State-owned Al-Amanah Islamic Investment Bank of the Philippines will roll out Shariah-compliant financing for local government units (LGUs) starting next year.
In a statement on Thursday, Al-Amanah said the roll-out was announced by its Chairperson and Chief Executive Officer Amenah Pangandaman in a forum.
Al-Amanah is the country’s first Islamic bank operating under its own legislative charter. It is supervised by the Bangko Sentral ng Pilipinas, ensuring sound governance and regulatory compliance.
Shariah-compliant means that a financial product, service or business activity is in accordance with the rules and principles of Islamic law.
Currently, Al-Amanah primarily extends Shariah-compliant financing to individuals, agricultural workers, cooperatives and micro, small and medium enterprises (MSMEs).
Pangandaman said the bank will initially focus on Mindanao and eventually expand to the rest of the country.
“We all know that Mindanao’s LGUs have long faced underfunding and infrastructure deficits compared to the rest of the nation. By providing the support and investment these communities deserve, we can close the gap in basic public services and pave the way for a sustainable climate-resilient future,” she said.
The Islamic bank will finance revenue-generating projects such as hospitals and health facilities, water systems, public markets and slaughterhouses, cold storage facilities, transport terminals and solar, and power generation facilities.
It will also support service-enhancing projects including heavy equipment, farm-to-market roads and bridges, municipal halls and capitol buildings, school buildings and convention centers, solid waste management facilities, and real property tax collection systems.
All provinces, cities, municipalities and barangays are eligible to apply provided that they have balanced or surplus actual income for the last three years and efficient collection of real property and other local taxes, with steady growth over the last three years.
Priority will also be given to LGUs that designate Al-Amanah as their national tax allotment depository.
“At Al-Amanah, we support sustainable local government because that would easily translate to sustainable public service which our people truly deserve,” Pangandaman said. (PNA)
