Fitch cites growth potential of PH Islamic finance

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Fitch Ratings said the Philippine government initiatives to develop the Islamic finance industry are likely to support the sector’s growth in the medium

to long term.

The government also aims to boost financial inclusion among Filipino Muslims, who form about 6 percent of the population but are largely underbanked. Islamic banking is estimated to have below 1-percent market share in the majority-Catholic country. Investors from the Middle East took up around 30 percent of the issuance, which was part of the country’s broader agenda to develop Islamic finance and diversify its investor base.

To create an enabling environment, the government issued Islamic finance regulations, provided incentives and launched a tax neutrality law to ensure equal tax treatment with conventional banking.

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