The government expects to privatize Al-Amanah Islamic Investment Bank of the Philippines (AAIIBP), the only bank in the country authorized to offer Islamic banking services, in a year as two Middle Eastern banking institutions are seriously in their acquisition bid.
AAIIBP, now a subsidiary of Development Bank of the Philippines, has been put on sale by the government for a year already.
Trade and Industry undersecretary Cristino L. Panlilio revealed that Al-Amanah is one banking institution in the country that Middle Eastern investment banking companies are looking into.
''We have Al-Amanah now and we are selling it at the right price. We are talking to at least two Middle Eastern banks now,'' Panlilio said, who refused to identify the two Middle Eastern banks.
Panlilio said that Al-Amanah has a license with the DBP and the license can be sold to interested parties.
''Regardless of the signing of the Bangsamoro, we can sell it one year because we've been selling it for a year already. This Bangsamoro only came up in the past two weeks.''
During the signing of the Framework Agreement for the Bangsamoro, President Aquino was quoted saying that investments in banking aside from food and education are expected to flow into the Bangsamoro region.
Al-Amanah is now on its third year of its five-year rehabilitation plan approved by the Monetary Board on October 22, 2009 focusing on four corporate strategies (4Rs), namely, Recapitalization, Restoration of Financial Viability, Reorganization and Reforms Institutionalization. Under the Rehabilitation Plan, AAIIBP is allowed to continuously do both conventional and Islamic banking.
In November 2009, the DBP infused P1.0-billion capital to Amanah Bank that marked the partial completion of the recapitalization strategy.
The bank's rehabilitation plan came after it was acquired by the government through the DBP, which took full control of the bank's operations on July 16, 2008.
On October 30, 2008, DBP completed the acquisition of the shareholdings of the National Government, the SSS and the GSIS in AAIIBP, thereby controlling 99.9% of the Bank.
From 1990 to 2007, AAIIBP managed its operation with the support of the Bureau of Treasury.
The Amanah Islamic Bank was first established as ''Philippine Amanah Bank'' by virtue of Presidential Decree No. 264 by then President Ferdinand E. Marcos. The decree required the Bank to invest 75%of its total loanable funds for the purpose of providing, among others, reasonable medium and long-term credit facilities to the people of the Muslim-dominated provinces of Cotabato, South Cotabato, Lanao del Sur, Lanao del Norte, Sulu, Basilan, Zamboanga del Norte, Zamboanga del Sur and Palawan.
This transformed Al-Amanah into a development bank with an initial capitalization of P50 million.
In 1974, Presidential Decree No. 542 was issued directing the Bank to implement the Islamic concept of banking, following the ''no interest principle'' and the partnership principles. This directive was not fully carried out because conventional banking still dominated the bank's operations.
When the Autonomous Region in Muslim Mindanao was established, the administration of then President Fidel V. Ramos passed Republic Act No. 6848, otherwise known as the Charter of Al-Amanah Islamic Investment Bank of the Philippines (AAIIBP) in 1990.
The new charter reenergized the bank with an authorized capital stock of P1 billion consisting of 10 million common shares.
AAIIBP has the mandate to promote and accelerate the socio-economic development of the Autonomous Region of Muslim Mindanao (ARMM) through banking, financing and participating in agricultural, commercial and industrial ventures based on the concept of Islamic banking.
By mid-1990, three of its branches, Cotabato, Marawi and Jolo, have been transformed into accepting Islamic deposits. The other branches have been transacting both conventional and Islamic banking products, services and facilities.