BARMM to implement Islamic finance with enactment of proposed revenue code

CAGAYAN DE ORO -  Once Bangsamoro Transition Authority (BTA) Bill 286, or the proposed Bangsamoro Revenue Code, is enacted, the BARMM is set to implement Islamic financing.

To make the Bangsamoro Autonomous Region more competitive in the market, the proposed revenue code seeks to promote Islamic banking and finance.

Deputy Speaker and CWM Chair lawyer Paisalin Tago emphasized the necessity of educating BARMM’s predominantly Muslim population about Shariah and Islamic finance.

Member of Parliament and Ministry of Finance, Budget, and Management Minister Atty. Ubaida Pacasem said that the proposed code is an effort to standardize Islamic financial contracts and transactions, ensuring their economic equivalence with their conventional counterparts.

He reiterated that the enactment of the proposed code is expected to create a level playing field for Islamic finance products and services.

It will also help promote a sustainable Islamic finance industry as well as an open, equitable, and competitive financial system within BARMM.

In a two-day forum of the Bangsamoro Parliament’s Ways and Means Committee, stakeholders from Region 10 provided recommendations that could enhance the proposed code.

Suggestions included institutionalizing hisbah to manage Shariah in the economy, taxation based on excess wealth, and incorporating zakat into the revenue code.

Mindanao State University-Marawi Shari’ah Center Director Anwar Radiamoda proposed implementing the concept of hisbah, an Islamic duty that emphasizes managing economic affairs in accordance with Islamic principles.

“Islamic finance promotes satisfaction for Muslims and enables them to fulfill their obligations to Allah and society,” he said.

In an economic brief released by MFBM, Islamic finance prohibits riba (interest), which differs substantially from traditional banking and investment practices.

It encourages equity, social justice, and economic participation through profit and risk-sharing mechanisms, aiming to prevent exploitation and ensure that financial transactions positively impact society.

Atty. Saniarah Diangca, a legal expert from D’Firm Diangca Law and Taxation Consultancy, emphasized the need to address potential overlaps in the functions of the BIR and the Bangsamoro Revenue Office (BRO), which is mandated to assess and collect all taxes, fees, and charges, as well as to account for all revenues collected.

Atty. Tago said the committee has scheduled another forum in Davao City next week with resource persons from Region 12. (LTAIS-Public Information, Publication, and Media Relations Division)