ijarah (leasing), mudharabah (profit sharing), musharakah (partnership). As a country of both Muslims (Malays) and non-Muslims (dominantly Chinese), we have witnessed how the country became united on the matters of Islamic banking and financing.
This concept of Islamic Banking and Finance may be new to us Filipinos but it is known already to other countries and is even practiced since the 70’s. Let us give the concept a chance to be understood by laymen and make our people realize that there is advantage in this principle for a better economy.