The Development Bank of the Philippines has received government approval to sell its 99.88% stake in the Philippines’ only Islamic bank.
The sale by the state-owned DBP of its majority ownership in Al-Amanah Islamic Investment Bank of the Philippines has been approved by the Bangko Sentral ng Pilipinas, the central bank. DBP, however, will have to secure the approval of the government’s Governance Commission for GOCCs to proceed with privatizing the bank.
“Once we get the GCG approval, we will proceed with the next step of the sale, which is the public bidding,” said aid Estrella Icasiano, DBP senior vice president and head of investment banking and capital markets group. DBP took over Al-Amanah in 2008 after the government failed to privatize the Islamic bank. It invested P1 billion into Al Amanah and charted a rehabilitation plan for the money-losing bank.
The government first attempted to privatize Al-Amanah in 2000 after it started incurring losses in 1990. From 1990 to 2007, Al-Amanah was managed by the Bureau of the Treasury. It is selling Al Amanah as it does not have the expertise in Islamic finance.
Its planned exit from Al Amanah, however, comes at a time when demand for Islamic financing worldwide is rising. Al-Amanah serves the banking needs of the Muslim community in the Philippines. It was formed by virtue of Presidential Decree No. 264 issued by then President Ferdinand Marcos.
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