RBOI to attract more financial institutions to ARMM

COTABATO CITY -Due to the increasing interest in the Autonomous Region in Muslim Mindanao (ARMM) and the prospective Bangsamoro political entity by bank and non-bank financial institutions to provide financial services to foreign and local investors in the region, the Regional Board of Investments (RBOI) is studying the grant of fiscal incentives.This forbank and non-bank financial institutions that eyes business operations in the ARMM in order to finance investment projects in the region. The past two years 2013 and 2014 the ARMM has enjoyed record-breaking investments of P1.4-B and P3.8-B, respectively. This year the RBOI has already exceeded its official target for investments in 2015 of P700 million with the entry of two investment projects totaling P863 million in the first quarter alone. The ASEAN economic integration slated to be implemented this year is also spurring the ARMM regional government to find ways to be more competitive vis-à-vis other regions, particularly in the field of Islamic banking and finance. ARMM has a comparative advantage in attracting investments in banks and othernon-bank financialinstitutions to have their base of operations or principal place of business in the ARMM since it is the only region where fiscal incentives can be given to them,” lawyer Ishak Mastura, RBOI chairman said. He cited one section in the ARMM Organic Act that provides that among the autonomous regional government’s sources of revenues are income taxes levied on banks and other financial institutions. The inherent power to tax income from these institutions allows the ARMM to give income tax holidays to banks and other non-bank financial institutions. The ARMM remains severely underserviced by banks and other financial institutions according to a World Bank study. In particular, Mastura said they are looking initially at giving income tax holidays to Islamic banking and finance institutions to make them competitive with conventional banking since currently one study by KPMG consulting firm shows that Islamic banking and finance institutions cannot compete with conventional banking due to tax constraints. The existing National Investment Priorities Plan ARMM List which RBOI administers already provides the Halal industry, which includes Islamic banking and finance, as being entitled to fiscal incentives.ARMM is composed of the provinces of Maguindanao, Lanao del Sur, Basilan, Sulu and Tawi-Tawi.